    [Senate Hearing 108-650]
    [From the U.S. Government Publishing Office]

                                                            S. Hrg. 108-650

                                                            Senate Hearings

                                     Before the Committee on Appropriations

    _______________________________________________________________________

                                                                 Energy and

                                                          Water Development

                                                             Appropriations

                                                                Fiscal Year
                                                                       2005

                                             108th CONGRESS, SECOND SESSION

                                                                  H.R. 4614

    DEPARTMENT OF DEFENSE--CIVIL

    DEPARTMENT OF ENERGY

    DEPARTMENT OF THE INTERIOR

    NONDEPARTMENTAL WITNESSES

         Energy and Water Development Appropriations, 2005 (H.R. 4614)

                                                            S. Hrg. 108-650

        ENERGY AND WATER DEVELOPMENT APPROPRIATIONS FOR FISCAL YEAR 2005

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

                                    HEARINGS

                                    before a

                              SUBCOMMITTEE OF THE

                COMMITTEE ON APPROPRIATIONS UNITED STATES SENATE

                          ONE HUNDRED EIGHTH CONGRESS

                                 SECOND SESSION

                                       on

                                   H.R. 4614

     AN ACT MAKING APPROPRIATIONS FOR ENERGY AND WATER DEVELOPMENT FOR THE
         FISCAL YEAR ENDING SEPTEMBER 30, 2005, 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

     Available via the World Wide Web: http://www.access.gpo.gov/congress/
                                     senate

                        U.S. GOVERNMENT PRINTING OFFICE
    92-143                      WASHINGTON : 2004
    ____________________________________________________________________________
    For Sale by the Superintendent of Documents, U.S. Government Printing Office
    Internet: bookstore.gpo.gov  Phone: toll free (866) 512-1800; (202) 512�091800
    Fax: (202) 512�092250 Mail: Stop SSOP, Washington, DC 20402�090001
                                   __________
                          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
                  Terrence 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
    TED STEVENS, Alaska (ex officio)

                               Professional Staff

                                  Tammy Perrin
                                 Scott O'Malia
                            Drew Willison (Minority)
                           Nancy Olkewicz (Minority)
                           Roger Cockrell (Minority)

                             Administrative Support
                                  Erin McHale

                                C O N T E N T S

                                  ----------

                            Wednesday, March 3, 2004

                                                                       Page
    Department of Energy:
        Office of Energy Efficiency and Renewable Energy.............     1
        Office of Science............................................    15
        Office of Nuclear Energy, Science and Technology.............    23

                            Tuesday, March 23, 2004

    Department of Energy: National Nuclear Security Administration...    63

                           Wednesday, March 31, 2004

    Department of Energy:
        Office of Environmental Management...........................   135
        Office of Environment, Safety and Health.....................   159
        Office of Civilian Radioactive Waste Management..............   168

                            Tuesday, April 20, 2004

    Department of the Interior: Bureau of Reclamation................   207
    Department of Defense--Civil: Department of the Army: Corps of
      Engineers--Civil...............................................   257

                           Nondepartmental Witnesses

    Department of Defense--Civil: Department of the Army: Corps of
      Engineers--Civil...............................................   287
    Department of the Interior: Bureau of Reclamation................   398
    Department of Energy.............................................   449

        ENERGY AND WATER DEVELOPMENT APPROPRIATIONS FOR FISCAL YEAR 2005

                                  ----------

                            WEDNESDAY, MARCH 3, 2004

                                           U.S. Senate,
               Subcommittee of the Committee on Appropriations,
                                                        Washington, DC.
        The subcommittee met at 10:08 a.m., in room SD-138, Dirksen
    Senate Office Building, Hon. Pete V. Domenici (chairman)
    presiding.
        Present: Senators Domenici, Craig, Reid, and Murray.

                              DEPARTMENT OF ENERGY

                Office of Energy Efficiency and Renewable Energy

    STATEMENT OF DAVID GARMAN, ASSISTANT SECRETARY

                 opening statement of senator pete v. domenici

        Senator Domenici. The committee will come to order. Thank
    you everyone for coming. It's interesting to note that, of no
    consequence other than it's interesting, this is the first
    meeting of the Subcommittee on Energy and Water and we haven't
    yet seen impact that the budget's going to have on this
    subcommittee's ability to do its work, but it's pretty obvious
    that it won't be a bed of roses, so I regret to tell you that I
    don't think there's any chance that very many of the
    discretionary programs are going to be funded with any
    increases. Most will get some cuts.
        But today we're going to review the Department of Energy's
    2005 budget request, the Office of Energy Efficiency and
    Renewable Energy, the Office of Science, and the Office of
    Nuclear Energy, and we will receive testimony from David
    Garman, Assistant Secretary, Office of Energy Efficiency. I'd
    like to thank you for joining us. And Dr. Raymond Orbach,
    Director of the Office of Science, and William Magwood,
    Director of the Office of Nuclear Energy. I appreciate your
    attendance today and look forward to your testimony.
        The budget request for Renewable Energy provides $374
    million, an increase of $4.3 million. DOE--that's 1.2 percent--
    DOE's budget provides $95 million for hydrogen technology, that
    is the basic research. It's a $13 million increase and overall
    the President proposes spending $228 million on hydrogen R&D,
    multi-agency effort to diversify energy supply.
        Office of Science, the administration requests $3.4
    billion, a reduction of $78 million, 2 percent below last
    year's level. Science reports specifically stated that flat
    funding for the office should be reversed. Unfortunately, that
    language was ignored.
        Dr. Orbach, I understand the Secretary of Energy released a
    20-year science plan late last year which will serve as a road
    map for science research. I appreciate your efforts to focus on
    these priorities and look forward to learning more about this
    proposal.
        For the Office of Nuclear Energy, the budget provides $409
    million, that's a $4.7 million increase, 1.2 percent. I'm
    disappointed to learn that nuclear R&D budget has been cut by
    $34 million, a 26 percent reduction. If I have anything to do
    about it, I'll put that money back, but I don't know how to do
    it yet.
        The budget also cuts nuclear energy technology by 50
    percent. I'm skeptical that the Department is serious about its
    commitment to deploy a new nuclear reactor, especially if you
    put a date alongside it of 2010.
        I'm discouraged by the fact that the advanced fuel concepts
    initiative was cut. The objective of this program is to develop
    a proliferation-resistant nuclear fuel. In light of the recent
    news regarding the sale of nuclear materials, the last and
    biggest being Pakistan's top nuclear scientist, I believe more
    should be done to protect against nuclear proliferation, not
    less. I think we're beginning to make people understand that in
    the administration. The President spoke to it, Secretary Powell
    has alluded to it, but nonetheless you can't do this without
    money, and I'm hopeful that America will take the international
    lead in this regard.

                               PREPARED STATEMENT

        I'm now going to turn to my good friend who's been working
    with me on this subcommittee either as chairman or ranking
    member for many years, Senator Reid. I'd like you to make your
    opening statement and then we will proceed in order to Mr.
    Garman, Dr. Orbach, and Mr. Magwood.
        [The statement follows:]

                 Prepared Statement of Senator Pete V. Domenici

        Today, the subcommittee will review the Department of Energy's
    fiscal year 2005 budget request for the Office of Energy Efficiency and
    Renewable Energy, the Office of Science, and the Office of Nuclear
    Energy.
        We will receive testimony from David Garman, Assistant Secretary,
    Office of Energy Efficiency and Renewable Energy, Dr. Raymond Orbach,
    Director, Office of Science, and William Magwood, Director, Office of
    Nuclear Energy.
        I appreciate your attendance today and look forward to your
    testimony.
        The budget request for Renewable Energy provides $374 million--an
    increase of just $4.3 million (+1.2 percent). The DOE budget provides
    $95 million for hydrogen technology research, a $13 million increase.
    Overall, the President proposes spending $228 million in fiscal year
    2005 on hydrogen R&D in a multi-agency effort to diversify our Nation's
    energy supply.
        For the Office of Science, the administration has requested $3.4
    billion--a reduction of $78 million or 2 percent below last year's
    level. The Senate report specifically stated that flat funding for the
    Office of Science should be reversed--unfortunately, that language was
    ignored.
        Dr. Orbach, I understand the Secretary of Energy released the 20-
    year Science Plan late last year, which will serve as a road map for
    DOE's science research. I appreciate your efforts to focus the
    Department's priorities and I look forward to learning more about this
    proposal.
        For the Office of Nuclear Energy, the budget provides $409
    million--an increase of $4.7 million above fiscal year 2004 (+1.2
    percent).
        I am disappointed to learn that the Nuclear R&D budget has been cut
    by $34 million (-26 percent). The budget entirely eliminates funding
    for the Nuclear Energy Plant Optimization and the Nuclear Energy
    Research Initiative.
        This budget also cuts the Nuclear Energy Technologies by 50
    percent. As a result of these cuts, I am skeptical that the Department
    is serious about its commitment to deploy a new nuclear reactor by
    2010.
        I am also discouraged by the fact that the Advanced Fuel Concepts
    Initiative was cut by 30 percent. The objective of this program is to
    develop a proliferation-resistant nuclear fuel. In light of the recent
    news regarding the sale of nuclear material by Pakistan's top nuclear
    scientist; I believe more should be done to protect against nuclear
    proliferation.
        It is clear from these lean budgets that we will face numerous
    challenges this year. Nevertheless, I look forward to working with
    Senator Reid to develop the best bill we can.
        I will now turn to Senator Reid or any other Senator who would like
    to make a brief opening statement. Thereafter, we will hear from Mr.
    Garman, Dr. Orbach, and Mr. Magwood.

                        STATEMENT OF SENATOR HARRY REID

        Senator Reid. Thank you very much, Mr. Chairman. You and I
    have worked together, a long, long time together on this
    committee, subcommittee, I'm sorry, and I enjoy working on this
    bill with you. I think the enjoyment will have been better in
    the past than this year because of the tremendous constraints
    on the budget. It's been frankly a lot of fun in years past,
    but I don't see that happening this year, but with our
    friendship we'll work our way through this.
        Today is a first, as you have indicated, in a series of
    five budget oversight hearings for our subcommittee. Next week,
    a week from today, the subcommittee will hear testimony from
    the Bureau of Reclamation and the Corps of Engineers, which is
    so vitally important to the entire western half of the United
    States.
        Today we're going to hear from the witnesses as you've
    outlined. I've reviewed all your statements and they cover some
    of my most--some of my favorite subjects, alternative energy
    and all these things that are so important to the future of our
    country.
        I'm going to--we have a big tax bill coming up in 20
    minutes so I have to leave soon, go back and work on that on
    the floor, but I appreciate everyone being here. I have a
    series of questions for each of the witnesses, Mr. Chairman,
    and I would ask consent of the subcommittee that I be allowed
    to submit those in writing and that they respond to them within
    the next 10 days in writing.
        Senator Domenici. Yes, sir.
        Senator Reid. And the answers go to every member of the
    subcommittee.
        Senator Domenici. I'll submit them on your behalf and let
    me say to you, if you have any trouble with the time, I don't
    expect you to just let it pass. I expect you to tell us why, if
    you had to go find something or whatever then let us know. Go
    ahead, Senator.

               OFFICE OF SCIENCE FISCAL YEAR 2005 BUDGET REQUEST

        Senator Reid. I've reviewed the budget for the Office of
    Science, and by and large I suspect that you share some of the
    same frustrations as I have and you won't articulate them today
    and I understand why you can't. I'm concerned that such a
    budget, if enacted, will not allow you to move forward
    aggressively on enough major initiatives, including the ITER
    Project.
        The request also strikes me as inadequate in terms of
    allowing you to maintain and improve your laboratory facilities
    nationwide. My overall impression is that the request is weak
    and I really believe it's short-sighted. I hope we'll be able
    to improve on that this year before we complete our work.
        As I've said many times before, funding for research in the
    hard sciences is one of the very best and most appropriate
    investments taxpayer dollars can be made for this country. 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 National Institutes of Health that have
    far outstripped the increase requests of the Office of Science.
    The imbalance between funding for the physical sciences and the
    biological sciences was getting to be staggering, particularly
    because both disciplines rely on each other so much. I think
    this is short-sighted in the long term.
        I'm pleased with the work that you're doing on genomics and
    with the very impressive pace of the nanotechnology. Drew
    Willison of my staff and Tammy Perrin of Senator Domenici's
    staff visited the Lawrence Berkeley National Lab last month and
    were surprised at the rapid progress the lab is making on the
    molecular foundry.

                     ENERGY EFFICIENCY AND RENEWABLE ENERGY

        You've been on the job now for nearly 2 years and I hope
    you're enjoying your time in one of the greatest jobs our
    Federal Government has to offer. Mr. Garman, as you know, I am
    a big supporter of your programs and believe that the National
    Renewable Energy Laboratory in Golden is one of the premiere
    labs in all the DOE if not the world. While I certainly hope we
    can add some resources to your budget, I realize that the most
    important thing Congress can do in the short term for the
    renewable energy industry is to get a series of productive tax
    credits into place and extend some of the others. Hopefully our
    body will be able to get that done this year and we may be able
    to get it done on this bill this week.
        For the last few years, you've funded a competitive project
    in Nevada that has worked very well. As you know, my State has
    tremendous solar and geothermal potential and the seed money
    for the Department--that the Department has provided--allows
    Nevada and its universities and research organization
    industries to work together to prove out technology and
    techniques.

                                 NUCLEAR ENERGY

        Mr. Magwood, as you know, I've been very supportive of your
    programs during my years as chairman and ranking member of this
    subcommittee. I'm 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, of course, at
    the end of the fuel cycle, and we've heard that so many times
    that I even get tired of myself saying it. To the extent that
    there will be an ongoing waste stream, it will be investments
    in science that solves all or most of those disposal problems,
    and you're involved in that and I appreciate that.
        That's why I've supported your advanced fuel cycle
    initiative over the years. I'm a little concerned this year
    that your support for this program seems to have eroded, but I
    suspect that Chairman Domenici and I can help you un-erode it
    as we move through this budget.

                               PREPARED STATEMENT

        I feel confident that Senator Craig and Domenici have
    thoughts on the ongoing transition of the laboratory in Idaho
    to the Nation--this is to the Nation's nuclear energy
    laboratory, so I'll not address that issue at this time, other
    than to say that I'm far more interested in an aggressive R&D
    budget that benefits the Nation as a whole than I am in a long,
    slow, drawn-out transition.
        I thank everyone for appearing today and appreciate the
    patience of everyone listening to my long statement.
        [The statement follows:]

                    Prepared Statement of Senator Harry Reid

        Thank you, Mr. Chairman. By my count you and I are beginning our
    eighth Energy and Water appropriations cycle together. As you know I
    enjoy working on this bill with you and greatly appreciate your
    friendship and support throughout our many years together here in the
    Senate.
        Today is the first in a series of five budget oversight hearings
    for our subcommittee. Next Wednesday, the subcommittee will hear
    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. We are likely to be on an accelerated
    schedule this year so timely responses are critical.
        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 2 percent cut this year. I am concerned that such a
    budget, if enacted, will not allow you to move forward aggressively
    enough on a number of major initiatives, including the ITER project.
    The request also strikes me as inadequate in terms of allowing you to
    maintain and improve your laboratory facilities nationwide.
        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.
        Again, over the long-term, this is very short-sighted.
        That said, I am very pleased with the work you are doing on
    genomics and with the very impressive pace of the nanotechnology
    program. Drew Willison of my staff and Tammy Perrin of Senator
    Domenici's staff visited Lawrence-Berkeley National Laboratory last
    month and were surprised at the rapid progress the lab is making on the
    Molecular Foundry.
        You have been on the job now for nearly 2 years and I hope you are
    enjoying your time in one of the greatest jobs our Federal Government
    has to offer.
        Mr. Garman, as you know, I am a big supporter of your programs and
    believe that the National Renewable Energy Laboratory in Golden is one
    of the premiere labs in all of DOE. While I certainly hope we can add
    some resources to your budget this year, I also realize that the most
    important thing Congress can do in the short term for the nascent
    renewable energy industry is to get a series of production tax credits
    into place and to extend some of the others. Hopefully, we, as a body,
    will be able to get that done this year.
        For the last few years you have funded a competitive pilot project
    in Nevada that has worked tremendously well. As you know, my home State
    has tremendous solar and geothermal potential and the seed money the
    Department has provided has allowed Nevada universities, research
    organizations, and industries to work together to prove out
    technologies and techniques. I appreciate your hard work and that of
    your staff in getting this program started and keeping it moving
    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 have supported your Advanced Fuel Cycle Initiative
    over the years. I am a little concerned this year that your support for
    this program seems to have eroded, but I suspect that Chairman Domenici
    and I can help you in this area.
        I feel confident that both Senator Craig and Senator Domenici have
    many thoughts on the on-going transition of INEEL to the Nation's
    nuclear energy laboratory, so I will not address that issue at this
    time other than to say that I am far more interested in an aggressive
    R&D budget that benefits the Nation as a whole than I am in a long,
    slow, drawn-out transition.
        Again, thanks to our witnesses for appearing today.

        Senator Domenici. Senator, thank you very much, and now we
    will excuse you and look forward to the next hearing.
        Senator, would you like to make some comments, please?
        Senator Murray. Mr. Chairman, I do not have an opening
    statement. I'll just welcome the witnesses. I do have questions
    and we'll wait until after they've had their testimony.

                   PREPARED STATEMENT OF SENATOR THAD COCHRAN

        Senator Domenici. Senator Cochran has submitted a statement
    for the record which will be included.
        [The statement follows:]

                   Prepared Statement of Senator Thad Cochran

        Mr. Chairman, I'd like to thank the Assistant Secretary and
    Directors for testifying before this committee today. The work you do
    is very important to my State and to me. I commend David Garman, the
    Assistant Secretary of the Office of Energy Efficiency and Renewable
    Energy, for the work his department does with biomass research.
        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
    benefits for Mississippi's economy by keeping energy dollars in our
    State and by providing jobs in rural areas where biomass is produced.
    By using these wastes for energy, disposal costs are avoided, and
    industries are better able to compete. I would also like to commend
    Mississippi State University and Jackson State University for their
    continuing research into this important scientific area.
        Mr. Chairman, with your permission I have some questions I'd like
    to submit for the record.

        Senator Domenici. Let me say how good it has been to have
    you working with us on this subcommittee. You have some very
    significant interests, but I'm very pleased to find that when
    we have problems on this committee, you're there to help us.
    It's not just strictly what's going on in your State, and we
    all need each other. Some very tough, tough problems when you
    cut the budget as much as ours here.
        I want to make one last observation before I proceed to the
    witnesses. I don't know how to solve it, but I want to say
    about 10 years ago or a little less, a couple of Senators
    circulated around and got most of us to sign up on a
    resolution. Perhaps you signed it like I did and you probably,
    having been here awhile, chuckled as you signed it. We were
    going to make the NIH, National Institute of Health, double in
    10 years. Of course, we signed it as we walked out the door
    wondering, who's kidding who?
        Well, it happened, and every year after that it would be
    among the last bills, and sure enough, somebody would stand up
    and say, well, in order to meet our resolution we need $680
    million more and the next year they needed a billion and here
    we have the largest National Institute of Health growth in a
    decade of any institution of that type in the world has ever
    seen. And here we sit with everybody telling us the counterpart
    is science, right, that without basic science, pretty soon the
    NIH, with all of its work, is going to be without the talent
    that's needed to back up the medical people.
        And here we come, not critical of the President, after all
    we're in this terrific deficit, but here we are. While that
    occurred, we're cutting basic science, not increasing it. And
    I'm just wondering what we have to do around here to get us on
    a path where we recognize that these scientists and scientific
    prowess is not going to keep America if we don't fund it.

                     ENERGY EFFICIENCY AND RENEWABLE ENERGY

        And so with that, I'm very sorry to start with such a
    negative comment, but let me open with you, Mr. Garman. You're
    the Assistant Secretary of Energy Efficiency and Renewable
    Energy and we want you to give your testimony and be ready for
    questions. I do want to say to you, sir, from the first time I
    inquired of you about this work, you have come a long way and I
    am very complimentary of you.
        First of all, you are not run by the renewable associations
    out here in America. They have their interests but they don't
    run your Department. You're not supposed to be running their
    editorials, you're not supposed to be paying for their
    journals. Remember, we had all that going when you took over.
    Of course, all they did was get mad. Then when you looked at it
    you found that Domenici was right, that if you want to do
    research, you ought to do research, but you sure shouldn't be
    paying for various organizations to get done what they want.
    They aren't synonymous with research. And now I think it's
    pretty clean in that regard.
        I also want to tell you that we can do as much research as
    you want, but ultimately Americans want to see some of this
    work, and I am very, very pleased that I heard today that
    Democratic leader said we have the votes to pass the Energy
    bill. Now why would I be speaking of that at the same time?
    Well, you know, if you want to build wind energy, you want to
    build solar energy and biomass energy, everybody knows how to
    do that. You can perfect it, but that's already passed, your
    research issues.
        And we're ready to go and build those but we need the
    incentive that caused them to move ahead so rapidly, and what
    everybody's finding out now, there is no incentive today. And
    people say, well what do you mean? Well, the incentives expired
    in January, so those who are very anxious and terribly enamored
    as most of us are with energy that comes from wind, you ought
    to know that unless you have a project that is already going,
    there are no new ones, and there's nobody going to do a new
    one. Why? Because they can't afford it.
        But if we pass this bill they got this wonderful incentive
    for this next decade, and you will see biomass and geothermal
    and these other ones, you'll see them flourish across the land.
    The biggest one will be wind. Whether the public's going to
    want that much wind, I don't know. It's going to look funny
    because there's going to be a lot of it, but I think we're
    going to win, I think it's going to happen.
        All right, would you proceed with your testimony? Make it
    brief, please.

                           STATEMENT OF DAVID GARMAN

        Mr. Garman. Yes, sir. And thank you for your comments. As
    you noted in your statement, we are seeking an increase of
    $17.3 million in the renewable energy funding, and a budget
    increase in this environment does constitute an awesome
    responsibility and we understand that. We're not only mindful
    of how much we spend, but the way we spend it, as you noted,
    and we're proud of the fact that OMB has recognized the
    Department of Energy as leading the pack of Cabinet agencies in
    terms of management improvement, and we're also proud that the
    Office of Management and Budget has singled out the Office of
    Energy Efficiency and Renewable Energy as an example in
    implementing the President's management agenda.
        So I will very briefly mention a few highlights of our
    budget. Our hydrogen technology subprogram is a key component
    of the President's Hydrogen Fuel Initiative. For 2005, we
    request $95.3 million, a $13.3 million increase. With these
    funds we propose to continue and accelerate our work with
    regard to hydrogen production, safety, storage, codes and
    standards, and other work that's critical to the long-term
    success of this initiative.
        Last year, roughly $40 million out of our total hydrogen
    appropriation of $82 million was earmarked for some specific
    projects that in many cases were inconsistent with our research
    plan, so we will have to delay some very important work in
    areas such as hydrogen storage and production that the National
    Academy of Sciences and others have told us is very important
    to the success of our program.
        For our solar energy technology program, we're seeking
    $80.3 million, roughly equivalent to the unencumbered amount of
    our fiscal year 2004 appropriations. With this funding, we'll
    continue our work to lower the cost of photovoltaic solar
    energy systems, and for the first time in several years we're
    seeking funding for concentrating solar power technologies.
        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, but, of course, as the
    chairman mentioned, that is dependent on the production tax
    credit, which we do hope Congress will extend very quickly.
        We are starting to devote more attention to the promise of
    offshore wind and our focus on wind energy has shifted to
    larger blades and turbines using advanced materials that will
    allow economically viable wind development in lower wind speed
    areas that are distributed across the country.
        For our hydropower technology work, we request $6 million,
    a $1.1 million increase over the fiscal year 2004
    appropriation. Geothermal, as the chairman mentioned, offers a
    promise as a baseload renewable energy resource, particularly
    in the U.S. West. 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.
        Our biomass and biorefinery system R&D program is focused
    on technologies to transform our domestic biomass resources
    into high value chemicals, fuels, and power. In fiscal year
    2005, we're seeking $72.6 million for activities conducted
    under this appropriation. That's $13.9 million less than the
    fiscal year 2004 amount. However, last year we did receive
    nearly $41 million in earmarks, so we're actually seeking far
    more funding directed toward our biomass and biorefinery R&D
    goals than we received last year.

                               PREPARED STATEMENT

        There are a variety of other programs and activities that
    time doesn't allow me to mention, but for now I ask that my
    full statement appear in the record and I'm happy to answer any
    questions this committee has either today or in the future.
    Thank you, Mr. Chairman.
        [The statement follows:]

                       Prepared Statement of David Garman

        Mr. Chairman, Members of the subcommittee, I appreciate the
    opportunity to testify on the Fiscal Year 2005 President's Budget
    request for the Office of Energy Efficiency and Renewable Energy
    (EERE). My focus will be the renewable energy activities under the
    purview of this subcommittee.
        The research and development activities surrounding and the
    deployment of advanced clean energy technologies are already making a
    difference in the lives of Americans, and they will have an even
    greater impact in the future. The overall EERE budget request for
    fiscal year 2005 is a robust $1.25 billion, an increase of $15.3
    million over the comparable fiscal year 2004 appropriation. For the
    renewable energy programs funded through the Energy and Water
    Development appropriation, the fiscal year 2005 request totals $374.8
    million, a $17.3 million increase over the fiscal year 2004
    appropriation and 30 percent of the total EERE Budget.\1\
    ---------------------------------------------------------------------------
        \1\ Activities focused on energy conservation are funded through
    the Interior and Related Agencies appropriations bill.
    ---------------------------------------------------------------------------
        We are not only mindful of how much we spend on these programs, but
    also the manner in which we operate and the results we are achieving.
    Our budget is prioritized in accordance with the National Energy Policy
    Report and the Department of Energy Strategic Plan. EERE has also used
    the research and development investment criteria called for in the
    President's Management Agenda to focus our research and development
    dollars on a balanced portfolio of well-planned activities that could
    generate significant public benefits and that require Federal
    involvement to be successful.
        The Office of Management and Budget (OMB) recently announced that
    DOE has made the most progress among cabinet-level agencies in the
    implementation of the President's Management Agenda. OMB recognized the
    Department as the cabinet-level agency ``leading the pack with regard
    to management improvement.'' In support of that, EERE in 2002 underwent
    a dramatic restructuring to streamline program management and
    centralize administration functions with a focus on developing
    consistent, uniform and efficient business practices. We are also
    increasingly successful in linking our expenditures with performance
    and results. We are striving to achieve more work in the laboratory
    with every research and development dollar entrusted to our
    stewardship. While we are very proud of the accomplishments we have
    made, a great deal of progress remains to be made in all of these
    areas.

           RENEWABLE ENERGY PROGRAMS FISCAL YEAR 2005 BUDGET REQUEST

        The renewable energy programs included in the Energy Supply account
    and funded within the Energy and Water Development appropriations
    include Hydrogen Technology, Solar Energy Technology, Wind and
    Hydropower Technologies, and Geothermal Technology. Activities in the
    Biomass Program and Intergovernmental programs are funded through both
    the Energy and Water Development and Interior and Related Agencies
    appropriations.

                              HYDROGEN TECHNOLOGY

        The Fiscal Year 2005 Budget Request for Hydrogen Technology is
    $95.3 million, a $13.3 million increase over the fiscal year 2004
    appropriation. Much of the proposed increase is for hydrogen safety
    research. This includes safety testing and analysis on bulk storage
    systems, fuel dispensing equipment, and piping to support new codes and
    standards specific to hydrogen. The Department has worked with the
    Department of Transportation and other agencies on an interagency codes
    and standards plan. Under this activity, we will also develop system
    safety requirements for producing hydrogen and sensors to detect
    hydrogen leaks.
        Research undertaken in the Hydrogen Technology Program is also
    targeted to reduce the cost of distributed hydrogen production from
    electrolysis and natural gas reformation. An enhanced focus on
    electrolysis, as recommended by the National Research Council, may lead
    to cost competitive production of hydrogen from renewable energy at
    $2.25 per gallon of gasoline equivalent by 2015.
        One of the major technical obstacles we face is developing the
    means to store sufficient amounts of hydrogen aboard the vehicle to
    provide a driving range of greater than 300 miles. The fiscal year 2005
    budget provides funding for innovative storage technologies to be
    pursued under our ``Grand Challenge'' to leading universities and
    national laboratories. ``Grand Challenge'' is our name for a
    competitive solicitation that was directed towards the scientific
    community to get the best minds at our universities and national labs
    to propose research ideas to tackle this challenging problem.
        The Hydrogen program is also stepping up its efforts on education
    at all levels, so Americans know what the hydrogen economy will mean
    for them, their businesses, and the environment, and understand how to
    handle hydrogen safely in their communities.
        Our hydrogen work is well integrated with the fuel cell and vehicle
    work funded through the Interior Appropriations bill. Taken together,
    these programs represent the majority of the Federal efforts comprising
    the Hydrogen Fuel Initiative announced by President Bush during his
    2003 State of the Union Address, and we have published very specific,
    measurable technical goals against which to measure our progress. If we
    achieve our technical objectives, the automotive and energy industries
    will be in a position to consider commercialization by 2015, with mass
    market availability of both vehicles and refueling infrastructure by
    2020.
        The President's initiative was received by Congress with
    enthusiasm, and we appreciate this subcommittee's support. However,
    while the fiscal year 2004 EERE appropriation for hydrogen technology
    was approximately $82 million, roughly half of those funds were
    earmarked for specific projects that are not wholly consistent with our
    research plan or the recommendations of the National Research Council.
    As a consequence, we must delay some very important work in areas such
    as hydrogen storage and production, and thus our ability to meet our
    established research targets in the specified timeframes may be in
    jeopardy. The Department looks forward to working with the subcommittee
    to help ensure that projects supported by the Committee are consistent
    with our established goals in an effort to keep our progress on track.

                            SOLAR ENERGY TECHNOLOGY

        The Solar Energy Technology program focuses research on advanced
    solar devices that can provide the Nation with a widely available
    domestic energy resource to help meet electricity needs and reduce the
    stress on our critical electricity infrastructure. Efforts are directed
    in the interrelated areas of Photovoltaics, Solar Heating and Lighting,
    and Concentrating Solar Power. The fiscal year 2005 budget request for
    Solar Technology is $80.3 million. This is roughly equivalent to the
    unencumbered amount of the fiscal year 2004 appropriation of $83.4
    million, which included $3.6 million earmarked to specific recipients.
        Photovoltaic research and development seeks to reduce the
    manufacturing cost of highly reliable photovoltaic modules from $2.10/
    watt in 2003 to $1.85/watt by fiscal year 2005. The program is focused
    on next-generation technologies such as thin-film photovoltaic cells
    and leap-frog technologies such as polymers and nanostructures. Systems
    engineering efforts seek to increase system durability and develop
    technologies to improve interconnections with the electric grid. The
    fiscal year 2005 request of $75.4 million for photovoltaic includes:
    $30 million for critical fundamental research, including $2.1 million
    to equip the new Science and Technology Facility at the National
    Renewable Energy Laboratory; $29 million for advanced materials,
    including thin films and next generation materials with potential for
    dramatic cost reductions; and $16.4 million for technology development
    efforts to improve reliability of the entire system, including testing,
    verification, and deployment activities for grid-connected applications
    and analysis of private sector commercialization options.
        The fiscal year 2005 $2.9 million request for Solar Heating and
    Lighting will support efforts on hot water and space heating for
    residential and commercial buildings in collaboration with industry
    partners. The program uses new formulations of lightweight polymer
    materials to modernize solar water heaters, making them easier to
    install, while lowering the cost of solar water heating in non-freezing
    climates.
        Last year, we did not request any funding for the Concentrating
    Solar Power (CSP). In light of recent studies we sought from an
    independent engineering firm, a draft of which was reviewed by the
    National Research Council, the Department proposes $2 million for
    Concentrating Solar Power in fiscal year 2005 to support a more
    thorough investigation of the appropriate R&D course needed to realize
    the potential for CSP. The fiscal year 2005 budget request will
    maintain essential facilities and support work with several States on
    the establishment of 1,000 MW of Concentrating Solar Power in the
    Southwest, while developing a comprehensive program plan to help inform
    the fiscal year 2006 budget development process and a longer term R&D
    plan.

                             ZERO ENERGY BUILDINGS

        Zero Energy Buildings activities develop strategies to integrate
    renewable energy technologies into highly energy-efficient buildings
    that produce as much or nearly as much energy as they consume on an
    annual basis. The fiscal year 2005 budget request for the Building
    Technologies Program funded through the Interior Appropriations bill
    combines this energy research and development with ongoing activities
    in the Buildings program and therefore, no fiscal year 2005 funds are
    requested in this area.

                        WIND AND HYDROPOWER TECHNOLOGIES

        Wind and Hydropower research and development supports the Nation's
    fastest growing and most widely used renewable energy resources. These
    technologies emit no air pollution or greenhouse gases, and they
    produce significant amounts of bulk power to help meet America's
    growing need for clean, domestic sources of electricity.
        Since 2000, installed wind turbine capacity in the United States
    has more than doubled, driven in large part by the tremendous
    reductions in cost that have resulted from wind energy research. Our
    research contributed to reducing the cost of electricity generation by
    a factor of 20 since 1982, to 4 cents or less per kilowatt-hour in
    areas with excellent wind resources.
        The fiscal year 2005 budget request for Wind Energy is $41.6
    million, $290,000 more than the fiscal year 2004 appropriation, which
    included $1.4 million in funds that were earmarked to specific
    recipients. The $12 million request for Low Wind Speed Technology
    research and development will support multiple large wind system
    technology pathways to achieve the goal of 3 cents per kilowatt-hour
    for onshore systems. It also supports new work in off-shore systems to
    help achieve a cost goal of 5 cents or less per kilowatt-hour. Fiscal
    year 2005 activities will include field testing of the first full-scale
    low wind speed technology prototype turbine and fabrication and testing
    of advanced drivetrains, power converter and blades for future low wind
    speed turbines. The $17 million request for supporting research and
    testing will engage the capabilities of the National Labs, universities
    and private sector for technical support including both facility and
    field tests of newly developed components and systems to ensure design
    and performance compliance.
        Hydropower is the most widely used form of renewable energy in the
    world today and accounts for about 7 percent of total electricity
    generation in the United States and over 75 percent of domestic
    renewable electricity generation. The fiscal year 2005 budget request
    for Hydropower Technologies is $6.0 million, a $1.1 million or 22
    percent increase over the fiscal year 2004 appropriation. The
    Department's research approach involves a unique combination of
    computer modeling, instrumentation, lab testing, and field-testing that
    is improving the design and operation of the next generation of
    hydropower technology. The request will support development of
    technologies that will enable hydropower operators at existing plants
    to generate more electricity with less environmental impact. This will
    be done through environmentally enhanced, improved efficiency turbines,
    as well as with new methods for optimizing unit, plant, and reservoir
    systems to increase energy production per unit water. Supporting
    research and testing will improve understanding of fish response to the
    physical stresses experienced in passage through turbine systems. The
    program will also explore ways to harness undeveloped hydropower
    capacity without constructing new dams.

                             GEOTHERMAL TECHNOLOGY

        The fiscal year 2005 budget request for Geothermal Technologies is
    $25.8 million, a $300,000 increase from the fiscal year 2004
    appropriation of $25.5 million, which included almost $2 million in
    funds that were earmarked to specific recipients. Geothermal energy
    generates electricity and provides heat for applications such as
    aquaculture, crop drying, and district heating, and for use in heat
    pumps to heat and cool buildings. The program focuses on developing
    technology that optimizes the use of geothermal energy through improved
    exploration, drilling, reservoir engineering, and energy conversion.
    These technology improvements lead to cost-effective energy production
    at new geothermal fields and expanded production at existing fields.
        Fiscal year 2005 resource development activities will characterize
    and assess the geothermal resource by understanding the formation and
    evolution of geothermal systems, including a collaborative effort with
    the U.S. Geological Survey on a national geothermal resource
    assessment. Activities in the Enhanced Geothermal Systems program seek
    to increase the productivity and lifetime of reservoirs, potentially
    more than doubling the amount of viable geothermal resources in the
    West. Fiscal year 2005 activities will include Enhanced Geothermal
    System field tests in California and Nevada, and tests of the
    Diagnostics-While-Drilling advanced drilling system in a high
    temperature geothermal well. New geothermal State working groups in
    Alaska and California will be added, bringing the number of groups to
    nine.

                      BIOMASS AND BIOREFINERY SYSTEMS R&D

        Biomass and Biorefinery Systems R&D focuses on advanced
    technologies to transform the Nation's domestic biomass resources into
    high value chemicals, fuels, and power. With the U.S. Department of
    Agriculture, the DOE biomass program leads the multi-agency Biomass
    Research and Development Initiative that coordinates and accelerates
    all Federal bioenergy research and development in accordance with the
    Biomass Research and Development Act of 2000.
        The 2002 EERE reorganization integrated several bioenergy
    activities into one office to allow a clear and consistent set of goals
    and objectives and increased collaboration with industry. The program
    worked closely with industry to produce a vision and R&D roadmap that
    focuses on the most promising long-term opportunities that, with
    leveraged funding from industry, can realize a goal of establishing the
    first large-scale biorefinery based on agricultural residues by 2010. A
    multiyear technical plan in support of this goal provides a
    comprehensive work breakdown structure with milestones, costs and
    schedule, so that every project is linked to program goals, objectives
    and technical barriers.
        In fiscal year 2005, the Department is requesting $72.6 million for
    biomass program activities in the purview of the Energy and Water
    appropriation, $13.9 million less than the fiscal year 2004
    appropriation. However, it is important to note that the fiscal year
    2004 appropriation included nearly $41 million, or nearly half of the
    biomass budget, targeted to specific projects not identified in program
    plans. Congressional earmarking has delayed progress toward the program
    goals and diminished core research capabilities at the National
    Laboratories.
        Biomass activities funded through the Energy and Water
    appropriation focus on advanced biorefinery technologies to produce low
    cost sugars, syngas and pyrolysis oils. In fiscal year 2005, the
    thermochemical program will test the continuous production, cleanup and
    conditioning of biomass syngas and pyrolysis oils suitable for
    conversion to fuels, chemicals or hydrogen, and examine the production
    of hydrogen from biomass via synthesis gas. Work will continue with
    industry on improved process integration capabilities for industrial
    biorefineries, and the program will evaluate existing partnerships for
    more productive and lower-cost cellulase enzyme systems. Additional
    partnerships may further improve the procession operations leading to
    cheaper biomass-based sugars. Projects to test and evaluate the
    performance and costs of converting corn fiber to fuels and co-products
    will also continue.

                          INTERGOVERNMENTAL ACTIVITIES

        Intergovernmental Activities funded through the Energy and Water
    appropriation include a variety of programs to promote renewable energy
    technologies. The fiscal year 2005 request for these programs is $16
    million, an increase of $1.3 million over the fiscal year 2004
    appropriation.
        The International Renewable Energy Program provides technical
    assistance to support sustainable development and emerging market
    economies. These efforts expand the market of U.S. industries and
    reduce the cost of energy to trading partners while improving their
    environment and creating new jobs. In fiscal year 2005, we request $6.5
    million for international activities, a $612,000 increase from the
    fiscal year 2004 appropriation, which included nearly $2.7 million in
    funds that were earmarked to specific recipients. We propose to use
    these funds for a wide variety of partnership activities under the U.S.
    Clean Energy Initiative arising from the World Summit on Sustainable
    Development.
        In fiscal year 2005, we request $5.5 million for the Tribal
    Resources Program, an increase of $594,000 over the fiscal year 2004
    appropriation. The program provides assistance to Native American
    Tribes and Tribal entities in assessing energy resources, comprehensive
    energy plan development, energy technology training, and project
    development. This primarily involves the development of energy
    efficiency and renewable energy resources on Tribal lands. Projects
    include resource assessments and development plans for energy efficient
    and renewable energy technologies. Technical assistance helps Native
    American Tribes, and Tribal Colleges develop culturally compatible
    energy and economic development plans and strategies reflecting Tribal
    priorities. In addition, the program invests in technical program and
    market analysis and performance assessment in order to direct effective
    strategic planning. Again, this is an area where congressionally
    directed spending totaling $3.2 million, or more than half of our
    funding, inhibits our ability to issue and entertain competitive
    funding opportunities for tribes.
        We are also requesting $4.0 million dollars for the Renewable
    Energy Production Incentive, which will create an incentive similar to
    the renewable production tax credits available to investor-owned
    utilities for public power providers.

                     DEPARTMENTAL ENERGY MANAGEMENT PROGRAM

        The Departmental Energy Management Program seeks to improve energy
    and water efficiency, promote renewable energy use, and manage utility
    costs in DOE facilities and operations. The Department owns or leases
    about 11,000 buildings at more than 50 sites across the United States.
    The fiscal year 2005 request for Department Energy Management Program
    activities of $1.97 million, about the same as the fiscal year 2004
    appropriation, will allow continued facility audits 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 COMPETITIVE SOLICITATION
                                    PROGRAM

        This is the third year we seek funding for the Competitive
    Solicitation Program as part of the President's National Climate Change
    Technology Initiative. The competitive solicitation process will seek
    innovative, novel, high-impact climate change technology options that
    can complement and enrich the existing portfolio of climate change-
    related research and applied technology. By stimulating and
    strengthening Federal research in this area, the program hopes to
    inspire private sector interest and international cooperation in a
    sustained collaborative program of research investment aimed at
    accelerating technology development and advancing the administration's
    climate change goals. The Department is requesting $3 million in fiscal
    year 2005 for this initiative.

                         FACILITIES AND INFRASTRUCTURE

        This Facilities and Infrastructure budget addresses capital
    requirements for capital projects, equipment and plant maintenance at
    the National Renewable Energy Laboratory (NREL). NREL provides state-
    of-the-art research facilities, user facilities, analysis, and
    management of R&D contracts for the Solar, Wind, Geothermal, Biomass,
    and Hydrogen programs within the Energy Supply budget, and does the
    same for the programs in the Energy Conservation budget and
    superconductivity research in the Office of Electricity Transmission
    and Distribution. NREL is home to 1,100 researchers, engineers,
    analysts, and administrative staff, plus visiting professionals,
    graduate students, and interns on a 300-acre campus in Golden, CO,
    occupying five large research buildings and over 200,000 square feet of
    research and administrative space in a neighboring office park.
        The fiscal year 2005 request of $11.5 million will provide $4.8
    million for operation and maintenance funded activities and $6.7
    million for continued construction of the Science and Technology
    Facility.

                               PROGRAM DIRECTION

        Program Direction provides the technical direction and oversight
    resources needed to successfully implement EERE renewable energy
    programs. The budget requests covers Federal staff, as well as
    associated properties, equipment, supplies, and materials required to
    support the management and oversight of programs. Areas funded by these
    requests include information systems and technology equipment; travel;
    public information activities; support service contractors; and
    crosscutting performance evaluation, analysis and planning.
        The fiscal year 2005 budget request for Program Direction in the
    Energy Supply account is $20.7 million, which is $8.3 million more than
    the fiscal year 2004 appropriation. The increase in fiscal year 2005
    will fund activities to develop and strengthen EERE's program
    management and project management practices at both Headquarters and
    field offices. A new Project Management Center that includes the Golden
    Field Office and other EERE field organizations is responsible for
    project management of research and development partnerships, laboratory
    contract administration including the management and operating contract
    for the National Renewable Energy Laboratory, and providing
    procurement, legal, business management, and information resource
    management. This Project Management Center initiative allows our
    Laboratories to devote more time to real research as opposed to
    management oversight functions, and will help our program dollars
    remain focused on research, development, and deployment.
        The proposed increase will also provide full funding for the
    renewable energy programs' share of landlord services at the Golden
    Field Office and its fair share of Information Technology services and
    local-area network operations.
        The budget request also includes $3 million to provide analytical
    and technical support services to the cross-cutting Climate Change
    Technology Program, a multi-agency research planning and coordination
    activity led by DOE.

                                   CONCLUSION

        Mr. Chairman, we believe the administration's fiscal year 2005
    budget request for renewable energy technologies reflects a robust,
    balanced and consistent approach toward meeting the Nation's energy
    goals of increased energy security through utilization of diverse
    domestic supplies, greater freedom of choice of technology, and reduced
    financial costs and environmental impacts of energy utilization.
        This completes my prepared statement, and I am happy to answer any
    questions the subcommittee may have.

                                 OFFSHORE WIND

        Senator Domenici. I have a series of questions, but your
    testimony kind of interrupted my thoughts and suggested that I
    ask you a question. When you mentioned offshore activities,
    we've run into a lot of arguing about people wanting more say-
    so about where these great big fields of windmills are located.
    In fact, we almost got an amendment on the floor. They were all
    waiting for me to do it and I guess I let them down to give
    local authority to decide yes or no.
        I'm not asking you that question, but I'm saying, is there
    a significant growth in the complaints about where you should
    locate these fields and tell me a little bit about what's
    happening?
        Mr. Garman. Sure. Today the regulatory structure is very,
    very difficult to navigate. There are a variety of State and
    local agencies that one has to deal with if one wants to put
    offshore wind in place. Offshore wind has such great promise
    because it is a tremendous resource that's located very close
    to the population and load centers, particularly on the
    northeast coast of the United States, and we believe wind
    energy could be very competitive there.
        But today, unlike if you're trying to develop offshore
    leasing for oil and gas and you deal with only one agency, the
    Minerals Management Service as the lead agency to develop
    offshore wind you have to deal with several agencies. The Army
    Corps of Engineers is the lead agency, but it is very, very
    difficult to deal with the regulatory structure.
        There is a provision in the energy bill, however, that
    would vest authority with the Department of the Interior to
    begin to manage offshore leasing for wind similar to the way
    they manage it for offshore outer continental shelf leasing.
        Senator Domenici. Well, sir, you mentioned the northeast.
    What's the issue off the shore of Massachusetts?
        Mr. Garman. The Cape Wind Project is a project that is
    probably economically viable today, but there is, of course,
    concern, NIMBYism, some call it, about the impact of the wind
    turbines on the horizon. I think wind turbines are
    aesthetically beautiful, but that's me. Not everybody agrees.
        So we are actually developing the larger technology that
    could be offshore at such a distance that it couldn't be seen
    from shore, and I think that could help ameliorate many of the
    concerns that people have about the aesthetics.
        Senator Domenici. There isn't any need that it be right
    close, but does it get more expensive as you go out?
        Mr. Garman. It does because the water is deeper. But
    particularly in the Northeast, less so on the West Coast, you
    have shallow water that extends 20 or more kilometers offshore.
    The limit today is about 30 meters. If you go deeper than that,
    we don't quite have the technology today to install wind
    turbines.
        Senator Domenici. Okay. Thank you very much. Dr. Orbach.

                               Office Of Science

    STATEMENT OF RAYMOND L. ORBACH, DIRECTOR
        Dr. Orbach. Mr. Chairman, members of the committee, I want
    to thank you for your support over the years. I look forward to
    working with you to ensure that our Nation stays at the leading
    edge of science and technology for energy security.
        The Office of Science 2005 budget request is $3.4 billion,
    an increase of $72 million, or 2.2 percent over the fiscal year
    2004 appropriation when congressionally-directed projects are
    taken into account. This request allows the Office of Science
    to carry forward with the Department's and the administration's
    priorities in critical areas of science.
        It enables us to begin our planning for the future of
    science in America through important progress on the priorities
    set out in the Facilities for the Future of Science report and
    in the Office of Science strategic plan. It increases the
    operation of our user facilities from 92 percent to 95 percent
    of optimum, enhancing our leverage for our construction
    investment. The full details of our budget request are provided
    in the written statement I have submitted.
        By title, let me talk about the highlights of our budget.
    It will keep our Nation on the path to fusion power, with
    important investments in ITER and other fusion programs. It
    will enable investments in leadership-class machines for high-
    end computation, essential for America's open scientific
    technological research and economic development.
        The President's request for the Office of Science will fund
    vital research enabling the hydrogen economy. The President's
    request provides funding for long-lead procurement of the LINAC
    coherent light source, an X-ray free-electron laser, which will
    truly provide a new window on nature.

                               PREPARED STATEMENT

        Finally, this request provides the funding needed to
    initiate project engineering design activities for the GTL
    facility for the production and characterization of proteins
    and molecular tags, which promises to accelerate genomics
    research.
        I would be delighted to answer any of your questions and I
    hope that my testimony can be submitted for the record. Thank
    you.
        [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 Office of
    Science fiscal year 2005 budget request. The Department appreciates the
    support of the Chairman and the Members of the committee over the past
    years and I look forward to working with you to ensure that our Nation
    stays at the leading edge of science and technology.
        The Office of Science fiscal year 2005 budget request is $3.4
    billion, a $68.5 million decrease from the fiscal year 2004
    appropriation levels. When $140.8 million for fiscal year 2004
    congressionally-directed projects is set aside, there is an increase of
    $72.3 million in fiscal year 2005. This request makes 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 for Teachers and Scientists and Science Program Direction.
        It allows us to increase support for high priority scientific
    research, increase operations at our key scientific user facilities,
    keep major science construction projects on schedule, and support new
    initiatives. This request, coming at a time of tight overall Federal
    budgets, is also a demonstration of the administration's support for
    basic research and the role that fundamental science plays in keeping
    our Nation strong and secure.

                                 OFFICE OF SCIENCE FISCAL YEAR 2005 PRESIDENT'S REQUEST
                                                   [B/A in thousands]
    ----------------------------------------------------------------------------------------------------------------
                                                                                                       Fiscal Year
                                                                     Fiscal Year      Fiscal Year          2005
                                                                   2003 Comparable  2004 Comparable    President's
                                                                       Approp.          Approp.          Request
    ----------------------------------------------------------------------------------------------------------------
    Science:
        Advanced Scientific Computing Research...................        $163,185         $202,292         $204,340
        Basic Energy Sciences....................................       1,001,941        1,010,591        1,063,530
        Biological & Environmental Research......................         494,360          641,454          501,590
            Congressionally-directed projects....................         (51,927)        (140,762)  ...............
            Core Biological and Environmental Research...........        (442,433)        (500,692)        (501,590)
        Fusion Energy Sciences...................................         240,695          262,555          264,110
        High Energy Physics......................................         702,038          733,631          737,380
        Nuclear Physics..........................................         370,655          389,623          401,040
        Science Laboratories Infrastructure......................          45,109           54,280           29,090
        Science Program Direction................................         137,425          152,581          155,268
        Workforce Development for Teachers & Scientists..........           5,392            6,432            7,660
        Small Business Innovation Research/Technology Transfer...         100,172   ...............  ...............
        Safeguards and Security..................................          61,272           56,730           67,710
                                                                  --------------------------------------------------
          Subtotal, Science......................................       3,322,244        3,510,169        3,431,718
    Use of prior year balances...................................  ...............         -10,000   ...............
                                                                  --------------------------------------------------
          Total, Science.........................................       3,322,244        3,500,169        3,431,718
          Total, excluding Congressionally-directed projects.....      (3,270,317)      (3,359,407)      (3,431,718)
    ----------------------------------------------------------------------------------------------------------------

        I am proud to tell you that the Department of Energy was ranked the
    most improved cabinet-level agency in the most recent scorecard to
    assess implementation of the President's Management Agenda (PMA). The
    scorecard, which evaluates agency performance in the areas of human
    capital, competitive sourcing, financial management, e-government, and
    budget/performance integration, was issued by the Office of Management
    and Budget (OMB) in January and recognized the Department as one of the
    agencies ``leading the pack with regard to management improvement.''
        The Department has made a strong commitment to a results-driven,
    performance-based approach to management of itself and its government-
    owned, contractor-operated laboratories. Laboratory contracts are being
    renegotiated so that mutually agreed upon performance measures will
    result in increased contractor authority and accountability, while
    lessening the burden of DOE day-to-day oversight of activities. In
    January of this year, the Department announced that it will compete the
    management and operating contracts for seven of the DOE laboratories.
        In September 2003, the Department issued its updated Strategic Plan
    and incorporated this Plan and the Performance Plan into the fiscal
    year 2005 budget request. The performance measures included in this
    budget were developed with input from our scientific advisory
    committees and OMB. A website (www.sc.doe.gov/measures) has been
    developed to more fully explain the new measures within the context of
    each program.

                          SCIENCE PLANS AND PRIORITIES

        When I joined the Office of Science after a career as a university
    scientist and administrator, I came with an appreciation for the four
    key roles that the Office plays in the U.S. research effort. We provide
    solutions to our Nation's energy challenges, contributing essential
    scientific foundations to the energy, national, and economic security
    missions of the DOE. We are the Nation's leading supporter of the
    physical sciences, investing in research at over 280 universities, 15
    national laboratories, and many international research institutions. We
    deliver the premier tools of science to our Nation's science
    enterprise, building and operating major research facilities for open
    access by the science community. We help keep the United States at the
    forefront of intellectual leadership, supporting the core capabilities,
    theories, experiments, and simulations to advance science.
        This fiscal year 2005 budget request will set us on the path toward
    addressing the challenges that face our Nation in the 21st Century. SC
    has recently released ``Facilities for the Future of Science: A Twenty-
    Year Outlook'' which sets an ambitious agenda for scientific discovery
    over the next two decades. The priorities established in this plan--
    which is clearly not a budget document--reflect national priorities set
    by the President and the Congress, our commitment to the DOE missions,
    and the views of the U.S. scientific community. Pursuing these
    priorities will be challenging, but they hold enormous promise for the
    overall well-being of all of our citizens. We have recently released an
    updated Office of Science Strategic Plan that is fully integrated with
    the Facilities Plan, the Department's Strategic Plan, and the
    President's Management Agenda--including the R&D Investment Criteria
    and OMB's Program Assessment Rating Tool. The fiscal year 2005 budget
    request begins to implement these plans.
        I am increasingly mindful that the health and vitality of U.S.
    science and technology depends upon the availability of the most
    advanced research facilities. DOE leads the world in the conception,
    design, construction, and operation of these large-scale devices. These
    machines have enabled U.S. researchers to make some of the most
    important scientific discoveries of the past 70 years, with spin-off
    technological advances leading to entirely new industries. More than
    19,000 researchers and their students from universities, other
    government agencies (including the National Science Foundation and the
    National Institutes of Health), private industry, and those from abroad
    use DOE facilities each year. These users are growing in both number
    and diversity.
        Because of the extraordinarily wide range of scientific disciplines
    required to support facility users at national laboratories, and the
    diversity of mission-driven research supported by the SC, we have
    developed an interdisciplinary capability that is extremely valuable to
    some of the most important scientific initiatives of the 21st Century.
    There is also a symbiotic relationship between research and research
    tools. Research efforts advance the capabilities of the facilities and
    tools that in turn enable new avenues of research.
        Excluding funds used to construct or operate our facilities,
    approximately half of our research funding goes to support research at
    universities and institutes. Academic scientists and their students are
    funded through peer-reviewed grants, and SC's funding of university
    research has made it an important source of support for graduate
    students and postdoctoral researchers in the physical sciences during
    their early careers.
        Mindful of the role that the Office of Science plays in supporting
    the physical sciences and other key fields, I would now like to briefly
    outline some specific investments that we are proposing in the Fiscal
    Year 2005 Request.

                                SCIENCE PROGRAMS
                     ADVANCED SCIENTIFIC COMPUTING RESEARCH

    Fiscal Year 2004 Comparable Appropriation--$202.3M; Fiscal Year 2005
            Request--$204.3M
        The Advanced Scientific Computing Research (ASCR) program
    significantly advances scientific simulation and computation, applying
    new approaches, algorithms, and software and hardware combinations to
    address the critical science challenges of the future, and provides
    access to world-class, scientific computation and networking facilities
    to the Nation's scientific community to support advancements in
    practically every field of science and industry. The ASCR budget also
    supports the Scientific Discovery through Advanced Computing (SciDAC)
    program--a set of coordinated investments across all Office of Science
    mission areas with the goal of achieving breakthrough scientific
    advances via computer simulation that were previously impossible using
    theoretical or laboratory studies alone.
        The fiscal year 2005 budget request includes $204.3 million for
    ASCR to advance U.S. leadership in high performance supercomputing and
    networks for science and to continue to advance the transformation of
    scientific simulation and computation into the third pillar of
    scientific discovery. The request includes $38.2 million for the Next
    Generation Computer Architecture (NGA) research activity, which is part
    of a coordinated interagency effort that supports research, development
    and evaluation of new architectures for scientific computers that could
    help enable continued U.S. leadership in science. Enhancements are
    supported for ASCR facilities--the Energy Sciences Network (ESnet) and
    the National Energy Research Scientific Computing Center (NERSC). The
    request also includes $8.5 million for the new Atomic to Macroscopic
    Mathematics research effort to provide the research support in applied
    mathematics needed to break through the current barriers in our
    understanding of complex physical processes.

                             BASIC ENERGY SCIENCES

    Fiscal Year 2004 Comparable Appropriation--$1,010.6M; Fiscal Year 2005
            Request--$1,063.5M
        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 the DOE missions in energy,
    environment, and national security; advances energy-related basic
    science on a broad front; and provides unique user facilities for the
    scientific community and industry.
        For fiscal year 2005, the Department requests $1.1 billion for BES
    including $208.6 million to continue to advance nanoscale science
    through atomic- and molecular-level studies in materials sciences and
    engineering, chemistry, geosciences, and energy biosciences. This
    supports Project Engineering Design (PED) and construction of four
    Nanoscale Science Research Centers (NSRC's) and a Major Item of
    Equipment for the fifth and final NSRC. NSRC's are user facilities for
    the synthesis, processing, fabrication, and analysis of materials at
    the nanoscale. The request also includes $80.5 million for construction
    and $33.1 million for other project costs for the Spallation Neutron
    Source, and $54.1 million for research, development, PED, and long lead
    procurement of the Linac Coherent Light Source, a revolutionary x-ray
    laser light source. With these tools, we will be able to understand how
    the compositions of materials affect their properties, watch proteins
    fold, see chemical reactions, and design matter for desired outcomes.
        The fiscal year 2005 budget request also includes $29.2 million for
    activities that support the President's Hydrogen Fuel Initiative. This
    research program is based on the BES workshop report ``Basic Research
    Needs for the Hydrogen Economy,'' which highlights the enormous gap
    between our present capabilities and those required for a competitive
    hydrogen economy.

                     BIOLOGICAL AND ENVIRONMENTAL RESEARCH

    Fiscal Year 2004 Comparable Appropriation--$641.5M; Fiscal Year 2005
            Request--$501.6M
        The Biological and Environmental Research (BER) program advances
    energy-related biological and environmental research in genomics and
    our understanding of complete biological systems, such as microbes that
    produce hydrogen; in climate change, including the development of
    models to predict climate over decades to centuries; developing
    science-based methods for cleaning up environmental contaminants; in
    radiation biology, providing regulators with a stronger scientific
    basis for developing future radiation protection standards; and in the
    medical sciences, by developing new diagnostic and therapeutic tools,
    technology for disease diagnosis and treatment, non-invasive medical
    imaging, and biomedical engineering such as an artificial retina that
    will restore sight to the blind. For fiscal year 2005, the Department
    requests $501.6 million for BER. The fiscal year 2004 appropriation
    includes $140.8 million of one-time Congressionally-directed projects,
    for which no additional funds are being requested in fiscal year 2005.
        Research on microbes through the Genomics: GTL program, addressing
    DOE energy and environmental needs, continues to expand from $63.5
    million in fiscal year 2004 to $67.5 million in fiscal year 2005. The
    request also provides $5 million for initiation of Project Engineering
    Design (PED) activities for the GTL Facility for the Production and
    Characterization of Proteins and Molecular Tags, a facility that will
    help move the Genomics: GTL systems biology research program to a new
    level by greatly increasing the rate and cost-effectiveness with which
    experiments can be done. DOE, through the Genomics: GTL program, will
    attempt to use genetic techniques to harness microbes to consume
    pollution, create hydrogen, and absorb carbon dioxide.

                             FUSION ENERGY SCIENCES

    Fiscal Year 2004 Comparable Appropriation--$262.6M; Fiscal Year 2005
            Request--$264.1M
        The Fusion Energy Sciences (FES) program advances the theoretical
    and experimental understanding of plasma and fusion science, including
    a close collaboration with international partners in identifying and
    exploring plasma and fusion physics issues through specialized
    facilities. This includes: (1) exploring basic issues in plasma
    science; (2) developing the scientific basis and computational tools to
    predict the behavior of magnetically confined plasmas; (3) using the
    advances in tokomak research to enable the initiation of the burning
    plasma physics phase of the Fusion Energy Sciences program; (4)
    exploring innovative confinement options that offer the potential of
    more attractive fusion energy sources in the long term; (5) focusing on
    the scientific issues of nonneutral plasma physics and High Energy
    Density Physics; (6) developing the cutting edge technologies that
    enable fusion facilities to achieve their scientific goals; and (7)
    advancing the science base for innovative materials to establish the
    economic feasibility and environmental quality of fusion energy.
        When the President announced that the United States would join in
    the International Thermonuclear Experimental Reactor (ITER) project he
    noted that ``the results of ITER will advance the effort to produce
    clean, safe, renewable, and commercially available fusion energy by the
    middle of this century.'' To this end, the Department continues its
    commitment to the future of Fusion Energy Science research with a
    request of $264.1 million, slightly above the fiscal year 2004 enacted
    level. Within that amount, $38 million is requested for preparations
    for ITER in fiscal year 2005, $30 million more than in fiscal year
    2004. Of this $38 million, $7 million is for scientists and engineers
    who will support the International Team and for the qualification of
    vendors that will supply superconducting cable for ITER magnets. The
    remaining $31 million will be used to support refocused experiments in
    our tokamak facilities and for component R&D in our laboratories and
    universities that is closely related to our ongoing program but which
    is focused on ITER's specific needs. The researchers and facilities
    that we support will not be doing less work because of ITER, but some
    of their time and effort will be directed to different, ITER-related,
    work than they were doing before.
        Fabrication continues on the National Compact Stellarator
    Experiment (NCSX), an innovative confinement system that is the product
    of advances in physics understanding and computer modeling. In
    addition, work will be initiated on the Fusion Simulation Project that,
    upon completion, will provide an integrated simulation and modeling
    capability for magnetic fusion energy confinement systems over a 15-
    year development period. The Inertial Fusion Energy research program
    will be redirected toward high energy density physics research based on
    recommendations that will come from the recently established
    Interagency Task Force on High Energy Density Physics.

                              HIGH ENERGY PHYSICS

    Fiscal Year 2004 Comparable Appropriation--$733.6M; Fiscal Year 2005
            Request--$737.4M
        The High Energy Physics (HEP) program advances our understanding of
    the basic constituents of matter, including the mysterious dark energy
    and dark matter that make up most of the universe; the striking
    imbalance of matter and antimatter in the universe, and the possible
    existence of other dimensions. Collectively, these investigations will
    reveal the key secrets of the birth, evolution, and final destiny of
    the universe. HEP expands the energy frontier with particle
    accelerators to study fundamental interactions at the highest possible
    energies, which may reveal previously unknown particles, forces or
    undiscovered dimensions of space and time; explain how everything came
    to have mass; and illuminate the pathway to the underlying simplicity
    of the universe.
        For fiscal year 2005, the Department requests $737.4 million for
    the HEP program, an increase from fiscal year 2004. The highest
    priority in HEP is the operation, upgrade and infrastructure for the
    two major HEP user facilities at the Fermi National Accelerator
    Laboratory (Fermilab) and the Stanford Linear Accelerator Center
    (SLAC), to maximize the scientific data generated.
        In 2005, the Neutrinos at the Main Injector (NuMI) facility will be
    complete and the beam line will be commissioned. The fiscal year 2005
    budget request also supports research and design activities for a new
    Major Item of Equipment, the BTeV (``B Physics at the TeVatron'')
    experiment at Fermilab that will extend current investigations, using
    modern detector technology to harvest a data sample more than 100 times
    larger than current experiments. Research and development work
    continues in fiscal year 2005 on the proposed Supernova Acceleration
    Probe (SNAP) experiment for the DOE/NASA Joint Dark Energy Mission
    (JDEM).

                                NUCLEAR PHYSICS

    Fiscal Year 2004 Comparable Appropriation--$389.6M; Fiscal Year 2005
            Request--$401M
        The Nuclear Physics (NP) program supports innovative, peer reviewed
    scientific research to advance knowledge and provide insights into the
    nature of energy and matter, and in particular, to investigate the
    fundamental forces which hold the nucleus together, and determine the
    detailed structure and behavior of the atomic nuclei. Nuclear science
    plays a vital role in studies of astrophysical phenomena and conditions
    of the early universe. At stake is a fundamental grasp of how the
    universe has evolved, an understanding of the origin of the elements,
    and the mechanisms of supernovae core collapse. The program builds and
    supports world-leading scientific facilities and state-of-the-art
    instruments necessary to carry out its basic research agenda.
    Scientific discoveries at the frontiers of Nuclear Physics further the
    Nation's energy-related research capacity, which in turn provides for
    the Nation's security, economic growth and opportunities, and improved
    quality of life.
        The fiscal year 2005 budget request of $401 million gives highest
    priority to exploiting the unique discovery potentials of the
    facilities at the Relativistic Heavy Ion Collider (RHIC) and Continuous
    Electron Beam Accelerator Facility (CEBAF) by increasing operating time
    by 26 percent compared with fiscal year 2004. R&D funding is provided
    for the proposed Rare Isotope Accelerator (RIA) and 12 GeV upgrade of
    CEBAF, which is located at Thomas Jefferson National Accelerator
    Facility.
        Operations of the MIT/Bates facility will be terminated as planned,
    following 3 months of operations in fiscal year 2005 to complete its
    research program. This facility closure follows the transitioning of
    operations of the Lawrence Berkeley National Laboratory 88-Inch
    Cyclotron in fiscal year 2004 from a user facility to a dedicated
    facility for the testing of electronic circuit components for use in
    space (using funds from other agencies) and a small in-house research
    program. These resources have been redirected to better utilize and
    increase science productivity of the remaining user facilities and
    provide for new opportunities in the low-energy subprogram.

                      SCIENCE LABORATORIES INFRASTRUCTURE

    Fiscal Year 2004 Comparable Appropriation--$54.3M; Fiscal Year 2005
            Request--$29.1M
        The Science Laboratories Infrastructure (SLI) program supports SC
    mission activities at SC laboratories by addressing needs related to
    general purpose infrastructure, excess facilities disposition, Oak
    Ridge landlord, health and safety improvements and payment in lieu of
    taxes (PILT).
        The fiscal year 2005 budget request supports three ongoing line
    item construction projects at Lawrence Berkeley National Laboratory,
    Brookhaven National Laboratory and the Stanford Linear Accelerator
    Center and nine projects to clean-up/remove 84,000 square feet of
    excess space to reduce operating costs, and environment, safety and
    health liabilities, and to free up land for future use. The request
    also supports activities to maintain continuity of operations at the
    Oak Ridge Reservation (ORR), including Federal facilities in the town
    of Oak Ridge and PILT for local communities surrounding Oak Ridge. PILT
    is also provided to communities surrounding Brookhaven and Argonne
    East.
        We have continued to work cooperatively with the Occupational
    Safety and Health Administration (OSHA) and the Nuclear Regulatory
    Commission (NRC) teams as they have conducted audits of our
    laboratories. NRC has completed its audits; OSHA is expected to
    complete its audits in mid-March 2004. The laboratories are preparing
    cost estimates to meet the requirements as identified by those
    agencies, and we plan to provide this information to Congress by May
    31, 2004. Health and safety improvements to address OSHA- and NRC-
    identified deficiencies and recommendations at Office of Science
    laboratories are expected to be completed in fiscal year 2004.

                            SAFEGUARDS AND SECURITY

    Fiscal Year 2004 Comparable Appropriation--$56.7M; Fiscal Year 2005
            Request--$67.7M
        Safeguards and Security activities reflects the Office of Science's
    commitment to maintain adequate protection of cutting edge scientific
    resources and assets. The fiscal year 2005 budget request includes $9.8
    million for Pacific Northwest Site Office safeguards and security
    activities, which were transferred from the Office of Environmental
    Management. In fiscal year 2005, Safeguards and Security will enable
    the Office of Science laboratories to meet the requirements of Security
    Condition 3 level mandates for the protection of assets. The request
    also provides the laboratories with the ability to maintain
    requirements of increased Security Condition 2 level for 60 days. The
    funding includes the increase needed to meet expectations of the
    revised Design Basis Threat approved by the Secretary in May 2003. In
    addition, critical cyber security investments will be made to respond
    to the ever changing cyber threat.

               WORKFORCE DEVELOPMENT FOR TEACHERS AND SCIENTISTS

    Fiscal Year 2004 Comparable Appropriation--$6.4M; Fiscal Year 2005
            Request--$7.7M
        The mission of the Workforce Development for Teachers and
    Scientists program is to continue the Office of Science's long-standing
    role of training young scientists, engineers, and technicians in the
    scientifically and technically advanced environments of our National
    Laboratories.
        The fiscal year 2005 budget request of $7.7 million provides $1.5
    million for a Laboratory Science Teacher Professional Development
    activity. About 90 participating teachers will gain experience and
    enhance their skills at five or more DOE laboratories in response to
    the national need for science teachers who have strong content
    knowledge in the classes they teach. A new $500,000 Faculty Sabbatical
    Fellowship activity will provide sabbatical opportunities for 12
    faculty from minority serving institutions (MSI's). This proposed
    activity is an extension of the successful Faculty and Student Teams
    (FaST) program where teams of faculty members and two or three
    undergraduate students, from colleges and universities with limited
    prior research capabilities, work with mentor scientists at a National
    Laboratory to complete a research project that is formally documented
    in a paper or presentation.

                           SCIENCE PROGRAM DIRECTION

    Fiscal Year 2004 Comparable Appropriation--$152.6M; Fiscal Year 2005
            Request--$155.3M
        The mission of Science Program Direction is to provide a Federal
    workforce, skilled and highly motivated, to manage and support basic
    energy and science-related research disciplines, diversely supported
    through research programs, projects, and facilities under the Office of
    Science's leadership.
        Science Program Direction consists of two subprograms: Program
    Direction and Field Operations. The Program Direction subprogram is the
    single funding source for the SC Federal staff in Headquarters
    responsible for directing, administering, and supporting the broad
    spectrum of scientific disciplines. This subprogram also includes
    program planning and analysis activities which provide the capabilities
    needed to evaluate and communicate the scientific excellence,
    relevance, and performance of SC basic research programs.
        The Field Operations subprogram is the centralized funding source
    for the SC Federal workforce in the field who are responsible for
    providing business, administrative, and specialized technical support
    to SC and other DOE programs. Our service centers in Chicago and Oak
    Ridge provide primary support to SC laboratories and facilities,
    including Ames, Argonne National Laboratory, Brookhaven National
    Laboratory, Lawrence Berkeley National Laboratories, Oak Ridge National
    Laboratory, Pacific Northwest National Laboratory, Fermilab, Princeton
    Plasma Physics Laboratory, Thomas Jefferson National Accelerator
    Facility, and Stanford Linear Accelerator Center.
        Secretary Abraham approved the Office of Science Restructuring
    (OneSC) on January 5, 2004. OneSC was initiated in July 2002 to embrace
    the changes envisioned by the President's Management Agenda (PMA) to
    accomplish government programs more economically and effectively by
    creating a new, more efficient, and productive SC organization. It will
    also provide a management environment for SC employees in which their
    success and high performance can continue in the face of changing
    resources, requirements, and societal needs.
        The fiscal year 2005 budget request of $155.3 million represents a
    1.8 percent increase over the fiscal year 2004 enacted level. This
    increase is reflected in salaries and benefits to support a total SC
    workforce of 1,014 full-time equivalents (FTE's). Compared to fiscal
    year 2004, the fiscal year 2005 request is flat or lower in our other
    major budget categories, such as travel, training, support services,
    and other related expenses. We will continue to leverage resources and
    rely on building good business practices by streamlining operations,
    improving financial controls, and reengineering business processes in
    support of the PMA and the OneSC structure.

                                   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. These include pushing the frontiers of
    the physical sciences through nanotechnology and exploring the key
    questions at the intersection of physics and astronomy. We are also
    pursuing opportunities at the intersection of the physical sciences,
    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 SC's research programs and our contributions to the
    Nation's scientific enterprise. This concludes my testimony. I would be
    pleased to answer any questions you might have.

        Senator Domenici. Is this your product?
        Dr. Orbach. Yes, it is, sir.
        Senator Domenici. Facilities for Future of Science 20-Year
    Outlook. I think it's terrific.
        [Clerk's Note.--The document entitled, ``Facilities for the
    Future of Science: A Twenty-Year Outlook'' can be found at
    http://www.sc.doe.gov/sub/Facilities_For_Future/20-Year-
    Outlook_screen.pdf.]
        Dr. Orbach. Thank you.
        Senator Domenici. I'm very sorry that it doesn't get more
    use and more exposure and maybe you might just tell me, how
    does it get around?
        Dr. Orbach. Well, we've been distributing it at each of the
    meetings that I attend around the country. We have made major
    press announcements and we have submitted it to scientific
    organizations not only in the United States but also abroad.
        Also our current budget request enables us to begin the top
    six of our priorities at different stages depending on R&D, so
    we're beginning to put it into play.
        Senator Domenici. Great.
        Dr. Orbach. Thank you for your comment.
        Senator Domenici. Mr. Magwood, would you proceed with kind
    of dispatch on your statement, because we've got a lot of
    questions.

                Office of Nuclear Energy, Science and Technology

    STATEMENT OF WILLIAM D. MAGWOOD, IV, DIRECTOR
        Mr. Magwood. Be happy to, Mr. Chairman. I do have a written
    statement for the record. Let me very briefly summarize my
    remarks because I know you're very familiar with our program
    activities.

                          NUCLEAR ENGINEERING PROGRAMS

        I want to take a look back. When you think about where we
    started from back in 1998, when you and I spoke about the
    pretty dire situation facing the nuclear energy program run by
    the Federal Government, at that time our research budget
    plummeted to zero; students entering nuclear engineering
    programs had gone down to 500 from 1,500 just a few years
    earlier; and many countries that had seen the United States as
    a principal partner for nuclear energy research and development
    had turned away from us and had begun to think of the United
    States as being basically a past partner.
        Over the last several years, this has turned around
    significantly. I think there's been a lot of success to look
    back on. Looking at it today, the number of nuclear engineering
    students now are 1,400 in universities across the country. This
    is a huge accomplishment considering where we were a few years
    ago.
        Senator Domenici. How many?
        Mr. Magwood. One thousand, four hundred. Almost as----
        Senator Domenici. Studying what?
        Mr. Magwood. Nuclear engineering. So that's almost
    completely reversed from the climate of the 1990's.
        Senator Domenici. But now we went like that and we're going
    to stop growing.
        Mr. Magwood. No, we want to keep growing. We think we're in
    good shape. As a matter of fact, we are actually starting new
    programs in nuclear engineering across the country at schools
    like the University of South Carolina, South Carolina State and
    even--I'm sorry that Mr. Reid's not here--University of Nevada
    Las Vegas is looking at starting a new nuclear engineering
    program.
        On our side, the research that we're pursuing in Generation
    IV nuclear power systems has really taken off. We're working
    with our international partners very closely and we're very
    optimistic about the direction that that work has taken.

                               PREPARED STATEMENT

        You may know, Mr. Chairman, that I was recently elected
    chairman of the Generation IV International Forum and also the
    OECD steering committee on nuclear energy, and in those
    positions I've been able to really leverage our activities with
    those of our international partners; and we think that the
    ability to work with our international partners to pursue
    advanced technologies, including the possible pursuit of a
    project at our Idaho site to look at an advanced hydrogen
    electricity production reactor, is something that's well within
    our grasp.
        So I'll just leave it at that. We've appreciated your
    leadership over the years and look forward to any questions you
    have.
        [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 2005 budget submission
    for DOE's Office of Nuclear Energy, Science and Technology.
        The program has made a great deal of progress over the past several
    years. From the time, not so many years ago, when it appeared that the
    United States might abandon advanced nuclear research and development,
    we have been successful in reasserting U.S. leadership in the world.
    Representing the United States, I have been elected by my international
    colleagues to serve as the chair of two important international
    bodies--the OECD Steering Committee on Nuclear Energy and the
    Generation IV International Forum. When it appeared that nuclear
    power's era had ended in the United States, nuclear utilities have
    turned their programs around, making more energy last year than at any
    time in history and launching into very serious discussions to explore
    the construction of new plants for the first time in decades.
        Recent developments have been encouraging. The Department has
    launched the process of establishing a central laboratory for nuclear
    research and development--the Idaho National Laboratory. We are also
    exploring the possible construction of a pilot Generation IV nuclear
    plant at our new lab that will demonstrate highly efficient electricity
    production and pave the way to realize the President's vision of a
    future hydrogen economy.
        The Department's fiscal year 2005 request for the nuclear energy
    program proposes a $410 million investment in nuclear research,
    development and infrastructure for the Nation's future that is designed
    to continue this progress. This budget request moves forward the
    Department's commitment to support the President's priorities to
    enhance the Nation's energy independence and security while enabling
    significant improvements in environmental quality. Our request supports
    development of new nuclear generation technologies and advanced energy
    products that provide significant improvements in sustainability,
    economics, safety and reliability, and proliferation and terrorism
    resistance.
        We are committed to efficiently managing the funds we are given. We
    have abandoned outdated paradigms to integrate the Idaho Operations
    Office with our headquarters organization, enabling us to manage our
    responsibilities in the field to achieve greater quality and efficiency
    than would otherwise be possible. We are enhancing our expertise in
    critical areas such as project management through training and
    certification of existing staff and the acquisition of experienced,
    proven managers. We continue to implement the President's Management
    Agenda (PMA) by further integrating budget and performance, improving
    Program Assessment Rating Tool (PART) scores for our research and
    development programs, and linking major program goals in the
    performance plans for our Senior Executives and technical staff. These
    improvements are challenging and time-consuming, but we feel they must
    be done to assure our program's ability to make the best use of the
    taxpayer dollars.
        While we have made great progress in all these areas, much remains
    to be done. Our fiscal year 2005 request moves us in the right
    direction and I will now provide you a full report of our activities
    and explain the President's request for nuclear energy in detail.

                      GENERATION IV NUCLEAR ENERGY SYSTEMS

        Our Generation IV effort continues to make significant progress.
    Since the Generation IV International Forum and the Nuclear Energy
    Research Advisory Committee (NERAC) issued their joint report, ``A
    Technology Roadmap for Generation IV Nuclear Energy Systems'', the
    members of the Forum have expanded to include Switzerland and the
    European Union. The now 11 members (Argentina, Brazil, Canada, the
    European Union, France, Japan, the Republic of Korea, the Republic of
    South Africa, Switzerland, the United Kingdom and the United States)
    have organized into interest groups associated with each of the six
    selected Generation IV systems and are negotiating international legal
    agreements to enable advanced nuclear research to be conducted on a
    multilateral basis.
        We hope to complete these negotiations later this year and move
    forward with these countries to develop advanced reactor technologies
    for commercial deployment in the 2015 to 2030 timeframe. Generation IV
    concepts offer significant improvements in sustainability,
    proliferation resistance, physical protection, safety and economics.
    These advanced systems will not only be safe, economic and secure, but
    will also include energy conversion systems that produce valuable
    commodities such as hydrogen, desalinated water and process heat. These
    features make Generation IV reactors ideal for meeting the President's
    energy and environmental objectives.
        As indicated in our recent report to Congress on our implementation
    strategy for the Generation IV program, while the Department is
    involved in research on several reactor concepts, our efforts and this
    budget proposal place priority on development of the Next Generation
    Nuclear Plant (NGNP). The NGNP is based on the union of the Very-High-
    Temperature Reactor concept in the Generation IV Roadmap with advanced
    electricity and hydrogen production technologies. We are exploring the
    potential of an international, public-private project to build and
    operate a pilot NGNP at the Department's Idaho site. While the
    Department has not made a decision to proceed with this effort, such a
    project could validate the potential of this technology to contribute
    to meeting to goals of the President's Hydrogen Fuel Initiative. If
    successful, this technology could produce hydrogen at a cost that is
    competitive with gasoline and electricity and with advanced natural
    gas-fired systems.
        The Idaho National Laboratory and several other labs will also
    explore a range of other Generation IV concepts principally the
    Supercritical Water-Cooled Reactor, the Gas-Cooled Fast Reactor and the
    Lead-Cooled Fast Reactor. Our efforts will focus on establishing
    technical and economic viability, and developing core and fuel designs,
    and advanced materials for these concepts. We are also working with our
    colleagues in the Office of Science to assemble a joint Future Energy
    Advanced Materials Initiative aimed at the development of new materials
    for advanced fission and fusion energy systems. The fiscal year 2005
    request enables progress on this broad front. With your support, and
    the leveraging of our resources with those of our international
    partners, we expect to make continued progress toward developing world-
    changing technologies.

                          NUCLEAR HYDROGEN INITIATIVE

        Hydrogen offers significant promise as a future energy technology,
    particularly for the transportation sector. The use of hydrogen in
    transportation will reduce U.S. dependence on foreign sources of
    petroleum, enhancing national security. Significant progress in
    hydrogen combustion engines and fuel cells is making transportation
    using hydrogen a reality. Today, through electrolysis, we can convert
    water to hydrogen using electricity. We believe that for the future,
    Very-High-Temperature Reactors coupled with thermo-chemical or high-
    temperature electrolytic water splitting processes offer a more
    efficient technology for production of large quantities of hydrogen
    without release of greenhouse gases. The goal of the Nuclear Hydrogen
    Initiative is to develop economic, commercial-scale production of
    hydrogen using nuclear energy.
        With funding of $9 million in fiscal year 2005, the Nuclear
    Hydrogen Initiative will progress toward the development and
    demonstration of closed, sulfur-based cycles, such as the sulfur-iodine
    process. These processes have been demonstrated on a bench scale at
    somewhat lower temperatures and pressures than would be required for
    economic hydrogen production, but they show considerable promise,
    especially when they are considered for mating to Very-High-Temperature
    Reactor systems. We will also explore high-temperature electrolysis,
    which uses electricity to split high-temperature steam into hydrogen
    and oxygen, similar to a fuel cell operating in reverse (specifically a
    solid-oxide fuel cell, SOFC). High-temperature electrolysis requires
    much less fundamental R&D, but the ability of the process to scale
    economically must be demonstrated.
        Finally, a major effort will be pursued in fiscal year 2005 to
    explore materials for hydrogen production processes which must endure
    high temperatures and very corrosive environments while maintaining
    structural integrity at low costs. Included in this effort will be our
    work to explore new membranes that can increase the efficiencies of the
    hydrogen production processes.

                         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 United States is moving forward with a
    geologic repository, and the Department is on schedule to submit a
    license application to the Nuclear Regulatory Commission by the end of
    2004.
        Research on improving ways to treat and utilize materials from
    spent nuclear fuel will allow the Department to optimize the first
    repository, and delay--and perhaps even eliminate--the need for future
    repositories. The Advanced Fuel Cycle Initiative, with an investment of
    $46 million for fiscal year 2005, will continue the progress made in
    the development of proliferation-resistant treatment and transmutation
    technologies that can reduce both the volume and toxicity of spent
    nuclear fuel. These technologies would support both national security
    and energy independence by reducing inventories of commercially-
    generated plutonium while recovering residual energy value from spent
    nuclear fuel. 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 program has already enjoyed considerable success. We have
    proven the ability of our UREX technology to separate uranium from
    spent fuel at a very high level of purity and also shown that a
    derivative, UREX+, can separate a combined mixture of plutonium and
    neptunium that can serve as the basis for a proliferation-resistant
    fuel for light water reactors.
        The Department's research efforts are leading to the demonstration
    of 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. We have tested
    proliferation-resistant nitride and metal transmutation fuels in the
    Advanced Test Reactor and are currently testing mixed-oxide fuels such
    as would be derived from the UREX+ process.
        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. We have organized our national
    labs, universities, and international collaborations in a manner that
    will enable this work to proceed in a coordinated manner.

                               NUCLEAR POWER 2010

        The President's Budget supports continuation of Nuclear Power 2010
    in fiscal year 2005 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. The requested funds of $10 million would support the activities
    associated with achieving NRC approval of early site permits and the
    development of Combined Construction and Operating License
    applications. (It is also critical that the Department identify the
    business conditions under which power generation companies would add
    new nuclear capacity and determine appropriate strategies to enhance
    such investment. In fiscal year 2005, the Department will continue to
    evaluate and develop strategies to mitigate specific financial risks
    associated with the deployment of new nuclear power plants.)
        In December, the Department issued a solicitation inviting
    proposals from teams led by power generation companies to initiate New
    Nuclear Plant Licensing Demonstration Projects. Under these cost-shared
    projects, power companies will conduct studies, analyses, and other
    activities necessary to select an advanced reactor technology and
    prepare a site-specific, technology-specific Combined Operating License
    application. These projects will provide for NRC design certification
    and other activities to license a standardized nuclear power plant
    design. The Department expects to award at least one project in this
    fiscal year. The focus of activities in fiscal year 2005 for these
    projects will be on development of the Combined Operating License
    application.

                 UNIVERSITY REACTOR FUEL ASSISTANCE AND SUPPORT

        The Department is very pleased with the progress we have made in
    reversing the decline in nuclear engineering in the United States. With
    significant support and encouragement from this body and your
    colleagues in the House of Representatives, we have played a large role
    in completely reversing the decline in undergraduate enrollments in
    this area of study that began in 1993 and continued through 1998. In
    1998, the United States saw only around 500 students enroll as nuclear
    engineers--down from almost 1,500 in 1992. After several years of
    focused effort, the United States now has over 1,300 students studying
    nuclear engineering. That number is set to increase further, as strong
    programs--such as at Purdue and Texas A&M--continue to grow and we see
    new programs start at schools such as South Carolina State University,
    the University of South Carolina, and the University of Nevada-Las
    Vegas.
        The growth of nuclear energy in the United States is dependent on
    the preservation of the education and training infrastructure at
    universities. The research conducted using these reactors is critical
    to many national priorities. Currently, there are 27 operating
    university research reactors at 26 campuses in 20 States. These
    reactors are providing support for research in such diverse areas as
    medical isotopes, human health, life sciences, environmental
    protection, advanced materials, lasers, energy conversion and food
    irradiation.
        The most exciting development in University Reactor Infrastructure
    and Education Assistance is the Innovations in Nuclear Infrastructure
    and Education (INIE) Program established in fiscal year 2002. In fiscal
    year 2003, two additional university consortia were awarded, bringing
    the total to six INIE grants, providing support to 24 universities in
    19 States across the Nation. The consortia have demonstrated remarkable
    collaborative efforts and strong formation of strategic partnerships
    between universities, national laboratories, and industry. These
    partnerships have resulted in increased use of the university nuclear
    reactor research and training facilities, upgrading of facilities,
    increased support for students, and additional research opportunities
    for students, faculty and other interested researchers. We are very
    pleased that the President's Budget includes $21 million for the
    University Reactor Infrastructure and Education Assistance program for
    fellowships, scholarships, nuclear engineering research, and for
    critical support to university research reactors, all of which will
    help address this shortage of well-trained nuclear scientists. (We have
    modified the structure of this program for fiscal year 2005. I am
    pleased to report that the President's request includes a small but
    important element to provide scholarships and graduate fellowships to
    students studying the vital and too-often overlooked discipline of
    health physics. The Department is concerned that the Nation may soon
    not have the trained health physicists who are needed to assure the
    safety of all nuclear and radiological activities. With this budget, we
    begin building a program to reverse the negative trends in this field
    as we have already done in nuclear engineering.)
        In another change, we will transfer responsibility for the shipment
    of spent research reactor fuel to the Office of Civilian Radioactive
    Waste Management, which is to become the Department's central expertise
    in the management of spent fuel.
        One final note in this regard, Mr. Chairman. I am sure that you
    have noticed that no funding is requested for the Nuclear Energy
    Research Initiative (NERI) in fiscal year 2005. While this program has
    successfully spurred U.S. nuclear energy R&D, we believe that the time
    has now come to integrate the program into our main-stream R&D
    programs. We will continue to make peer-reviewed NERI awards to
    university-based researchers who work in areas relevant to our
    Generation IV, Nuclear Hydrogen, and Advanced Fuel Cycle Initiative
    programs. With this step, we will engage NERI researchers at
    universities in the exciting, first-class research we are pursuing in
    cooperation with countries all over the world.

                       RADIOLOGICAL FACILITIES MANAGEMENT

        This budget request also includes $69.1 million 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 2005 budget request also includes $20.6 million to
    continue baseline operations and begin construction of 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.

                   INL--DOE'S COMMAND CENTER FOR NUCLEAR R&D

        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. The
    Department is in the process of establishing the Idaho National
    Laboratory, which will combine the resources of the INEEL and the
    Argonne-West site. As the Department's leading center of nuclear
    research and development, a core mission of this laboratory is advanced
    nuclear reactor and fuel cycle technologies, including the development
    of space nuclear power and propulsion technologies. The new Idaho
    National Laboratory will play a vital role in the research and
    development of enabling technologies for the Next Generation Nuclear
    Plant, which will support the Department's long-term vision of a zero-
    emissions future free of reliance on imported energy.
        The Department issued a request for proposals in February to find a
    management team to reduce costs and build expertise at the INL. The
    Department's nuclear energy program involves the collective talents of
    universities, the private sector, international partners and many of
    our other national laboratories--Argonne, Los Alamos, Sandia and Oak
    Ridge among them. However, the rebuilding of the Department's nuclear
    power research and development program will be centered at INL. While
    environmental cleanup remains an important focus at the Idaho site,
    real progress is being made that will aid in the expansion of nuclear
    research and development.
        Developing a central research laboratory is a major step forward
    for the nuclear energy program. We will join the other key energy
    programs at the Department by having a central, dedicated research site
    at which we can centralize our infrastructure investments and build the
    expertise needed to accomplish our program goals. A central lab also
    helps us minimize the shipment of nuclear materials across the country
    and allows us to bring our nuclear materials together in a single,
    secure location. We also expect that our new lab will become a major
    player in the education of the next generation of nuclear energy
    technologists that this Nation will need to assure our energy security
    in the future.

                                   CONCLUSION

        This concludes my prepared statement. Your leadership and guidance
    has been essential to the progress the program has achieved thus far
    and your support is needed as we engage the tasks ahead.
        I would be pleased to answer any questions you may have.

        Senator Domenici. Thank you very much. Well, the fact that
    we've started at nothing and put these things in is a good
    thing to repeat, but it's pretty pathetic when you note that
    most of them were things everybody knew we needed. It wasn't
    like this was a vision from on high, and every year because
    they didn't come out of the administration made it harder and
    harder to fund them. And now when we get a tighter and tighter
    budget, it's, you know, they're the easiest ones to choke.
        So, you know, you're getting 20 and 30 percent cuts in
    yours, while over here on the side they're saying we're for
    nuclear energy, right? You don't have to comment. You work for
    the administration.

                       STATEMENT OF SENATOR PATTY MURRAY

        Senator Murray, I note you're on a tough time schedule and
    I'm most appreciative you would come today so I yield to you.

                PACIFIC NORTHWEST NATIONAL LABORATORY FACILITIES

        Senator Murray. Well, thank you very much, Mr. Chairman.
    Thank you for your tremendous work on this committee over the
    years and your leadership in many directions. I just have a
    couple of questions for Dr. Orbach today. Dr. Orbach, you note
    the Pacific Northwest National Laboratory, PNNL. In my State
    it's one of the Department of Energy's multi-program
    laboratories and is under your stewardship at the--as Director
    of Science.
        PNNL is a very valuable asset to the State of Washington
    and it's going to be an enduring asset to the Tri-Cities
    community after Hanford clean-up is completed. I think you know
    there's been considerable concern over the schedule for the
    cleaning up of the 300 area and the replacement of the many
    facilities that currently house approximately 1,000 staff at
    PNNL. That space, I think it's 700,000 square feet, represents
    a third of PNNL's total laboratory space.
        The Tri-Party Agreement required clean-up of the Columbia
    River corridor including that 300 area by 2018. As I understand
    it, current proposed clean-up contracts assume a 2012 or 6-year
    earlier completion date. That would require those 1,000 PNNL
    employees to exit the 300 area facility by 2007. This budget,
    the fiscal year 2005 budget, has no funding for replacement
    facilities in the 300 area and I see no scenario where new
    facilities can be in place by fiscal year 2007.
        I noticed in your written testimony you talk a great deal
    about facilities and infrastructure and planning, but I don't
    see any plan from you or DOE on how those facilities at PNNL
    are going to be replaced. As owner of PNNL, Mr. Orbach, what
    are you doing to lead the effort in the Department to seek an
    aggressive program to replace those facilities at PNNL, which
    is your laboratory?
        Dr. Orbach. Thank you, Senator, for the question. We are as
    concerned as you are over the 1,000 staff members who have been
    so productive for our country. I have visited PNNL often and it
    is a magnificent laboratory and your assessment of its future
    is mine as well, and also the community's.
        We have put together some funding from our own budget from
    2003 and from fiscal year 2004, and there are funds in the
    fiscal year 2005 budget which we believe can help in this
    process, but it will require a reprogramming to use the fiscal
    year 2003 and fiscal year 2004 funds and so I hope you will
    help us in the reprogramming request.
        Senator Murray. So would you support a reprogramming in the
    fiscal year 2004 budget for that?
        Dr. Orbach. Yes.
        Senator Murray. You do, okay.
        Dr. Orbach. We may require it for 2003, 2004, and for 2005
    we will reassess our options.
        Senator Domenici. Did you ask him if they had?
        Senator Murray. I was about to. I will.
        Senator Domenici. Good.
        Senator Murray. Had you----
        Dr. Orbach. And I want to say also we're working very
    closely with the contractor, Battelle, to work together to
    provide the facilities for the staff who will be displaced from
    the 300 area. Our target date is October 2007, which as we
    understand it, would be the latest that the Office of
    Environmental Management could begin the clean-up in order to
    satisfy the river corridor agreement that it has by 2012. And
    we believe that by working with Battelle, we can achieve the
    facilities that are required to house the staff. They will be
    new facilities, they will be more efficient facilities, and in
    the long run we hope that this will be a very positive outcome
    for the laboratory.
        Senator Murray. Well, we need to get a reprogramming
    request from you as soon as possible then to get this going
    because in order to replace your facility there we're going to
    have to have some planning in place fairly quickly. And, Mr.
    Chairman, I really am concerned about DOE's initial inability
    to coordinate its clean-up and its science programs, and I
    think we have to be very concerned about DOE's planning process
    for both the labs and the clean-up sites.
        I know that the Secretary's office has become engaged in
    this matter and I've personally spoken with Mr. McSlarrow and I
    appreciate the Secretary and Mr. McSlarrow's involvement. I
    wish it hadn't risen to that level, but I do think we need
    direction from you, reprogramming requests, and to get this
    going because 2007 is not that far off when we're talking about
    an entire facility or large facility there that needs to be--we
    need to know where we're going with that, so I want to hear
    more from you on this.
        Dr. Orbach. You're absolutely right, Senator, and I have
    just met with Dr. Len Peters, the director at PNNL, and we've
    talked about the need to get moving quickly in order to begin
    the planning and construction phase. It's my view that if we
    start now that we can in fact meet that October 2007 date.
        Senator Murray. When do we expect to see the reprogramming
    request from you?
        Dr. Orbach. We need to process it through the Department
    and I'm hopeful that we can get it to you within a month.
        Senator Murray. All right. Well, Mr. Chairman, thank you
    very much. I have some other questions. I will submit them for
    the record and look forward to working with you on this.
        Senator Domenici. You understand if we get that, unless
    there's something I'm not aware of, I will hurry up. It comes
    to me and my friend in the House and we'll try to----
        Senator Murray. I appreciate that very much.
        Senator Domenici [continuing]. Try to hurry it up.
        Dr. Orbach. Thank you.
        Senator Murray. Thank you.
        Senator Domenici. Senator, would you like to inquire,
    Senator Craig?

                        STATEMENT OF SENATOR LARRY CRAIG

        Senator Craig. Thank you, Mr. Chairman. I apologize for
    running late.
        Senator Domenici. I haven't asked any questions yet, but I
    would like to yield to you for a few remarks.
        Senator Craig. Well, why don't we move right ahead into the
    questioning? You proceed with questions and then I'll come to
    questions. That would be appropriate.
        Senator Domenici. I was going to make an observation since
    this was the first time off the Senate floor this year that we
    have your presence at a committee hearing and I want the record
    to reflect that we have a very distinguished Senator here. He
    has a big record. Yesterday he completed work on a bill where
    he spent more time, took more amendments, defeated more
    amendments, all in pursuit of the bill that he wanted, that
    many wanted, only to find that in the end he had to vote
    against the bill.
        Senator, I had been leaving for a little while and taking
    naps, so when I came in, my staff said, it's very important you
    be here for the last vote because it's an important thing for
    your constituency, as you might recall, you were there. And I
    walked in and made the wrong vote. I voted aye because I had
    been wanting to help pass that bill. It turned out everything
    had kind of blown up and you were advising everyone to vote no.
    How many no votes? Everybody?
        Senator Craig. Ninety-something, yes. I don't think it was
    a demonstration of my power whatsoever. I wish it were, Mr.
    Chairman.
        Senator Domenici. It was.
        Senator Craig. But I will tell you, in the words that I've
    been here working with you and a good many other of our
    friends, I've learned a few lessons, and I've also learned that
    something that goes bad does not necessarily get better and
    that you have an opportunity to stop something and that's what
    I did yesterday.
        Senator Domenici. Yes.
        Senator Craig. Because it had grown worse than we had hoped
    it would be and because of the rules of the Senate, something
    those who want to obstruct can obstruct absolutely. We found
    that on a couple of issues that you and I had been working on
    in recent times and some of our friends on the other side I
    think have determined that this is a year of total
    obstructionism, and so we're going to have to work our way
    through those problems. Thank you.
        Senator Domenici. I do want to tell you, Senator, I'm most
    appreciative of all your work that you've put into the energy
    bill, and there's a nice story out today that the Minority
    Leader expects a victory on the floor and so it's just a matter
    of when. No, there are going to be some Senators like the ones
    you mentioned that wanted to obstruct that bill, but how many
    days are they going to get on it to make our leader frustrated?
    I don't know. I don't think it's going to frustrate him if they
    take a few days because he's made up his mind that he wants to
    send this bill to the House so that the Senate can at least go
    on record that they've produced one.

                               SCIENCE PRIORITIES

        Having said that, let me move quickly. Dr. Orbach, can you
    explain to me the department's priorities contained in this 20-
    year plan and how they were selected? Can you do that very
    quickly?
        Dr. Orbach. Yes, thank you, Mr. Chairman. We began an
    initial process in my office through our Associate Directors
    who headed each of our six programs. That set of
    recommendations is important because it began first with the
    research money. We took into account the energy bill
    authorization level and subtracted from the out-years the cost
    of doing research. The reason I stress that is that these
    facilities are not meant to displace our ability to do
    research. Research comes first. They then provide us the
    ability to do that.
        With the recommendations from the Associate Directors, we
    went out to our advisory committees, and what you see today
    reflects the advice, priorities that the advisory committee set
    with regard to the importance of the science. This is a
    science-driven prioritization.
        I then had over 50 recommendations from the advisory
    committees and I had to make them fit under the energy bill's
    authorization levels and I had to make them fit also with
    regard to time, and when we got done we had 28 facilities that
    survived.
        I was in the unenviable position of having to prioritize
    across fields, but the response of the community has been very
    positive and I believe that the scientific community is very
    supportive of this prioritization.

                  Z MACHINE APPLICATION TO THE SCIENCE PROGRAM

        Senator Domenici. Thank you very much. Now let me ask you a
    question about something technical and see if you can agree to
    do something for us. Sandia National Laboratory has developed a
    power plant concept known as the Z machine. You must have heard
    of it. It has made all kinds of news, including the front page
    of Time magazine. Shortly after we had agreed to pay for NIF
    over in California because the Z hadn't quite made it, we got a
    big announcement that Z was ready to go. What we've got now is
    about $3 billion invested in NIF and we've got Z going, a
    little cheap machine.
        This machine is the world's most powerful x-ray source, and
    extensive experiments have led the technology to make
    breakthroughs that lead to record fusion neutron yields.
    Although this program has been funded by NNSA, and that's part
    of the nuclear preparedness program of the country, the low
    cost and high efficiency seem attractive to the development of
    commercial fusion power. In fact, this facility has been
    identified by the Fusion Energy Science Advisory Committee as
    one of the three promising approaches to internal fusion
    energy.
        I would greatly appreciate it if you would visit Sandia and
    spend some time with the scientists associated with Z and would
    be willing to visit the facility. After you've done that and
    had the opportunity to evaluate it, I would be interested in
    your thoughts on its application to the science program. Can
    you do that?
        Dr. Orbach. Yes, Mr. Chairman, I'd be delighted. I've been
    briefed on the Z-Pinch machine. It is a magnificent
    accomplishment and I am scheduled to visit Sandia on the 24th
    of May.
        Senator Domenici. That's great.
        Dr. Orbach. And I will be spending a good portion of my
    time there to talk to the people on the Z-Pinch. They have some
    very clever ideas for renewing it with a liquid wall, which
    might help in the fusion energy area.

                            GENOMES TO LIFE PROGRAM

        Senator Domenici. I have a question with reference to ITER,
    but I'll just submit that and I'll move on to Genomes to Life.
    This project focuses on the utilization of genome maps and
    understanding of genome, or genomic functions in seeking
    solutions to DOE missions. Funding increases by $4 million to
    $67 million from its inception. It's accurate to say that the
    entire program was created by virtue of a discussion which very
    few people know about which took place in my office with a very
    distinguished scientist named Charles DeLisi. You may or may
    not know him but he was with the NIH.
        He decided he didn't like the NIH because they didn't like
    genome research, believe it or not. Think of that. They covet
    it today as their great baby, but they literally didn't want to
    do it, so he left and went to the Energy Department. He came to
    my office and talked me into funding it. Believe it or not,
    when I got it funded, NIH decided that they should too, so it
    turned out--you wonder why DOE and NIH are in it, that's why,
    because I introduced a bill, put it all in DOE, and that
    brought the people who are for NIH to my office and we changed
    the bill so they both got funding. Great things happened much
    quicker than expected in producing the genome mapping of the
    human system. You're aware of that.

                      PROTEIN AND MOLECULAR TAGS FACILITY

        I note that you plan to start project engineering and
    design for dedicating a facility, a facility for the production
    and characterization of protein and molecular tags. I
    understand that you will conduct a competition for the site of
    that facility. What's the status of that competition? How will
    this benefit the Genomes to Life program?
        Dr. Orbach. First of all, Mr. Chairman, I want to thank you
    for your support----
        Senator Domenici. You're welcome.
        Dr. Orbach [continuing]. Of genomics and the Genomes to
    Life program. It has been a tremendous success. What this
    project does is to take us from the structural elements that we
    have been able to study through our sequencing to the dynamics
    of how cells actually function, and this particular factory
    will produce, as you noted, proteins for our scientists in the
    United States which are tagged.
        We are currently in the final stages of preparing the
    competition amongst all of the DOE laboratories for the
    facility, and we are working towards the formal RFP as we
    speak.

                                 GENOME SCIENCE

        Senator Domenici. How do you generally, for 2 minutes,
    think genome is going? The evolution of the genome science, is
    it going well?
        Dr. Orbach. It's going wonderfully. The relationship with
    NIH is as you described it. The DOE has the ability to create
    these large-scale machines using, as you said in your opening
    remarks, the physical sciences that we have available. This is
    truly a factory. This will produce proteins that are tagged so
    there will be a common way of identifying them and visualizing
    them in cellular function. Your assistance and really
    initiation of this project has had phenomenal impact.
        Senator Domenici. You know, it's interesting when people
    look around and read from time to time some experts tell us,
    Greenspan testifies and my friend, Senator Craig, gets a hold
    of it and goes to the floor and gives a speech because
    Greenspan says productivity went up 8.2 percent and it doesn't
    bother him because he doesn't have too much hair, but people
    that have got a lot of hair, they go bald-headed when they hear
    such a thing. That's incredible.
        But I'll give you an example. We produced the entire
    mapping of the protoplasm of the human genome in half the time
    predicted when we started the program, half. It was supposed to
    take 20-plus years, it took 10. Why? Well, because the machines
    that we used to do it, computers, were never imagined to have
    the capacity in such a short time that they had. That's a
    perfect example of productivity. The productivity was
    incredible in producing the mapping of the human genome, wasn't
    it? It was so big that it caused us to produce the most complex
    set of information in half the time, which is the genome
    mapping of the human body.
        I think we haven't even come close to its utility, is that
    correct?
        Dr. Orbach. Absolutely, and what you've said is true in
    spades. The sequencing facility we have in Walnut Creek used to
    cost $2 a base pair to sequence. It now costs two-tenths of a
    cent, so it's a factor of 1,000 increase in productivity that
    this factory has achieved. It can now sequence two human
    genomes a year.
        Senator Domenici. Entirely?
        Dr. Orbach. Entirely, so that 10 years is now compressed
    into 6 months.

               ADVANCED REACTOR HYDROGEN CODE GENERATION PROJECT

        Senator Domenici. Just a couple more. This one has to do
    with Senator Craig and I. Mr. Magwood, general funding under
    the title of nuclear energy, last year as part of the 2004, $15
    million was included in the Generation IV initiative so the
    Department could begin the research, development, design work
    on an advanced reactor hydrogen code generation project at
    Idaho National Laboratory.
        Senator Craig and I sent a letter to Secretary Abraham
    urging him to make a competitive solicitation for this project.
    The response we received, signed by the Secretary, reassuring
    Senator Craig and me that the Department intended to undertake
    this design competition this year. Do you recall that, Senator?
        Senator Craig. I do.
        Senator Domenici. Now, can you please tell us what you have
    prepared for the budget and the schedule for this solicitation,
    and what you believe your funding requirements will be for
    2005? Are the funds requested sufficient to support the
    engineering design of at least two competing concepts as
    spelled out in H.R. 6 prior to selecting the final choice?
        Mr. Magwood. Mr. Chairman, we have been working very hard
    over the last several months since the 2004 appropriation was
    passed to put in place the kind of program that you're
    describing. We do expect to have some sort of solicitation
    available for the industry and others to look at this fiscal
    year, fiscal year 2004, and we believe that the funding that we
    have available in fiscal 2004, and what we have requested in
    fiscal 2005, which by the way is an increase for this activity
    of about $4\1/2\ million over the 2004 request, 2004
    appropriation rather, is sufficient to move forward.
        Obviously, if we move forward with a major project,
    significantly more funds will be needed, but at this stage of
    the game, we believe that what we've asked for is enough.

             WORLD NUCLEAR POWER PLANTS UNDER CONSTRUCTION ON ORDER

        Senator Domenici. I have two other questions for you, Mr.
    Magwood, and then I'll proceed to yield to Senator Craig. One,
    could you get for us at your earliest convenience a current
    status of the construction of nuclear power plants in the
    world? Get us a report that says as of this date, whatever date
    that is, three plants are being built in Taiwan, two in China,
    one somewhere else, so we would know just how many plants the
    world is building, and if you can, tell us what their status is
    and what kind they are, we'd appreciate it.
        Mr. Magwood. Be happy to do that.
        [The information follows:]

                                               WORLD NUCLEAR POWER PLANTS UNDER CONSTRUCTION AS OF JANUARY 1, 2004
    --------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                           Year of
                                                                                                              Capacity     Expected
                  Country                        Name                 Location               Type \1\          (MWe)      Commercial          Comments
                                                                                                                        Operation \2\
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    USA...............................  Browns Ferry 1.......  Decatur, AL..........  BWR..................      1,065         2007    Approximately $1.7
                                                                                                                                        billion is being
                                                                                                                                        invested over five
                                                                                                                                        years to return this
                                                                                                                                        unit, which has not
                                                                                                                                        operated since 1985,
                                                                                                                                        to service.
    Argentina.........................  Atucha 2.............  Buenos Aires.........  PHWR.................        962           NA    Suspended
                                                                                                                                        indefinitely.
    China.............................  Tianwan 1............  Jiangsu..............  VVER.................      1,000         2004
    China.............................  Tianwan 2............  Jiangsu..............  VVER.................      1,000         2005
    China--Taiwan.....................  Lungmen 1............  Taipei...............  BWR..................      1,300         2006
    China--Taiwan.....................  Lungmen 2............  Taipei...............  BWR..................      1,300         2007
    India.............................  Kaiga 3..............  Karnataka............  PHWR.................        202         2007
    India.............................  Kaiga 4..............  Karnataka............  PHWR.................        202         2007
    India.............................  Kudankulam 1.........  Tamil Nadu...........  VVER.................        917         2007
    India.............................  Kudankulam 2.........  Tamil Nadu...........  VVER.................        917         2008
    India.............................  Rajasthan 5..........  Rajasthan............  PHWR.................        202         2007
    India.............................  Rajasthan 6..........  Rajasthan............  PHWR.................        202         2008
    India.............................  Tarapur 3............  Maharastra...........  PHWR.................        490         2007
    India.............................  Tarapur 4............  Maharastra...........  PHWR.................        490         2006
    Iran..............................  Bushehr 1............  Bushehr..............  PWR..................        915         2005
    Japan.............................  Hamaoka 5............  Shizuoka.............  BWR..................      1,325         2005
    Japan.............................  Higashidori 1........  Aomori...............  BWR..................      1,067         2005
    Japan.............................  Shika 2..............  Ishikawa.............  BWR..................      1,304         2006
    North Korea.......................  LWR-Project 1........  Kumho................  PWR..................      1,040           NA    Construction
                                                                                                                                        suspended pending a
                                                                                                                                        decision, to be made
                                                                                                                                        before 12/1/04, on
                                                                                                                                        whether support for
                                                                                                                                        this project by the
                                                                                                                                        Korean Peninsula
                                                                                                                                        Energy Development
                                                                                                                                        Organization (KEDO)
                                                                                                                                        should continue.
    Romania...........................  Cernavoda 2..........  Cernavoda............  PHWR.................        655         2007
    Russia............................  Balakovo 5...........  Saratov..............  VVER.................        950         2008
    Russia............................  Kalinin 3............  Tver.................  VVER.................        950         2004
    Russia............................  Kursk 5..............  Kursk................  RBMK.................        925         2006
    Russia............................  Rostov 2.............  Rostov...............  VVER.................        950         2007
    South Korea.......................  Ulchin 5.............  Ulchin...............  PWR..................        950         2004
    South Korea.......................  Ulchin 6.............  Ulchin...............  PWR..................        950         2005
    Ukraine...........................  Khmelnitski 2........  Neteshin.............  VVER.................        950         2004
    Ukraine...........................  Rovno 4..............  Kuznetsovsk..........  VVER.................        950         2004
                                       ---------------------------------------------------------------------------------------------------------------------
          Total.......................  .....................  .....................  .....................     24,130  .............
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    \1\ BWR-Boiling Water Reactor; PWR-Pressurized Water Reactor; PHWR-Pressurized Heavy Water Reactor; LMFBR-Liquid Metal Fast Breeder Reactor; VVER-Soviet-
      designed PWR; RBMK-Soviet-designed boiling water, graphite-moderated, pressure-tube reactor.
    \2\ NA-Not Announced.

    Sources: IAEA Power Reactor Information System; Uranium Information Centre/World Nuclear Association; Nuclear News 2004; organization press releases/web
      pages.

                                WORLD NUCLEAR POWER PLANTS ON ORDER AS OF JANUARY 1, 2004
    ----------------------------------------------------------------------------------------------------------------
                                                                                                          Year of
                                                                                             Capacity     Expected
                   Country                          Name                   Type \1\           (MWe)      Commercial
                                                                                                       Operation \2\
    ----------------------------------------------------------------------------------------------------------------
    China...............................  Lingdong 1.............  PWR....................      1,000         2012
    China...............................  Lingdong 2.............  PWR....................      1,000         2012
    China...............................  Sanmen 1...............  PWR....................      1,000         2012
    China...............................  Sanmen 2...............  PWR....................      1,000         2012
    Finland.............................  Olkiluoto..............  PWR....................      1,600         2009
    India...............................  Kaiga 5................  PHWR...................        489           NA
    India...............................  Kaiga 6................  PHWR...................        490           NA
    India...............................  Rawatbhata 7...........  PHWR...................        490           NA
    India...............................  Rawatbhata 8...........  PHWR...................        491           NA
    Japan...............................  Fuikishima 7...........  PWR....................      1,325         2009
    Japan...............................  Tomari 3...............  PWR....................        912         2009
    Japan...............................  Fuikishima 8...........  PWR....................      1,325         2010
    Japan...............................  Higashidori 1-2........  BWR....................      1,320         2011
    Japan...............................  Shimane 3..............  BWR....................      1,375         2011
    Japan...............................  Tsuruga 3..............  PWR....................      1,500         2011
    Japan...............................  Higashidori 2..........  BWR....................      1,320         2012
    Japan...............................  Ohma...................  BWR....................      1,350         2012
    Japan...............................  Tsuruga 4..............  PWR....................      1,500         2012
    Pakistan............................  Chashma 2..............  PWR....................        300         2011
    South Korea.........................  Shin Kori 1............  PWR....................        950         2008
    South Korea.........................  Shin Kori 2............  PWR....................        950         2009
    South Korea.........................  Shin Wolsong 5.........  PWR....................        950         2009
    South Korea.........................  Shin Kori 3............  PWR....................      1,350         2010
    South Korea.........................  Shin Wolsong 6.........  PWR....................        950         2010
    South Korea.........................  Shin Kori 4............  PWR....................      1,350         2011
    South Korea.........................  Ulchin __..............  PWR....................      1,350         2015
    South Korea.........................  Ulchin __..............  PWR....................      1,350         2015
                                         ---------------------------------------------------------------------------
          Total.........................  .......................  .......................     28,987
    ----------------------------------------------------------------------------------------------------------------
    \1\ BWR-Boiling Water Reactor; PWR-Pressurized Water Reactor; PHWR-Pressurized Heavy Water Reactor.
    \2\ Not Announced.

    Source: Uranium Information Centre/World Nuclear Association.

                         ADVANCED FUEL CYCLE INITIATIVE

        Senator Domenici. You know, Mr. Magwood, some of us in this
    Congress are very happy that the President and the Secretary
    have finally come around. They're talking about trying to stop
    proliferation of Weapons of Mass Destruction in the broadest
    sense, stop the proliferation of the great scientists, you know
    about that. We're trying to stop the flow of plutonium, got a
    big program going, highly enriched uranium, we've bought a
    bunch of it from them, a lot of things, cost a lot of money,
    but we've started.
        Now, I am very concerned. With that going and the threat of
    nuclear proliferation, what's the basis for reducing funding
    for this account, Advanced Fuel Cycle Initiative, from $66
    million to $46 million? Would you update the committee as to
    what you hope to achieve this year, when you expect to have a
    project ready for deployment?
        Mr. Magwood. Yes, Mr. Chairman. First, I should say that
    the Advanced Fuel Cycle Initiative really has shown tremendous
    progress over the last several years and continues to show
    progress. For example, we have successfully demonstrated on a
    laboratory scale the separation of pure uranium from spent
    fuel, to the point of 99.999 percent purity.
        We've also demonstrated on a laboratory scale the
    separation of a mixed neptunium/plutonium fuel that we believe
    could form the basis of a new proliferation-resistant
    recyclable fuel for the future, and this work is going to
    continue in increasing scale in fiscal 2005.
        So our primary missions for this program will continue. We
    will continue to make progress. The reduction that you spoke of
    is primarily because we are deferring the project of a large
    commercial-scale facility for UREX+ until we've gained greater
    confidence that this technology is really viable commercially.
        That said, there are--we are going to continue to fund our
    primary missions for the program. That will continue.
        Senator Domenici. Senator Craig.
        Senator Craig. Mr. Chairman, thank you very much. Let me
    use my time both to ask questions and make in positioning those
    questions somewhat of an opening statement, and I'll address my
    questions at you, Bill, and I do thank all the rest of you for
    being here.

                    ADVANCEMENT OF NUCLEAR ENERGY TECHNOLOGY

        Bill, your prepared statement starts off by talking about
    the times not so many years ago when this country was very
    close to abandoning advanced nuclear reactor research and
    development. I remember those years very well. As a matter of
    fact, the chairman and I wrote a letter to the then-Secretary
    of Energy, Federico Pena, and we told him this in our letter,
    and I'm going to quote from that letter, that was 1997.
        The Chairman and I said, the coming fiscal year will mark a
    notable event in the history of your agency and its
    predecessors. For the first time since the establishment of the
    Atomic Energy Commission more than 40 years ago, the United
    States Government has no program to further the development of
    nuclear energy for the production of energy. This change, in
    the view of many, of the technology's critics is long overdue.
    However, in the view of many members of the Senate and in the
    view of the Nation's energy experts, the lack of a strong and
    reliant nuclear energy research and development program
    represents a major gap in the Department of Energy's research
    and development agenda.
        The year is now 2004. We've traveled a long way on nuclear
    energy since I signed that letter along with the chairman. I
    appreciate your efforts in the progress we've made and I mean
    that most sincerely, but I must suggest to you that the state
    of our nuclear energy program is nearly as fragile and
    vulnerable today as it was when we sent that letter in 1997,
    and I will further suggest that the nuclear energy budget
    proposal for fiscal year 1995 is as--is a--2005--is a discredit
    to the progress that we've made. I believe the chairman has
    made similar strong statements.

                     INEEL SOLICITATION AND INFRASTRUCTURE

        That's the basis of my following questions, the question
    that the chairman just asked was my first question, and I
    appreciate him asking it. So, having heard that answer, Bill,
    let me ask you this question. Since you will be issuing a
    solicitation, why have you not engaged the experts at the Idaho
    labs, the INEEL and Argonne, that are supposedly DOE's command
    center of nuclear R&D? To my knowledge, you have not engaged
    anyone in the lab in this initiative yet. Is that true?
        Mr. Magwood. In the actual solicitation?
        Senator Craig. In the process.
        Mr. Magwood. In the process, not yet, and that's because we
    are still working within my office to put a plan on the table
    where we can sit down with those lab scientists and discuss the
    ins and outs and the particulars of it. It's been my experience
    that before sitting down with the scientists who are trying to
    deal with very technical issues, it's been my job to set the
    framework as to how to accomplish a particular mission, and
    that's proven successful in the past and that's what we're
    implementing this time.
        Senator Craig. Well, I thank you for that, because the
    Office of Nuclear Energy is currently responsible, I think is
    the lead program office for the INEEL. Because you have this
    lead, most of the costs for supporting the INEEL's
    infrastructure being transferred over to the nuclear energy
    budget, my conclusion is that the nuclear energy budget is not
    growing sufficiently to support the infrastructure that your
    program is becoming responsible for at Idaho.
        I think this leads to a very dangerous situation. You can
    either not support the infrastructure adequately, a program
    that some would say already exists, or you can raid your small
    research budget to support the infrastructure. Over time, the
    nuclear energy program might reach a point where it is doing
    very little research but is merely supporting an aging
    infrastructure. Either way, it is a bad situation for nuclear
    energy, for Idaho, and for the country from my perspective.
        We even had a recent example, I think, with the Advanced
    Test Reactor, the only operating test reactor in Idaho and one
    of the few in the DOE complex. What happened? It was shut down
    because the safety documentation was not up to date. Lack of
    resources, lack of initiative, down goes the reactor. Question:
    Do you believe the budget you are requesting is sufficient to
    fully support the Idaho infrastructure as well as research you
    are charged with doing?
        Mr. Magwood. Senator, I would say that clearly--you use the
    word fragile--and I clearly agree with that. I think that the
    program is at a fragile state at this point in history, but
    nevertheless, still poised for some considerable growth. In the
    case of the infrastructure and research program that we've laid
    out for fiscal 2005, I do believe that it's sufficient to meet
    the primary missions that we've set out for ourselves.
        We have a long way to go to build this laboratory. It's
    going to be a long, hard process that we think will take 10
    years to really accomplish. So while this fiscal year 2005
    budget request is a first step, a fragile first step, it is
    only the first step, and I think that what we do in fiscal
    years 2006 and beyond will probably be more important to the
    future of the laboratory than what we've done in 2005.
        Senator Craig. Well, I guess my greatest concern, one last
    comment----
        Senator Domenici. Sure.
        Senator Craig [continuing]. Mr. Chairman, it is that
    tearing down and then building back can be a very expensive
    process, one that I doubt this country could afford to do or
    would be willing to do. Sustaining and building on a sustained
    base is something that we can afford to do and should.
        Now finally, I have many concerns, I think, with DOE's
    request for the proposals for the Idaho lab. This is not, I
    think, the forum to explore all of those concerns, but let me
    say this. The Idaho congressional delegation will be sitting
    down with the Secretary. We are very concerned about DOE's
    draft RFP. It does not reflect, we believe, the principles
    necessary to build a sustainable new mission. We--and I say
    this, Mr. Chairman--I know that Los Alamos is facing a
    recompetition in its operating contract in the near term.
        Senator Domenici. Yes.
        Senator Craig. I think that we have at stake some very
    important issues to address with DOE as we craft RFP's for the
    sustainability and growth of these laboratories. So I say that
    as now not just an observer, but one who's fully engaged in an
    RFP that--the devil is in the details, and we're very much
    focused on the details.
        I thank you very much, Bill, to all of you thank you much.
    Mr. Chairman, thank you.

                      ENERGY EFFICIENCY PROGRAM DIRECTION

        Senator Domenici. Mr. Garman, did we fail to ask you
    something that is important in your opinion that you want put
    on the record?
        Mr. Garman. I would like to mention one thing, Mr.
    Chairman.
        Senator Domenici. Please do.
        Mr. Garman. And I appreciate the opportunity. You said
    something a little earlier about gaining control of the program
    and understanding and being able to be accountable for the
    things we spend----
        Senator Domenici. Yes.
        Mr. Garman [continuing]. And to assure the taxpayers are
    receiving value for their dollars. I think the committee will
    note that we have sought an increase in funding for program
    direction, which is not a very popular thing to do and a very
    difficult thing to talk OMB, much less the Congress, into
    doing.
        But we've done that and we were successful in making our
    case to OMB and we think it's important, because quite frankly,
    we heard what you said in your direction to us in prior
    conference reports that we must have an increased vigilance in
    project management and that we take project management very,
    very seriously. And candidly, in the past we ceded some of our
    responsibilities to contractors and others that we need to re-
    federalize to ensure that we're doing a good job. More money
    will actually get to the lab at the bench doing R&D, which is
    the important thing, and so I do leave you with that plea and
    thank you for that opportunity.
        Senator Domenici. Well, thank you. Thank you to all three
    of you and for the record, I'd like to close with two things.
    First, it's my understanding that Senator Stevens from Alaska
    has questions he's going to ask of you. They're going to be
    submitted. Please answer them as quickly as you can. I ask that
    any other questions submitted to you by me or any other members
    of the committee receive your response within 2 weeks, and
    again, I said if you can't do it, tell us so we don't sit over
    here getting mad at you for not doing your work. The record
    will be left open for 2 weeks for members to submit questions,
    so watch for them also.

                                 YUCCA MOUNTAIN

        Senator Craig, I would just like to talk with you a moment
    about the status of nuclear power in the world and what a
    terrible mistake the United States has made, is making. You
    know, there is nobody, no country trying to build a Yucca
    facility, just America. France has 87 percent of its facility
    from nuclear. Countries have lots of nuclear power. So I ask
    for the record for conversation, that we be able to talk about
    what's even happening today, how many new reactors are being
    built.
        Senator Craig. Good point.
        Senator Domenici. Lots of them. I don't mean 50, but I can
    check off six or eight that I know about. What are we doing?
    Nothing. Every year we have a fight over how much is enough for
    Yucca and we all with bated breath wonder, is the Nuclear
    Regulatory Commission (NRC) going to really license them,
    aren't they?
        And if you go to Europe or France and you'd say, I'd like
    to see your spent fuel rods. Oh, fine, we'll take you. They put
    you in a bus and blindfold you--no they don't, but they could--
    and say, we're here and let you out. You walk into this
    beautiful building, looks like a great schoolhouse, modern
    schoolhouse, and once you're in the doors, they say, now you
    can look all around. And you look around and you say, this is
    where all the nuclear waste is, and you say, well, what are you
    talking about. Well, now you can just look down and you look
    down and it's all in the floor in casks, glass casks. Spent
    fuel rods are in there and the whole thing is filled with glass
    of some kind and you walk all over the place and there's no
    radioactivity escaping, it never will, and they may take it out
    of there in 100 years. They plan to get it out in 50 but
    they're wondering how crazy, why do we want to do that and just
    disturb everybody. It's very safe.
        Here we sit with the tail end of this tiger haunting us,
    the greatest engineers in the world. This morning we read we're
    following old Rover around up there on the red planet, right?
    Trying to find out how much water was up there, how many
    thousands of years ago, and America can't find a way to dispose
    of in a safe manner high-level waste so you can build some
    nuclear reactors.
        To me, one of the most astounding failures on the part of
    talent and leadership that the world has ever seen, and we're
    all worried about energy. Now we're going to run out of the
    next one, which is natural gas. We've already run out of crude
    oil, now pretty soon natural gas, and then pretty soon after
    that, who knows? But we've got 15 big power plants in a row
    waiting there, where's my natural gas, right, 15, I think, or
    13, up almost 1,000 kilowatts each. Not a single one plans to
    use coal, geothermal, nothing, all natural gas.
        Well, to me, we have a little bit of a role up here when
    we're in the Senate for a while, we're only here a few years.
    But I tell you, I'm going to continue to make the point and try
    to make the proposition wherever I can that the United States
    must get on with this, and frankly I wouldn't be at all adverse
    right now, as late as it is, to pick a site for interim storage
    and do it. You know, Senator, we've come that close.
        Senator Craig. Oh, yes.
        Senator Domenici. If we didn't have the President we had at
    that point, we would already be building interim storage some
    place and it wouldn't have been the least bit dangerous to
    anybody except those who want to run around and claim that the
    world's dying because there's radioactivity coming out of spent
    fuel. So obviously you can't help but get my lecture.
        Senator Craig. Well, Mr. Chairman, for those of us who
    worry about a variety of issues when it comes to energy, I so
    totally agree with you that we've not only made some missteps
    and some poor judgement over time because of the political
    pressures involved, but we've been unwilling to lead.
        The reason I was late coming here, as I was sitting down
    with the new Minister for Energy from Canada. Canada loves us
    at the moment and they'll continue to love us more because
    we're not developing energy and they are and they're anxious to
    send it south. And I'm glad they're our northern neighbors,
    because if we cannot rely on ourselves, thank goodness we've
    got them to rely on.
        But the consequence of doing that is that the $35 billion
    that flows north today will be $40, then $50, then $60, then
    $80, then $100 billion a year and more, and that's not good
    business that some of that can't stay here. That'll be our
    companies north of the border working with Canadians and
    Canadian companies.

                                 CLIMATE CHANGE

        But lastly, I found it fascinating, I was in Milan this
    winter for the climate change conference. The world has
    significantly changed since I was in Belgium a few years ago
    where I was almost--put it this way--a riot almost occurred, we
    almost were succumbed by eggs and pies in the face and all of
    that. Today the world recognizes a folly so defined. The
    Minister of Energy for Italy, now that Italy has ratified the
    Kyoto Protocol, suggests that they can't meet it. In fact,
    their gases today, emissions, are a factor of 5, 4 or 5 percent
    higher than they were at the time. You cannot grow today in the
    world using hydrocarbons without greater emissions and nobody
    wants to die, economically speaking.
        I met with the Minister of Environment for Japan. Japan was
    at 6 percent above 1999 gas emissions at the time they signed
    it. They are now 13 percent and she opined as to how they could
    not meet, and they've even become an aggressive nuclear reactor
    developer.
        So it is significant out there that politics sometimes
    mislead us dramatically, but the reality is that those
    emissions levels cannot be met, because we're driving the world
    toward greater use of hydrocarbon, and unless we advance the
    technologies of their utilization, we don't meet anywhere near
    those standards unless we just turn our economy off.
        Lastly, we met the 1999 standards about 6 months ago, 8
    months ago in this country, and the reason we did was because
    we were in a recession and we reduced our employment by 2.5,
    almost 3 million jobs, and we met the standard or were right at
    it. That's the bad news, so you see they can be met, and for
    those of us who went to the floor and spoke of those realities,
    guess what? We were right. I don't like to be right on those
    kinds of issues, but we were.
        Now, the good news is that we come back--as we come back
    online, and we are, our unit of utilization of hydrocarbons is
    less per unit of production. Our emissions are less per unit of
    production coming back online because the technologies we are
    applying are newer. We're not using less hydrocarbon, we're
    using it differently, and those of us who have advocated
    technology and the application of technology over the years
    again are right as it relates to economic growth development
    and jobs.
        And the combination of the two, and that's what the
    chairman has always driven toward, the development of
    hydrocarbons and the combination of nuclear energy, is the
    right combination. So we're not going to give up on this fight.
    I hope the chairman is right that the Minority Leader will
    support us in the policy you've developed. Our new hurdle will
    be the House again and we'll work closely over there to see if
    we can't get something accomplished this year, but thank you
    for your leadership, Mr. Chairman. It's greatly appreciated.

                         ADDITIONAL COMMITTEE QUESTIONS

        Senator Domenici. Thank you very much, Senator. I just want
    to say, what one should do as you listened to all statements
    just made by the good Senator from Idaho, we probably ought to
    conclude our remarks by saying we speak of nuclear because it
    has not contributed any of the pollutants we're worried about,
    zero. So it's not like we were for it because we did it once
    and it's our baby. It's because the pollutants that we're
    worried about and the pollutants that are going to ruin China
    come from coal, come from those kinds of products which they're
    going to all have to produce because everybody's scared of
    nuclear. Nuclear produces none excepting fear and trauma from
    those who are scared and question what we do with the waste.
        [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

                           TWENTY YEAR FACILITY PLAN

        Question. Given the strong support demonstrated by the Secretary
    for your 20 year facility plan can you help me understand how this
    budget supports these new priorities?
        Answer. The 20-year facility plan is not a budget document and
    reflects a most aggressive and optimistic view of future funding for
    the Office of Science. Affordability of these facilities will depend
    upon many factors in the future, and the list of facilities may change
    as science priorities evolve and mature. In the fiscal year 2005
    request, funding is provided for the top 5 facility priorities in the
    plan as follows: ITER $7,000,000; Ultrascale Scientific Computing
    capability $38,212,000; Joint Dark Energy mission $7,580,000; Linac
    Coherent Light Source $54,075,000; and Protein Production and Tags
    $5,000,000. We consider the above facilities to be near-term priorities
    for the next decade.

            INTERNATIONAL THERMONUCLEAR EXPERIMENTAL REACTOR (ITER)

        Question. Can you explain why the Department purposefully ignored
    congressional direction in this regard?
        Answer. We believe the Department has not ignored Congressional
    direction because the fiscal year 2005 budget request does not reduce
    the overall level of domestic fusion research to any significant extent
    as a result of ITER preparations. Where appropriate, domestic fusion
    experimental, theoretical and enabling technology research is
    reoriented more toward the needs of ITER. This research is performed by
    existing fusion scientists and engineers. Only a very small amount, on
    the order of $1 million of the ITER preparations request of $38
    million, is for industrial preparations at this time. This
    reorientation of fusion research has resulted in some shifts in
    priorities, such as reducing facility operating time and focusing
    technology more on the near-term, but overall the domestic fusion
    research is not reduced to any significant extent.
        Question. Can you please update the subcommittee on the ongoing
    negotiations to pick a location for the project?
        Answer. The ongoing negotiations are centered on the two host
    candidates, Japan and EU. These two governments are communicating with
    each other and trying to find a solution. On the periphery, all of the
    negotiating parties are still discussing various technical aspects of
    the two candidate sites; however, this is not likely to be decisive as
    both sites are considered to be fully acceptable.
        Question. What does the funding curve look like for this large
    international project?
        Answer. Assuming the site negotiations are successful and the ITER
    International Agreement is completed, fiscal year 2006 would be the
    earliest time to start the ITER construction project. According to a
    preliminary cost and schedule estimate--which has yet to be validated
    according to the project management guidelines for capital assets set
    out in DOE Order 413.3 and OMB Circular A-11--the profile of the U.S.
    funding share would begin in fiscal year 2006, peak around fiscal year
    2010 at about $190 million, and end in fiscal year 2013.
        Question. How much funding is the United States expected to provide
    on an annual basis going forward and how does that compare with our
    international partners on this project?
        Answer. The U.S. contributions to the project, mainly in the form
    of hardware, but also including some personnel to work on the project
    and some cash for common expenses, would be about 10 percent of that
    required for the total project. That is essentially the same as all of
    the non-host partners.

                     WHO CONTROLS THE HYDROGEN INITIATIVE?

        Question. Who is ultimately responsible for the overall hydrogen
    initiative, and what controls will be implemented to ensure the
    taxpayers are getting best deal for the research dollars?
        Answer. Within the Department of Energy, the Offices of Energy
    Efficiency and Renewable Energy (EE), Fossil Energy (FE), Nuclear
    Energy, Science and Technology (NE), and Science (SC) participate in
    the hydrogen initiative. As stated in the DOE Hydrogen Posture Plan,
    the Office of Energy Efficiency and Renewable Energy leads the effort
    and is responsible and accountable for DOE's success or failure in
    carrying out the Plan.
        The Hydrogen Posture Plan includes performance-based milestones
    that will be used to track progress of the hydrogen initiative. Based
    on a recommendation by the National Academies, the Hydrogen, Fuel
    Cells, and Infrastructure Technologies Program is establishing an
    independent systems-analysis activity to help prioritize research,
    evaluate program risks, and ensure that results meet requirements. The
    Program will undergo periodic peer reviews of its plans and research
    such as the one just recently performed by the National Academies.
        The approach of the Department's four offices working together has
    been to:
      --Update internal planning documents annually to support the
            administration's request for the President's Hydrogen
            Initiative;
      --Ensure EE, FE, NE and SC budget submissions to OMB support the DOE
            Posture Plan and that there are no gaps or redundancies in
            requested budgets;
      --Plan solicitations and evaluate proposals; and
      --Evaluate funded research.
        No conflicts have arisen between the four DOE offices participating
    in the hydrogen initiative thus far. Should conflicts arise in the
    future, the Under Secretary for Energy, Science and the Environment
    will ensure program and budget integration, as all of the Assistant
    Secretaries and Directors of the four offices involved in the effort at
    DOE report to the Under Secretary.
        The Department also works closely with the Department of
    Transportation, which currently has a small role, but whose
    participation will grow more important as hydrogen technologies advance
    toward commercialization.

                   R&D VS. FUNDING FOR DEMONSTRATION PROJECTS

        Question. How is DOE deciding on and managing the balance between
    funding for the necessary research for the required breakthroughs and
    funding for demonstration projects using current technology platforms?
        Answer. A continuum of research and development, from basic science
    to demonstration, will be needed to develop a long-term hydrogen
    economy.
        Basic science will be performed in areas that are only conceptual
    but have the potential for making major impacts. An example would be
    photoelectrochemical production of hydrogen (direct solar conversion
    without the intermediate step of electrolysis). Although conversion
    efficiencies are orders of magnitude too low, the potential benefit is
    great because of the large renewable resource available. This research
    may take decades to come to fruition.
        Exploratory and applied research will be done in areas where there
    is proven performance but a large gap still exists between current
    technology and what is needed to meet consumer requirements. An example
    is hydrogen storage, where approaches such as metal hydrides are
    proven, but we still need improvement factors of two to three times
    current values to meet our requirements. As performance improvements
    are made, cost targets become more important.
        Demonstrations are appropriate when technology has matured to the
    point that system integration issues must be addressed and performance
    under real-world operating conditions must be evaluated. Further
    research or significant progress may still be needed to reduce cost,
    but system performance must be validated. Demonstrations may uncover
    operating issues not previously considered, such as performance in
    certain climates, and will guide and refocus future R&D efforts.
        The National Academies' hydrogen report recommended that the
    Department shift away from some development areas towards more
    exploratory work. Exploratory research involves the application of
    novel ideas and new approaches to ``established'' research topics, and
    is likely to catalyze more rapid advances than basic research and more
    innovative advances than applied research. The Department is doing this
    through the Hydrogen Storage Grand Challenge, which includes the
    establishment of three ``Centers of Excellence'' led by national
    laboratories along with multiple university and industry partners. This
    could be a model for ``expert'' centers focusing on other priority
    research areas.

                       CENTERS FOR EXCELLENCE IN HYDROGEN

        Question. How do you plan to fund your soon-to-be announced centers
    for excellence in hydrogen storage, and future R&D efforts?
        Answer. Funding for the Hydrogen Storage Grand Challenge
    solicitation was requested in the fiscal year 2004 budget. However, due
    to the number of and funding associated with Congressionally-directed
    projects in the fiscal year 2004 hydrogen account, no funds are
    available to start the Centers of Excellence and other projects
    selected under the Grand Challenge this year. These efforts will be
    initiated in fiscal year 2005 with fiscal year 2005 funds, subject to
    the availability of funds.

                                STORAGE CENTERS

        Question. Will you start any activity this year for these storage
    centers to begin the important groundwork?
        Answer. No. Due to the number of and funding associated with
    Congressionally-directed projects in the fiscal year 2004 hydrogen
    account, no funds are available to start research in the Centers of
    Excellence and other projects selected under the Grand Challenge this
    year.

                              OMB FUNDING REQUEST

        Question. Your [EE] budget has an unusually large funding increase
    for Program Funding within the Renewable section. Funding increased by
    67 percent from $12.3 million in fiscal year 2004 to $20.7 million. How
    did you get this funding request by OMB and how do you intend to use
    the funding?
        Answer. Of the proposed $8.4 million increase, $3 million is for a
    new activity, the Climate Change Technology Program (CCTP). These funds
    will generally be used for support services in developing a CCTP
    strategic plan and conducting analyses.
        Excluding this new activity, the increase we request is $5.4
    million, or 44 percent. Much of this proposed increase is in direct
    response to the committee's exhortations that EERE emphasize better
    stewardship through stronger project management and increased
    competition in contracting.
        We plan to spend $3.6 million to hire additional Federal staff in
    order to move away from the practice of using the laboratories to
    oversee their own contracts, cooperative agreements, and grants. We
    believe these inherently Federal activities should be performed by
    Federal employees. Our fiscal year 2005 budget request includes an
    increase of 22 FTE over the budgeted level of 84 FTE for fiscal year
    2004, mostly for project management staff at the Golden Field Office.
        It is important to note that hiring Federal staff instead of using
    laboratory personnel for these 22 FTEs will allow more of EERE's
    funding to be devoted to actual R&D activities. In fact, we calculate
    that filling these 22 FTE positions using laboratory personnel would
    cost roughly $5.8 million, compared to $3.6 million for Federal staff.
    This action will therefore ``save'' an estimated $2.2 million in
    program funding, which is captured in the Program Direction budget
    line. We do not show the ``savings'' by program in the budget
    justification materials because program budgets generally do not
    include a line item corresponding to overhead costs for laboratory
    staff to manage contracts. These costs are built into each budgetary
    line as appropriate. The entire amount of the ``savings'' within each
    program is redirected from formerly unstated program overhead costs to
    actual program activities that contribute to program goals.
        Of the remaining portion of the increase ($1.8 million), $1.2
    million will be used to sustain the current on-board staff level of 84
    FTE. The remaining $0.6 million will be used mostly for support
    services, information technology investments, consolidation of legacy
    business practices and systems, and management services for
    implementing our strategic management system.

                             NUCLEAR ENERGY BUDGET

        Question. Based on this anemic budget should the committee assume
    that the nuclear energy is no longer a priority for this
    administration?
        Answer. The President's budget request increases the funding for
    the Department's nuclear energy program by 1.2 percent to about $410
    million for fiscal year 2005. This budget advances the policy direction
    for the Nation's energy security established by the National Energy
    Policy and allows the Department's priority efforts in programs such as
    Generation IV and the Nuclear Hydrogen Initiative to proceed
    vigorously. The Department's request more than doubles the fiscal year
    2004 request for each of these programs, demonstrating the
    administration's commitment to dealing with not just the short-term
    issues of the energy market, but longer-term, strategic issues.
        In addition, the President's fiscal year 2005 budget also lays the
    groundwork for one very important element of the administration's
    effort to expand our future use of nuclear energy with the creation of
    a new national laboratory, the Idaho National Laboratory. This new
    laboratory's central mission is to pursue research, development,
    demonstration and education associated with nuclear energy.
        Two of the Department's nuclear R&D programs have ended with the
    fiscal year 2005 budget.
      --We request no funding for the Nuclear Energy Research Initiative
            (NERI) for fiscal year 2005, but the activity will continue as
            an annual competitive research grants program for university
            researchers that is tied to mainline programs such as
            Generation IV and Nuclear Hydrogen Initiative. We believe that,
            to be relevant, the NERI program must be tied more closely to
            the Department's mainline nuclear energy programs. We also
            believe that NERI's greatest benefit is in its support for the
            Nation's university nuclear technology programs. The
            restructuring of NERI addresses both of these important
            concerns.
      --The Nuclear Energy Plant Optimization program has accomplished the
            most important mission it was designed for: addressing many of
            the aging material and generation optimization issued which
            have been identified as the key long-term issues facing current
            operating plants. We are confident that industry will continue
            supporting the research objectives highlighted by NEPO because
            these objectives are consistent with industry's interest in the
            long-term, reliable, and economic operation of existing nuclear
            power plants.
        We are requesting less for two other programs:
      --The Advanced Fuel Cycle Initiative requires less funding in fiscal
            year 2005 because the Department has decided against the rapid
            development of commercial-scale UREX+ technology. Instead, we
            are focusing on longer-term, higher-payoff research at
            laboratory scale in next-generation fuel cycle technologies
            including advanced aqueous and pyroprocessing spent fuel
            treatment, advanced transmutation and Generation IV fuels, and
            detailed systems analysis and modeling.
      --The Department has requested only minimal funding for the Nuclear
            Power 2010 program in fiscal year 2005 to enable the
            continuation of ongoing licensing demonstration and related
            analysis projects. Future requirements for the program will be
            reviewed as Congress completes work on comprehensive energy
            legislation and the Department assess the responses and
            requirements associated with its recent solicitation related to
            New Plant Licensing Demonstration Projects.
                 nuclear energy technologies/nuclear power 2010
        Question. Can you please update me on the status of the Nuclear
    Power 2010 program and explain to me how this money will be used and
    how it will benefit the companies participating in this program?
        Answer. The Nuclear Power 2010 program is a joint government/
    industry cost-shared effort to identify sites for new nuclear power
    plants, develop advanced nuclear plant technologies, evaluate the
    business case for building new nuclear power plants, and demonstrate
    untested regulatory processes. These efforts are designed to pave the
    way for an industry decision by the end of 2005 to order a new nuclear
    power plant which will be built and begin commercial operation early in
    the next decade.
        As an initial step in the demonstration of the untested regulatory
    processes, the Department has established cost-shared cooperative
    projects with three nuclear power generating companies to demonstrate
    the Nuclear Regulatory Commission (NRC) Early Site Permit (ESP)
    licensing process. Under these cooperative projects, each of the three
    power generation companies (Dominion, Exelon, and Entergy) prepared and
    submitted, in the fall of 2003, an ESP application to the NRC. The
    program will support the analysis and regulatory interactions required
    to allow the NRC to issue Early Site Permits to all three sites during
    fiscal year 2006.
        In fiscal year 2003, the Department initiated a cost-shared project
    with an additional power company, Tennessee Valley Authority (TVA), to
    evaluate the environmental, seismic and geo-technical suitability of a
    commercial nuclear plant site in Alabama. This project is expected to
    be completed in October 2004 and will provide important input for a TVA
    decision to proceed with ordering and building a new nuclear power
    plant.
        The remaining critical untested regulatory process is the combined
    Construction and Operating License (COL) process. The COL process is a
    ``one-step licensing'' process which results in resolution of all
    health and safety issues associated with construction and operation of
    a new nuclear power plant. The importance of this new ``one-step
    licensing'' process is that all regulatory and licensing issues are
    resolved before a power company makes a major investment and begins
    construction of the plant. In fiscal year 2003, the Department
    initiated a cost-shared project with industry to develop generic
    guidance for the COL application preparation and to resolve generic COL
    regulatory process issues. This project will be completed in fiscal
    year 2005.
        In November 2003, the Department solicited power company proposals
    to initiate New Nuclear Plant Licensing Demonstration Projects. Under
    these cost-shared projects, power companies will conduct the necessary
    activities to select an advanced reactor technology and prepare a
    license application to build and operate a new nuclear power plant.
    These projects will also provide for NRC design certification of a
    standardized nuclear power plant design. The Department expects to
    receive two or three and proposals from industry teams.
        This work and a variety of smaller studies in cooperation with a
    range of industry partners will advance the public/private effort aimed
    at the deployment of new nuclear power plants around the beginning of
    the next decade.
        Question. Do you have an estimate as to how much time the DOE
    proposed contribution of $10 million will save companies in this
    licensing process?
        Answer. The Nuclear Power 2010 cooperative licensing demonstration
    projects with the power generation companies has made it possible for
    the companies to seek Early Site Permits (ESPs) and begin planning for
    a combined Construction and Operating License (COL). Successful
    demonstration of the licensing processes will encourage future
    decisions to build new nuclear plants by elimination of industry
    concerns over regulatory risk and reduction in the overall license
    process duration. It is estimated an overall reduction of at least 1
    year in the ESP licensing application and approval process can be
    realized from the current projection of 4\1/4\ years. Similar time
    savings is expected to be realized in the COL licensing process. The
    savings for COL applicants are in addition to more than 2 years in
    savings projected to be realized as a result of having certified
    standardized Generation III+ designs available.
        Perhaps more important than the funding provided to support this
    work is the Department's partnership with the industry in exploring the
    development of new nuclear power plant projects. Without such
    aggressive government support, which flows from the National Energy
    Policy and public encouragement provided by senior administration
    officials, it is possible that industry would be more hesitant to
    pursue these activities.
        Question. Do you have an estimate as to what you believe the
    companies will expend over the next year?
        Answer. As part of the Nuclear Power 2010 program cost-shared
    projects, power companies are expected to invest an amount at least
    equal to DOE spending. For ongoing activities in fiscal year 2005,
    industry is expected to spend at least $4.5 million on the Early Site
    Permit Demonstration projects and an additional $1.8 million for
    generic activities and guidance development for COL applications.
        The Department expects to have a firm estimate of industry planned
    expenditures for fiscal year 2005 and the overall requirement for the
    licensing and development of Generation III+ designs after assessing
    the industry responses to its recent solicitation for New Nuclear Plant
    Licensing Demonstration projects. This solicitation was issued in
    November 2003 and we expect to receive responses from industry in
    spring 2004. The most recent industry estimates provided to the
    Department project an industry cost-share of approximately $60 million
    to $80 million per year through 2010 to obtain a combined Construction
    and Operating License and complete associated first of a kind
    engineering activities.

                           IDAHO NATIONAL LABORATORY

        Question. Following the establishment of the Idaho National
    Laboratory, what role do you see for the other laboratories that
    currently contribute to the nuclear energy program?
        Answer. We anticipate that several of the Department's national
    laboratories will continue to play key roles in implementing the Office
    of Nuclear Energy Science and Technology's research and development
    agenda. While the Idaho National Laboratory will develop a prominent
    and central role in the nuclear energy technology program, the
    expertise and capabilities of several other labs--chiefly Oak Ridge
    National Laboratory and Los Alamos National Laboratory--will be
    essential in the success of our research efforts.
        Question. Do you have a transition plan and budget estimate
    prepared that will guarantee the success of the nuclear research into
    the future and continue to draw on the experience of the other national
    laboratories?
        Answer. The execution of our nuclear energy R&D programs is guided
    by multi-year program plans that have been jointly developed by our
    Federal and national laboratory personnel. These program plans identify
    R&D activities will evaluate undertaking over the next 10 years and
    include estimates of the out-year budgets necessary to carry out those
    efforts. The continued participation of the national laboratories in
    executing the multi-year program plans is essential to the overall
    success of the programs. As an example, the attached chart displays the
    organization of the Department's Generation IV Nuclear Energy Systems
    and Advanced Fuel Cycle Initiative programs--note that this
    organization highlights important roles for several national
    laboratories. We expect that this approach will endure as these
    programs progress.
        The attached chart illustrates the program integration for the
    Generation IV and Advanced Fuel Cycle Initiatives.

        Question. Can you explain what would happen if full funding of $48
    million isn't provided for costs associated with the restructuring of
    the Idaho National Lab restructuring plan?
        Answer. The $43.8 million identified in the President's budget
    request for Laboratory Transition and Restructuring will assure that
    all current INEEL personnel remain employed through the contract
    transition period, thus enabling the new contractors to hire the staff
    that best fit their very different requirements. Without this funding,
    we would not be in a position to facilitate an effective transition of
    the laboratory staff.
        Question. Would funding shortfalls delay the Idaho upgrades or will
    this put the entire nuclear energy R&D effort at risk with further
    delays?
        Answer. Shortfalls in the restructuring request could require the
    Department to explore taking funds taken from the infrastructure or
    other programs at the site including the nuclear energy R&D efforts.
    Alternatively personnel could be terminated before the new contractors
    have an adequate opportunity to review their qualifications.
        Question. The Budget Request includes $46 million for ``one-time
    costs associated with restructuring the Idaho lab.'' Since EM was the
    previous landlord for this Lab, why aren't these one-time costs being
    paid by EM, instead of NE?
        Answer. Most of the workers who may not find immediate employment
    with either new contractor will be support personnel who perform
    landlord type functions that benefit the entire site. As NE is now the
    site landlord, it falls to NE to fund this work since that office
    controls the affected functions.
        Question. The Idaho Lab will have a difficult challenge
    establishing its research programs. In the past, the Idaho Lab could
    tax EM programs for LDRD to fund internal research. Now those EM funds
    are being swept into another contract. I am hearing that future EM
    funds can not be taxed to support the new INL. Is this correct and can
    you explain that logic?
        Answer. The Idaho Cleanup Contract is designed to only fund those
    activities that directly support accelerated cleanup. As the cleanup
    work is not expected to continue indefinitely, it is not appropriate
    for the lab to rely on the cleanup contractor to fund ongoing research
    activities.
        Question. Aren't you worried that the new INL will have too small a
    base of funding to derive any meaningful LDRD funding?
        Answer. We believe that there will be adequate the funding
    available for LDRD projects in the future as the INL becomes a world
    class research center for nuclear technology development.

                              UNIVERSITY PROGRAMS

        Question. How can progress in university programs be maintained
    when the overall pot of R&D funds, for universities and labs is
    slashed?
        Answer. Over the past several years, the Department has had a
    substantial positive impact on the Nation's university nuclear
    engineering programs as evidenced by increasing student enrollments,
    re-establishing stronger academic programs, improving the performance
    and use of their research and training reactors, and attracting
    minorities to the nuclear engineering discipline. The University
    Programs budget for fiscal year 2005 is essentially equal to our fiscal
    year 2004 appropriation when it is considered without the one-time
    funding of $2.5 million for spent fuel transportation. In fiscal year
    2005 the Office of Civilian Radioactive Waste Management will assume
    responsibility for university reactor spent fuel transportation and,
    therefore, the University Programs budget reflects the transfer of this
    activity. Funding for faculty and student research at our Nation's
    nuclear universities remains constant for fiscal year 2005.
        In fiscal year 2005, the Department will integrate researchers from
    the Nation's universities into the Department's mainline nuclear energy
    R&D activities. The Department will use competitive, peer-reviewed
    solicitations focused on the university community to select the best
    ideas for meeting the technology challenges of our various research
    efforts. Funding for this university-based research will be derived
    from the Department's primary nuclear energy R&D programs, including
    the Generation IV Nuclear Energy Systems Initiative, the Advanced Fuel
    Cycle Initiative, and the Nuclear Hydrogen Initiative. Overall, the
    proposed funding for university R&D is $1.8 million higher in fiscal
    year 2005 than fiscal year 2004.
        Question. I was pleased that additional regional consortia, now six
    in total, were created to enable students to have access to important
    research reactors. But how does addition of new consortia match with
    proposed 10 percent cut in the university program budgets?
        Answer. The six consortia, under the Innovations in Nuclear
    Infrastructure and Education (INIE) program, are an unqualified
    success. Funding for this important and highly successful program is
    essentially equal to the level of fiscal year 2004, which supported the
    increase from four to six consortia.

                     LOUISIANA ENERGY SERVICES--ENRICHMENT

        Question. In written response to questions in last year's review of
    the fiscal year 2004 budget, you stated:

        ``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 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.
        ``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.''

        Does this response from the Department still stand?
        Answer. Yes, we understand that URENCO continues to follow
    nonproliferation safeguards and controls on access to sensitive
    technology in accordance to agreements with the U.S. Government
    regarding to LES' deployment of centrifuge technology.
        The Department also continues to believe 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. Currently, domestic uranium enrichment capacity
    is less than half of U.S. nuclear fuel requirements. Over the next two
    decades, U.S. demand for electricity is forecasted to grow by 50
    percent. Without the deployment of reliable and economical advanced
    technology and assuming nuclear power maintains its current share of
    demand, the share of U.S. nuclear fuel requirements met by foreign
    suppliers could rise to 80 percent in 20 years.

                              RADIOPHARMACEUTICALS

        Question. Is the Department's policy of requiring that researchers,
    who require new radiopharmaceuticals, pay the full production costs
    coordinated with the National Institutes of Health such that vital
    research in improved applications of radiopharmaceuticals is continuing
    at a rapid pace?
        Answer. The Department's program requires that researchers pay for
    isotope development and direct production costs. Isotope production
    costs are accrued on a batch basis. The Department must obtain funding
    for the direct production cost for each batch before production can
    commence. Research customers have not been able to purchase the
    required isotopes in the manner currently required by the Department.
    Recognizing this and the impact this approach could have on medical
    research, the Department has engaged with the NIH. We are working with
    that agency to develop an approach to address this issue and to ensure
    that vital isotope-based medical research is not impeded.
        Question. Are the two agencies, DOE and NIH in agreement that this
    is the appropriate place for these costs to be borne?
        Answer. There have been positive discussions at the staff level.
    The Department continues to seek an agreement with the NIH that will
    lead to a resolution of this issue.

                              BARTER ARRANGEMENTS

        Question. As part of DOE's fiscal year 2005 budget request for its
    Nuclear Energy Program, DOE is proposing to employ a ``barter
    arrangement'' to support the continuation of the technetium-99
    activities currently being undertaken by USEC at the Portsmouth Site.
    Please describe the nature of the ``barter arrangement'' that DOE is
    contemplating?
        Answer. At the end of fiscal year 2004, substantial quantities of
    both USEC and the Department's uranium inventories will remain
    contaminated with technetium-99 above the commercial standard for use
    as feed in a uranium enrichment process. Currently, processing the
    uranium at Portsmouth is the only economical means to remove enough
    technetium-99 contamination to allow it to be used as feed to the
    Paducah Gaseous Diffusion Plant. Because the cost to continue the
    technetium-99 removal activities is between one-third and one-half the
    replacement or market value, both USEC and the Department may benefit
    from the continuation of this program. A barter arrangement would help
    achieve realization of the full economic value of the uranium.
        Question. Has DOE completed its evaluation of the need for
    additional legal authority to carry out the proposed ``barter
    arrangement?'' If so, please provide a copy of the evaluation. If not,
    when will this evaluation be completed? When it is completed, please
    provide a copy.
        Answer. The Department has performed an informal evaluation and
    concluded that an additional authorization is not needed. Under section
    3(d) of the Atomic Energy Act (AEA), the Department is to effectuate
    programs that encourage the ``widespread participation in development
    and utilization of atomic energy for peaceful purposes.'' All of the
    material, with the exception of Freon, that is currently being
    contemplated for barter is ``source material'' as defined by section
    11(z) of the Atomic Energy Act (AEA). Under section 63 of the AEA the
    Department is authorized to distribute source material, and under
    section 66 of the AEA the Department is ``authorized and directed . . .
    to effectuate the provisions of this Act'' to purchase or otherwise
    acquire supplies of source material. In addition, under section 161(g)
    of the AEA the Department is authorized to acquire, sell, lease, grant
    and dispose of real and personal property that the Department has
    acquired in connection with carrying out functions under the AEA or
    property that will be used to carry out objectives under the AEA.
    Pursuant to these existing authorities, the Department is authorized to
    enter into any of the barter arrangements that are currently being
    contemplated.
        Question. What products or services is DOE contemplating using as
    ``barter'' under the proposed arrangement? Is DOE considering the
    option of transferring uranium from DOE's stockpile to USEC as part of
    a ``barter arrangement?''
        Answer. The products or services being considered for a possible
    barter arrangement are excess assets related to the Department's former
    uranium enrichment program, or services that are incidental to
    activities necessary to the final disposition of that programs legacy.
    The selection of materials is subject to negotiation and agreement by
    the other party.
        Question. Section 3112 of the 1996 USEC Privatization Act includes
    a provision that explicitly requires DOE to undertake an evaluation of
    the impact of any sales or transfers of natural or low-enriched uranium
    on, among other things, the domestic uranium mining, conversion, and
    enrichment industry. In the event that any ``barter arrangement'' were
    established employing uranium from DOE's stockpile, would DOE agree
    that the provision in section 3112(d) would apply to any such transfer?
    Does DOE consider a ``sale or transfer'' to include a ``barter''? If
    so, please provide the analysis to support this conclusion.
        Answer. The Department is not currently considering proposing to
    barter material that is subject to subsection 3112(d). However, if the
    Department were to use material subject to 3112(d), it would comply
    with the provisions of 3112(d). ``Sale or Transfer'' is a broad term
    which encompasses arrangements in addition to normal commercial sales
    such as barter transfer.
        The Secretary is sensitive to his responsibility for the domestic
    uranium industry as detailed in the USEC Privatization Act and
    subsection 1014 of the Energy Policy Act of 1992, and has carefully
    considered the proposed activities. In addition to restoring the
    economic value to contaminated uranium inventory, any barter proposal
    would sustain 154 workers employed during fiscal year 2005 in the
    domestic uranium industry.
        Question. Section 3112(d) also requires the recipient of any such
    uranium sales or transfers to pay the ``fair market value of the
    material.'' In a barter arrangement, how would DOE address this ``fair
    market value'' requirement?
        Answer. The Department is not contemplating a barter of material
    that is subject to subsection 3112(d). However, the barter would be an
    arms' length transaction for value that would take into consideration
    the ability to monetize the asset in a fashion adequate to meet the
    financial needs necessary to provide the services at the Portsmouth
    facility.

                    CERAMIC ION TRANSPORT MEMBRANES PROJECT

        Question. For the past 7 years the DOE-Office of Fossil Energy (FE)
    and Office of Energy Efficiency and Renewable Energy (EERE) have
    supported a development project that uses ceramic Ion Transport
    Membranes (ITM) to produce hydrogen from natural gas. Selected through
    a competitive solicitation in 1997, the ITM Syngas project has been co-
    funded since that time by DOE-FE (75 percent), and DOE-EERE (25
    percent). However the fiscal year 2004 funding for the project was
    reduced by EERE from $1.3 million to $200 thousand. The ITM Syngas
    project is currently in Phase 2 with the objective of operating a Sub-
    scale Engineering Prototype (SEP) that will demonstrate full conversion
    of natural gas to synthesis gas. Achieving this objective is critical
    to gaining the technical understanding to proceed to the project's next
    phase, a pre-commercial demonstration of the ITM Syngas technology.
    From the beginning of the project, EERE had committed to supporting the
    project through the end of Phase 2, and financial participation through
    completion of the SEP demonstration is necessary to maintain the
    project on schedule. After demonstrating full product conversion in the
    ITM Syngas process, smaller units could be developed that would be
    amenable to distributed hydrogen production.
        In view of this critical stage of the ITM Syngas project, will DOE-
    EERE revise its fiscal year 2005 budget to provide $1.3 million for the
    project?
        Answer. The ITM Syngas project was one of several hydrogen
    production projects for which EERE funding was reduced in fiscal year
    2004 due to a shortfall caused by the large number of Congressionally-
    directed projects. The Department plans to meet its total obligations
    identified in the ITM cooperative agreement, subject to Congressional
    appropriations, the extent of fiscal year 2005 Congressionally-directed
    projects, and the results of the annual merit review that helps to
    guide our prioritization of research projects. EERE will determine its
    fiscal year 2005 contribution to the project following the completion
    of the fiscal year 2005 appropriation process.
                                     ______

                  Questions Submitted by Senator Thad Cochran

                     BIOMASS R&D AND NATIONAL LABORATORIES

        Question. Mr. Garman, you mention in your written testimony that
    the Department is interested in working with industry and the National
    Laboratories to reach your goals of a large-scale biorefinery and
    advanced technologies to transform the Nation's domestic biomass
    resources into high value power. I believe that our National Labs
    provide a valuable service and conduct important research. What are you
    doing to ensure that this research and development is not overly
    entangled with the industries which fund such activities?
        Answer. Our National Bioenergy Center facilitates the coordination
    of biomass research and development across the National Laboratories.
    The Center is focused on enabling long-term research needed to convert
    a wide variety of domestic biomass resources to fuels, chemicals, and
    heat and power in a sustainable manner. Through partnerships with
    industry, the Department fosters the nearer term research and
    development that leverages the National Laboratories' foundational,
    enabling work. The public/private partnerships advance biomass
    conversion processes and integrate them into commercial systems and
    facilities for testing and performance validation. The National
    Laboratories are involved with industry's research and development
    through Cooperative Research and Development Agreements (CRADAs). These
    CRADAs are carefully constructed to avoid duplicative efforts and to
    ensure that our participation is an appropriate Federal role.

                          BIOMASS R&D AND UNIVERSITIES

        Question. What role do you see our Nation's universities playing in
    this ongoing research and development?
        Answer. Universities play an important role in the Biomass Program.
    One example is the Biomass Refining Consortium for Applied Fundamentals
    and Innovation (CAFI). With support from the National Laboratories,
    Federal Government, and industry, this group of universities focuses on
    various possible pretreatment technologies to identify options that
    enable the integrated industrial biorefinery. In addition, universities
    are collaborating with the National Laboratories on a variety of
    research projects as listed below:
      --Colorado School of Mines.--Impact of Water Structure Modifying
            Agents and Cellulase Mutations on Cellulase-Cellulose
            Interactions,
      --University of Arkansas.--X-Ray Crystallographic Studies of
            Cellulases,
      --Purdue University.--Building A Bridge To The Corn Ethanol Industry
            Follow-On Project--Phase II,
      --University of Colorado.--Boulder, Mechanistic Model Development for
            Biomass Thermochemical Conversion Process,
      --Cornell University.--Molecular Modeling of the Interaction of
            Cellulose with Cellulases and Catalysts,
      --Cornell University.--Improving T. fusca Cellulases by Protein
            Engineering,
      --Dartmouth University.--The Role of Biomass in America's Energy
            Future,
      --University of Pittsburgh.--Biorefinery Optimization Software.
        Universities are also funded in fiscal year 2004 through the
    following congressionally-directed projects: Iowa State University,
    Iowa State University Center for Catalysis, Purdue University & the
    Midwest Consortium for Sustainable Biobased Products and Bioenergy,
    University of Louisville, Louisiana State University Agriculture
    Center, Mississippi State, and the University of North Dakota. While we
    do not support continuation of Congressionally directed projects, we
    expect that many universities would receive funds through a competitive
    awards process.
        The Biomass Program continues to fund multi-disciplinary programs
    at universities to develop graduate programs that focus on biomass. The
    approach is to foster collaboration among various departments including
    business, science, and engineering. The Biomass Program also sponsors
    research internships at the National Renewable Energy Laboratory
    involving undergraduate and graduate students majoring in science and
    engineering. These internships allow the students to gain hands-on
    research experience under the guidance of prominent researchers.
                                     ______

                   Question Submitted by Senator Larry Craig

                       FUNDING A COMMERCIAL BIOMASS PLANT

        Question. A biotechnology company is interested in building a
    commercial bio-ethanol production facility in the State of Idaho. This
    plant would use agricultural wastes--primarily wheat straw--as its
    feedstock. Using an enzyme-based process, the plant would convert the
    carbohydrates from the wheat straw into hydrocarbons for ethanol. The
    construction of this plant would demonstrate the long-term viability of
    using agricultural products to provide both energy and chemicals that
    have thus far been derived from petroleum. The success of this project
    will create new jobs in the agriculture, energy, technology, research,
    and construction sectors in Idaho and elsewhere. It will contribute to
    accomplishing the President's goal of reducing the greenhouse-gas
    intensity of the economy because the CO2 emitted by burning
    ethanol is roughly equal to the CO2 absorbed by growing the
    wheat--meaning that burning ethanol created from this process would add
    no net CO2 to the atmosphere. Completion of this facility
    would also demonstrate a realistic way to begin reducing our Nation's
    dependence on foreign oil.
        This cutting-edge project would be eligible for the loan guarantee
    program described in the energy bill conference report. Because that
    bill has not been sent to the President by the Congress, and because
    this project can serve multiple national interests simultaneously, I
    seek your assistance in identifying existing authorities that would
    ensure the rapid construction of this facility.
        Please identify any existing programs, funds or authorities that
    could be used by this company to secure financing and commence
    construction on this vitally important project.
        Answer. The Department of Energy does not have any program funding
    available to support this effort at this time. The Department of
    Agriculture (USDA) conducts a loan guarantee program under Section 9006
    of the Farm Bill that has funded small grain-based ethanol plants.
    However, because the proposed plant is a first-of-a-kind facility with
    a high degree of technical and financial risk, this project may not
    receive funding under the USDA program. The Department is unaware of
    any other Federal programs that would fund this project.
                                     ______

                   Questions Submitted by Senator Ted Stevens

                     ALASKA EXAMINATION OF GEOTHERMAL SITES

        Question. In September 2003, Assistant Secretary David Garman and
    Dr. Roy Mink traveled to Alaska to examine geothermal sites, determine
    their viability for electricity production, and to assess ways in which
    the Department of Energy can assist in developing this energy resource.
    What steps has the Geothermal Technologies division and the Office of
    Energy Efficiency and Renewable Energy taken towards this end?
        Answer. The Geothermal Technologies Program has reached out to help
    Alaska define its geothermal resource and to begin building a base for
    development of that resource. A database of potential geothermal
    resources has been developed that targets two areas in Alaska for
    possible power plant developments (Akutan and Unalaska).
        The Program is also providing assistance to private developers, one
    working with the Native Corporation to establish a basis for
    development of a power plant at Akutan and another developer who has an
    interest in working with the Native Corporation for a potential power
    plant at Dutch Harbor (Unalaska). We are also working with the Kotzebue
    Electric Association to evaluate existing geothermal data and provide a
    basis to evaluate potential use of geothermal thermal energy to protect
    the town sewer system from freezing.
        As a result of the September 2003 trip, the Geothermal Technologies
    Program has included additional funding opportunities for Alaska. The
    Geothermal Outreach funding opportunity announcement (State Energy
    Program) closes on April 6, 2004. The Geothermal Resources Exploration
    and Definition funding opportunity announcement will be released on
    March 18, 2004, and the Power Plant Development funding opportunity
    announcement will be released near the end of March 2004. These
    announcements will provide up to $5 million of geothermal funding in
    fiscal year 2004.
        DOE also provided $100,000 to the Alaska Division of Energy to
    support development of a working group to promote geothermal energy
    awareness in Alaska.

                         ASSISTANCE TO ALASKA COMPANIES

        Question. Given the extraordinarily high cost of energy in rural
    Alaska, many utility companies are exploring the possibility of
    harnessing wind energy to supply rural communities with electricity.
    What assistance is the Office of Energy Efficiency and Renewable Energy
    providing to these companies?
        Answer. The Department of Energy supports wind power projects in
    Alaska through several local and State organizations. There are ongoing
    wind projects with Kotzebue Electric Association, the City of Unalaska,
    and TDX Corporation (St. Paul Island) that are aimed at providing lower
    cost energy alternatives to rural Alaskan communities. Through the
    Department's Tribal Energy Program, renewable energy studies are
    underway for Southeast Alaska, the Yukon-Kuskokwim Delta region, and
    the Bristol Bay region. National Wind Technology Center personnel
    provide expert technical support to these projects by supplying
    anemometers, evaluating the wind resources, conducting wind workshops,
    and sponsoring local representatives to attend technical workshops.

             EVALUATION OF RENEWABLE ENERGY SOURCES ON PUBLIC LANDS

        Question. In February 2003, the Department of Energy and the
    Department of the Interior released a report evaluating renewable
    energy resources on public lands. Alaska was excluded from this report.
    Will the Department of Energy undertake a similar evaluation of
    renewable energy resources on public lands in Alaska?
        Answer. The Geothermal Technologies Program is working with the
    United States Geological Survey on a limited geothermal resource
    assessment for the western United States, including Alaska.
    Comprehensive energy legislation pending in the Congress requires
    thorough annual assessments of all renewable energy resources,
    including solar, wind, biomass, ocean, geothermal, and hydroelectric,
    in all 50 States.

                      TIDAL ENERGY PROJECTS COST IN ALASKA

        Question. The use of tidal energy is currently being explored in
    Alaska. As you know, the coast of Alaska has exceptional energy
    producing potential. Tidal energy projects have high capital costs. Is
    the Office of Energy Efficiency and Renewable Energy exploring
    opportunities to harness tidal energy?
        Answer. The Department is not currently funding research in tidal
    energy. Since there are only two areas of the Nation with a significant
    tidal flux (Cook Inlet, Alaska; Bay of Fundy, Maine) the application of
    tidal energy is not considered widely applicable.

                       RENEWABLE ENERGY PROGRAM IN ALASKA

        Question. Please describe in detail the Department of Energy's
    (DOE) renewable energy program in Alaska.
        Answer. Some of the activities DOE is funding in renewable energy
    in Alaska are described below. All of these projects were
    Congressionally directed. We strongly support competitive awards to
    ensure that the Department's program goals are advanced and taxpayer
    dollars are spent wisely.
    Biomass
        The Department is supporting an ethanol production facility with
    Sealaska Corporation in Ketchikan that will utilize wood residues
    produced from various forest industry operations in a process to
    produce fuel grade ethanol. Regional Biomass Energy Program funds
    support a biomass energy specialist at the State level who assists
    developers with regulatory and utility issues, provides technical
    assistance, and in some cases provide financial assistance. The
    Regional Biomass Program also contributed to the Dutch Harbor Fish Oil
    Demonstration Project which demonstrated blending fish oil with diesel
    oil to power engine generator sets that provides electricity to the
    town of Dutch Harbor.
    Wind
        DOE has been supporting wind power projects in Alaska for several
    years through various local and State organizations. There are ongoing
    wind projects with Kotzebue Electric Association, the City of Unalaska,
    and TDX Corporation (St. Paul Island) that are aimed at providing lower
    cost energy alternatives to rural Alaskan communities. National Wind
    Technology Center personnel provide expert technical support by
    supplying anemometers, evaluating the wind resources, conducting wind
    workshops, and sponsoring local representatives to attend technical
    workshops. The Department has also tested cold weather wind turbines to
    mitigate performance problems in extreme-cold climates (e.g. icing on
    blades and gear box freezing).
    Geothermal
        The Department assisted the Alaska Energy Authority in completing a
    statewide assessment of geothermal resources. The assessment concluded
    that geothermal resources near the community of Akutan have the
    potential to displace a substantial portion of the 4.3 million gallons
    of diesel per year used for generating power and heat in the community
    and fish processing plant. The Department has also supported site
    specific feasibility investigations. This past September, Assistant
    Secretary Garman accompanied the Geothermal Program Manager to Alaska
    to examine several geothermal sites to determine their viability for
    electricity production. The Geothermal Technology Program is supporting
    a geothermal working group to promote geothermal energy awareness in
    Alaska. This group will be visiting Nevada on a trade mission to learn
    about successes and procedures used by Nevadans to develop geothermal
    energy.
    Hydropower
        The Department has supported a number of hydropower technology
    development efforts in Alaska over the years. Currently, DOE is
    supporting the Alaska Village Electric Corporation in a hydropower
    feasibility study at Scammonbay, and a Power Creek hydro-electric
    project in Anchorage.
    State Energy Program
        The State Energy Program provides base-level funding for Alaska to
    maintain energy specialists in State government. Funding is used to
    conduct resource assessments, fund projects, and provide technical
    assistance and workshops.
    Tribal Energy Program
        Renewable energy studies are underway for Southeast Alaska, the
    Yukon-Kuskokwim Delta region, and the Bristol Bay region.
                                     ______

                   Questions Submitted by Senator Harry Reid

       FOR INSPIRATION AND RECOGNITION OF SCIENCE AND TECHNOLOGY (FIRST)

        Question. In the fiscal year 2004 Conference Report we carried
    language encouraging the Department to support competitors in the For
    Inspiration and Recognition of Science and Technology (FIRST) robotics
    competition, a brainchild of Dean Kamen, the inventor of the Segway and
    several other remarkable devices. Do you mind describing what the
    Department has done to follow-up on this direction?
        Answer. Brookhaven National Laboratory (BNL) scientists and
    engineers provided significant support to students of William Floyd
    High School, Mastic Beach, NY, in the form of technical guidance and
    assistance in the fabrication of the components to build a robot. BNL
    is providing the funding necessary to purchase the competition kits for
    Longwood High School, Middle Island, NY, and Port Jefferson High
    School, Port Jefferson, NY, to participate for the FIRST event.
    Additionally, special times for operation of the machine shop were
    provided by BNL. The FIRST competition is exciting and rewarding with
    the per team costs typically running between $10,000 to $15,000. The
    Office of Science provided $20,000 to BNL to support these three high
    school teams' participation in the FIRST event.

                      IOWA ENVIRONMENTAL/EDUCATION PROJECT

        Question. Is the Iowa Environmental/Education Project, something
    that has been described to me as a giant, $200 million roadside
    terrarium, a worthy investment of Federal funds that will generate
    useful, cutting edge science or is it just a huge waste of Federal
    taxpayer dollars?
        Answer. This Congressionally directed project will develop an
    environmental and ``green energy'' education center on a 30 acre
    Environmental Protection Agency Brownfield site in Coralville, Iowa. It
    will not be a cutting edge research facility. The project includes an
    indoor tropical rain forest, aquarium, educational center, and
    galleries on the prairie eco-system, Midwest geology, and agriculture.

                                USER FACILITIES

        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 2005 budget to meet the needs of these scientists?
        Answer. Overall, Office of Science user facilities are operating at
    95 percent of optimum in the fiscal year 2005 request, 3 percent better
    than in fiscal year 2004. (This metric is straightforward but perhaps
    too simplistic, and we are working to develop a more sophisticated
    metric for the fiscal year 2006 President's Budget.) It is always
    difficult to find the right balance among competing 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.

            INTERNATIONAL THERMONUCLEAR EXPERIMENTAL REACTOR (ITER)

        Question. As I mentioned in my opening statement, I am pleased that
    the United States has resumed its participation in the ITER (``EATER'')
    project. However, the dollar levels look somewhat low, particularly in
    light of our commitment to fund 10 percent of the total. Are the funds
    in the budget adequate to fulfill our international requirements?
        Answer. The fiscal year 2005 budget request for ITER is adequate
    because the funds are for preparations for a subsequent ITER
    construction project. The plan is for the construction project to start
    in fiscal year 2006, at which time the U.S. funding requirement would
    increase significantly.
        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. The Department is satisfied that the 10 percent role is
    appropriate for the United States. With the exception of the host, all
    of the ITER Parties would be at approximately the same level of
    participation. Each Party would receive the same benefits in terms of
    equal access to the scientific and technological results from ITER, as
    well as an equal role in planning the ITER scientific program.
    Accordingly, a larger financial contribution for the United States is
    not considered necessary.
        Question. Dr. Orbach, as I understand it, the Department is getting
    ready to select a site for a U.S. ITER Project Office. Could you please
    explain the process for that selection?
        Answer. The process for selection of the host for a U.S. ITER
    Project Office consists of review by an independent Evaluation
    Committee of Federal and non-Federal employees. This process will be
    managed by the Chicago Operations Office. The conclusions of the
    Evaluation Committee will be forwarded to the Office of Fusion Energy
    Sciences for selection of the host by the director of that office.
        Question. Given the importance of the ITER project to fusion
    research and to the fusion community, has an expert independent review
    board been appointed to guide that selection?
        Answer. We are in the process of identifying members of such a
    board.

                     FUNDING FOR CONCENTRATING SOLAR POWER

        Question. I see that you have a $2 million request for funding for
    the Concentrating Solar Power portion of the solar energy budget. While
    I realize this is an improvement from the $0 you requested last year it
    is a far cry from what I expected given that your office, the National
    Academy, and many other national organizations all now agree that CSP
    has merit and promise. Despite your words to the contrary, are you
    giving up on Concentrating Solar Power?
        Answer. We are not giving up on Concentrating Solar Power (CSP). As
    you pointed out, last year we did not request any funding for CSP. In
    light of recent studies we sought from an independent engineering firm,
    a draft of which was reviewed by the National Research Council, we
    propose $2 million to support a more thorough investigation of the
    appropriate R&D course needed to realize the potential for CSP. The
    fiscal year 2005 budget request will be used to maintain CSP facilities
    at Sandia National Lab, to provide analytical support to States, and to
    develop a comprehensive program plan to help inform the fiscal year
    2006 budget development process and a longer term R&D plan.
        Question. If not, what do we need to do to get this program back on
    track?
        Answer. DOE will develop a Concentrating Solar Power (CSP) program
    plan which will use recommendations from the independent review studies
    and take a systems approach to identify the highest value technology
    R&D investments. These findings will then be used to inform the fiscal
    year 2006 budget development process and a longer term R&D plan.

                      NATIONAL RENEWABLE ENERGY LABORATORY

        Question. In the last three 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. As a matter of principle and administration policy, we do
    not support earmarks. Nevertheless, over the past 2 years, the
    Department has worked closely with NREL and various State interests in
    order to make the most effective use of these directed funds. A
    competitive process was used to select projects that would bring
    laboratory, university, and industrial partners together in the State
    of Nevada to help develop the solar, geothermal, wind, and related
    hydrogen resources in the Southwest. Per fiscal year 2004 Congressional
    direction, the Department will continue these efforts and look for
    additional opportunities to form alliances between Nevada's university
    system, other Nevada State agencies, and industry to establish centers
    of renewable energy expertise in the State. The ``RE Centers of
    Expertise'' will likely include, but not be limited to, research and
    development, training for future workers in renewable energy, and
    technology demonstration and performance validation.

                           BIOMASS RATIONALE FOR CUTS

        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.

                                                     FUNDING SUMMARY
                                                [In thousands of dollars]
    ----------------------------------------------------------------------------------------------------------------
                                                               Fiscal Year                 Fiscal Year
                                                 Fiscal Year       2004      Fiscal Year       2004      Fiscal Year
                  Program/Activity                   2004       Comparable       2004      Unencumbered      2005
                                                   Request    Appropriation    Earmarks   Appropriation    Request
    ----------------------------------------------------------------------------------------------------------------
    Biomass Program (EWD and Omnibus                  69,750        86,471        42,805        43,666        72,596
     Appropriation)............................
    Biomass Program (Interior).................        8,808         7,506   ...........         7,506         8,680
                                                --------------------------------------------------------------------
          Total, Biomass Program...............       78,558        93,977        42,805        51,172        81,276
    ----------------------------------------------------------------------------------------------------------------

        Excluding all the Congressionally-directed projects in fiscal year
    2004, we are actually seeking $30 million more in fiscal year 2005 than
    was appropriated last year toward the research and development (R&D)
    goals established in our program plan and budget submissions. Our R&D
    goals have been developed in consultation with the U.S. Department of
    Agriculture, National Laboratories and the Biomass R&D Advisory Board
    established by Congress.
        In order to fund Congressionally-directed projects in fiscal year
    2004, we have had to modify our program goals. Furthermore, we will
    experience delays in achieving our key milestones and the broader
    market acceptance of power, fuels and products derived from biomass. We
    urge the committee to provide us the flexibility to spend Biomass funds
    in accordance with our program plans, which will provide the best
    potential for producing long-term positive returns on the taxpayers'
    investment.

                    HIGH TEMPERATURE SUPERCONDUCTOR PROGRAM

        Question. Do you think that the High Temperature Superconductor
    program should be moved back into your organization, particularly in
    light of the wholesale redirection of funds away from superconductors
    that the Electricity Transmission and Distribution program has
    undertaken?
        Answer. The new Office of Electric Transmission and Distribution
    (OETD) has voiced its strong support for High Temperature
    Superconductivity (HTS). The funding of the High Temperature
    Superconductor Program is not a result of the office in which the
    program is housed, but rather the fact that Congress appropriated
    $10.972 million less for transmission and distribution R&D in fiscal
    year 2004 than in fiscal year 2003, the year before the new office was
    created. Of the $69.467 million appropriated for R&D within OETD,
    $25.75 million was for Congressionally Directed Activities, leaving
    only $42.49 million ($6.285 million less than in fiscal year 2003) for
    all R&D work.

            FINANCIAL ASSISTANCE TO GEOTHERMAL DEVELOPMENT IN ALASKA

        Question. What percentage of the division's budget will be
    dedicated to providing financial assistance to geothermal development
    in Alaska?
        Answer. The fiscal year 2004 budget for the Geothermal Technologies
    Program is $26 million. The program provides opportunities for Alaskan
    entities to participate in open and competitive funding opportunity
    announcements. Current and upcoming opportunities are valued at a total
    of $5 million, or 19 percent of the program's budget. Alaskan proposals
    will be considered alongside others in open competition.
                                     ______

                  Questions Submitted by Senator Patty Murray

                            GENOMICS: GTL FACILITIES

        Question. Dr. Orbach, I understand you have recently published a
    strategic plan for new facilities supporting DOE's missions. PNNL,
    along with other research Institutions in the State of Washington, is
    very interested and, indeed, believe we have a strong research
    infrastructure to be the location of one of the GTL facilities in your
    strategic plan and facilities plan.
        What is your position on the schedule for the various facilities
    with the genomics program, including the proteome analysis facility?
        Answer. Our 20-year facilities plan lays out the time sequence of
    the scientific user facilities, including those advocated by our
    Genomics program. As the Genomics program evolves we hope to be able to
    proceed with the construction and operation of the Genomics facilities.
    PNNL, along with other research institutions in the State of Washington
    should be in a strong position to successfully compete for one or more
    of these facilities. I should also note that while the facilities plan
    lists four large Genomics facilities, it is conceivable that evolving
    scientific needs and the competitive solicitation process for each
    facility could lead to us to fund multiple distributed facilities at a
    smaller scale. As available funding allows, we intend to let the
    science drive the ultimate makeup of these facilities.

                        ULTRA HIGH-SPEED SUPER COMPUTERS

        Question. The Department of Energy has recently announced an
    aggressive computing program, including ultra high-speed super
    computers. What is your position on competition?
        Answer. The Department believes that competition is critical to
    ensuring effective stewardship of the taxpayers' investment in science
    as well as selection of the best ideas to ensure the scientific
    leadership of the country. We have just announced a solicitation to the
    Office of Science laboratories to begin installation of a leadership
    class computer for open science. The award will be made on the basis of
    peer reviewed open competition.

                       HYDROGEN IN THE PACIFIC NORTHWEST

        Question. What are the unique assets that research institutions and
    the natural resources of the Pacific Northwest provide that will make
    hydrogen a reality in the Northwest?
        Answer. The Pacific Northwest uses renewable energy resources to
    produce much of its energy. These resources can be tapped to produce
    hydrogen. Hydropower is a carbon free source of inexpensive electricity
    that can produce hydrogen via electrolysis. Wind can also be harnessed
    to create hydrogen via electrolysis, with Washington and Oregon alone
    possessing over 8,000 megawatts of developable wind generation
    potential.
        The Northwest is home to many organizations with the ability to
    play a part in developing a hydrogen infrastructure. These include
    State and city governments, the Bonneville Power Administration, fuel
    cell developers (Ballard, Avista labs, IdaTech, etc.), major regional
    universities, heavy truck and aerospace manufactures, Pacific Northwest
    National Laboratory, and Idaho National Engineering and Environmental
    Laboratory.

                      TIME SCALE FOR HYDROGEN IN NORTHWEST

        Question. In what time scale do you see hydrogen being a viable
    source of energy in the Northwest?
        Answer. Hydrogen is not a source of energy, but an energy carrier
    that can be produced from multiple energy resources. Because of the
    many technical and cost hurdles associated with a transition to a
    hydrogen economy, we don't expect wide scale use of hydrogen--in the
    Northwest or elsewhere--before 2020.

                        INDUSTRY-LABORATORY COOPERATION

        Question. Can you tell me more about industry's role in research
    development and demonstration projects in the effort to develop a more
    robust grid; specifically efforts underway involving national
    laboratory and industry cooperation?
        Answer. Industry-laboratory partnerships enable the full
    development and/or deployment of new and promising technologies that
    form the cornerstone of DOE's efforts to modernize the Nation's
    Electric Transmission infrastructure.
        Within the High Temperature Superconductivity's (HTS's) Strategic
    Partnership Initiative (SPI), Los Alamos National Laboratory (LANL),
    Oak Ridge National Laboratory (ORNL), IGC SuperPower, Waukesha Electric
    Systems, Southwire Company, and American Superconductor are the primary
    partners working together to develop High Temperature Superconducting
    (HTS) wire, and four types of HTS electric power equipment prototypes,
    including cables, motors, generators and transformers. This technology
    will enable distribution and transmission cables that have three to
    five times the capacity of conventional copper cables and higher
    efficiency (especially useful in congested urban areas), and power
    equipment with half the energy losses and half the size of conventional
    equipment.
        Examples of current research and development projects--all
    involving DOE-Industry cost sharing--include the Boeing Phantom Works
    with Argonne National Laboratory to design, fabricate and test a 35
    kilowatt hour superconducting flywheel energy storage system as a power
    risk management system that will give power users and utilities a full-
    scale device to manage both cost and reliability risks; the General
    Electric HTS Generator Project involving LANL and ORNL to install a 100
    MVA prototype generator; the IGC SuperPower project with LANL to
    develop and install a transformer component at a HTS substation; and
    the Long Island Power Authority project with LANL involving the
    installation of a HTS cable system.
        Lawrence Berkeley National Laboratory has the lead for the national
    laboratory/industry/university consortium that was formed to support
    cutting-edge research in Transmission Reliability R&D, provided support
    on the summer 2003 Blackout Investigation, and is integral to projects
    for developing reliability tools.
        The Pacific Northwest National Laboratory (PNNL) is part of the
    national laboratory/industry/university consortium that was formed to
    support research on Transmission Reliability R&D to transform the
    Nation's distribution system. PNNL conducts evaluations of the
    technological and institutional aspects of recent reliability events on
    the Nation's electric power system, and is the lead for research
    activities in real-time monitoring and control of the power grid. PNNL
    partners with the GridWise Alliance, in which IBM, SEMPRA, the
    Pennsylvania, New Jersey, Maryland Interconnection (PJM) and others
    work to modernize the Nation's electric distribution system in
    potentially revolutionary ways.
        In fiscal year 2004, PNNL has provided support on the summer 2003
    Blackout Investigation. PNNL supports development of communication and
    control architectures and technologies, as well as the integration of
    multi-vendor distributed energy resources into the distribution system.
    PNNL supports development of technologies for improved load/demand
    management while responding to market prices and electricity supply/
    demand conditions.
        Sandia National Laboratory (SNL) participates in a national
    laboratory/industry/university consortium to support research on
    Transmission Reliability R&D. SNL also works to develop advanced
    superconductors based on the sol-gel chemical deposition process. For
    energy storage, SNL develops improved energy storage system components
    including power conversion electronics and modular multi-functional
    energy storage systems.
        Argonne National Laboratory performs research and development for
    the HTS Program Activity. Argonne utilizes unique expertise in ceramics
    and materials science to improve conductor performance and to
    investigate deposition processes, such as metal-organic chemical vapor
    deposition. Argonne also performs research on superconducting electric
    motors, transmission cables, and flywheel electricity systems.

                              SUBCOMMITTEE RECESS

        Senator Domenici. So that's it. We stand in recess. Thanks.
        [Whereupon, at 11:23 a.m., Wednesday, March 3, the
    subcommittee was recessed, to reconvene subject to the call of
    the Chair.]

        ENERGY AND WATER DEVELOPMENT APPROPRIATIONS FOR FISCAL YEAR 2005

                                  ----------

                            TUESDAY, MARCH 23, 2004

                                           U.S. Senate,
               Subcommittee of the Committee on Appropriations,
                                                        Washington, DC.
        The subcommittee met at 2:32 p.m., in room SD-138, Dirksen
    Senate Office Building, Hon. Pete V. Domenici (chairman)
    presiding.
        Present: Senators Domenici, Bennett, Craig, Reid, and
    Feinstein.

                              DEPARTMENT OF ENERGY

                    National Nuclear Security Administration

    STATEMENT OF AMBASSADOR LINTON F. BROOKS, UNDER
                SECRETARY
    ACCOMPANIED BY:
            ADMIRAL FRANK L. BOWMAN, DEPUTY ADMINISTRATOR, NAVAL REACTORS
                PROGRAM
            DR. EVERET H. BECKNER, DEPUTY ADMINISTRATOR, DEFENSE PROGRAMS
            PAUL M. LONGSWORTH, DEPUTY ADMINISTRATOR, DEFENSE NUCLEAR
                NONPROLIFERATION

                 OPENING STATEMENT OF SENATOR PETE V. DOMENICI

        Senator Domenici. Good afternoon. This hearing will come to
    order.
        Today, the subcommittee will take testimony on the fiscal
    year 2005 budget request for the National Nuclear Security
    Administration. We will receive testimony from Under Secretary
    and Administrator of NNSA, Ambassador Linton Brooks; Deputy
    Administrator for Naval Reactors, Admiral Frank Bowman; Deputy
    Administrator for Defense Programs, Dr. Everet Beckner; Deputy
    Administrator for Nuclear Nonproliferation, Paul Longsworth.
        It is a pleasure to have all of you here. I look forward to
    your testimony today.
        For the NNSA, the President has requested $9 billion, an
    increase of 4.4 percent from the current year funding level of
    $8.6 billion. As a percentage, this is a considerable increase
    above the 1.2 percent growth in discretionary funding for
    Department of Energy.
        Ambassador Brooks, your responsibilities include the
    important job of maintaining our shrinking nuclear stockpile
    and to ensure that it serves its essential mission of
    deterrence. Funding priorities in this account include
    continuation of the stockpile refurbishment activities as well
    as conducting important stewardship activities to ensure safety
    and reliability, a vital necessity in the absence of
    underground testing.
        Your budget also continues to make the National Ignition
    Facility, NIF, a top priority. I am deeply concerned that the
    fiscal year 2005 budget has slipped the target date for
    ignition back to 2014 as a result of numerous technical
    challenges, including the cryogenic targets. To date, we have
    spent $2.5 billion with another $4 billion that will be spent
    over the life of the program. I don't believe it is prudent to
    continue to throw good money after bad. I will do everything in
    my power to ensure that program managers deal with the most
    pressing technical issues before we allow the program to go any
    further. In addition, I will work to ensure there are clear and
    verifiable programmatic milestones.
        I was surprised to see the request that nearly $500 million
    is provided for the Robust Nuclear Earth Penetrator. The
    Department should not assume such large sums in its budget
    without Congressional approval or direction. What we are really
    talking about is a stockpile plan. A successful report
    validates design feasibility and need and does not force the
    inclusion of such a large amount of money. I want it explained
    to this committee, unequivocally, so what we are doing and what
    we are authorizing and what we are not doing and what we are
    not authorizing. Because nobody on this committee is voting to
    do this. We are voting to study it if it wins but not to do it.
    To study it is a small amount of money. If we do it it is a lot
    of money.
        The budget also provides $124 million, a 21 percent
    increase above current year funding in the safeguards and
    security accounts to respond to the new design basis threat.
    That new security requirements, that these new ones are driving
    costs to such a high level it is diverting limited resources
    from other cash-strapped programs within DoE. While I recognize
    the need to protect this special nuclear material I fear that
    there is not a plan to consolidate the nuclear material across
    NNSA complex in order to lower our security costs and at the
    same time minimize terrorist threats.
        Ambassador Brooks, I am somewhat disappointed that the
    administration has failed to provide the nuclear stockpile
    report that was required in the 2004 Energy and Water Bill.
    This is an important priority within this bill and I would
    appreciate it if you would take the message back to the
    Forrestal Building and to the Pentagon that we are eagerly
    awaiting that report. Soon this committee will begin developing
    our budget priorities. Failure to produce the stockpile report
    will have serious consequences for your funding priorities next
    year. I need not spend any more time; you had better answer it,
    acknowledging that what I am talking about is right and you had
    better promise us to fix it or we will have big troubles
    between you and this committee, I assure you. This should have
    already been done.
        Finally, I am very discouraged with the funding cuts
    proposed in 2005 for the Mesa Facility at Sandia and the CMR
    replacement facility at Los Alamos. Shortfalls of a serious
    budget nature will delay these construction projects, adding to
    the costs and limiting the lab's ability to perform critical
    stockpile work.
        Now, I understand you are short of money. You get told by
    the OMB what to do but some of this, you know, we are not going
    to do what you ask us just because OMB let you, we are going to
    do what we think and not let you do some of the things that
    they have told you that you can do. I will have my turn on
    these laboratories when I ask you the questions.
        I will just make a statement ad lib now, that everything
    that I can now read about America in the globalization and jobs
    would indicate that what this country needs more than anything
    else is new technology breakthroughs. And we need them quick.
    We need new things that follow on the computer with new
    technologies. And if I understand correctly, those come in the
    fields of micro-engineering, probably, and nano-science, and
    the center for those should have been Mesa. Maybe it still will
    be but if we delay it so long it will not be.
        In addition to maintaining the nuclear stockpile, you at
    the NNSA also have the important challenge of preventing the
    spread of nuclear material, technology and expertise that could
    be used to develop and use weapons of mass destructions. The
    Office of Nuclear Non-Proliferation works very hard to secure
    weapons-grade material and prevent the sale of technology used
    by countries to develop nuclear weapons.
        Mr. Ambassador, I must compliment you and Mr. Longsworth
    and his staff for the role DoE played in disarming Libya, as
    well as uncovering the proliferation activities operated by
    Pakistan's top nuclear weapons scientist, Abdul Khan. We
    congratulate you on that. And we only fail to understand how
    Abdul Khan, with what we know he has already done, is still
    free. If somebody else in the world had done that, God knows
    what would have happened.
        Another top priority for the office is to ensure the
    success of the U.S./Russian MOX program that will dispose of 34
    tons of plutonium from each of the Russian and U.S. stockpiles.
    I am very pleased, Senators, to have been part of that. Senator
    Reid, you remember when I helped put it together and went to
    Russia with President Clinton, but I am very, very concerned
    about the lack of progress in these negotiations. How long ago
    did this start? 1998. U.S. negotiations to work with the
    Russians where we to try to find an acceptable solution so we
    can break ground on this project and we are hung up over what I
    think are trivial negotiating issues. I recently told the White
    House that maybe they ought to put some bigger people in the
    position of negotiating. How a little issue of indemnification
    can hold this up is beyond me. Now I find that indemnification
    has occurred between Russians and us and some other program
    where the liability potential might have been more severe than
    this, and the Russians came to the table. They would not have
    got that one done, if I would have had anything to do with it,
    until they get this one done. This is a way to get rid of a
    huge chunk of nuclear-grade plutonium.
        Admiral Bowman, thank you for your participation in what
    may be your last hearing before the subcommittee. I appreciate
    your steady hand. The Naval Reactors Program continues to serve
    as the world's gold standard for safe and reliable operations
    of nuclear power. I am interested to know how your office has
    been handed the responsibility of producing the next generation
    of space reactors. Traditionally this has fallen to the Office
    of Nuclear Energy, which has developed some expertise in these
    unique engineering systems. I surmise that part of the reason
    it went where it did is that you have more expertise than they
    had in the area.

                               PREPARED STATEMENT

        Dr. Beckner and Mr. Longsworth, I appreciate your
    participation and welcome your input.
        [The statement follows:]

                 Prepared Statement of Senator Pete V. Domenici

        Good morning--this hearing will come to order.
        Today, the subcommittee will take testimony on the fiscal year 2005
    budget request for the National Nuclear Security Administration.
        We will receive testimony from Under Secretary and Administrator of
    the NNSA, Ambassador Linton Brooks; Deputy Administrator for Naval
    Reactors, Admiral Frank Bowman; Deputy Administrator for Defense
    Programs, Dr. Everet Beckner; and Deputy Administrator for Nuclear
    Nonproliferation, Paul Longsworth.
        You have all testified before this subcommittee before and it is a
    pleasure to have you here again. I look forward to your testimony
    today.
        For the NNSA, the President has requested $9 billion, an increase
    of 4.4 percent from the current year funding level of $8.6 billion. As
    a percentage, this is a considerable increase above the 1.2 percent
    growth in discretionary funding for Department of Energy.
        Ambassador Brooks, your responsibilities include the important job
    of maintaining our shrinking nuclear stockpile and to ensure that it
    serves its essential mission of deterrence. Funding priorities in this
    account include continuation of the stockpile refurbishment activities
    as well as conducting important stewardship activities to ensure safety
    and reliability--a vital necessity in the absence of underground
    testing.
        Your budget also continues to make the National Ignition Facility
    (NIF) a top priority. I am deeply concerned that the fiscal year 2005
    budget has slipped the target date for ignition back to 2014 as a
    result of numerous technical challenges, including the cryogenic
    targets. To date, we have spent $2.5 billion with another $4 billion
    that will be spent over the life of the program. I don't believe it is
    prudent to continue to throw good money after bad. I will do everything
    in my power to ensure that program managers deal with the most pressing
    technical issues before we allow the program to go any further. In
    addition, I will work to ensure there are clear and verifiable
    programmatic milestones.
        Like many of my colleagues, I was surprised to see in the budget
    request that nearly $500 million is provided for the Robust Nuclear
    Earth Penetrator (RNEP) in out-year funding. I want be absolutely
    clear, without a stockpile plan and a successful report that validates
    design feasibility and need; the Department should not assume such
    large sums in its budget without Congressional approval or direction.
        This budget also provides a $124 million increase (21 percent above
    current year funding) in the Safeguards and Security Account in order
    to respond to the new Design Basis Threat. The new security
    requirements are driving costs to such a high level, it is diverting
    limited resources from other cash-strapped programs within DOE. While,
    I recognize the need to protect this special nuclear material, I fear
    that there is not a plan to consolidate special nuclear material across
    the NNSA complex in order to lower our security costs and eliminate
    potential terrorist threats.
        Ambassador Brooks, I am disappointed that the administration has
    failed to provide the nuclear stockpile report that was required in the
    fiscal year 2004 Energy and Water bill. This is an important priority
    within this bill and I would appreciate it if you would take the
    message back to the Forrestal building and to the Pentagon that we are
    eagerly awaiting that report. Soon this subcommittee will begin
    developing our budget priorities. Failure to produce the stockpile
    report will have serious consequences for your funding priorities next
    year.
        Finally, I am discouraged with the funding cuts proposed for fiscal
    year 2005 for the MESA facility at Sandia and the CMR Replacement
    facility at Los Alamos. Serious budget shortfalls will delay these
    construction projects adding to the overall cost and limiting the labs
    ability to perform critical stockpile work.
        In addition to maintaining the nuclear stockpile, the NNSA also has
    the important challenge of preventing the spread of nuclear material,
    technology and expertise that could be used to develop and use weapons
    of mass destruction. The Office of Nuclear Nonproliferation works very
    hard to secure weapons-grade material and to prevent the sale of
    technology used by countries to develop nuclear weapons.
        Ambassador Brooks, I must compliment you, Mr. Longsworth and his
    staff for the role DoE played in disarming Libya as well as uncovering
    the proliferation activities operated by Pakistan's top nuclear weapons
    scientist Abdul Khan.
        Another top priority for that office is to ensure the success of
    the U.S./Russian MOX program that will dispose of 34 tons of excess
    plutonium from each of the Russian and U.S. stockpiles. This is an
    important project from a proliferation standpoint, but I am concerned
    about the lack of progress in negotiations. I have worked hard to push
    U.S. negotiators to work with the Russians to find an acceptable
    solution that will allow us to break ground on this important project
    and forever dispose of the plutonium.
        Admiral Bowman, thank you for your participation in what may be
    your last hearing before this subcommittee. I appreciate your steady
    hand on the rudder. The Naval Reactor program continues to serve as the
    world's gold standard for safe and reliable operations of nuclear
    power.
        Admiral, I am interested to know how your office has been handed
    the responsibility of producing the next generation of space reactors.
    Traditionally, this responsibility has fallen to the Office of Nuclear
    Energy, which has developed an expertise in designing these unique
    energy systems.
        Dr. Beckner and Mr. Longsworth, I appreciate your participation in
    this hearing and welcome your input.
        Now, I will yield to Senator Reid for any opening statement he
    would like to make.

        Senator Domenici. Now I yield to Senator Reid for comments
    and then we will proceed. Senator Reid.
        Senator Reid. Thank you very much, Mr. Chairman. I welcome
    you back after the recess. I hope your recess went well.
        Senator Domenici. Thank you. It did.

                        STATEMENT OF SENATOR HARRY REID

        Senator Reid. Ambassador Brooks, by and large I believe you
    and your team are doing a good job. I have met with you on
    occasion and you have always been forthcoming in spite of the
    rocky start that you and I had regarding your confirmation. I
    think you have been candid with me and I have tried to be with
    you. I have, as with Senator Domenici, a long tenure on this
    subcommittee; we go back to the days of Dr. Victor Reis where
    we were trying to come up with a stockpile stewardship program.
    And I think we came up with one to have a safe and reliable
    nuclear stockpile, clearly the safest and most secure of any in
    the world. And even though I fought Senator Domenici initially
    on establishing the entity which you lead, Senator Domenici was
    right; I think it has been a tremendous step forward. And
    General Gordon did such a remarkably good job, he has very
    large shoes to fill, as you know. He had a commanding
    personality and his great record, I think, added the prestige
    needed to get this new entity started.
        So, I have reviewed your testimony, budget request, and I
    will bet there is not a hearing that I have attended, or will
    attend during this budget cycle, that they would not love to
    have OMB sign off on what you have gotten. I do not know of an
    entity that has been treated better than yours that I have seen
    this whole year. Your problem is not an inadequate budget
    request, your problem is going to be holding on to what you
    already have. This subcommittee may be as much as $1.7 billion
    in the hole due to a combination of inadequate funding
    requests, especially the Corps of Engineers, budget gimmicks
    that certainly are just amateurish and the budget committees
    have chosen not to accept these gimmicks.
        Holding NNSA harmless may not be possible unless the
    subcommittee is given a sizeable increase in its allocation. I
    read an article during the recess that suggests, Mr. Chairman,
    you have secured a commitment from the Majority Leader and the
    Chairman of the Budget Committee that our subcommittee will
    remain healthy at the end of the budget process. I certainly
    hope so. It is not just this subcommittee, it is the entire
    Senate that benefits. And having said that, the entire country
    benefits from giving us a better budget mark than what we have.
    And if that is the case, Senator Domenici, you deserve every
    accolade that you can get, and I would be the leading
    cheerleader for this if your efforts are successful.
        Second, Ambassador Brooks, you are going to hear a lot, as
    you already have heard, from the chairman of this subcommittee
    about a number of things. One of the things I know he is
    frustrated about is the National Ignition Facility. And as we
    look back at the ability of that project to go forward, I have
    to say that project would not have gone forward but for Senator
    Domenici. I was ready to can that whole thing. But Senator
    Domenici and I try to work together on this subcommittee as
    much as we can and as a result of our working together we let
    this project go forward. And Senator Domenici, having been the
    lead person on this, I on a number of occasions will set aside
    my personal feelings about what is going on because of his
    initial involvement in this. So what I am saying is that I
    think you are going to have to take a closer look at NIF
    because Senator Domenici certainly is going to take a close
    look at it. We know there have been some problems in the latest
    snafu, and I think that this is something that we have to look
    at closely because I know the chairman is going to look at it
    closely. NIF has a large number and unless we get our budget
    allocation changed we are going to have to look there for some
    of the money to take care of other things.
        Third, you are requesting expanded funding for a number of
    very controversial items: Robust Nuclear Earth Penetrator,
    Modern Pit Facility, Advanced Nuclear Concepts Program. Last
    year, the House of Representatives, without a word of dissent
    to be heard anywhere in the House, slashed funding for these
    programs. The Senate bill fully funded them; there was an
    amendment offered on the Senate floor to cut the funding. It
    failed although it had support of most of the Democratic
    Caucus. The point I am making is that you need to tread very
    carefully here. Congressional support for these programs is not
    very strong and I would encourage you to be very candid on a
    regular basis with your plans and intentions for all these
    programs. The memo you sent the laboratories regarding the
    Advanced Concepts Program last year, the one that seemed to
    indicate that it was okay to move forward as planned regardless
    of Congressional guidance, concerns us all. I am willing to
    give you the benefit of the doubt that you are not encouraging
    your contractors to ignore our intent but I strongly suggest
    that you and your staff work very closely with us up here on
    these initiatives.
        I am a little concerned, maybe even put off, by the notion
    that you have included a half-a-billion dollars in your out-
    year spending plan as what you call a ``placeholder'' for
    bunker busting pending White House and Congressional decisions.
    I am not sure that we can allow this to go forward. This is a
    large ``placeholder.'' Many of us remain unconvinced that this
    is an appropriate path.
        Finally, on the subject of working with us here in
    Congress, our Conference directed you to submit the Revised
    Stockpile Plan to us with fiscal year 2005 budget request. We
    carried these words because we were beyond being fed up with
    waiting for the Plan half-a-year ago. The budget request has
    been here for nearly 2 months and we still have no sign of the
    Revised Stockpile Plan. We set that date in consultation with
    your staff so we can use that document to assist our financial
    decision-making. I am not interested in the story about how
    complicated it is to get such an important document signed or
    how many people over at the White House or NNSA need to read
    it, polish it, refine or rewrite it; it is just way overdue and
    we need to get the document up here. I might even suggest that
    we write a bill that fences off every dollar above current year
    levels for NNSA until this is provided. And I hope this gets
    the White House's attention. And I am convinced, Ambassador,
    that this is not you personally holding this up and you need
    not comment on that. But sometimes we get a little put-off by
    someone who is a Secretary or an Administrator such as you are
    who comes here and says to us privately, well, I'm not the one
    holding this up. And you are the person that we look to.
        So, I want to thank each of your deputies for being here;
    Dr. Beckner, Admiral Bowman, Mr. Longsworth, we appreciate that
    very much.
        The chairman's not here so the acting chairman, Senator
    Bennett, I would ask permission of the chair to be able to
    submit questions in writing and would ask that you, the
    witnesses, get back to the subcommittee within 10 days. We have
    a little parliamentary problem on the floor that I am going to
    work on.
        Senator Bennett [presiding]. Without objection.
        Senator Reid. Thank you very much.

                     STATEMENT OF SENATOR ROBERT F. BENNETT

        Senator Bennett. Thank you, Senator Reid, very much.
        When the Chairman returns I will make it clear that I hope
    to have more than a single round of questioning because I have
    a number of concerns that I want to raise and a number of
    issues that I think have to be made very clear for the record.
        I assume you know the history of southern Utah with respect
    to nuclear testing in Nevada. It goes back to the 1950's and
    the 1960's, and Utahans were not only let down by their
    government, quite frankly, Utahans were lied to by their
    government. Things that were done in those periods in
    retrospect are incomprehensible. Students were let out of
    school and taken out to the schoolyard to stand in the open air
    and look for the flash of the above-ground test and then watch
    the cloud as it went over. And the incidence of cancer and
    other problems that occurred among people who lived down-wind
    from the Nevada testing site has been well documented and
    Congress has taken actions with it and I will not review all of
    that past. But I think if you are not familiar with that past
    you should be and therefore understand why the people of
    southern Utah, in particular, are very suspicious of anything
    the government says about nuclear testing, above-ground or
    below-ground, and for that reason, Mr. Chairman, I intend to
    use this opportunity to ask a number of questions, quite
    pointed. I expect that I will get direct answers so that they
    will be firmly on the record and there will be no ambiguity
    about some of this.
        Now, while I speak with that background as the Senator
    representing Utah, I want to make it clear that my concern for
    the safety of the people of Utah is not limited to Utah. I, as
    a Senator, must be concerned about the safety of all of the
    people who will be down-wind from any test that will occur, and
    that would include not only everybody in the United States but
    given the jet stream and the way we now understand the weather
    goes around the world, accidents or sloppiness in testing in
    Nevada can affect far more than just Utah. So while I speak
    here as the Senator for Utah I want to make it clear that I
    want to be sure that health and safety for everyone in America,
    and to the degree it gets beyond our shores, to the rest of the
    world becomes the primary concern. And I know that none of you
    were involved in the things that were done back in the 1950's
    and 1960's when the government lied to its citizens in that
    part of the world and that is fine.
        But that means that we must be even more circumspect and
    more penetrating in our attempts to make sure that this
    administration does not repeat, in any way, either
    inadvertently or deliberately, the things that have happened in
    the past. There is still a great deal of skepticism among those
    who live in southern Utah about any government pronouncement on
    this issue and that is why, Mr. Chairman, I intend to be fairly
    penetrating in the question period. And I said before you came
    I hope we will have more than one round so that I will have
    time to explore all of this properly.
        Senator Domenici [presiding]. Senator, if we do not finish
    and you need some more, we would turn the committee over to you
    and you can spend the whole afternoon.
        Shall we proceed? Do you need to make an opening statement,
    Senator?
        Senator Feinstein. I do, Mr. Chairman. I hate to tell you.
        Senator Domenici. Well, we were not going to have them but
    I got out of here and it got started. So we have got to let
    you.
        Senator Bennett. When you relinquished the gavel for 30
    seconds I took advantage of it.
        Senator Domenici. Go ahead.
        Senator Feinstein. Thank you very much.
        Senator Domenici. We want to be brief.

                     STATEMENT OF SENATOR DIANNE FEINSTEIN

        Senator Feinstein. I will try very hard to be brief but I
    think as Mr. Brooks knows I have very strong views on the
    proposed nuclear program and I wanted to make a couple of
    comments about it. Ambassador Brooks was nice enough to spend
    some time with me in my office, and I appreciate that very
    much, and went over his views of what the program is. The more
    I read about the program the more I believe it is something
    else and I would characterize that something else by saying it
    is a reopening of the nuclear door.
        Just where you sit last year Secretary Abraham sat. He said
    we have no intentions of proceeding with new nuclear weapons.
    Secretary of Defense, at a Defense Appropriations hearing, came
    before us and said that the Robust Nuclear Earth Penetrator is
    a study, it is nothing more and nothing less. And then, if you
    look to follow the money, I think you see that it is much more
    than that. This year's budget request includes the $27.5
    million for the Earth Penetrator, the $9 million for the so-
    called Advanced Weapons Initiative, and the $30 million for the
    Modern Pit Facility to make up to 450 new pits, which as you
    know we discussed and you said there was no way of knowing
    whether we need this kind of improvement in the Pit Facility.
    And the Revised Stockpile Plan has not yet been presented to
    the best of my knowledge. But if you look at the Congressional
    Research Service, they now report that the administration's own
    long-term budget plan includes $485 million for the Robust
    Nuclear Earth Penetrator between 2005 and 2009. I think that
    number casts doubts on the contention that this is just a study
    and that all we are doing is just a study. Because I do not
    believe there can be a commitment of nearly $500 million for
    just a study. And I think it means that the administration is
    determined to develop and field a new generation of nuclear
    weapons. And this Senator is strongly opposed to that.
        I think by seeking to develop new nuclear weapons, and as
    indicated in the Nuclear Posture Review, a new doctrine that
    considers nuclear weapons in the same category as conventional
    weapons, the United States is sending a message that nuclear
    weapons have a future battlefield role and utility. And by
    doing so I believe we are going to make our Nation and our
    allies less secure, not more secure. And if the United States
    opens the door to the development, testing and deployment of
    new nuclear weapons. So I am just here to kind of follow this
    thing along and I am going to try to oppose it at every step of
    the road because I do not believe the American people want to
    support a new generation of nuclear weapons.

                   PREPARED STATEMENT OF SENATOR LARRY CRAIG

        Senator Domenici. Senator Craig has also submitted a
    prepared statement which will be included in the record.
        [The statement follows:]

                   Prepared Statement of Senator Larry Craig

        The DOE's nuclear weapons programs are of great interest to the
    Nation and to this subcommittee. DOE is a significant national security
    agency. Both the Chairman and Ranking Member of the subcommittee have
    parts of the nuclear weapons complex located in their States.
        Idaho has a stake in these programs, too. As Admiral Bowman is
    aware, there isn't a single element of nuclear fuel that gets
    discharged from a Naval reactor that does not end up in Idaho. The fuel
    is examined in Idaho and then stored there for the long term. This work
    is the reason why Navy cores now last ``the life of the ship.''
        Naval Reactors is now being tasked to provide this kind of
    expertise to space nuclear reactors. Idaho can bring much more to this
    enterprise than simply being the resting place for the Navy's spent
    fuel. I ask our witnesses to consider that, as they go about deciding
    how to approach this new space nuclear mission.
        DOE also has the job of stopping the proliferation of nuclear
    materials which is an important one in the world we face. I believe
    that DOE should more closely coordinate its nuclear nonproliferation
    missions with those of DOE's Office of Nuclear Energy. People around
    the world want cheap, abundant energy. They might decide nuclear energy
    is the way to get there. If they decide to build nuclear reactors, I am
    confident that this country can design reactors that do not cause the
    spread of enriched materials around the globe. Scientists at the Idaho
    National Lab can contribute to solving this challenge.
        Finally, I would ask all of our witnesses to consider the issue of
    economic security. A prosperous world will be more secure. A world
    where resources are scarce and people are in conflict will be a more
    dangerous world. Energy security is a key part of national security of
    global security. I challenge each of you to think more broadly about
    the role of energy technology in our national security. It is an
    essential element, and we need to devote the resources to it.
        Greater support for energy technology should be part of the
    appropriations bill we craft. For our national security, we also need
    to pass a comprehensive energy bill as soon as possible. The chairman
    of the subcommittee has worked diligently on that, as have I. We will
    continue to do so.

        Senator Domenici. Well, let me first say, so there is no
    misunderstanding, I do not favor a new round of the development
    of nuclear weapons. I think I am just as firm on that as is the
    distinguished Senator from California. But I do believe
    research is not static with reference to nuclear activity. And
    so we will go into this a little more and ask whether we can
    actually ask our great scientists to just close their minds to
    these issues and say they cannot study them even if they fall
    right before their face. So we will have our arguments. The
    California Senator can contend we are building new weapons; I
    will contend we are researching them. She can contend we are
    paying for $500 million worth; I will say we are going to vote
    for a small number and no more in the language of dollars, and
    the language will say what it is for and no more. So with that,
    I would like to proceed.
        What is your pleasure? Shall we start with the Ambassador?
    All right, Mr. Ambassador, please proceed.

                    STATEMENT OF AMBASSADOR LINTON F. BROOKS

        Ambassador Brooks. Thank you, Mr. Chairman. I want to thank
    the Members for their support for our national security
    efforts. I have prepared some detailed written testimony I
    would like to submit for the record, and I would like to
    summarize that now. And I would like it if Admiral Bowman could
    follow me and talk about the Naval Reactors portion which I
    will not cover.
        Senator Domenici. On the record.
        Ambassador Brooks. As you said in your opening statement,
    the fiscal year 2005 request totals just over $9 billion, which
    is a 4 percent increase over 2004 and is consistent with the
    long-range plan presented to the Congress last year. For
    weapons activities we're seeking $6.5 billion. That will
    maintain the safety and reliability of the nuclear weapons
    stockpile, enhance stockpile surveillance in the engineering
    base, refurbish and extend the service life of warheads,
    maintain an R&D base and support the required facilities and
    infrastructure. I am pleased with the ability of the Stockpile
    Stewardship Program to certify the safety, security and
    reliability of our aging nuclear weapons and I'm pleased that
    we can do that without having to consider returning to
    underground nuclear testing. And, the cutting edge scientific
    and engineering tools that we are requesting in this budget
    will let us continue these certification efforts with the same
    kind of confidence.
        We are extending the life of several existing weapons; that
    life-extension program is proceeding well. This year, we will
    complete the life-extension for the W87 ICBM warhead and we
    expect to meet DOD schedules for the submarine launched
    ballistic missile W76, the B61 bomb and the W80 cruise missile.
    The National Ignition Facility will perform its first Stockpile
    Stewardship experiment this year using four of its eventual 192
    laser beams. We have recently devised a strategy that will
    ensure ignition experiments begin in 2010 as previously
    planned. During the question and answer period we can explain
    technically why that now appears feasible.
        Our Advanced Simulation Computing Program will deliver two
    new machines, one this year, one next year, which will be the
    fastest computers in the world and, more importantly, will help
    us provide important data on the health of the stockpile.
        The Nuclear Posture Review gave infrastructure equal
    priority with offensive and defensive forces. We have two
    accounts in the budget that are essential to our ability to
    maintain such an infrastructure. Readiness in Technical Base
    and Facilities provides the funding to operate and maintain our
    facilities over the long-term. In contrast, there's a
    Facilities and Infrastructure Recapitalization Program which is
    a get-well program the Congress authorized designed to
    eliminate maintenance backlogs this decade. We expect to meet
    our goal of eliminating those backlogs and have the so-called
    FIR-program go out of existence shortly after the end of the
    decade. These two programs are fixing the backlog and restoring
    the weapons complex. They're crucial and I urge the committee
    to fully support them.
        Now, these programs will allow us to maintain the stockpile
    for the next decade. Nuclear Posture Review recognized the need
    over the long-run to design and build a Modern Pit Facility.
    That's a poor term, it might better be called a Pit Rework
    Facility. It'll support the pit remanufacturing needs of the
    stockpile. It's important to understand we need this facility
    even if the United States never produces another nuclear weapon
    of any kind. All existing plutonium pits will ultimately need
    to be rebuilt due to aging effects caused by the radioactive
    decay of plutonium. Last year's conference requested that we
    delay issuing the Final Environmental Impact Statement in
    selecting a site for the Modern Pit Facility pending the
    submission of the Revised Stockpile Plan that was referred to
    in several of the Members' opening statements. This decision to
    delay site selection doesn't affect our very limited efforts at
    Los Alamos to manufacture a W88 pit nor to reestablish the
    capability that we've not had in almost 15 years. We're on
    schedule to produce a War Reserve pit for our Trident-2 missile
    by 2007.
        Now, I have no reason to doubt the ability of the Stockpile
    Stewardship Program to continue to ensure the safety, security
    and reliability of the enduring stockpile. But we must maintain
    our ability to carry out a nuclear weapons test in the event of
    some currently unforeseen problems that can't be resolved by
    other means. Our fiscal 2005 request allows us to meet the
    requirements of the Defense Authorization Act to achieve by
    October 2006, a readiness to conduct an underground test within
    18 months. The President has made it very clear we have no
    intention of resuming testing. Our plan is to improve test
    readiness posture, a prudent hedge against the possibility of a
    problem arising in the stockpile that can't be confirmed or
    fixed or certified without a nuclear test. I also want to make
    it clear that much of the money that we are requesting goes to
    ensure, through very detailed analysis, the absolute safety of
    any hypothetical future nuclear test. We are extremely
    conscious of our safety responsibilities and intend to ensure
    that if it ever becomes necessary to resume nuclear testing we
    can do so safely.

                               ADVANCED CONCEPTS

        The programs I have described let us maintain the stockpile
    and correct unforeseen problems. The Nuclear Posture Review
    also highlighted the importance of ensuring the weapons complex
    can adjust to changing requirements of nuclear deterrence in
    the coming decade. We're requesting $9 million, about one-tenth
    of 1 percent of our budget, for research on advanced concepts
    and we're requesting, as has been mentioned by several Members,
    $27 million to continue the Nuclear Earth Penetrator
    feasibility study.
        There's been a great deal of discussion on the implications
    of these programs and I'd like to comment on them in a little
    more detail. Some of the discussion has been based on a
    misunderstanding of our intent. In his opening statement, the
    Ranking Member specifically noted one reason for that, a poorly
    written memorandum that I sent in December. I'd be delighted to
    submit, for the record, that memorandum, a criticism of it by
    another committee and my response, in order to make it clear
    that what we have here is poor drafting and not an attempt to
    thwart the will of the Congress.
        We intend to use our Advanced Concepts funds to
    investigate----
        Senator Domenici. Are you going to make those a part of the
    record?
        Ambassador Brooks. Yes sir, if I may.
        Senator Domenici. Yes, please do.
        [The information follows:]

                                  Department of Energy,
                      National Nuclear Security Administration,
                                      Washington, DC, December 5, 2003.
    Pete Nanos,
    Director, Los Alamos National Laboratory.
    Michael Anastasio,
    Director, Lawrence Livermore National Laboratory.
    C. Paul Robinson,
    President, Sandia National Laboratory.
        On November 24, 2003, President Bush signed the National Defense
    Authorization Act for fiscal year 2004. Section 3116 of this law
    repealed the 1994 law prohibiting the Secretary of Energy from
    conducting research and development that could lead to the production
    of a new, low-yield nuclear weapon (i.e., Section 3136 of Public Law
    103-160--the so-called PLYWD restriction). The administration had
    sought to remove this restriction because of the chilling effect it has
    had on nuclear weapons research and development.
        On behalf of the administration, I would like to thank you and your
    staff for helping to support this important effort, we are now free to
    explore a range of technical options that could strengthen our ability
    to deter, or respond to new or emerging threats without any concern
    that some ideas could inadvertently violate a vague and arbitrary
    limitation. (Of course, testing, acquisition or deployment of any
    nuclear weapon--low-yield or otherwise--or commencement of weapons
    engineering development or subsequent phases, requires authorization by
    Congress).
        Along these lines, I expect your design teams to engage fully with
    the Department of Defense to examine advanced concepts that could
    contribute to our nation's security. Potentially important areas of
    such research include agent defeat and reduced collateral damage.
        In addition, we must take advantage of this opportunity to ensure
    that we close any gaps that may have opened this past decade in our
    understanding of the possible military applications of atomic energy--
    no novel nuclear weapons concept developed by any other nation should
    ever come as a technical surprise to us.
        Repeal of the PLYWD restriction on nuclear weapons research and
    development represents, in part, an endorsement by Congress of our
    efforts to begin to address the nuclear weapons stockpile in accordance
    with the recommendations of the administration's Nuclear Posture Review
    to meet the security needs of the 21st century. We should not fail to
    take advantage of this opportunity.

                                              Linton F. Brooks,
                                                         Administrator.
                                     ______

                     Congress of the United States,
                              House of Representatives,
                                   Committee on Appropriations,
                                      Washington, DC, January 22, 2004.
    The Honorable Linton F. Brooks,
    Administrator, National Nuclear Security Administration, 1000
            Independence Avenue, S.W., Washington, DC 20585.
        Dear Ambassador Brooks: We are deeply concerned by the tenor and
    substance of your December 5, 2003, memorandum to the directors of the
    three National Nuclear Security Administration (NNSA) weapons
    laboratories. You are well aware of our reservations about embarking on
    significant new nuclear weapons design initiatives under the advanced
    concepts proposal, and this issue was a significant point of
    disagreement with the Senate during the Energy and Water Development
    conference negotiations last fall. These issues continue to command
    much of our attention and will do so in our consideration of the
    Department's fiscal year 2005 budget request.
        Therefore, we were troubled to read your guidance that the weapons
    laboratories are now ``free to explore a range of technical options
    that could strengthen our ability to deter, or respond to new or
    emerging threats, without any concern that some ideas could violate a
    vague and arbitrary limitation.'' Your memo also encourages your
    ``design teams to engage fully with the Department of Defense'' and
    ``to take advantage of this opportunity to ensure that we close any
    gaps that may have opened this past decades in our understanding of the
    possible military applications of atomic energy . . .''.
        You should be very well aware of our concerns about this advanced
    concepts work on new nuclear weapons, and of the language in the fiscal
    year 2004 conference report for Energy and Water Development
    Appropriations that fences two-thirds of the advanced concepts funding
    pending submission to Congress and Congressional review of a revised
    nuclear weapons stockpile report. However, your guidance memo to the
    weapons laboratories contained no mention of this funding restriction--
    the only message conveyed to the weapons laboratories is that of
    unbridled enthusiasm for new weapons designs and for seeking new
    military missions for nuclear weapons.
        Having had several discussions with you on advanced concepts, we
    took you at your word that you were willing to redefine the scope of
    the Advanced Concepts work to address our concerns. Unfortunately, it
    is now apparent to us that those were hollow assurances and that the
    NNSA is determined to charge forward with unrestricted efforts on
    advanced nuclear weapons concepts. Nothing in your direction to the
    weapons researchers communicates any sense of the measured and
    thoughtful steps that must be taken by the NNSA before Congress is
    comfortable with the direction the Department is proposing. In
    addition, your memo also makes us question the sincerity of your
    commitment to address our concerns regarding the schedule and sizing of
    the proposed new Modern Pit Facility.
        Although we find your actions unhelpful, they are at least
    instructive in gauging the actual intent of the Advanced Concepts work
    proposed by the Administration; we will view future proposals from the
    Department with this memorandum in mind.
                Sincerely,
                                       Peter J. Visclosky,
                                               Ranking Minority Member.
                                       David L. Hobson,
                Chairman, Subcommittee on Energy and Water Development.
                                     ______

                                  Department of Energy,
                      National Nuclear Security Administration,
                                      Washington, DC, January 27, 2004.
    The Honorable Peter J. Visclosky,
    Ranking Minority Member, Subcommittee on Energy and Water Development,
            Committee on Appropriations, U.S. House of Representatives,
            Washington, DC 20515.
        Dear Mr. Visclosky: Thank you for your letter of January 22, 2004,
    which expresses concerns over my December 5, 2003, memorandum to the
    Directors of the three National Nuclear Security Administration weapons
    laboratories. Your letter clearly conveys that, in your view, my
    memorandum fails to take into account the concerns of the Congress with
    regard to advanced concepts development.
        I have reviewed the memorandum in question and agree some of the
    wording could lead to misinterpretation of my intent. I regret any
    misunderstanding. The memorandum was sent to document the removal of
    the prohibition on conducting research and development that ``could''
    lead to development of a new, low-yield nuclear weapon. As my
    memorandum stated, the removal of this provision in the fiscal year
    2004 Defense Authorization Act allows us to explore advanced concepts
    without an artificial constraint. Repeal of this restriction was
    strongly supported by the House Armed Services Committee.
        My memorandum did not direct the conduct of specific research aimed
    at developing new weapons. We intend to use the advanced concept money
    to investigate new ideas, not necessarily new weapons. For example, the
    first two million dollars of the fiscal year 2004 funding will be used
    for examining the feasibility of adapting an existing weapons carrier
    and existing nuclear warheads to achieve a delivery system with greater
    assurance that the intended nuclear mission could not be compromised by
    either component failure or adversary attack; i.e., greater reliability
    for nuclear missions. Because the remaining funds will not be available
    until we have submitted a revised nuclear weapons stockpile report and
    the Congress has had time to review that report, we have not yet
    determined how the remaining funds will be used. We will, as my
    December memorandum states, be engaging closely with the Department of
    Defense on how best to use these funds. Appropriate uses might include
    examining the feasibility of improving design margins of existing
    warheads in order to ensure still greater reliability in the absence of
    nuclear testing or examining other features to improve safety further.
        In your letter, you expressed two additional concerns. First, you
    noted that I did not indicate that two-thirds of the advanced concepts
    money is fenced until we submit a revised nuclear weapons stockpile
    report and the Congress has had time to review that report. I did not
    include that provision because I had personally delivered to each of
    the laboratory directors a copy of both the bill and the committee
    report and had highlighted that provision to them.
        You also expressed doubt about the Administration's plans with
    respect to the Modern Pit Facility. To remove any doubt on our plans, I
    have enclosed a draft press release for your consideration which will
    be released on Wednesday, January 28, 2004, indicating our intent to
    delay issuing the final Environmental Impact Statement and, thus, our
    intent to delay identifying a preferred site for the facility. At the
    same time, I respectfully repeat what I have said in previous
    conversations on this matter which is, if the United States never
    develops another nuclear weapon, a Modern Pit Facility will still be
    required. I would welcome the opportunity to review my reasoning with
    you or to arrange a briefing with your staff.
        Finally, I want to make it absolutely clear that it was not my
    intent to mislead the Committee, and I regret any inference you may
    have drawn that I have done so. You and other members of the
    Subcommittee have concerns with some of the approaches that the
    Administration is advocating. Such disagreements are inherent in the
    process of developing an overall U.S. position on these important
    issues. I strongly support the President's program for nuclear
    deterrence and believe that the proposals we have made in the nuclear
    area are overwhelmingly in the national interest. But, I also
    understand the importance of not misleading Congress. I regret that the
    wording of my December 5, 2003, memorandum may have led to the
    incorrect assumption that I had done so in this case. I have not. I
    appreciate your bringing this matter to my attention and will ensure
    that future correspondence does not lead to similar misunderstandings.
        I would be happy to discuss any of these points with you personally
    at your convenience. If you have any further questions, please feel
    free to contact me or C. Anson Franklin, Director of Congressional and
    Intergovernmental Affairs.
                Sincerely,
                                              Linton F. Brooks,
                                                         Administrator.

        Ambassador Brooks. We intend to use Advanced Concepts funds
    to investigate new ideas, not necessarily new weapons. For
    example, with that portion of the Advanced Concepts money which
    is not held in abeyance pending the Stockpile Plan, we will
    begin to examine the feasibility of adapting an existing
    nuclear weapon to provide a Cruise Missile capability that
    involves enhanced safety and use control. We are also looking
    at improving warhead design margins in order to ensure high
    confidence in warhead reliability. We're also in discussion
    with the Air Force on examining the utility of nuclear weapons
    against chemical and biological agents, although we've made no
    decisions to study this area. Specific uses of the proposed
    2005 funds will be determined jointly with the Department of
    Defense.
        Perhaps the single most contentious issue in our budget is
    continued funding for the Robust Nuclear Earth Penetrator
    study. The study is to determine whether existing warheads,
    either the B61 bomb or the B83 bomb, could be adapted without
    nuclear testing to improve our ability to hold at risk hardened
    and deeply buried facilities. I want to make several points
    about this effort.
        First, there's a clear military utility to this weapon. A
    classified Defense Department report was submitted to the
    Congress last year on this subject and remains valid.
        Secondly, despite this obvious utility to the capability,
    we will move beyond the study stage only if the President
    approves and if funds are authorized and appropriated by
    Congress. We included funds in our out-year projections only to
    preserve the President's option. There won't be any decision
    made until the study is completed. What we are asking the
    Congress to do this year is approve the continuation of the
    study. The law is extremely clear that beginning development
    and engineering requires Congressional approval and there's no
    one in the administration who has any doubt about that feature
    of the law.
        Finally, even if the study shows that it's feasible and the
    President decides to pursue it and the Congress decides to fund
    it, this weapon does not represent a change from our policy of
    deterrence. Deterrence requires that we be able to hold at risk
    something that an adversary values. Now, I refer you once again
    to the classified report where we and the Department of Defense
    speak in specific detail on the potential deterrent benefits of
    this weapon.
        As the Congress evaluates our request it's important to
    understand that while there have been press accounts of
    administration plans to develop low-yield weapons, there are no
    such plans. Further, nothing we will do is intended to lower
    the nuclear threshold or blur the distinction between nuclear
    and non-nuclear weapons. Indeed, the intent of the Nuclear
    Posture Review is to place greater emphasis on conventional
    weapons rather than nuclear weapons.
        I repeat, as I have said to this committee before, only the
    President can authorize the use of nuclear weapons and no
    President would make that decision except in the gravest of
    circumstances.

                        DEFENSE NUCLEAR NONPROLIFERATION

        Let me turn now to Defense Nuclear Nonproliferation. We're
    asking for $1.35 billion to support activities to reduce the
    global danger. We're not doing this alone; our G8 partners have
    committed to spend $10 billion to help decrease the global
    proliferation threat over the next 10 years. The largest
    program in this area involves the disposition of surplus U.S.
    and Russian plutonium. As you mentioned in your opening
    statement, Mr. Chairman, one of the key obstacles we
    encountered is a disagreement with Russia regarding liability
    protection for plutonium disposition work performed in that
    country. At the present time, this disagreement has resulted in
    a 10-month delay in the start of construction of the Mixed
    Oxide, or MOX, Fuel Facility in Russia as well as the facility
    in the United States. This issue is being worked at the highest
    levels of the administration; the President's 2005 budget
    request supports construction of both MOX facilities starting
    in May of next year and I am hopeful that we will resolve the
    liability issue shortly, as soon as the new Russian government
    is fully organized.
        Senator Domenici. Who is your negotiator?
        Ambassador Brooks. The Under Secretary of State for Arms
    Control, John Bolton, has been the primary lead; the Secretary
    of State has also been involved.
        In addition to disposing of existing stocks of surplus
    weapons-grade plutonium, we're working hard to stop more from
    being produced by shutting down the last three plutonium
    production reactors in Russia and replacing them with fossil
    fuel plants. That will result in halting annual production of
    about 1.2 metric tons of weapons-grade plutonium, roughly a
    bomb a day. We are preparing preliminary designs for the fossil
    fuel replacement plants, and validating cost estimates and we
    expect to complete these designs by the end of the calendar
    year, at which time we'll be able to provide the Congress with
    revised and firm cost estimates.
        Given recent threats to the United States, it has become
    increasingly clear that protecting and securing nuclear
    materials and detecting nuclear materials destined for the
    United States at foreign ports, airports, and border crossings
    is a high priority. Our budget request for material protection,
    control, and accounting, which includes our Second Line of
    Defense Program and our Mega-Ports Program, is $238 million. Of
    that, $15 million will go toward moving ahead with our Mega-
    Ports Program to train law enforcement officials and equip key
    international ports with radiation detection equipment. We
    expect to complete work at ports in Greece and The Netherlands
    by late summer in 2004. In addition, also under Material
    Protection, we have made a number of improvements in the
    security of the Russian Nuclear Navy and are now focused on
    improving security at Strategic Rocket Forces sites.
        In fiscal year 2005, we will assume, NNSA will assume,
    responsibility for the Off-site Source Recovery Project. The
    requested program funding is $5.5 million, with a total cost of
    about $40 million to substantially reduce the risk of source
    materials within the United States being used for radiological
    dispersion devices. And, we're working closely with the U.S.
    Nuclear Regulatory Commission.
        Our budget reflects our continued support for the
    International Atomic Energy Agency and it reflects a renewed
    emphasis on retrieving material with weapons potential from
    research reactors worldwide. We've been working to secure
    materials in Russia and Eurasia for over a decade and our
    programs have now expanded worldwide. We've worked to return
    both U.S.- and Russian-origin highly enriched uranium to
    convert civilian reactor cores to use low-enriched uranium,
    which is of less proliferation concern, and to secure and
    remove vulnerable nuclear and radiological materials. Our
    efforts are paying off. By the end of this year almost half of
    the 98 targeted reactors will have been converted to use low-
    enriched uranium fuel. In 2002, the Department assisted in the
    removal of vulnerable nuclear material from Yugoslavia. In
    2003, we helped return 17 kilograms of Russian-origin highly-
    enriched uranium from Bulgaria, and 14 kilograms of Russian
    highly-enriched uranium from Romania. We're now working with
    Libya and have recently helped remove highly-enriched uranium
    from that country as well. In Iraq, the Department is securing
    and disposing of vulnerable radiological sources. To help
    coordinate all this, last year we established a Nuclear and
    Radiological Threat Reduction Task Force to combat the threat
    posed by so-called dirty bombs. This task force is identifying
    and securing high risk radiological materials and developing an
    action plan to mitigate these vulnerabilities overseas.
        Senator Domenici. Who will lead that committee?
        Ambassador Brooks. Mr. Longsworth will be in overall
    charge.
        In all this we have strengthened the security of our Nation
    and I believe we're making the world safer.
        Senator Domenici. Mr. Ambassador, I know you have a lot to
    say but you told us you were going to be brief.
        Ambassador Brooks. Yes sir, I've got two more points to
    make and then I'll quit, if I may.
        Senator Domenici. All right.
        Ambassador Brooks. I want to just mention safeguards and
    security. That's one of Secretary Abraham's and my highest
    priorities. Our request includes an increase over the past to
    deal with the safeguards and security consequences of the
    Design Basis Threat and I believe that we are well on track to
    meet the Secretary's guidance to have improvements in place by
    the end of next year.

                               PREPARED STATEMENT

        Finally, let me just say that our budget is consistent with
    the President's policy to reduce reliance on nuclear weapons.
    It supports continued progress in certifying our nuclear
    deterrent and reducing the danger from proliferation. And it
    will enable us to continue to maintain the safety and security
    of the stockpile through the 21st century.
        This concludes my statement. After you've heard from
    Admiral Bowman I'm ready for your questions, sir.
        [The statement follows:]

               Prepared Statement of Ambassador Linton F. Brooks

        Thank you for the opportunity to discuss the Fiscal Year 2005
    Budget Request for the National Nuclear Security Administration (NNSA).
    This is my second appearance before this committee as the Under
    Secretary for Nuclear Security, and I want to thank all of the Members
    for their strong support for our important national security
    responsibilities.
                                    overview
        The NNSA has four fundamental and unique responsibilities for U.S.
    national security:
      --Stewardship of the Nation's nuclear weapons stockpile,
      --Reducing the threat posed by the proliferation of weapons of mass
            destruction,
      --Providing reliable and safe propulsion for the U.S. Navy,
      --Management of the national nuclear security complex, which includes
            both security for our facilities and materials to protect our
            employees and our neighbors, and sustaining the facilities
            infrastructure.
        In the fourth year of this administration, with the strong support
    of the Congress, the NNSA programs have achieved a level of stability
    that is required for accomplishing our long-term missions. As the post-
    Cold War era evolves, the NNSA is managing the Nation's nuclear
    warheads according to the guidance in the Nuclear Posture Review. The
    Department of Energy (DOE), through the NNSA, works to assure that the
    Nation's nuclear weapons stockpile remains safe, secure, reliable, and
    ready, and to extend the life of that stockpile in support of
    Department of Defense (DOD) military requirements. Our Nation will
    continue to benefit from the security that results from an effective
    nuclear deterrent, with confidence that the nuclear weapons complex is
    ready and prepared to respond rapidly and effectively if required.
        Stockpile Stewardship activities are carried out without the use of
    underground nuclear testing, continuing the moratorium initiated by the
    United States in 1992. I am pleased with the continuing ability of the
    Stockpile Stewardship Program to certify to the President, through the
    Annual Certification Assessment Report, the safety, security, and
    reliability of our nuclear weapons stockpile using science-based
    judgments using cutting edge scientific and engineering tools as well
    as extensive laboratory and flight tests. We are gaining a more
    complete understanding of the stockpile each year. Computer codes and
    platforms developed by our Advanced Simulation and Computing (ASCI)
    program are now used routinely to address three-dimensional issues in
    weapons performance, contributing to continuing certification, baseline
    studies, as well as supporting the upcoming refurbishment workload.
        The NNSA maintains a robust infrastructure of people, programs, and
    facilities to provide specialized scientific and technical capability
    for stewardship of the nuclear weapons stockpile. This past year, Los
    Alamos National Laboratory manufactured the first certifiable W88 pit
    since the closure of Rocky Flats in 1989. Los Alamos remains on-track
    to certify a war reserve W88 pit by 2007. Also, in the past year, we
    began the irradiation of Tritium Producing Burnable Absorber Rods in a
    TVA reactor, restoring a key nuclear manufacturing technology. We also
    continue our facilities recapitalization effort. There is a notable
    improvement across the nuclear weapons complex, and NNSA is delivering
    on our promise to the Congress to stabilize our deferred maintenance in
    fiscal year 2005.
        The Nation continues to benefit from advances in science,
    technology and engineering fostered by the national security program
    activities, including cutting edge research and development carried out
    in partnership with many of the Nation's colleges, universities, small
    businesses and minority educational institutions. The University of
    Rochester's Omega laser is a key facility in NNSA's Inertial
    Confinement Fusion program. It provides experimental capability for
    Stockpile Stewardship as well as a user facility for training
    tomorrow's scientists and engineers. Overall, the NNSA programs,
    including three national laboratories, the Nevada Test Site, and the
    production facilities across the United States employ nearly 2,300
    Federal employees and approximately 35,000 contractor employees to
    carry out this work.
        In June 2002, the United States championed a new, comprehensive
    nonproliferation effort known as the Global Partnership. World leaders
    committed to raise up to $20 billion over 10 years to fund
    nonproliferation programs in the former Soviet Union. The NNSA
    contributes directly to this effort by carrying out programs with the
    international community to reduce and prevent the proliferation of
    nuclear weapons, materials and expertise. The security of our Nation
    and the world are enhanced by NNSA's ongoing work to provide security
    upgrades for military and civilian nuclear sites and enhanced border
    security in Russia and the Former Soviet Union. In the past year, we
    have completed comprehensive materials protection control and
    accountability upgrades at 17 Russian nuclear facilities, and began
    efforts to install security upgrades at vulnerable Russian Federation
    Strategic Rocket Forces sites. With the support of the Congress, we are
    implementing an aggressive Megaports initiative to enhance global
    nuclear material detection at 15 major seaports shipping large volumes
    of container traffic to the United States. We are reducing the world's
    stocks of dangerous materials such as plutonium through NNSA-sponsored
    Fissile Materials Disposition programs in the United States and Russia
    as well as through elimination of Russian plutonium production.
        The Nation benefits from NNSA's work in partnership with the
    Department of Homeland Security to develop and demonstrate new
    detection technologies to improve security of our cities. Perhaps the
    most tangible benefits to the Nation following the 9/11 terrorist
    attacks are the ``first responder teams'' of highly specialized
    scientists and technical personnel from the NNSA sites who are deployed
    across the Nation to address threats of weapons of mass destruction.
    These teams work under the direction of the Department of Homeland
    Security and the Federal Bureau of Investigation to respond to nuclear
    emergencies in the United States and around the world. In the past
    year, these teams have provided support to such diverse groups and
    locations as New York City, Operation Iraqi Freedom, Olympic Planning
    in Athens, and the Government of Thailand. Our teams have participated
    in major training and exercise events in the United States and
    overseas. They have developed new capabilities, including Triage, that
    enables our first responders to rapidly determine if an item of
    interest includes special nuclear material in yield-producing
    quantities.
        The NNSA also works in partnership with the DOD to meet their needs
    for reliable and militarily effective nuclear propulsion for the U.S.
    Navy. In the past year, the Naval Reactors Program has completed 99
    percent of the reactor plant design for the VIRGINIA-class submarine,
    and supported ``safe steaming'' of another 2 million miles by our
    nuclear-powered ships. They have continued their unsurpassed record of
    ``clean up as you go'', including remediating to ``green grass'' the
    former S1C prototype Site at Windsor, Connecticut, and completing a
    successful demonstration of the interim naval spent fuel dry storage
    capability in Idaho.

                                                   NNSA BUDGET SUMMARY
                                                [In Millions of Dollars]
    ----------------------------------------------------------------------------------------------------------------
                                                  Fiscal Year    Fiscal Year                 Fiscal Year
                                                      2003           2004      Fiscal Year       2004        Fiscal
                                                   Comparable      Original        2004       Comparable   Year 2005
                                                 Appropriation  Appropriation  Adjustments  Appropriation    Request
    ----------------------------------------------------------------------------------------------------------------
    Office of the Administrator................          330            340            -3           337          334
    Weapons Activities.........................        5,961          6,273           -39         6,234        6,568
    Defense Nuclear Nonproliferation...........        1,224          1,328            +6         1,334        1,349
    Naval Reactors.............................          702            766            -4           762          798
                                                --------------------------------------------------------------------
          Total, NNSA..........................        8,217          8,707           -40         8,667        9,049
    ----------------------------------------------------------------------------------------------------------------

        The fiscal year 2005 budget request totals $9.0 billion, an
    increase of $382 million or 4.4 percent. We are managing our program
    activities within a disciplined 5-year budget and planning envelope. We
    are doing it successfully enough to be able to address emerging new
    priorities and provide for needed funding increases in some of our
    programs within an overall modest growth rate--notably Safeguards and
    Security, Nuclear Weapons Incident Response, and Facilities and
    Infrastructure Recapitalization--by reallocating from other activities
    and projects that are concluded or winding down.
        The NNSA budget justification contains the required 3 years of
    budget and performance information, as well as similar information for
    5 years as required by Sec. 3253 of the NNSA Act, as amended (Title
    XXXII of the National Defense Authorization Act for fiscal year 2000,
    Public Law 106-65, 50 U.S.C. 2453). This section, entitled Future-Years
    Nuclear Security Program, requires NNSA to provide to Congress each
    year at the time the budget is submitted the estimated expenditures
    necessary to support the programs, projects and activities of the NNSA
    for a 5-fiscal-year period, in a level of detail comparable to that
    contained in the budget. Since the inception of NNSA, the Future Years
    Nuclear Security Program (FYNSP) has been provided as a separate
    document supporting the budget request. Starting with this budget, NNSA
    will meet this statutory requirement by including outyear budget and
    performance information as part of a fully integrated budget
    submission.

                                      FUTURE YEARS NUCLEAR SECURITY PROGRAM (FYNSP)
                                                [In Millions of Dollars]
    ----------------------------------------------------------------------------------------------------------------
                                                                 Fiscal   Fiscal   Fiscal   Fiscal   Fiscal
                                                                  Year     Year     Year     Year     Year    Total
                                                                  2005     2006     2007     2008     2009
    ----------------------------------------------------------------------------------------------------------------
    Office of the Administrator...............................      334      340      347      353      360    1,734
    Weapons Activities........................................    6,568    6,881    7,216    7,353    7,492   35,510
    Defense Nuclear Nonproliferation..........................    1,349    1,381    1,410    1,441    1,465    7,046
    Naval Reactors............................................      798      803      818      834      850    4,103
                                                               -----------------------------------------------------
          Total, NNSA.........................................    9,049    9,405    9,791    9,981   10,167   48,393
    ----------------------------------------------------------------------------------------------------------------

                         BUDGET AND PROGRAM HIGHLIGHTS

        There are three areas of the NNSA budget where mission priorities
    require us to request significant increases in funding for fiscal year
    2005.

                  SAFEGUARDS AND SECURITY/DESIGN BASIS THREAT

        Protecting NNSA people, information, materials, and infrastructure
    from harm or compromise is one of our most serious responsibilities and
    highest priorities. The fiscal year 2005 budget request for NNSA's
    Safeguards and Security Program is $706.9 million, an increase of 21
    percent over the fiscal year 2004 enacted level, that is needed to
    implement a new Design Basis Threat (DBT) at all NNSA sites and
    facilities. The Secretary of Energy issued the new DST in May 2003, as
    a result of a post-September 11 analysis of the threats against which
    we must protect DOE sites and materials across the country.
    Implementation plans based on vulnerability assessments for each of the
    sites are in final preparation. These will delineate the upgrades and
    associated costs plan to upgrade service weaponry, extend explosive
    impact zones, consolidate nuclear material, and make additional
    improvements of a classified nature to bring NNSA facilities into full
    compliance with the new DBT by the year 2006. The fiscal year 2005 NNSA
    budget includes $107.9 million ($89.6 in Safeguards and Security and
    $18.3 million in Secure Transportation Asset) to address the new DBT.
    NNSA will shortly submit a request for fiscal year 2004 reprogramming
    and appropriation transfer to allow this important work to continue on
    schedule. The fiscal year 2006 funding request for DBT implementation
    will be addressed during this spring's programming process.
        In recent months we have had some highly publicized occurrences at
    some NNSA sites. In each instance, NNSA and DOE have taken immediate
    and aggressive actions to address these occurrences and to ensure that
    any potential vulnerability is mitigated as soon as possible and that
    longer term fixes are put into place as appropriate. Because of these
    problems, we have chartered two external review groups to provide an
    independent assessment of our management of security. While I am
    confident that there has been no compromise of classified material and
    that no nuclear material is at risk, I believe security can and should
    be improved. The Secretary and I have both made it clear that we will
    not tolerate any reduction, perceived or real, in our protective force
    readiness or in our ability to protect the complex. Funding for
    Safeguards and Security in NNSA has increased over 70 percent during
    this administration, which is strong indicator of the priority we place
    on this responsibility. The Secretary and I join together in making it
    well known that we will not tolerate any reduction, perceived or real,
    in our protective forces and our abilities to protect the complex.

                 FACILITIES AND INFRASTRUCTURE RECAPITALIZATION

        The Facilities and Infrastructure Recapitalization Program (FIRP)
    is essential to NNSA's ability to maintain a responsive robust
    infrastructure. I am pleased to note that its mission and performance
    is commended in the recent preliminary assessment by the National
    Research Council on DOE's facility management. The fiscal year 2005
    budget request for FIRP is $316.2 million. This increase follows a 2-
    year period of flat funding. The request restores the program to our
    previously requested FYNSP levels; it places the program back on our
    previously planned schedule and reflects our commitment to fulfill the
    direction of the Congress to end the program by 2011.

                       NUCLEAR WEAPONS INCIDENT RESPONSE

        The third growth area in the fiscal year 2005 budget request is the
    Nuclear Weapons Incident Response Programs. The fiscal year 2005
    request of $99.2 million reflects an increase of 11 percent over the
    fiscal year 2004 level, recognizing the greatly increased number of
    deployments of these assets within the United States and abroad. The
    long term sizing of this effort in terms of dollars and people
    continues to evolve along with its critical role in homeland security.
    We have relocated this account separately within the Weapons Activities
    appropriation to provide additional visibility into these programs and
    funding request.
        At this time, I would like to focus on the remainder of the
    President's budget request for NNSA Weapons Activities including
    Defense Programs, Defense Nuclear Nonproliferation, Naval Reactors, and
    the Office of the Administrator accounts.

                               WEAPONS ACTIVITIES

        The fiscal year 2005 budget request for the programs funded within
    the Weapons Activities appropriation is $6.568 billion, an increase of
    5.4 percent over fiscal year 2004 due largely to the increase in
    security and facilities infrastructure. Within Weapons Activities, the
    budget structure has been changed in response to Congressional concerns
    to align Directed Stockpile Work funding with individual weapon
    systems, and to highlight Nuclear Weapon Incident Response as a
    separate line.
        The Nuclear Posture Review (NPR) guidance directed that NNSA
    maintain a research and development and manufacturing base that ensures
    the long-term effectiveness of the Nation's stockpile; and, support the
    facilities and infrastructure that are responsive to new or emerging
    threats. The NPR also directed NNSA to begin a modest effort to examine
    concepts that could be deployed to further enhance the deterrent
    capabilities of the stockpile in response to the national security
    challenges of the 21st century.
        The United States is continuing work to refurbish and extend the
    life of the B61, W76 and W80 warheads in the stockpile. Within the
    fiscal year 2005 request of $1.4 billion for Directed Stockpile Work
    (DSW), funding for the life extension programs increases by 7 percent
    to $477.4 million. This reflects the expected ramp up in the three
    systems with First Production Units scheduled in fiscal year 2006-2009,
    and the completion of life extension activities for the W87. In fiscal
    year 2005, DSW funding will support research and development of
    advanced weapon concepts to meet emerging DOD needs that will enhance
    the nuclear deterrent, and to ensure a robust and capable NNSA for the
    Future. The NPR highlighted the importance of pursuing advanced
    concepts work to ensure that the weapons complex can provide nuclear
    deterrence for decades to come. In fiscal year 2005, $9.0 million is
    requested to support the modest research and development effort in the
    Advanced Concepts Initiatives (ACI) to meet emerging DOD needs and to
    train the next generation of nuclear weapons scientists and engineers.
    The Robust Nuclear Earth Penetrator (RNEP) is the most mature concept
    being studied in this program. Funds for the RNEP study are included in
    the fiscal year 2005 budget as a separate line item from the rest of
    the advanced concepts study activity. A request for $27.6 million is
    also included for the continuing RNEP feasibility, design definition
    and cost study. The RNEP study was requested by the Nuclear Weapons
    Council in January 2002.
        The RNEP study is to determine whether either of two existing
    warheads--the B61 or the B83--can be adapted without resuming nuclear
    testing to improve our ability to hold at risk hardened, deeply buried
    facilities that may be important to a future adversary. The request for
    advanced concepts funding is to investigate new ideas, not necessarily
    new weapons. For example, we are currently examining the feasibility of
    adapting an existing weapons carrier and existing nuclear warheads to
    achieve a delivery system with greater assurance that the intended
    nuclear mission could not be compromised by either component failure or
    adversary attack, thus giving greater reliability for nuclear missions.
    Appropriate uses for additional work in advanced concepts might include
    examining the feasibility of warheads with improved design margins,
    easier manufacturing, greater longevity and improved safety. Any of
    these ideas would only be pursued for future development if directed to
    do so by the President and the Congress.
        Progress in other parts of the Stockpile Stewardship Program
    continues. The fiscal year 2005 request for Campaigns is $2.4 billion,
    essentially level with fiscal year 2004. This request funds a variety
    of Campaigns, experimental facilities and activities that continue to
    enhance NNSA's confidence in moving to ``science-based'' judgments for
    stockpile stewardship, and provide cutting edge technologies for
    stockpile certification and maintenance.
        While there is no reason to doubt the ability of the Stockpile
    Stewardship Program to continue to ensure the safety, security, and
    reliability of the nuclear deterrent, the Nation must maintain the
    ability to carry out a nuclear weapons test in the event of some
    currently unforeseen problems that cannot be resolved by other means.
    Within the guidance provided by the Congress, we are beginning to
    improve our readiness posture from the current ability to test within
    24 to 36 months to an ability to test within approximately 18 months.
    The fiscal year 2005 budget request of $30 million supports achieving
    an 18-month readiness by September 2005. But let me be clear, there are
    no plans to test.
        National Ignition Facility at Lawrence Livermore National
    Laboratory (LLNL) remains on budget and schedule. The fiscal year 2005
    request of $130.0 million continues construction installation and
    commissioning of laser beams. Once complete in 2008, the 192-laser beam
    facility will be capable of achieving temperatures and pressures found
    only on the surface of the sun and in exploding nuclear weapons. We are
    anticipating the first Stockpile Stewardship experiments in 2004 using
    four laser beams. As a result of recent technical advances in capsule
    design, target fabrication and computer simulations, we expect to begin
    the fusion ignition campaign in fiscal year 2009 with a goal of
    achieving fusion ignition in fiscal year 2010. The Advanced Simulation
    and Computing Campaign request for fiscal year 2005 is $741.3 million,
    an increase of nearly 3 percent over fiscal year 2004. Working with IBM
    and Cray Research, the program expects delivery of Red Storm in fiscal
    year 2004 and Purple in fiscal year 2005. These will be the world's
    fastest machines, operating at 40 and 100 Teraops, respectively, and
    they will continue to revolutionize supercomputer capabilities and
    three-dimensional modeling. Having these machines on-line will begin to
    redress the capacity and capability issues raised in the September 2003
    JASONs report required by the Congress.
        The NPR recognized a need, over the long run, for a Modern Pit
    Facility (MPF) to support the pit manufacturing needs of the entire
    stockpile. NNSA's fiscal year 2005 request for the Pit Manufacturing
    Campaign is $336.5 million, an increase of 13 percent over fiscal year
    2004, but with some changes since the last budget request. We delayed
    the final environmental impact statement (EIS) for the MPF in order to
    address Congressional concerns that it is premature to pursue further
    decisions on an MPF at this time. The decision to delay the final EIS
    also delays identification of a preferred site for constructing the
    MPF.
        This decision will in no way affect the W88 pit manufacturing and
    recertification program underway at Los Alamos, which is reestablishing
    the technological base to manufacture pits and which thereby will
    inform many of the technology decisions which will be contained in the
    eventual MPF design.
        Readiness Campaigns are requested at $280.1 million in fiscal year
    2005, a decrease of about 14 percent. The decrease is attributable
    mainly to continuing progress in construction of the Tritium Extraction
    Facility that is funded within this account.
        NNSA's Readiness in Technical Base and Facilities activities
    operate and maintain current facilities and ensure the long-term
    vitality of the NNSA complex through a multi-year program of
    infrastructure construction. About $1.5 billion is requested for these
    efforts, a slight decrease from fiscal year 2004 that is attributable
    to a 20 percent decline in funding needed to support line-item
    construction project schedules. Three new construction starts are
    requested.
        In fiscal year 2005 the President's budget provides a total of
    $201.3 million for the Office of Secure Transportation, which is
    responsible for meeting the Department's transportation requirements
    for nuclear weapons, components, special nuclear materials and waste
    shipments.
        The remainder of the Weapons Activities appropriation funding is
    for Nuclear Weapons Incident Response, Facilities and Infrastructure
    Recapitalization, and Safeguards and Security, discussed earlier in
    this statement.

                        DEFENSE NUCLEAR NONPROLIFERATION

        The Defense Nuclear Nonproliferation Program works to prevent the
    spread of nuclear weapons and materials to terrorist organizations and
    rogue states. The administration is requesting $1.35 billion to support
    activities to reduce the global weapons of mass destruction
    proliferation threat, about a 1 percent increase over comparable fiscal
    year 2004 activities. This reflects a leveling off of growth in these
    important programs that have increased over 60 percent in the past 4
    years.
        Given recent threats to the United States, it has become
    increasingly clear that protecting and securing nuclear materials and
    detecting nuclear and radioactive material at foreign ports, airports,
    and border crossings is a very high priority. The administration's
    leadership in the Global Partnership is one way that we are trying to
    address these issues. The fiscal year 2005 request for programs
    supporting the Partnership is $439 million. This includes a fiscal year
    2005 request of $238 million for the International Nuclear Material
    Protection and Cooperation (MPC&A) Program, which supports Second Line
    of Defense activities and the Mega-ports Program. The Mega-ports
    Program was jump-started with $99 million appropriated in fiscal year
    2003. Progress is continuing, and with the $15 million requested in
    fiscal year 2005, we will have work underway or complete at 9 of the 15
    planned international ports. The $15 million in fiscal year 2005 is
    requested to train law enforcement officials and equip key
    international ports with radiation detection equipment to detect,
    deter, and interdict illicit trafficking of nuclear and other
    radioactive materials. We are scheduled to complete work at ports in
    Greece and the Netherlands by the summer of 2004. We have made a number
    of security improvements to Nuclear Navy sites in Russia and we are now
    focusing resources on securing Strategic Rocket Forces sites. In
    addition to this work, we are also pursuing a dialogue with countries
    we believe are of particular concern. We hope that these activities
    will lead to broader MPC&A cooperation in the coming years.
        The largest activity funded by this appropriation is the Fissile
    Materials Disposition program. We are working to design and build
    facilities to dispose of inventories of surplus U.S. weapons-grade
    plutonium and highly-enriched uranium, and supporting concurrent
    efforts in Russia to obtain reciprocal disposition of similar
    materials.
        One of the key obstacles encountered this year is a disagreement
    with Russia regarding liability protection for plutonium disposition
    work performed in that country. This has resulted in a 10-month delay
    in the planned start of construction of a MOX Facility in Russia as
    well as a similar facility in the United States. The liability issue is
    being worked at high levels of the administration. The President's
    fiscal year 2005 budget request seeks $649 million for this program to
    begin construction of both the U.S. and Russian MOX facilities in May
    2005, as we work to resolve the liability issue by this spring. Our
    outyear funding profiles reflect the administration's full commitment
    for proceeding with plutonium disposition.
        Not only are we pursuing the disposition of weapons-grade plutonium
    but also we are working hard to stop more from being produced. NNSA has
    assumed the responsibility from the DOD for shutting down the last
    three plutonium production reactors in Russia and replacing them with
    fossil fuel plants by 2008 and 2011. This will result in the cessation
    of the annual production of 1.2 metric tons of weapons-grade plutonium.
    Under the Elimination of Weapons-Grade Plutonium Production Program, we
    have selected the Washington Group International and Raytheon Technical
    Services to provide oversight for Russian contractors who will actually
    be performing the work. The fiscal year 2005 request for this effort is
    $50.1 million.
        In fiscal year 2005, NNSA assumes responsibility for the Off-site
    Source Recovery Project from the Office of Environmental Management.
    The requested program funding is $5.6 million, with a projected cost of
    about $40 million over the next 5 years to substantially reduce the
    risk of these source materials being used for radiological dispersion
    devices. The program works closely with the U.S. Nuclear Regulatory
    Commission to prioritize source recovery.
        The Russian reactor safety efforts under the International Nuclear
    Safety Program were completed successfully in 2003. The remaining $4
    million for emergency management and cooperation efforts was shifted to
    the Nonproliferation and International Security Program. These funds
    provide for the orderly shutdown of the BN 350 reactor in Kazakhstan
    ($1.5 million) and continue activities to strengthen international
    emergency cooperation and communications ($2.5 million). The
    Accelerated Materials Disposition initiative was not supported by the
    Congress in fiscal year 2004 and in consideration of overall NNSA
    priorities, is not requested in the fiscal year 2005 budget or
    outyears.

                                 NAVAL REACTORS

        The NNSA is requesting $798 million for the Naval Reactors Program
    in fiscal year 2005, an increase of about 4 percent. This program
    continues to be a prime example of how to manage unforgiving and
    complex technology. The Naval Reactors Program provides safe and
    reliable nuclear reactors to power the Navy's warships. It is
    responsible for all naval nuclear propulsion work, beginning with
    technology development, through reactor operations, and ultimately to
    reactor plant disposal. The budget increase will support 70 percent
    completion of the design of the next generation nuclear reactor on an
    aircraft carrier, and continue work on the Transformational Technology
    Core, which will deliver a significant energy increase to future
    submarines, resulting in greater operational ability and flexibility.
    The request includes $6.2 million for a new construction start, the
    Materials Development Facility Building, in Schenectady, NY. The TTC
    facility is estimated at $20.4 million, and it is expected to be
    completed in 2008.

                          OFFICE OF THE ADMINISTRATOR

        NNSA is in the final implementation phase of a re-engineering
    effort that follows the principles of the President's Management Agenda
    to modernize, integrate, and streamline operations. As a result, at the
    end of fiscal year 2004, NNSA will achieve its goal of a 15 percent
    reduction in Federal personnel since fiscal year 2002. It is likely
    that the Congress will receive a request for reprogramming in fiscal
    year 2004 to fund the remainder of these realignment and reengineering
    activities.
        The fiscal year 2005 budget request of $333.7 million is about 1
    percent below the fiscal year 2004 appropriation. This reflects cost
    avoidance due to reduction of about 300 positions since 2002, and no
    further request for incremental funding needed to accomplish re-
    engineering in NNSA HQ and field organizations. The budget request
    assumes that personnel reductions are achieved, restructuring finished,
    and associated employee transfers are complete at the end of fiscal
    year 2004.
        The Defense Nuclear Nonproliferation (NN) and Nuclear Weapons
    Incident Response programs have been excluded from staff reductions due
    to increased program requirements in those areas. NNSA is not
    requesting a separate funding control for the Office of Defense Nuclear
    Nonproliferation because it is no longer necessary to assure that
    Federal hiring goals are met for these activities that are experiencing
    rapid mission growth. Based on hiring to date in fiscal year 2004, it
    is projected that this organization will meet or exceed its managed
    staffing plan goal of 244 by fiscal year 2005. A single funding control
    for the appropriation is necessary to facilitate NNSA's corporate
    efforts to rebalance the NN's office transition from reliance on
    support service contractors to permanent Federal staff.

                               MANAGEMENT ISSUES

        I would like to conclude by discussing some of NNSA's management
    challenges and successes. We are all aware of the management
    difficulties that beset the weapons laboratories last year. The
    contractors and NNSA/DOE have made many changes to the laboratories'
    management and reporting/oversight requirements in response to the
    problems. Soon their contracts are coming up for renewal. Secretary
    Abraham has outlined the Department's strategy for competing the
    Management and Operating contracts for our nuclear design labs in
    accordance with Section 301 of the Energy and Water Development
    Appropriations Act, Fiscal Year 2004 (Public Law 108-137). On April 30,
    2003, the Secretary announced that we intend to compete the Los Alamos
    National Laboratory contract on a full and open basis to have a
    contract in place by September 30, 2005, when the old contract expires.
        On January 21, 2004, the Secretary reiterated his decision
    concerning Los Alamos National Laboratory. At that time, he also
    announced his decision to compete the Lawrence Livermore National
    Laboratory contract, as well as three other DOE laboratories, but
    indicated that the precise timing and form of these competitions were
    under consideration.
        NNSA, with the concurrence of the Secretary, is establishing a
    Source Evaluation Board (SEB) for the Los Alamos competition. I have
    named Tyler Przybylek as the Chairman of that SEB and he is in the
    process of identifying members and advisers to the SEB. We see no
    obstacle to meeting the Secretary's schedule for competing and awarding
    a new contract or managing Los Alamos.
        On the ``success'' side, I am proud that the Department of Energy
    was ranked first among cabinet-level agencies in the most recent
    scorecard to assess implementation of the President's Management
    Agenda. The scorecard, which evaluates agency performance in the areas
    of human capital, competitive sourcing, financial management, e-
    Government, and budget/performance integration, was issued by OMB. We
    at NNSA take very seriously the responsibility to manage the resources
    of the American people effectively and I am glad that our management
    efforts are achieving such results.

                                   CONCLUSION

        In conclusion, I am 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
    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 States of the 21st
    century.
        Mr. Chairman, this concludes my statement. A statistical appendix
    follows that contains the budget figures supporting our request. My
    colleagues and I would be pleased to answer any questions on the
    justification for the requested budget.

                       NATIONAL NUCLEAR SECURITY ADMINISTRATION APPROPRIATION AND PROGRAM SUMMARY
                                                [In Millions of Dollars]
    ----------------------------------------------------------------------------------------------------------------
                                                 Fiscal Year    Fiscal Year                 Fiscal Year
                                                     2003           2004      Fiscal Year       2004        Fiscal
                                                  Comparable      Original        2004       Comparable    Year 2005
                                                Appropriation  Appropriation  Adjustments  Appropriation    Request
    ----------------------------------------------------------------------------------------------------------------
    Office of the Administrator...............           330            340            -3           337          334
    Weapons Activities........................         5,961          6,273           -39         6,234        6,568
    Defense Nuclear Nonproliferation..........         1,224          1,328            +6         1,334        1,349
    Naval Reactors............................           702            766            -4           762          798
                                               ---------------------------------------------------------------------
          Total, NNSA.........................         8,217          8,707           -40         8,667        9,049
    ----------------------------------------------------------------------------------------------------------------

                                 FUTURE YEARS NUCLEAR SECURITY PROGRAM (FYNSP) SCHEDULE
                                                [In Millions of Dollars]
    ----------------------------------------------------------------------------------------------------------------
                                                                 Fiscal   Fiscal   Fiscal   Fiscal   Fiscal
                                                                  Year     Year     Year     Year     Year    Total
                                                                  2005     2006     2007     2008     2009
    ----------------------------------------------------------------------------------------------------------------
    Office of the Administrator...............................      334      340      347      353      360    1,734
    Weapons Activities........................................    6,568    6,881    7,216    7,353    7,492   35,510
    Defense Nuclear Nonproliferation..........................    1,349    1,381    1,410    1,441    1,465    7,046
    Naval Reactors............................................      798      803      818      834      850    4,103
                                                               -----------------------------------------------------
          Total, NNSA.........................................    9,049    9,405    9,791    9,981   10,167   48,393
    ----------------------------------------------------------------------------------------------------------------

                                            WEAPONS ACTIVITIES APPROPRIATION
                                                [In Thousands of Dollars]
    ----------------------------------------------------------------------------------------------------------------
                                                Fiscal Year    Fiscal Year                 Fiscal Year
                                                    2003           2004      Fiscal Year       2004      Fiscal Year
                                                 Comparable      Original        2004       Comparable       2005
                                               Appropriation  Appropriation  Adjustments  Appropriation    Request
    ----------------------------------------------------------------------------------------------------------------
    Weapons Activities:
        Directed Stockpile Work..............     1,259,136      1,340,286       -13,630     1,326,656     1,406,435
        Science Campaign.....................       260,867        250,548       +23,300       273,848       300,962
        Engineering Campaign.................       270,502        344,387       -79,472       264,915       242,984
        Inertial Confinement Fusion and High        499,230        517,269        -3,018       514,251       492,034
         Yield Campaign......................
        Advanced Simulation and Computing           674,453        725,626        -4,250       721,376       741,260
         Campaign............................
        Pit Manufacturing and Certification         261,807        298,528        -1,738       296,790       336,473
         Campaign............................
        Readiness Campaign...................       270,147        247,097       +81,819       328,916       280,127
        Readiness in Technical Base and           1,480,872      1,664,235      -123,590     1,540,645     1,474,454
         Facilities..........................
        Secure Transportation Asset..........       168,548        162,400          -948       161,452       201,300
        Nuclear Weapons Incident Response....        81,114              0       +89,167        89,167        99,209
        Facilities and Infrastructure               235,474        240,123        -1,368       238,755       316,224
         Recapitalization Program............
        Safeguards & Security................       558,161        585,750        -3,280       582,470       706,991
                                              ----------------------------------------------------------------------
          Subtotal, Weapons Activities.......     6,020,311      6,376,249       -37,008     6,339,241     6,598,453
        Use of Prior Year Balances...........       -29,981        -74,753        -2,000       -76,753             0
        Security Charge for Reimbursable Work       -28,985        -28,985            +0       -28,985       -30,000
                                              ----------------------------------------------------------------------
          Total, Weapons Activities..........     5,961,345      6,272,511       -39,008     6,233,503     6,568,453
    ----------------------------------------------------------------------------------------------------------------

                                     DEFENSE NUCLEAR NONPROLIFERATION APPROPRIATION
                                                [In Thousands of Dollars]
    ----------------------------------------------------------------------------------------------------------------
                                                  Fiscal Year    Fiscal Year                 Fiscal Year
                                                      2003           2004      Fiscal Year       2004        Fiscal
                                                   Comparable      Original        2004       Comparable   Year 2005
                                                 Appropriation  Appropriation  Adjustments  Appropriation    Request
    ----------------------------------------------------------------------------------------------------------------
    Defense Nuclear Nonproliferation:
        Nonproliferation and Verification            256,092        231,997             0       231,997      220,000
         Research and Development..............
        Nonproliferation and International           130,873        110,107        +3,977       114,084      124,000
         Security..............................
        International Nuclear Materials              333,029        258,487             0       258,487      238,000
         Protection and Cooperation............
        Russian Transition Initiatives.........       39,081         39,764             0        39,764       41,000
        HEU Transparency Implementation........       17,118         17,894             0        17,894       20,950
        International Nuclear Safety...........       33,570          3,977        -3,977             0            0
        Elimination of Weapons-Grade Plutonium        49,221         49,735       +15,300        65,035       50,097
         Production............................
        Accelerated Material Disposition.......          894              0             0             0            0
        Fissile Materials Disposition..........      445,528        652,818             0       652,818      649,000
        Offsite Source Recovery Project........        2,172              0        +1,961         1,961        5,600
                                                --------------------------------------------------------------------
          Subtotal, Defense Nuclear                1,307,578      1,364,779       +17,261     1,382,040    1,348,647
           Nonproliferation....................
        Use of Prior Year Balances.............      -84,125        -45,000        -3,000       -48,000    .........
                                                --------------------------------------------------------------------
          Total, Defense Nuclear                   1,223,453      1,319,779       +14,261     1,334,040    1,348,647
           Nonproliferation....................
    ----------------------------------------------------------------------------------------------------------------

                                              NAVAL REACTORS APPROPRIATION
                                                [In Thousands of Dollars]
    ----------------------------------------------------------------------------------------------------------------
                                                  Fiscal Year    Fiscal Year                 Fiscal Year
                                                      2003           2004      Fiscal Year       2004        Fiscal
                                                   Comparable      Original        2004       Comparable   Year 2005
                                                 Appropriation  Appropriation  Adjustments  Appropriation    Request
    ----------------------------------------------------------------------------------------------------------------
    Naval Reactors Development (NRD):
        Operations and Maintenance.............      666,927        723,100        -4,264       718,836      761,211
        Program Direction......................       24,043         26,700          -148        26,552       29,500
        Construction...........................       11,226         18,600          -110        18,490        7,189
                                                --------------------------------------------------------------------
          Subtotal, Naval Reactors Development.      702,196        768,400        -4,522       763,878      797,900
        Less Use of prior year balances........            0         -2,000    ...........       -2,000            0
        Subtotal Adjustments...................            0              0             0             0            0
                                                --------------------------------------------------------------------
          Total, Naval Reactors................      702,196        766,400        -4,522       761,878      797,900
    ----------------------------------------------------------------------------------------------------------------

                                        OFFICE OF THE ADMINISTRATOR APPROPRIATION
                                                [In Thousands of Dollars]
    ----------------------------------------------------------------------------------------------------------------
                                                  Fiscal Year    Fiscal Year                 Fiscal Year
                                                      2003           2004      Fiscal Year       2004        Fiscal
                                                   Comparable      Original        2004       Comparable   Year 2005
                                                 Appropriation  Appropriation  Adjustments  Appropriation    Request
    ----------------------------------------------------------------------------------------------------------------
    Office of the Administrator Program              330,314        339,980        -3,154       336,826      333,700
     Direction.................................
    ----------------------------------------------------------------------------------------------------------------

                                                                     FUNDING BY GENERAL GOAL
                                                                      [Dollars in Millions]
    --------------------------------------------------------------------------------------------------------------------------------------------------------
                                                 Fiscal      Fiscal      Fiscal                  Percent     Fiscal    Fiscal Year  Fiscal Year  Fiscal Year
                                                Year 2003   Year 2004   Year 2005   $ Change     Change     Year 2006      2007         2008         2009
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    General Goal 1, Nuclear Weapons
     Stewardship:
        Directed Stockpile Work..............      $1,259      $1,327      $1,406        +$79        +6.0      $1,521       $1,648       $1,778       $1,812
        Science Campaign.....................         261         274         301         +27        +9.9         301          308          328          341
        Engineering Campaign.................         271         265         243         -22        -8.3         268          226          284          237
        ICF and High Yield Campaign..........         499         514         492         -22        -4.3         521          535          437          441
        Advanced Simulation and Computing             674         721         741         +20        +2.8         782          826          834          848
         Campaign............................
        Pit Manufacturing and Certification           262         297         336         +39       +13.1         324          314          155          158
         Campaign............................
        Readiness Campaign...................         270         329         280         -49       -14.9         331          307          357          376
        Readiness in Technical Base and             1,481       1,541       1,474         -67        -4.3       1,600        1,753        1,839        1,916
         Facilities..........................
        Nuclear Weapons Incident Response....          81          89          99         +10       +11.2         100          101           98          101
        Secure Transportation Asset..........         169         161         201         +40       +24.8         185          186          190          195
        Facilities and Infrastructure                 235         239         316         +77       +32.2         373          426          472          476
         Recapitalization Program............
        Safeguards and Security..............         529         553         677        +124       +22.4         575          586          580          591
        Office of the Administrator..........         279         283         277          -6        -2.1         282          288          293          299
        Use of PY Balances...................         -30         -77           0           0           0           0            0            0            0
                                              --------------------------------------------------------------------------------------------------------------
          Total Goal 1, Nuclear Weapons             6,237       6,513       6,845        +332        +5.1       7,163        7,504        7,646        7,791
           Stewardship.......................
                                              ==============================================================================================================
    General Goal 2, Control of Weapons of
     Mass Destruction:
        Nonproliferation and Verification             256         232         220         -12        -5.2         229          235          246          248
         Research & Development..............
        Nonproliferation and International            131         114         124         +10        +8.8         119          120          120          120
         Security............................
        International Nuclear Material                333         258         238         -20        -7.8         244          250          258          260
         Protection and Cooperation..........
        Russian Transition Initiative........          39          40          41          +1        +2.5          42           43           43           44
        HEU Transparency Implementation......          17          18          21          +3       +16.7          21           21           20           20
        International Nuclear Safety.........          34           0           0           0           0           0            0            0            0
        Elimination of Weapons-Grade                   49          65          50         -15       -23.1          56           59           60           67
         Plutonium Production................
        Accelerated Materials Disposition....           1           0           0           0           0           0            0            0            0
        Fissile Materials Disposition........         382         653         649          -4        -0.6         661          673          685          697
        Offsite Source Recovery Project......           2           2           6          +4      +200.0           9            9            9            9
        Office of the Administrator..........          54          57          57           0           0          58           59           60           61
        Use of PY Balances...................         -20         -48           0  ..........  ..........           0            0            0            0
                                              --------------------------------------------------------------------------------------------------------------
          Total Goal 2, Control of Weapons of       1,278       1,391       1,406         +15        +1.0       1,439        1,469        1,501        1,526
           Mass Destruction..................
                                              ==============================================================================================================
    Goal 3, Defense Nuclear Power (Naval              702         762         798         +36        +4.7         803          818          834          850
     Reactors)...............................
                                              ==============================================================================================================
          Total, NNSA........................       8,217       8,667       9,049        +382        +4.4       9,405        9,791        9,981       10,167
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    NNSA Program Direction expenditures funded in the Office of the Administrator appropriation have been allocated in support of Goals 1 and 2. Goal 1
      allocation includes Federal support for programs funded by the Weapons Activities appropriation, as well as NNSA corporate support, including Federal
      staffing at the site offices. Goal 2 allocation includes Federal support for all Nuclear Nonproliferation programs. Program Direction expenditures for
      Naval Reactors, supporting Goal 3, are funded within the Naval Reactors appropriation.

                                                                     FUNDING SUMMARY BY SITE
                                                                    [In Millions of Dollars]
    --------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                             Fiscal Year               Fiscal Year
                                                                   Fiscal Year  Fiscal Year  2005 Office  Fiscal Year      2005     Fiscal Year     Total
                                                                       2003         2004        of the    2005 Weapon    Nuclear     2005 Naval  Fiscal Year
                                                                                                Admin      Activities   Nonprolif      React         2005
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    Chicago Operations Office:
        Ames Laboratory..........................................          0.2          0.2  ...........  ...........          0.2  ...........          0.2
        Argonne Nat. Laboratory..................................         24.7         19.2  ...........          1.9         20.5  ...........         22.4
        Brookhaven National Laboratory...........................         25.4         44.5  ...........          1.6         33.3  ...........         34.9
        Chicago Operations Office................................        209.5        428.4  ...........         25.2        446.3  ...........        471.5
        New Brunswick Laboratory.................................          1.5          1.1  ...........  ...........          1.1  ...........          1.1
    Idaho Operations Office:
        Idaho National Laboratory................................         59.5         58.0  ...........  ...........          2.0         56.0         58.0
        Idaho Operations Office..................................          1.4          1.1  ...........          1.4  ...........  ...........          1.4
    Kansas City Site Office:
        Kansas City Plant........................................        390.3        403.8  ...........        378.0          1.4  ...........        379.5
        Kansas City Site Office..................................          6.2          6.2          6.0  ...........  ...........  ...........          6.0
    Livermore Site Office:
        Lawrence Livermore National Laboratory...................      1,048.7      1,004.1  ...........        963.3         70.4  ...........      1,033.7
        Livermore Site Office....................................         12.8         16.1         16.5  ...........  ...........  ...........         16.5
    Los Alamos Site Office:
        Los Alamos National Laboratory...........................      1,410.0      1,415.6  ...........      1,395.6        123.6  ...........      1,519.2
        Los Alamos Site Office...................................         12.0         14.6         15.9  ...........  ...........  ...........         15.9
    National Engineering Technology Laboratory...................          1.7          0.0  ...........  ...........  ...........  ...........          0.0
    NNSA Service Center:
        Atomic Energy of Canada, Ltd.............................          2.4          1.2  ...........  ...........          1.2  ...........          1.2
        General Atomics..........................................         10.8         11.0  ...........         13.1          0.2  ...........         13.3
        Lawrence Berkeley National Laboratory....................          5.2          4.0  ...........  ...........          4.1  ...........          4.1
        Naval Research Laboratory................................         22.3         13.3  ...........         11.0  ...........  ...........         11.0
        NNSA Service Center (all other sites)....................        487.8        467.2         98.7        232.2         83.4  ...........        414.4
        Nonproliferation and National Security Institute.........          0.1  ...........  ...........  ...........  ...........  ...........  ...........
        University of Rochester/LLE..............................         46.8         62.6  ...........         45.5  ...........  ...........         45.5
    Nevada Site Office:
        Nevada Site Office.......................................        104.1         92.5         17.5         45.7          7.4  ...........         70.6
        Nevada Test Site.........................................        247.7        285.4  ...........        282.9          1.0  ...........        283.9
    Oak Ridge Operations Office:
        Oak Ridge Institute for Science and Engineering..........          7.8          8.8  ...........          7.1  ...........  ...........          7.1
        Oak Ridge National Laboratory............................        110.6         95.8  ...........          7.5        136.9  ...........        144.4
        Office of Science and Technical Information..............          0.1          0.1  ...........          0.1  ...........  ...........          0.1
        Y-12 Site Office.........................................          9.6         16.3         11.7  ...........  ...........  ...........         11.7
        Y-12 National Security Complex...........................        734.3        728.2  ...........        727.0         61.0  ...........        788.0
    Pantex Site Office:
        Pantex Plant.............................................        413.0        431.1  ...........        463.5         10.3  ...........        473.8
        Pantex Site Office.......................................          9.9         10.8         11.6  ...........  ...........  ...........         11.6
    Pittsburgh Naval Reactors Office:
        Bettis Atomic Power Laboratory...........................        351.6        396.2  ...........  ...........  ...........        401.2        401.2
        Pittsburgh Naval Reactors Office.........................          7.8          8.2  ...........  ...........  ...........          8.7          8.7
    Richland Operations Office:
        Richland Operations Office...............................          0.4          0.8  ...........          1.3  ...........  ...........          1.3
        Pacific Northwest National Laboratory....................        132.5         85.6  ...........          4.4         70.1  ...........         74.5
    Sandia Site Office:
        Sandia National Laboratories.............................      1,306.8      1,376.7  ...........      1,167.7        144.3  ...........      1,312.0
        Sandia Site Office.......................................          8.6         12.1         12.5  ...........  ...........  ...........         12.5
    Savannah River Operations Office:
        Savannah River Operations Office.........................         14.0         26.5  ...........  ...........         32.4  ...........         32.4
        Savannah River Site Office...............................          3.5          3.1          2.9  ...........  ...........  ...........          2.9
        Savannah River Site......................................        305.3        303.3  ...........        238.9         55.5  ...........        294.4
    Schenectady Naval Reactors Office:
        Knolls Atomic Power Laboratory...........................        269.5        282.0  ...........  ...........  ...........        308.2        308.2
        Schenectady Naval Reactors Office........................          6.3          6.7  ...........  ...........  ...........          7.0          7.0
    Washington DC Headquarters...................................        501.3        688.2        137.9        577.5         41.9         13.8        771.1
    Other........................................................          5.7          7.0          2.4  ...........  ...........          3.0          5.4
                                                                  ------------------------------------------------------------------------------------------
          Subtotal, NNSA.........................................      8,360.4      8,842.0        333.7      6,598.5      1,348.6        768.4      9,078.7
    Adjustments..................................................       -143.5       -176.2          0.0        -30.0          0.0          0.0        -30.0
                                                                  ------------------------------------------------------------------------------------------
          Total, NNSA............................................      8,216.9      8,665.8        333.7      6,568.5      1,348.6        768.4      9,048.7
    --------------------------------------------------------------------------------------------------------------------------------------------------------

                      STATEMENT OF ADMIRAL FRANK L. BOWMAN

        Senator Domenici. Thank you very much. Are you next,
    Admiral?
        Admiral Bowman. Yes sir.
        Senator Domenici. Please proceed.
        Admiral Bowman. Mr. Chairman and members of the committee,
    thank you very much for the opportunity to testify, as you
    said, Mr. Chairman, maybe one last time before this committee
    in my last 8 years as Director of Naval Reactors.
        Sir, with your permission I would like to submit a detailed
    statement for the record.
        Senator Domenici. Please do.
        Admiral Bowman. And also the normal environmental,
    radiation and occupational safety health reports.
        [Clerk's Note.--The reports referenced above will be
    retained in committee files.]
        Admiral Bowman. Let me begin by thanking you and the
    committee for the support you've continued to provide the Naval
    Nuclear Propulsion Program, and Senator Domenici, especially,
    on a personal note, your support of me and my program for these
    years. Many of the impressive capabilities of our nuclear-
    powered ships were developed with funding that was supported by
    you. As you know, nuclear propulsion provides the mobility, the
    flexibility and the endurance that today's Navy needs to meet a
    growing number of important missions with fewer and fewer
    ships.
        Today our 10 nuclear-powered aircraft carriers continue to
    be the centerpiece of U.S. military presence worldwide in
    support of our interests and commitments. In war they deliver
    strike sorties, protect friendly forces and engage in sustained
    combat operations.
        Our 54 operational attack submarines are the envy of navies
    around the world. Because of their stealth, endurance,
    mobility, firepower and multi-mission flexibility they
    guarantee access to the world's oceans and littorals, monitor
    those who may act counter to our interests and conduct
    reconnaissance in preparation for conflict. In the event of
    hostilities they conduct Tomahawk strike missions, deploy and
    support special operations forces, and destroy enemy ships and
    diesel submarines.
        Our 14 Trident ballistic missile submarines, down from 18
    as a result of the last NPR, are the most survivable and
    efficient leg of our strategic deterrent arsenal and continue
    to represent a cornerstone of our national security.
        And then finally, the deep-diving, nuclear-powered research
    submarine, NR-1, provides unique military mission support to
    the Navy and valuable oceanographic research to the scientific
    community.
        When I testified before this committee last year, Mr.
    Chairman, our Armed Forces had been engaged in Operation Iraqi
    Freedom for 3 weeks. I reported then that our nuclear-powered
    warships were playing a leading role in combat operations. My
    written, detailed statement reports more details of the superb
    performance of our ships and their crews. Today our nuclear-
    powered fleet is deployed around the world, protecting our
    interests, deterring aggression and continuing to fight
    terrorism. At the center of this new surge Navy, our nuclear-
    powered warships are ready for any and all missions our
    Nation's leaders may direct.
        As we look to the near future, the first of the Virginia-
    class attack submarines will be delivered this summer,
    remarkably close to the schedule established over a decade ago.
    You recall that the operational requirements document for that
    Virginia-class was approved some 4 years after the fall of the
    Berlin Wall. As such, the Virginia-class is the first submarine
    designed specifically for post-Cold War missions. It's designed
    to prevail in both the littorals and the open ocean.
        Our work also continues on the design of the nuclear
    propulsion plant for the CVN-21, the next generation class of
    aircraft carriers. The modern technologies of this design will
    enable increased war fighting capability and operational
    availability with lower life cycle costs.
        We're also continuing work on the Transformational
    Technology Core (TTC). It will use new core materials, new
    reactor materials, to achieve a greater energy density, more
    energy in the reactor without increasing the size, weight or
    space and at a reasonable cost for future Virginia-class
    submarines. That TTC core is a direct outgrowth of the Programs
    advanced reactor technology work, funded by this committee. It
    will also be a stepping stone for future reactor development.
        Though new designs are important, Naval Reactors' number
    one priority is ensuring that the men and women at sea
    defending our Nation are operating safe, effective and reliable
    nuclear propulsion plants. Most of Naval Reactors' funding is
    devoted to this.
        With your vital support, I'm confident we will continue to
    build on our success. Naval Reactors' fiscal year 2005 DOE
    budget request is for about $798 million, an increase of 3
    percent after inflation compared to fiscal year 2004. The
    funding increase mainly supports the continued development of
    the Transformational Technology Core.

                               PREPARED STATEMENT

        Mr. Chairman, as the Director of Naval Reactors for the
    last 7\1/2\ years, I can assure you that the ongoing support of
    your committee is one of the most important factors in our
    success story. The unique capabilities inherent in nuclear
    power have played a vital role in our Nation's defense over the
    past 50 years. This legacy is as strong and vibrant today as
    ever. Our Navy continues to face a growing need for power
    projection and forward presence far from home, which places
    even greater demands on our nuclear fleet. With your continued
    support Naval Reactors' success will continue far into the
    future. Our record is strong, the work is important, and the
    funding needs have been very carefully scrubbed by me
    personally.
        Mr. Chairman, other members of the committee, I thank you
    very much for your continued support.
        [The statement follows:]

                 Prepared Statement of Admiral Frank L. Bowman

        Thank you for inviting me to testify today on Naval Reactors'
    Fiscal Year 2005 Department of Energy/National Nuclear Security
    Administration budget request in what will be my last of 8 years as
    Director, Naval Reactors.
        Let me also thank you for the faith you continue to demonstrate in
    the Naval Reactors Program. Through your steadfast support, our nuclear
    fleet remains deployed around the world today, prosecuting the Global
    War on Terrorism while protecting our interests and deterring
    aggression. Nuclear propulsion continues to prove itself essential by
    providing the flexibility, speed, endurance, and multimission
    capability required for the United States Navy to meet its global
    commitments. The nuclear propulsion plants, developed with funding
    supported by this subcommittee, enable many of the impressive
    capabilities our nuclear-powered ships possess. Let me begin by
    discussing the capabilities and accomplishments of the nuclear-powered
    Fleet--the Program's principal product.

                         TODAY'S NUCLEAR-POWERED FLEET

        Our nuclear fleet includes 10 of our Nation's 12 aircraft carriers,
    each of them providing 4\1/2\ acres of sovereign U.S. territory from
    which we can rapidly begin and sustain continuous combat operations,
    without having to negotiate basing rights on--and overflight rights
    across--foreign soil. Nuclear power enhances the capability of these
    warships to surge and to sprint where needed and arrive on station
    ready for round-the-clock power projection and other combat operations.
    Sustained high-speed capability enables a rapid response to world
    circumstances, giving the Combatant Commanders the ability to surge
    these ships from one crisis to the next without dependence on slower
    fleet tankers.
        Our 54 operational attack submarines (SSN's) possess the inherent
    characteristics of stealth, endurance, mobility, firepower, and
    multimission flexibility. They provide guaranteed access to the world's
    oceans and littorals, monitor those who may act counter to our
    interests, and conduct reconnaissance in preparation for conflict. Our
    SSN's can covertly monitor an adversary's actions without the risk of
    political or military escalation--a particularly valuable capability
    since adversaries understand and can sometimes avoid other methods of
    reconnaissance. If tensions escalate, these SSN's can provide Tomahawk
    strikes or deliver special operations forces from their undisclosed
    locations without warning, inside an adversary's defensive umbrella.
    Our ``high-tech'' SSN's make our Navy the envy of other navies
    throughout the world.
        This summer, the Navy will deliver the first-of-the-class USS
    VIRGINIA to the Fleet, close to the shipyard's schedule that was
    established over a decade ago. Float-off and christening occurred in
    August 2003 and the reactor was taken critical for the first time on
    January 27, 2004. Final construction work is being completed, and
    shipboard acceptance testing is ongoing. When the reactor went critical
    for the first time, the actual control rod position was virtually the
    same as predicted by our analysis over 6 years ago--within 0.2 percent.
        The VIRGINIA Class Operational Requirements Document, approved in
    September 1993, called for the ship to be the first nuclear-powered
    submarine designed for post-Cold War missions. Specifically, VIRGINIA
    is built to dominate the littorals without sacrificing undersea
    dominance in the open ocean. In a single platform, the VIRGINIA class
    will combine a unique mix of stealth, endurance, agility, and firepower
    to fulfill vital national security roles, even in areas denied to other
    U.S. assets. There are nine follow-on VIRGINIA-class submarines under
    contract, five of which are in the multiyear contract authorized by
    Congress last year.
        The remaining ships in the nuclear fleet include 14 strategic
    ballistic missile submarines (SSBN's), four former SSBN's being
    converted to guided missile/multimission submarines (SSGN's), and one
    deep submergence vehicle (NR-1). Our 14 TRIDENT ballistic missile
    submarines are the survivable leg of our strategic deterrent arsenal
    and therefore provide the cornerstones of our national security at the
    lowest cost. The four TRIDENT submarines now undergoing conversion to
    SSGN's will exploit the submarine's tremendous mission volume and 22
    large interfaces with the sea to deploy futuristic payloads and special
    operations forces. These multi-mission stealth platforms will provide
    the combatant commanders with littoral warfare and land-attack
    capabilities that will be truly transformational. The deep-diving,
    nuclear-powered research submarine NR-1 provides unique military
    mission support to the Navy and valuable oceanographic research to the
    scientific community.
        Now I'd like to discuss our work in a little more detail. Naval
    Reactors' No. 1 priority has always been and continues to be providing
    safe, effective, and reliable nuclear propulsion to the men and women
    who are at sea, defending our national interests. Most of our funding
    goes to that purpose.
        Today, Naval Reactors supports 104 reactor plants (one more than
    the number of commercial reactors in the United States) in 83 nuclear-
    powered warships, the NR-1, and 4 training and test reactor plants. The
    ships are welcomed in more than 150 ports of call in more than 50
    countries. In all, we have operated safely for more than 5,500 reactor
    years and steamed over 130 million miles.
        Naval Reactors' technical support for these ships is more important
    than ever. Today, the average age of a nuclear-powered warship in our
    Navy is 18 years, but it will increase to more than 24 by 2012. As
    these ships age, the technical work necessary to maintain their
    performance places a greater demand on Naval Reactors' DOE budgets.
    This challenge is my primary concern. As I said earlier, your support
    remains vital, and I am confident we will continue to build on our
    successes.
        On March 8 of this year, the Secretary of Energy assigned to Naval
    Reactors a project to develop, design, deliver, and operationally
    support a civilian nuclear reactor for space exploration missions under
    NASA's Project Prometheus. Since this work is exclusive of our core
    naval nuclear propulsion work and is assigned as a DOE civilian project
    to NR, NASA will budget for and fund this work throughout the effort.
    Our initial work will begin this year to establish a working
    relationship with our new partners at NASA and to define the elements
    of the reactor design.

              FISCAL YEAR 2005 DEPARTMENT OF ENERGY BUDGET REQUEST

        Naval Reactors' fiscal year 2005 DOE budget request is $797.9
    million, an increase of about 3 percent (after inflation) compared to
    fiscal year 2004. One of the major activities enabled by this modest
    increase is continued development of the Transformational Technology
    Core. Additionally, this increase supports continuing development of a
    production-line system for the preparation of dry storage of spent
    nuclear fuel. This production-line system is needed to meet a court-
    ordered obligation to move all spent fuel stored in Idaho into dry
    storage by 2023 and to be among the early shipments of fuel to the
    national spent fuel repository. Finally, this increase supports ongoing
    facility upgrades at Program sites.
        The majority of the Naval Reactors fiscal year 2005 DOE budget
    request funds our work in sustaining 104 operational reactors. This
    work involves continual testing, analysis, and monitoring of plant and
    core performance especially as these plants age. The nature of our
    business demands a careful, measured approach to developing and
    verifying nuclear technology; designing needed components, systems, and
    processes; and implementing them in existing and future plant designs.
    Demanding engineering challenges and long lead times to fabricate the
    massive, complex components require many years of effort before
    technological advances can be introduced into the Fleet.
        Most of this work is accomplished at Naval Reactors' DOE
    laboratories. These laboratories have made significant advancements in
    extending core lifetime, developing robust materials and components,
    and creating an array of predictive capabilities. These advancements
    allowed the Navy to extend the service life and intervals between major
    maintenance periods for nuclear-powered warships to reduce ship offline
    time for maintenance. Increasing ship availability also increases the
    Navy's warfighting capabilities and supports the Navy's ability to
    surge when needed.
        For example, a recent Navy decision to delay a major overhaul and
    refueling of the aircraft carrier, USS CARL VINSON (CVN 70), was made
    possible in part by our continual monitoring of core performance and
    subsequent analysis to establish that the ship had sufficient nuclear
    fuel remaining to safely operate during this extended period. This
    decision enabled the Navy to fund nearer term priorities without
    adversely impacting the Fleet.
        New plant development work at the Program's DOE laboratories is
    focused on continuing the reactor design for the CVN-21 aircraft
    carrier. Design for the CVN-21 nuclear propulsion plant is well
    underway. CVN-21 is the first new aircraft carrier designed since the
    1960's NIMITZ class. The CVN-21 reactor plant will build on technology
    developed for the three generations of submarines designed since
    NIMITZ. Compared to the NIMITZ-class propulsion plant, the CVN-21
    propulsion plant will provide three times the electrical generation and
    distribution capacity, and will require about 50 percent fewer Reactor
    Department personnel. This modern technology will enable increased
    warfighting capability and operational availability, while lowering
    life-cycle costs.
        Another aspect of DOE laboratories' development work is the
    Transformational Technology Core (TTC). The TTC is a direct outgrowth
    of the Program's advanced reactor technology work. The TTC will use new
    core materials to achieve a significant increase in core energy density
    (that is, more energy in the core without increasing reactor size,
    weight, or space). The TTC will be forward-fitted into the VIRGINIA-
    class submarines, which will be the mainstay of the submarine fleet for
    future decades, without the need to redesign the ship. The importance
    of TTC is becoming more evident as we depend on our SSN's more in the
    current national security environment. The goal is to achieve at least
    a 30 percent increase in energy.
        We are also prudent stewards of the environment. The four prototype
    reactors at the Naval Reactors Facility (NRF) in Idaho are defueled and
    in an environmentally benign, safe layup condition; site and reactor
    plant dismantlement work is planned for future years. 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 2003. Other dismantlement work at Kesselring Site is
    continuing. Dismantlement work and unrestricted radiological release at
    the Windsor site in Connecticut are complete, and approval from the EPA
    and the State for chemical release for unrestricted future use and
    property transfer is expected later this year.

       NAVAL REACTORS FISCAL YEAR 2005 DEPARTMENT OF ENERGY BUDGET DETAIL

        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 $232.1 million requested for Reactor Technology and Analysis
            will continue work on the design for the new reactor for CVN-
            21. These efforts also support a portion of the design of the
            TTC, a new high-energy core that is a direct outgrowth of the
            Program's advanced reactor technology work. TTC will support
            national security demands by providing additional energy for
            one or a combination of:
        --Extended ship life,
        --More operating hours per operating year,
        --Higher ship transit speed,
        --Increased available energy to enable future innovations, such as
                the ability to recharge off-board undersea and air
                autonomous vehicles, or any other use for energy yet to be
                conceived.
          The increasing average age of our existing reactor plants, along
            with future extended service lives and reduced maintenance
            periods, place a greater emphasis on our work in thermal-
            hydraulics, structural mechanics, fluid mechanics, and
            vibration analysis. These factors, along with longer-life
            cores, mean that for years to come, both the reactor plants and
            the reactor cores will be operating beyond our previously
            proven experience base. To counter this, our improved analysis
            tools and understanding of basic nuclear data will allow us to
            predict performance more accurately and thereby better ensure
            safety and reliability throughout the extended life.
      --The $155.5 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 through a full understanding of component
            performance and system condition over the life of each ship.
            The request supports both the goal of enhancing steam generator
            performance and the goal of reducing lifecycle costs by
            eliminating the need for expensive inspection and maintenance.
            In addition, development work for improving VIRGINIA steam
            generator performance is needed for the plant to exploit the
            additional energy available from the TTC. Naval Reactors is
            developing components to address known limitations or to
            improve reliability of instrumentation and power distribution
            equipment by replacing obsolete equipment that is increasingly
            difficult to support. Additional technology development in the
            areas of chemistry, energy conversion, plant arrangement, and
            plant components will continue to improve reactor performance
            and support Fleet operational requirements.
      --The $150.8 million requested for Materials Development and
            Verification funds material analyses and testing to provide the
            high-performance materials necessary to ensure that naval
            nuclear propulsion plants meet Navy goals for extended warship
            operation and greater power capability. More explicitly,
            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 and
            lifetime capability. Testing and development of reactor plant
            materials also leads to improvements such as more resilient
            materials that we are incorporating into our newest designs.
          Funds in this category also support 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 that we use to test
            reactor core and plant materials specimen. The specimen are
            subsequently examined at the Expended Core Facility (ECF) at
            NRF or the Radioactive Materials Laboratory at Knolls Atomic
            Power Laboratory to obtain data used to support both core and
            plant materials development. This enhanced knowledge of
            materials performance has been key to technical breakthroughs
            in extending core life. Although Naval Reactors is not
            responsible for ATR, it is important to our continued efforts
            to understand material behavior. ATR is more than 35 years old
            now, and I understand that the Department of Energy's Office of
            Nuclear Science and Technology has identified a need for
            increased funding to keep it viable for years to come. I
            support this funding.
      --The $172.0 million requested for Evaluation and Servicing sustains
            the operation, maintenance, and servicing of land-based test
            reactor plants and part of Naval Reactors' share of ATR
            operations. 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
            subsequently 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 implementation of
            a dry spent fuel storage production-line that will allow us to
            put naval spent fuel currently stored in water pits at the
            Idaho Nuclear Technology and Engineering Center and at ECF into
            dry storage. 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 or changing conditions.
             program infrastructure and administrative requirements
        In addition to the budget request for the important technical work
    discussed above, infrastructure and administrative funding is required
    for continued support of the Program's operation and infrastructure.
    Specifically, the fiscal year 2005 budget request includes:
        Facility Operations.--Fifty-point-eight million dollars are
    requested to maintain and modernize the Program's facilities, including
    the Bettis and Knolls laboratories and ECF, through Capital Equipment
    purchases and General Plant Project upgrades.
        Construction.--Seven-point-two million dollars are requested to
    refurbish and replace Program facilities. This includes funding for the
    construction 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. The requested funding also supports construction
    of a replacement industrial facility building at the Knolls Atomic
    Power Laboratory to consolidate non-irradiated material development
    fabrication and characterization (i.e., determining material
    properties) activities, which are currently located in five separate,
    aging buildings.
        Program Direction.--Twenty-nine-point-five million dollars are
    requested to fund Naval Reactors' 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 environmental, safety, and other
    regulatory requirements--all of which, notwithstanding our excellent
    record, necessitate substantial effort.

              PERFORMANCE MEASUREMENTS, GOALS, AND ACCOMPLISHMENTS

        Naval Reactors has a long history of operating with the highest
    levels of integrity and operational accountability. The Naval Reactors
    Program has always been dedicated to continual improvement. We use
    semiannual reviews of short and long-range plans to adjust and refine
    work priorities. Work is broken up into thousands of discrete
    ``deliverables,'' each assigned to an individual responsible for
    completion of the task on schedule. Monthly financial reports from
    contractors are used to compare actual performance against projected
    performance. Additionally, Naval Reactors Headquarters closely oversees
    its management and operating contractors through periodic reviews,
    formal audits, performance appraisals, and close integration with our
    resident field offices.
        For the fiscal year 2003 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 our training and test reactor plants. As
    of today, U.S. nuclear-powered warships have safely steamed over 130
    million miles. Naval Reactors developed new technologies, methods, and
    materials to support reactor plant design, which included attaining the
    fiscal year 2003 goal of 99 percent design completion of the next-
    generation submarine reactor. We continued design of the propulsion
    plant for the next-generation aircraft carrier, which is on schedule to
    meet the planned ship construction start in fiscal year 2007.
    Additionally, Naval Reactors maintained its outstanding radiation
    protection program and its environmental performance: no Program
    personnel have ever exceeded the applicable annual or lifetime Federal
    limits for radiation exposure, and Program operations had no adverse
    impact on health or on the quality of the environment.
        Naval Reactors has met or expects to meet or exceed all fiscal year
    2004 performance targets, which are to achieve 90 percent utilization
    availability for operation of our training and test reactor plants; to
    safely steam on nuclear power about 2 million more miles; to complete
    the next-generation submarine reactor design deliverables (design is
    complete); to complete 60 percent of the CVN-21 reactor plant design;
    to have no personnel exceed the annual Federal limit for 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 continuing
    need for power projection and forward presence far from home, which
    strains our limited 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 in our Nation's defense over the past 50 years. 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.
        Thank you for your support.

        Senator Domenici. Well Admiral, I'll just tell you the
    truth. We serve around here as elected officials and we meet
    people who give their lives to the government and do services
    for our people. And sometimes we run into some that we do not
    know what to tell them in terms of how much we appreciate them.
    We use the typical words but they are not enough. But we really
    think the United States Navy's use of nuclear power is one of
    the most fantastic achievements of mankind. And when they have
    done it since Nautilus without one single nuclear mistake and
    have had as high as 123, I think, nuclear reactors floating
    around the oceans of the world, it is tremendous. And you are
    in charge of that and you made it go along just like it had
    been, or better. We do not need any accolades or thanks from
    you because they all run the other direction.
        Admiral Bowman. Thank you, sir.
        Senator Domenici. Now, who is next? The other two do not
    need to testify?
        Ambassador Brooks. No sir, that's why I was so long, I was
    doing for all three of us.
        Senator Domenici. All right. Well, I am going to ask a few
    questions and yield to you two Senators and if we do not finish
    we will submit the rest of them.

                        ROBUST NUCLEAR EARTH PENETRATOR

        Mr. Brooks, I do not have this question written up but I
    would like you to do something again for me. I have been a
    budgeteer, until this year, part of the budget process for 28
    years, Chairman 10 times, maybe. Now, you are asking us to
    approve how much money for the research on the penetrating
    warhead?
        Ambassador Brooks. Twenty-seven-point-five million dollars.
        Senator Domenici. Now, the Senator from California says
    that you have $500 and some million.
        Senator Feinstein. Four-hundred-and-eighty-four.
        Senator Domenici. Four-hundred-and-eighty-four million
    dollars that you are going to spend and she says that is why
    she will not vote for it, among the reasons, because that is
    what you are going to spend, that is what you are going to do.
    Tell me why that number is in there at all.
        Ambassador Brooks. One of the things we tried to do
    starting 3 years ago was to get to true 5-year budgeting so
    that when we submitted a budget to the Congress we submitted a
    5-year plan that really meant something. That's important for
    the Congress and it was also important for us because otherwise
    you would start things that you couldn't finish. When we
    prepared this 5-year plan we had no idea, and we don't know
    now, whether the research will show this is feasible or whether
    the President will decide to pick it up. But if he does, we
    wanted to have the wedge to support the funding in the out-
    years. So we put the money in there because it was our
    interpretation of the right thing to do in terms of making sure
    the Congress knew the implication of the research that we were
    doing and making sure that if the President did so choose,
    after the completion of the study, that we had preserved his
    options financially. It was not intended to suggest that we
    made a decision, let alone that we think that you've made a
    decision.
        Senator Domenici. Well I'll tell you, Mr. Ambassador, you
    get hit both ways. If you leave it out somebody says you are
    underselling the program and it costs a lot more than 27 or 24.
    And if you put it in as the outside you get beat over the head
    because that is what you are going to spend. But we have to
    figure out a way, in the next 5 or 6 weeks, 7, to make the case
    that putting that number in does nothing with reference to this
    program in terms of its future, that its future is capsulized
    in the funding as described to be used that you ask for right
    now. I am willing, in this bill, to fight it out. If we lose,
    we lose, if we win, I am willing to put any kind of language in
    that says that is it. There is no other expenditure. You do it
    and no more. And before you do anymore you must get
    concurrence. Now, that is all right with you, right?
        Ambassador Brooks. Yes sir. That's completely what the law
    says.

                                      NIF

        Senator Domenici. Okay. Now, let me move to Dr. Beckner. I
    understand, Dr. Beckner, that NIF is still at least 6 years and
    $1 billion away from completion of this project. Is it accurate
    to say that NIF is both the largest laser and the most
    expensive diagnostic tool in the NNSA stockpile? When we
    develop any technology, we need to ask ourselves, is this
    outcome worth the cost? Right?
        Dr. Beckner. A fair question.
        Senator Domenici. If you do not achieve ignition, the
    American people have purchased a laser that is 25 times more
    expensive than the Z Machine, which proved its worth 1 year too
    late. It came into existence one year after we started funding
    NIF. It is proceeding along as a much cheaper machine but I
    think we need to understand that the project is viable before
    we spend billions more on the life of this program.
        So my question to you, how much money are you willing to
    spend above ignition? Excuse me, how much money are you willing
    to spend to achieve ignition and at what point do you say, we
    have spent too much?
        Dr. Beckner. Our present plan shows the expenditures out
    through the year 2010 in the budget that we've submitted, and
    it's close to a billion dollars, as you've said. I believe we
    need to get to that point in order to, in any sense, have a
    chance at achieving ignition. You can't do it with a smaller
    laser, based on everything that we know today. That's only part
    of the answer, however. The second part really is that absent
    ignition, we require this laser for a large number of
    applications that are specific to the sustenance and the study
    of phenomena associated with nuclear weapons themselves. In
    other words, it is a very significant element of Stockpile
    Stewardship. Ignition, of course, is important, make no mistake
    about it, and we will use it aggressively to achieve that goal.
    But we do have this additional reason to need NIF. And I don't
    want us to forget that.
        Senator Domenici. Do you mean for the Stockpile
    Stewardship?
        Dr. Beckner. Yes sir.
        Senator Domenici. Well of course, that is why we put it in
    there.
        Dr. Beckner. Yes sir.
        Senator Domenici. But if it does not work it does not
    matter where we put it, right?
        Dr. Beckner. Well, there are many things you can do with a
    laser without achieving ignition, that's my point. We will use
    it for those other things.
        Senator Domenici. But will those help with Stockpile
    Stewardship?
        Dr. Beckner. Yes sir.
        Senator Domenici. And would we need $5 or $6 billion to
    achieve that?
        Dr. Beckner. No, I think we would not have embarked upon
    this mission if we did not believe we had a reasonable
    opportunity to achieve ignition.
        Senator Domenici. Ignition.
        Dr. Beckner. Yes sir.
        Senator Domenici. So let me go on. If the 2005 budget
    specifies that NIF ignition has been delayed until 2014, that
    gives me great concern regarding the project. Delaying the
    ignition start date is contrary to news that the project is
    ahead of schedule. I understand that the laser installation is
    18 months ahead of schedule and the beam light infrastructure
    was achieved nearly 3 years ahead of schedule. As a result of
    these conflicting statements, I am very skeptical as to the
    actual status of NIF. To date, $2.5 billion has been spent and
    another billion required before we know whether or not this
    project will work. I do not share this all or nothing attitude
    because the costs are very high and the budget is very slim. So
    I believe we need a more measured approach to address the
    significant technical measures and technical challenges that
    lie ahead.
        George Miller, the NIF Associate Director, is he here
    today?
        Dr. Beckner. Not to my knowledge.
        Senator Domenici. Is he still doing this job?
        Dr. Beckner. Yes he is.
        Senator Domenici. Did he move out there?
        Dr. Beckner. Yes. George is an employee of Lawrence
    Livermore National Laboratory.
        Senator Domenici. Well, whoever sees him, give him my
    regards. Thank you.
        Dr. Beckner. I'll do that.
        Senator Domenici. Terrific guy. He is the Associate
    Director, he stated that the most significant technical
    challenge he has is the full ignition of the lasers. I believe
    the first cluster, which is 48 lasers, or one-quarter of the
    total, would certainly give a clear indication of whether
    ignition is feasible. Is that what you think?
        Dr. Beckner. I believe it's more complicated than that.
        Senator Domenici. You what?
        Dr. Beckner. It's more complicated than that.
        Senator Domenici. Okay.
        Dr. Beckner. Let me back up to your earlier statement.
    First of all, I've met with the staff of this committee as well
    as the other three committees to clarify our recent decisions
    to change course on some of the milestones in order to pull
    back the ignition target to 2010, as opposed to 2014. And we've
    done that because of our realization that this committee and
    the other committees as well have a very strong view that we
    must maintain that schedule. We had allowed it to move out
    because of priorities in other elements of the program and
    without the full understanding that this was unacceptable. So
    we have changed that plan and we've done it also because we've
    had some technical progress in target design which makes it now
    possible to do that. So we are very much aware of the
    committee's determination that we stay on target with ignition.
    That's the first part.
        Secondly, we agree with you that we need more milestones
    for this committee and the other committees of the Congress to
    track. We're going to put those in place; we will provide them
    to you annually; and we'll report to you at regular intervals
    to be sure that you are satisfied with the progress of the
    program.
        Now, the third part of your question regarding
    demonstration of significant events at the time we have one
    cluster operational, I think is not likely to be--we would not
    want to see that as an end point. That's my concern. We
    certainly see that as a very important target in program
    progress and we have that as a goal.
        Senator Domenici. Well, I am going to yield here shortly
    because I understand these Senators have more interest than
    just NIF. But I am not finished with you, even if we have to do
    it another day. I have two questions. First, I want everybody
    here to know that I know him very well; he worked in my State
    and, you know, I have been with him many times when he was not
    in such a hard position. And he smiles no matter what, when he
    was doing the other work or this so, I guess it does not really
    matter. He has got a good brain.
        Dr. Beckner, I would like you to put together a budget and
    a schedule that will accelerate the installation and testing of
    the first cluster in fiscal year 2005. Can you do that?

                                    NIF PLAN

        Dr. Beckner. I can certainly put together the plan. I don't
    know the results of your instructions but we'll certainly be
    responsive to your request.
        [The information follows:]

        It is not possible to complete the first cluster milestone in
    fiscal year 2005 without a significant increase in the Total Project
    Cost. Procurement logistics and lead times limit our ability to
    complete the scope of work required to accelerate the first cluster
    into fiscal year 2005. The ability does exist to marginally accelerate
    the first cluster and project completion dates if the funding profile
    is changed without increasing the Total Project Cost (TPC).
        The first cluster milestone is currently scheduled for completion
    in June 2006 with Project completion in September 2008. We believe it
    is possible to accelerate these dates by modifying the funding profile
    for the project beginning in fiscal year 2005. The first cluster
    milestone could be accelerated by 1 to 3 months, and the project
    completion date could be accelerated by 3 to 5 months, by moving $59
    million from fiscal year 2007 to fiscal year 2005 and fiscal year 2006.
    Of the $59 million total, $27 million would be required in fiscal year
    2005 and $32 million required in fiscal year 2006.
        Please let me know if you would support such a change in the
    funding profile in order to achieve the schedule acceleration
    described. This would allow the ignition campaign to begin sooner and
    support the goal of ignition in fiscal year 2010. I ask you to
    recognize that if we must achieve the change within the FYNSP plans, it
    will likely be at the expense of other activities which are vital to
    the Stewardship mission. We will not proceed with additional planning
    until we receive your input.

        Senator Domenici. Now, I want to state, and then I yield
    and will come back for a number of questions. I want to say,
    you know how I feel right now, Dr. Beckner, is that I have been
    hoodwinked. And not a little hoodwink, a big one. Because I
    think what we are going to get out of this is a big civilian
    tool that can be used at that laboratory for a lot of research.
    And we are going to run around saying that is the best research
    laser facility the world has ever seen. And I tell you, if I
    see that coming, they better not be asking me for any money
    because I would close it down. Because that is not fair. We
    never intended to spend $5 to $6 billion to build a laser
    facility for a laboratory that would provide civilian research
    and visitations from around the world. So I know you all look
    at this and say well, it is going to do something. And it is
    sure going to be extraordinary. But that is not why I agreed to
    pay for it.
        Dr. Beckner. I understand.
        Senator Domenici. I agreed in a very, very highly debated,
    that this was going to reach ignition and that would be the
    best part of science-based stewardship. Think of that. The best
    part. Now right now we are moving with Z also.
        Dr. Beckner. Yes sir.
        Senator Domenici. And we are.
        Dr. Beckner. Yes sir.
        Senator Domenici. And nobody is going to stop us from doing
    that. It may do three-quarters of the work but it is a little
    tiny weeny $100 million project and it may do three-quarters of
    your work, or more. So, in any event, we will make sure that
    everybody understands that.
        Now, Senator Bennett, you are next. We are going on time of
    arrival, and then the Senator from California.

                                NUCLEAR TESTING

        Senator Bennett. Thank you very much, Mr. Chairman.
    Ambassador Brooks, I think I heard the answers to my questions
    in your statement but let us go over them again so that they
    are very clear.
        There is a moratorium currently in place. Is that correct?
        Ambassador Brooks. Yes sir.
        Senator Bennett. And testing is not imminent, is that
    correct?
        Ambassador Brooks. That's correct.
        Senator Bennett. You said that there is no anticipation of
    testing at any foreseeable time in the future. Is that correct?
        Ambassador Brooks. Yes.
        Senator Bennett. None that you can now foresee?
        Ambassador Brooks. That's correct.
        Senator Bennett. And that the testing will not happen
    unless the President makes a very public finding and the
    Congress acts in funding that finding. Is that correct?
        Ambassador Brooks. That's correct.
        Senator Bennett. So the newspaper stories, I think I heard
    you say, are not correct? That say that nuclear testing is now
    imminent as a result of the vote we took last year?
        Ambassador Brooks. I haven't seen stories that blamed me
    for that one, but in any event, if there are such stories
    they're not correct.
        Senator Bennett. Not you, they blame us. So there is no
    testing pending at the present time?
        Ambassador Brooks. No sir.
        Senator Bennett. Or in the future circumstances that you
    currently can see?
        Ambassador Brooks. No sir.
        Senator Bennett. All right.
        Ambassador Brooks. But I don't want to mislead the
    committee. If I find a problem that can only be verified
    through testing I would not hesitate to recommend to the
    Secretary and he would not hesitate to recommend to the
    President that we test. I have no reason to believe I'm going
    to find that problem, but it is a hedge against the possibility
    of finding that problem that we've asked for the money to
    ensure that we are ready if that contingency occurs. We have no
    reason to believe it's going to occur.
        Senator Bennett. All right. Here is a postcard that is
    currently circulating. I am sure you have seen it. I get copies
    of it. I cannot respond to most of them because they do not put
    return addresses on them, they just send them in. And it says,
    for those that are not familiar with it, ``This is an
    underground nuclear test.'' And it shows an obvious spew into
    the atmosphere. Would you comment on that, because it has great
    currency right now.
        Ambassador Brooks. Yes sir. The United States started doing
    only underground tests following the Limited Test Ban Treaty in
    1963. In 1970, a test called Baneberry vented. That is to say,
    although we thought it would all be contained, it was not.
    Radioactivity was spread off the test site to an area north and
    west of the site, all within Nevada; there was no radioactivity
    above background levels detected in Utah, although there had,
    obviously been fallout in Utah and indeed worldwide and from
    the atmospheric tests of the 1950's and 1960's. After
    Baneberry, we took a 6-month moratorium on underground tests.
    Now, in the context of today, when we haven't tested for over
    10 years, that doesn't sound like much but in the 1970's when
    we had a very robust test program that was a significant step.
    We made a number of both analytic and technical corrections.
    What had happened was, there was a fissure, a crack in the
    Earth that we had not detected. So first, we required that for
    future tests we drill more exploratory holes to make sure we
    find fissures. We put together an evaluation panel that
    included both testing experts and geologic experts to evaluate
    the containment design of each test and then we required that
    those findings be peer-reviewed, in accordance with standard
    scientific procedures. We set up a series of environmental
    monitoring stations and those networks operated continuously.
        Now, that was a long time ago. But we have not had a repeat
    of Baneberry. We had some far less significant events, three I
    believe, in the 20-some odd years following that, two of which
    resulted in nothing leaving the test site. We are confident
    that with the combination of the corrective actions we put in
    place then and the greater scientific understanding that we
    have now of geology and hydrology, and the greater formality
    that we build into all aspects of nuclear safety, and the
    funding that the Congress has given us in the last 2 years to
    make sure we do careful safety analysis, that if, at some
    future date, the President decides we need to do an underground
    test there will be a policy debate, but there won't be any
    public health issue because we are confident that we will make
    sure that we do not have a repeat of that 1970 event.
        Senator Bennett. So just to summarize what you have told
    me, since this occurred in 1970, for the intervening quarter of
    a century, there has never been a reoccurrence of something
    like this postcard?
        Ambassador Brooks. There certainly has been nothing like
    that. As I said previously there has been minor venting, but
    nothing like Baneberry.
        Senator Bennett. How many tests are we talking about? If we
    had three occasions, is that three out of thirty or?
        Ambassador Brooks. Between 1970, in 22 years, oh, I don't
    know. I'd have to give you that for the record, a couple
    hundred.
        Senator Bennett. Couple hundred?
        Ambassador Brooks. Yes sir. Let me supply that for the
    record to make sure I'm giving you the right answer.

                         NUCLEAR TESTS SINCE BANEBERRY

        Senator Bennett. I would appreciate knowing that, for the
    record, so that, we are within 1 percent?
        Ambassador Brooks. I think so sir, yes sir.
        Senator Bennett. And I would like to know the date of the
    last one.
        Ambassador Brooks. Yes sir. I'd be more than happy to
    supply that.
        [The information follows:]

        There were 384 underground nuclear tests at the Nevada Test Site
    since the 1970 Baneberry test.
        The last underground nuclear test was conducted at the Nevada Test
    Site on September 23, 1992.

        Senator Bennett. So that if it was 15 years ago there is a
    little bit higher sense of confidence than if it was 5 years
    ago, when the last leak.
        Ambassador Brooks. Yes sir.
        Senator Bennett. I would appreciate it.
        Ambassador Brooks. It was more than 11 years ago because
    we've done no testing in the last 11 years.

                                NUCLEAR RESEARCH

        Senator Bennett. Okay. You say you want to do research,
    that there is no pressing indication now that that research
    would lead to testing, indeed, there is nothing you have in
    your mind that would suggest that it would lead to testing. But
    you want to do the research anyway. Are you aware of research
    that is being done outside of the United States that you feel
    you want to catch up with? Is that part of the impetus here?
        Ambassador Brooks. There are multiple impetuses. We don't
    want to be surprised by developments outside of the United
    States. That's one reason for looking at advanced concepts and
    making sure that you understand what the laws of physics will
    allow. But I think we also want to make sure that we are paying
    attention to maintaining the safety and reliability of the
    existing stockpile. So I think there are multiple reasons why
    we want to look. I don't rule out that someday the President
    will want us to have a capability that we don't have. Nuclear
    Earth Penetrator, in my view, both as a matter of practice and
    as a matter of law, is a capability we sort of have now, we're
    just trying to make it better. So that's a somewhat special
    case. But the principle reason for advanced concepts and the
    projects that we have looked at are primarily, I think,
    motivated by making sure we're not overlooking an opportunity
    to improve safety, security and reliability. There's a
    secondary motivation to make sure that we are not subject to
    technological surprise by someone outside this country. We know
    that there is a vigorous program in Russia. We don't understand
    everything we'd like to and I can't, in an open hearing go into
    what we do understand. Some of the things they're doing we
    don't completely understand so it would be useful to make sure
    we understood the technology. But I think we're more motivated
    by safety, security, and reliability than by sort of a
    technological keeping up with others.
        Senator Bennett. All right. But I want to get back to one
    of the things you said when you outlined the reasons for
    looking at existing warheads to see if they can be adapted.
    Clear military utility would move only if the President
    approves and Congress funds. And number three caught my
    attention because I have not seen it before. Maybe I have not
    been paying attention. When you say this is not a change in our
    policy, that this is deterrence.
        Ambassador Brooks. Yes sir.
        Senator Bennett. If that is the case, that means, for
    example, this would not have been used in Iraq. Let's assume
    there was a circumstance where this particular weapon that you
    are researching, or this adaptation, let me get the words
    right, that this adaptation of a weapon that you are
    researching, might strike the Joint Chiefs as being a good
    weapon to use in Iraq. Under no circumstances would that be
    considered a deterrent to anyone else who might attack us. So
    you are saying it is the position of this administration that
    the weapon would not be used in that circumstance, even if it
    were available.
        Ambassador Brooks. We have, as a matter of policy, in every
    administration I am familiar with, been very careful not to
    make dogmatic statements about what a President will or will
    not do in support of national security. And I don't want to be
    the one to break that tradition. Let me explain what I did
    mean.
        Senator Bennett. Okay. I will accept that. You do not need
    to go any farther than that.
        Ambassador Brooks. Okay.
        Senator Bennett. But, just to make the comment, that if
    indeed this President or some future President, we are going to
    decide who is going to be President, come November, this
    President or some future President were to come to Congress
    while I was sitting in Congress and say, okay, we have done the
    research, we think this is a viable weapon, we want now to fund
    it and we are going to use it in a situation quite like Iraq,
    this Senator would not vote in favor of that. My view of a
    deterrent and the use of the nuclear stockpile through the Cold
    War, is that it is never used unless the other side puts you in
    a position where you do it. You never use it as an offensive
    weapon, you never use it in order to project American power.
    You use it held in reserve as part of the deterrent capacity of
    the United States of America, which is the Polaris submarines
    and their nuclear weapons and all of the rest of them. The
    Polaris submarine has never fired a nuclear weapon in an
    offensive way and it is there to say to a potential aggressor,
    if you proceed with your aggression, this is what awaits you.
        Ambassador Brooks. That's correct.
        Senator Bennett. And just for the record, that is how I
    would view, if such a weapon at some point by some future
    President were ever proposed. In the context of what you have
    said I would view that as having to have that same kind of
    restriction that I currently see on Polaris weapons, Polaris
    missiles and so on. I will not put you into that box. I
    understand that you cannot make that firm statement because you
    are a member of the administration. But I can make that
    statement because I am answerable to the people of Utah, all of
    whom have a very great concern, which I most thoroughly share,
    that we do not want to disarm this country, we do not want to
    do anything that will harm our national security. But in the
    end we want to make sure that as we move down the road to
    protect our national security we do not, in any way, endanger
    the health and safety of any of our citizens, regardless of the
    state in which they live. I am assuming you could support that.
        Ambassador Brooks. I'm confident I can speak for the
    President on this one. We agree with that. We have no interest
    in harming the health and safety of anybody, sir.
        Senator Bennett. We just may give you a little help
    legislatively at some future point. I have not made up my mind
    firmly as to what I might do in terms of legislation that I
    will offer. But I appreciate your assurance and we want to do
    everything we can on this side to make sure that that assurance
    is not forgotten by whomever replaces you in whatever kind of
    administration that might come along.
        Ambassador Brooks. Yes sir.
        Senator Bennett. Thank you, Mr. Chairman.
        Senator Domenici. Thank you, Senator. I do not know how
    long you are going to stick around but I have some different
    views than you. I am not going to make them until it is my
    turn. Senator?

                        ROBUST NUCLEAR EARTH PENETRATOR

        Senator Feinstein. Thank you very much, Mr. Chairman.
    Ambassador Brooks, I just want to get some of the figures. I
    think we have anticipated that the Nuclear Earth Penetrator
    figure, 5-year figure, is $484 million. Does that take us up to
    phase 6.3?
        Ambassador Brooks. Actually I think it takes us beyond 6.3.
    So those numbers assume decisions we can't make without your
    permission.
        Senator Feinstein. Okay, at 6.3, according to the Defense
    Authorization Bill, the Earth Penetrator needs authorization
    from Congress?
        Ambassador Brooks. Yes ma'am.

                  FUNDING SCHEDULE FOR DIRECTED STOCKPILE WORK

        Senator Feinstein. So it is somewhere, I would like to know
    for the record, how much will be spent up to that point. What
    is the 5-year figure on the battlefield low-yield nuclear
    weapons?
        Ambassador Brooks. Senator.
        Senator Feinstein. Well, give me the advance concepts.
        Ambassador Brooks. Do you remember? Is it $9 million a
    year?
        Senator Feinstein. Number for 5 years?
        Dr. Beckner. I think it actually goes a bit beyond that.
        Ambassador Brooks. I'll get it for the record, Senator.
        [The information follows:]

                                              FUNDING SCHEDULE BY ACTIVITY
                                                [In thousands of dollars]
    ----------------------------------------------------------------------------------------------------------------
                                                                        Fiscal Year     Fiscal Year     Fiscal Year
                                                                           2003            2004            2005
    ----------------------------------------------------------------------------------------------------------------
    Directed Stockpile Work:
        Stockpile Services Advanced Concepts........................  ..............           6,000           9,000
        Stockpile Services Robust Nuclear Earth Penetrator..........          14,577           7,435          27,557
    ----------------------------------------------------------------------------------------------------------------

                                                     FYNSP SCHEDULE
                                                [In thousands of dollars]
    ----------------------------------------------------------------------------------------------------------------
                                                      Fiscal     Fiscal     Fiscal     Fiscal     Fiscal     FYNSP
                                                    Year 2005  Year 2006  Year 2007  Year 2008  Year 2009    Total
    ----------------------------------------------------------------------------------------------------------------
    Stockpile Services Advanced Concepts..........      9,000     14,425     14,874     14,595     29,472     82,366
    Stockpile Services Robust Nuclear Earth            27,557     94,955    145,371    128,431     88,416    484,730
     Penetrator Research and Development..........
    ----------------------------------------------------------------------------------------------------------------

       FUNDING SCHEDULE FOR PIT MANUFACTURING AND CERTIFICATION CAMPAIGN

        Senator Feinstein. Okay. And the 5-year figure for the pit
    facilities.
        Ambassador Brooks. Yes ma'am. May I get that for the record
    as well? Although I may have that here.
        [The information follows:]

                                              FUNDING SCHEDULE BY ACTIVITY
                                                [In thousands of dollars]
    ----------------------------------------------------------------------------------------------------------------
                                                                        Fiscal Year     Fiscal Year     Fiscal Year
                                                                           2003            2004            2005
    ----------------------------------------------------------------------------------------------------------------
    Pit Manufacturing and Certification Campaign Modern Pit Facility           4,242          10,810          29,800
    ----------------------------------------------------------------------------------------------------------------

                                                     FYNSP SCHEDULE
                                                [In thousands of dollars]
    ----------------------------------------------------------------------------------------------------------------
                                                      Fiscal     Fiscal     Fiscal     Fiscal     Fiscal     FYNSP
                                                    Year 2005  Year 2006  Year 2007  Year 2008  Year 2009    Total
    ----------------------------------------------------------------------------------------------------------------
    Pit Manufacturing and Certification Campaign       29,800     43,291     94,570    101,434    105,168    374,263
     Modern Pit Facility..........................
    ----------------------------------------------------------------------------------------------------------------

        Senator Feinstein. Okay. Now, as I understand it, the
    Advanced Weapons Concept will not require Congressional
    approval prior to going into the engineering phase. Is that
    correct?
        Ambassador Brooks. I'm always reluctant to give away
    prerogatives but I didn't think so.
        Senator Feinstein. Defense Authorization Bill, page 855.
        Ambassador Brooks. I mean.
        Senator Feinstein. And it is just the, unfortunately, just
    the Robust Nuclear Earth Penetrator.
        Ambassador Brooks. The Advanced Concepts work is really
    less far along. I mean, as a practical matter for us to take
    something that came out of an Advanced Concept and do something
    significant with it, at a minimum we would require
    Congressional line-item funding. Whether we would need, I mean,
    you're correct that the National Defense authorization bill
    speaks specifically of 6.3, other legislation speaks of
    production. That unambiguously requires a separate decision by
    Congress. If you're asking a technical, legal question I'd like
    to get back to you for the record. If you're asking a practical
    question, of course nothing that we do in Advanced Concepts can
    move into any sort of meaningful program without the Congress
    because we have to come back to you for money.
        Senator Feinstein. I am trying to find out is how much are
    we going to spend, up to the point of engineering build on
    these programs. What is the total 5-year cost up to that point
    of these three programs, RNEP, Advanced Concepts, Pit?
        Ambassador Brooks. All right. May I provide that for the
    record to make sure I'm precise?
        [Clerk's Note.--See preceding tables.]
        Senator Feinstein. I would appreciate it. Now, we have
    discussed this and----
        Senator Domenici. Senator, would you yield for a moment?
        Senator Feinstein. Of course.
        Senator Domenici. First step, I would like to make the
    point and seek your thoughts, Senator. Here we have the
    Penetrator and whatever we are doing with reference to its
    research, and we are going to look carefully at building a
    plant to make pits. If this idea had never been invented we
    would still be doing this.
        Senator Feinstein. You mean the pit?
        Senator Domenici. Yes.
        Senator Feinstein. Yes.
        Senator Domenici. It has nothing to do with it.
        Senator Feinstein. To field old warheads that are in stock,
    right.
        Senator Domenici. Yes. So, you know, when we talk about and
    add them up, the public assumes that they are in some way
    related so that all this money that we're spending for the Pit
    is related to this work for the Penetrator, they are unrelated.
    I mean, you are out there thinking about how many more years
    can we not have a Pit, right? It has nothing to do with whether
    we build Penetrators, right?
        Ambassador Brooks. That's correct.
        Senator Feinstein. You are correct, Mr. Chairman, as
    always. However, there is one thing. The money for the Pit is
    huge. And it is based on 450.
        Senator Domenici. Correct. It might be too much.
        Senator Feinstein. And it may well be very much too much
    because a study has not been completed yet to let us know
    whether it is 30 or 40 years or whatever we would need the Pit.
        Ambassador Brooks. May I make a correction?
        Senator Feinstein. Of course, please.
        Ambassador Brooks. We are required, under the National
    Environmental Policy Act, and we do an analysis, we have to be
    able to look everybody in the eye and say there's no plausible
    alternative that has been excluded. So, the Environmental
    Impact Statement that we've now suspended work on, analyzes
    between a capability of 125 pits a year and 450 pits a year. I
    think it would be, I don't want to prejudge decisions that
    haven't been made, but it's very hard for me to see, based on
    what we know, that we're going to be anywhere near that upper
    limit. But I've got to make sure that the analysis is broad
    enough, because if there's an option that's outside this
    analysis, I'm in violation of the law because I haven't
    examined all analyses. So I would urge you not to look at the
    upper limit of what we're analyzing under the National
    Environmental Policy Act and assume that that's a program. The
    lower level is probably roughly right. I could explain why now
    but it would be easier if you'd let me send you a paper.
        Senator Feinstein. I would appreciate that. For somebody
    like me, when you indicate a capacity of 450 pits, you send a
    major signal that a whole major new program is going into
    place. At 125, it may be a servicing unit, you know, based on
    what you need to do to replenish and fix old stock. But I am
    very suspicious. I think I know where you are going and I think
    it is a wolf in sheep's clothing. I think to spend all this
    money on the Nuclear Earth Penetrator, which as I understand it
    will produce 1.5 million tons of radioactive debris that is
    going to spew out with no present way of controlling it is
    beyond sanity. I mean, I do not know why anyone would even want
    to do that.

                                    FALLOUT

        Let me ask you this: is there any known way, from a physics
    point of view, because I have spent some time now, with Dr.
    Drell, of containing the radioactive fallout from 100 kiloton
    nuclear bunker buster?
        Ambassador Brooks. There's no way that I know of. I don't
    know of anyone in the administration who advocates that and
    nothing in our proposal for the Earth Penetrator or for the
    previous B61-11, which was the previous administration's less
    robust penetrator, was ever intended to suggest that you can
    contain fallout; you can't. I have no idea how you would do
    that. And, as I think you and I have discussed before, if I
    have said or anyone in this administration has said, anything
    that suggests that we believe that nuclear use is anything
    other than absolutely horrible and a decision a President would
    only take in the most severe circumstances, then we have
    misspoken. The issue that we have is, there are facilities in
    the world that are beyond our ability to threaten except with
    nuclear weapons. We think it is possible that the country may
    decide it wants to threaten those facilities anyhow. We think
    we ought to spend some money to find out if this country can
    have that option by finding out whether I can take an existing
    weapon and threaten those facilities.
        Senator Feinstein. All right. Just for the sake. But you
    know you cannot contain the fallout.
        Ambassador Brooks. That's correct.
        Senator Feinstein. And you know how big you have got to get
    to get down deep enough let alone have the sufficient casing to
    enable the weapon to go down that deep. Therefore you are going
    to have tremendous radioactivity.
        Ambassador Brooks. Yes ma'am.
        Senator Feinstein. So why does it become even a viable
    option? If used in North Korea you jeopardize Japan, you
    jeopardize South Korea. Who in their right mind would ever do
    this?
        Senator Domenici. Senator, would you yield?
        Senator Feinstein. Of course.
        Senator Domenici. Senator, the problem with the argument
    is, I have heard you here and I do not think you are for
    disarmament, are you, of our nuclear weapons? Do you want to
    get rid of them all?
        Senator Feinstein. Well, I will tell you, I am for no first
    use.
        Senator Domenici. That is not my question. Do you want us
    to have some or not have some?
        Senator Feinstein. I am not for the Nuclear Posture Review.
    You asked a question.
        Senator Domenici. Yes.
        Senator Feinstein. That cites seven nations against whom we
    would countenance a first use of nuclear weapons. I am not for
    that.
        Senator Domenici. I understand.
        Senator Feinstein. Therefore, when we are going to spend a
    half-a-billion dollars up to engineering to develop a 100-
    kiloton nuclear bunker buster, which you cannot contain the
    radiation, I have got to wonder well, who is smoking something?
    Why are we doing this if you cannot contain the radiation?
        Senator Domenici. Senator, I do not know who is smoking it,
    but let me tell you. There is more radiation exposure,
    uncontrollable, from existing nuclear weapons than from the
    underground bunker possibility. So the logic is, we should not
    have any of those because there is no way to control a nuclear
    explosion, the radioactivity, from the hydrogen bombs we have.
    And I do not know today how many we have but down from many
    thousands to a controllable number. But the issue is not an
    issue of damaging the world. Because if that is the issue, we
    have got to get rid of all of our nuclear weapons in the event
    that we are saying we do not want to harm anything. They are
    there so that nobody will ever use them. That is why they are
    there.
        Senator Feinstein. But that is not the issue. The issue is,
    these are new classes of nuclear weapons.
        Senator Domenici. But the argument that they are going to
    pollute the world more than the weapons we have is not a valid
    argument. The rest of your arguments are valid but not the
    pollution argument.

                               NUCLEAR DETERRENCE

        Senator Feinstein. You were out of the room when Senator
    Bennett made a very interesting point, and the point was one of
    deterrence, and what is, in effect, a deterrent. And a nuclear
    arsenal of missiles may well be some form of deterrent. A
    nuclear Earth Bunker Buster, I do not see as a deterrent. And
    if we are going to build tactical battlefield nuclear weapons,
    God help our sons and daughters that go on that battlefield. So
    I become very upset. And Ambassador, you say the included out-
    year funds are only to preserve a President's option. And then,
    if you think about the option, how would a President ever, ever
    say, use a 100-kiloton--Hiroshima was 15 kilotons--use a 100-
    kiloton nuclear Earth Penetrator and have no way to control the
    nuclear fallout, the radioactive fallout?
        Ambassador Brooks. May I try it?
        Senator Feinstein. Of course.
        Ambassador Brooks. First of all, part of the problem in
    open hearings is that we can't talk about specific yields. But
    let me just make the technical point that if there is a bunker
    that you want to hold at risk, it takes far more energy if it
    bursts in the air to hold that at risk than it does if you can
    get it just a little way into the ground. So it is quite
    possible that a penetrator can be of lower yields. But the more
    general point, I think, is the problem we've always had with
    nuclear deterrence, Senator. On the one hand, nobody can think
    of a situation in which a rational human being would want to
    use nuclear weapons. On the other hand, in order to deter, we
    have to tell people who think differently than we that if they
    did something that was so serious that it would warrant
    retaliation, we're capable of doing it. It is the case that
    increasingly, we believe, facilities can be put where we cannot
    reach them with existing nuclear or conventional capabilities.
    It is the case, we believe, that at least some dictators--I
    don't want to suggest any country, I would simply point out
    that the popular countries to talk about lately are countries
    in which it's clear the leadership, whatever else they value,
    doesn't care about the suffering of their people. And their
    people are, in fact, victims. So we need to be able to tell
    those leaders there is nothing you can do that is beyond the
    reach of American power. And, a whole different Department is
    spending a whole different set of money on working to improve
    that. My job is to say, suppose conventional doesn't work, can
    we do something with a nuclear weapon and then, if we can, then
    there's the question is it worth both the financial and the
    policy cost? It's a perfectly fair debate but I guess I don't
    accept the view that it's only worth spending this money if
    we're prepared, as soon as we have this, to go out and start
    using it casually. I think this is an example of improving the
    deterrent, just like the various things, many of them
    contentious at the time, that we did during the Cold War, as an
    example, of improving deterrent.
        Senator Feinstein. I will not belabor it. I appreciate the
    time. I profoundly differ with you.
        Senator Domenici. You what?
        Senator Feinstein. I profoundly differ. I think morally,
    ethically, to create weapon systems that are so bizarre and so
    catastrophic goes beyond the moral code. I really do.
        Ambassador Brooks. Yes ma'am, with the greatest respect,
    and I think to have only the ability to destroy cities and kill
    people has its own set of problems.
        Senator Domenici. Let us proceed. Let us make sure we
    understand here where some of us are. But I am profoundly
    concerned if we have nuclear weapons at all. I wish we could
    get rid of them all. I wish we could find a way that we do not
    need them and that we could prove that nobody else would ever
    have them, which is going to be the issue, so that we could get
    rid of them. I am terribly concerned that the damage that one
    of them might do, that we do have, and I am not supporting
    anything, ever, that says we should have more nuclear weapons
    in our arsenal. I should not say ever but right now we are
    building them down, not upward. In fact, we are having a
    terrible time building them down as fast as we can because we
    cannot get rid of the pollution that is coming out of them. I
    mean, we cannot get rid of plutonium fast enough as we destroy
    Russian nuclear weapons. We cannot find a way to do it. You are
    in charge of one now, we cannot even get them to agree on
    something so we can get rid of them, right?

                                      MOX

        I am going to just close by saying the biggest change in
    American policy, overruling policy since President Carter said
    we will build a MOX refinery in America. And we had said no,
    never, never. He said, we will build it if the Russians will
    build it because we will both get rid of plutonium that way.
    Right?
        Ambassador Brooks. Yes sir.
        Senator Domenici. So we made a profound change in our
    policy. I would have never been against the MOX but I mean, the
    President's decided against it, I would give you the reasons, I
    think you would not agree that his reasons were right. The
    reason was to build MOX you enhanced the production of fissile
    material to produce bombs. Turned out nobody in the world ever
    did it, so probably the fear was not there. So here we come
    along and what changes it? The Russians change it because they
    are going to do it, we say we will do it. Now we cannot get it
    done because we cannot get an agreement, right? That is a tough
    one for you.
        Ambassador Brooks. That's right, sir.
        Senator Domenici. Okay. So, I am on the side of trying to
    get rid of this stuff. I do not want them to use it again, I do
    not want us running around, leaking around, being transferred
    around. So, my record is pretty good on that.
        Now, I want to just be parochial and I want to tell you
    that I do not like the idea of the Los Alamos schools being
    treated differently all of a sudden than they have been for a
    long time. If you want to treat them differently, Mr.
    Ambassador, then we ought to start treating them differently
    and give them an opportunity to be treated differently over a
    long period of time. Either buy them out or something be done
    elsewhere but just say this year they do not get funded and so
    you did not put it in the budget, you know I have to find it
    somewhere so I will. But I am just telling you I do not think
    it is the right way to do it. And you have to get a team and
    let us get started finding out how do we solve this problem,
    not just the budget issue.

                                   Z MACHINE

        The Z Machine, very quickly, I just want to make sure that
    I am correct, that it is being maintained and the little bit of
    money that is needed for it is going to be there and that is
    moving ahead?
        Dr. Beckner. Yes sir.
        Ambassador Brooks. Yes sir.
        Senator Domenici. And everybody is satisfied with its
    performance?
        Dr. Beckner. Yes sir.
        Senator Domenici. Is it a good piece of equipment for the
    price?
        Dr. Beckner. Yes sir.
        Senator Domenici. Will not take the place of what we
    expected NIF to do, right?
        Dr. Beckner. No sir. It is not of adequate size to do that.
        Senator Domenici. But if NIF fails it may do what a failed
    NIF will do?
        Dr. Beckner. That's a possibility and we certainly intend
    to continue to support that program and to have milestones in
    that program so that we can measure its progress.

                            NUCLEAR NONPROLIFERATION

        Senator Domenici. Mr. Longsworth, have you read the ``Wall
    Street Journal'' article, how the Pakistani nuclear ring
    managed to skirt export laws?
        Mr. Longsworth. Yes, I have.
        Senator Domenici. Are you receiving adequate international
    cooperation in stopping the activities outlined in this
    article?
        Mr. Longsworth. We are working very diligently on that. In
    fact, we've asked for an increase in our budget this year to
    address those kinds of issues.
        Senator Domenici. You haven't got everything you need yet?
        Mr. Longsworth. Well, we hope to if we get this increase
    we've asked for in our budget, yes sir.
        Senator Domenici. Mr. Ambassador, what is the likelihood
    that the liability issue will be resolved in a timely fashion
    so we can move ahead with construction so we can get rid of
    some of that plutonium that is sitting around in Russia and
    America?
        Ambassador Brooks. I am hopeful that we will get it
    resolved soon but the last 12 years have told me predicting
    Russia is risky. And I just don't know. The problem is not in
    this country; the problem is in the Russian Federation.
        Senator Domenici. Okay. So it is high enough that we ought
    to encourage our President, if we can, to ask the Kremlin to
    get with it on this one?
        Ambassador Brooks. Yes sir.
        Senator Domenici. This Libya situation. We added $5
    million, I think, in the Senate to initiatives focused on
    removing nuclear weapons useable material from volatile sites
    around the world. I understand your office was able to make use
    of this earmark to quickly respond in the Libyan situation?
        Mr. Longsworth. Yes sir. Let me just say, we would not have
    been able to respond quickly without that authorization.
        Senator Domenici. I am glad we did it. The role your office
    and the Department played in removing the nuclear materials,
    can you explain that in a minute or two?
        Mr. Longsworth. Yes sir. We had three missions into and out
    of Libya. The first mission was using the money you just
    referred to to immediately remove the core of their nuclear
    weapons capability; their nuclear fuel cycle capability. We
    removed key components, not all of the components, but the
    components that would, if we had not been invited back, have
    posed the most serious proliferation concern. The second
    shipment was a fairly large shipment which has just arrived
    back in the United States of the remaining centrifuge parts.
    The third shipment was to remove the HEU fuel, fresh fuel, from
    the Tajura reactor. That was sent back to the Russian
    Federation. That material was under IAEA safeguards, so it was
    accounted for and they were legally allowed to have it, but
    they agreed to remove it at our request and it went back to
    Russia. It will be recycled back into civilian low-enriched
    fuel.
        Senator Domenici. Good. Well, Senator, do you have any
    other questions?
        Senator Feinstein. I have one quick question. When we
    discussed, and I will just put it in a general category, the
    warhead redesign, the general fixing that may have to be done,
    does that come out of any of these programs' budget? The
    Advanced Concepts, the Pit, the Earth Penetrator?
        Mr. Longsworth. If we look at problems with fixing an
    existing warhead that's usually done as part of the Life
    Extension Program, which is a separate line item.
        Senator Feinstein. That is in another?
        Mr. Longsworth. Yes ma'am.
        Senator Feinstein. So nothing in this goes for that?
        Mr. Longsworth. In general that's correct, ma'am.
        Senator Feinstein. Thank you.
        Senator Domenici. Thank you, Senator.
        Senator Feinstein. Thank you.
        Senator Domenici. That is a very good hearing because you
    came. Thank you.
        Senator Feinstein. Thank you.
        Senator Domenici. We will have another big fight, huh?
        Senator Feinstein. Oh, I welcome it.
        Senator Domenici. The thing is, we get a second round, they
    may win it before.
        Senator Feinstein. You never know, you never know.
        Senator Domenici. See and then ours might not be terribly
    relevant because they already won in Armed Services. If they
    lose----
        Senator Feinstein. Well, we will try with the House.
        Senator Domenici. We lose in Armed Services we are in
    terrible shape. You will win.

                            NUCLEAR STOCKPILE REPORT

        Nuclear Stockpile Report.
        Ambassador Brooks. Yes sir.
        Senator Domenici. Mr. Ambassador, I noted in the opening
    statement that you talked about it and I am very disappointed
    that the Departments of Defense and Energy have not produced
    the Stockpile Report as requested. I think the distinguished
    Senator who is here because of what she worries about, ought to
    be very concerned that we do not have that report. Priorities
    of the future seem to be very much dependent upon it. So, Mr.
    Ambassador, it is the fault of the government of the United
    States that we do not have it, right?
        Ambassador Brooks. Yes sir.
        Senator Domenici. Should have been done.
        Ambassador Brooks. Yes sir.
        Senator Domenici. Will it be done?
        Ambassador Brooks. Yes sir.
        Senator Domenici. When?
        Ambassador Brooks. I don't know.
        Senator Domenici. Well, that is not good enough.
        Ambassador Brooks. I don't want to make promises to the
    Senator that I can't keep.
        Senator Domenici. Okay. But give me some talk. Are you
    working on it? Who is holding it up?
        Ambassador Brooks. The Secretary of Defense said it would
    be submitted in the spring. Spring started 2 days ago. It is
    being worked on, literally, as we speak, but because of the
    importance I think this will have to be personally approved by
    the President and I can't predict how long that will take.

                         ADDITIONAL COMMITTEE QUESTIONS

        Senator Domenici. Okay. I am going to wrap up the hearing
    in just a minute. And Senators that are here or not here that
    want to submit questions, please do so. Thank you.
        [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

                         REVISED NUCLEAR STOCKPILE PLAN

        Question. I noted in my opening statement, I am disappointed that
    the Department of Defense and Department of Energy have not produced
    the stockpile report requested in the fiscal year 2004 Energy and Water
    Development bill. I believe this report is critical in establishing the
    priorities of the administration. This report was requested to be
    delivered with the President's budget. However, that deadline has come
    and gone and we still don't have our report. When do you expect that
    this committee will receive a copy of this report?
        Answer. The Departments of Defense and Energy understand the
    importance of completing this plan promptly and providing it to the
    Congress. Both departments are working together to complete this
    complex task. I anticipate that the plan will be forwarded to the Hill
    in the Spring.
        Question. We are beginning to put together our budget priorities
    and the failure to produce the report will have significant
    consequences for your budget priorities. Will you convey that message
    back to the Department?
        Answer. Yes, sir. I have already done so.

                        ROBUST NUCLEAR EARTH PENETRATOR

        Question. I was surprised to see in the budget request that nearly
    $500 million is provided for the Robust Nuclear Earth Penetrator (RNEP)
    in out-year funding. I believe many members are concerned that you have
    already made a decision on the need for this type of weapon without any
    input from Congress. Would you like to clarify what the President's
    budget provides for this project and outline the role Congress will
    play in the future development of this weapon?
        Answer. We have not decided whether to proceed with the Robust
    Nuclear Earth Penetrator beyond the 6.2/2A study that is currently
    underway. Our fiscal year 2006-2009 funding estimates are only
    placeholders within the FYNSP, based on predecisional data and in no
    way represent a signal that we intend to proceed with the RNEP. That
    study will be competed by the end of fiscal year 2006, and will cost an
    estimated $71 million from fiscal year 2003 through fiscal year 2006.
        Consistent with section 3143 of the fiscal year 2003 National
    Defense Authorization Act, Public Law 108-314, and section 3117 of the
    fiscal year 2004 National Defense Authorization Act, Public Law 108-
    136, the administration may request congressional approval to proceed
    with phase 6.3 (engineering development) in the first quarter of fiscal
    year 2007. This request is contingent on the identification of a
    feasible and affordable design using either the B61 or B83; the
    determination by the Department of Defense that the design meets
    military requirements; and the approval of the joint DOD/DOE Nuclear
    Weapons Council.

                            SAFEGUARDS AND SECURITY

        Question. Ambassador Brooks the new Design Basis Threat has
    elevated the security requirements at DOE and NNSA sites. The
    President's budget requests a $106.9 million increase (8.6 percent) in
    the Safeguards and Security budget. As a result of the increased
    security requirements, we are able to spend less on important research.
    TA-18 in Los Alamos is a good example of the need for the NNSA to
    consolidate the special nuclear material in safer, better defended
    areas. I would like the NNSA to undertake a study that will be the
    basis for a plan to develop a clear understanding of our future
    security needs and the benefit of consolidating the special nuclear
    material across the complex. Can you do this study and report to me on
    your findings?
        Answer. We have already begun the study you requested on the
    benefits of consolidating nuclear materials with a focus on security.
    This effort is being conducted jointly by the NNSA and the Office of
    the Under Secretary for Energy, Science, and Environment and should be
    completed in Fall 2004. I will provide you with the report of this
    effort by December 31, 2004. We're also not waiting for the results of
    the reports to take action to consolidate nuclear materials as we
    identify opportunities to do so for increased security, on efficiency
    of security arrangements.
        Question. How are you planning to handle the transfer of TA-18 at
    Los Alamos?
        Answer. The Secretary has directed the NNSA to begin a near term
    shipping campaign that will move approximately 50 percent of the Los
    Alamos National Laboratory Technical Area (TA-18) Category I and II
    Special Nuclear Material to Nevada. This campaign will begin in
    September and last approximately 18 months. NNSA will immediately start
    preparing the Device Assembly Facility (DAF) to support storage of
    these nuclear materials while scheduling packaging and transportation
    resources. The movement of these materials will be handled by NNSA's
    Office of Secure Transportation. In parallel, the design modifications
    to DAF to assume program responsibilities will continue, and the
    modifications will be made in the next several years to receive the
    additional material to support the associated missions.
        Question. What is the timetable for this decision?
        Answer. We will begin the shipping campaign this September. Between
    now and then Los Alamos National Laboratory, the Office of Secure
    Transportation and Nevada personnel will identify, characterize and
    pack materials in approved shipping containers for transfer to the
    Device Assembly Facility in Nevada.
        Question. If TA-18 is moved from Los Alamos, will Los Alamos still
    maintain the mission associated with this facility?
        Answer. Yes, Los Alamos will continue to perform the vital Category
    I and II mission work associated with TA-18 at the Device Assembly
    Facility at the Nevada Test Site. LANL will retain security Category
    III and IV missions at Los Alamos and TA-18 program personnel will
    remain on-site. These people will relocate to DAF, as necessary to
    conduct experiments with Category I and II materials. Experiments with
    Category III and IV will occur at another LANL location. NNSA and LANL
    are working to identify locations for these activities and will issue a
    separate ROD pending completion of this assessment.

                               LOS ALAMOS SCHOOLS

        Question. I would like an answer as to why the budget has failed to
    provide the necessary and authorized funding for the Los Alamos School
    system. You may be interested to know that the $8 million that has been
    included in previous budgets makes up a third of the total school
    budget. I would also point that many of the scientists who support your
    stewardship programs also have strong views about the education of
    their children. If you hope to continue to recruit top people to this
    Lab, this funding will help achieve your goal. What was the
    justification for not funding the Los Alamos Schools or the Los Alamos
    Foundation?
        Answer. I understand and appreciate the importance that a high
    quality education system provides for the recruitment and retention of
    quality scientists and engineers at Los Alamos National Laboratory. The
    administration however doesn't feel that the President's budget for
    stockpile stewardship activities is the proper funding vehicle for this
    activity. NNSA recently submitted a report to the Congress on Los
    Alamos schools and funding options that could take the place of the
    annual authorization and appropriations approach. Option 1 would rely
    on the State of New Mexico and the citizens of Los Alamos County to
    ensure that adequate funding is available for the schools. Option 2
    would reestablish a charitable foundation funded by annual
    appropriations for a limited period of time so that Los Alamos Schools
    would receive approximately $8 million annually from the endowment.
    Finally, Option 3 would allow the M&O contractor for LANL to support
    the school system by modifying the provisions in Appendix N of the
    contract. Currently under Appendix N, Los Alamos provides a few million
    dollars to the school systems in the vicinity of Los Alamos County.

                     RUSSIAN HIGHLY ENRICHED URANIUM (HEU)

        Question. Mr. Longsworth, the administration has consistently
    identified the need to reduce the hundreds of metric tons of Highly
    Enriched Uranium stocks in the Russian Federation as a critical part of
    our non-proliferation efforts. In fiscal year 2003, the committee
    provided $14 million for the Accelerated Materials Disposition (AMD)
    Program to meet those commitments. However, no progress has been made
    since that appropriation and your fiscal year 2005 request eliminates
    funding for the AMD Program. Therefore, the only current U.S./Russian
    program to address the dangerous stockpiles of HEU is the existing HEU
    agreement and the research reactor initiatives. This later projects
    result in the equivalent of one-tenth of a metric ton per year.
    Unfortunately, this will not have the address the long-term strategic
    objectives of HEU disposition. Has the administration abandoned its
    efforts to accelerate reduction in Russian HEU stockpiles beyond what
    is covered in the HEU deal?
        Answer. No, the administration has not abandoned its efforts to
    accelerate the reduction of Russian HEU stockpiles. Several initiatives
    were identified by the Experts Group on Nuclear Materials, with two
    initiatives approved for immediate action that are being pursued: (1)
    Purchase of low enriched uranium (LEU) derived from HEU to be used as a
    U.S. strategic LEU reserve, and (2) Purchase of HEU for use in U.S.
    research reactors. We have been pursuing these initiatives with varied
    success, and some progress has been made.
        For the first initiative, we have been advocating expansion of the
    HEU disposition from Russia by blending down additional HEU to LEU and
    then using this LEU to establish a U.S. Strategic LEU Reserve so as not
    to adversely affect the current enrichment market. Because of House
    budget concerns regarding the up-front cost of the strategic reserve
    approach, Congress did not fund this initiative in fiscal year 2004.
    Following the guidance of the Appropriations Committee, the funding for
    these initiatives has been subsumed into the base program for Reactor
    Fuel return. Concurrently, in order to address Congressional concerns,
    DOE is developing a more comprehensive approach that would make these
    initiatives acceptable as separate line items. As part of this
    development, we are also addressing the long-term strategic objective
    that Ambassador Brooks has requested that includes both a follow-on
    strategy for negotiating the extension of the HEU purchase agreement
    beyond 2013 as well as interim strategies for expanding beyond the 500
    MTs included in the current agreement.
        With respect to the second initiative, the contract with the
    Russians for the purchase of HEU for the research reactor initiative
    has been negotiated with only two points of contention remaining: (1)
    the price to be paid for the HEU material; and (2) transportation
    method. The price problem exits because there is no commercial market
    basis for HEU sales that can be used to establish a fair price.
    Currently negotiations are underway to establish a fair price. The
    transportation concerns should be resolved without much delay once
    price is agreed upon.
        In addition to the specific purchase contract for HEU for U.S.
    research reactors, we are still engaging the Russians in developing the
    framework for accelerated disposition of HEU in the form of a
    Memorandum of Understanding that would act as an umbrella agreement for
    additional purchases or other initiatives. It should be noted that, in
    addition to our direct actions on these initiatives, we are also
    cooperating with and providing appropriate support to other
    organizations to engage the Russians in identifying other options that
    are acceptable both to the Russian Federation and the United States.
        As you can see, we have not abandoned our efforts to accelerate
    reduction of Russian HEU stockpiles, but we have encountered obstacles
    associated with the economics of these approaches that we are working
    to resolve. We appreciate the continued support of Congress in these
    endeavors.
        In addition to the two programs you have mentioned, my office also
    includes the Material Consolidation and Conversion (MCC) Project, which
    supports the conversion of HEU, which is not from weapons, to LEU. This
    HEU is excess to the needs of the sites where it is currently located
    and is transferred to one of two down blending sites in Russia for
    conversion to LEU. The MCC Project began in fiscal year 1999 and to
    date has supported the down blending of almost 5 metric tons of HEU. We
    are currently engaging the Russian Federation in discussions to
    increase the rate of conversion under the MCC Project.
        Question. Could more be done to remove more HEU material from
    poorly defended facilities in Russia?
        Answer. Yes, more can be done to remove additional HEU material
    from poorly defended facilities in Russia. One part of this effort
    would be to attempt to purchase more material. This aspect was
    discussed in the previous question.
        The MPC&A and MCC programs are other avenues that could be
    followed. The MCC Project was designed to support the transfer of HEU
    from less secure sites in Russia to more secure sites and to down blend
    that material to LEU. We are actively engaged with the Russian
    Federation to try to accelerate that process.

                                  MOX PROGRAM

        Question. I am deeply concerned about the future of the Russian/
    U.S. MOX program that will remove 34 metric tons of plutonium from the
    respective stockpiles. I have personally contacted Secretary Powell to
    urge the State Department to find an acceptable resolution in order to
    keep this program on track.
        It is my understanding that negotiations regarding the liability
    concerns have yet to be resolved. What is the likelihood that the
    liability issue will be resolved in a timely fashion allowing the
    construction of the Russian and U.S. facilities to go forward in the
    near future?
        Answer. The United States and Russia have yet to resolve liability
    protections that will be needed for the U.S. Government and its
    contractors for plutonium disposition work in Russia. If this issue
    cannot be resolved in the near future, the start of construction of the
    Russian MOX program will be further delayed. Because the United States
    and Russian programs are to proceed in parallel, any further delays in
    the Russian effort will mean additional delays in the U.S. program as
    well. However, this would in no way indicate a lessening of the
    administration commitment to this effort.
        Question. How will the recent reelection of President Putin affect
    these negotiations?
        Answer. Given that President Putin will not fully stand-up his new
    government until May 7, it is too early to comment definitively on how
    the reorganization of the Russian Government will affect these
    negotiations.
        Question. Ambassador Brooks, are you aware of any changes within
    the administration including the State Department or within the White
    House that might indicate a change in policy or a reluctance to
    finalize this deal?
        Answer. I believe that the administration is committed to moving
    forward with this important nonproliferation program. The liability
    issue is being addressed at the highest levels of the government.

                            LOWER LIABILITY STANDARD

        Question. I understand that Russia has signed a liability agreement
    with our G-8 partners that does not provide the same level of
    protection as the United States is seeking as part of the Cooperative
    Threat Reduction plan. How is this affecting the negotiations?
        Answer. Russia and some of our G-8 partners have accepted, in
    another context, a less comprehensive liability provision than what the
    United States has under the Cooperative Threat Reduction plan.
    Specifically, this provision does not cover the liability of an
    individual who intentionally causes a nuclear accident or the liability
    resulting from a non-nuclear accident. Russia has been insisting on a
    similar reduced scope for the liability provisions for the MOX program.

                           EMERGING THREAT--PAKISTAN

        Question. The Nonproliferation budget seems to assume a general
    status quo in future funding. It reflects an expectation that our
    primary nonproliferation concern will remain Russia and its former
    republics. However, in light of the news over the past several months
    regarding Libya, Iran and Pakistan, are you concerned that this budget
    places too great a focus on Russian stockpiles and doesn't adequately
    fund efforts to address proliferation in other countries?
        Answer. The budget appropriately focuses on Russia where most of
    the weapons-usable material of proliferation concern is located.
    However, it also includes funds for activities in other countries. As
    those latter activities develop we will revisit the appropriate balance
    between work in Russia and work outside of the former Soviet Union
    (FSU).
        Question. Does this budget adequately provide for this new reality
    and how will your office respond to these threats?
        Answer. We are working very carefully to develop prudent and
    effective activities that address proliferation concerns outside of the
    FSU, and will carefully monitor these activities to ensure that they
    are adequately funded.
        Question. Would additional resources accelerate your ability to
    contain the emerging proliferation threats?
        Answer. As our work outside of the FSU develops, we will certainly
    keep you informed about its progress and whether additional funding
    would be helpful. We will continue to work with the administration and
    Congress to assess priorities and develop budgets.
        Question. Mr. Longsworth, on the front page of the Wall Street
    Journal this morning is an article that explains how Pakistani
    officials were able to avoid export laws that prohibit the sale of
    material and technology that can be used in the development of nuclear
    weapons. This article details a very complicated scheme that took
    advantage of weak export controls in various countries to avoid
    detection. It is obvious from this article your job of tracking and
    preventing the proliferation of technology and material is a terrific
    challenge.
        Mr. Longsworth, have you read this article and do you agree with
    the characterization of the Pakistani efforts?
        Answer. Yes. It is a fair characterization of what occurred, as far
    as we know it. Though it's clear that A.Q. Khan was deeply involved
    with the procurement and supply effort, it is not known if his actions
    were in some way associated with his official duties or if he was
    abusing his official position, knowledge, and connections for personal
    benefit only. In any event, the United States and Pakistan are now
    dismantling the A.Q. Khan network responsible for proliferating nuclear
    weapons-related technologies, and we are working with our interagency
    colleagues and Pakistan on steps to bring its export control system in
    line with international standards.
        Question. Also, are you receiving adequate international
    cooperation in stopping the activities outlined in this article?
        Answer. Yes. We have underway an increasingly coordinated
    international effort to detect and destroy these proliferation
    networks. We are working in the Nuclear Suppliers Group to tighten up
    controls on sensitive materials and technologies. We are also working
    on enhanced targeting techniques and more in-depth training of
    inspection and enforcement personnel and conducting more industry
    outreach to sensitize the private sector on the importance of some of
    these technologies.
        In addition, we have recently started export control assistance to
    the government of Pakistan.

                                     LIBYA

        Question. Last year the Senate added $5 million for initiatives
    focused on removing nuclear weapons-usable material from vulnerable
    sites around the world. I understand that your office was able to make
    use of this earmark to quickly respond to Libya's decision to open
    their weapons program to outside review. Please explain the role your
    office and the Department of Energy played in removing the nuclear
    threat from Libya.
        Answer. The Department of Energy (DOE)/National Nuclear Security
    Administration (NNSA) is participating in an interagency effort to
    remove materials and equipment from Libya and assist the Libyan
    government with its efforts to eliminate its weapons of mass
    destruction programs. We have been involved in three removal missions
    to date. For the first two missions, a U.S. team composed of
    representatives from DOE/NNSA headquarters staff, our National
    Laboratories, and the interagency community helped remove nuclear
    materials, equipment (such as finished components for centrifuges,
    specialized materials and manufacturing equipment for centrifuge
    construction, as well as components for a uranium conversion facility),
    and highly sensitive nuclear weapons design documents from Libya.
        The third mission in Libya repatriated to Russia approximately 17kg
    of unirradiated highly enriched uranium (HEU) fuel from a research
    reactor in Libya. Coordinated with the Russian Federation and the
    International Atomic Energy Agency (IAEA) under the Russian Research
    Reactor Fuel Return program, this effort has been, and continues to be,
    a crucial part of our efforts to secure at-risk weapons usable nuclear
    materials around the world.
        The funding Congress provided to NNSA was critical for our work in
    Libya. It gave my organization the flexibility and capability needed to
    support the mission to assist Libya in its effort to rid itself of
    weapons of mass destruction and the ability to create them. We continue
    to need authority and flexibility to carry out our mission outside the
    former Soviet Union and not constrain our ability to address the
    threats at targets of opportunity.
        This swift movement suggests the seriousness with which the U.S.
    Government treats proliferation threats. Congressional support is
    fundamental to the success of these efforts. The expedited removal of
    this material from Libya certainly advanced the U.S. national security
    goals and represents a tremendous success for our nonproliferation
    efforts.

                    RUSSIA--UNCOSTED BALANCE & ACCESS ISSUES

        Question. It appears from your budget that there remain large
    amounts of uncosted balances associated with the Russian programs. I
    assume that these balances remain due to the fact that your Russian
    counterparts are unenthusiastic about allowing U.S. teams in to either
    dispose of or secure their precious nuclear stockpile. A GAO report
    from last year noted that DOE was having better luck than DOD in
    gaining access to sites that contain special nuclear material. Has
    there been any improvement with relations that will allow you to secure
    Russian material?
        Answer. 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. Barring any
    unanticipated delays, we expect to complete the security upgrade phase
    of our cooperation at four sites within the next 16 months Novosibirsk
    Chemical Concentrates Plant (NCCP), Institute of Physics and Power
    Engineering (IPPE), Research Institute for Atomic Reactors (RIAR),
    Lytkarino. This will mark a significant step forward for our program.
        We are making progress at some of these sites--contracts for
    upgrades have and will continue to be signed at places like Tomsk,
    Krasnoyarsk-26, and Mayak. We will continue to focus our efforts on
    providing upgrades to sites containing materials of concern to which we
    have access in order to reduce the threat as quickly as possible, while
    we negotiate access to or a suitable alternative assurance for the
    remaining weapons sites. Additionally, we are working on a pilot
    project that could improve our access to sensitive MinAtom facilities.
        With the Ministry of Defense, we have signed comprehensive
    contracts for the last two Navy warhead sites, which finish the major
    contracts upgrading 50 Navy-related sites--39 warhead sites and 11 fuel
    sites. We are cooperating with the Strategic Rocket Forces to upgrade
    the security of a total of 17 approved nuclear sites located at 11
    different Intercontinental Ballistic Missile (ICBM) bases. Currently,
    we have contracts in place (varying from vulnerability assessments to
    rapid upgrades) for the first 13 sites. We have had fewer access issues
    with the Ministry of Defense and cooperation continues to be very good.
        These improvements in our relations with the Russians are allowing
    our work to proceed and begin a drawdown of our uncosted balances as
    security upgrades to the Ministry of Defense and MinAtom facilities are
    completed over the next several years.
        Question. How and when do you expect to commit the available
    appropriated balances?
        Answer. As a result of a number of recent successful contractual
    negotiations, we expect to commit the majority of International Nuclear
    Materials Protection and Cooperation (MPC&A) non-Megaport appropriated
    balances by the end of this fiscal year. With the Russian Ministry of
    Defense, we have signed comprehensive contracts for the last two Navy
    warhead sites, which finish the major contracts upgrading 50 Navy-
    related sites--39 warhead sites and 11 fuel sites. We are cooperating
    with the Russian Strategic Rocket Forces to upgrade the security of a
    total of 17 approved nuclear sites located at 11 different ICBM bases.
    Work at sensitive MinAtom facilities continues, but the pace is limited
    mostly by the need to negotiate access to facilities. We are making
    progress at some of these sites. Contracts for upgrades have and will
    continue to be signed at places such as Tomsk, Krasnoyarsk-26, and
    Mayak. Agreement has been reached with Greece and we are nearing
    agreement with Kazakhstan to implement a Second Line of Defense program
    in those countries. In Kazakhstan alone we expect to complete
    installations of radiation detection equipment at approximately 20
    sites over the next year.
        The ability to commit funds for the Megaports program has so far
    been limited by the pace of successful negotiations with host
    countries. We are currently negotiating with several countries and
    expect those negotiations to result in a number of agreements, which
    will allow us to commit funds for the installation of radiation
    detection equipment at these ports.
        As of March 31 the current total funding for the MPC&A program with
    carryover, is $655 million. This consists of Start of Year uncosted
    balances of $378 million plus Year to Date Approved Funding Profile of
    $277 million. Of the $655 million in MPC&A, $124 million is allocated
    to the Megaports program and $75 million to the Radiological Threat
    Reduction (RTR) Program (Radiological Dispersion Devices and MPC&A
    Activities in Iraq). Both Megaports and the RTR programs are less than
    2 years old, and are working feverishly to ramp up.
        We consider that the real measure of funding is commitments to
    contractors, that is, signed contracts should be considered ``costed''
    as the U.S. Government has ``committed'' to provide funding for
    deliverables that are underway. Given the length of time it takes to
    complete sensitive nonproliferation work in foreign countries, we have
    begun to track funds that have been committed but not yet costed as a
    more accurate measure of true requirements. We have made changes to the
    DOE accounting system to track these obligations and expect our first
    preliminary report of uncosted commitments in coming weeks. We expect
    that the April 2004 report to Congress on uncosted ``commitments'' will
    show that our true uncosted balances are under control.
        Question. Are there alternatives that the Russians have suggested,
    other than providing full access to sensitive facilities, which may
    accomplish U.S. objectives?
        Answer. We are currently working with the Russians on a pilot
    project that could improve our access to sensitive MinAtom facilities.
    This project incorporates a new strategy for access that was negotiated
    by the MPC&A acceleration working group, convened by Secretary Abraham
    and Minister Rumyantsev last year. If this pilot effort is successful,
    it is anticipated that this will allow MPC&A upgrades to be carried out
    at Russian sites that were previously too sensitive to support
    cooperative work with the Department of Energy to improve nuclear
    material security. The first site visit of this project has been
    completed and contracts have been signed. A second visit will take
    place early this summer.

                   COOPERATION WITH OFFICE OF NUCLEAR ENERGY

        Question. The current light water reactor fuel cycle in widespread
    use was developed prior to today's emphasis on safeguards to prevent
    proliferation from the civil nuclear energy cycle. The International
    Atomic Energy Agency (IAEA) has been forced to establish new safeguards
    into an existing cycle and into the existing facilities. The AFCI
    program is exploring new options for fuel cycles that would reduce
    waste, enhance more efficient use of nuclear fuel and reduce
    proliferation concerns.
        Do you concur that review of proliferation aspects of new fuel
    cycles should be coordinated among the Department of Energy's (DOE)
    Office of Nuclear Energy and the National Nuclear Security
    Administration's (NNSA) Nuclear Nonproliferation?
        Answer. Yes, in fact we are coordinating just such an effort
    between Office of Nuclear Energy, Science and Technology, and the
    National Nuclear Security Administration. Our joint Proliferation
    Resistance and Physical Protection (PRPP) Working Group is an excellent
    example of our coordination. Under PRPP, we are bringing together
    experts from all facets of the nuclear fuel cycle. Beyond the
    safeguards and physical protection experts, we also are engaging the
    engineers who design all the components and processes of the entire
    fuel cycle. Such an approach will ensure that the ideas to enhance PRPP
    actually will be applied and used to reduce proliferation concerns.

              REMOVAL OF ADDITIONAL HIGHLY ENRICHED URANIUM (HEU)

        Question. There are a number of programs within your office
    including the Reduced Enrichment Research and Test Reactor Program
    charged with developing technologies to reduce the threat of
    proliferation and increase the amount of low enriched uranium that is
    used in research reactors worldwide. What barriers exist to more rapid
    progress on removing HEU from research reactors?
        Answer. The Reduced Enrichment Research and Test Reactor (RERTR)
    Program has a number of technological and political limitations that
    slow the speed by which progress can be accelerated, regardless of the
    amount of funding provided for the program. The development of low
    enriched uranium (LEU) fuels suitable for conversion of reactors
    requires the following steps, which comprise the primary challenges
    facing the program: analyses of the performance and safety
    characteristics of research reactors undergoing conversion;
    determination of the detailed technical specifications of the LEU fuel
    assemblies for each reactor; and regulatory approval of the
    conversions.
        Once LEU conversions are determined to be technically feasible,
    adequate incentives need to be identified to make the conversions
    happen. Countries that have HEU fuel stockpiles are often aware that
    they have a ``valuable'' commodity and it can be difficult to persuade
    them to release the fuel. Incentives are often case-dependent and could
    include, for instance, removal of spent fuel, supply of fresh LEU fuel,
    or facility upgrades. Negotiated government-to-government agreements
    may be required to implement the incentives.
        Question. Are you resource constrained?
        Answer. Yes, in that the facilities, equipment, and trained
    personnel that can perform the necessary fuel development are limited.
    We are actively addressing this situation through international
    collaboration to study the characteristics of the new LEU fuels to
    determine if there are any limitations to the use of the proposed fuel.

                      RESEARCH & DEVELOPMENT (R&D) FUNDING

        Question. The Proliferation and Verification R&D account has been
    reduced by $11 million. This account performs a critical role in
    developing nuclear detection technologies, including space-based
    surveillance. Our ability to detect, monitor and verify the transfer,
    production or testing of special nuclear material will be critical to
    preventing proliferation of weapons of mass destruction and putting
    U.S. citizens at risk. Why has this account been reduced and will this
    budget cut allow for the research, testing and deployment of new
    detection technology?
        Answer. Our budget request for the Nonproliferation and
    Verification R&D Program is, in fact, $16 million higher than our
    request in fiscal year 2004. This reflects, in particular, the need to
    begin the development of new space-based nuclear explosion monitoring
    sensors to replace the capability on the Defense Support Program
    satellites which are due to be retired before the end of the decade.
        In the appropriation for fiscal year 2004, the Congress added $29.5
    million to our request for the R&D program for critical research in
    nuclear and radiological national security and for particular projects
    important to the members. Our fiscal year 2005 budget request was
    formulated last fall, before we knew the details of the Congressional
    action on our fiscal year 2004 request. Consequently, that result did
    not figure into the baseline level for fiscal year 2005 funding
    request. We appreciate the confidence expressed by the Congress in the
    importance of our R&D program.
        Question. If this account received level funding at the fiscal year
    2004 level, how would you spend the additional funding and how would it
    assist in detection?
        Answer. We agree that the need to improve the Nation's ability to
    detect proliferation and testing of nuclear weapons and materials is
    becoming ever more important in the world today given the proliferation
    challenges facing us. If the level appropriated by the Congress for our
    R&D program in fiscal year 2004 were continued, we would be able to
    pursue further demonstration of new detection methods and begin to
    realign our program to address the expanding proliferation threat. We
    would focus our research to develop methods to more confidently detect
    and characterize enrichment of uranium and reprocessing of plutonium in
    areas of concern around the world. We would also increase our effort to
    provide the scientific basis for attributing the source of any detected
    nuclear materials.
        We would also seek to accelerate our nuclear explosion monitoring
    R&D program by achieving our goals to calibrate new seismic monitoring
    stations sooner and enable our partnering agencies to meet their
    monitoring requirements. We also anticipate a change to those
    requirements in the near future, to achieve a much lower threshold of
    yield to detect any nuclear explosions. At this time, this challenge
    would be addressed only at a lower level of effort until the seismic
    calibration program is completed.

                       INTERNATIONAL NUCLEAR FUEL MARKETS

        Question. There are a number of utilities that are concerned about
    the amount of available nuclear fuel there is in the international
    market. Recently, several companies have found their contracts with
    Russian suppliers are not being honored and they are forced to find
    other sources to meet their fuel needs. As a result of this tight
    market, fuel prices are rising and there are few opportunities to
    increase production. In fact, the limited number of nuclear fuel
    vendors makes OPEC look like a free and open market. Are you familiar
    with these concerns and, if so, are there any opportunities in either
    the U.S. or Russian stockpiles of HEU that would provide an opportunity
    to down blend in order to add more supply to the market?
        Answer. We are familiar with these concerns and have been
    monitoring the situation closely. I believe the question should address
    the supply situation for natural uranium, not fuel-grade low enriched
    uranium, of which there is no shortage. Tight supplies of natural
    uranium feed are responsible for the price increases. The connection is
    that utilities must provide natural uranium feed to the fuel supplier
    in order to get fuel.
        Supplies into the natural uranium market were interrupted when the
    Russian supplier Techsnabexport (Tenex) cut off supplies of natural
    uranium to Globe Nuclear Services and Supply (GNSS) as of January 1,
    2004. The problem was not only the cut-off of supply to GNSS but the
    short notice provided by Tenex. Tenex notified the world on November 3,
    2003, just 2 months prior to the cutoff, that supplies under contract
    to GNSS would not be honored. As a result, beginning in January 2004
    GNSS has been unable to supply natural uranium under contracts to U.S.
    utilities.
        The Department of Energy and the U.S. Government have communicated
    to Russia our concern on the possible supply shortfalls to U.S.
    utilities. In that regard, Secretary of Energy Abraham was informed by
    former Minister, now Director Rumyantsev of the Russian Atomic Energy
    Agency, that Tenex is now in negotiations with several U.S. utilities
    to supply uranium with a view to resolving the GNSS shortfall. DOE also
    understands that the uranium would be provided at the same prices and
    delivery times as under original contracts with GNSS.
        Unfortunately, the Honeywell facility in Metropolis, IL, which is
    the only U.S. facility for converting uranium to the gaseous form for
    the next stage of uranium processing (i.e. enrichment), had to cease
    production on December 22, 2003, due to an accident. It appears that
    Honeywell has implemented procedures and other changes at the plant, so
    that the Nuclear Regulatory Commission could allow the plant to resume
    operations, which have already begun the process of re-starting. With
    that and the supply of natural uranium now being negotiated with Tenex,
    we expect balance to be restored to the natural uranium market.
        Nevertheless, it appears that the market is coping with the
    temporary supply shortfall. We suspect that utilities have exercised
    provisions for supply flexibilities in their contracts with uranium
    vendors to alleviate at least some of the shortfall. The Department, of
    course, continues to closely monitor the situation.
        Since this is primarily a commercial, not a non-proliferation,
    issue, I would suggest that the Office of Nuclear Energy, Science &
    Technology or the Office of the Undersecretary could provide further
    details.

                           NATIONAL IGNITION FACILITY

        Question. Dr. Beckner, I understand that NIF is still at least 6
    years and over $1 billion away from completion of this project. It is
    accurate to say that NIF is both the largest laser, and the most
    expensive diagnostic tool in the NNSA stockpile. When we develop any
    technology, we need to ask ourselves--is the outcome worth the cost? If
    you don't achieve ignition, the American people have purchased a laser
    that is it 25 times more expensive than the Z machine at Sandia. I
    think we need to understand that the project is viable before we spend
    billions more over the life of this program. How much money are you
    willing to spend to achieve ignition and at what point would you say we
    have spent too much?
        Answer. The NIF Project is on schedule for completion at the end of
    fiscal year 2008. Our plan, as outlined in the project data sheet,
    shows the funding required in fiscal years 2005-2008 to complete the
    project is approximately $867 million, a figure that has not changed
    since the present baseline was approved in September 2000.
        NNSA is developing an integrated activation and early use plan for
    NIF that provides for first ignition experiments in 2010. This advance
    in the ignition date has been made possible by the strong technical
    advances in the Inertial Confinement Fusion program. Recent simulations
    have shown that it is possible to develop capsules that can be filled
    using a simple fill tube instead of a high pressure diffusion system.
    The fill tube system is simpler and less costly than the currently
    planned diffusion method, and can be developed sooner. Hence fusion
    ignition can be attempted earlier with this new fill tube approach. A
    1995 review of the ignition program concluded the probability of
    ignition on NIF was 50 percent or greater. Our confidence in
    demonstrating ignition on NIF has increased since then. The NIF
    activation and early use plan will be reviewed by the Defense Sciences
    Board.
        Completing the NIF Project is a key step in achieving ignition. In
    order to pursue the experimental campaign needed to support pursuit of
    our goal of obtaining ignition in fiscal year 2010, there are many
    program activities that must be conducted. Our total budget for
    Inertial Confinement Fusion (ICF) Program activities (not including the
    project), as outlined in the FYNSP, is approximately $2,046 million
    over the period fiscal year 2005 through fiscal year 2010. Of this
    amount, approximately half is directly related to national efforts
    aimed at our goal of achieving ignition utilizing the NIF. The balance
    supports operation of other facilities (such as Z) and our non-ignition
    stewardship activities.
        We fully recognize the magnitude of the investment we are making in
    the ICF area, and are convinced that it is the appropriate course of
    action to achieve our ignition and stewardship missions.
        We would be pleased to supply additional details on the break out
    of the inertial fusion budget elements for fiscal year 2005.
    Preliminary plans also exist for fiscal year 2006-2010.
        Question. Would you be willing to focus on solving the most
    challenging technical problems such as the cryogenic targets and
    perform a thorough testing on a full cluster of 48 lasers before you go
    forward as currently planned?
        Answer. In pursuing the goal of ignition in 2010, we must address
    many challenges. Among these are the design and manufacture of the
    ignition targets, development of cryogenic target handling capability,
    and completion of the NIF in fiscal year 2008. Our current plans
    provide the correct balance, within the FYNSP budget, for addressing
    each of these challenges. In addition, we are currently developing a
    NIF Activation and Early Use Plan that will define the specific path
    towards ignition in more detail. We anticipate having this plan
    reviewed by the Defense Science Board this summer, and will finalize
    the document after receiving their input.
        The performance of the NIF laser system is being continuously
    evaluated. Data from the initial quad of four laser beams has already
    demonstrated that on a per-beam basis, the facility meets its design
    requirements. In addition, we have used the diagnostics and target
    systems that are being developed in parallel with the NIF laser project
    to successfully demonstrate the facility's capability of performing
    sophisticated experiments, and to make progress toward the Stockpile
    Stewardship Program's important high energy density physics and
    ignition goals. We intend to continually test facility's performance as
    additional beams are activated, and perform increasingly more difficult
    experiments with those laser beams.
        While having a full cluster of 48 beams operating on NIF will be
    useful to high energy density physics, the placement of the beams will
    not allow many important ignition experiments to be conducted. All the
    beams from the same cluster enter the NIF target chamber from the same
    quarter of the chamber, essentially coming from the same direction.
    This is desirable for high energy density physics, and enables
    important experiments to be performed in this area. For example, planar
    hydrodynamics experiments will be performed in late 2004 to support
    validation of 3D ASC computer codes; equation of State experiments will
    be performed in late 2005; and radiation hydrodynamics experiments will
    be performed in late 2006. However, this configuration does not provide
    the symmetrical target illumination required to do the compression
    experiments required to investigate ignition. Consequently, we do not
    foresee any added value to placing a hold point at the completion of
    the first cluster of 48 beams. In fact, such a hold point would likely
    lead to schedule delays and cost increases while making the goal of
    ignition in 2010 impossible to achieve.

                        FIRST CLUSTER-LASER INTEGRATION

        Question. The fiscal year 2005 budget specifies that NIF ignition
    has been delayed until 2014 gives me great concern regarding this
    project. Delaying the ignition start date is contrary to news that the
    project is ahead of schedule. I understand that laser installation is
    18 months ahead of schedule and the Beam Light Infrastructure was
    achieved nearly 3 years ahead of schedule. As a result of these
    conflicting statements, I am very skeptical of actual status of NIF. To
    date, $2.5 billion has been spent and another $1 billion is required
    before we know whether or not this project will work. I don't share
    this all-or-nothing attitude, because the costs are too high. I believe
    we need a more measured approach to address the significant technical
    challenges that lie ahead. George Miller, the NIF Associate Director,
    has stated that the most significant technical challenge he has is the
    full integration of the lasers. I believe the first cluster, which is
    48 lasers or one-quarter of the total, would certainly give a clear
    indication of whether full integration is feasible. Dr. Beckner I would
    like you to put together a budget and schedule that will accelerate the
    installation and testing of the first cluster in fiscal year 2005. Can
    you do that?
        Answer. I am very much aware of the committee's determination that
    the program to achieve ignition remains on target. I've met with the
    staff of this committee as well as the other three committees to
    clarify our recent decisions to change course in order to pull back the
    ignition target to 2010, as opposed to 2014. We've done that because
    all of the committees have a very strong view that we must maintain
    that schedule. We had allowed the target date for ignition to move out
    because of funding priorities in other elements of the program not
    because of a reduced commitment to ignition.
        Successful completion of the NIF project on its current baseline
    schedule is only one of the elements necessary to achieve our goal of
    ignition in 2010. The project has re-sequenced some of its work to both
    accomplish it more efficiently, and to allow early activation of a quad
    of four laser beams. This re-sequencing has resulted in several major
    project milestones being completed well ahead of schedule, while the
    performance of the first quad of beams has provided us with a
    demonstration that the fundamental design is sound, as well as
    providing a basis for fine tuning component designs prior to initiating
    large procurements. We continue to monitor the project closely, and are
    satisfied that it is on schedule for successful completion in
    accordance with its approved baseline.
        I have discussed the feasibility of accelerating completion of the
    first cluster of 48 laser beams into fiscal year 2005 with Dr. Miller.
    At this stage in the project and within the current baseline and
    funding profile, procurement logistics, and lead times limit our
    ability to further re-sequence work and selectively accelerate
    milestones. Further we do not see any way to pull the first cluster
    milestone back as far as fiscal year 2005. However, if the committee
    would like to see an alternative schedule which accelerated
    installation and testing of the first cluster, which includes a modest
    suite of ``proof of principles'' experiments and which minimizes but
    could not eliminate impact to the ignition campaign schedule, we will
    develop such a schedule for your consideration.

                               CRYOGENIC TARGETS

        Question. The cryogenic target for the NIF system is a component
    the Department has deferred working on for several years. The
    University of Rochester has been working on the only cryogenic target
    in the world and it has been an enormous challenge. As I understand it,
    your office is currently considering two technology options. One is
    similar to the Omega Laser target developed at Rochester and a second
    is a theoretical option you believe will save NIF tens of millions of
    dollars and 4 years using a beryllium capsule. However, until this
    problem is solved, ignition will not become reality. Like laser
    integration, I believe you should focus your staff and budget on
    resolving the enormous challenges associated with the cryogenic
    targets. What is your plan and timetable to address the challenges
    associated with cryogenic targets?
        Answer. A cryogenic ignition target consists of a capsule filled
    with fusion ``fuel'', and a surrounding cryogenic system which holds
    the capsule accurately at temperatures near absolute zero. Research on
    cryogenic ignition targets has been a major component of the ICF
    Program since its inception. We have developed a wide variety of
    ignition capsule designs, and numerous aspects of the performance of
    these capsules have been validated via experiments on the Nova and
    Omega lasers and elsewhere. We have made strong progress on cryogenic
    systems. We have demonstrated much of the required technology, and a
    complete, integrated cryogenic system is operational at Rochester. The
    Rochester system provides valuable insight for NIF. The Rochester
    cryogenic system uses a high-pressure chamber to diffuse gas into the
    capsule.
        Our plan for NIF cryogenic ignition targets has three major
    components. First, we will continue our national cryogenic target
    technology development program. This program has demonstrated
    impressive results in the past several years, particularly in the areas
    of target fabrication and characterization. Secondly, we are planning a
    cryogenic system for NIF that uses a thin tube to fill the capsule with
    fusion fuel. This ``fill-tube'' cryogenic system will be completed in
    2009 and used for ignition experiments in 2010. A simpler pre-ignition
    cryogenic system will be completed in fiscal year 2006. This fill-tube
    system will ultimately be modified to allow operation with all types of
    ignition targets, including the diffusion filled targets used at
    Rochester. Finally, we are planning experiments and calculations to
    refine the design for fill-tube ignition targets. Note the fill-tube
    effort is not based on theory alone; fill-tubes have been used
    extensively in other areas of the ICF Campaign and the stewardship
    program, and we will draw upon this experience in preparing the first
    ignition experiments.
        Question. Are you planning to draw on the available expertise at
    the national labs to solve this problem and will you seek to have one
    of the labs validate the technology and design?
        Answer. Yes, as part of the national planning process for the ICF
    Program, all ICF participants are committed to leading technical
    efforts within the context of participation in an integrated program.
    This will continue to be the case for the cryogenic ignition target
    program. Lawrence Livermore National Laboratory will lead the
    construction of the NIF cryogenic target system and play a major role
    in ignition capsule design. Los Alamos National Laboratory will do
    independent calculations of the fill-tube approach, and in addition the
    material science capabilities at Los Alamos will be brought to bear on
    key questions related to ignition target fabrication. The University of
    Rochester will provide valuable input to the NIF cryogenic system via
    cryogenic experiments at OMEGA, and with the Naval Research Laboratory
    will also examine fill-tube target designs applicable to ``direct
    drive'' inertial fusion. General Atomics is focused on specific aspects
    of target fabrication and has experience in cryogenic systems. This
    national approach has proven very effective in advancing the
    technological state-of-the-art and providing innovative solutions as
    well as effective peer review.

                                     OMEGA

        Question. Will you begin to test the beryllium target design on the
    OMEGA system as soon as possible to get initial data to know if you
    have a viable target?
        Answer. Lawrence Livermore, Los Alamos, and Sandia have been
    conducting an extensive series of ignition-related experiments at OMEGA
    since the 1999 shutdown of Livermore's Nova laser. We expect that the
    OMEGA laser and the early experimental capability available at NIF will
    continue to be of great benefit as we move toward ignition. Experiments
    at OMEGA and NIF will be an integral part of our risk mitigation
    strategy. Both beryllium and plastic targets will be examined. These
    experiments will be used to validate advanced simulation tools and
    thereby refine our target designs for the 2010 ignition campaign.

                       ESTABLISHING SCIENTIFIC MILESTONES

        Question. Dr. Beckner, following the re-baselining of the NIF
    program in 2000, DOE agreed to specific milestones for the construction
    project. The Defense Authorization for 2002 requires that the
    Administrator of the NNSA notify Congress for every level 1 and level 2
    milestones that are achieved and a full report if a milestone is
    missed. However, that reporting requirement is only for construction
    and assembly milestones and doesn't apply to any scientific or
    programmatic milestones. In fact, there aren't any programmatic
    milestones by which to base NIF's success or failure as a scientific
    tool. I believe it is important that NNSA develop specific milestones
    by which Congress can judge this project. This document should also be
    peer-reviewed complex-wide for input on the scientific and research
    goals. Can you develop these scientific R&D milestones and provide to
    Congress such goals by this June?
        Answer. I fully agree a defined set of R&D milestones will provide
    insight into the success of NIF as a scientific tool. Experiments which
    could only be performed on the NIF have already been conducted and will
    continue to be performed during the commissioning of subsequent laser
    beams. In addition, we are currently developing a NIF Activation and
    Early Use Plan that will define the specific path towards ignition in
    more detail, including the scientific milestones we will achieve. We
    anticipate having this plan available in draft by the June time frame
    so that it can be reviewed by the Defense Science Board this summer. We
    will be pleased to provide you with the draft document, but request
    that you allow us to complete the external peer review process and
    incorporate the input from that review prior to finalizing the plan and
    beginning to report to you on our progress against it.

                                   Z MACHINE

        Question. Dr. Beckner, Sandia National Labs currently operates the
    most powerful energy source of X-rays in the world. I think that anyone
    familiar with this machine would agree that Z has been a very cost-
    effective workhorse of the stockpile stewardship program providing
    important data from high energy density experiments as well as
    possessing great potential for inertial confinement fusion research. We
    are turning away important research, because we haven't provided the
    financial support. I can certainly think of a project that could be
    used to provide the needed funding to expand the research operations
    and capabilities of this important scientific tool. Do you share my
    belief that the Z-machine is underutilized and that we are foregoing
    important research by not expanding to a second shift and increasing
    operational funding?
        Answer. The Z pulsed-power facility has been very successful, and I
    agree with you that more shots on Z could be effectively used. The
    amount of shots requested annually on Z is more than twice the number
    available under single-shift, 5-day-per-week operations. NNSA has added
    significant additional funds to Z over the past few years via the Z-
    refurbishment Project. This approximately $60M activity will further
    expand Z's capabilities and ensure that it remains a vital part of the
    stewardship program.
        While we have funded the refurbishment of Z, we unfortunately have
    not been able to implement additional operations due to funding
    limitations and competing program demands. In fact, many large
    Department of Energy and NNSA scientific facilities are oversubscribed;
    indeed, one of the hallmarks of a successful facility is strong demand
    from the scientific community. We have attempted to balance the
    experimental, computational and engineering demands of Stockpile
    Stewardship within the FYNSP. There are a number of critical
    experiments on Z required to support life-extension program and other
    critical activities which have the highest priority. We recognize that
    some important experiments will be delayed given the current single-
    shift operational status of Z.
        Question. What is the justification for remaining with one shift,
    when so much more could be accomplished?
        Answer. NNSA is committed to funding all stewardship activities
    within the existing FYNSP. Additional facility operations at Z would
    require the addition of funds to the Inertial Confinement Fusion (ICF)
    Campaign from other parts of the stockpile stewardship program or the
    shifting of funds within the ICF campaign; in my judgment neither has
    been the right course to pursue given other funding pressures in the
    ICF Campaign and the stewardship program.
        The NIF Project is a major commitment by NNSA and DOE and a key
    element of the stewardship program, and hence we are committed to
    delivering it on schedule. Demonstration of ignition is the major
    purpose of NIF, and with respect to demonstrating fusion in the
    laboratory, it is our first priority. Success on NIF ignition is
    essential to the future of the ICF Program. The situation is similar in
    the NIF diagnostics, cryogenics, and supporting technologies area. As I
    noted earlier, we have decided to fund the refurbishment of the Z
    machine. We also have major commitments to additional operations and
    the Extended Performance project for the OMEGA laser at the Laboratory
    for Laser Energetics at the University of Rochester, which also has had
    recent outstanding results.
        Question. Do you support expanding the opportunity to do more
    research in inertial confinement fusion at Z?
        Answer. The technical progress on inertial fusion at Z has been
    impressive, and if it were possible to do more under the constraints we
    face I would support it. However, given the FYNSP, I do not support the
    diversion of resources from elsewhere within the ICF Campaign or other
    stewardship accounts to fund additional ICF research at Z. We do have
    several important challenging milestones in the Z research plan during
    fiscal year 2005 and fiscal year 2006 and success in achieving or
    exceeding these milestones could cause us to change some of our
    procurement priorities. As documented in National Academy of Sciences
    and other reviews, the demonstration of ignition is the essential next
    step forward for the ICF Program. Demonstration of ignition is the
    major purpose of NIF, and with respect to demonstrating inertial fusion
    in the laboratory, it is our first priority. Success on NIF ignition is
    essential to the future of the ICF Program. The NIF ignition program is
    tightly constrained and we must stay focused upon it to succeed.
        Question. What can NNSA do to facilitate such research?
        Answer. The primary way NNSA can facilitate this research is by
    adding additional operations to Z and successfully completing the Z
    refurbishment project.
        NNSA is proceeding with the refurbishment of the Z machine. This
    refurbishment will replace original components that date back to the
    early 1980's. This refurbishment will: extend the lifetime of Z,
    increase its precision and reproducibility, reduce the maintenance
    required between experiments thereby facilitating double-shift
    operations should the additional funds become available, and
    significantly enhance its technical capabilities. For example, the
    refurbished Z facility will produce nearly double the X-ray energy for
    stockpile stewardship and ICF research. It will also greatly expand the
    utility of Z to address fundamental material properties by including
    the flexibility of pulse shaping in order to double the experimental
    pressures achieved.

                               NIF OTHER OPTIONS

        Question. Dr. Beckner, if we pulled the plug on NIF today I
    estimate we could save between $3 and $5 billion over the life of this
    project. A lot of very promising work could be done with this money
    including a variety of experiments using pulse power and laser power to
    test our weapons systems. Also, the Japanese have had tremendous
    success with petawatt lasers at a fraction the cost of NIF. I know you
    are very much aware that the French are pursuing a similar laser system
    slightly larger than NIF that hopes to have ignition within a decade.
    Is there any reason why we shouldn't look at other options before we
    spend another $3 to $5 billion?
        Answer. The NIF is a unique element of the Stockpile Stewardship
    Program (SSP), providing the capability to pursue the goal of ignition
    and create conditions of matter similar to those found in nuclear
    weapons. We believe NIF is the only facility in the world capable of
    getting ignition by 2010. At that time, it will have been nearly 20
    years since the last U.S. nuclear test. NIF will enable the study of
    issues that affect an aging or refurbished stockpile. It will also
    advance critical elements of the underlying science of nuclear weapons
    that will play a major role in validation of ASC codes. NIF will be
    important in helping to attract and train the exceptional scientific
    and technical talent needed to sustain stockpile stewardship over the
    long term. While we are constantly evaluating all options to obtain the
    capabilities and information required to support the SSP, we have not
    identified any U.S. facilities that can support the vital needs of the
    Stewardship program as well as NIF.
        We do not believe it prudent to rely on foreign nations to satisfy
    our requirements. While it is true that the French are pursuing a laser
    similar to NIF, their project has just broken ground, something we did
    for NIF in 1997. Thus, we believe the French are 6 to 7 years further
    from ignition than we are. In addition, the French project is dependant
    on optical components jointly developed with NIF for success. If NIF is
    cancelled, the French laser project will also be impacted. The Japanese
    results, partially based on target designs and laser technology from
    Livermore, is scientifically exciting but in its infancy. Their next
    step, not anticipated for another 5 years, will use NIF laser
    technology, is only a proof of principle, and will not achieve
    ignition. In addition, current evaluations require a NIF-scale facility
    of petawatt and long pulse lasers for ignition success. We believe that
    the current FYNSP is the appropriate funding approach to our
    Stewardship mission.

                              MESA/CMR FACILITIES

        Question. Your fiscal year 2005 budget provided only half of the
    funding necessary to complete the MESA project at Sandia National Lab
    by 2007. This delay will unnecessarily increase the overall cost and
    delay critical work on engineering solutions that will benefit the
    weapons stockpile. This budget, also fails to provide adequate funding
    to complete the Chemical and Metallurgy Research Facility (CMR) at Los
    Alamos. It is my understanding that the planned end-life of the
    existing 50-years-old facility will expire 4 years before a new CMR
    replacement will be ready for use. What is the justification for
    delaying the completion of these important facilities--especially when
    delays will drive up the overall cost?
        Answer. The fiscal year 2005 request for MESA is consistent with
    the Performance Baseline approved by the Secretary of Energy on October
    8, 2002, with a Total Project Cost of $518.5 million and a completion
    date of May 2011. The Performance Baseline reflects construction of the
    MESA facility in a sequenced approach that brings the MESA Complex on-
    line in phases to meet NNSA's priority mission requirements, while at
    the same time being affordable within the confines of the Future Years
    Nuclear Security Program (FYNSP). Critical microelectronic integrated
    circuits are already being produced in the retooled Microelectronics
    Development Laboratory portion of the MESA project and have met the
    initial needs of the life extension program.
        As a result of the congressional appropriation increase provided
    for MESA in fiscal year 2003, the Performance Baseline was changed to
    reflect a revised completion date of May 2010. The appropriation
    increase in fiscal year 2004 will result in further acceleration of the
    project; the actual schedule impact is being evaluated as part of the
    fiscal year 2006 budget process. The fiscal year 2005 request was then
    adjusted due to overall priorities within the constraints of the FYNSP,
    and to reflect a favorable bidding environment that allowed for shifts
    in the project funding profile that had no impact on project
    completion.
        The CMR Replacement Project continues to be a high priority for the
    Stockpile Stewardship Program. Based on the fiscal year 2004
    appropriation reducing the CMR Replacement Project funding by
    approximately 50 percent (from $20.5 million to $9.9 million after the
    rescission), it was necessary to reassess the project's path forward
    within the confines of the Future Years Nuclear Security Program
    (FYNSP). We re-scoped the project realizing that it would not be sound
    management to move from a fiscal year 2004 appropriation of $9.9
    million to our original plan of $75.0 million for fiscal year 2005.

                              MODERN PIT FACILITY

        Question. Dr. Beckner, the President's budget provides a $19
    million increase for conceptual design for the Modern Pit Facility. I
    assume, based on this funding request, that the Department is intent on
    moving forward with the construction of a $4 billion facility. What is
    the proposed timetable for the Secretary of Energy to make a final
    decision to site the Modern Pit Facility?
        Answer. A secretarial decision to move forward with planning that
    includes a site selection for a Modern Pit Facility is currently
    pending. All documentation required by the National Environmental
    Policy Act (NEPA) to support a final Environmental Impact Statement
    (EIS) and associated siting decision is complete. NNSA Administrator
    Linton Brooks announced on January 28, 2004, ``I intend to have further
    consultations with Congress before we proceed to a final EIS.''
    Construction start for an MPF is currently scheduled for 2012 with full
    operations in 2021. The Congress will be consulted at major planning
    decision points prior to the start of construction.
        Question. Is the Carlsbad region or elsewhere in New Mexico still a
    viable option for this facility?
        Answer. Yes, the Carlsbad region, the Los Alamos site along with
    the three other sites evaluated in the draft environmental impact
    statement are still viable options to host the Modern Pit Facility.
        Question. Has the Department undertaken a study to evaluate the
    condition of the existing plutonium pits to verify the need for this
    facility?
        Answer. The Department has an extensive study to evaluate the
    condition of existing plutonium pits in the stockpile. NNSA is also
    conducting an extensive set of aging studies to confirm the minimum pit
    lifetime. While some results from these studies are expected in 2006,
    the result of additional work to confirm current pit lifetime estimates
    will become available prior to 2012 when construction of a Modern Pit
    Facility (MPF) is scheduled to start. Because of the uncertainty in pit
    lifetimes and the long-lead time to design and construct an MPF,
    continued planning for an MPF is prudent risk management.
        Question. Will the nuclear stockpile report that was requested by
    this committee impact the Secretary's decision to site a new pit
    facility?
        Answer. As noted in the report (``An Enhanced Schedule for the
    Modern Pit Facility (MPF)'') provided by the Secretary of Energy on
    March 1, 2004, continued planning for a new pit facility is appropriate
    for all future stockpiles under consideration. The NNSA has evaluated
    capacity requirements for an MPF based on the following parameters: (1)
    size of the future stockpile, (2) numbers and types of weapons in the
    stockpile, (3) pit lifetime, (4) start date for quantity production,
    and (5) length of time between shutdown of Rocky Flats and start of new
    production. We have concluded from these analyses that if the number of
    weapons in the U.S. stockpile is consistent with NPR/Moscow Treaty and
    if pit lifetimes are assumed to be about 60 years, the Nation will need
    a production capacity of some 125 pits per year beginning in about
    2021.

                                 SPACE REACTORS

        Question. Admiral Bowman, I understand that Secretary Abraham has
    recently assigned the responsibility for the development of a civilian
    space nuclear reactor as part of project Prometheus. The mission NASA
    has identified for this project is the Jupiter Icy Moons Orbiter.
    Traditionally, this activity has been the responsibility for DOE's
    Office of Nuclear Energy. How is it that the Naval Reactor program has
    secured this responsibility?
        Answer. The NASA Administrator asked the Secretary of Energy to
    assign my Program the responsibility to develop, design, deliver, and
    operationally support civilian space nuclear reactors. On March 8,
    2004, the Secretary of Energy assigned Naval Reactors these
    responsibilities in support of Project Prometheus. The Secretary of the
    Navy concurred in this assignment.
        In the NASA press release, NASA Administrator Sean O'Keefe is
    quoted as saying, ``NASA sought this partnership because NR has an
    enduring commitment to safety and environmental stewardship that is a
    requirement for an undertaking of this magnitude. This partnership will
    help ensure the safe development and use of a space-fission reactor to
    enable unparalleled science and discovery as we explore the solar
    system and beyond. This work is an integral piece of the President's
    exploration agenda and without it the exploration agenda is
    compromised.''
        The DOE's Office of Nuclear Energy (NE) will retain responsibility
    for various space nuclear technology efforts, including long-term space
    reactor science and technology development not associated with work
    assigned to NR. NE will also continue its responsibility for all
    aspects of space radioisotope power systems.

                       STAFFING AND TECHNICAL CHALLENGES

        Question. How do you plan to meet this challenge from a staffing
    and technical capability?
        Answer. Because the Naval Nuclear Propulsion Program is a lean
    organization, accepting a role in Project Prometheus requires that I
    increase the size of my staff and my DOE laboratory staffs to prevent
    any noticeable impact on the core mission of supporting the nuclear
    fleet. Because we are still early in the planning phase, we have not
    yet determined how much of the Project Prometheus effort will be done
    in house and how much will be subcontracted. The analysis we've done so
    far indicates that this year I should increase my Headquarters staff by
    a few people and my two DOE laboratory staffs by about 60 people
    (combined increase). Because I intend to subcontract some of the
    Project Prometheus work, my staff will be reviewing the specialized
    expertise and facilities of industry, academia, and other DOE
    laboratories to inform my decision. All of my staff and DOE laboratory
    increases will be fully funded by NASA.
                                     ______

                   Questions Submitted by Senator Larry Craig

                TECHNICAL AREA 18 LOS ALAMOS NATIONAL LABORATORY

        Question. Last June, the Department of Energy halted work on the
    project to relocate nuclear material and functions from the Los Alamos
    National Laboratory's Technical Area 18 to the Nevada Test Site because
    of an excessively high increase in the cost to complete the relocation.
    At that time, it was reported that the cost estimate for the
    modifications to the facility at NTS had risen to more than $200
    million over the original estimate of $100 million. The DOE had further
    indicated its intent to conduct an independent cost review.
        What is the current cost of this project? What has been done to
    reduce the cost? Has project scope or facility functionality been
    reduced or changed and what effect has this had on cost?
        Answer. NNSA is finalizing its review of the conceptual design for
    the NTS Device Assembly Facility (DAF) option. The initial conceptual
    design for DAF was submitted to NNSA Headquarters on January 20, 2004
    with an estimated project range of $219 million to $255 million with a
    schedule for completing the project in 2011.
        As part of this submission, the project schedule had special
    nuclear material (SNM) shipments from TA-18 to DAF in 2009. After
    reviewing this package and assessing options for accelerating
    activities, I announced on March 31, 2004 that NNSA would accelerate
    movement of TA-18 programmatic SNM to DAF. The initial goal is to move
    approximately 50 percent of the programmatic SNM from TA-18 to DAF by
    March 2006. At this time, NNSA anticipates it will need access to a
    subset of the TA-18 SNM to support ongoing mission commitments during
    transition in the areas of emergency response, nuclear
    nonproliferation, and criticality safety.
        On April 9, 2004, Dr. Beckner, directed that the early move of SNM
    occur outside of the project. The original project submission
    identified approximately $22 million related to transportation costs of
    SNM, including the design, development, and testing of new SNM shipping
    containers. Accelerating transportation activities will allow for NNSA
    to use existing shipping containers, avoiding approximately $7-8
    million for designing new containers. Current estimates related to SNM
    move are $1.22 million in fiscal year 2004 and $3 million in fiscal
    year 2005. On April 30, 2004, I directed my staff to prepare a closure
    plan for TA-18 that will identify the schedule and cost for moving the
    rest of the SNM to DAF.
        Based on this direction and input provided by other NNSA program
    managers, the project team revised the CD-1 submission and provided
    information to NNSA Headquarters for review and approval on May 7,
    2004. While the final range is under validation by NNSA, it is expected
    to be in the low- to mid-$100 millions with project schedule for
    completion in late 2009. In addition to removing transportation
    activities at $22 million, NNSA is removing the design and construction
    of a new low scatter building within the DAF PIDAS based on discussions
    with NNSA programs and security experts. Design and construction of the
    low scatter building was estimated at approximately $30 million. NNSA
    is now exploring options to conduct the activities proposed for this
    new facility. In addition, NNSA is deferring upgrades to the critical
    assemblies at a cost of approximately $10 million; only new control
    systems and instrumentation for the critical assemblies are contained
    within the project to support installation at DAF.
        Question. Please provide an ``apples to apples'' comparison of cost
    among the options that the DOE considered and explain the rationale for
    concluding that the NTS option is the option with the lowest cost and
    highest probability of success.
        Answer. During the CD-0 phase of the project, NNSA evaluated the
    proposed action of relocating TA-18 capabilities and materials
    associated with Security Category I/II materials to a new location.
    Location alternatives included sites: (1) a different site at LANL at
    Los Alamos, New Mexico; (2) Sandia National Laboratories (SNL) at
    Albuquerque, New Mexico; (3) NTS near Las Vegas, Nevada; and (4)
    Argonne National Laboratory--West (ANL-W), near Idaho Falls, Idaho. The
    No Action and Upgrade in Place Alternatives were also evaluated. These
    alternatives are discussed in detail in the Environmental Impact
    Statement (EIS) for the Proposed Relocation of Technical Area 18
    Capabilities and Materials at the Los Alamos National Laboratory, DOE/
    EIS-0319, August 2002. The preferred alternative in the Final EIS was
    the DAF.
        As a result of CD-0 Phase 1, each alternative developed a concept
    and rough order of magnitude cost estimate. These estimates were
    analyzed by NNSA and adjusted to provide equal comparison as shown in
    Table 1. It is important to note that the transportation cost estimates
    at this time were anticipated to exceed $50 million and there were
    concerns regarding the system's ability to support TA-18 SNM relocation
    in addition to other requirements.

                                   TABLE 1.--CD-0 PHASE 1 ALTERNATIVE COST ASSESSMENT
                                                [In millions of dollars]
    ----------------------------------------------------------------------------------------------------------------
                                                                      LANL         NTS          SNL         ANL-W
    ----------------------------------------------------------------------------------------------------------------
    TEC.........................................................        130.6         76.7        129.2         92.7
    TPC.........................................................        148.9         95.0        147.6        111.0
    Transportation..............................................          4           52           50           53
                                                                 ---------------------------------------------------
          TOTAL.................................................        152.9        147.0        197.6        164.0
    ----------------------------------------------------------------------------------------------------------------

        Based on this cost information and program considerations, former
    NNSA Administrator John Gordon approved the original CD-0 Phase 2 for
    this project on July 27, 2001 to proceed with designing a new
    underground facility at LANL. While not completed, preliminary
    information from conceptual design activities for this underground
    facility in conjunction with the events of September 11, 2001,
    warranted a re-examination of the NTS option (DAF). The AE chartered a
    group to update the initial NTS concept on April 15, 2002 and to assess
    life cycle costs. The group completed a special study ``TA-18 Mission
    Relocation Project Special Study: Revisit the DAF Concept'' on June 25,
    2002. The results showed that the DAF alternative was now a more cost
    effective option in terms of construction and SNM transportation (see
    Table 2). As a result of new information, the AE approved the revised
    CD-0 Phase 2 on August 8, 2002, for the DAF.

        TABLE 2.--TA-18 MISSION RELOCATION PROJECT SPECIAL STUDY RESULTS
                            [In millions of dollars]
    ------------------------------------------------------------------------
                                                        LANL         NTS
    ------------------------------------------------------------------------
    Design, Construction and Start-up.............        162.0         96.7
    PIDAS Requirements............................         16.0    ( \1\ )
    Transportation................................          4.0         30
                                                   -------------------------
          TOTAL...................................        182.0        126.7
    ------------------------------------------------------------------------
    \1\ N/A.

        At NTS, only DAF was determined to be suitable and capable of
    adequately supporting the TA-18 missions. This decision was based on
    the fact that other NTS locations would require new construction at a
    substantially higher base cost than re-modeling DAF. In addition, the
    DAF has long been recognized as under-utilized and it maintains
    substantial excess capacity. A decision was made based upon an option
    analysis to utilize existing office space at the NTS control point
    rather than build new offices near the DAF (with resulting cost
    avoidance).
                                     ______

                  Questions Submitted by Senator Patty Murray

                     PACIFIC NORTHWEST NATIONAL LAB (PNNL)

        Question. Ambassador Brooks, a draft plan for accelerated cleanup
    of the Hanford Site, and the 300 Area in particular, would force
    evacuation by 2007 of several buildings within the Pacific Northwest
    National Lab (PNNL)--buildings that currently host work for the
    National Nuclear Security Administration (NNSA) and the Department of
    Homeland Security. Adequate replacement facilities cannot be in place
    by the 2007 deadline, making this the first time in the history of the
    Environmental Management program that cleanup would require active
    facilities to be demolished, and capabilities discontinued and/or lost.
        During a House Armed Services Committee hearing last week, you said
    the Office of Science, which serves as steward of PNNL, had not yet
    asked for NNSA help in addressing the potential loss of national
    security capability at the lab. Is that still true?
        Answer. The Office of Science has asked NNSA to inventory its
    activities at Area 300. NNSA has conducted this assessment and
    submitted it to the Office of Science.
        Question. Has the Department sought input from your office in
    finding a solution to the problems posed by the draft cleanup schedule
    for 300 Area?
        Answer. The Department has raised the problems posed by the draft
    cleanup schedule for the 300 Area with NNSA but has not yet asked NNSA
    for solutions.
        Question. If the Department or the Office of Science seeks help
    from the NNSA, is your office prepared to contribute to the cost of
    replacing the facilities lost to 300 Area cleanup?
        Answer. We are currently assessing whether or not the NNSA
    activities that would be lost at Area 300 justify the considerable cost
    of replacing the 300 Area facilities.
        Question. Are you confident that the Department is on track to find
    a solution that preserves the important capabilities at PNNL?
        Answer. PNNL supports the national security of the United States in
    a variety of ways and should be commended for its efforts. However,
    given that PNNL's 300 Area capabilities only account for roughly 17
    percent of NNSA's nonproliferation budget at PNNL, NNSA must evaluate
    all available options before it can support the construction of a new
    facility to replace PNNL's 300 Area facilities.

        Senator Domenici. I want to share something with you just
    before we close this hearing. I do not know if I should be
    talking about this issue of America with you, but it is going
    to be science that is going to make the breakthrough, be it one
    or ten, that will once again start creating jobs in America, so
    that when productivity increases we will see jobs instead of
    what we are seeing now as productivity and no jobs. Most crazy
    arrangement of economics we have ever seen. It would seem to me
    the breakthrough with brand new technology and innovative
    things is going to do it. Where it will come from, I do not
    know. I have been pondering what we could do in the Federal
    Government as an incentive to have it happen quicker but that
    is too tough for me. But I have some people thinking about it.
    But frankly, I think you have more to do with it than people
    think, because you have the greatest array of scientists and
    engineers, when you add your three labs up, of anywhere in the
    world. And when you take the Mesa Facility and the CMR
    facilities, and those are needed for the stockpile, but
    everybody knows that nano-science and micro-engineering,
    somewhere from those is going to come that breakthrough. And
    the center for it was supposed to be Sandia National
    Laboratories in a facility we started because of some things
    that nano-science may do for the nuclear weapons. Now, we can
    let an institution see and live its day and not do what it is
    supposed to do because we do not fund it on time. Or we can
    think it is important enough and fund it. So I am complaining
    to you that your budget will cause a very big delay in
    providing the facilities that are not there, that you cannot
    expect great scientists to work in. If you ever saw what they
    are working in, they are not going to make the innovative
    breakthroughs that we are talking about there. And so I think
    the 50 percent reduction in the expected continuation of the
    building is not right. I urge that you be considerate of our
    efforts to move it back on a path, that it might get built
    sooner. Now, that is enough. If you want to comment, fine. If
    not.
        Ambassador Brooks. I think yes sir is the appropriate thing
    for me to say.

                              SUBCOMMITTEE RECESS

        Senator Domenici. Okay. With that, we have a number of
    hearings for this subcommittee this year and they will be
    interesting, but we stand recessed.
        [Whereupon, at 4:25 p.m., Wednesday, March 23, the
    subcommittee was recessed, to reconvene subject to the call of
    the Chair.]

        ENERGY AND WATER DEVELOPMENT APPROPRIATIONS FOR FISCAL YEAR 2005

                                  ----------

                           WEDNESDAY, MARCH 31, 2004

                                           U.S. Senate,
               Subcommittee of the Committee on Appropriations,
                                                        Washington, DC.
        The subcommittee met at 10 a.m., in room SD-138, Dirksen
    Senate Office Building, Hon. Pete V. Domenici (chairman)
    presiding.
        Present: Senators Domenici, Craig, Reid, and Murray.

                              DEPARTMENT OF ENERGY

                       Office of Environmental Management

    STATEMENT OF JESSIE H. ROBERSON, ASSISTANT SECRETARY

                 OPENING STATEMENT OF SENATOR PETE V. DOMENICI

        Senator Domenici. The meeting will come to order. I
    understand Senator Reid, Senator Craig will be along, but I
    want to explain to you what's going on here and I haven't
    decided yet what I'm going to do, but there's a briefing by Mr.
    Tenet, a closed briefing for Senators, and I haven't heard him
    yet and I may get started and just recess and you'll have to
    wait. Sorry for the audience. We'll wait and come back, but
    we'll get you finished before noon.
        So good morning, and for all of you the hearing is going to
    come to order. The subcommittee is going to take testimony on
    the fiscal year 2005 budget request. We're going to take
    testimony from Jessie Roberson, Assistant Secretary, Office of
    Environmental Management; Beverly Cook, Assistant Secretary of
    the Office of Environmental Health and Safety; Dr. Margaret
    Chu, Director of Civilian Radioactive Waste Management. I
    appreciate your participation here today and I look forward to
    your testimony.
        The President's request for the Office of Environmental
    Management provides $7.4 billion. This is the largest request
    ever made for environmental cleanup. I applaud the efforts of
    the Assistant Secretary Roberson and the efforts to reform the
    DOE cleanup program. I intend to carefully evaluate all the
    cleanup responsibilities.
        The administration has succeeded in reducing the total cost
    estimates for 35 years by focusing on risk-based cleanup as a
    strategy and seeking accelerated cleanup agreements with the
    States. The DOE now believes that cleanup of the remaining 39
    sites will finish by 2035 and will cost $142 billion down from
    $192 billion which we were looking at in 2001. While the
    achievement that we're going to work towards is remarkable, I'm
    concerned by the Department's overriding determination to close
    out cleanup by 2035.
        This budget proposes shifting a number of cleanup
    responsibilities to other offices and creating an entirely new
    office to manage future cleanup of any ongoing DOE activities
    that are not currently managed by EM.
        It seems absurd to think that waste generated after a
    certain date shouldn't be handled in the same aggressive manner
    that EM has applied to existing cleanup. The budget process,
    creation of an office of future liability--and I'm not at all
    convinced that creating a new office and bureaucracy makes
    sense--EM has worked very hard to minimize waste cost and it
    would be a shame to lose the experience and knowledge created.
        I intend to evaluate all the cleanup responsibilities EM
    has proposed shifting to other programs in this budget,
    including the proposal to saddle NNSA with the added cleanup
    burden. Since we don't ask EM to test our nuclear stockpile, it
    seemed inconsistent to expect NNSA to perform environmental
    cleanup. Now maybe I got it wrong, but I don't think so.
        The President's budget requests $880 million for Yucca. The
    President proposes tapping the mandatory fees assessed to
    utility customers to pay for developing the waste repository.
    These fees amount to $749 million this year. The budget
    proposes that an annual receipt be reclassified as
    discretionary funds and appropriated. I'm not optimistic that
    this reclassification can be accomplished.
        I know that the Senate budget resolution does assume $577
    million as a minimum level of funding, the same level that was
    provided in 2004. I remain hopeful that more will be provided
    this year in order to keep Yucca on schedule to open by 2010.
    For the Office of Environmental Safety and Health, the
    President's budget provides $139 million. This office has the
    important responsibility of ensuring that DOE facilities across
    the complex maintain the highest levels of worker safety and
    abide by proper environmental standards.
        I was disappointed to read in the Washington Post of a
    draft DOE inspector general report that indicates that there
    has been significant underreporting of worker inquiries by the
    Department of Energy's Office of Environmental Safety and
    Health.
        According to the IG, the audit disclosed instances of
    inaccurate and incomplete data entry and the Department's
    safety performance was overstated. The audit found that the
    Department's reporting of restricted work, but that the
    contractor had actually reported 1,113 days of restricted work,
    a figure more than twice that which DOE has figured. If true,
    these accusations indicate that this Office has not addressed
    worker safety consistent with the mission and the
    responsibility. We'll be asking about that. You may have a
    different version. We want to hear that.
        The Office also funds the Energy Employees Occupational
    Illness Compensation Program which has failed to expedite
    worker compensation claims. Now, I understand that that statute
    is not very easy to interpret and not very easy to implement.
    Nonetheless, we don't have any other statute and that means
    we've got to do better.
        In my opinion, the claims that we failed in that regard
    need to be thoroughly discussed. Those who are waiting around
    for coverage are making a lot out of the fact that they are
    waiting and waiting, and that's difficult and it's very hard
    for us, too. I'm sure it's very hard for Senator Craig to
    gather enormous amounts of data to validate the worker claims
    that exist and I understand the Department has prepared new
    legislation as well as $33 million for reprogramming in 2004.
    That's going to be tough, but we ought to get started.

                               PREPARED STATEMENT

        I will evaluate both requests to ensure that these
    proposals will help DOE improve its ability to process worker
    claims. Now, I was going to yield to Senator Reid who is
    tremendously interested in what's going on and I appreciate
    working with him. Senator Reid.
        [The statement follows:]

                 Prepared Statement of Senator Pete V. Domenici

        Good morning--this hearing will come to order.
        Today, the subcommittee will take testimony on the fiscal year 2005
    budget request from Jessie Roberson, Assistant Secretary, Office of
    Environmental Management; Beverly Cook, Assistant Secretary, Office of
    Environment, Safety and Health; and Dr. Margaret Chu, Director, Office
    of Civilian Radioactive Waste Management.
        I appreciate your participation here today and I look forward to
    your testimony.
        The President's request for the Office of Environmental Management
    provides $7.4 billion. This is the largest request ever made for
    environmental cleanup. I must applaud the efforts of Assistant
    Secretary Roberson for her efforts and the efforts by the Department of
    Energy to reform the DoE cleanup program.
        This administration has succeeded in reducing the total cost of EM
    cleanup by $50 billion and shortening the estimated timetable by 35
    years. By focusing on risked-based cleanup strategies and seeking
    accelerated cleanup agreements with States, DoE now believes that clean
    up of the remaining 39 sites will finish by 2035 and will cost $142
    billion. Down from $192 billion estimated in 2001.
        While this achievement is remarkable, I am concerned by the
    Department's overriding determination to close-out cleanup by 2035.
    This budget proposes shifting a number of cleanup responsibilities to
    other Offices and creating an entirely new Office to manage the future
    cleanup of any on-going DOE activities that are not currently managed
    by EM. It seems absurd to think that waste generated after a certain
    date shouldn't be handled in the same aggressive manner EM has applied
    to existing cleanup.
        This budget proposes the creation of the Office of Future
    Liability. I am not at all convinced that creating a new office and
    bureaucracy makes any sense. EM has worked very hard to minimize waste
    and cost and it would be a shame to lose the experience and knowledge
    created within EM.
        I intend to carefully evaluate all the cleanup responsibilities EM
    has proposed shifting to other programs in this budget, including the
    proposal to saddle NNSA with the added burden of cleanup. Since we
    don't ask EM to test our nuclear stockpile, it seems inconsistent to
    expect NNSA to perform environmental cleanup.
        The President's budget requests $880 million for Yucca Mountain.
    The President proposes tapping the mandatory fees assessed to utility
    customers to pay for developing the waste repository. These fees amount
    to $749 million this year. The budget proposes that the annual receipts
    be reclassified as discretionary funds and appropriated. I am not
    optimistic that this reclassification can be accomplished this year.
    However, the Senate Budget Resolution does assumes $577 million as a
    minimum level of funding--the same level that was provided in fiscal
    year 2004. I remain hopeful that more will be provided this year in
    order to keep the Yucca Mountain on schedule to open by 2010.
        For the Office of Environment, Safety and Health, the President's
    budget provides $139 million. This Office has the important
    responsibility of ensuring that DoE facilities across the complex
    maintain the highest levels of worker safety and abide by proper
    environmental standards.
        I was disappointed to read in the Washington Post of a ``draft''
    DoE Inspector General Report that indicates that there has been
    significant under-reporting of worker injuries by the Department of
    Energy's Office of Environmental, Safety and Health.
        According to the IG ``the audit disclosed instances of inaccurate
    and incomplete accident and injury data'' and the ``Department's safety
    performance statistics were overstated.'' The audit found that the
    Department's reporting at the Waste Treatment facility at Hanford
    reported 552 days of restricted work, but that the contractor had
    actually reported 1,113 days of restricted work--a figure more than
    twice has high as the DOE figure. If true, these accusations indicate
    that this office has failed to address worker safety consistent with
    its mission and responsibility.
        This Office also funds the Employee Compensation program has failed
    to expedite worker compensation claims. The existing program has been
    plagued by challenges in putting together enormous amounts of data to
    validate workers claims. I understand the Department has prepared new
    legislation as well as a $33 million reprogramming in fiscal year 2004
    to increase the effectiveness of the program.
        I will carefully evaluate both requests to ensure that these
    proposals will help DoE improve its ability to process worker claims.
        Now, I will yield to Senator Reid for any opening statement he
    would like to make.

                        STATEMENT OF SENATOR HARRY REID

        Senator Reid. Thank you very much, Mr. Chairman. I
    apologize for being a little bit late, but you always start
    promptly for which I am grateful. I am pleased to welcome the
    panelists here today. I think, Mr. Chairman, it's a mere
    coincidence that three of the witnesses here that are appearing
    today--anyway, I think it's good that you are appearing here
    today.
        We generally mix these panels from year to year and I'm not
    sure that I am personally aware of your office having testified
    before, but if you have, I missed that. I'm glad that you're
    all here. I think this has been arranged well. I want to make a
    point about how history tends to repeat itself at the
    Department generally with results that I have to say haven't
    been good for the employees and the contractors.
        Dr. Chu, as you know, this subcommittee held a hearing in
    Las Vegas earlier this month to address the issue of Yucca
    Mountain mining workers being exposed to silica dust and other
    problems, other compounds I guess would be the right word,
    during the boring of the experimental tunnel.
        The experimental tunnel is 5 miles long. The Department
    didn't provide respiration equipment for ventilation--I'm
    sorry. I thought I turned it on. I must have turned it off.
        Only after workers began getting sick recently has the
    Department begun to try to identify and find these workers,
    many of whom have no idea that the Department in essence has
    sent many of them to an early death. The Department knew of the
    presence, I should say, of silica in the rock being bored. The
    link to silicosis has been known for thousands of years and in
    that area it's been known for more than 100 years.
        To make matters worse, the Department waited 10 years
    before lifting a finger to determine the extent of damage done
    to workers' health, only after workers began getting sick. Dr.
    Chu, you were gracious to send your Yucca Mountain site manager
    and your safety advisor to the field hearing and we appreciate
    that very much. You have been candid in my estimation.
        I was, though, concerned with both of them. I thought they
    would say that we as an organization didn't do the right thing,
    didn't do a good job. We are going to do everything in our
    power to find the people who are sick and take care of them,
    but we didn't get that. We got a lengthy discussion of how the
    Department now has policies and procedures in place to make
    sure something like this will never happen again. It shouldn't
    have happened in the first place, and we really have to do
    everything we can to find out the condition of the people that
    have been exposed there.
        The present-day environmental management and environment
    safety and health programs--perhaps you will see that I am not
    comforted when I am told that DOE has policies and procedures
    in place. They do not have procedures in place to protect
    workers nationwide.
        Ms. Roberson, you have the largest budget and one of the
    most important jobs in the entire department. For all intents
    and purposes, you are in charge of cleaning up the
    environmental catastrophe of winning the Cold War. This is a
    huge, technically difficult and extremely expensive job. I
    don't envy you this task. I think by and large, you've done a
    good job with your program of accelerated cleanups. Shaving
    decades and billions of dollars from these cleanup programs is
    a noble and important goal. Everyone involved wants these tasks
    completed, but we want them done right and the only way they
    can be done right is by keeping the workers who are doing it
    healthy and safe.
        I am concerned when I read about what seems to be a very
    high injury and exposure rate among workers at cleanup sites.
    This was reported in the press over the weekend. I get more
    than upset when I read that DOE's own inspector general is
    reporting that the Department maintains ``inaccurate and
    incomplete accident and injury data'' even when its contractors
    have completely accurate data.
        When the Department's database indicates that 166 days were
    lost to injury at the Idaho National Engineering Laboratory and
    the contractor, Bechtel, reports 463 days lost during the same
    reporting period, something's really wrong and this is
    particularly in light of the fact that Bechtel has received
    incentives and as contractors, discourages them from reporting
    too many injuries.
        There are only two possible conclusions to draw from such a
    disparity: first, incompetence. Based on the Yucca Mountain
    Program experience and other monitoring of site workers that I
    have seen and heard over the years, this is plausible,
    unacceptable but plausible.
        Second, the Department has been deliberately downplaying
    the risks associated with doing this cleanup, either to meet
    schedule or contain costs. Incompetence of keeping health
    records, particularly an organization that has roots dating
    back over 50 years, upsets me. However, if the final IG's
    report contains even a whiff of a notion that DOE has been
    systematically underreporting injury and exposure in order to
    meet deadlines and to contain costs, there are going to be some
    serious consequences.
        None of us here are willing to trade lives and long-term
    life of our citizens in order to meet these milestones. Ms.
    Roberson, Ms. Cook, I desperately want to believe that there is
    a simple and plausible explanation for what the IG has found,
    and if you have one, I hope you'll share it with us. My long
    association with the Department through administrations, both
    Republican and Democratic, is that worker safety has never been
    the priority that it should be. Frankly, the Department's first
    crack at an explanation gives me no faith that you're going to
    be able to convince me that everything is as it should be.
        Whenever a department spokesman's first line of defense is
    that it's just a draft report and B, anyone who thinks we have
    a problem is just being political, as Joe Davis said this
    weekend, the Press Secretary for Secretary Abraham, my
    confidence level sinks. This is typical. Any professional doing
    his or her job who has the audacity to agree with their point
    of view is by nature a partisan or political hack. In my view,
    this is a flimsy defense when compelling answers and solutions
    are called for.
        Dr. Chu, as you might imagine, I have some things I want to
    discuss. This is something that you may want to respond to in
    writing, but let me just say that you recently announced that
    you retained the Virginia-based law firm of Hunton & Williams
    at the sum of $45 million to defend your license application.
    That seems like a lot of money to me, in light that the firm
    and its employees have had no involvement to date in the
    drafting of the license application. Your staff should be
    competent enough to draft and assemble the application itself,
    and it would seem to me they're in a good position to answer
    the questions and defend its contents.
        Given the incredibly technical nature of this application,
    how is it possible for a bunch of lawyers to add $45 million of
    value to this process? But I am hopeful that Hunton & Williams
    will not have any of the obvious conflicts of interests that
    the previous law firm did, Winston & Strawn. I'd be keeping a
    close eye on the staffing and billing of this legal team.
        In the trade press, I've noted that you've settled the
    lawsuit filed by the loser in the original firm bidding process
    for almost $5 million. That's a lot of money for a law firm
    that didn't do one single minute of work for American taxpayers
    in this matter.
        So I have a series of questions that I will submit with the
    chairman's permission. I would hope that you would answer them
    as quickly as you can. One more thing. You were unable to
    attend the field hearing in Las Vegas early this month and hear
    what some of those workers had to say. We have to really take a
    look at that, and I hope that you'll go back and look at how
    the workers have been treated and how sick they are until we
    get to the bottom of this.
        As I indicated earlier, not only am I concerned about the
    silicosis, but we had expert testimony there that one of the
    formations that they went through is something called ironite
    which is worse than asbestos and causes mesothelioma. We had a
    doctor come and testify to that fact, so it's a serious
    situation.

                               PREPARED STATEMENT

        I appreciate very much, Mr. Chairman, your patience in
    allowing me to make this statement. I am going to, as I
    indicated, with your permission, submit a number of questions
    and ask the witnesses to respond to those to the full committee
    at their earliest convenience.
        [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, the Yucca Mountain
    program, and the Office of Environment, Safety and Health.
        Like you, I am pleased to welcome Ms. Jessie Roberson, the
    Assistant Secretary for the Office of Environmental Management; Dr.
    Margaret Chu, the Director of the Office of Civilian Radioactive
    Nuclear Waste; and Ms. Beverly Cook, the Director of the Office of
    Environment, Safety, and Health.
        It is a mere coincidence that the three of you are appearing
    together here today. We generally mix these panels up a little bit from
    year to year. Additionally, I am not sure that we hear from your office
    each year, Ms. Cook.
        However, I am glad that all three of you are here together, so I
    can make a point about how history tends to repeat itself at the
    Department of Energy, generally with bad results for the health of
    employees and contractors.
        Dr. Chu, as you know, this subcommittee held a field hearing in Las
    Vegas earlier this month to address the issue of Yucca Mountain mining
    workers being exposed to silica dust during the boring of the
    Experimental Tunnel in the mid-1990's. The Experimental tunnel is 5
    miles long. The Department did not require or provide adequate
    respiration equipment for ventilation during the drilling of the first
    3 miles, a period of about 2 years.
        As many as 1,500-2,000 Test Site Workers may now be facing
    silicosis, a deadly respiratory disease. The number may be higher or
    lower. The Department is not really sure yet and did not keep accurate
    records of who was on the work site at the time and have made no effort
    until recently to try to figure it out.
        Only after workers began getting sick recently has the Department
    begun to try to identify and find these workers, many of whom have no
    idea that the Department's negligence has potentially sentenced them to
    an early death.
        The Department knew of the presence of the silica in the rock being
    bored. The link to silicosis has been known for THOUSANDS of years, yet
    the Department knowingly allowed its employees and contractors to toil
    for 2 years in such an environment before fixing the problem.
        Then, to make matters worse, they waited for 10 years before
    lifting a finger to determine the extent of the damage done to workers'
    health, and then only AFTER workers began getting sick.
        Dr. Chu, you were nice enough to send your Yucca Mountain Site
    Manager and your Senior Safety Advisor to the field hearing. However, I
    got pretty upset with both of them because, frankly, I expected them to
    say clearly and without equivocation, ``We, as an organization, screwed
    up, but we are going to do everything in our power to find these
    workers and TAKE CARE OF THEM.''
        Instead, I got a lengthy discussion of how the Department now has
    policies and procedures in place to make sure something like this will
    never happen again.
        Wrong Answer. It never should have happened in the first place.
        Unfortunately, it happens a lot at DOE.
        Let's fast forward to the present day Environmental Management, and
    Environment, Safety and Health Programs and perhaps you will see why I
    am not comforted when I am told that the DOE has policies in procedures
    in place to protect workers nationwide.
        Ms. Roberson, you have the largest budget and one of the most
    important jobs in the entire Department: For all intents and purposes
    you are charged with cleaning up the environmental catastrophe
    associated with winning the cold war.
        This is a huge, technically difficult, and extremely expensive job.
    I do not envy you this task, Ms. Roberson. I think, by and large, you
    have done a good job with your program of accelerated clean-ups.
    Shaving decades and billions of dollars from these clean-up programs is
    a noble and important goal.
        Everyone involved wants these tasks completed.
        However, we want them done right. And the only way they can be done
    right is by keeping the workers healthy and safe.
        I am certainly concerned when I read about what seems to be a very
    high injury and exposure rate among workers at clean-up sites as I read
    over the weekend. But I get downright angry when I read that the DOE's
    own Inspector General is reporting that the Department maintains
    ``inaccurate and incomplete accident and injury data'' even when its
    contractors have completely accurate data.
        When the Department's database indicates that 166 days were lost
    due to injury at the Idaho National Engineering and Environmental
    Laboratory and the contractor, Bechtel, reports 463 days lost during
    the same reporting period, something is wrong, particularly in light of
    the fact that Bechtel has incentives in its contract to discourage them
    from reporting too many injuries.
        In my view, there are only two possible conclusions to draw from
    such a disparity:
      --First, utter incompetence on the part of the Department in
            maintaining records. Based on the Yucca Mountain Program
            experience and other monitoring of Test Site Workers that I
            have seen and heard about over the years, this is entirely
            plausible. Unacceptable, but plausible.
      --Second, the Department has been deliberately downplaying the risks
            associated with doing this clean-up work, either to meet
            schedule or contain costs.
        Incompetence at keeping health records, particularly in an
    organization that has its roots dating back over 50 years, makes me
    very angry.
        However, if the final IG's report contains even a whiff of a notion
    that DOE has been systematically under-reporting injury and exposure
    rates in order to meet deadlines or contain costs, there is going to be
    hell to pay.
        None of us up here are willing to trade lives and long-term health
    of our citizens in order to meet milestones.
        Ms. Roberson and Ms. Cook, I desperately want to believe that there
    is a simple and plausible explanation for what the IG has found. If you
    have one, I hope you will share it with all of us.
        However, my long association with the Department, through
    administrations both Republican and Democratic, is that worker safety
    has never been the priority it should be.
        Frankly, the Department's first crack at an explanation gives me no
    great faith that you are going to be able to convince me that
    everything is as it should be: whenever a Departmental spokesman's
    first line of defense is that (A) It is just a draft report and (B)
    Anyone who thinks we have a problem is just being political, as Joe
    Davis, Secretary Abraham's press secretary did this weekend, my
    confidence level sinks quickly.
        This is pretty typical for this administration, though. Any
    professional doing his or her job who has the audacity to disagree with
    their point of view is, by nature, a partisan political hack.
        In my view, that is a pretty flimsy defense when compelling answers
    and solutions are called for.
        Enough on all of that for the moment.
        Dr. Chu, as you might imagine, I have a further thought or two for
    you: first, you recently announced that you had retained the Virginia-
    based law firm of Hunton and Williams, for the sum of $45 million, to
    defend your license application for Yucca Mountain before the Nuclear
    Regulatory Commission.
        That seems like a huge sum for me, particularly in light of the
    fact that the firm and its employees have had no involvement to date in
    the drafting of the licence application. If your staff is competent
    enough to draft and assemble the application itself, are they not in a
    better position to answer questions about it and defend the its
    contents? Given the incredibly technical nature of the application, how
    is it possible for a bunch of attorneys, even ones with some knowledge
    of the regulatory process, to add $45 million in value to this process?
        While I am hopeful that Hunton and Williams will not have any of
    the obvious conflicts of interests that your previous law firm did, I
    will be keeping a close eye on the staffing and billing of this legal
    team.
        I further note that I saw in the trade press that you have settled
    the lawsuit filed by the loser in the original law firm bidding process
    for $4.5 million. That is a lot of money for a law firm that did not
    one single minute of work for the American taxpayers on this matter.
        I have a series of questions for all of you that I will either ask
    at the appropriate time or will submit for the record. I hope all of
    you will respond in a timely fashion.
        Thank you for allowing me to take up a little more time than usual,
    Mr. Chairman. You were unable to attend the field hearing in Las Vegas
    earlier this month and hear what some of these former workers had to
    say. I am still stunned and angry at the way the Department treated its
    workers back then and apparently still are. The Department is charged
    with doing important things for this country, many of them dangerous,
    and, unfortunately, I am no longer convinced that worker safety is a
    high enough priority. Perhaps we should consider slowing clean-ups down
    for a short period to allow the Department to take a comprehensive,
    across-the-board look at its safety policies and procedures.
        Thank you, Mr. Chairman.

        Senator Domenici. I would like to hear from Senator Craig.
    Senator Craig, before you do that, I want to share with you, in
    the event you haven't seen this, an announcement today by a
    consortium of American companies to start a process of seeing
    how the new licensing procedures will help them in the event
    they want to build a nuclear power plant.
        Now, they haven't said they're going to build one, but
    they've said they're going to join together and apply in an
    effort to determine whether it is true that this new process
    expedites licensing or not. I'm very thrilled. That's not the
    end of the road, but I would assume with your advocacy for
    nuclear power, that you would probably think this is a very
    important event.
        Senator Reid. Who's going to do that, Mr. Chairman?
        Senator Craig. The companies are Exxon Energy, Nuclear
    Southern Company, Constellation Energy Baltimore, EDF
    International, which is a subsidiary of a large French firm.
        Senator Domenici. Senator, I want to make sure that you
    understand that there is no site. This is just to see if it
    works.
        Senator Craig. There's nothing wrong with that.
        Senator Domenici. And I think we just need that. Senator
    Craig.

                        STATEMENT OF SENATOR LARRY CRAIG

        Senator Craig. Well, thank you very much, Mr. Chairman, and
    thank you for mentioning that. I think what is important here
    is to, as the companies are attempting to do, demonstrate the
    U.S. Nuclear Regulatory Commission's new what they call the COL
    or COL process, which is a combination I think of construction
    and operating license end process. I think that might work
    well. Thank you all for being here today. We have a variety of
    important questions to ask of you and to look at the budget for
    the coming year. Let me say, and Senator Reid, let me echo your
    concern about worker safety.
        There is a field report in each one of the field offices,
    and in the conversion of that report to a headquarters report,
    nothing should fall through the cracks, and I think that is
    what is being suggested that something might. To say that there
    is not full reporting, to go to the field offices and look, I
    think we see a different story, and it's important that there
    be full transparency here as it relates to reports and
    realities in worker safety. All of us are extremely concerned
    about that as we should be, as I know certainly all of you are.
        Mr. Chairman, I've got a variety of issues that I will
    discuss and questions today, but let me say at the outset that
    I'm going to be very direct for a few moments on items
    associated with environmental management and that budget
    request. I'm going to be, I hope, very clear as to where I
    stand and what I'm going to ask of you, Mr. Chairman, and of
    the Ranking Member to support as we craft this budget bill.
        For the second budget request in a row, DOE is asking that
    a number of responsibilities be transferred out of EM and into
    other programs. I guess I have to ask this, then. Is there a
    larger design here and is Congress only seeing it in a
    piecemeal fashion by a year-to-year budget proposal. It almost
    appears that DOE is reducing the scope of the EM program so
    that it can be finished and victory declared by a date possible
    and then, oh by the way, we aren't done with high-level waste
    and we transfer the spent fuel storage to another program and
    we haven't addressed buried waste and we've created a new
    office of future liabilities.
        In other words, Mr. Chairman and to all of you assembled,
    environmental management is focused on completion as DOE's
    budget states, but only completion of all the things that
    aren't transferable somewhere else. So do I sound concerned?
    You bet I'm concerned. I'm very concerned about the position
    and the reorganization that DOE is proposing.
        Here is what I have to ask the chairman and the ranking
    member to consider. I believe we should put these piecemeal
    transfers on hold in the fiscal year 2005 budget. I asked DOE
    to come back to the authorizing committees and to this
    committee with a comprehensive plan for all of these changes
    along with a mapping from the old budget to the new proposal
    and to submit all that within the 2006 budget request.
        DOE is also asking to fence off $350 million related to
    cleanup of high-level waste in Idaho and Washington, South
    Carolina until Congress passes legislative language related to
    waste reclassification. Let me be clear. I do not support the
    language DOE submitted. It may be that given DOE's loss in the
    court in Idaho, we may need to clarify what we mean in terms of
    tank closure.
        If DOE and the State of Idaho can come to an agreement on
    the shape of that, what shape that clarification should take in
    law, I will work with my colleagues here to support that effort
    and to support the Department's effort.
        I will not allow DOE to hold this work hostage or to hold
    this budget hostage with these kinds of tactics. DOE's own
    budget makes reference to the sole-source aquifer in Idaho,
    that most of the waste sits over the top of, that provides
    Idaho's drinking and irrigation water. Now, I notice that DOE's
    fiscal year 2005 budget at Rocky Flats in Colorado is asking
    for the funding to remove every last bit of radioactive
    material or waste, low-level waste, from Rocky Flats for off-
    site disposal. I find it very difficult to reconcile that with
    DOE's continued innuendoes that the States like Idaho and
    Washington are insisting on ``gold-plated cleanup'' just
    because they want some say in how DOE defines how clean is
    clean.
        DOE knows I have been open to proposals that are
    alternatives to current proposals if they make sense to all
    parties involved. At Rocky Flats, DOE spent over 5 years
    working with the State of Colorado and other stakeholders in
    developing how clean is clean. They call it their soil action
    levels. Well, they were taking 5 years to develop those
    standards, they kept clunking along on the cleanup.
        So I find it completely unacceptable that DOE thinks it
    can, if you will, hold hostage $350 million and refuse to
    continue high-level waste cleanup while demanding that DOE have
    it their way in Idaho and Washington and South Carolina, or to
    spend money to remove all the radioactive waste at Rocky Flat
    but tell Idaho that DOE doesn't have to address any of our
    buried waste, some of which is transuranic, that stuff that is
    customarily, as we know, going to the facility in Carlsbad.
        We know on this committee that resources are limited and
    that we don't have an open access to the U.S. Treasury, but
    we're going to be looking for some equitable treatment when it
    comes to risk. We're also going to be asking for what I would
    suggest needs to be a clearly transparent approach to what the
    end game is and what the procedures are, and I don't feel at
    this time, frankly, we understand it nor are we gaining that
    kind of transparency. I hope that's about as clear as it can be
    said.
        But Mr. Chairman, this is one Senator that is not at all
    happy with the current proposal and the current budget.
        Senator Domenici. Thank you very much, Senator Craig. Let
    me say you have had to sit there and accept as we do in the
    Congress, the feelings of Senators. You have your opportunities
    to answer all this, but I'm going to do the following.
        Senator Murray is willing to stay. I don't know if you want
    to go to Tenet? You don't. Well, Senator, you preside, and then
    Senator Murray has a series of questions, so if you would let
    her go, and I will try to get back. When I come back, I do want
    to ask if you have had a chance to explain the allegations,
    especially in the safety and health area, but four or five
    areas, because I am interested and I don't necessarily share
    the same opinion of the Senators who have spoken, but that's
    too bad. They may have more votes than I have.
        But the important thing is to try to figure out how we can
    do it, and to do that, we've got to know facts, so with this,
    I'm going to yield to Senator Murray, and then Senator Craig is
    going to take over. I'm going to walk quickly to hear Mr.
    Tenet. I will stay until noon. If we are not finished, we'll
    just have another hearing because there are three or four
    issues that have to be answered or we're going nowhere.
        You haven't talked much, Dr. Chu, and we want to hear from
    you also. Before I leave, I want to say that it is rare indeed
    to look at this problem of Yucca and the disposal of waste.
    We've been sitting around looking at a graph. At one point, we
    had 300, 400 billion on these graphs, and it's amazing that all
    the men that tried didn't make any headway. So now we've
    decided the women will take the lead, and I'm very pleased with
    you, Dr. Roberson, and with you, Dr. Chu. You came from one of
    our laboratories. It is absolutely amazing what you have done,
    regardless of the criticism. Your activities have been very,
    very interesting and I will leave now and try very much to come
    back. Okay.

                       STATEMENT OF SENATOR PATTY MURRAY

        Senator Murray. Thank you very much. I assume that's an
    endorsement for women to take over the Senate as well.
        Senator Craig [presiding]. I am now clearly in the minority
    in this room. Please proceed.
        Senator Murray. Well, I do want to make an opening
    statement. I want to thank Senator Domenici. And other
    challenges are completed or well underway. The funding the
    administration has been requesting and this subcommittee has
    been providing is making a real difference. Unfortunately, that
    is not the full story at hand for today. It seems time and
    again, the Department makes decisions that raise questions
    about its commitment to full cleanup, partnership with Federal
    and State regulators, communication with the community, and
    concern about safety.
        We can all agree with the Department's goal of accelerated
    cleanup, but as I said 2 years ago, this cannot occur at the
    expense of worker safety or the environment. The recent events
    raised this very fear. First, the Department is seeking
    unilateral authority to reclassify high-level waste at Hanford,
    Idaho and South Carolina. Those three States plus New Mexico,
    New York and Oregon are opposing this effort in court.
        Secondly, workers are being exposed to potentially
    dangerous tank vapors at Hanford.
        Third, there are accusations that medical care is being
    manipulated to reduce the number of days not worked due to
    work-related injuries. These and other injuries raise real
    questions about the Department's commitment to full and
    faithful cleanup and worker safety.

                               PREPARED STATEMENT

        I believe the Department can achieve full cleanup and cost
    and time savings while keeping faith with regulators,
    communities and workers. In fact, I believe the cleanup program
    can be a nearly unquestionable success if it addresses all
    those issues. We will not solve this today, but the Department
    needs to take some considerable steps to rebuild good faith
    with these partners in cleanup. Thank you, Mr. Chairman. I do
    have questions and I will wait until after the witness'
    testimony. Thank you.
        [The statement follows:]

                   Prepared Statement of Senator Patty Murray

        Mr. Chairman, I would like to make a brief opening statement.
        First, I'd like to express my appreciation to you and Senator Reid
    for both of your steadfast support of the Environmental Management
    Program. This program is obviously vitally important to my State and
    I'm very appreciative of your help.
        I'd like to say that I'm pleased with most of the recent cleanup
    activities at Hanford. Significant actions on spent fuel, the plutonium
    finishing plant, and other challenges are completed or well underway.
    The funding the administration has been requesting and this
    subcommittee has been providing is making a real difference.
        Unfortunately this is not the full story at Hanford.
        It seems time and again the Department makes decisions that raise
    questions about its commitment to full cleanup, partnership with
    Federal and State regulators, communication with the community, and
    concern about safety.
        We can all agree with the Department's goal of accelerated cleanup,
    but as I said 2 years ago, this cannot occur at the expense of worker
    safety or the environment.
        But recent events raise this very fear.
        First, the Department is seeking unilateral authority to reclassify
    high-level waste at Hanford, Idaho, and South Carolina. Those three
    States, plus New Mexico, New York and Oregon are opposing this effort
    in court.
        Second, workers are being exposed to potentially dangerous tank
    vapors at Hanford.
        Third, there are accusations that medical care is being manipulated
    to reduce the number of days not worked due to work related injuries.
        These and other issues raise real questions about the Department's
    commitment to full and faithful cleanup and worker safety.
        I believe the Department can achieve full cleanup and cost and time
    savings, while keeping faith with regulators, communities and workers.
    In fact, I believe the cleanup program can be a nearly unquestionable
    success if it really addresses these issues.
        We will not solve this today, but the Department needs to take some
    considerable steps to rebuild good-faith with these partners in
    cleanup. Thank you Mr. Chairman.

        Senator Craig. Well, thank you very much, Senator. Now that
    we've had our say, it's more than appropriate for you all to
    have your say before we go to questions, and with that in mind,
    let me first turn to Jessie Roberson, Assistant Secretary for
    Environmental Management. Jessie, again, as the chairman has
    said, welcome before the committee.

                        STATEMENT OF JESSIE H. ROBERSON

        Ms. Roberson. Thank you, sir, and good morning, Senator
    Murray and Senator Craig and staff for the subcommittee. I'd
    like to begin by conveying the Department's appreciation to you
    for your investment in the accelerated cleanup program. Your
    support is allowing us to achieve the dramatic results we
    forecast before this subcommittee a short 2 years ago.
        I'm here today to discuss President Bush's fiscal year 2005
    budget request for the Environmental Management program and its
    goal of sustaining the momentum that our work force has labored
    so hard to achieve, a momentum that benefits the vibrancy of
    our communities, our environment and our economy. In the last 2
    years, we've introduced dynamic reforms, delivered fundamental
    change and achieved significant improvements in health, safety
    and environmental protection.
        With your support, these reforms have become ingrained in
    our operations and our business processes, and with your
    continued support and our continued keen focus on risk
    reduction and cleanup, the momentum can and will continue. I'd
    like to take a moment to underscore the impacts of refocusing
    the Environmental Management program.
        We have improved safety performance. We are committed to
    instilling the appropriate philosophy in every worker's day-to-
    day decisions from start to finish of every project. To that
    end, we are demonstrating that we can accelerate work and
    improve safety performance at the same time. We are focused on
    continuous safety improvement. We have institutionalized the
    behaviors of a learning organization in our organization. We
    invest in system safety training and leadership training. We
    demand a healthy inquisitiveness. We stick to the basics,
    allowing a disciplined conduct of operations, and we are
    focusing our environmental and operational safety efforts on
    prevention first.
        And I look forward to responding to the issues raised in
    the opening statements regarding challenges to our safety
    performance. We have not nor will we stop paying attention to
    safety. We will continue to ``raise the bar'' and hold
    ourselves accountable to the highest standards.
        Second, we have demonstrated real cleanup results and risk
    reduction. Last year we set a new floor of performance not yet
    seen in the history of this program, and I say floor because we
    see this as a level of performance that we will continue to
    build upon. Over the last 2 years, for example, six of nine
    nuclear fuel basins completely deinventoried. None of those
    were in our plan before. Four thousand, one hundred of 5,900
    containers of plutonium, approximately 80 percent, have been
    packaged, we're almost complete. Over 1,300 of 2,400 metric
    tons, more than half, of the spent nuclear fuel is repackaged.
    Our workforce has accelerated that work, too.
        Our corporate performance measures, detailing our
    performance, which I have included in my written statement,
    further demonstrates our progress and in combination with our
    safety performance, we have accomplished consequential outcomes
    important to the public, the communities that host our sites,
    and for the generations that follow us.
        Three years ago, the Environmental Management program was
    described as lacking a risk-based cleanup approach and the
    hazards at the DOE sites and the liability associated with them
    did not appear to dictate the need for urgency. Innovative
    actions in all elements of the cleanup program were needed to
    transform EM's processes and operations to reflect an
    accelerated risk-based cleanup paradigm.
        We believe that by providing an atmosphere that encourages
    innovation, we can reduce risk to workers and the environment
    more effectively and save resources to be reinvested in
    furthering the cleanup priorities of each of the sites. Tying
    all these accomplishments together has been our driving force
    to improve performance in our acquisition strategy
    specifically.
        Legal actions and court decisions may direct us to alter or
    modify our activities from the accelerated cleanup and closure
    path. We are committed to work diligently with all concerned
    parties to avoid interruptions in reducing risk where we can.
    This year has seen dramatic results demonstrating our steadfast
    belief that continuing on the accelerated path will resolve the
    problems that lie before us. We must not lose our momentum that
    has so earnestly been established by the work force.
        As with all new enterprises, impediments will be many, but
    we are committed to employ our resources to continue to show
    meaningful results and we're taking a very critical view of
    those results. The job is not done until it's done. We can't be
    complacent. We must continue to do better. It's not done when
    we develop a plan. It's not done when we agree on a milestone.
    It's not done when we ask for funding. It's not done when we
    sign a contract. It's not done when we get money. It's not done
    until it's done and there is positive and measurable risk
    reduction for the investment made.

                               PREPARED STATEMENT

        I ask for your support of our fiscal year 2005 budget
    request of $7.43 billion to continue this momentum. We are
    safer today than we were last year, and we must stay the course
    so that we are safer next year than today. We have accelerated
    cleanup by at least 35 years, saving over $50 billion. The
    potential is there to lose what we have gained should we fail
    to stay focused on our commitments. Thank you, sir.
        [The statement follows:]

                    Prepared Statement of Jessie H. Roberson

        Mr. Chairman and Members of the subcommittee, I am delighted to be
    here today to convey the Department's appreciation for your support of
    the Environmental Management (EM) program, without which the dramatic
    results in accelerating the cleanup of the legacy of the Cold War would
    not be possible. I welcome this opportunity to sit before you and
    report on our progress, the potential gains and risks that lie before
    us, and the importance of sustaining the momentum that our workforce
    has labored so hard to achieve--a momentum that benefits the vibrancy
    of our communities and the environment.
        Two eventful years have passed since the release of the Top-to-
    Bottom Review of the EM program. In these last 2 years, we have taken
    decisive steps to transform a program focused on managing risk to a
    core mission-focused program that is accelerating risk reduction and
    cleanup. We have introduced dynamic reforms, delivering fundamental
    change and achieving significant improvements in health, safety, and
    environmental protection but more was needed to be done.
        Last year when I spoke with you, I stated that I was not
    ``satisfied'' with our progress. We must continue to better our
    performance and to look beyond the status quo to achieve results that
    are truly groundbreaking for the benefit of the generations that follow
    us. I challenged our workforce, our partners, and myself and all those
    interested in joining us in our vision of accelerated cleanup to put
    their most innovative ideas and people forward. I am proud to announce
    that with our combined efforts, our objective of accelerating
    environmental cleanup and risk reduction by 35 years and reducing
    estimated program costs in excess of $50 billion has become a reality.
    As cited in the recently released U.S. Department of Treasury 2003
    Financial Report to the United States Government, ``the recognized cost
    of cleaning up environmental damage and contamination across Government
    programs was estimated to be $249.9 billion, a decrease of $23.1
    billion or 8.5 percent from September 30, 2002. The most significant
    component of this reduction relates to the Department of Energy
    (Energy). Energy has reduced its environmental liability by $26.3
    billion or 12.5 percent in fiscal year 2003; this is the second year in
    a row that Energy's environmental liability decreased''. Along with the
    environmental liability reduction in fiscal year 2002 of $28.7 billion,
    the Department has reduced its environmental liability by $55 billion
    over the last 2 years. A reduction mostly due to employing a cleanup
    approach that focuses on accelerating risk reduction to public health.
    With your support and our continued keen focus on cleanup and closure,
    the momentum can continue.
        For fiscal year 2005, the President's Budget includes a record
    $7.43 billion for the accelerated cleanup program, the peak year in our
    funding profile. As we identified last year, the administration
    believes that this investment 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 2005 Congressional budget is
    structured analogous to last year. The budget structure 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.
        Within the Defense Site Acceleration Completion Appropriation, the
    budget reserves $350 million for a High-Level Waste Proposal. With the
    Idaho District Court decision on Waste Incidental to Reprocessing, the
    Department's ability to proceed prudently with accelerated risk
    reduction for some activities is drawn into question. The decision
    makes it difficult, if not impossible, for us to undertake planned
    actions at Idaho, Hanford and Savannah River Site to aggressively
    reduce risks posed by wastes stored in tanks at those sites--actions we
    had committed to take, in agreement with our host States, before the
    court decision. The decision now means we are likely to leave tank
    wastes in place longer while we try to resolve issues created by the
    decision--a course that has significant societal and monetary costs.
    This $350 million supports activities normally funded from the 2012
    Accelerated Completions account and from the 2035 Accelerated
    Completions. These funds will be requested only if the legal
    uncertainties are satisfactorily resolved.
        In alignment with ongoing Departmental missions, this budget
    reflects a transfer of multiple activities that are not core to the EM
    mission to other Departmental elements. These transfers provide the
    responsible and accountable mission programs with the resources and
    tools to achieve their objectives at the expected performance level.
    This accountability model is the key to moving each of the enterprises
    or missions of the Department forward in attaining the desired outcomes
    and results important to the administration and supporting our
    accelerated risk reduction and closure initiative. Transfers include:
      --Transferring Federal staff at the Pacific Northwest National
            Laboratory to the Office of Science and Federal staff at
            Headquarters to the Office of the Chief Information Office.
      --Transferring the EM portion of the Offsite Source Recovery Program
            to the National Nuclear Security Administration.
      --Transferring spent fuel storage responsibilities at Idaho National
            Laboratory, the Foreign Research Reactor Spent Fuel Program,
            management of NRC-licensed spent fuel, and the National Nuclear
            Spent Fuel Program to the Office of Civilian Radioactive Waste
            Management.
      --Transferring Formerly Utilized Sites Remedial Action Project
            records management, responsibility for cost liability and
            recovery reviews, and Environmental Justice and the Massie
            Chairs of Excellence Program to the Office of Legacy Management
            (LM).
        We will also be transferring sites, as they are completed, either
    to the landlord or to LM. The latter will occur if the site has no
    further DOE mission. EM is working with LM to ensure smooth site
    closure and transition by:
      --Ensuring that site baselines identify functions and elements beyond
            contract closure to meet all internal requirements;
      --Conducting assessments of site readiness for transfer and closure
            in tandem with LM;
      --Having joint teams at each site (Rocky Flats has 2 LM employees)
            and supported by HQ LM personnel who were once EM personnel and
            EM personnel at sites are transferring to LM positions;
      --Holding quarterly meetings between EM and LM senior management to
            address key issues and make decisions;
      --Developing a communication plan defining roles and responsibilities
            between EM and LM staff.
        The administration considers this budget request a critical step on
    the accelerated risk reduction and cleanup path. Without these
    resources, we could face higher risk to the environment and the public
    and lose the momentum we have gained in changing the paradigm. With
    your support, we have the opportunity to succeed in producing historic
    results that will last for many years to come.

                             DEMONSTRATING RESULTS

        With the October 2003 release of the Report to Congress on the
    Status of Implementation of the Top to Bottom Review, we have
    demonstrated that the direction we took 2 years ago is showing real
    results. I wish to take a moment and expound the impacts of the far-
    reaching accomplishments that are underpinning the developing momentum
    of the program.

    Improved Safety Performance
        We believe in order to accomplish our accelerated risk reduction
    and cleanup mission, we must continue to do work safely. We are
    committed to instilling this philosophy in every worker's day-to-day
    decisions from start to finish of every project. To that end, with top-
    quality safety standards, we are demonstrating that we can accelerate
    work and improve safety performance at the same time. For example in
    August 2001, EM's Total Reportable Cases (TRC) and Lost Workday Cases
    (LWC) were 1.9 and 0.8 respectively, per 100 workers (TRC and LWC are
    standard tools used to measure safety performance). In September 2003,
    we had reduced our TRC to 1.2 and LWC to 0.5. These rates are
    significantly better than private industry, which OSHA reported in
    2002, had a TRC of 5.3 and LWC of 1.6. The construction industry alone
    had rates of 7.1 for TRC and 2.8 for LWC in 2002. We have not nor will
    we stop paying attention to safety. We will continue to ``raise the
    bar'' and hold ourselves accountable to the highest standards.
    Complacency is not acceptable in our advance to the safe conclusion of
    our cleanup objectives.

    Cleanup Results and Risk Reduction
        Prior to the Top to Bottom Review, EM had lost focus of the core
    mission, the mission that the program was established to solve--address
    the environmental legacy of the Nation's Cold War nuclear weapons
    research and production. With a program responsible for the management
    of millions of gallons of liquid radioactive waste and thousands of
    tons of spent nuclear fuel, the unhurried pace of cleanup and risk
    reduction was unacceptable. If immediate actions were not taken the
    risks associated with the EM program would continue to grow to
    unpardonable levels.
        Last year set a new floor of performance not seen before in the
    history of the program. Our investment has born amazing results. For
    example: three spent nuclear fuel basins were de-inventoried at Idaho
    National Laboratory, along with two at the Savannah River Site and one
    at Hanford. And in regard to Hanford, we have removed 70 percent of the
    spent nuclear fuel from the K-Basins. These basins located less than a
    quarter of a mile from the Columbia River have the potential to leak
    and cause costly environmental harm both to the health of the river and
    the public--this is a significant gain in risk reduction. Another
    example is at Rocky Flats. This site, once responsible for nuclear
    triggers, has shipped all plutonium off site and closed the last
    remaining material access area. These visible, risk reducing results
    that have demonstrated our ability to accelerate schedule and reduce
    life cycle cost while showing to our public and surrounding communities
    the Department's commitment to improve worker safety, reduce health
    risks and eliminate environmental hazards.
        So you may have a better comprehension of the magnitude of our
    cleanup results, I would like to insert for the record a copy of our
    recent corporate performance measures. EM's Performance Measures is a
    compilation of the program's 16 complex wide performance measures. As
    you can see, we can deliver significant risk reduction and cleanup and,
    as I stated earlier, in combination with improved safety performance.
    Accelerating risk reduction and cleanup, in concert with exceptional
    safety performance, accomplishes consequential outcomes important to
    the public, our communities, and for the generations that follow us.

    Innovations in Ideas, Processes, and Practices
        Two years ago, the Top-to-Bottom Review described the EM program as
    lacking a project completion mindset, internal processes were
    inconsistent with a risk-based cleanup approach, and 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 Top-to-
    Bottom Review team emphasized that the EM mission cannot be
    accomplished by continuing business as usual. Innovative 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.
        To foster innovation, we identified ideas and processes from
    successful projects that had delivered accelerated results and conveyed
    the information across the EM program. For example, at Rocky Flats, we
    drew from their experience in project planning and delivery along with
    technology advancements. Sharing the innovative practices allowed for
    similar outcomes at other sites. If I may take a moment to share a few
    ideas and practices:
        (a) Establish a clear end-state vision and risk-based cleanup
    levels in conjunction with specific future land/site use and in
    consultation with regulators, stakeholders, and affected and interested
    governments.
        (b) A ``best-in-class'' management team is recruited and sustained
    with the result of team focus and retention of key staff.
        (c) Senior management emphasis is placed on key safety issues of
    keeping workers working, minimizing the risk of possible high-impact
    events, quick recovery after accidents, safety ``pauses'' as
    appropriate, and improved safety training.
        (d) Projects are managed in an environment that provides
    significant incentives for real cost savings.
        (e) New and innovative equipment and methods are being used for
    size reduction (e.g. plasma cutting torch, engineered enclosures,
    water-jet cutting of components), significantly improving safety and
    effectiveness.
        (f) Improved decontamination techniques coupled with new radiation
    instrumentation.
        We continue to encourage innovation in our processes and practices
    to further enhance safety performance, accelerate risk reduction,
    reduce health impacts, and save resources to be reinvested in
    furthering the priorities of each of the sites.
    Acquisitions Driving Performance
        Tying all these accomplishments together has been our continued
    drive to improve performance from our new acquisition strategy. These
    accomplishments serve as indicators of the level of performance we are
    expecting from our contractors now as well as into the future. When we
    reviewed our contracts over the past year--as you may remember I said
    we formed a Contract Management Advisory Board last year--we identified
    a short list of significant findings that did not prove advantageous to
    the overall success of the program. We concluded that DOE tends to
    manage the contractor not the contract, that project baselines needed
    improvement along with project management and the associated reporting,
    incentives for meaningful risk reduction were lacking, more emphasis
    was needed on cost-efficient performance, and there seemed to be
    insufficient competition and small business participation.
        To address these weaknesses, we have instituted three business
    models that we believe will vastly improve our acquisition process and
    opportunities for success. Our reform strategy is to accelerate the
    reduction of risk from the legacy of the Cold War safely and
    efficiently and at a cost savings for the taxpayer. One model focuses
    on improving incumbent contractor's performance, while another aims to
    increase competition and small business participation. The third
    concentrates on the establishment of national Indefinite Delivery/
    Indefinite Quantity (IDIQ) contracts for remediation and
    decontamination and decommissioning. All three are on the fast track.
    In fact, in September, as a first step we announced the selection of
    five 8(a) businesses that will perform work at our small sites across
    the country. And in fiscal 2004, we have six new contracts--two at
    Paducah, two at Portsmouth, one at the Fast Flux Test Facility at
    Hanford, and one at the Idaho National Laboratory along with the IDIQ
    contracts that will be competed. We expect these new contracts will
    challenge the contractor community, a challenge that is healthy for all
    involved.

    We Have Our Challenges Too
        As we continue to challenge the status quo, we may be confronted
    with legal actions and court decisions that will direct us to alter or
    modify our activities from the accelerated cleanup and closure path. We
    will continue to work diligently with all concerned parties to avoid
    interruptions in reducing risk and advancing cleanup for the public.
        We expect to be challenged on our delivery of Government Funded
    Services and Items, or GFSI. We are accountable on delivery of GFSI and
    we expect to be held to our commitments.
        Also, we have challenged our managers at all levels to stay true to
    our commitment and employ our corporate performance measures as an
    accountability and success gauge assessing our progress as well as a
    tool that alerts us when management action or intervention is
    warranted.

                      THE FISCAL YEAR 2005 BUDGET REQUEST

        The fiscal year 2004 budget was the first budget that fully
    reflected the initiatives undertaken by the administration to transform
    and revitalize the cleanup of the former weapons complex. The EM
    program has been refined and fortified with management reforms, which
    have led to accelerated risk reduction and a decrease in life-cycle
    costs surpassing previous expectations. The investment we have
    requested in our fiscal year 2005 budget will contribute to EM's
    continued success in achieving its mission of accelerated risk
    reduction and site closure.
        The EM fiscal year 2005 budget request represents the peak year of
    our investment strategy to accelerate cleanup and reduce risk. This
    budget fully reflects each site's accelerated risk reduction and
    cleanup strategy. The fiscal year 2005 budget request is pivotal to
    keep the momentum going and to achieve even greater risk reduction and
    cost savings than ever before.
        The 2005 budget request for EM activities totals $7.43 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 ($5.97 billion),
      --Defense Environmental Services ($982 million),
      --Non-Defense Site Acceleration ($152 million),
      --Non-Defense Environmental Services ($291 million), and
      --Uranium Enrichment Decontamination and Decommissioning Fund ($500
            million).
        Within the Defense Site Acceleration Completion Appropriation, $350
    million is tied to the Idaho District Court decision on Waste
    Incidental to Reprocessing. These funds will only be requested upon
    satisfactory resolution of the recent court decision that affected the
    Department's plans for some waste streams.
        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 EM's cleanup
    strategies allows 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. Over the past 2 years, dramatic improvements in safety
    performance have been demonstrated.
        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, including the new Design Basis Threat requirements.
    Overall, the budget has decreased from fiscal year 2004 because we have
    been able to consolidate materials into fewer, more secure locations,
    and we have reduced the footprint of secure areas. The sites with the
    largest remaining funding needs are the Savannah River Site and
    Hanford. Savannah River Site's funding supports the security of nuclear
    materials, maintenance of uniformed protective force personnel,
    information security and operations security for the protection of
    classified and sensitive information, cyber security for the protection
    of classified and unclassified computer security, and personnel
    security. Hanford's funding supports security for shipment of special
    nuclear materials and elimination of one Material Access Area within
    the Plutonium Finishing Plant, enhancement of cyber security, Hanford
    site security clearances and other security activities.
        Accelerate risk reduction.--Accelerated risk reduction requires a
    pragmatic approach to cleanup. 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 waste in tanks,
      --Sodium bearing liquid waste in tanks,
      --Deteriorating spent nuclear fuel in leaky or poor integrity basins,
      --Remote-handled transuranic waste and high transuranic content
            waste,
      --Transuranic waste stored on the surface, and
      --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. Risk
    reduction is a major consideration in the development of the site
    baselines. Examples of planned activities/milestones for fiscal year
    2005 that correspond to site-specific risk categories are:
    Hanford
        Complete cleanout of K East and K West basins (fuel, sludge,
    debris, and water).--The K basins are located less than 1,000 feet from
    the Columbia River. This project involves packaging and removing
    degrading spent nuclear fuel and radioactive sludge, debris, and water
    from wet storage in the K Basins to safe, dry interim storage away from
    the Columbia River. The K Basin facilities are well past their design
    lives and are a major threat to the environment due to the potential
    for basin leakage to the surrounding soil and the Columbia River. Their
    cleanout will prevent potential leakage of 55 million curies of
    radioactivity to the soil and the River and will decrease the risks
    posed by the basins to human health and the environment.
        Complete transfer of nuclear material to the Savannah River Site or
    DOE approved interim storage facility, and complete legacy holdup
    removal and packaging/disposition of material/waste.--The Plutonium
    Finishing Plant (PFP) consists of several buildings that were used for
    defense production of plutonium nitrates, oxides and metal from 1950
    through 1989. Completion of the transfer of the stabilized materials
    and legacy holdup material from PFP allows the cleanout and demolition
    of these facilities to slab on grade. It results in a reduced National
    security threat by consolidating nuclear materials into fewer
    locations.
        Ship all above-ground transuranic waste to the Waste Isolation
    Pilot Plant.--Hanford has several thousand containers of previously
    generated transuranic waste in above-ground storage buildings.
    Characterization and shipment of this waste to the Waste Isolation
    Pilot Project for final disposal will reduce the risks to facility
    workers as well as reduce the safeguard and security vulnerability
    associated with this waste. This action represents final disposal of
    this waste in an environmentally protective repository.
        Complete installation of In Situ Redox Manipulation Barrier in the
    100-D Area.--Chromium-contaminated groundwater is reaching the Columbia
    River in the 100-D Area. The contamination levels are above 20 times
    the aquatic life water standard, and the area is adjacent to potential
    salmon spawning locations. To address this, a series of wells will be
    drilled and a chemical that detoxifies chromium will be deposited into
    the matrix in which the groundwater travels to the river. As a result,
    the groundwater reaching the Columbia River will once again meet the
    aquatic water standards, thereby protecting human health and the salmon
    population in the River.
        Initiate waste retrieval from eleven single-shelled tanks.--
    Radioactive liquid waste stored in older single-shelled tanks has the
    potential of leaking and contaminating soil and groundwater that flows
    to the Columbia River, presenting a risk to human health and the
    environment. Waste will be retrieved from the single-shelled tanks and
    moved to safer double-shelled tanks.
    Idaho
        Disposition 34 containers of special nuclear material containing
    uranium, completing 75 percent of shipments offsite; initiate transfer
    of spent nuclear fuel from CPP-666 wet storage to the Irradiated Fuel
    Storage Facility; and maintain a running average of 2,000 cubic meters
    per year of TRU waste shipped out of Idaho.--Idaho sits over a major
    sole source aquifer, the Snake River Plain Aquifer, which is used to
    supply water to the people of southeastern Idaho as well as irrigation
    water for the significant agricultural activities. These actions will
    reduce the potential risk to human health by preventing the migration
    of contamination into the aquifer. It also will reduce the national
    security threat by consolidating materials into fewer locations.
    Paducah
        Disposition 875 cubic meters of low-level/mixed low-level legacy
    waste, allowing for a 37 percent completion of work.--The packaging and
    disposal of low-level waste stored outdoors will reduce the waste
    inventory and eliminate the potential release into the environment that
    could result from deterioration of the storage drums. Outside storage
    of this material in some cases leads to additional surface water and
    soil contamination. Removal of these materials further reduces the
    continued exposure to workers performing surveillance and maintenance.
        Disposition 12,400 tons of scrap metal.--Scrap metal is a suspected
    source of continued surface water and possible soil contamination. This
    action contributes to the continued source term removal of contaminants
    leaching into the environment. Reduction in the massive quantities of
    scrap metal continues to improve the potential safety concern to our
    workers.
        Continue decontamination and decommissioning of C-410 complex.--The
    C-410 Complex is a large chemical complex in a shutdown condition.
    Removal of contaminated materials and equipment reduces potential risk
    to onsite workers and represents a key step in stabilizing the facility
    such that contaminants are prevented from release to the environment.
    Portsmouth
        Disposition 9,089 cubic meters of legacy waste.--The continued
    shipment and disposal of legacy waste will proportionally reduce the
    risk such wastes present to the health and safety of workers and reduce
    the on-going potential for release to the environment.
        Process approximately 42 million gallons of water through
    Groundwater Pump and Treat facilities.--Plume control keeps
    contaminants from reaching surface streams and off-site drinking water
    supplies. Trichloroethylene (TCE), which was an industrial solvent, is
    the main groundwater contaminant at the site.
    Pantex Plant
        Complete Zone 11 soil vapor extraction for removal of contamination
    from the vadose zone and protection of the groundwater.--Removing the
    soil gas contamination will avoid potential migration to a fresh water
    supply, thereby reducing the risk posed to human health and the
    environment.
        Complete Burning Grounds landfills interim corrective measure
    (engineered covers) to secure wastes and protect groundwater.--The
    covers will mitigate the vertical transport of contaminants, which will
    reduce the potential impact to the fresh water supply.
        Complete demolition of Zone 10 Ruins.--The Zone 10 ruins have
    suspected high explosives contaminants in the numerous disintegrating
    structures. Removal of high explosive will avoid further contamination
    of soils, and demolition of the ruins will reduce safety risks to
    persons in the area.
        Complete decontamination and decommissioning of Building 12-24
    Complex.--There is evidence that this complex contributed to the high
    explosives plume that migrated to the southeast and off-site.
    Decontamination of the 12-24 Complex will mitigate the migration of
    this plume.
    Oak Ridge
        Complete East Chestnut Ridge Waste Pile Closure.--Risks associated
    with industrial safety will be reduced by eliminating the need to
    excavate and transport the material to treatment subsequent to
    disposal.
        Complete disposition of legacy low-level waste.--Approximately 40
    percent of the low-level waste was stored outdoors in deteriorating
    containers. Disposition of this waste will decrease the risks
    associated with their potential environmental release.
        Complete processing and stabilization of transuranic waste tanks.--
    This action will eliminate the potential for the waste's migration to
    groundwater.
        Initiate contact-handled transuranic waste processing at the Waste
    Processing Facility.--This waste is stored in above grade-storage
    trenches and in earthen trenches. Processing the waste prevents the
    risk of release to the environment and a continued cost of waste
    storage and monitoring.
        Complete treatment of liquid low-level waste supernate at the Waste
    Processing Facility and disposal of the dried supernate product at the
    Nevada Test Site.--Treatment and disposal of the supernate decreases
    the risks posed by these highly radioactive fission products.
        Complete Atomic City Auto Parts.--This action will reduce the risks
    posed to workers and the surrounding community from uranium and
    polychlorinated biphenyls contamination in the soil.
    Savannah River Site
        Begin processing neptunium solutions.--SRS has approximately 6,000
    liters of Neptunium-237 nitrate solution in H-Canyon. Through
    processing, the neptunium solutions are converted into a more stable
    form, and the risks they pose to human health and the environment are
    reduced.
        Complete bulk waste removal in Tank 5.--Tank 5 is 1 of 49
    underground tanks currently used to store radioactive liquid waste at
    the Savannah River Site. This waste represents one of the highest risk
    to human health and the environment. Current plans call for the removal
    of the waste from Tank 5 for treatment, stabilization and disposal. A
    new approach, the Waste-On-Wheels (WOW) system, will be utilized to
    remove the waste from Tank 5 and other tanks. The Waste-On-Wheels is a
    portable method of performing bulk sludge waste removal from the tanks.
    The WOW system will reduce the project schedule for waste removal and
    therefore reduce the risk to human health and the environment imposed
    by the highly radioactive waste.
        Complete decommissioning of seven industrial and radioactive
    facilities.--Decommissioning excess radioactive facilities will reduce
    the footprint of the site, and therefore collectively reduces risk to
    the worker by eliminating the need to enter the facilities to perform
    required, routine surveillance and maintenance activities. Risk of
    worker exposures while performing these activities is eliminated.
    Decommissioning excess radioactive facilities also eliminates the
    potential environmental and human health risk of accidental releases
    from these facilities. Decommissioning industrial facilities eliminates
    the risk to workers associated with having to maintain old facilities
    which are no longer needed but which require regular inspections or
    maintenance activities, such as roof work.
    Lawrence Livermore National Laboratory--Livermore Site
        Construct, install, and operate a portable treatment unit at
    Treatment Facility D Hotspot, Treatment Facility E Hotspot, the
    northern portion of the East Traffic Circle Source Area, and the
    Treatment Facility 406 Hotspot area.--These actions will further
    prevent the release of trichloroethylene (TCE), thereby reducing risks
    to the public from exposure to contaminated groundwater.
        Remove contaminated surface soil and contaminated sandpile at
    Building 850.--These actions will mitigate risk to onsite workers, and
    will prevent further impacts to groundwater above health-based
    standards.
        Construct, install, and operate groundwater extraction and
    treatment facility.--Remediation of the high-explosive process area is
    a high priority due to the offsite migration of contaminant plumes,
    current impacts to onsite water-supply wells, and the inhalation risk
    to onsite workers. These actions will impede the migration of plumes,
    protecting offsite water-supply wells from contamination.
        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 2005 budget will allow these
    sites to remain on track toward project completion and site closure.
        At Rocky Flats, fiscal year 2005 funding provides for:
      --Completing site deinventory of legacy low-level/mixed low-level and
            transuranic waste to off-site disposal; completing remediation
            of 30 release sites.--During fiscal year 2005, Rocky Flats will
            be approaching completion of their commitment to closure and
            conversion of the Rocky Flats site for future beneficial use.
            The buildings where plutonium and other hazardous materials
            were used in support of the nuclear weapons deterrent will be
            under various stages of demolition, the final quantities of
            radioactive wastes will be removed from the site, and the
            grounds will be receiving the necessary remediation action.
            These actions, when complete, will allow the Department of
            Energy to release the site to the U.S. Fish and Wildlife
            Service to become the Rocky Flats Wildlife Refuge with little
            or no further risk to human health or the environment.
        At Fernald, fiscal year 2005 funding provides for:
      --Completing decontamination and dismantlement of the Waste Pits
            Complex and the East Warehouse Complex, and completion of waste
            pits remedial action operations.--Completing the Waste Pit
            Remediation Project will result in over 1 million tons of waste
            pit material having been transported off-site via rail for
            safe, compliant disposal and the D&D of the treatment facility
            and other waste pit infrastructures. Completing these
            activities represents a substantial risk reduction to human
            health and the environment for the entire Fernald Closure
            Project site. This remediation activity is being conducted in
            an extremely safe manner considering the industrial hazards
            involved.
      --Completing Silos 1 and 2 operations, including removal of waste
            material, and beginning disposition of the waste for off-site
            disposal.--Silos 1 and 2 Extraction and Treatment Operations
            represent the greatest risk to human health and the environment
            at the Fernald Closure Project. Silos 1 and 2 contain the
            highest levels of radiological activity residing in any waste
            stream at the site. The Silos 1 and 2 project constitute the
            Site Closure Critical Path. Their successful completion is a
            prerequisite for a timely and safe closure.
      --Completing construction of the On-Site Disposal Facility Cell 3 and
            Cell 4 caps.--Capping Cells of the On-Site Disposal Facility
            (OSDF) will insure the reduction in risk to human health and
            the environment during post closure. Overall, the OSDF will be
            composed of 8 cells, containing 2.5 million cubic yards of
            waste soil and debris. The OSDF has been designed and
            engineered to possess a 5-foot thick liner and a 9-foot thick
            cap. The OSDF has a design life of 1,000 years.
        At Mound, fiscal year 2005 funding provides for:
      --Completing remediation of 37 potential release sites (65 percent of
            remaining), including the restoration of potential release site
            (PRS) 66.--Completing the PRS's in fiscal year 2005 decreases
            risk by preventing any further radioactive contamination from
            migrating into clean soil areas and ground water, by reducing
            potential exposure to site workers and other personnel located
            on site, and by precluding any potential environmental impacts
            to off site areas.
        At Ashtabula, fiscal year 2005 funding provides for:
      --Completing remediation of the Waste Management Unit.--Remediating
            the Waste Management Unit significantly reduces the remaining
            risks of organic and inorganic chemical exposure to both soil
            and groundwater at the RMI site.
        At Battelle-Columbus, fiscal year 2005 funding provides for:
      --Completing decontamination/stabilization of the fuel storage pool
            and transfer canal and the high-bay area surfaces in JN-1.--
            Removing this source term will reduce the risk of
            contamination, both internal and external, to the workers
            during building de-construction. Removal of the source term
            would also reduce risk to off-site areas and members of the
            general public.
        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.
        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 closure site, technical assistance teams will assess
            critical technical issues and provide technology alternatives
            including the treatment and disposition of orphaned waste
            streams and improved methods of beryllium decontamination.
      --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, and technical support to the Silos No. 1, 2, and 3
            waste removal and disposition will be successfully completed.
      --At Oak Ridge, delineation of contamination and definition of
            treatment feasibility for subsurface contamination will be
            completed.
        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 2005 on:
      --Alternatives For Tank Waste Pretreatment and Immobilization
            (Hanford Site, Office of River Protection);
      --Alternatives for Carbon Tetrachloride Source Term Location (Hanford
            Site, Richland);
      --Alternatives for Disposition of High-Level Salt Waste (Savannah
            River Site);
      --Alternatives for Remediation of Chlorinated Ethenes using Monitored
            Natural Attenuation (Savannah River Site);
      --Alternatives for Deposit Characterization and Removal at Gaseous
            Diffusion Plants (Portsmouth);
      --Alternatives for In situ Transuranic Waste Delineation and Removal
            (Hanford Site, Richland); and
      --Alternatives for Non-Destructive Assay and Examination of Large
            Transuranic Waste Containers (Savannah River Site/Carlsbad).

                                   CONCLUSION

        This year has seen dramatic results demonstrating our steadfast
    belief that continuing on the accelerated path will provide the
    direction and framework to resolve the problems that lie before us. As
    with all new enterprises that seek to challenge the status quo,
    impediments will be encountered. We must not lose our momentum that has
    so earnestly been established through collaboration and a singular
    focus of delivering meaningful results for the American public.
        We are committed to employ our resources to show meaningful results
    and we are taking a very staunch view of results. The job is not done
    until it is done. We cannot be complacent, we must continue to do
    better. It is not done when we develop a plan--it is not done when we
    agree to a milestone--it is not done when we ask for funding--it is not
    done when we sign a contract--it is not done when we get money. It is
    not done until it's done and there is positive and measurable risk
    reduction for the investment.
        The only measure of success will be positive, measurable
    accomplishments of public safety and environmental protection. The
    longer we wait, the greater the potential risk. We must not lessen our
    commitment to the American people to do the ``right thing''. I ask for
    your support to continue this important work. We must avoid losing the
    opportunity to rid this legacy from our children's inheritance. We are
    safer today than we were last year and we must stay the course so we
    are safer next year than today. We have accelerated cleanup by at least
    35 years reducing lifecycle cost over $50 billion. The potential is
    there to lose what we have gained should we fail to stay true to our
    commitments.
        I look forward to working with Congress and others to achieve this
    worthy goal. I will be happy to answer questions.

                                                           EM'S COMPLEX WIDE PERFORMANCE MEASURES \1\
    --------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                       Actual
                                                                                                                                     Lifecycle
                Performance Measure                           Unit              Fiscal Year  Fiscal Year  Fiscal Year  Fiscal Year    Through     Lifecycle
                                                                                2003 Target  2003 Actual  2004 Target  2005 Target  Fiscal Year     Scope
                                                                                                                                        2003
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    Pu packaged for long-term disposition......  No. Cont.....................        2,836        3,065        1,323          165        4,549        5,850
    eU packaged for disposition................  No. Cont.....................          277          201          925          669        2,054        9,101
    Pu/U residues packaged for disposition.....  kg Bulk......................          934        1,140          254           76      107,659      107,782
    DU&U packaged for disposition..............  MT...........................        1,815        4,551  ...........  ...........        7,651      742,149
    Liquid Waste eliminated....................  gallons (1000s)..............          700  ...........        1,300        1,900  ...........       88,000
    Liquid Waste Tanks closed..................  No. Tanks....................            1  ...........            9            9            2          241
    HLW packaged for disposition...............  No. Cont.....................          130          115          250          250        1,727       18,735
    SNF packaged for disposition...............  MTHM.........................          857          807          633            1        1,446        2,420
    TRU disposed...............................  m3...........................        4,522        6,372       12,952       13,678       14,092      141,314
    LL/LLMW disposed...........................  m3...........................       75,030      118,362       89,815      107,067      402,568    1,155,360
    MAAs eliminated............................  No. MAA's....................  ...........            1            1            1            6           14
    Nuclear Facility Completions...............  No. Facs.....................            2            4            5           14           21          523
    Radioactive Facility Completions...........  No. Facs.....................            7           24           45           67          148          804
    Industrial Facility Completions............  No. Facs.....................           49          107          110          187          617        2,423
    Geographic Sites Eliminated................  Sites........................            2            1  ...........            2           76          114
    Remediation Complete.......................  No. Rel. Sites...............          214          260          200          283        5,186       10,374
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    \1\ Each of EM's 16 corporate performance measures is quantitative and focuses on those materials, wastes, environmental media, and facilities that
      comprise the majority of the risk to environment, public health, and safety. When these measures are completed, the EM program has accomplished its
      mission. Each measure is tracked in the context of the total life-cycle on 2035 accelerated schedule. The corporate performance measures are under
      strict configuration control, thereby establishing performance expectations and accountability. Through strict configuration control, EM is able to
      make crucial corporate decisions that will keep the program on track, monitor and control costs, and manage site closure expectations.

        Senator Craig. Secretary Roberson, thank you very much. Now
    let me turn to Beverly Cook, Assistant Secretary, Environmental
    Safety and Health. Bev, it's great to see you in this capacity.
    I saw you more often in Idaho. I think that I saw you here, but
    at any rate, welcome to the committee. Please proceed.

                    Office of Environment, Safety and Health

    STATEMENT OF BEVERLY COOK, ASSISTANT SECRETARY
    ACCOMPANIED BY BOB CAREY, SENIOR POLICY ADVISOR, OFFICE OF THE
                SECRETARY, DEPARTMENT OF ENERGY

        Ms. Cook. Thank you, Senator Craig. It's good to see you
    again, too, and thank you, also, Senator Murray, for having me
    here. I appreciate this opportunity to discuss the fiscal year
    2005 budget request for the Office of Environment, Safety and
    Health. It's sometimes not very clear exactly what the EH
    organization does, so I wanted to discuss it in a little bit of
    detail.
        The mission of the Office of Environment Safety and Health
    is to ensure that the Department of Energy performs work in a
    safe, environmentally compliant manner. We fulfill that role by
    assuring that considerations of safety and health and the
    environment are integrated into all parts of the work that is
    done, in all the planning and all the execution of all the
    Department's work.
        Our budget request in fiscal year 2005 is $135 million.
    It's approximately level with that in fiscal year 2004
    appropriations. In fiscal year 2005, we will partner with the
    line management, and we will establish programs that promote
    safe and environmentally compliant conduct, work and determine
    the effectiveness of those programs, and provide improvements
    and regulations where possible and where necessary to make sure
    that those improvements happen.
        The EH budget programs are split between both Energy Supply
    and Other Defense Activities accounts, which is a little bit
    confusing at times within the energy and water development
    appropriations. However, the scope of the work in both of those
    accounts are applicable across the Department, across what we
    say and across everything that we do.
        Our activities are split in areas of program and policies
    and standards and guidance and also corporate safety programs,
    health studies, and employee compensation. In addition, we have
    a program direction account in both of those accounts that
    cover our Federal staff, and that also sometimes gets to be a
    bit difficult. Under Energy Supply account activities, we issue
    policies, standards, and guidance to assure that the people,
    property and the environment are adequately protected.
        For most DOE facilities, the DOE assumes the regulatory
    authority for safety and health as provided in the Atomic
    Energy Act. These requirements must take into account the
    unique nuclear, chemical and industrial hazards posed by the
    DOE operations, must be current with worldwide technologies,
    knowledge and experience, which is a large part of what we do,
    making sure that we stay current. We use the best available
    information.
        In 2005, our nuclear safety policies and standards will be
    enhanced to reflect updated commercial codes and standards, the
    changing DOE missions and work environments and emerging safety
    issues that are always encountered when we are working with
    hazardous materials in aging facilities. We will continue our
    interface with other agencies and organizations to ensure that
    these policies and standards are consistent with other Federal
    agencies and with the industrial regulations. We will use the
    results of the many health studies that have taken place over
    several decades to make sure that we have modified our policies
    as appropriate to protect our workers.
        Our environmental protection policies will also be enhanced
    to reflect new and emerging environmental issues and
    regulations and allow for compliance with external
    environmental protection requirements in a cost-effective
    manner. We review and provide comments on regulations developed
    by other agencies to assure that DOE's unique operations are
    fully considered and comply with those regulations, and we also
    provide them the required documentation of the Department's
    compliance with environmental standards and progress toward
    meeting those environmental goals and radiation protection and
    pollution prevention goals.
        In our DOE-wide environmental safety and health programs,
    we design programs to encourage and improve worker and nuclear
    facility safety and protect the public and environment, and
    that goes everywhere from things like the Department of Energy
    laboratory accreditation program which provides assurance that
    workers' records, exposure radiation records, are accurately
    measured and documented, and also things like the VPP program,
    the Voluntary Protection Program, which is highly recognized,
    DOE's work in that, to make sure that workers are involved in
    providing protection for themselves in their work place.
        In fiscal year 2005, EH will develop the new DOE pollution
    prevention goals for the next 5 years, and we will make sure
    that we meet DOE's responsibilities under executive orders
    related to pollution prevention and implementing of
    environmental management systems within all of our work.
        Environmental management systems are required of all
    Federal agencies and must be in place by 2005. Those require
    that you consider all environmental issues when you plan the
    work, so that you make sure they are effectively implemented.
    We will also provide cost-effective centralized environment,
    safety and health information to the DOE complex through online
    access to Environment Safety and Health industry standards,
    programs, policies and activities. We want to make sure that
    there is access to everyone to commercial standards and access
    to historical Environmental Safety and Health information to
    all people at all sites.
        One of the things that we do now, one of the things that I
    looked at this morning, is a ``rollup'' or summary of all the
    occurrences that happen within the complex every 24 hours. The
    rollup is communicated electronically throughout the complex,
    and is available to everyone. The rollup is done weekly to
    inform the Headquarters senior managers and the senior managers
    throughout the complex about what's going on, what kind of
    trends, what people are running into, and to make sure that
    they learn from the lessons of others.
        Under our Other Defense Activities account in the corporate
    safety programs, we spend much of our time looking at the
    synthesis of operational information, and through that, setting
    ESH expectations, through our contracts, through performance
    measures, and implementing of these ``lessons learned''
    programs. Consolidating existing databases is a big part of
    what we're doing right now and will continue to do through
    2005. I will talk more later about the draft IG report.
        The Computerized Accident/Incident Reporting System (CAIRS)
    was a way of summarizing the OSHA-type statistics although it
    is not our only way of collecting information. In the past,
    information was shared by circulating paper reports. We
    recognized that over a year ago that was not effective and that
    there was a great time delay between the occurrences and
    entering the paper information into the electronic system.
    We've made a concerted effort over the last year to make sure
    that we move to a fully electronic system with daily input and
    weekly checks to make sure that the information is accurate.
    We're working with the IG so that they fully understand the
    changes that have happened to those systems and to make sure
    that we no longer have a time delay in sharing information.
        We have consolidated the quality assurance responsibilities
    of the Department within the Office of Environment Safety and
    Health and are making sure that we strengthen our quality
    assurance methodologies. The RESL Program at Idaho, the
    Radiological Environmental Science Laboratories, is now under
    the purview of the Office of Environment Safety and Health.
        In that laboratory we do analytical chemistry and radiation
    exposure assessments, environmental sampling and certification,
    and quality assurance. We also ensure that the data are
    accurate as well as technically and legally defensible. We
    continue to provide immediate environment safety and health
    support, everything from accident investigations to
    authorizations on a facility authorization basis. We
    investigate safety allegations, perform special reviews on
    nuclear hazards, fire protection, and a wide range of
    operations.
        EH also carries out the statutory mandate for the Price-
    Anderson Amendments Act, where we enforce compliance of the
    Code of Federal Regulations' nuclear safety requirements. In
    fiscal year 2005, we will begin enforcement of worker
    occupational safety and health requirements.
        Our health responsibilities, which are under the Other
    Defense Activities account, cover a wide range of issues. They
    include occupational health, public health and epidemiological
    studies and international health studies; international studies
    make up the largest part of the EH budget. Under occupational
    health, we will provide the medical screening that we provide
    to our former workers at the Defense nuclear complex. We will
    also try to upgrade our occupational medical services by
    integrating it throughout the complex by including it in our
    contracts, to make sure that we've got consistent and reliable
    occupational medicine services across the complex.
        We also will continue to support the Radiation Emergency
    Assistance Center training site at Oak Ridge, the REAC/TS,
    which provides rapid response for medical expertise and
    training to address radiological accidents. Supporting REAC/TS
    is critically important, especially when we move into concerns
    about terrorist events.
        Under public health, we will continue to fund the
    independent program of energy-related epidemiological studies
    that are done by HHS for us at DOE facilities. Many of those
    studies, however, are coming to an end. In fiscal year 2005
    some of those studies will require fewer dollars as they come
    to the end. We document and publish the studies that have been
    done. This concerns not only the communities surrounding our
    sites but also our current and our former workers included in
    those studies.
        Finally, EH supports several international health programs.
    Those include studies in Russia and in Japan of radiation-
    exposed populations. The Russian studies are very relevant and
    very interesting because they concern the kinds of exposures
    that we've seen in some of our more exposed populations within
    the DOE complex in the past. We also provide the support for
    medical surveillance and environmental monitoring in Spain and
    the Marshall Islands.
        The Energy Employees Occupational Illness Compensation
    Program is funded within the EH budget, and as you have seen in
    our fiscal year 2005 budget submittal, there is a significant
    increase. This is because we have recognized that the number of
    applications greatly exceeded our original expectations, and
    the Department is actively and aggressively pursuing a 3-year
    program to completely eliminate the backlog of applications by
    the end of fiscal year 2006. It will require significant
    funding to do that. We have also implemented some reforms to
    effect those improvements to get to that point.
        Finally, let me just say a few words about our program
    direction funding. As I said, it's in two different accounts.
    We perform critical functions with Federal staff to directly
    support the missions of the Department. It requires expertise
    in developing overall environmental safety and health policies
    for the DOE sites and the facility operations. We've taken
    many, many steps over the last year and a half to streamline
    our operations.
        We've developed efficient processes such as reducing travel
    or other fixed costs through use of video conference
    capabilities to provide the training and information that's
    necessary in the complex in everything from consolidating
    office space to anything else we could think about. The number
    of Federal employees in EH has decreased by almost half over
    the last 5 years; that's a huge decrease.
        Large funding reductions in fiscal year 2004 put at risk
    EH's ability to meet the demands of the DOE complex. We have to
    prioritize what we do and where we assist the program offices.
        The requested funding level in fiscal year 2005 will
    restore the level of resources commensurate with the
    responsibilities of the office, and I think that is critical to
    do.

                               PREPARED STATEMENT

        So thank you for this opportunity. I believe our
    administration's 2005 budget request for the Office of
    Environment Safety and Health reflects the level of funding
    that is needed to protect the workers and the public in our DOE
    sites in a cost-effective manner. I'd be happy to answer any
    questions that you have.
        [The statement follows:]

                       Prepared Statement of Beverly Cook

        Mr. Chairman, Members of the subcommittee, I appreciate the
    opportunity to testify on the fiscal year 2005 President's Budget
    request for the Office of Environment, Safety and Health (EH).
        The mission of the Office of Environment, Safety and Health is to
    ensure that the Department of Energy (DOE) performs work in a safe and
    environmentally compliant manner. EH fulfills that role by assuring
    that consideration for the safety and health of the DOE workforce and
    members of the public and protection of the environment are integrated
    into the planning and execution of all Departmental activities.
        The Office of Environment, Safety and Health fiscal year 2005
    budget request is $135 million, approximately level with the fiscal
    year 2004 appropriation. This level of funding allows EH to leverage
    its resources and personnel to provide DOE's line management programs
    with essential environment, safety and health performance expectations;
    management tools to promote the safe conduct of work; environment,
    safety and health performance measures and analysis; and guidance for
    the protection of the environment in and around DOE sites. Integral to
    the Department's success is EH's skill in fostering increased awareness
    and providing support to line management throughout the Department
    using open and easily accessible communications tools. Our goal is to
    provide the safety infrastructure that allows for and promotes the safe
    and environmentally responsible conduct of work.
        EH has traditionally filled the role of setting regulations and
    standards, and then providing independent oversight and enforcement to
    ensure the Department's compliance with those standards. The
    independent oversight functions were moved from EH in 2002, allowing EH
    to provide corporate environment, safety and health services. EH now
    serves as a partner with DOE Line Managers to establish programs that
    promote the safe and environmentally compliant conduct of work, to
    determine the effectiveness of those programs and to improve the
    programs and regulations when necessary.
        In support of the President's Management Agenda, EH underwent a
    dramatic restructuring in 2003 to better perform its new role within
    the DOE. The restructuring allowed for cutting management layers,
    placing greater emphasis on corporate performance and quality
    assurance, and focusing more on e-government initiatives by
    consolidating databases and other electronic information management
    functions. The implementation of the new organization is continuing
    through 2004. The major challenge in 2005 will be succession planning.
    It is the responsibility of EH to assure appropriate technical
    expertise is available to support environment, safety and health
    concerns. As more of the DOE complex reaches retirement age, we are
    concerned that the necessary technical expertise may be lost, both in
    the headquarters and field operations, and in EH, where corporate
    expertise to support the program activities is required.
        The scope of work performed by EH staff is multifaceted. I will now
    provide you with a description of the specific activities identified in
    the President's request for the Office of Environment, Safety and
    Health.

         ENVIRONMENT, SAFETY AND HEALTH FISCAL YEAR 2005 BUDGET REQUEST

        The Environment, Safety and Health programs are split between the
    Energy Supply and Other Defense Activities accounts within the Energy
    and Water Development appropriation. However, the scope of work often
    cuts across these funding lines because of the generic nature and cross
    cutting applicability of the work performed by EH. It is important that
    a framework is in place that is clear and easily understood by the DOE
    Federal and Contractor workforce, and the overall safety and
    environment goals of the Department are consistent throughout the DOE
    complex.

                                 ENERGY SUPPLY

        Fiscal Year 2004 Comparable Appropriation--$22,564,000: Fiscal Year
    2005 Request--$30,474,000.
        EH activities funded within the Energy Supply appropriation are
    concentrated into two programmatic areas: Policy, Standards and
    Guidance and DOE-Wide Environment, Safety and Health Programs. In
    general, work funded under this account is applicable to all of the DOE
    operations. In addition, a Program Direction decision unit includes
    funding for a portion of EH Federal staff and all of the EH Working
    Capital Fund.

    Policy, Standards and Guidance
        Fiscal Year 2004 Comparable Appropriation--$1,799,000; Fiscal Year
    2005 Request--$4,205,000.
        Policy, standards and guidance are issued to assure that people,
    property and the environment are adequately protected from the hazards
    of DOE activities. For most DOE facilities, DOE assumes direct
    regulatory authority for safety and health as provided by the Atomic
    Energy Act of 1954, as amended. Safety and quality assurance policy,
    standards and guidance must therefore take into account the unique
    nuclear, chemical and industrial hazards posed by DOE operations and
    must be current with worldwide technologies, knowledge and experience.
    EH must establish nuclear and facility safety requirements and
    expectations for working with workplace hazards and safety issues
    unique to our operations.
        In fiscal year 2005, DOE nuclear and facility safety policies and
    standards will be enhanced to reflect updated commercial codes and
    standards, changing DOE missions and work environments, and emerging
    safety issues that are encountered continuously when working with
    hazardous materials and in aging facilities. We will continue our
    interface with the Occupational Safety and Health Administration, the
    U.S. Nuclear Regulatory Commission, the National Aeronautics and Space
    Administration, and Federal Departments of Transportation, Health and
    Human Services, Homeland Security, and the Defense Nuclear Facilities
    Safety Board to ensure DOE policies and standards are consistent with
    other Federal and industry regulations and are based on best available
    information. EH will also maintain close ties with national and
    international standards and regulatory bodies and various industry
    groups, such as the Institute of Nuclear Power Operations and the
    Energy Facilities Contractors Group. In fiscal year 2005, EH will
    continue to utilize the results of epidemiologic studies performed
    under other parts of the EH programs and modify worker safety and
    health policies as appropriate to improve protection of the workers. EH
    will also strengthen the Federal Employee Occupational Safety and
    Health program, which provides for protection of our Federal workforce.
        Environmental protection policies will also be enhanced to reflect
    new and emerging environmental issues and regulations. EH will assist
    Programs to comply with external environmental protection requirements
    in a cost-effective manner and continue to develop timely guidance to
    assure understanding of newly promulgated environmental requirements.
    We will review and provide agency comments on regulations under
    development by other agencies, to assure that DOE's unique operations
    are fully considered. EH will also provide the required documentation
    of the Department's compliance with environmental standards and
    progress towards meeting performance goals for radiation protection and
    pollution prevention.
        The increase in this account is due to moving the technical
    standards activities from DOE-Wide programs to Policy standards and
    guidance. This puts all of the policy and standards setting activities
    into one account. Increased membership fees for participation in the
    industry nuclear power group are also included.
    DOE-Wide Environment, Safety and Health Programs
        Fiscal Year 2004 Comparable Appropriation--$5,068,000: Fiscal Year
    2005 Request--$5,795,000.
        EH's DOE-Wide Environment, Safety, and Health (ES&H) Programs are
    designed to encourage and improve worker and nuclear facilities safety
    and protect the public and the environment. EH has developed state-of-
    the-art analysis tools and approaches, due to the unique nature and mix
    of radioactive, hazardous, and toxic materials at DOE facilities.
        EH has responsibility for the Department of Energy Laboratory
    Accreditation Program (DOELAP). DOELAP is an accreditation
    (certification) program that provides assurance that worker radiation
    exposures are being accurately measured. DOE's nationally recognized
    Voluntary Protection Program (VPP), managed by EH, has resulted in
    enhanced worker safety protection. In fiscal year 2005, DOE will
    continue to re-certify DOE contractor VPP status and evaluate new
    applications for VPP status.
        In fiscal year 2005, EH will develop new DOE pollution prevention
    goals for recycling and reduced toxic chemical use. Consistent with the
    new, Department-wide pollution prevention program plan to be developed
    during fiscal year 2004, EH will provide a roadmap for continuous
    improvement in DOE's pollution prevention efforts. We will also provide
    instruction and guidance to meet DOE's responsibilities under Executive
    Orders related to pollution prevention and implementation of
    environment management systems. EH will continue to guide all DOE
    programs in their planning and execution of complete National
    Environmental Policy Act (NEPA) analyses and conduct independent
    compliance assurance reviews for more than 15 major Environmental
    Impact Statements and related documents.
        EH provides cost-effective management of centralized environmental,
    safety, and health information to the DOE complex. We will provide on-
    line access to environment, safety and health related industry
    standards, programs, policies and activities; access to a commercial
    standards subscription service; and access to historical environmental
    safety and health information for all DOE operations and sites.
        The slight increase in this account is the net result of a large
    increase in the resources required to implement the new Worker Safety
    and Health rule, coupled with a decrease from moving the technical
    standards work to the Policy, Standards and Guidance account.
    Program Direction
        Fiscal Year 2004 Appropriation--$15,697,000; Fiscal Year 2005
    Request--$20,474,000.
        Program Direction in this account provides overall support for EH
    staff responsible for Energy Supply programs, includes salaries,
    performance awards and other benefits; all costs of transportation and
    expenses for Federal employees in accordance with Federal Travel
    Regulations; the EH Working Capital Fund for all EH staff, including
    those with salaries paid under Other Defense; and training for Federal
    staff. The Working Capital Fund provides for non-discretionary prorated
    costs for items such as space utilization, computer and telephone
    usage, mail service, and supplies. Also included is funding for
    competitive sourcing studies.
        EH performs critical functions which directly support the mission
    of the Department. The EH mission requires experts to develop overall
    environment, safety, and health policy for DOE sites and facility
    operations and to provide a central and coordinated source of technical
    expertise to all field elements. EH provides a central clearing house
    for information, and analysis and feedback regarding new efforts,
    present activities, and unforeseen occurrences taking place at the
    multitude of diverse facilities within the DOE complex.
        EH has taken many steps to streamline and develop more efficient
    internal processes in order to reduce costs. For example, EH has
    reduced travel and other fixed costs through the use of video
    conference capabilities and other innovative techniques. Furthermore,
    the number of Federal employees in EH has decreased by almost half in
    the last 10 years. However, the large funding reductions in fiscal year
    2004 put at risk EH's ability to meet the demands of the DOE complex.
    Therefore, the increase in fiscal year 2005 will restore the level of
    resources commensurate with the roles and responsibilities of the
    office.

                             OTHER DEFENSE PROGRAMS

        Fiscal Year 2004 Comparable Appropriation--$119,366,000; Fiscal
    Year 2005 Request--$104,519,000.
        The EH Other Defense Activities are concentrated into three
    accounts: Corporate Safety Programs, Health Studies and Employee
    Compensation. These activities address the needs and issues related to
    a variety of Defense related program activities being conducted by the
    Department. In addition, a Program Direction decision unit includes
    funding for the salaries and benefits of a portion of the EH Federal
    staff and their travel and training.
        The fiscal year 2005 budget request also includes funding for two
    Other Defense Activities programs that were transferred to EH from the
    Office of Environmental Management (EM) in fiscal year 2004. These are:
    (1) the Radiological and Environmental Sciences Laboratory (RESL) at
    Idaho, and (2) the Analytical Services Program. These programs help to
    ensure that analytical laboratory data and worker radiation exposure
    and environmental samples are of high quality and reliability. These
    programs support the quality of data used throughout the Department and
    are more closely aligned with EH's quality assurance function than EM's
    mission of accelerated risk reduction and site closure.
    Corporate Safety and Health Program
        Fiscal Year 2004 Comparable Appropriations--$9,032,000; Fiscal Year
    2005 Request--$10,883,000.
        The Corporate Safety Program serve a crosscutting safety function
    for the Department and its stakeholders in assessing, achieving and
    assuring excellence and continuous improvement in safety management and
    performance in the conduct of its missions and activities. Several
    tasks are included in Corporate Safety Program.
        In fiscal year 2005, EH will provide analysis and certification of
    DOE's performance in protecting the public, workers, and the
    environment by synthesizing operational information. This supports
    decision-making and continuous ES&H improvement across the DOE complex.
    We will support the setting of ES&H performance expectations through
    contracts and performance measurements and implement a lessons learned
    program. Our ES&H web sites and web-based database systems will be re-
    engineered in fiscal year 2005 to consolidate existing databases and
    utilize the most recent technology to distribute information in an
    efficient and effective manner. Because EH now has overall
    responsibility for DOE Quality Assurance, we will provide quality
    assurance information, corporate policy and guidance, and certification
    for activities such as Contractor Self-Assessment Programs. We will
    conduct performance evaluation and accreditation, technical support and
    measurements, and quality assurance methodologies through RESL. EH will
    also provide a process to ensure DOE environmental data is of high
    quality and reliability as well as technically and legally defensible.
    The increase in this account reflects the implementation of EH's new
    responsibilities related to Department-wide quality assurance.
        To address immediate environment, safety and health issues, EH will
    perform accident investigations, facility authorization basis reviews,
    and safety allegation investigations. We will also conduct special
    safety reviews of nuclear hazards, criticality safety, seismic
    analysis, fire protection, emergency operations, facility design, and
    the startup and restart of facilities upon request of the Program
    offices. EH will continue to carry out the statutory mandate of the
    Price-Anderson Amendments Act of 1988 to enforce compliance with Code
    of Federal Regulations nuclear safety requirements at DOE sites and
    begin enforcement of the Worker Occupational Safety and Health Rule.
    Health
        Fiscal Year 2004 Comparable Budget--$67,335,000; Fiscal Year 2005
    Request--$45,222,000.
        The EH Health responsibilities are to establish and enhance the
    scientific bases for standards that provide levels of protection
    appropriate to the risk of the hazards present at DOE sites. This
    responsibility is included in four general areas: Occupational Health
    (corporate occupational medicine policy); Public Health (community
    bases health studies); Epidemiologic Studies (analysis and
    communication of worker injury and illness information); and
    International Health Studies.
        There are several activities related to occupational health.
    Targeted medical screening will be provided to former workers of DOE's
    defense nuclear complex. Standards, policies, and corporate resources
    will be provided to efficiently delivery quality occupational medical
    services in an integrated manner to the current DOE workforce. In
    fiscal year 2005, EH will work to implement occupational medicine model
    contract language to ensure adequate and integrated occupation health
    programs at all DOE sites. EH will continue to support the Radiation
    Emergency Accident Center/Training Site (REAC/TS), which provides rapid
    response medical expertise and training to address radiological
    accidents.
        Public health will be addressed through independent energy-related
    epidemiologic studies relevant to DOE workers and neighboring
    communities by the National Institute for Occupational Safety and
    Health, the National Center for Environmental Health, and the Agency
    for Toxic Substances and Disease Registry. These studies will inform
    the DOE and stakeholders of any adverse health impacts that DOE
    operations may have had on DOE workers and the public. In addition, DOE
    epidemiologic studies will be conducted that collect and analyze both
    medical and exposure data information for both current DOE workers and
    the public.
        EH will support several international health program studies in
    order to upgrade and validate our knowledge of radiation health effects
    among workers and populations exposed to ionizing radiation or
    environmental contamination. DOE and the National Cancer Institute will
    jointly sponsor international studies to determine if there are any
    adverse health effects from exposure to radiological contamination from
    Chernobyl on the populations of Belarus, Ukraine, and Chernobyl cleanup
    workers, and epidemiologic studies of Russian workers at the Mayak
    Production Facility and other facilities in Russia. These studies will
    identify the level of radiation exposure where adverse health effects
    can be demonstrated for a large worker population exposed to low and
    moderate levels of radiation over a working lifetime and support the
    establishment of international and national radiation protection
    standards and policy. The DOE and Spain jointly sponsored Project
    Indalo will provide support for medical surveillance and environmental
    monitoring of the spread of plutonium contamination on a few hundred
    acres of land in southern Spain. In addition, EH will provide special
    medical care for a specific group of radiation-exposed individuals in
    the Marshall Islands and support the Radiation Effects Research
    Facility (RERF) in Japan, which conducts epidemiologic studies and
    medical surveillance for the Hiroshima and Nagasaki exposed population.
        A decrease in this account reflects the absence of some programs
    that were congressionally directed in fiscal year 2004 and an
    assumption of reduced funding for certain international studies as they
    approach their conclusion.

           ENERGY EMPLOYEES OCCUPATIONAL ILLNESS COMPENSATION PROGRAM

        Fiscal Year 2004 Comparable Appropriation--$25,646,000; Fiscal Year
    2005 Request--$43,000,000.
        The Energy Employees Occupational Illness Compensation Program Act
    of 2000 (EEOICPA) authorized DOE to establish a process to assist
    employees of DOE contractors and their survivors with their
    applications for State workers compensation benefits. Around the time
    that EEOICPA was passed in 2000, and given the complexity of the
    process mandated in the authorizing legislation and the expected
    complexity of the physician panel reviews to be conducted, DOE had
    planned that it would take 10 years to completely review all
    applications. However, as the number of applications greatly exceeded
    original expectations, and the applicants' immediate need for this data
    to effectively pursue State workers compensation claims became clear,
    the Department has pursued a 3-year program to completely eliminate the
    backlog of applications by the end of fiscal year 2006.
        The fiscal year 2005 budget includes $43 million to maintain the
    accelerated schedule for EEOICPA activities. Together with additional
    funds reprogrammed from fiscal year 2003 and additional funds that have
    been requested to be reprogrammed in fiscal year 2004, this funding
    should enable DOE to significantly expedite the process through fiscal
    year 2004, complete the processing of all applications currently on
    file with DOE in fiscal year 2005, and completely process all of these
    applications through the Physicians Panels in fiscal year 2006. The
    Department has also implemented reforms that have already improved
    performance. In August 2003 the program processed 30 cases per week.
    But with process improvements and the final approval in fiscal year
    2003 of $9.7 million in transferred funds in September 2003, the rate
    has more than tripled to over 100 per week, and continues to rise. The
    Department also recently made changes to its regulations to expedite
    the processing of applications and currently is discussion with other
    Federal agencies and stakeholders possible legislative changes to
    address impediments to effective program implementation.
        The significant increase in this account for fiscal year 2005
    supports expedited processing of applications.
    Program Direction
        Fiscal Year 2004 Comparable Appropriation--$17,853,000; Fiscal Year
    2005 Request--$20,414,000.
        Program Direction in this account provides for the salaries and
    benefits of a portion of the EH Federal staff, their travel and
    training. The Working Capital Fund, the non-discretionary prorated
    costs for items such as space utilization, computer and telephone
    usage, mail service, and supplies for all EH staff, is budgeted under
    the Energy Supply account. In this account, Program Direction also
    includes funding to support the Federal RESL and the Analytical
    Services Program staff. As with the Energy Supply account, the large
    funding reductions in fiscal year 2004 put at risk EH's ability to meet
    the demands of the DOE complex. Therefore, the increase in fiscal year
    2005 will restore resources commensurate with the roles and
    responsibilities of the office.

                                   CONCLUSION

        Mr. Chairman, we believe the administration's fiscal year 2005
    budget request for the Office of Environment, Safety and Health
    reflects a level of funding to ensure protection of the workers and
    public near DOE sites and allows for the accomplishment of the critical
    work performed by DOE in a cost effective manner. It is critical that
    the Federal Government maintain the expertise to evaluate and direct
    operations to maintain a level of safety and environmental compliance
    the public and the Congress expects.
        This completes my prepared statement, and I am happy to answer any
    questions the subcommittee may have.

        Senator Craig. Secretary Cook, thank you very much for
    being before the committee this morning. Now let us turn to Dr.
    Margaret Chu, Director, Civilian Radioactive Waste Management.
    Doctor, welcome again before the committee.

                Office of Civilian Radioactive Waste Management

    STATEMENT OF MARGARET CHU, DIRECTOR
        Dr. Chu. Thank you, Senator Craig and Senator Murray. I
    very much appreciate the opportunity to present our fiscal year
    2005 budget request from the Office of Civilian Radioactive
    Waste Management. Our key objective is to begin receiving waste
    at Yucca Mountain in 2010. The schedule is tight and the
    consequences of delay are enormous. Fiscal year 2005 is a
    critical year in which important activities must be initiated
    and start to converge. Our total budget request is $880
    million. While this is an increase over historical funding
    levels, it is one that has been understood and carefully
    planned for many years.
        We are positioned to commit funds responsibly and
    effectively. Out of the total budget request of $880 million,
    the amount requested for the Repository Project is $559
    million. Our foremost funding priority is to meet our
    longstanding goal of submitting a high quality license
    application to the NRC in December of 2004. We are on track.
        Quality and completeness are paramount. The application we
    submit will meet NRC's regulatory requirements and be
    docketable by the NRC. After the license application is
    delivered, we must be prepared to respond to queries and
    requests that NRC will make during the review. We expect that
    NRC's review would be very thorough and very rigorous, and our
    objective is to provide information in a timely and effective
    manner to support completion of NRC's review within the
    statutorily established time period.
        There will also be continuing technical work, including
    ongoing testing programs as part of the performance
    confirmation. In parallel with the licensing process, we must
    focus on detailed repository design and ensure that the site is
    ready to support construction as soon as it is authorized by
    the NRC. We will be initiating activities related to long lead
    time procurements, prototyping and testing of engineered
    components and equipment, and we are also requesting funds to
    address safety-related needs at the site.
        In the area of transportation, our request is $186 million.
    One of the key activities will be the first phase of
    acquisition of long lead-time transportation casks and
    equipment which must begin now to provide the capability for
    waste acceptance in 2010. We are working with industry to
    procure an efficient cask fleet with the minimum number of
    separate designs. We will support expanded institutional
    interactions as we begin to establish preliminary routes,
    operating protocols and safeguard and security activities. We
    will continue to work on policy for emergency response training
    and technical assistance as required by the Nuclear Waste
    Policy Act.
        State and tribal officials and other stakeholders will play
    an integral part in our transportation planning. In the area of
    Nevada transportation, we recently announced a preferred rail
    corridor and the proposed work in fiscal year 2005 includes
    completion of conceptual design and the beginning of
    preliminary design activities and issuance of the draft
    environmental impact statement for the rail alignment.
        Some of this is contingent on the Department's issuing a
    record of decision selecting a mode of transportation and a
    rail corridor as appropriate. We expect to issue the decision
    very shortly.
        Finally, many of us, including the Congress, have been
    aware for many years that funding requirements for Yucca
    Mountain would increase substantially as we approach
    construction and transportation system development. Historical
    appropriation levels will not be sufficient to meet these
    needs. Since 1995, the cumulative shortfall of funds between
    requested and appropriated amount exceeded $700 million. A
    mechanism must be put in place now to allow the program to have
    ready access to the Nuclear Waste Fund without being
    constrained by funding pressures from other programs.
        In accordance with the funding approach established in the
    Nuclear Waste Policy Act, the Department collects fees from
    nuclear utilities for the disposal of their spent nuclear fuel.
    In fiscal year 2005, an estimated $749 million will be
    collected. The resources are there and we should not delay in
    making them available for their intended purpose.
        Secretary Abraham has recently sent proposed legislation to
    the Congress that would reclassify the annual receipts that are
    deposited into the Nuclear Waste Fund as discretionary and
    credit them as offsetting collections. Under this proposal, the
    proposal will continue to be subject to an annual appropriation
    process and continue to be under Congress' oversight, however,
    without having to compete with other programs for funds.
        If sufficient appropriations are not available, the Nation
    will not have an operating repository in 2010. Delays will mean
    an additional cost of nearly a billion dollars per year for
    waste sites to continue to provide temporary storage. The
    country would be forced to spend billions of dollars in this
    scenario without solving the problem.

                               PREPARED STATEMENT

        In conclusion, we are ready to submit a high-quality
    license application to the NRC in December of 2004 and we are
    committed to begin operations at a licensed repository in 2010.
    We have reached a point where investment must be made in
    transportation, repository and waste acceptance readiness. I
    urge your support for our budget request to accomplish this
    vital national mission. Thank you very much.
        [The statement follows:]

                       Prepared Statement of Margaret Chu

        Mr. Chairman and members of the Committee, I am Margaret Chu,
    Director of the Department of Energy's (DOE) Office of Civilian
    Radioactive Waste Management (OCRWM). I appreciate the opportunity to
    present our fiscal year 2005 budget request and discuss our plans to
    license, build, and operate a geologic repository at Yucca Mountain in
    Nevada, and our efforts to develop the transportation system needed to
    deliver spent nuclear fuel and high-level radioactive waste to the
    repository.
        OCRWM implements our Nation's radioactive waste management policy,
    as established by the Nuclear Waste Policy Act of 1982, as amended.
    This policy requires safe, permanent geologic disposal of spent nuclear
    fuel and high-level radioactive waste resulting from the Nation's
    atomic energy defense activities. The disposal of this material in a
    geologic repository is required to maintain our energy options and
    national security, to allow the cleanup of former weapons production
    sites, to continue operation of our nuclear-powered vessels, and to
    advance our international nonproliferation goals. The Department's
    consolidation of spent nuclear fuel and high-level waste from 127 sites
    at a single secure, remote location is vital to our national interest.
    The Federal Government is contractually required to implement a
    permanent solution for management of commercial spent nuclear fuel, in
    return for which utilities and ratepayers have paid fees to cover the
    costs of disposal.

                               THE 2010 OBJECTIVE

        The Program's key objective remains to begin receiving waste at the
    Nuclear Regulatory Commission (NRC) licensed Yucca Mountain repository
    in 2010. To achieve that objective, the Program must, in less than 7
    years, seek and secure authorization to construct the repository from
    the NRC, begin constructing the repository, and receive a license
    amendment allowing receipt of waste and operation of the repository. We
    must also develop a transportation system to transport waste from
    civilian and defense storage sites to the repository. That is a tight
    schedule, and the consequences of delay are significant.
        For every year of delay beyond 2010, the cost of storing and
    handling Departmental defense waste 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 reasonable to assume that the amount of damages will be
    substantial and will increase with each year of delay.
        Meeting the 2010 objective will require much greater resources than
    the Program has thus far received. We estimate, for example, that from
    2005 to 2010 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, which is much higher than our previous annual
    appropriations.

                      THE FISCAL YEAR 2005 BUDGET REQUEST

        Fiscal year 2005 is a critical year in which important activities
    must converge if we are to meet the 2010 objective. In fiscal year
    2005, we will be fully engaged in the licensing process. At the same
    time, we must initiate certain activities in the near term to permit
    timely construction and ensure readiness for operations. These
    activities, in the areas of repository readiness and detailed design,
    transportation system development, and waste acceptance readiness--
    along with licensing activities--lead to our total budget request for
    fiscal year 2005 of $880 million. While this is a significant increase
    over historical funding levels, it is an increase that has been
    carefully planned and understood for many years. We are confident that
    we are positioned to commit funds responsibly and effectively to defend
    the license application; to accelerate repository surface, subsurface,
    and waste package design work needed for construction authorization;
    and to conduct conceptual and preliminary design activities for Nevada
    transportation. Moreover, a major portion of the increase represents
    procurements, including transportation cask acquisition and important
    repository site safety infrastructure upgrades.
        To set the stage for our fiscal year 2005 budget request, I would
    like to briefly describe OCRWM's fiscal year 2003 accomplishments, our
    ongoing activities based on our fiscal year 2004 appropriation, and our
    goals for fiscal year 2005.

                        FISCAL YEAR 2003 ACCOMPLISHMENTS

        Having achieved Congressional and Presidential approval of the
    Yucca Mountain site in 2002, we successfully transitioned from a
    scientific study program to one focused on the regulatory requirements
    for obtaining a license from the NRC. We targeted five areas critical
    to licensing success in a broad Management Improvement Initiative:
    roles, responsibilities, authority and accountability; Quality
    Assurance; procedural compliance; the Corrective Action Program; and
    Safety Conscious Work Environment. We implemented a Program-wide
    functional realignment to create an organization focused on licensing,
    and we strengthened our Federal management team by bringing on board
    several senior managers with extensive experience in managing major
    Federal projects. These actions have positioned us to be a successful
    NRC licensee and to meet requirements for operating a repository
    safely, and will continue into fiscal year 2005.
        Fiscal year 2003 brought significant challenges to our Program. The
    limited funding provided during the continuing resolution and the final
    fiscal year 2003 appropriation of $457 million, which was $134 million
    below our request, required us to institute contingency plans, reduce
    near-term work scope, and further delay transportation activities that
    are directly tied to our ability to meet the 2010 objective. Rather
    than stretch our resources and risk the safety of our workers, we
    elected to partially close the Yucca Mountain site and to defer some
    work there. The focus of our efforts under these constraints was to
    maintain our goal of submitting a high-quality license application to
    the NRC in December 2004.
        The Program prepared a conceptual design and a detailed plan for
    repository licensing, construction, and operation, and focused on
    completing the license application to the NRC for authority to
    construct the repository. By the end of fiscal year 2003, the Yucca
    Mountain Project had accomplished the following:
      --Completed the conceptual design of the repository surface and
            underground facilities and waste package elements sufficient
            for development of the preliminary design for the license
            application.
      --Completed materials testing and analyses required to support the
            license application design for the waste package and surface
            and subsurface facilities.
      --Completed testing data input for the Total System Performance
            Assessment Post-closure Report, to be included in the license
            application.
      --Initiated the development of the license application document.
      --Identified Project records and technical documents that will be
            included in the licensing support network.
        In addition, during fiscal year 2003, the OCRWM National
    Transportation Project drafted the ``Strategic Plan for the Safe
    Transportation of Spent Nuclear Fuel and High-Level Radioactive Waste
    to Yucca Mountain'', which was issued in November 2003.
        Throughout the Program, we implemented management improvements
    identified in the President's Management Agenda. In fiscal year 2003,
    DOE was ranked number one among all Federal agencies in implementation
    of the President's Management Agenda.
        During fiscal year 2003, the Program launched its new and more
    rigorous Corrective Action Program (CAP) software system. The new CAP
    combined condition, nonconformance, and technical error reports, and
    the condition/issue identification and reporting/resolution system into
    a single entry point process.

                      FISCAL YEAR 2004 ONGOING ACTIVITIES

    Yucca Mountain Project
        Consistent with Departmental and Program objectives, the Yucca
    Mountain Project's main focus in fiscal year 2004 is on completing the
    license application. The required elements of preliminary design,
    performance assessment, safety analyses, and technical data in the
    license application must be sufficient for the NRC 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.
        By the end of fiscal year 2004, with the funds appropriated, we
    will:
      --Address all ``key technical issue'' agreements that the Department
            and NRC agree the Program needs to address prior to license
            application submittal.
      --Complete required elements of the preliminary design for the waste
            package, surface facilities, and subsurface facilities in
            support of the license application.
      --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 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.
      --Prepare tens of millions of pages of relevant documentation for
            inclusion in the electronic Licensing Support Network (LSN) and
            completed certification consistent with the requirements of 10
            CFR Part 2, Subpart J.
      --Complete a draft of the license application.
        Even though site characterization is complete, in fiscal year 2004
    we are continuing to collect valuable scientific information for the
    Performance Confirmation baseline. The NRC requires Performance
    Confirmation to continue until the repository is permanently closed.
    National and Nevada Transportation Projects
        As noted previously, we issued the ``Strategic Plan for the Safe
    Transportation of Spent Nuclear Fuel and High-Level Radioactive Waste
    to Yucca Mountain'' in November, which described the Department's
    process for working cooperatively with States, tribes, and other
    interested parties as the transportation system is developed. In early
    fiscal year 2004, the transportation program focused on selecting the
    transportation mode and corridor that would establish the
    transportation system's infrastructure requirements. In December 2003,
    we announced a preferred corridor for development of a branch rail line
    in Nevada to connect from an existing rail line to the Yucca Mountain
    site. The program is now defining infrastructure development projects
    to provide the capability for transporting spent nuclear fuel and high-
    level waste to the repository. Funding in fiscal year 2004 represents
    initial investments in major transportation infrastructure needs,
    including transportation casks, rolling stock, the transportation
    system in Nevada, a fleet maintenance facility, and the business
    systems needed to manage multiple procurements and construction
    projects.

    Program Management and Integration
        A key component of the Program Management and Integration budget
    element is Quality Assurance (QA). In the last year, we have made
    significant progress in the implementation of our QA program
    requirements. We have had several independent assessments that have
    determined that the QA program is being effectively implemented. We
    have also completed the actions and closed several of the significant
    QA issues that have been open for extended periods of time. Finally, we
    are preparing a major revision to our QA program document in support of
    the license application.
        During this fiscal year, we have taken several steps to ensure we
    are prepared to manage major capital projects efficiently and cost-
    effectively. We submitted a detailed Capital Asset Management Plan for
    the Program to the Office of Management and Budget in November 2003,
    and are now working to complete a comprehensive program acquisition
    strategy that will be incorporated in the next update of the Plan next
    fall. We have strengthened our performance measurement and project
    management capabilities and systems, and are using them to monitor and
    manage all the activities that support license application completion.

                        FISCAL YEAR 2005 KEY ACTIVITIES

    Yucca Mountain Project
        The amount requested for the repository project in fiscal year 2005
    is $558.9 million, an increase of $155 million over our fiscal year
    2004 enacted level. The primary drivers for this increase are
    repository facility design, prototype development and testing,
    procurement in preparation for underground excavation, design of
    offsite utilities and infrastructure, and support for responding to
    technical questions on the license application.
        Our initial focus will be on submitting the license application by
    December 2004. The license application, expected to be approximately
    10,000 pages, 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; safety analysis results for the period prior to
    permanent closure; total system performance assessment results for the
    post-closure period; and a discussion of how the proposed waste package
    and repository will comply with applicable regulatory requirements. It
    also will address safeguards, physical security plans, the quality
    assurance program, and performance confirmation. We are closely
    managing the schedule for the remaining work. Quality and completeness
    are paramount: the application we submit will meet the NRC's regulatory
    requirements and be docketable by the NRC.
        After the license application is delivered, we must be prepared to
    respond to queries and requests that NRC will make during its technical
    review. We expect NRC's review to be thorough and rigorous, and our
    objective is to provide all required information in a timely and
    effective manner to support completion of the NRC's review within the
    statutorily established time period.
        In parallel with the licensing process, we must focus on design of
    the repository and ensure that the site is ready to support
    construction as soon as it is authorized by the NRC.
        By the end of fiscal year 2005, we will have:
      --Completed and submitted a license application for repository
            construction authorization to the NRC.
      --Updated the LSN certification concurrent with license application
            submittal.
      --Completed the preliminary design for the waste package, surface
            facilities, and subsurface facilities, which requires
            continuing performance assessment analysis.
      --Continued to refine the safety analysis as needed, in response to
            NRC review and in accordance with NRC licensing regulations.
      --Completed the detailed work plan, cost estimate, and schedule, and
            established a performance measurement baseline for the final
            repository design and construction.
      --Initiated procurement activities for construction of the surface
            and underground facilities.
      --Developed designs for offsite facilities and utilities needed to
            support the start of construction.
      --Addressed safety-related needs at the site.
        We are requesting funding for payments-equal-to-taxes to the State
    of Nevada and to Nye County, Nevada; Yucca Mountain is located in Nye
    County. Our fiscal year 2005 request also includes funding for Affected
    Units of Local Government, as well as funding to the University System
    of Nevada and to Nye County and Inyo County, California for independent
    scientific studies.

    National and Nevada Transportation Projects
        The amount requested in fiscal year 2005 for National and Nevada
    Transportation activities increases from the fiscal year 2004 enacted
    level of $63.5 million to $186 million, $163 million of which will be
    for the National Transportation Project. The significant increase in
    funding will support the initial procurement of transportation casks
    and auxiliary equipment and will accelerate operational capability.
        The initial procurement of truck and rail casks is needed to
    provide the capability for waste acceptance in 2010, given the lead
    time required for solicitation, evaluation of proposals, NRC package
    certification (for new designs), and fabrication of transportation
    casks. We are working with the cask vendor industry to procure an
    efficient cask fleet that maximizes the government's ability to support
    the full range of contents that need to be shipped with the minimum
    number of separate designs. These procurements will proceed towards
    cask fabrication in a step-wise manner to maintain flexibility on final
    procurements as long as possible. We will also continue to address a
    new railcar standard implemented by the American Association of
    Railroads for shipments of spent nuclear fuel and high-level waste. In
    addition, we have requested funds for equipment procurement and
    infrastructure preparation needed for full-scale cask testing by the
    NRC to enhance public confidence in the NRC's cask certification
    process.
        The National Transportation Project will support expanded
    institutional interactions with regard to establishing preliminary
    transportation routes, operating protocols, and safeguards and security
    activities. We will also continue support of State regional groups to
    facilitate development of the policy for funding State and tribal
    emergency response training and technical assistance as required by
    Section 180(c) of the NWPA. We will continue and expand our ongoing
    dialogue with State and tribal officials and other stakeholders who
    will play an integral role in our transportation planning.
        We have requested $23 million for Nevada transportation work,
    including completion of conceptual design and the beginning of
    preliminary design activities, issuance of the draft Environmental
    Impact Statement for the rail alignment, associated public hearings,
    and continued development of the land acquisition case file required by
    the Bureau of Land Management. Some of this is contingent upon the
    Department issuing a Record of Decision under the National
    Environmental Policy Act selecting a mode of transportation in Nevada
    and a rail alignment, as appropriate. We expect to issue the decision
    shortly.

    Program Management and Integration
        Our fiscal year 2005 request includes $47.5 million for program
    management and integration activities, an increase of $17.8 million
    over the fiscal year 2004 enacted level. 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 complete the institutionalization of
    improvements that were introduced through the Management Improvement
    Initiative to meet the NRC's expectations of its licensees.
        The fiscal year 2005 request also contains funding for system
    engineering and analysis activities to enable us to better evaluate and
    optimize the Program's component elements as they begin to converge
    into a single waste management system. In addition to the repository
    and transportation readiness, the third key piece that must be put in
    place is waste acceptance readiness--i.e., establishing the
    ``pipeline'' of wastes destined for Yucca Mountain. (In prior years,
    waste acceptance was part of the Transportation budget request, but is
    now included in Program Management and Integration.) By addressing
    waste acceptance issues now, we can ensure that repository facilities
    and transportation infrastructure will be compatible with the
    commercial spent nuclear fuel and DOE-managed wastes that are planned
    for receipt in 2010 and beyond. OCRWM will work closely with the Office
    of Environmental Management on DOE spent nuclear fuel and high-level
    waste acceptance criteria to ensure that we have an integrated, timely,
    and cost-effective approach.

    Program Direction
        The Program Direction budget request of $87.5 million supports
    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 and cost analyses. These resources fund a small increase in
    support services related to Quality Assurance, and national
    transportation technical support activities. The request also reflects
    a small increase in Federal staff expenses to manage additional
    repository design/licensing activities and National and Nevada
    transportation work.

    Assumption of DOE Spent Nuclear Fuel Management Functions
        OCRWM will be the organization ultimately responsible for disposing
    of spent nuclear fuel owned by the Department. Therefore, our fiscal
    year 2005 budget reflects OCRWM's assumption of responsibilities for
    the National Spent Nuclear Fuel Program, management within the United
    States of returned foreign research reactor spent nuclear fuel,
    domestic research reactor spent fuel management, and the management of
    Chemical Processing Plant-666 from the Office of Environmental
    Management. To fund these programs, we expect the Office of
    Environmental Management to transfer $22.3 million from its fiscal year
    2005 appropriation, funded from the Other Defense Activities account.
    Similarly, the Department's plans call for the Office of Environmental
    Management to transfer to OCRWM $5.2 million from the Energy Supply
    Research and Development account to support spent fuel management work
    at the Fort St. Vrain, Colorado, Independent Spent Fuel Storage
    Installation, and the Three Mile Island-2 Independent Spent Fuel
    Storage Installation at the Idaho Nuclear Technology Engineering
    Center, which will be transferred from the Office of Environmental
    Management, as well as domestic and university research reactor spent
    fuel management functions transferred from the Office of Nuclear
    Energy, Science and Technology.
        An Office of DOE Spent Fuel Management, reporting to the OCRWM
    Director, will be established to integrate and manage DOE spent nuclear
    fuel activities without interfering with the ongoing mission we perform
    under the Nuclear Waste Policy Act. The transfer of these functions
    will enable OCRWM to consolidate DOE spent nuclear fuel expertise and
    oversight effectively and efficiently.

              ENSURING ADEQUATE RESOURCES TO COMPLETE THE MISSION

        The Department of Energy and the Congress have been aware for many
    years that funding requirements for the repository program would
    increase substantially as we approach construction and transportation
    system development. In fiscal year 2005 and beyond, the Program will
    need significantly increased funding to pay for the design,
    construction, and operation of the repository, and for acquisition and
    development of the transportation infrastructure. Much greater
    certainty of funding is needed for such a massive capital project to
    ensure proper and cost-effective planning and acquisition of capital
    assets. Delays simply increase costs, without fulfilling the Federal
    responsibility for safe, secure disposal of the waste.
        In accordance with the funding approach established in the Nuclear
    Waste Policy Act, the Department collects annual fees from nuclear
    utilities for the disposal of their spent nuclear fuel. The fees are
    reflected in the utility bills that their customers receive. In fiscal
    year 2005, an estimated $749 million will be collected. The resources
    will be there and we should not delay in making them available for
    their intended purpose.
        The proposed appropriations language in the President's Budget is
    contingent upon enactment of legislation reclassifying the annual
    receipts that are deposited into the Nuclear Waste Fund as
    discretionary and crediting them as offsetting collections to annual
    appropriations. On February 27, 2004, Secretary Abraham sent proposed
    legislation to Congress that would accomplish this reclassification. By
    allowing the mandatory collections to be credited as discretionary, the
    net discretionary appropriation would be $0. The proposed legislation
    would be effective until construction is complete for surface
    facilities for the fully operating repository. Under this proposal, the
    Program would continue to be subject to the annual appropriations
    process and Congressional oversight. This proposal would simply allow
    the Appropriations Committees to provide funding sufficient for the
    Program's needs without interfering with other DOE programs.

                           COST REDUCTION INITIATIVES

        While access to the funds paid by ratepayers for nuclear waste
    disposal is nonetheless critical, we believe we can improve the funding
    outlook by reducing the total system life cycle cost of the repository
    system. With this goal in mind, we are looking at enhancements that can
    be achieved through phased development, technical alternatives, and
    acceleration of operations post-2010.
        Under a phased development approach to repository construction, we
    have divided the surface and underground facilities into several phases
    so that the repository can be constructed and operated in stages. The
    license application will address all facilities necessary to emplace
    70,000 metric tons of spent nuclear fuel and high-level radioactive
    waste, and will describe the incremental process for building those
    surface and underground facilities in modules and panels. In addition
    to controlling short-term cost spikes, this strategy will increase
    confidence in our ability to begin operations in 2010, allow experience
    from initial operations to guide later activities, and retain
    flexibility for future technology improvements to be incorporated.
        Present-day technology and technical information are adequate to
    support a robust license application, the transportation of waste to
    the site, and repository operations. However, within the decades-long
    time span during which the Yucca Mountain repository would be operated,
    advances in technology can lead to life-cycle cost savings, schedule
    efficiencies, and improved understanding of the safety and security of
    the repository system. To date, we have identified potential cost
    savings opportunities totaling several billion dollars over the long
    lifetime of repository operations in areas such as welding, advanced
    materials, techniques for excavating the underground tunnels, and low-
    maintenance ground support. Activities to reduce life-cycle costs and
    allow for enhancements in the waste management system are integrated
    throughout the Program, and as such will be funded from all budget
    areas.
        Finally, OCRWM is developing plans for accelerating operations
    after 2010 to achieve steady-state waste receipt rates without
    diminishing safety or quality. As we gain experience, faster handling
    and underground emplacement will become possible, and as additional
    phased construction modules are completed, operational capacity will
    increase. In addition to lowering costs, accelerated waste receipt
    would enhance security by isolating spent nuclear fuel and high-level
    waste faster, and could have the added effect of allowing waste storage
    sites to be decommissioned sooner than currently planned.

                               CONCLUDING REMARKS

        We are committed to the goal of beginning to receive and transport
    spent nuclear fuel and high-level waste to an NRC-licensed repository
    in 2010. Toward that end, we intend to submit a high-quality license
    application to the NRC in December of this year.
        We are requesting a major increase in funding in fiscal year 2005,
    but a necessary one both to achieve the Program's goals and to begin to
    meet the Federal Government's responsibility for safe, secure disposal
    of spent nuclear fuel and high-level radioactive waste. After more than
    20 years of scientific study; a site approval process involving the
    Department, the State of Nevada, Congress, and the President; and
    purposeful efforts toward securing a license, we have reached the point
    where investments must be made in transportation, repository, and waste
    acceptance readiness, if we are to maintain the objective of commencing
    operations in 2010. 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 Craig. Thank you very much, Dr. Chu, for that
    provocative testimony. Let me start the questioning process.
    I'll do five and turn to Senator Murray and we'll go back and
    forth in that time frame and the chairman will be back in a few
    moments, I trust, to join in with us so we all have a variety
    of questions to be asked of the three of you.

                        RISK-BASED END STATES INITIATIVE

        Let me turn to you, Jessie, and talk about the document
    published by your program for each large cleanup site called
    the Risk-Based End States, which is referred to as a vision
    document, I believe. The question from that would be what is
    the purpose of this document at a site which is a Superfund
    site and is controlled by CERCLA, the Superfund law and has
    NEPA records of decision of most cleanup actions?
        Ms. Roberson. Senator Craig, the Risk-Based End State
    initiative really is an effort to do exactly what you stated in
    your opening comments. It is an integration of some of the
    elements which are independent documents today--land use plans,
    our cleanup agreement, other documents that define our
    activities. It is an initiative to integrate those.
        It is exactly one of the steps that we went through that
    allowed us to make informed decisions about soil cleanup levels
    at Rocky Flats. We will have to go through the same process at
    the other sites. This is a process that mimics the same process
    we used there that allowed a clear understanding of the basis
    for decision-making regardless to what the actual regulatory
    process was. It does not change the regulatory processes, but
    it does provide information for those decisions and it also
    makes transparent the basis for those decisions.
        Many regulatory decisions are made relative to specific
    geographic areas without taking into consideration the context
    of our cleanup. We think it's a critical step. It does indeed
    mimic the same process that got us to cleanup levels at Rocky
    Flats, and we expect that it will be useful as a tool in our
    cleanup at Idaho.
        Senator Craig. Okay. I've seen a draft of Idaho's End State
    document dated January 2004, but it has draft written on every
    page. What is the path forward for this document?
        Ms. Roberson. Well, they will remain drafts for quite a
    while until we believe that we have adequately and openly
    addressed any issues or concerns with the public and with the
    regulators, so they may well be drafts for 6 months. We
    actually met with our field managers on Monday and Tuesday and
    went through site by site, and I think we still have not done
    an adequate job in that arena and we will be taking more time
    to do that.
        At some point, we would expect to conclude that discussion
    and then we will look at those documents. This doesn't overtake
    the regulatory process. What it does is provides a visible
    basis for us and for the public to understand why we may
    propose what we propose in the regulatory process.

                          BNFL CONTRACT COSTS OVERRUNS

        Senator Craig. Okay. Another question of you, earlier this
    week, trade publications reported that DOE has agreed to pay
    British-owned BNFL for cost overruns related to cleanups in
    Tennessee and Idaho. What can you tell us about the status of
    these negotiations between the U.S. and British officials and
    if there is any truth to the fact that DOE would provide $500
    million to compensate BNFL for what appears to be a bad
    investment?
        Ms. Roberson. What I can say with total confidence is that
    the Department has a contract with BNFL and we are living up to
    that contract and we expect them to live up to that contract as
    well. We continue to look at all of our work at Idaho and any
    of our other sites specifically when we're in a procurement
    mode. We are looking at that work and how it fits into the
    overall procurement. I read the same article. I was intrigued,
    but I can't offer you more than that.

                  LABORATORY DIRECT RESEARCH FUNDING AT IDAHO

        Senator Craig. Okay. I'm intrigued, too. My last question
    of you and then I'll turn to Senator Murray. Jessie, you know
    that I'm very concerned about the potential loss of LDRD
    funding, and of course we all know that's Laboratory Direct
    Research at the new Idaho national lab, and I've told the
    Secretary very directly that I believe LDRD is vital to that
    lab and its future missions. Isn't EM funding tapped for LDRD
    at both Oak Ridge and Savannah River?

                  LDRD FUNDING AT OAK RIDGE AND SAVANNAH RIVER

        Ms. Roberson. I will tell you honestly, Senator, I do not
    believe so, but I would like to validate that for the record if
    I might. As a result of your raising this concern, we are
    certainly looking very closely at the issue. To my
    understanding, EM is not contributing, but I would like to
    validate that.
        [The information follows:]

                  LDRD Funding At Oak Ridge and Savannah River

        At the Oak Ridge National Laboratory (ORNL), EM funds the
    laboratory for work in Technology Deployment and infrastructure
    activities like bioassays and utilities. Of the overhead rate paid by
    EM, ORNL uses of a portion of the funding to support its LDRD
    activities. EM does not directly fund any LDRD activities at ORNL.
    Since the Savannah River Site has not established an LDRD program, no
    EM funds are used for LDRD at that facility.

        Senator Craig. Please do. Thank you. Let me turn to Senator
    Murray.

                            HANFORD 300-AREA CLOSURE

        Senator Murray. Thank you, Mr. Chairman. Ms. Roberson, the
    Pacific Northwest lab is a very valuable asset to the Federal
    Government, the State of Washington and to the tri-cities and
    in particular, as Hanford cleanup moves forward. As you know,
    there is a lot of concern over the schedule for cleaning up the
    300-Area and replacing the laboratory's ongoing research
    capabilities that exist in that area.
        I addressed those concerns when Dr. Orbach from the Office
    of Science testified on March 3, again in writing when
    Ambassador Brooks from NNSA testified March 23, and to date, no
    strategy has emerged from the Department of Energy.
        An accelerated cleanup plan in theory is a good idea, but
    it has to be implemented thoughtfully, and that seems to be the
    problem. For the first time in the history of the DOE cleanup
    program, facilities that have ongoing missions are being
    affected. I believe the Department doesn't help itself when it
    pursues a track of accelerated cleanup while at the same time
    ignoring the responsibility of replacing facilities that house
    critical programs for the Department and for other agencies. A
    good objective to not have a bad outcome.
        Today you reiterated the goal of dealing with high-risk
    materials first. No one would classify the 300-Area as high-
    risk and frankly, it leaves the community really questioning
    DOE's choices. Ms. Roberson, can you tell the committee what is
    the current status of the river corridor contract proposal and
    efforts to address its current impact on the lab and what are
    the options for using anticipated savings from accelerated
    cleanup at Hanford to support replacement of facilities for the
    laboratory?
        Ms. Roberson. Senator Murray, I probably can't address all
    of those, but let me please take a shot at as many as I can.
    The facilities in question were transferred to the
    Environmental Management portfolio in 2001-2002. By definition,
    that meant they were excess to mission need. During the next
    couple of years as we readied ourselves through the procurement
    process to do the river corridor cleanup, there was indeed a
    growth in mission, both in NNSA as well as Homeland Security,
    and so the Department has taken a step back on the cleanup
    procurement to try to make sure there's no impact to those
    missions as well as to stay focused on the river corridor
    cleanup, because those are all important priorities.
        I would say, as I sit here today, we are engaged with our
    Deputy Secretary. We've looked at a number of alternatives. We
    do not have one that I can share with you, but I think we're
    very close. That procurement is awaiting action as a result of
    those discussions.
        Senator Murray. Okay. Do you have a time line on that?
        Ms. Roberson. No, I honestly do not have a time line as I
    sit here today. Since it's a multi-program initiative, my time
    line is as soon as we have a decision, to move forward, but I
    can't tell you when the Department will.
        Senator Murray. Is part of that what the options are for
    using the savings from the accelerated cleanup?
        Ms. Roberson. That's actually one. Unfortunately we don't
    achieve the savings until we achieve the cleanup, so I can't
    say that savings today are available for that purpose, but I
    also again can't tell you all of the options that the
    Department is looking at because we are simply one participant
    in that decision-making process.
        Senator Murray. Can you tell me, are we talking a couple
    weeks or a couple months or 6 months before we have an idea?
        Ms. Roberson. Actually, as I sit here today, I cannot tell
    you. We are inputing into the process. I'd be glad to get back
    to you as soon as we leave here today.
        Senator Murray. I would really like to know. Obviously the
    community is waiting. We all want to know where this is going
    and your response, timely response would be really appreciated.
        Ms. Roberson. Thank you.

                        WASTE INCIDENTAL TO REPROCESSING

        Senator Murray. Let me move on then to another question.
    The Department is still seeking unilateral authority to
    reclassify the high-level waste at Hanford, Idaho and Savannah
    River. Frankly that appears to a lot of us to just be another
    example of the Department not working with its Federal and
    State regulators. The Department lost the lawsuit in Federal
    court and it's now appealing and the President's budget
    proposes to hold $350 million from cleanup of those sites aside
    until this issue is resolved to the agency's satisfaction. You
    know, frankly, this proposal is being labeled as blackmail to
    some people.
        The proposal certainly seems similar to the Department's
    former accelerated cleanup account proposal that this
    subcommittee rejected last year and I hope it will reject again
    this year. The fact is that before the Department lost in court
    and after, it did have an opportunity to work with the
    litigants and States to resolve this issue.
        Can you tell me, Ms. Roberson, why the Department rejected
    offers of mediation by the NRDC and the States prior to trial
    and even more surprisingly rejected the court's request that
    all parties agree to mediation after the Department lost?
        Ms. Roberson. Actually, I would have to defer to our Chief
    Counsel on the specifics of the litigation. What I can say is
    that there was conversation among the parties to the lawsuit. I
    won't try to describe when or how that happened, because that
    process actually would have been managed by our General Counsel
    rather than by the Office of Environmental Management, but I
    would like to say a few things.
        I have heard the term being used that this looks like
    blackmail, but Senator Murray, I have to say to you, we haven't
    considered changing nary a cleanup agreement at any site. We
    are simply trying to implement what we've already agreed to in
    those cleanup agreements at every one of those sites.
        Senator Murray. But you lost the battle in court.
        Ms. Roberson. We are appealing the decision in court, but
    even before we lost the lawsuit in the Ninth District, we were
    implementing those agreements we have with our regulators in
    each State, and we are trying to continue to implement those
    agreements. We have not proposed a single change to a cleanup
    agreement in any of those States.
        Senator Murray. Well, it does appear to a lot of people
    that DOE's the only one who thinks legislation is necessary to
    resolve this issue. It seems even when our States attempt to
    reach common ground, they are just met with steadfast
    resistance to maintaining regulatory oversight on this matter,
    and it just is disheartening to all of us.
        Ms. Roberson. Well, we continue to have a dialogue and I
    think a fairly successful dialogue with the States even today.
        Senator Murray. They don't feel that way.
        Ms. Roberson. Well, that's unfortunate. I appreciate that
    insight. That's surprising to me.
        Senator Murray. Well, I think everyone I've talked to wants
    to resolve this issue, but they feel like the Department is
    just resisting any attempts to speak with the States, to work
    with them to find common ground. You're simply giving us
    legislation to override an issue and thus it is not acceptable.
        Ms. Roberson. We are working even today with the States on
    a path forward, we absolutely are. It's unfortunate if we have
    a State that doesn't believe that that's our goal.
        Senator Murray. Let me just give you a personal appeal. Can
    you make a concerted effort to sit down with them to really
    listen to their concerns and to find common ground on this
    issue?
        Ms. Roberson. Absolutely.
        Senator Murray. Okay. I take you at your word on that and I
    will wait to hear from our States that they feel that they are
    actually working with you.
        Ms. Roberson. Okay.

                 HANFORD EMPLOYEES EXPOSURE TO TANK FARM VAPORS

        Senator Murray. Let me raise another issue and this is
    really a critical one for our State. Ms. Roberson, as you know,
    there has been a serious issue at Hanford related to continued
    exposures of workers to vapors escaping from the tank farms.
    It's causing workers to seek medical attention on-site and
    often being taken to local hospital emergency rooms.
        Related to that vapor issue but not confined to these
    medical problems is the Hanford Environmental Health Foundation
    which is under a DOE contract to provide medical care at the
    site who's now facing allegations of supervisor misconduct,
    fraud and medical record tampering. The fear is that this
    Hanford Environment Health Foundation has done these things due
    to financial considerations and/or perhaps pressure from
    contractors to limit the number of work days lost which can
    affect the contractor's own financial incentives.
        In fact, in last Sunday's Washington Post, it's reported
    that the DOE's own inspector general, as you know, found that,
    and I want to read from it, ``For 9 out of 10 private
    contractors that perform environmental cleanup at old bomb-
    making sites from Washington State to South Carolina, the audit
    found that the Department of Energy maintained inaccurate and
    incomplete accident and injury data.''
        Frankly, given the significant coverage on these issues
    that we've received in the national and Washington State press,
    I was surprised you didn't address them in your own written
    statement, but I'm even more surprised that your written
    statement makes claims on improved worker safety by citing the
    lost work day cases when your own inspector general says the
    Department underreports such events. There are many
    investigations going on right now at Hanford related to the
    tank vapors and HEHF, and I hope we're going to get some
    answers from those investigations, but I really fear that the
    Environmental Management Program has lost considerable
    credibility with workers and their families on these issues.
        Cleanup of nuclear waste is a very difficult task. You and
    I both know that it involves many known and unknown dangers. We
    ask a lot of our workers who are on-site and it seems clear to
    me that we need to provide assurance that we know what we are
    doing, that we are taking real precautions and that we have
    reliable investigations when necessary.
        The National Institute of Occupational Safety and Health,
    NIOSH, has been on-site, but DOE limited its review authority
    to the vapor issue. I don't believe that DOE has requested OSHA
    or the NRC to play any role. It seems reasonable to consider if
    it would make sense to have OSHA and the NRC regulate health
    and safety.
        Do you believe that DOE is responsibly on top of these
    vapor and medical issues?
        Ms. Roberson. Senator Murray, actually, I do believe.
    Specifically on the tank farm vapors, I think our field
    operations has been fairly aggressive. They've had three
    external independent reviews from organizations that have
    expertise in the occupational medicine area and they've offered
    advice on improvements and we've moved forward with those
    improvements, and where we can get good advice to improve,
    we're going to continue to do that. That's our commitment.
        I won't speak on HEHF since that is an ongoing
    investigation. I don't think that I can speak on that, but what
    I can say is if there is a determination of any misconduct, the
    Department will react swiftly and strongly. There is no doubt
    in my mind that we will.

                        IG REPORT ON SAFETY PERFORMANCE

        I'd like to, if I could, respond to--and even though the
    system that is in question belongs to the Assistant Secretary
    for Environment, Safety and Health, I'd actually like to
    respond because the IG draft report was fairly specific to the
    Environmental Management program. I mean, I have to say
    unequivocally I disagree with some of the information presented
    as fact as well as the conclusions reached in that draft
    report.
        Senator Murray. You disagree with the IG?
        Ms. Roberson. Yes, and I have responded. There are two
    specific points I'd like to make. There are many others, but I
    would like to address two specific points. One assumption was
    that this database provided data that was used by Environmental
    Management to determine the status of its safety performance.
    That is incorrect.
        In 2002, OSHA changed the criteria for reporting in the
    system and to smooth the path for transitioning to the new
    criteria directed that nobody should spend time trying to catch
    up with the old system. DOE did the same. DOE took the same
    action.
        As the Assistant Secretary for Environment, Safety and
    Health said in her opening comment, this is a paper-intensive
    system and it's prone to quality assurance problems and lag
    time. In 2002, we identified this as an issue in our program
    and discontinued using it for that purpose. The very law that
    the IG cited in its draft report as being the basis for
    identifying what data was not being transferred, is the law
    that we also look at in our operations to make determinations
    as well, too.
        So the law that provided the basis of their assumption that
    there was underreporting, is the mandated law for the
    contractors to keep and in fact, based upon the IG's draft
    report, they are obviously keeping it up to date. That is the
    law that our facility representatives and our managers look at
    in the field and we also look at as well.
        The Department has undergone in the last year an initiative
    to simplify the translation of that data from the OSHA logs to
    its headquarters system, but that hasn't alleviated the
    requirement for us to look at their logs in the meantime which
    is what we have done.
        Senator Murray. I appreciate that. I would like to see your
    response back to the IG, but I also think that there's--don't
    you think there's something more we can do to make sure the
    workers and families feel that their----
        Ms. Roberson. Absolutely.
        Senator Murray [continuing]. Health and welfare is the
    Federal Government's first priority because that certainly
    doesn't feel like it today.
        Ms. Roberson. Absolutely, and I think you probably know in
    the tank farm even as late as last week, we talked with our
    site operations and our contractor and we've taken additional
    actions there. We are absolutely committed to doing this work
    and doing it safely, and we are interested in the expertise and
    advice of any that can help us to continue to improve it
    because that's what we have to do. So that is our commitment,
    and we will continue to be focused on that and look for
    improvement wherever.
        Senator Murray. Will we be seeing recommendations from your
    agency on what we can do perhaps to have OSHA and NRC regulate
    health and safety? Will you be making any recommendations like
    that?
        Ms. Roberson. I'm not personally familiar with whether the
    Department will make those recommendations, but I know the
    Secretary is looking forward to the results of the reviews and
    investigations he's initiated, and I think those will inform
    any decisions going forward from there.
        Senator Murray. Mr. Chairman, I see you've returned. I have
    one more question. I'm happy to wait until you----
        Senator Domenici [presiding]. Give it. Let's go.

           ENERGY EMPLOYEES OCCUPATIONAL ILLNESS COMPENSATION PROGRAM

        Senator Murray. Ms. Cook, your office has authority over
    the Energy Employees Occupational Illness Compensation Program
    Act. In fact, the Department makes a big deal about its efforts
    to implement the program and is currently opposed to efforts to
    move implementation from DOE to the Department of Labor which
    many of us would believe would be much more effectively
    operating the program and serving as the willing partner.
        Specifically related to Hanford, it's my understanding that
    you intend to end the medical screening program for former
    workers at Hanford at the end of this current fiscal year. It
    is estimated that there are 2,700 former workers with past
    exposures who have actively indicated an interest in an
    examination from the site and there are 600 who are awaiting
    appointments that won't be available due to budget cuts.
        Can you tell me why your budget proposes to end the Hanford
    former worker screening and how you justify such an action in
    light of such an incredibly big need?
        Ms. Cook. Yes. First off, the budget does not define that
    we are going to end the former worker program at all. What we
    are going to do, though, is make it more effective and
    efficient for exactly the reasons you just pointed out. The
    former worker program was started several years ago. At the
    current time, we have 14 different pilot projects out at
    different sites all around the complex. Many sites are waiting
    to participate in the former worker screening program.
        What we intend to do through this year and into 2005 is to
    move forward with a nationwide former worker screening program
    that provides more timely and more service without paying
    overhead for 14 projects throughout the complex, so at all of
    the sites, all of the former workers will have access to a
    screening program locally. And if local expertise isn't
    available, then we will connect them with someone nearby, but
    we do not intend to end any former worker program at any site.
        Senator Murray. So the screenings still go on at the
    Hanford site?
        Ms. Cook. Yes.
        Senator Murray. At the site?
        Ms. Cook. Yes, absolutely, but it will be part of the
    national program and not individual programs at each site, so
    it will be managed nationally.
        Senator Murray. And the 600 that are awaiting appointments
    will get appointments?
        Ms. Cook. Absolutely.
        Senator Murray. As well as the 2,700?
        Ms. Cook. Absolutely.
        Senator Murray. Thank you, Mr. Chairman.
        Senator Domenici. Thank you very much, Senator. First let
    me say, and you've had a pretty good grilling today. I'm glad
    you got to offer your views, and let me say I wish we could be
    here predicting that your recommendations would be followed,
    but it seems to me that in some areas it will be very
    difficult.
        I have questions in each area, but if I don't get them done
    today, I'll get them to you and I would appreciate your
    answering them at your earliest convenience.

                PLUTONIUM TRACES AT WASTE ISOLATION PILOT PLANT

        I noted in a recent press article about the detection of
    microscopic traces of plutonium in the sampling at WIPP. I
    understand that the quantity is far below the regulatory
    concern, but I'm curious whether that detection could be
    indicative of more serious issues. My question is, please
    describe your understanding of this situation and address my
    concern about these samples that could indicate a more serious
    problem.
        Ms. Roberson. Senator Domenici, we have multiple
    independent monitoring sources and for the second quarter in
    2003, in some cases it's monthly; in some cases it's quarterly.
    This was monthly sampling, I think, for June of 2003. That
    sampling or that analysis was conducted using the most capable
    and sensitive equipment available to us.

                          NEW MEXICO CLEANUP AGREEMENT

        Senator Domenici. Thank you very much. Ms. Roberson, let me
    thank you for your willingness to return to the negotiation
    table to work out an acceptable cleanup agreement between DOE
    and New Mexico. As a result of these negotiations, $43 million
    in additional money can be applied toward meaningful cleanup.
    You can be sure that I will continue to watch the matter and I
    hope you will too, to ensure that cleanup stays on track.
        Does this agreement have enforceable deadlines and
    standards to ensure that cleanup is accomplished and we won't
    find DOE and the State fighting over the same old issues and
    compromising the cleanup?
        Ms. Roberson. Senator, it does indeed include enforceable
    milestones where Federal or State standards exist, and it would
    include those where they do not exist. It would include a
    process by which we would go through and work with our
    regulators to establish them.
        I'm sure this is not the end of the challenges that the
    parties will have to work together on, but it certainly
    establishes a process through which we can resolve those issues
    as we go forward and achieve the cleanup as we've laid out.

                          WORKER SAFETY SITE PROFILES

        Senator Domenici. Let me say, Ms. Cook, last year the DOE
    testified that it was in the process of developing site
    profiles and to pull together the necessary site data in order
    to speed up the case approval process for workers that were
    made sick while working for the Department. DOE's testimony
    stated that by developing a complete understanding of the
    occupational hazards at each of the DOE sites, it will help the
    doctors in developing the claims as to exposure hazards a
    worker may have been exposed to.
        The question to you is, where do we stand on the
    development of site profiles and how much is being spent in
    2004 and how much will you do in 2005?
        Ms. Cook. Yes, to answer that I need to introduce to Bob
    Carey that he really wanted to be closely involved, as did the
    Undersecretary in this program. And so what they did is bring
    in Mr. Carey to bring in the program as a whole with only that
    responsibility and directly reporting to the Undersecretary and
    to the Secretary, and Bob will tell you about where we are on
    the site.
        Senator Domenici. What is your name and what do you do?
        Mr. Carey. Sir, my name is Bob Carey. I'm a Senior Policy
    Advisor in the Office of the Secretary and this elevation of
    the Office of Worker Advocacy to a direct report to the Under
    Secretary Card happened to coexist, happened at the same time
    as my return to active duty, so I was assigned to this program.
        I think there may be some misunderstanding as to the
    relationship between the site profiles that NIOSH does as part
    of the dose reconstruction process and the site profiles that
    some people have been advocating for this program.
        For the site profiles that NIOSH does for the Part D
    Program for the dose reconstructions, it's regarding radiation,
    a relatively well understood, quantifiable and discrete program
    where the causal relationships are pretty well understood. For
    the other toxic substances that Part D also covers, the
    Department of Energy Program, those causal relationships are
    not nearly as well understood. A lot of these substances hadn't
    even become known to be toxic except in the last couple
    decades. Prior to that we didn't even have a lot of records on
    these issues.
        Because of that, the cost benefit analysis that we've done
    to date has not indicated that such large scale discrete site
    profiles would be beneficial. We believe they cost several
    million dollars and they take a year or 2 to complete and that
    they don't necessarily provide any additional data that would
    be that useful to the Physicians' Panels.
        And the fact of the matter is we believe we already have
    sufficient information for these Physician Panels. The statute
    requires that we provide all available information. It does not
    state that we are required to provide additional analysis like
    the statute requires NIOSH to do for dose reconstructions. With
    that available information we currently provide, we believe we
    provide more information than other compensation programs do,
    and we provide a large volume of information already to these
    physicians.
        The fact of the matter also is we have to look at this cost
    benefit analysis in terms of what we provide to the applicant
    with our positive determination. The Department of Labor's Part
    B Program has a 50 percent or greater standard of causation for
    the radiation-induced cancer, whereas ours is not as likely to
    be a significant factor in the causation, aggravation or
    contribution to an illness.
        So we've had positive determinations where we've had a 2\1/
    2\ percent probability of causation. Given all those issues and
    the fact that we don't make a disability determination and we
    don't make a compensation recommendation in our physician panel
    process to the State worker's compensation boards, we do not
    believe that these large-scale site profiles that some people
    have been talking about would be beneficial in the net.
        Senator Domenici. Well, let me tell you, all that statement
    notwithstanding, we are in a mess because the claimants clearly
    don't believe us anymore, and things are going too slow and
    we're not getting anybody compensated. And I suggest while the
    bill is a little drawn, it doesn't provide that much per
    individual that we shouldn't get on with it. I think it's got a
    cap of $15,000, doesn't it?
        Mr. Carey. No, sir, our program does not have any cap. In
    fact, under the Part D Program, the one that the Department of
    Energy runs, we provide no direct Federal benefit. We provide a
    positive physician panel determination which we can then use to
    issue to a contractor----
        Senator Domenici. Who pays the money?
        Mr. Carey. The contractor or the insurance company that the
    contractor may have hired is the one that ultimately pays the
    money. If we have a current contract with that contractor, we
    can then reimburse them under those contracts, but the States
    are the ones that direct the money, the payment of the money,
    sir, under the Part D Program.
        Senator Domenici. Well, straighten me out. What are they
    complaining about?
        Mr. Carey. Sir, we initially vastly underestimated the
    scope of this program and because of that underestimation, we
    underestimated how long it was going to take to set up the
    program and how much we were going to have to invest in order
    to establish this program.
        We now believe that we have established this program, and
    since we received that $9.7 million reprogramming for fiscal
    year 2003, we received that in October of 2003, we've tripled
    our case processing up to the physician panels; we've increased
    our physician panel determinations approximately six-fold;
    we've also been able to put together a strategic plan based
    upon a top to bottom review to be able to eliminate the entire
    backlog of current and future backlog applications by the end
    of calendar year 2006.
        If we thought we could hire enough physicians in order to
    be able to panel these panels faster and in greater quantities
    than we currently believe, we'd want to do that faster.
        Senator Domenici. Who's in charge of the program now, the
    Secretary?
        Mr. Carey. Under Secretary Card is who I directly report
    to, sir.
        Senator Domenici. Well, I'll tell you, this isn't in the
    scheme of things, may not be for the Department a very big
    program or very significant.
        Mr. Carey. It's my life, sir.
        Senator Domenici. What?
        Mr. Carey. It's my life.
        Senator Domenici. Well, I'm glad it's somebody important's
    life because there's an awful lot of folks that don't think we
    know what we're doing.
        Mr. Carey. Sir, my father--I'm sorry, sir, go ahead.
        Senator Domenici. And we didn't know what we were doing. It
    was wrong for a long time. Now you tell me it's going to get
    right and I don't question you except you've got to understand,
    we know about the doctor issue, but you've got to understand
    that you've got to get going.
        Mr. Carey. Yes, sir.

                 YUCCA MOUNTAIN FISCAL YEAR 2005 BUDGET REQUEST

        Senator Domenici. Okay, now let me talk a little with Dr.
    Chu. Let me first thank you and congratulate you. I wish we
    could tell you that we could move forward with dispatch, but
    you understand the problem and the President's budget requests
    $880 million for Yucca. A significant portion of this funding
    is to be paid from fees assessed which you're aware of. The
    fund will collect $749 million this year, the budget process
    that the annual receipts be reclassified as discretionary funds
    and then appropriated.
        As a former budget committee chairman, I know that you
    can't wave a magic wand to reclassify these fees. It requires
    legislation and some degree of cooperation.
        I'm not optimistic that we are going to accomplish that
    this year. However, if we fail to get the agreement and
    reclassify the fees, the Senate Budget Resolution assumes a
    level that you are not satisfied with of $577 million. Now,
    that's not the end because we've got to go to conference with
    the House. You're aware of that. If Congress only provides $577
    million, what activities will the Department be forced to defer
    and will this significantly delay the opening?
        Dr. Chu. Senator, thank you very much for your support all
    these years. We have looked at this budget situation very
    carefully, and the reason we ask for $880 million is we need
    the funding to open a repository in 2010. If we get a level of
    funding of $577 million in 2005, we will be able to deliver the
    application because that's our highest priority. That's our
    first milestone. But we will not be able to achieve our goal of
    2010 without getting the full funding.
        Senator Domenici. But when you get the first step that you
    just described, the licensing?
        Dr. Chu. Yes.
        Senator Domenici. You think you can do that?
        Dr. Chu. Yes. We will be able to do a license application
    because we are in the process of completing that in 2005. Since
    our schedule is December 2004, it's really the first quarter of
    2005 we intend to deliver the license application.
        Senator Domenici. I hope you can. Isn't that being
    contested also?
        Dr. Chu. That remains to be seen.
        Senator Domenici. That licensing is being contested also
    just like everything else?
        Dr. Chu. Not yet.

               TRANSPORTATION MODE AND ROUTES FOR YUCCA MOUNTAIN

        Senator Domenici. Okay. It's my understanding that the
    Department has not made a final decision as to whether it will
    use rail or truck as the transportation mode of waste to Yucca
    or decided on a specific route. When will the Department make
    this decision and begin the environmental impact study?
        Dr. Chu. In our final environmental impact statement, we
    have indicated that mostly rail is our preferred transportation
    mode, but we have yet to issue a formal record of decision on
    that. In my testimony, I say we expect to do that very shortly.
        And as to specific routing, this is part of a whole
    planning process with the stakeholders and the State and the
    local governments. And we are just starting that process right
    now and we do not anticipate to identify a suite of routes
    until probably fiscal year 2006. That's the preliminary plan,
    but we'll deal cooperatively with all the stakeholders.
        Senator Domenici. Well, I'm amazed, I mean if you think
    you're over the hurdles, you know, transportation is a big
    issue, too, among people. Routes will be a big issue. I want to
    suggest to you that I have found one of the most intriguing
    responses to be a detailed history of the U.S. Navy and its
    ships and where they are on a given day and how many nuclear
    reactors are floating around the oceans and seas of the world.
    There are lots of them. You know, some of them have two on
    board. They are now permitted to land, to dock at every dock in
    the world except New Zealand, and that's an old thing.
        Now, when we worry about safety, isn't it amazing that
    there's probably about 150 nuclear reactors traveling the
    waters of the ocean and from time to time docked in docks that
    are full of ships that are adjacent to them, to development,
    and nobody complains. I just tell you that it's pretty
    interesting.
        When we sit around and worry so much, the peoples of the
    world let these dock with, you know, a battleship has two of
    them.
        Dr. Chu. Senator, I totally agree with you. You know,
    worldwide, there's excellent safety records in transportation
    of nuclear materials.

                        WASTE INCIDENTAL TO REPROCESSING

        Senator Domenici. Let me talk a minute to you, Ms.
    Roberson. The budget provides $350 million that can be used to
    address the cleanup of waste incidental to reprocessing, WIR,
    located in Washington, Idaho and South Carolina. I understand
    that the Department is allowed to reprocess some of the WIR
    waste in Washington and Idaho. It would generate transuranic
    waste streams that DOE intends to send to WIPP. Thus far I'm
    correct, am I not?
        Ms. Roberson. The one adjustment I would make in
    Washington, it's not even waste from reprocessing. The source,
    the actual source is transuranic waste.
        Senator Domenici. Well, to date, the Department has
    discussed a strategy with Washington, Idaho and South Carolina,
    but the State of New Mexico was yet to be included in these
    discussions. Will you commit here to including New Mexico in
    these negotiations and work with the State in developing a
    solution?
        Ms. Roberson. Absolutely, Mr. Domenici, and we actually did
    start that a couple weeks ago with the workshop hosted by EEG
    and I think it was a very successful workshop in providing
    information to all the parties that allowed a platform for
    future conversations, so you do have my commitment.

                               TRANSURANIC WASTE

        Senator Domenici. Okay, what is the basis for determining
    what transuranic waste is and what is the process by which you
    believe you can remove the fission products? That would mean
    we're going to meet the criteria for permanent disposal at
    WIPP.
        Ms. Roberson. The basis for determining--TRU waste is
    actually defined by the permit for disposal at WIPP and we must
    satisfy the permit requirement before any such material can go
    there.
        Senator Domenici. Okay. We have about 20 other questions
    and I have about 20 other people lined up, so I'm just going to
    give you those.
        Ms. Roberson. Thank you, sir.

                         ADDITIONAL COMMITTEE QUESTIONS

        Senator Domenici. I'd like to thank the witnesses. I'm
    sorry that we talked more than you, but that's the Senate. I
    think some chairmen do a better job than I and just say that
    only two people will talk. The rest of you can wait for your
    questions, but that's not so easy.
        I'd like to remind members that the subcommittee will keep
    the record open for 2 weeks for additional questions. And to
    our witnesses, you have 2 weeks upon receipt of the questions
    to provide answers. If there are too many and are too bulky,
    just tell us you need another week on some of them. Just don't
    let us think you're not cooperating.
        [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 Department of Energy

                Questions Submitted by Senator Robert F. Bennett

                   REMOVAL OF MOAB URANIUM MILL TAILINGS PILE

        Question. The State of Utah has raised significant concerns
    regarding the instability of the Moab Atlas tailings pile over time and
    the need to remove the tailings from their current location on the
    banks of the Colorado River. Where is the Department with regard to its
    determination about whether to remove the tailings pile from the banks
    of the Colorado River?
        Answer. The Department is now preparing the draft environmental
    impact statement (EIS) for remediation of the tailings in cooperation
    with other Federal agencies, as well as State, Tribal, and local
    governments. The Department plans to issue the draft EIS for public
    comment in the fall and to identify a range of remedial alternatives
    including no action, stabilization in place, and disposal of the
    tailings at one of three potential off-site locations. The National
    Environmental Policy Act regulations require that the no action
    alternative be evaluated as well as all reasonable alternatives. We
    will allow adequate time for public review of the document; a minimum
    of 45 days is required by regulation, and more time can be granted if
    needed. The Department has not selected a preferred alternative at this
    time and would like to obtain public input on the draft as an aid in
    making our selection. We will identify a preferred alternative in the
    final EIS and will brief interested members of Congress at the earliest
    opportunity when we have made a selection. The Department's current
    schedule anticipates issuance of a Record of Decision for the selected
    remedial action in 2005.

                  SALT CAVERN DISPOSAL REMEDIATION ALTERNATIVE

        Question. I understand that there is some interest in a new
    remediation alternative called salt cavern disposal because of the hope
    that it may be both protective of the environment and economically
    competitive with the other remediation alternatives already listed in
    the Draft EIS. Has DOE investigated this option and if so, what
    conclusions have been reached with regard to this alternative?
        Answer. The Department is considering an alternative to dispose of
    the uranium mill tailings in mined salt caverns. Conceptually, such
    disposal caverns would be created by solutions mining in the salt beds
    of the Paradox Formation beneath the Moab site or other possible
    locations, such as the commercial potash mine site approximately 6
    miles downstream from Moab. This alternative would involve withdrawal
    of significant quantities of Colorado River water (on the order of
    2,000 gallons per minute for 20 years). The water would be used as part
    of the solution mining process and would become saturated with salt,
    generating brine that would have to be disposed of by deep injection
    well, or solar evaporation pond, or other alternative methods for
    disposal of brine. Disposal for uranium mill tailings in mined salt
    caverns would be a unique, first of a kind methodology and is an
    unproven approach to uranium mill tailings disposal that could take at
    least 20 years to complete and for which there are several areas of
    technical, geological, and operational vulnerabilities and uncertainty.
    The National Academy of Sciences recommended that DOE ``take advantage
    of the experience gained from previous DOE projects and the UMTRA
    project.'' The Department has not yet reached a final conclusion
    regarding this alternative.
        Resolving these uncertainties sufficiently so the Department could
    be sure that this alternative is technically feasible would require
    significant investment in additional studies, including injection well
    testing, subsurface characterization, geological and salt cavern
    performance modeling, and an overall system performance assessment.
    Such studies would require a multi-million dollar investment and
    several years to complete, with no guarantee that the investment would
    demonstrate that this alternative is viable. The Department has not yet
    reached a final conclusion regarding this alternative.
                                     ______

         Questions Submitted to the Office of Environmental Management

                Questions Submitted by Senator Pete V. Domenici

                          WIPP DETECTION OF PLUTONIUM

        Question. I noted in a recent press article about the detection of
    microscopic traces of plutonium in the air sampling system at WIPP. I
    understand the quantity of plutonium is far below regulatory concern,
    but I am curious whether such detection of plutonium could be
    indicative of a more serious issue. Please describe your understanding
    of the situation and address my concern that these samples could
    indicate a more serious issue in the future.
        Answer. The detection of a few microscopic particles of plutonium
    during the spring of 2003 is not indicative of a more serious issue;
    rather, it indicates the sensitivity of one of the methods DOE uses to
    ensure serious issues do not arise. With DOE's support, the Carlsbad
    Environmental Monitoring and Research Center (CEMRC), the Environmental
    Evaluation Group (EEG), and Washington TRU Solutions (WTS) have
    developed sensitive radiochemistry capabilities that allow them to
    detect traces of plutonium in composite samples of air filters
    collected over weeks and months. The amounts detected were barely above
    the detection limits of these laboratories' analytical capabilities,
    and several of the samples analyzed from this period did not detect any
    traces of plutonium. The laboratories have analyzed samples taken
    subsequently during the summer of 2003 and have not detected any
    plutonium in them; they are continuing to analyze similar samples taken
    since the ones in which plutonium was detected. In light of the
    laboratories' extremely sensitive analytical methods, the environmental
    conditions around the site, and the Waste Isolation Pilot Plant's
    (WIPP) 5 years of operations, DOE anticipated that these types of
    particles would eventually be detected.
        Although these particles may be the result of WIPP's operation,
    their source is uncertain at this time. CEMRC, EEG and WTS are working
    to identify the source. The continuous air monitoring devices used to
    protect workers, the public and the environment did not detect anything
    of significance during this period. In addition, CEMRC's analysis of
    ambient air samples taken within 100 meters of the exhaust shaft and
    elsewhere did not detect any levels of plutonium during this period
    above those resulting from fallout from past nuclear weapons testing.

                               LOS ALAMOS CLEANUP

        Question. Ms. Roberson, thank you for your willingness to return to
    the negotiating table to workout an acceptable cleanup agreement
    between DOE and the New Mexico Environment Department for Los Alamos
    National Lab. As a result of these negotiations, $43 million in
    additional funding can be applied toward meaningful cleanup this year.
    You can be sure I will continue to watch this matter very closely to
    ensure that cleanup stays on track. Does this agreement have
    enforceable deadlines and standards to ensure that the cleanup is
    accomplished and we won't find DOE and the State of New Mexico fighting
    over the same old issues and compromising cleanup?
        Answer. The consent order as agreed upon by the Department and the
    State of New Mexico does indeed have specified enforceable deadlines
    and cleanup standards. Where standards do not exist, the consent order
    sets forth a process to establish appropriate risk-based standards.

                           OFFICE OF FUTURE LIABILITY

        Question. The budget provides $8 million to establish the new
    Office of Future Liability that will take over environmental cleanup
    not already assigned to the Office of Environmental Management. The
    budget indicates that this will include 2,000 contaminated sites that
    must begin cleanup by 2025. I believe that in DOE's zeal to close the
    EM program by 2035, it is ignoring significant waste streams that must
    be addressed. I am skeptical that creating an entirely new bureaucracy
    to address the future cleanup is the most cost effective means of
    achieving cleanup. How much does the Department expect the Office of
    Future Liability will spend for cleanup over the next 20 years and how
    many people will the new office need to manage this massive cleanup
    effort?
        Answer. The Office of Future Liabilities (FL) was established as a
    planning office to develop comprehensive estimates of the Department's
    future environmental liabilities, including decommissioning and
    decontamination of excess facilities and disposition of excess nuclear
    materials in order to assist DOE in developing the best organizational
    structure for managing that cleanup. FL will work with the line DOE
    science, energy, and defense organizations to develop the scope, cost
    and schedule for all the requirements and identify organizational
    options for managing these requirements. For the near-term budget
    window, four full-time equivalents are requested to support the
    planning responsibilities of the office. DOE has not decided what line
    office will be charged with managing future liability.
        Question. Has the Department determined whether or not creating
    this new office and bureaucracy will lower the cost of cleanup, and is
    there any data to validate this decision; and will there be a
    transition plan for experiences staff from one office to another?
        Answer. The Department's Top-to-Bottom Review of the Environmental
    Management program recommended the accelerated cleanup of the legacy of
    the Cold War, the mission the Office of Environmental Management was
    designed to carry out. Defined, finite work scope has been key to
    focusing the active cleanup mission on accelerated completion with the
    benefits of reducing risk and life-cycle cost while accelerating
    schedule and cleanup. However, long-term waste treatment and disposal
    will continue beyond the completion of the current EM baseline (scope)
    program. So that we do not diminish the momentum we have gained with
    accelerated EM cleanup, the Department has proposed the new planning
    office to look at options for managing the long-term liabilities and in
    so allowing the accelerated pace in achieving near-term cleanup results
    to continue unabated. We believe these are prudent steps to effectively
    manage our near-term cleanup responsibilities while establishing a
    visible process to address future liabilities.
        We do not foresee a need for a transition plan at this planning
    stage as longer-term liabilities may involve different issues and
    different skill mixes compared to the near-term cleanup activities.

                          MANAGING FUTURE WASTE COSTS

        Question. EM is negotiating with other DOE offices to require that
    they take over all environmental responsibilities for waste they
    generate in the future. I have many concerns with this approach,
    because EM is the only office qualified to deal with the waste cleanup.
    On the other hand, I recognize that every Office in the Department must
    be more sensitive to the costs of managing waste streams they create.
    It seems to me there could be better ways to force each office to make
    a serious effort to reduce these costs. One option might be to require
    that an office which generates wastes set aside sufficient funds that
    would be used by EM to manage the cleanup. Has the department
    considered this option and would it make program managers more
    considerate of waste management costs?
        Answer. The Department has considered the option of a waste
    generator charge-back program. Our assessment has indicated that
    implementation of a charge-back program is difficult to manage and has
    the potential to increase costs because of the additional accounting
    burden. In addition, the Department has the risk of augmenting an
    appropriation if the charge-back program does not collect the exact
    funding necessary for operations. Should the generating program exceed
    the level of appropriated funds, EM will be required to supplement the
    remaining cost of newly generated waste operations. Compounding this
    approach, a charge-back system would not enable EM to focus its efforts
    strictly on its core mission of accelerated risk reduction and site
    closure for legacy activities.

                             WASTE DEPOSITS AT WIPP

        Question. The budget provides $350 million that can be used to
    address the cleanup of Waste Incidental to Reprocessing (WIR) located
    in Washington, Idaho, and South Carolina. I understand that if the
    Department is allowed to reprocess some of the WIR waste in Washington
    and Idaho it would generate transuranic waste streams that DOE intends
    to send to WIPP. To date, the Department has discussed this strategy
    with Washington, Idaho, and South Carolina; but the State of New Mexico
    has yet to be included in these discussions. Will you commit to
    including New Mexico in the negotiations and work with the State on
    developing a solution?
        Answer. The State of New Mexico was represented in some of the
    discussions the Department has had with affected States on waste
    incidental to reprocessing. Pursuant to my commitment to you, since the
    hearing, we have stepped up our efforts to discuss this matter with the
    State, including productive conversation between Governor Richardson
    and the Deputy Secretary. We are committed to working with the State
    and the State's elected representatives to resolve issues relating to
    transuranic waste.
        Question. What is the basis for determining what transuranic waste
    is and what is the process by which you believe you can remove the
    fission products that would meet the criteria for permanent disposal at
    WIPP?
        Answer. Transuranic (TRU) waste is defined by the Waste Isolation
    Pilot Plant (WIPP) Land Withdrawal Act as ``waste containing more than
    100 nanocuries of alpha-emitting transuranic isotopes per gram of waste
    with half-lives greater than 20 years, except for (A) high-level
    radioactive waste, (B) waste that the Secretary of Energy has
    determined, with concurrence of the Administrator [of the Environmental
    Protection Agency, EPA], does not need the degree of isolation required
    by the disposal regulations, or (C) waste that the Nuclear Regulatory
    Commission has approved for disposal on a case-by-case basis in
    accordance with part 61 of title 10 Code of Federal Regulations
    (CFR).'' ``High-level radioactive waste'' is defined in the Nuclear
    Waste Policy Act (NWPA) as ``(a) the highly radioactive material
    resulting from the reprocessing of spent nuclear fuel, including liquid
    waste produced directly in reprocess and any solid material derived
    from such liquid waste that contains fission products in sufficient
    concentrations; and (b) other highly radioactive material that the
    [Nuclear Regulatory] Commission, consistent with existing law,
    determines by rule requires permanent isolation.''
        DOE believes that certain tank waste in Idaho and Washington is not
    high-level waste but rather is TRU waste. This is largely for two
    reasons.
        First, DOE believes that this waste is not ``highly radioactive
    material resulting from the reprocessing of spent nuclear fuel.''
    Rather, in the case of Idaho, the waste, known as ``sodium-bearing
    waste,'' is waste primarily from decontamination activities and
    wastewater resulting from operations at the Idaho Nuclear Technology
    and Engineering Center (INTEC). This waste also contains trace amounts
    of radioactivity from first-cycle reprocessing wastes resulting from
    heels from these wastes left in the tanks after the first-cycle
    reprocessing wastes were removed and calcined in anticipation of their
    disposal in the spent fuel repository, along with some second- and
    third-cycle reprocessing wastes that remained in the tanks after most
    of that waste was also calcined in anticipation of disposal in the
    spent fuel repository. These wastes, approximately 1 million gallons,
    are currently being stored in the same tanks that were used to store
    waste from reprocessing. The total curies that have been removed and
    calcined represent on the order of 98 percent of the total INTEC curie
    inventory generated through spent fuel reprocessing. In the case of
    Washington, there is waste in approximately 20 tanks at Hanford that
    DOE believes resulted from decladding of fuel prior to reprocessing and
    from the cleanup of plutonium that occurred after the reprocessing of
    spent fuel. In DOE's view, this waste does not result ``from
    reprocessing,'' whose purpose is to recover uranium and plutonium, but
    rather from activities necessary to prepare the fuel for reprocessing
    and to remove impurities from the recovered metals to meet weapons
    production purity standards. To put the point a little differently,
    this waste is very different from waste from the ``first solvent
    extraction or similar process by means of which uranium and plutonium
    are recovered from irradiated reactor fuel.'' That was the definition
    of ``high level waste'' used by the Consultation and Cooperation
    Agreement between the State of New Mexico and DOE which contained the
    original prohibition on disposal of high-level waste at WIPP and that
    we believe was at the heart of what Congress had in mind when it
    defined ``high-level waste'' in the NWPA. The WIPP Land Withdrawal Act
    specified that this Agreement was unaffected by the WIPP Land
    Withdrawal Act. The radionuclide concentrations in these wastes are
    substantially lower than those contained in wastes from the first cycle
    of spent nuclear fuel reprocessing.
        Second, DOE believes that this waste meets the definition of
    ``transuranic waste'' and has other radiological characteristics that
    make it similar to other defense TRU waste in the complex that is being
    disposed of at WIPP, i.e., alpha-emitting radionuclide concentrations
    that are greater than 100 nanocuries per gram.
        With regard to the removal of fission products, with respect to the
    Idaho waste, as explained above, the current tank inventory in Idaho
    represents about 2 percent of the radioactivity from the initial spent
    fuel waste inventory, because 98 percent of that radioactivity has been
    calcined. This has also resulted in removal of on the order of 98
    percent of the cesium, strontium, technetium and actinides from
    reprocessing that the waste originally contained. As for the Washington
    waste, it never contained fission products from reprocessing operations
    to begin with (except for possible limited cross-contamination in three
    tanks due to the tanks' having been used for multiple purposes during
    their operating life times), and it is expected to contain less than 1
    percent of the radioactivity from the Washington tanks.
        WIPP does not have specific radionuclide or fission product
    limitations for acceptable waste. In fact, it is specifically
    statutorily authorized to receive remote-handled transuranic waste (RH
    TRU), which generally contains significant amounts of fission products.
    Instead, the relevant limitations in WIPP's waste acceptance criteria
    are fourfold. First, there is a statutory cap on the volume of RH TRU
    that WIPP may accept. While much of the treated TRU from Idaho and
    Washington is expected to be contact-handled, some is expected to be
    remote-handled, and disposal of that waste at WIPP will have to comply
    with the statutory volume limits. Second, WIPP has received approval
    from EPA to accept remote-handled waste, but it is still awaiting
    action from New Mexico on DOE's request for modification of its
    Resource Conservation and Recovery Act (RCRA) permit, so again, no
    remote-handled TRU from either site would be able to go to WIPP until
    that approval has been received. Third, WIPP has a performance
    assessment demonstrating that disposal of a total assumed volume of
    contact-handled and remote-handled transuranic waste with certain
    characteristics satisfies EPA's standards for disposal of transuranic
    waste. The tank waste from Idaho and Washington under consideration for
    WIPP disposal has characteristics consistent with the assumptions in
    that performance assessment and therefore can safely be disposed of
    there. Finally, DOE has submitted to the State of New Mexico a request
    for a modification of its RCRA permit that would require it to submit a
    further Class III RCRA permit modification for tank waste it is seeking
    to dispose of at WIPP. If that modification is approved, DOE would have
    to comply with its conditions as well.

                        $500 MILLION SETTLEMENT FOR BNFL

        Question. Earlier this week, trade publications reported that DOE
    had agreed to pay British-owned BNFL for cost overruns related to
    cleanups in Tennessee and Idaho. What can you tell me about the status
    of these negotiations between the U.S. and British officials and if
    there is any truth to the fact that DOE would provide $500 million to
    compensate BNFL for what appears to be a bad investment?
        Answer. DOE is working to resolve several outstanding contract
    issues under the BNFL contracts in Tennessee and Idaho. There is no
    final agreement at this time, but any resolution we reach with BNFL
    will only be reached if we believe it is in the interest of the
    taxpayers consistent with the programmatic interests of the Department
    and will allow us to meet our cleanup commitments.

                     WASTE INCIDENTAL TO REPROCESSING (WIR)

        Question. This budget provides $350 million to be spent to fund
    cleanup of nuclear material designated as Waste Incidental to
    Reprocessing (WIR). The budget states that enormous savings can be
    achieved if DOE is able to reclassify nuclear waste streams and follow
    through with cleanup remedies that have been negotiated with each
    State. However, a recent Idaho court decision is blocking final
    disposition of the material. Until this court ruling is resolved or
    legislation is passed, a final remedy cannot be prescribed. Can you
    please provide what you believe to be the total cost estimates to clean
    up the material in Washington, Idaho and South Carolina if you must
    treat all of this material as high level waste, verses the potential
    cost savings that would be realized if some of this material can be
    treated as waste incidental to reprocessing?
        Answer. The Department's baseline life-cycle cost for implementing
    its accelerated cleanup plans at Washington, Idaho and South Carolina
    is $52 billion, if some of the waste can be treated as waste incidental
    to reprocessing. If the Department must treat all of the material as
    high-level waste, the life-cycle cost increases to more than $138
    billion. Under this worst-case scenario:
      --Retrieval of all tank reprocessing wastes and treatment for
            disposal in a geologic repository could require as much as $69
            billion over the current Environmental Management program life-
            cycle cost baseline.
      --As much as an additional $17 billion--and possibly more--would be
            required to exhume and dispose of tanks and associated
            components in a geologic repository.
      --It is difficult to estimate the additional costs the Department
            would incur in terms of Federal repository fees. Under existing
            cleanup baselines, the Department expects to produce
            approximately 20,000 canisters of high-level waste for disposal
            in a geologic repository; the fee associated with these
            canisters is estimated to be $10 billion. Under a scenario in
            which all tank reprocessing wastes currently anticipated to be
            removed and disposed of as low-level waste are instead prepared
            for disposal in a repository, the new baseline could approach
            200,000 canisters. Thus, the fees could be significantly
            greater. This canister estimate does not include exhuming the
            tanks themselves nor associated piping, equipment, and
            concrete. At this time, the Department does not have accurate
            estimates of the volumes for these additional materials that
            also might need to be placed in the repository. (Calculating
            the additional fee is complicated by the Department's statutory
            and contractual obligation to dispose of commercial spent fuel
            and by the statutory and physical constraints on the capacity
            of a repository at Yucca Mountain, Nevada. While the statutory
            70,000 metric ton limit on waste at Yucca Mountain is already
            exceeded by the current inventory of waste, Yucca Mountain's
            physical capacity could well also be exceeded if the volumes of
            waste the worst-case scenario contemplates are added to current
            estimates.)
        Question. Can you please explain why you don't believe this
    material in question at each site qualifies as the high-level waste and
    the processes that will ensure that high-level radioactive waste
    remains separate?
        Answer. The U.S. Department of Energy (DOE), the U.S. Nuclear
    Regulatory Commission (NRC), and the Atomic Energy Commission (AEC)
    (the predecessor of both DOE and the NRC) have long been of the view
    that while most of the radioactive waste from reprocessing is ``high-
    level waste,'' some of the material is not high-level waste, and is
    instead ``waste incidental to reprocessing.'' Reprocessing waste is
    currently stored in tanks at DOE sites in Idaho, Savannah River, and
    Hanford.
        DOE plans to solidify, treat and dispose as high-level waste the
    portion of tank waste that contains by far the vast bulk of the
    radioactivity. At Idaho, DOE already has finished calcining these
    wastes; at Savannah River, DOE currently is vitrifying them through the
    Defense Waste Processing Facility; and at Hanford, DOE will vitrify
    them in the new Waste Treatment Plant currently under construction.
        But DOE, the NRC, and the AEC have also long been of the view that
    some of the tank waste can instead be properly classified as ``waste
    incidental to reprocessing'' that may be managed and disposed of as
    low-level waste. These wastes do not pose the same risk to human health
    and the environment and can safely and lawfully be disposed of as low-
    level waste because they do not need the degree of isolation that the
    more highly radioactive wastes require.
        To determine which tank waste may be managed in this fashion, DOE
    has used criteria developed originally through an iterative process of
    consultation with the NRC regarding particular tanks waste, and
    subsequently codified in the ``Waste Incidental to Reprocessing''
    portions of Order 435.1, DOE's Order governing classification of
    nuclear waste. These criteria specify that to classify waste as low-
    level WIR, DOE must remove as much radioactivity as possible, and that
    what remains must be solidified and put in a form that will meet
    performance objectives for disposal of low-level waste as set out in 10
    C.F.R. part 61--primarily, that it will not result in an annual dose to
    a member of the public of more than 25 millirems and that inadvertent
    intruders will also be protected.
        DOE believes that this approach is protective of public health and
    safety and consistent with the Nuclear Waste Policy Act's (NWPA)
    definition of ``high level waste.'' The NWPA defines ``high-level
    radioactive waste'' as: (A) the highly radioactive material resulting
    from the reprocessing of spent nuclear fuel, including liquid waste
    produced directly in reprocessing and any solid material derived from
    such liquid waste that contains fission products in sufficient
    concentrations; and (B) other highly radioactive material that the
    Commission, consistent with existing law, determines by rule requires
    permanent isolation.'' [emphasis added] DOE believes that the criteria
    described above properly distinguish between ``highly radioactive''
    material from reprocessing that ``requires permanent isolation'' in the
    spent nuclear fuel repository and ``non-highly radioactive'' material
    from reprocessing that does not.
        We recognize that some doubt has been cast on the correctness of
    this view by the Idaho District Court decision in NRDC v. Abraham. The
    Department has appealed that decision and has also asked Congress to
    enact legislation to clarify this matter.

                           DEFINING HIGH-LEVEL WASTE

        Question. Part of the debate over WIR involves the rather unclear
    definition of high-level waste. We now identify waste depending on how
    it was generated, not on how radioactive it is--that doesn't make much
    sense. Do you agree that a serious National Academy of Sciences study
    to improve the definition of high-level waste might help clarify this
    issue and avoid the kind of debates you are now having with Waste
    Incidental to Reprocessing?
        Answer. The Department agrees that identifying waste depending on
    how it was generated rather than on its radioactivity does not make
    much sense. However, while a serious National Academy of Sciences study
    to improve the definition of high-level waste might help clarify this
    issue, such a study would not provide DOE the legal certainty it needs
    to make the kinds of decisions it must make to clean up the tank farms.
        DOE's accelerated cleanup plans for the tank farms at Idaho,
    Hanford, and Savannah River all depend, in part, on DOE's being able to
    classify certain waste from reprocessing as low-level or transuranic
    waste. DOE's problem is that the District Court has ruled that the
    underpinnings of these cleanup plans are contrary to Federal law, and
    that if it proceeds with key aspects of the current cleanup plans, the
    District Court has signaled that it will issue an injunction telling
    DOE to stop.
        Therefore, any new or different criteria DOE might promulgate, even
    if based on the advice of the National Academy of Sciences, would also
    likely be the subject of legal challenge. Unless Congress acts quickly
    to clarify the Department's authority to proceed, our efforts to clean
    up the tank farms at these sites, which are at the core of our
    accelerated cleanup plans there, will be largely paralyzed.
        Question. It is unclear from the budget how much material there is
    at each of the sites and the amounts of material DOE believes should be
    designated as high level, transuranic and low-level waste at each of
    the sites.
        Answer. DOE currently has roughly 91 million gallons of waste from
    reprocessing stored in tanks in Idaho, Savannah River, and Hanford.
    Stabilizing and disposing of this material and closing the tanks is the
    Department's single largest ongoing environmental risk-reduction
    project.
        DOE's plans at all three sites call for removing on the order of 99
    percent or more of the radioactivity from the tanks. At all three
    sites, DOE's plans then call for solidifying, treating and disposing of
    the vast bulk of the removed radioactivity from these stored wastes in
    a deep geologic repository for spent nuclear fuel and high-level waste.
    At two of the sites (Savannah River and Hanford) DOE's plans call for
    solidifying, treating and disposing of some of the removed waste,
    consisting of lower-activity salts that in most instances will have
    been further treated to remove additional actinides and cesium, and
    which will contain only a small fraction of the radioactivity from the
    tanks, as low-level waste on-site. Likewise, at two of the sites (Idaho
    and Hanford), DOE's plans call for solidifying, treating and disposing
    of some of the removed waste, again containing a small fraction of the
    tank radioactivity, as transuranic waste at the Waste Isolation Pilot
    Plant (WIPP). Finally, at all three sites DOE's plans call for grouting
    in place in the tanks a very small amount of residual waste remaining
    in the tanks.

    Waste Destined for Spent Fuel Repository
        Specifically, of the 99 percent or more of the curies removed from
    the tanks, at Idaho, DOE already has finished calcining the wastes
    destined for the spent fuel repository, representing on the order of 98
    percent of the total tank waste radioactivity. At Savannah River, DOE
    is currently vitrifying the wastes destined for the spent fuel
    repository, representing on the order of 99 percent or more of the
    total tank waste radioactivity, through the Defense Waste Processing
    Facility. At Hanford, DOE is not as far along in the cleanup process,
    since it is still building the principal facility it will use to
    prepare waste for disposal at the spent fuel repository and developing
    other aspects of its plans. There too, however, DOE anticipates that it
    will treat and dispose of the vast bulk of the radioactivity in the
    spent fuel repository using the new Waste Treatment Plant currently
    under construction.

    Waste Anticipated To Be Disposed of On-Site as Low-Level Waste
        In addition, of the 99 percent or more of the radioactivity to be
    removed from the tanks, at Savannah River and Hanford, DOE's plans call
    for retrieving and processing the lower-activity salt waste from the
    tanks that in most instances will have been further treated to remove
    additional actinides and cesium for disposal on-site as low-level waste
    in saltstone vaults at Savannah River and at a facility permitted under
    the Resource Conservation and Recovery Act (RCRA) for mixed low-level
    waste disposal at Hanford. Again, this waste represents a small
    fraction of the radioactivity from the tanks--on the order of 1 percent
    or less of the tank waste radioactivity at Savannah River and a small
    amount of the tank waste radioactivity at Hanford. At both sites, this
    waste would have to meet the performance objectives for disposal of
    low-level waste specified in 10 C.F.R. Part 61 under which a member of
    the general population cannot receive an annual dose of more than 25
    millirem from the residues, and an inadvertent intruder must be
    protected as well. In addition, at both sites, the waste would have to
    be disposed of in accordance with State environmental law permits
    because of its chemical constituents, and DOE would have to account for
    this waste disposal in overall site remediation and closure under the
    Comprehensive Environmental Response, Compensation and Liability Act
    (CERCLA).

    Waste Potentially Disposed of as Transuranic Waste at WIPP
        Further, at Idaho and Hanford, of the 99 percent or more of the
    curies removed from the tanks, DOE's plans call for retrieving and
    processing some of the tank waste (representing a small fraction of the
    radioactivity in the tanks) for disposal as transuranic waste at WIPP.
    This would contain on the order of 1 percent of the tank waste
    radioactivity at Idaho and less than 1 percent of the tank waste
    radioactivity at Hanford. This includes the sodium-bearing waste which
    comprises the remaining liquids in the 8 tanks in Idaho, and the
    contents of between 8 and 20 tanks of the 177 tanks at Hanford. This
    waste would have to meet WIPP's waste acceptance criteria in order to
    be sent there. Its disposal there would have to be shown to be
    consistent with the assumptions made in WIPP's performance assessment,
    which demonstrates that the repository and the waste disposed of there
    complies with the Environmental Protection Agency's standards for
    disposal of transuranic waste and is protective of humans and the
    environment. It also would have to comply with any other relevant WIPP
    limits such as the WIPP Land Withdrawal Act's statutory limit on how
    much remote-handled transuranic waste may be disposed of at WIPP. In
    addition, DOE has committed to New Mexico to seek a specific WIPP RCRA
    permit modification from the State addressing these waste streams
    before sending them there.

    Tank Residues
        Finally, at all three sites, DOE's plans call for grouting in place
    a very small amount of residual waste remaining in the tanks. DOE
    anticipates that these residues will constitute on the order of 1
    percent or less of the overall tank radioactivity. More importantly,
    under DOE's plans, when this process is complete, the residual waste
    grouted in place will have to meet standards for disposal of low-level
    waste specified in 10 C.F.R. Part 61, under which a member of the
    general population cannot receive an annual dose of more than 25
    millirem from the residues, and an inadvertent intruder must be
    protected as well. By comparison, a frequent flyer receives
    approximately 100 millirem per year from cross-country airline trips,
    and individuals receive at least 20 millirem from each medical X-ray.
    The treated and grouted residues will also have to meet State
    environmental law requirements with respect to their chemical
    constituents and will have to be accounted for in overall site
    remediation and closure under CERCLA.

                    SMALL BUSINESS CONTRACTS AND EM CLEANUP

        Question. I realize that OMB is forcing DOE to increase the number
    of contracts they extend to small business and at the same time DOE is
    forcing the labs and sites to reduce their small business contracting
    just so DOE can meet its ``quota.'' I don't think it makes sense for
    DOE to manage a large number of small business contracts at each site.
    This is exactly what led to the frustration that created the NNSA out
    of the DOE. I'm so concerned about this trend that I've scheduled a
    hearing in the Energy and Natural Resources Committee for this subject.
    I fear that some of these procurements are placing contracts with small
    businesses that jeopardize the safe effective performance of critical
    work. There are two examples of small business set asides related to EM
    that concern me. The first is the very complex site cleanup for Paducah
    and the second is the draining of sodium coolant from the FFTF reactor
    at Hanford, which is also an extremely dangerous job. How can you
    assure me that EM is not jeopardizing effective completion of critical
    tasks with this rush to entrust procurements to small businesses?
        Answer. As part of its strategy to increase competition and the
    cadre of business firms with the core competencies to effectively meet
    the challenges of EM's accelerated cleanup mission, EM elected to issue
    competitive procurement actions set-aside for small business firms.
    Prior to making a final decision on competing a small business set-
    aside contract, EM publishes a Federal Business Opportunities
    (FedBizOps) sources sought notice inviting firms to demonstrate their
    capabilities to perform the work, either alone or by teaming with other
    firms. Responses to these notices are carefully reviewed to ensure that
    qualified companies are available to perform the work prior to issuance
    of a final solicitation. This process was followed for both Paducah and
    the Fast Flux Test Facility contracts.
        Firms, large and small, competing to perform EM work scopes are
    held to the same high-level expectations. These firms must clearly
    demonstrate a robust safety program, sound technical approaches to
    safely complete the work, cost-effective work practices, commitment of
    a strong management team, and demonstrated experience in performing
    similar work. The same metrics for measuring performance after award
    are applied regardless of the size of the firm performing the work.
        EM is pursuing small business opportunities aggressively; and I am
    confident that sufficient checks and balances, management commitment,
    and accountability are built into the acquisition and project
    management processes to assure that the small business firms selected
    for these projects will contribute substantially to EM's success in
    meeting accelerated cleanup schedules.

                             RISK BASED END STATES

        Question. Earlier this year, EM raised serious concerns at Los
    Alamos and other sites when you asked each site to sign off on a so-
    called Risk Based End State (RBES), which would serve as the benchmark
    measuring the end of cleanup at each site. I've heard concerns at some
    sites that they did not have enough time to involve the public in a
    decision of such serious impact on the people living and working at
    these sites. Has EM provided additional time at each site for
    development of the RBES, and is the public being seriously and
    significantly involved in development of each of these RBES site
    criteria?
        Answer. Stakeholder involvement is an essential part of the RBES
    process. The RBES documents will remain drafts for quite a while,
    possibly even 6 months, until we believe that we have adequately and
    openly addressed any issues or concerns with the public and with the
    regulators.

                      DOE PLAN TO CONVERT DEPLETED URANIUM

        Question. What is the status of the depleted uranium plants located
    at Portsmouth and Paducah?
        Answer. Construction on the depleted uranium hexafluoride (called
    DUF6) project is on schedule for start by July 31, 2004. DOE
    is working to issue the Environmental Impact Statement Record of
    Decision which must be completed prior to the start of construction.
        Question. Will these plants be able to accept waste material from
    outside the State?
        Answer. We note that DOE does not consider its DUF6 to
    be waste and therefore, views the facilities as conversion facilities,
    not waste processing facilities. Some cylinders containing
    DUF6 are being received in Portsmouth, Ohio, from the East
    Tennessee Technology Park in Oak Ridge, Tennessee. No other off-site
    materials are currently planned for conversion at these sites other
    than possible shipments between the two sites. However, there is
    nothing in the design of the plants that would preclude their use for
    other DUF6.
        Question. Is there any additional R&D to be undertaken to
    demonstrate the viability of these facilities?
        Answer. No. The dry conversion technology the facilities will use
    is a scaled up version of a process already commercially viable and in
    use at Richland, Washington, and in Germany.
                                     ______

                  Questions Submitted by Senator Patty Murray

        Question. Ms. Roberson, I understand you have decided to terminate
    at the end of this fiscal year the partnership DOE has with the General
    Services Administration to provide child care for Federal and
    contractor employees at Hanford. I also understand that child care is
    particularly tight in Richland, especially for infants, and that this
    move is likely to displace 60+ children. In addition to affecting
    operations of the existing facility, this decision almost certainly
    will kill the plans for a new state of the art facility, for which bids
    had already been received. Is DOE terminating this important employee
    benefit at all of its facilities or at ANY other site except Hanford?
        Answer. Employee benefits vary from site to site so a comparison of
    one single area does not provide a true measure of the benefits that
    are afforded our Federal and contractor workforce.
        The Department is hopeful that GSA will continue its plans for the
    new facility and sees no reason why our discontinuation of subsidy
    payments should be a hindrance toward that goal if GSA's survey is
    correct and the need for childcare in the Richland area is growing.
        If GSA decides to pursue other Federal partnerships in the Richland
    area, it would have many to choose from, including the Federal Bureau
    of Investigation, the Postal Service and the Environmental Protection
    Agency.
        Question. Why is providing childcare suddenly no longer a priority?
        Answer. EM's priority is environmental restoration. With regard to
    the childcare facility, earlier this year a DOE assessment revealed a
    level of participation and interest by Federal employees that was
    inconsistent with the amount of Federal dollars being spent to
    subsidize the childcare facility. Based on this assessment, and the
    shrinking of both the Federal and contractor workforces as cleanup
    projects reach completion, DOE believes these funds would benefit a
    much broader range of people if invested in the workforce to accelerate
    Hanford cleanup.
        Question. Have you considered a longer transition period to ensure
    DOE will continue to be a good corporate neighbor and allow a new, high
    quality facility to be developed?
        Answer. The notification period to GSA is 120 days, taking us
    through the end of September 2004. This should be sufficient for the
    private childcare facility operator to seek funding from other
    entities.
        Again we are hopeful that GSA will continue to pursue its idea of a
    new facility.
        Question. Will DOE (or GSA) be liable for costs incurred in the
    design, bid proposals, etc. for the new childcare facility that will
    now (likely) not be built?
        Answer. GSA is the sole Federal agency responsible for the
    construction of the new childcare facility. To date, we understand that
    GSA has spent $275,000 on architectural design and energy modeling
    contracts but has not awarded the construction contract for the new
    childcare facility, so neither costs nor penalties are currently being
    incurred.
        Question. Ms. Roberson, contractors at the Hanford site and the
    Hanford Atomic Trades Council have for years successfully negotiated
    pension plan and other cost effective agreements--with the full
    approval and endorsement of DOE. It is my understanding that the DOE is
    actively pursuing new contracts for multiple projects, specifically the
    Fast Flux Test Facility Closure Project, the 222 S Analytical Services
    Project, and the River Corridor Closure Project. I am very concerned
    that these Requests for Proposals (RFPs) contain a new two-tiered
    pension system that only requires 5 years of pension contributions from
    the winning bidder. Some might see this move as a back door attempt by
    the DOE to reduce their costs by reducing requirements for pension
    contributions.
        Hanford employees have remained dedicated to completing the
    challenging tasks of the mission. This spirit of labor/management
    cooperation will be seriously jeopardized if workers are now told that
    the pension benefits they have earned will need to be reduced in order
    to save DOE money. I would like to know what you intend to do to
    maintain the level of pension benefits workers have been promised and
    have earned through years of their hard work at Hanford?
        Answer. DOE agrees that the addition of new contractors and
    multiple pension plans for Hanford employees may have potential impacts
    on workers. However, the DOE Richland Operations Office will ensure
    that the new contracts minimize any such issues. The Department
    anticipates responsive resolution of any issues that may arise.
                                     ______

      Questions Submitted to the Office of Environment, Safety and Health

                Questions Submitted by Senator Pete V. Domenici

                        REPORTING OF INJURY AT DOE SITES

        Question. I was disappointed to read in the Washington Post that an
    Inspector General's draft report found that DOE failed to report a
    significant number of injuries that occurred at DOE sites. The
    Inspector General found that DOE maintained ``inaccurate and incomplete
    accident and injury data.'' This article also alluded to the fact that
    accelerated cleanup contributed to the behavior of not reporting worker
    injury. Assistant Secretary Cook, since the responsibility for worker
    safety and environmental protection falls under your watch; I would
    like a full explanation as to how the IG has come to these conclusions.
    Are these allegations of under-reporting accurate and if so, where and
    to what extent has this occurred within the DOE complex?
        Answer. We take all issues raised by the IG very seriously,
    especially those involving safety. The Inspector General has a rigorous
    process for generating reports and part of that process is asking for a
    review of the draft report for factual accuracy. Our initial findings
    indicate that many of the conclusions are based on out-of-date or
    incorrect information. We identified and began corrective actions on
    some of the items identified in the report over a year ago. In other
    cases, the Program Offices have taken other measures to get up-to-date,
    accurate information directly from the field sites, to resolve the
    delay time in getting information into the data system. I do not agree
    that the accident statistics for the Department are under-reported.
        Question. What are you doing about the current findings of the
    Inspector General that DOE is not accurately reporting worker injuries?
        Answer. We are providing comments to the Inspector General on the
    inaccuracy of some aspects of the report as it addresses reporting
    worker injuries while continuing to implement the changes that have
    been underway for over a year to correct other issues.
        Question. Why are we learning of this activity from the Inspector
    General and not your office? What are you doing to correct this?
        Answer. Actions were already underway by my office to correct the
    known problems with the reporting system, and by the Program Offices to
    obtain accurate information in other ways until these actions were
    completed.

                        OVERSIGHT REORGANIZATION REFORM

        Question. Ms. Cook, your testimony references oversight changes and
    restructuring of your Office in 2002 and 2003. In 2002, you noted that
    the independent oversight functions were removed from your office and
    you now work to promote ``safe and environmentally compliant conduct of
    work.'' In 2003, your restructuring efforts describe cuts to management
    and new focus on ``e-government initiatives.'' If you aren't performing
    oversight in areas of worker safety--what office is?
        Answer. The Office of Independent Oversight and Performance
    Assurance performs independent oversight of safety and security for the
    Department of Energy.
        Question. Did any of the changes since 2002 result in your
    inability to hold DOE contractors to the highest level of worker
    safety?
        Answer. DOE holds its contractors to the highest level of worker
    safety. EH writes the policies and requirements and provides technical
    assistance to the program offices who implement these requirements. The
    Office of Independent Oversight evaluates DOE and contractor compliance
    with these requirements. EH continues to analyze the information
    provided by the Office of Independent Oversight, especially where
    contractors may not be in compliance, in order to refine the
    requirements to achieve the right outcomes; protecting our workforce
    and the public. The changes in EH over the last several years has
    allowed us to better focus on setting the right policies to drive the
    right performance.

                               DOE SITE PROFILES

        Question. Last year, DOE testified that it was in the process of
    developing site profiles to pull together the necessary site data in
    order to speed up the case approval process for workers that were made
    sick while working for the Department. DOE's testimony stated that by
    developing a complete understanding of the occupational hazards at each
    of the DOE sites, it will help the doctors in evaluating claims of
    exposure based on the hazards a worker may have been exposed to and
    when. The site profiles will significantly improve the doctor's ability
    to do their job. Where do we stand on the development of site profiles
    and how much is being spent in fiscal year 2004 and how much have you
    provided for this effort in fiscal year 2005?
        Answer. DOE already provides all available medical, work history,
    work exposure and facility information to the Physician Panels. We
    consider the information DOE has been providing to the panels to be
    adequate to support Physician Panel deliberations. With respect to
    ``site profiles'', the term is not clearly defined and the Department
    believes that creating site profiles as commonly defined by advocates
    of this process would be a costly and time consuming effort that would
    not provide substantial assistance to Part D applicants. Further, it is
    not clear whether there is even adequate data to profile toxic
    exposures at DOE facilities in any reasonable way. Regulatory
    requirements for the collection and maintenance of information relevant
    to ionizing radiation exposures, such as the data used by NIOSH for
    Part B, predate and far exceed such requirements for occupational
    exposures to potentially toxic chemicals (Part D) at worksites. Such
    requirements, referred to as job-exposure matrices, can be
    exceptionally difficult, labor intensive, and expensive, if they are
    scientifically feasible at all.
        In fiscal year 2004, with the recent $23.3 million appropriations
    transfer that Congress approved, DOE will spend roughly $49 million to
    collect, compile, categorize and summarize the information required by
    the Physician Panels process. Of this, roughly $24 million will be
    spent on collecting information from the field sites and $25 million
    will be spent on data quality control, compiling, categorizing,
    summarizing and post-panel quality control. In fiscal year 2005, $14
    million is being requested for these functions.
        Question. How much will it cost and how long will it take to
    develop a site profile at each of the 15 largest DOE facilities?
        Answer. Currently, DOE is soliciting information on how to scope a
    project for providing a ``site overview.'' This project would provide
    for each site a generally standard format and improved categorization
    of existing information. At this time DOE does not have a specific
    dollar figure for this project. As discussed above, DOE believes that
    the limited value to a qualitative assessment on some pre-defined set
    of agents does not justify the high cost for developing this
    information and, therefore, DOE has no current plans to conduct or
    prepare comprehensive ``site profiles'' for DOE's facilities.
        Question. Can you provide for the record a timeline as to when you
    expect to have site profiles for the sites?
        Answer. DOE does not have a timeline for the development of site
    profiles. As discussed above, DOE believes it would not be prudent to
    develop and prepare ``site profiles'' as that term is commonly defined.
    However, DOE is investigating the development of site overviews that
    would better package existing data by site.

                                 BUDGET DETAILS

        Question. The fiscal year 2005 request fails to provide the same
    level of detail for the Office of Environment, Safety and Health as
    provided in the fiscal year 2004 request, especially in the area of the
    Energy Supply--Health Account. In addition to providing fewer details
    of your spending priorities there is also significantly less money. The
    budget provides $45 million. This is $22 million less than was provided
    in fiscal year 2004. I would appreciate a written description of your
    program budgets within each of the following accounts--Health, Employee
    Compensation, and Corporate Safety.
        Answer. The budget is broken down in detail commensurate with the
    total budget amounts. However, the budget request was based on certain
    assumptions.
    Under Health
        Occupational Health ($15,902,000).--This includes former worker
    medical screening, former beryllium worker surveillance, medical
    monitoring of former workers from Rocky Flats, integrated DOE
    occupational medicine support, and a portion of the funding for the
    Radiation Emergency Accident Center/Training Site (REAC/TS).
        Public Health ($13,500,000).--This includes funding to other
    agencies, including the National Institute for Occupational Safety and
    Health (NIOSH), the National Center for Environmental Health (NCEH) and
    the Agency for Toxic Substances and Disease Registry (ATSDR) for
    independent energy-related studies relevant to DOE workers and
    neighboring communities.
        Epidemiologic Studies ($3,300,000).--This includes a collection of
    both medical and exposure information to expand understanding of the
    health effects of radiation, chemical and other hazards to current DOE
    workers and the public.
        International Programs ($12,520,000).--This supports the upgrading
    and validation of our knowledge of radiation health effects among
    workers and populations exposed to ionizing radiation in the former
    Soviet Union and Spain, participation in the life span study of the
    Hiroshima and Nagasaki exposed population and environmental monitoring
    to support resettlement activities as well as special medical care for
    a specific group of radiation-exposed individuals in the Marshall
    Islands.
        Total.--$45,222,000.

    Under Employee Compensation
        For EEOICPA, the fiscal year 2005 budget request is $43 million for
    the operations of the EEOICPA Part D program, which includes the
    following activities and funding allocations. Resource centers jointly
    managed with the Department of Labor are funded at $2.4 million. These
    centers provide outreach to potential EEOICPA applicants and support
    during the application process. Collecting and producing medical, work
    history, work exposure and facility information data from the DOE field
    sites are provided $14 million. Processing the Part D cases up to the
    Physician Panels, paying for the Physician Panels and providing for
    quality controls are funded at $24.6 million. Additional Federal staff
    to manage the 200 percent increase in case processing and the 900
    percent increase in Physician Panel determinations that will be
    required to eliminate the backlog of Part D applications at DOE in 2006
    is provided $2 million.

    Corporate Safety.--$10,883,000
        Performance Assessment/Information Management ($2,000,000).--This
    provides for the analysis and certification of DOE's performance by
    synthesizing operational information, and also provides web-based
    information technology support for effectively distributing safety and
    health information.
        Quality Assurance ($6,483,000).--This provides quality assurance
    policies and requirements to support current DOE missions, and performs
    evaluations and accreditations to ensure that the health and
    environmental data that is generated by DOE is technically defensible.
    This includes the operation of the Radiological and Environmental
    Science Laboratory, a Federal reference laboratory that performs much
    of the Department's evaluation and accreditation services.
        Facility Safety ($1,600,000).--This supports appraisals of
    accidents, facility authorizations bases and safety allegations, and
    special safety reviews on specific topics such as seismic analysis,
    fire protections, facility design and the startup/restart of
    facilities.
        Enforcement ($800,000).--This activity covers the statutory mandate
    of the Price-Anderson Amendments Act of 1988 to enforce compliance with
    Code of Federal Regulations nuclear safety requirements at DOE sites
    and the enforcement of the Worker Occupational Safety and Health Rule.
        Question. Where do you propose to make the $22 million in spending
    cuts from the fiscal year 2004 appropriation to meet this year's
    request?
        Answer. The DOE EH health budget includes a variety of activities.
    There are several items in the health budget that require less funding
    in fiscal year 2004 comparable appropriation is $22 million more that
    the fiscal year 2005 request. The comparison to prior year funding is:

                                 FUNDING SUMMARY
                            [In thousands of dollars]
    ------------------------------------------------------------------------
                                                                  Amount
    ------------------------------------------------------------------------
    Program/Activity Health Fiscal Year 2003 Comparable               50,051
     Appropriation..........................................
    Program/Activity Health Fiscal Year 2004 Requests.......          66,660
    Program/Activity Health Fiscal Year 2004 Comparable               67,335
     Appropriation..........................................
    Program/Activity Health Fiscal Year 2005 Requests.......          45,222
    ------------------------------------------------------------------------

        Of the total decrease of $22 million, several items account for a
    decrease in the request of $16 million from fiscal year 2004 to fiscal
    year 2005 includes:
      --Decrease $12 million for international health studies. DOE's role
            in certain studies is reduced as they are coming to closure.
            The Department also plans to use carryover balances to meet
            some fiscal year 2005 requirements. DOE is evaluating its
            responsibilities and future involvement in these studies.
      --Decrease of approximately $3 million for public health studies
            around DOE sites because studies have concluded. These studies
            are conducted by Health and Human Services (HHS) agencies. This
            is transitioning to smaller, more highly focused studies, and
            it is expected that HHS will complete the DOE studies in fiscal
            year 2007.
      --Decrease of approximately $1 million for DOE occupational health
            programs, due to efficiencies to be realized by combining the
            12 individual worker screening programs into a comprehensive
            nationwide program. The nationwide programs will provide the
            most efficient and effective method to guarantee that all
            former DOE workers are offered the opportunity to participate
            and will be served consistently across the complex.
        Question. Please provide a summary of the Marshall Islands Program
    budget for fiscal year 2003, fiscal year 2004, and proposed for fiscal
    year 2005, which presents the Program's budget components, describes
    the activities to be changed, and the reasons for such changes.
        Answer. The following breakdown of the Marshall Islands Program is
    provided for fiscal year 2003, fiscal year 2004 and fiscal year 2005.

                                                [In thousands of dollars]
    ----------------------------------------------------------------------------------------------------------------
                                                                        Fiscal Year     Fiscal Year     Fiscal Year
                            Program Activity                               2003       2004 Allocated       2005
    ----------------------------------------------------------------------------------------------------------------
    Medical.........................................................           2,340           2,100           2,100
    Environmental...................................................           3,950           2,200           1,900
                                                                     -----------------------------------------------
          TOTAL.....................................................           6,290           4,300           4,000
    ----------------------------------------------------------------------------------------------------------------

        There are no activities to be changed in the level of services
    provided as part of medical surveillance and treatment of radiation-
    related conditions in fiscal year 2005. The medical program provider
    has managed the program for 6 years, therefore the program is under
    review and options for its future design and management are being
    considered. Upon review of options with Federal partners, the options
    will be presented to the Government of the Republic of the Marshall
    Islands, and the governments of the two affected atolls for discussion.
        For the environmental program, the changes in fiscal year 2004 were
    directed at clearing up the analysis backlog of the environmental
    samples gathered form the Marshall Islands and the preparation a final
    analytical summary report to support future program planning purposes.
    To date $4.3 million has been allocated as detailed in the above chart.
    Other than reductions associated with Congressionally directed prior-
    year offsets and rescissions, the only difference between appropriated
    and allocated-year-to-date is $1.5 million. That amount is being held
    in reserve to address additional activities which will be developed in
    conjunction with the Marshallese during the annual June-July meeting
    sponsored by DOE.
        The field missions for fiscal year 2004 were suspended to allow the
    scientists to focus on this backlog. The suspension did not delay any
    work required to assist in resettlement of Rongelap Island. In fiscal
    year 2005, the environmental program will support resettlement
    activities on Rongelap Island and the network of whole body counting
    facilities. The funds requested are adequate for these two activities.

                              DOE AND HHS STUDIES

        Question. DOE and HHS have signed cooperative MOUs over the past 15
    years that require DOE to provide funding to the National Institute for
    Occupational Safety and Health (NIOSH) for epidemiological studies on
    former DOE workers. I understand that the existing MOU will expire at
    the end of this year. Will you sign another agreement to provide for
    independent health studies of former DOE workers?
        Answer. It is the intention of DOE to develop, in cooperation with
    HHS organizations, a new MOU for the conduct of independent health
    studies. A draft revised MOU has been prepared; following internal
    review it will be sent to HHS for comment.

                        MARSHALL ISLANDS HEALTH TESTING

        Question. The traditional mission of the Marshall Islands Program
    has been to monitor health and the environment in the four affected
    communities. In the 1990's, the Program entered into MOAs with the four
    Atolls to support remediation and resettlement activities, but DOE's
    level of commitment to these new activities is unclear. Does DOE regard
    its support for remediation and resettlement activities as dependent on
    its traditional monitoring activities?
        Answer. DOE is committed to and will continue to meet its
    responsibilities to provide medical surveillance and treatment for
    radiation-related conditions among the exposed population on Rongelap
    and Utrik Atolls and to support resettlement activities. DOE will be
    negotiating annual work plans with each of the four atolls to assure
    continued environmental monitoring support for resettlement.
        Question. Are these activities undertaken on an ``as funds
    available'' basis, or would DOE request funds if necessary to support
    the remediation and resettlement activities set forth in the various
    MOAs?
        Answer. DOE annually requests funding that will assure continuity
    in medical surveillance and treatment of radiation-related conditions
    and support for resettlement activities. Environmental monitoring
    activities in the MOU's have in the past been supported on an ``as
    funds are available'' basis. It is DOE's intention to request and
    dedicate resources to meet its legislative responsibilities.
        Question. What is the status of DOE's MOAs with the four affected
    communities? Does DOE plan to extend the MOAs upon on their expiration?
        Answer. The Bikini MOU expired several years ago and has been
    replaced with an annual work plan; the Rongelap MOU extension expires
    this June; the Enewetak MOU expires in 2005, and the Utrik MOU in 2007.
    It is DOE's intention to explore with representatives of the four
    Atolls transitioning from MOUs to annual work plans that would focus
    activities on providing environmental monitoring support to
    resettlement.
        Question. Do you plan to have a physical DOE presence in the
    Marshall Islands, if so, where and what will their responsibilities
    entail?
        Answer. DOE is evaluating the need for a physical presence, beyond
    the logistical support office on Kwajalein Island, in order to provide
    environmental monitoring support to resettlement.

                        MARSHALL ISLANDS CARRYOVER FUNDS

        Question. It is my understanding that $1.5 million in fiscal year
    2004 funds has not been expended at this time. Is that correct? What
    work is not being performed in the Marshall Islands as a result of the
    withholding of this $1.5 million?
        Answer. It is correct that $1.5 million in fiscal year 2004 funds
    appropriated for the Marshall Islands are not currently planned to be
    expended in fiscal year 2004. This funding was identified for
    conducting an environmental mission to the Marshall Islands.
        Question. Given that there are 6 remaining months in this fiscal
    year, why hasn't this funding been obligated?
        Answer. It is felt that it is most important at this time to
    dedicate contractor resources to the development and publication of
    scientific and technical reports and articles on the latest
    radiological status. These reports and articles, providing the latest
    results of analysis of samples from previous environmental missions,
    will be critical to informing all parties in the conduct of
    deliberations concerning the Republic of the Marshall Islands Changed
    Circumstances Petition. The Department conducts annual meeting with the
    Marshallese and jointly prioritizes additional activities. These funds
    may be used for those specific activities or other follow-on activities
    jointly determined to be needed.
        Question. Could the remaining $1.5 million be used pursuant to
    DOE's MOAs with the four affected atolls? If yes, why hasn't DOE
    pursued this option?
        Answer. It is important that contactor efforts be dedicated to the
    development and publication of scientific and technical reports and
    articles analyzing the results of prior environmental missions at this
    time. It is DOE's intention to support activities in the MOU's
    consistent with these legislative responsibilities. The remaining $1.5
    million will be dedicated to the Marshall Islands program in the
    conduct of future activities in support of the medical care and
    resettlement activities.
        Question. Can this $1.5 million be reprogrammed to other activities
    within DOE or must it be expended within the Marshall Islands Program?
        Answer. It is DOE's intention to support its legislative
    responsibilities in the Marshall Islands. The $1.5 million could be
    reprogrammed in fiscal year 2004, with Congressional approval, but DOE
    has no intention of doing so at this time.

                       EXISTING SAMPLES--MARSHALL ISLANDS

        Question. What is the status of the previous samples that have been
    taken by Livermore scientists at the Marshall Islands?
        Answer. The DOE contractor is in the process of completing analysis
    and writing scientific and technical reports and articles to provide
    the latest data and information on radiological conditions on the four
    Atolls in the Marshall Islands.
        Question. Is it correct that, at this time, the samples have been
    analyzed and the Department is in the process of preparing a summary
    report? If yes, when will that report be available?
        Answer. Yes, the DOE contractor is in the process of preparing
    scientific and technical reports and articles on radiological
    conditions in the Marshall Islands. The contractors draft report is to
    be submitted to DOE for review. DOE has seen an early draft of the
    Whole Body Counting results, is awaiting a draft report on plutonium
    uptake data results, and expects a draft report on ``where we stand''
    on the radiological characterization of the four Atolls in the near
    future. The contractor has not determined its delivery dates for the
    deliverables to DOE.

                        MARSHALL ISLANDS ANNUAL MEETING

        Question. Will Program officials hold their next annual meeting
    with representatives of the four Atolls in June 2004? If not, when will
    that annual meeting take place?
        Answer. DOE Program officials do plan to hold the annual meeting
    with representatives of the four Atolls in June 2004 timeframe.
                                     ______

                  Questions Submitted by Senator Patty Murray

        Question. Ms. Cook, why ramp down the Hanford Former Worker Program
    (Hanford FWP) if there are over 2,700 workers with significant past
    exposures and who have requested examinations waiting to be screened at
    that site?
        Answer. We are not ramping down the program. We are transitioning
    to a nationwide medical screening program that will serve all former
    workers from all DOE sites locally. The Hanford Former Production
    Worker Medical Screening Project was initiated in 1996 as a 5-year
    pilot project. Any former worker interested in medical screening who is
    not seen this year by the Hanford Former Production Worker Medical
    Screening Project will be seen by the nationwide program, which is
    scheduled to be in place in October 2004.
        Question. Ms. Cook, how will USDOE ensure that workers who are
    currently awaiting exams in the FWPs do not risk being dropped from the
    program in the transition to a national program (subject of new RFA)?
        Answer. DOE has provided the principal investigator of each site-
    specific project with a toll-free number that can be given to
    individuals interested in screening but for whom the ongoing medical
    screening projects cannot see this year. Additionally, through the
    existing site-specific projects, DOE will soon mail an information
    package regarding the transition to a nationwide program. Included in
    this package is an authorization for individuals to sign requesting
    that their names and mailing addresses be provided to DOE. DOE will
    then send them additional information upon initiation of the new
    nationwide program.
        Question. Ms. Cook, has performance of medical screening grantees
    known as the former worker program been satisfactory?
        Answer. For the most part, yes. However, there are several lessons
    learned from this effort. These include the following:
      --DOE's central management of these projects is complicated by the
            multiple management teams within each of the numerous
            cooperative agreements, each with layers of their own
            management and subcontractor management;
      --Multiple layers of management per project resulting in increased
            overhead charges and fees;
      --Communication between DOE and participating organizations, as well
            as participating organizations and former workers, is
            cumbersome;
      --Recruitment of participants has been a major cost for many of the
            projects, with additional years of funding for some projects
            resulting in minimal increases in worker participation;
      --Coordination efforts between the FWP and the Former Beryllium
            Worker Medical Surveillance Program at DOE sites have been
            challenging;
      --The significant resource needs for each of the site-specific
            efforts conducted to date has resulted in a delay in the
            initiation of screening for former workers at remaining defense
            nuclear sites.
        Question. Ms. Cook, how will the new national program coordinate
    State workers compensation and EEOICP claims (sub-part D), e.g. will
    the examination sites around the country be expected to file Washington
    State worker's compensation claims and sub-part D claims as workers
    currently get?
        Answer. The current programs were not expected to file state
    workers compensation claims on behalf of workers. The workers who
    participate in the new program will be directed to the Federal and
    State resource centers as appropriate, where they will get the
    assistance they need to file.
        Question. Ms. Cook, why are the Former Worker Programs (FWPs) being
    asked to destroy workers' data? What are the risks to privacy when such
    data are protected by Institutional Review Boards responsible for
    protecting human research subjects?
        Answer. The Former Worker Programs are being asked to handle
    records appropriately based on the workers' desires. The worker gets to
    decide what happens to their records. Of course, a worker may have
    their own records. Then the worker can decide if they would like the
    DOE to keep copies. The worker may also decide that they would like the
    former program to have copies of their records and use them for other
    purposes, but that is a decision to be made by each worker.
    Additionally, the clinics that conduct the medical screening under the
    FWPs are required by State law to maintain the workers' medical records
    for a certain number of years. Workers have the option of obtaining
    copies from these clinics in the future as well.
        Question. Ms. Cook, how will the Office of Worker Advocacy (OWA)
    obtain records from FWPs who are being told to destroy such records?
        Answer. The Office of Worked Advocacy can only obtain records from
    the worker, or with the worker's permission. The DOE does not have open
    access to workers' records.
        Question. Ms. Cook, has NIOSH reviewed the new RFA, as required by
    Section 3162 of the 1993 Defense Authorization Act?
        Answer. Section 3162 of the 1993 Defense Authorization Act does not
    require NIOSH to review the RFA. We have also referred back to the
    original MOU signed by Energy Secretary Hazel O'Leary and HHS Secretary
    Donna Shalala in August 1995, and this MOU does not call for HHS
    (NIOSH) review of DOE-issued RFAs either.
        Question. Ms. Cook, are lessons learned and experience from the
    FWPs during the 8 years of operation being utilized in the RFA?
        Answer. Yes, they are. The current program is expensive and
    cumbersome to operate when divided into 12 separate cooperative
    agreements. There are workers at many sites that are still waiting for
    an opportunity to have screening exams. We understand we must provide
    this screening more efficiently and effectively and we believe the
    nationwide medical screening program will accomplish this objective.
      --DOE's central management of these projects is complicated by the
            multiple management teams within each of the numerous
            cooperative agreements, each with layers of their own
            management and subcontractor management;
      --Multiple layers of management per project resulting in increased
            overhead charges and fees;
      --Communication between DOE and participating organizations, as well
            as participating organizations and former workers, is
            cumbersome;
      --Recruitment of participants has been a major cost for many of the
            projects, with additional years of funding for some projects
            resulting in minimal increases in worker participation;
      --Coordination efforts between the FWP and the Former Beryllium
            Worker Medical Surveillance Program at DOE sites have been
            challenging;
      --The significant resource needs for each of the site-specific
            efforts conducted to date has resulted in a delay in the
            initiation of screening for former workers.
                                     ______

        Questions Submitted to the Office of Civilian Radioactive Waste
                                   Management
                Questions Submitted by Senator Pete V. Domenici

                                 BUDGET REQUEST

        Question. The President's budget requests $880 million for Yucca
    Mountain. A significant portion of this funding is to be paid for by
    fees assessed to utility customers. The fund will collect $749 million
    this year. The budget proposes that the annual receipts be reclassified
    as discretionary funds and then appropriated. As the former Budget
    Committee Chairman, I know you can't waive a magic wand to reclassify
    these fees. It requires legislation and some degree of cooperation. I
    am not optimistic this can be accomplished this year. However, if we
    fail to get agreement to reclassify the fees, the Senate Budget
    Resolution assumes a minimum level of funding of $577 million. If
    Congress is only able to provide $577 million, what activities will the
    Department be forced to defer in fiscal year 2005?
        Answer. National and Nevada transportation activities would again
    be deferred, with no reasonable chance for schedule recovery. Site
    infrastructure maintenance work would be delayed, and effort devoted to
    repository design and development would be reduced.
        Question. Will this significantly delay the opening of Yucca
    Mountain beyond the 2010 target date and can you estimate what impact
    this would have on litigation costs for the department?
        Answer. We are at the point where any reduction in our funding
    profile, in fiscal year 2005 or the out-years, will adversely affect
    the scheduled 2010 opening date for the repository. If funding for
    fiscal year 2005 is frozen at the fiscal year 2004 level of $577
    million, the Department's ability to meet the scheduled 2010 repository
    opening date will be severely compromised and most likely lost. To
    date, more than 65 claims have been filed by utilities in the Court of
    Federal Claims for breach of contract to recover monetary damages
    incurred as a result of the Department's delay. For each year of delay
    beyond 2010 that the Department is unable to begin accepting spent
    nuclear fuel from commercial reactors pursuant to the Department's
    contracts with utilities, the Department estimates that the utilities
    will incur costs of $500 million a year to store their spent fuel at
    utility sites, some portion of which the Department would be liable
    for. A delay in opening the repository could substantially increase the
    government's liability.

                    YUCCA MOUNTAIN--METAL STORAGE CONTAINERS

        Question. I have read that Nuclear Regulatory Commission (NRC)
    Chairman Nils Diaz disputes the controversial evaluation made by the
    Nuclear Waste Technical Review Board regarding the corrosion analysis
    of the metal containers that will be used at Yucca Mountain. Dr. Chu
    could you please explain where you believe the science comes out on
    this issue and share with the committee how site managers have dealt
    with this issue?
        Answer. The EPA's radiation protection standards and NRC's
    licensing regulations require DOE to evaluate long-term repository
    safety based on risk to the public. This requires an assessment of the
    total system, and must take into account the likelihood of events
    occurring and their effect on public health and safety.
        The NWTRB's report focuses on a specific component of the
    repository system, namely the disposal canisters, and does not address
    the effect on the safety of the total system. In addition, the NWTRB
    position relies on the presence of very specific conditions in the
    repository tunnels, which DOE technical studies show are very unlikely
    and will have no significant effect on public health and safety.
        DOE's current design will meet the EPA and NRC regulations, and we
    will demonstrate this in our license application to the NRC. DOE will
    continue to discuss the corrosion issues with the NWTRB at their
    regularly scheduled public meetings. Finally, if required by the NRC,
    the issues will be fully and openly explored during the licensing
    proceedings.
        Question. Do you believe that the U.S. population would be safer to
    locate spent fuel in Yucca Mountain as opposed to leaving the waste
    where it currently is scattered across the country?
        Answer. As Secretary Abraham indicated in his Yucca Mountain Site
    Recommendation statement, spent nuclear fuel and high-level radioactive
    waste is currently stored in surface facilities at nearly 130 locations
    in 39 States awaiting final disposition. Most of these temporary
    storage facilities are located near major population centers, and
    because nuclear reactors need abundant water, are located near rivers,
    lakes and seacoasts. More than 161 million Americans live within 75
    miles of these temporary storage facilities. It is clearly preferable
    to locate these wastes at Yucca Mountain, on Federal land, more than 90
    miles from any major population center, where they would be placed
    1,000 feet underground.

                              YUCCA TRANSPORTATION

        Question. It is my understanding that the Department has not made a
    final decision as to whether it will use rail or truck transportation
    to move the waste to Yucca, or decided on a specific route. When will
    the Department make its final decision and begin the Environmental
    Impact Study?
        Answer. On April 2, 2004, I signed the Record of Decision selecting
    mostly rail as the transportation mode, and the Caliente corridor as
    the rail corridor in Nevada. To initiate the Environmental Impact
    Statement development process for a specific rail alignment within the
    corridor, DOE conducted five public scoping meetings in Nevada from May
    3 through May 17, 2004. The public comment period is scheduled to end
    June 1, 2004. We expect to issue the Draft EIS early next year and
    issue the Final EIS later in the same year.

                              SUBCOMMITTEE RECESS

        Senator Domenici. That's what it is. So we stand in recess
    until the call of the Chair.
        [Whereupon, at 11:45 a.m., Wednesday, March 31, the subcom-
    mittee was recessed, to reconvene subject to the call of the
    Chair.]

        ENERGY AND WATER DEVELOPMENT APPROPRIATIONS FOR FISCAL YEAR 2005

                                  ----------

                            TUESDAY, APRIL 20, 2004

                                           U.S. Senate,
               Subcommittee of the Committee on Appropriations,
                                                        Washington, DC.
        The subcommittee met at 10:05 a.m., in room SD-124, Dirksen
    Senate Office Building, Hon. Pete V. Domenici (chairman)
    presiding.
        Present: Senators Domenici, Cochran, Burns, Craig, Stevens,
    Reid, Murray, and Dorgan.

                           DEPARTMENT OF THE INTERIOR

                             Bureau of Reclamation

    STATEMENT OF JOHN W. KEYS, III, COMMISSIONER
    ACCOMPANIED BY:
            J. RONALD JOHNSTON, PROGRAM DIRECTOR, CENTRAL UTAH PROJECT
                COMPLETION ACT OFFICE
            BOB WOLF, DIRECTOR, BUDGET OFFICE
            PAM HAYES, BUDGET OFFICE

                 OPENING STATEMENT OF SENATOR PETE V. DOMENICI

        Senator Domenici. The hearing will please come to order. We
    understand Senator Reid will be joining us shortly, perhaps
    some other Senators, but we're going to go right on through
    with what we've got to do today.
        Okay, Panel One will be Mr. John Keys, Commissioner of the
    Bureau of Reclamation. We welcome you, Commissioner, and thank
    you for all your hard work. We know this is a very difficult
    time for you because of the budget. If you don't mind, and
    Senator Burns doesn't mind, I'd like to summarize where we are.
        We're once again in a difficult position because of some
    assumptions that the White House makes, that OMB makes, with
    reference to how we might save some money or maybe add some
    money to our pot, which I don't think we're going to be able to
    do. So today the Bureau of Reclamation and the Corps of
    Engineers--and we will appropriately address the General when
    he comes up here, with reference to this being his last
    testimony before he leaves--there will be two panels, and, in
    the tradition of the subcommittee, this year we will begin with
    the Bureau, and then we will go the Corps as a second panel.
        This subcommittee has jurisdiction over our country's water
    resources, under which falls the Bureau of Reclamation and the
    Corps of Engineers. Both agencies are responsible for managing
    this precious national resource in a cost-effective manner,
    while balancing the needs of its diverse users.
        I believe the mission of these two agencies will only
    become more critical over time, as increasing pressure is
    placed on our water resources. Unfortunately, I fear this is a
    budget request that only exacerbates the problem that we face
    in addressing our various water resource requirements. Overall,
    I believe it will be very difficult, if not impossible, to meet
    what I consider a workable budget for these two agencies
    because the administration has proposed such a low starting
    point.
        For the Bureau of Reclamation, for instance, the President
    has requested, for fiscal year 2005, $956 million, a $14
    million increase over 2004. However, that request assumes an
    offsetting collection of Power Marketing Association--Senator
    Reid, you know that's not possible; and welcome to the
    meeting--and the maintenance of activities which are not likely
    to be enacted, and, therefore, effectively becomes a cut of $30
    million. If you back out these assumed savings, which are not
    going to happen, which I regret--OMB continues to try, and puts
    them in, knowing full well, they're not going to happen--then
    if you back out these assumed savings, the true 2005 request is
    $926 million, a $17 million reduction over 2004.
        There are a few items of particular concern regarding the
    Bureau's budget. The proposed funding for the silver minnow, a
    listed species in my home State of New Mexico, is $18 million--
    a listed species, which I don't believe can get along with that
    small amount--that's a $14 million reduction from 2004, and
    we've not been able to make any real headway in establishing
    alternatives that might cost less. Now, I know that the
    administration does not find this as high a priority as I do,
    but I believe this number is just not workable.
        Recently, the committee held a hearing regarding the
    Animas-La Plata. You're fully aware of that hearing's contents,
    Mr. Commissioner, and the understated cost estimate. As you
    know, I shared my frustration, as did some other Senators, with
    the Bureau, because they permitted this to occur. And the
    Department knows how a number of us feel about this
    predicament. As we look forward, I must say that I am concerned
    that this year's funding request does not take into account
    this recent cost increase in the project.
        This year, the administration proposes to replace the
    Western Water Initiative by Water 2025, and the request is $20
    million, up $11.6 million from 2004. The program is to continue
    to address critical western water issues. The biggest change
    here is that this program is proposed to become a grant-based
    effort, whereby local projects would meet criteria in order to
    be a recipient. Actually, with the water needs in the country,
    it is almost hilarious to have a proposal for $20 million for
    the water needs of our country.
        Last year in my State, the Middle Rio Grande District was
    provided funds under the Western Water Initiative. I'd like to
    hear from you how this effort has improved the situation in the
    West and on the Rio Grande and Albuquerque.

                               PREPARED STATEMENT

        Now, for the Corps, we have similar problems. I will wait
    until we get the Corps, and then make my statement regarding
    the same.
        [The statement follows:]
                 Prepared Statement of Senator Pete V. Domenici

        The committee will please come to order.
        Today we have the Bureau of Reclamation and the Corps of Engineers
    before us to testify regarding their fiscal year 2005 budgets. There
    will be two panels, and as the subcommittee's tradition dictates, this
    year we will begin with the Bureau of Reclamation in the first panel
    and the Corps of Engineers in the second panel.
        This subcommittee has jurisdiction over our country's water
    resources, under which falls the Bureau of Reclamation and the Corps of
    Engineers. 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. Unfortunately, I fear this is a budget request that only
    exacerbates problems we face in addressing our various water resource
    requirements. Overall, I believe it will be very difficult to meet what
    I would consider a workable budget for these two agencies because the
    administration has proposed such a low starting point.
        For the Bureau of Reclamation, the President has requested for
    fiscal year 2005 $956 million, a $14 million increase over fiscal year
    2004. However, the request assumes an offsetting collection for Power
    Marketing Association operation and maintenance activities which are
    not likely to be enacted and therefore effectively becomes a cut of $30
    million. If you back out these assumed savings, the true 2005 request
    for the Bureau is $926 million, a $17 million reduction from fiscal
    year 2004.
        There are a few items of particular concern to me regarding the
    Bureau's budget. The proposed funding for the silvery minnow, a listed
    species in my home State of New Mexico, is $18 million, a $14 million
    reduction from fiscal year 2004. Now I know that the administration
    does not find this as high as a priority as I do, but I believe this
    number is just not workable given the State's continued drought. I will
    discuss this further when we get to the questions.
        Recently, this committee held a hearing regarding the Animas-La
    Plata project and the understated cost-estimate. As you know
    Commissioner, I shared my frustration with the Bureau and the
    Department about how we got in this predicament. I am sure you share my
    same frustration. As we look forward, I must say that I am concerned
    that this year's funding request does not take into account this recent
    cost increase in the project.
        This year the administration proposes to replace the Western Water
    Initiative by Water 2025 and the request is $20 million, up $11.6
    million from fiscal year 2004. The program is to continue to address
    critical Western water issues. The biggest change here is that this
    program is proposed to become a grant-based effort whereby local
    projects must meet criteria in order to be a recipient. The proposed
    cost-share is 50/50.
        Last year the Middle Rio Grande Conservancy District was provided
    funds under the Western Water Initiative. I'd like to hear from you how
    this effort has improved the situation on the Rio Grande and elsewhere
    in the West.
        For the Corps in fiscal year 2005, the President has requested
    $4.215 billion, which is $356 million below the fiscal year 2004
    enacted of $4.571 billion. There are a variety of policy changes, most
    of which I find ridiculous and irresponsible. Mr. Woodley, I will tell
    you that in many instances in the Corps' budget it appears as if you
    cut the Corps' budget and then after the fact, you tried to justify it
    by proposing a change in policy.
        The two that come to mind are the beach restoration policy which
    you propose to abolish. The second is the 29 projects, currently mid-
    construction--let me repeat, mid-construction--which you propose to
    cancel altogether. Now, how can you honestly propose to cancel a
    project half-way through construction, so that the Federal Government
    cannot realize any of the projects benefits and protections? I will
    tell you Mr. Woodley you will not find this provision enacted at the
    end of the year.
        The Corps' request, like the Bureau's, assumes again this year an
    offsetting collection for direct funding Power Marketing Association's
    operation and maintenance activities. This provision is included in the
    current draft of the Energy Bill but does not cover fiscal year 2005.
    The effect of not having this enacted is that it results in a further
    cut of $150 million making the true fiscal year 2005 request $4.065
    billion, an 11 percent reduction from fiscal year 2004.
        I would like to share with my colleagues who may not already be
    aware, that the Corps is the project management agent in Iraq. They are
    the agency directly tasked with the physical reconstruction of Iraq
    because of both its expertise in project management on a large scale,
    and in the rehabilitation of critical infrastructure.
        I find it ironic that the Corps' talent we are all relying on so
    heavily in Iraq is the very same one that is most negatively impacted
    by the administration's budget. I believe that if the administration
    had its way, the Corps would merely become an operations and
    maintenance agency. I will tell you Mr. Woodley that the very Corps
    talent we are utilizing in Iraq was only developed as a direct result
    of its domestic work in all of our States.
        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 2005 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.
        On our first panel will be the Bureau of Reclamation. Appearing
    before us will be Commissioner of the Bureau of Reclamation, John Keys,
    and Program Director Ronald Johnston from the CUP Office.
        I would like to welcome the members of the second panel from the
    Corps of Engineers. They are Assistant Secretary for Civil Works, John
    Paul Woodley, Jr.; Lieutenant General Flowers, Chief of Engineers;
    Major General Griffin, Director for Civil Works; and Rob Vining, Chief,
    Programs Management Division.
        I would ask both panels to keep your statements to 10 minutes if
    possible.
        Senator Reid would you like to make your opening remarks before we
    start off with the Commissioner?

        Senator Domenici. Now, having said that, if you don't mind,
    Senator Reid, I will proceed on the basis of arrival, and----
        Senator Reid. Sure, that's fine.
        Senator Domenici [continuing]. Senator Burns has been
    waiting for a long time.
        Senator Burns. I'd yield to the Ranking Member.
        Senator Domenici. Thank you so much.
        Senator Reid.

                        STATEMENT OF SENATOR HARRY REID

        Senator Reid. Thank you very much, Senator Burns.
    Appreciate your courtesy.
        I first want to thank the witnesses that we're going to
    have today for the two panels, Commissioner of the Bureau of
    Reclamation, and, of course, General Flowers, who knows--and
    the Assistant Secretary, John Woodley.
        It's awkward and difficult, I know, for you to defend the
    budget proposals presented by the administration this year. For
    fiscal year 2005, as my friend, Senator Domenici has indicated,
    the administration has proposed large spending increases for a
    number of our Nation's defense and homeland security. And I
    support that. But to have a secure Nation includes things other
    than the things that explode. We have to do what we can with
    the Bureau of Reclamation and the Army Corps to make sure that
    these projects also are funded at a level that we can live
    with.
        Everyone should understand, if we went forward with this
    budget, it would cost the American people more to shut the
    projects down than would be available for few remaining. It's
    troubling.
        We cannot secure the homeland without a strong economy. We
    have with us today the Chairman of the Homeland Security
    Subcommittee of Appropriations, Senator Cochran, an important
    new subcommittee. And I support the subcommittee and the
    problems that they have.
        Take, for example, water resource projects funded in this
    bill. They, in my opinion, are a significant part of our
    national economy and provide important and positive economic
    benefits. The chief of engineers cannot even recommend a
    project to this administration or this Congress unless the
    analysis shows that positive net economic benefits will accrue
    to the national economy. The same is true for the Commissioner
    of the Bureau. Therefore, the only conclusion I can draw from
    this budget is that the administration places our economy, our
    economic security, in a different category than our homeland
    security. I don't share this view. I believe it's shortsighted.
        Water resource infrastructure benefits every American. How
    many of us realize that a typical household uses only 50 to 85
    gallons of water a day? However, it takes nearly 1,200 gallons
    of water per person per day to meet the needs of farmers,
    factories, electric utilities, and many other organizations
    that make it possible for us to have food on our table, a
    computer on our desk, and power for our homes.
        During a hundred years, the Bureau of Reclamation has had a
    major impact on life in the West. The first project ever in the
    history of the country was the Newlands Project in Northern
    Nevada, which is still operable. Without Bureau water projects,
    the western population economy could not be sustained.
    Certainly, that's the case in the State of Nevada.
        The Bureau and the Corps water-storage projects have a
    total capacity of nearly 570-odd-million acre feet. This
    provides municipal and industrial water supply to millions of
    our citizens. The water-supply infrastructure provided by the
    Bureau and the Corps in the West are the lifeblood of the
    communities they serve. Without these investments, the
    tremendous population growth in our western States would not
    have been possible. Further, the tremendous bounty of our
    western farms could not be achieved without these projects.
        Today, the Bureau is having a major impact on many of our
    citizens' lives in the Great Plains providing clean drinking
    water where many have never had it before. In many of our
    western States, the water that comes into people's homes is the
    color of a strong cup of tea. Water out of the Colorado, until
    it's strained, is like mud. When people try to wash their
    clothes without the work done by the agencies I've spoken of,
    it stains them. Sinks, tubs, and toilets are all stained by
    this water. The Bureau's rural water programs have been a
    godsend to these communities. However, funding for these
    programs needs to be increased, not decreased. I'm glad that,
    for the fiscal year 2005, the administration seems to recognize
    the worth of these programs. I hope so, anyway.
        Reclaimed water projects in the West have allowed many
    States to stretch their precious water resources. Nevada relies
    heavily on recycled water for golf courses and water features
    on the Las Vegas strip and for many other uses. Without this
    recycled water, Nevada would find it very difficult to live
    within its allocation on the Colorado River. Yet funding for
    these vital projects was again severely cut this year.
        The people preparing this budget don't realize it, but the
    Federal limit for most of these projects is extremely low to
    begin with. The Federal dollars, when leveraged with the State
    and local dollars, make these projects viable. The Bureau and
    the Corps provide about 35 percent of the Nation's
    hydroelectric power, which amounts to nearly 5 percent of the
    total U.S. electric capacity. Four out of five homes in the
    Northwest are powered by hydroelectric.
        The administration's budget request contains a huge number
    of gimmicks designed to mask the huge deficits they're running
    up. The administration has again recycled the hydropower
    gimmick for the Corps, and expanded it to include the Bureau.
    The budget proposal includes the assumption that the Power
    Marketing of the administration, as Senator Domenici has said,
    will contribute $30 million toward operation and maintenance of
    Bureau hydropower facilities and $150 million toward Army Corps
    facilities. This is just absolutely foolishness.
        Enabling legislation of these proposals has not been
    enacted. We could ignore the proposal and not fund a portion of
    Bureau and Army Corps hydropower. This would have an extreme
    impact on electricity production. The other option is for us to
    appropriate the necessary funds. To take funding away from
    other priorities to fund this unfunded necessary task is--due
    to these budget gimmicks. This is the third straight year that
    the administration has included this proposal for the Army
    Corps, and we still don't have the enabling legislation.
        One would think we're sending the appropriate message in
    this proposal, but someone doesn't understand it. Forty-one
    States are served by the Corps ports and waterways. These ports
    and waterways provide an integrated, efficient, and safe system
    for moving cargo. Two-point-three billion tons of cargo are
    moved through these ports and waterways. The value of this
    cargo to our national economy is $700 billion. Navigable
    waterways generate over 13 million jobs and nearly $150 billion
    in Federal taxes.
        The budget proposal cuts operation and maintenance funding
    to low-use waterways and ports. This is akin to not funding
    snow removal on secondary streets, while completely clearing
    the interstate highway system. You end up with a great system
    with no way to fully utilize it. The same is true of low-use
    waterways and ports and their relations to our deepwater
    harbors. The inland waterway system operates as an integrated
    unit. Not funding a portion of it drags down other parts of the
    system.
        Average annual damages prevented by the Corps flood-control
    projects exceed $20 billion. From 1928 to 2000, cumulative
    flood damages prevented, when adjusted for inflation, were $709
    billion, for an investment of $122 billion. That is nearly a
    6:1 return. It's hard to find many things in the Federal budget
    that have a 6:1 rate of return, and yet this area has been
    severely underfunded in the budget. Again, only the Simms
    Bayou, Eastern Texas project, and Westbank, in the vicinity New
    Orleans, projects were adequately funded. The Corps will likely
    have to juggle the funding shortfalls for remaining projects to
    keep work going on them. Remember what I said initially. To
    follow what we have in this budget would cost more than we
    would save, and that's an understatement.
        The President's budget proposals also include another new
    beach policy. It's the third year in 3 years. This is the worst
    one yet. I have to believe that someone in the bowels of the
    administration that comes up with these policies isn't
    thinking. Beaches are the leading tourist destination in our
    country. California beaches alone receive nearly 600 million
    tourist visits every year. This is more tourist visits than to
    all the lands controlled by the National Park Service and the
    Bureau of Land Management combined. Beach tourists contribute
    $260 million to the U.S. economy and $60 billion in Federal
    taxes, yet for this budget that we're asked to approve, the
    administration has decided that the Federal Government should
    only participate in the initial construction of beach
    restoration, and that local interests should be responsible for
    all subsequent beach renourishments. This proposal tells our
    citizens that government will provide your initial storm-damage
    protection, but after we finish, you're on your own.
        The impacts of this policy resonate through this budget,
    and are impacting execution of funding provided this year. Both
    the Corps and Bureau contribute to our Nation's environmental
    protection. Over $1 billion, or 25 percent of the Army's Corps
    fiscal appropriation, were targeted for environmental
    activities. Reclamation expended a similar percentage on their
    budget.
        One final note. I would be remiss if I didn't mention the
    Brazos Island Texas Project--the Island Harbor Texas Project.
    In fiscal year 2004, the first year of funding was provided to
    determine the Federal interest. The fiscal year 2005 budget has
    unilaterally determined that not only is the project in the
    Federal interest, but it should be funded for construction even
    though a feasibility study has not been conducted, nor has the
    project been authorized. Five hundred thousand dollars provided
    in the request to conduct a feasibility study, and $9\1/2\
    million was provided to construct this unauthorized project. I
    can't remember a time when funding was provided for these two
    phases at the same time. This is astounding, in light of the
    fact that the administration is holding up funding for numerous
    projects that have been fully vetted by the Corps and the
    Assistant Secretary, yet the administration exempted this
    project not only from the entire review system, but also from
    being authorized by Congress for construction. This project
    should face the same scrutiny as all other projects, and I
    intend to treat this project the same as all other projects.

                               PREPARED STATEMENT

        It's clear to me, and it should be clear to all of us, that
    investments in our water infrastructure strengthen our economy
    and, thereby, directly contribute to our homeland security. So
    I intend to work with Senator Domenici, the full committee
    chairman, Senator Stevens, and Senator Byrd, to try to find
    additional resources to more adequately fund our water
    infrastructure.
        Thank you very much for your patience, and especially you,
    Senator Burns.
        [The information follows:]

                    Prepared Statement of Senator Harry Reid

        Good morning.
        I am glad to be here today with my good friend, Senator Domenici
    and his staff as we work towards preparing our annual Energy and Water
    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 to explain and elaborate on the President's
    budget proposals.
        However, most importantly, we will develop our appropriations bill
    by taking into account the needs of our Members and the American
    people.
        I want to thank our witnesses from the Bureau of Reclamation and
    the U.S. Army Corps of Engineers for appearing before us today. I know
    that it is both awkward and difficult for you to defend the budget
    proposals presented by the administration in this year's budget.
        For fiscal year 2005, the administration has proposed large
    spending increases for our Nation's defense and our homeland security,
    and yet the budget proposals for the Bureau of Reclamation and the Army
    Corps are not only flat, they are counterproductive and will, if
    enacted, cost the American people more to shut projects down than will
    be available to move the few remaining.
        I find this very troubling.
        Homeland security has rightly been a priority within this
    administration. However, I do not believe that we can secure the
    homeland without a strong economy.
        The water resource projects funded in this bill are a significant
    part of our national economy and provide important and positive
    economic benefits.
        The Chief of Engineers cannot even recommend a project to this
    administration or this Congress unless the analysis shows that positive
    net economic benefits will accrue to the national economy. The same is
    true for the Commissioner of the Bureau of Reclamation.
        Therefore, the only conclusion that I can draw from this budget is
    that the administration places our economic security in a different
    category than our homeland security.
        I do not share this shortsighted view. Water resource
    infrastructure benefits all of us.
        I wonder how many of us realize that the typical household only
    uses 50 to 85 gallons of water a day. However, it takes nearly 1,200
    gallons of water per person per day to meet the needs of farmers,
    factories, electrical utilities, and the many other organizations that
    make it possible for us to have food on our table, a computer on our
    desk and power for our homes.
        During their 100-year history, the Bureau of Reclamation has had a
    major impact on life in the west. Without Bureau water projects, the
    western population and economy could not be sustained, including my
    home State of Nevada.
        Bureau of Reclamation and 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. Further, the
    tremendous bounty of our western farms could not be achieved without
    these projects.
        Today the Bureau is having a major impact on many of our citizens'
    lives in the Great Plains by providing clean drinking water where many
    have never had it before. In many of our western States, the water that
    comes into people's homes is the color of a strong cup of tea. When
    people try to wash their clothes, it stains them. Sinks, tubs and
    toilets are all stained by this water.
        The Bureau's rural water programs have been a godsend to these
    communities, however, funding for these programs needs to be increased.
    I am glad that for fiscal year 2005 the administration seems to
    recognize the worth of these programs after the devastating cuts made
    in fiscal year 2004 that Congress had to restore.
        Reclaimed water projects in the west have allowed many western
    States to stretch their precious water resources. My own State of
    Nevada heavily uses recycled water for the golf courses and water
    features on the Las Vegas Strip and for other uses.
        Without recycled water, Nevada would find it very difficult to live
    within its 300,000 acre-foot allocation of the Colorado River.
        Yet, funding for these vital projects was again severely cut this
    year. Perhaps the people preparing this budget don't realize it, but
    the Federal limit for most of these projects is relatively low.
    However, the Federal dollars when leveraged with the State and local
    dollars make these projects viable.
        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. Four out of five
    homes in the northwest are powered by hydroelectric power.
        As always, the administration's budget request contains a huge
    number of budget gimmicks designed to mask the huge deficits they are
    running up. The administration has again recycled a hydropower gimmick
    for the Army Corps and expanded it to include the Bureau of
    Reclamation. The budget proposal includes the assumption that the Power
    Marketing Administrations will contribute $30 million towards operation
    and maintenance of Bureau of Reclamation hydropower facilities and $150
    million towards Army Corps facilities.
        Enabling legislation for these proposals has not been enacted.
    Absent this legislation, we have two choices. We could ignore the
    proposal and not fund this portion of Bureau and Army Corps hydropower.
    This would have extreme impacts on Federal hydropower production.
        The other option is for us to appropriate the necessary funds. That
    is, to take funding away from other priorities to fund this unfunded
    necessary task due to budget gimmicks. This is the third straight year
    that the administration has included this proposal for the Army Corps
    and enabling legislation has still not been enacted. One would think we
    were sending the appropriate message on this proposal, but obviously
    someone does not understand it.
        Forty-one States are served by Army Corps ports and waterways.
    These ports and waterways provide an integrated, efficient and safe
    system for moving bulk cargos. Two-point-three 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.
        The budget proposal again cuts operation and maintenance funding to
    ``low use'' waterways and ports. This is akin to not funding snow
    removal on secondary streets while completely clearing the interstate
    highway system. You end up with a great system with no way to fully
    utilize it.
        The same is true of ``low use'' waterways and ports and their
    relationship to our deepwater harbors. The inland waterway system
    operates as an integrated unit. Not funding a portion of it drags down
    other parts of the system.
        I am gratified to see that the budget proposal adequately funds the
    New York and New Jersey Harbor project as well as the Olmstead Lock and
    Dam project on the Ohio River, however, it does this at the expense of
    all of the other navigation projects. Only these two chosen projects
    will be able to initiate any new work for fiscal year 2005. All of the
    projects will have to limp by on the remaining funding.
        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.
        It is hard to find many things in the Federal budget that have a 6
    to 1 rate of return, and yet this area has been severely underfunded in
    the budget. Again, only the Sims Bayou, Houston, Texas, project and the
    West Bank and Vicinity, New Orleans, project were adequately funded.
    The Army Corps will likely have to juggle the funding shortfalls for
    the remaining projects to keep work going on them.
        The President's budget proposal has also included another ``new''
    beach policy, his third in 3 years. This is the worst one yet. I have
    to believe that someone in the bowels of the administration that comes
    up with these policies is just not thinking them through.
        Beaches are the leading tourist destination in the United States.
    California beaches alone receive nearly 600 million tourist visits
    annually. This is more tourist visits than to all of the lands
    controlled by the National Park Service and the Bureau of Land
    Management combined.
        Beach tourists contribute $260 billion to the U.S. economy and $60
    billion in Federal taxes.
        And yet, for fiscal year 2005, the administration has decided that
    the Federal Government should only participate in the initial
    construction of beach restoration projects and that the local interests
    should be responsible for all subsequent beach renourishments needed
    over the 50 year life of the project.
        This proposal tells our citizens, that the government will provide
    your initial storm damage protection, but after we finish, you're on
    your own!
        The impacts of this beach policy resonate throughout the fiscal
    year 2005 budget and are impacting execution of funding provided in
    fiscal year 2004.
        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 2004 appropriations was targeted for
    environmental activities. Reclamation expended a similar percentage of
    their budget on these important activities.
        One final note about the President's proposal that I would be
    remiss if I did not mention is the Brazos Island Harbor, Texas,
    project. In fiscal year 2004, first year funding was provided to
    determine the Federal interest.
        The fiscal year 2005 budget proposal has unilaterally determined
    that not only is the project in the Federal interest, it should be
    funded for construction, even though a feasibility study has not been
    conducted nor has the project been authorized for construction. Five
    hundred thousand dollars is provided in the request to conduct a
    feasibility study and $9.5 million was provided to construct this
    unauthorized project. I cannot remember a time when funding was
    provided for these two phases at the same time.
        This is astounding in light of the fact that the administration is
    holding up funding for numerous projects that have been fully vetted by
    the Army Corps and the Assistant Secretary of the Army for Civil Works.
    Yet the administration has exempted this project not only from the
    entire review system established by the administration, but also from
    being authorized by Congress for construction.
        I believe this project should face the same scrutiny as all of the
    other projects in the President's proposal and intend to treat this
    project the same as all other projects as we prepare our Bill.
        It is clear to me and should be clear to all of us that investments
    in our water infrastructure strengthen our economy and thereby directly
    contribute to our homeland security.
        I intend to work with Chairman Domenici, Chairman Stevens, and
    Ranking Member Byrd to try to find additional resources to more
    adequately fund our water infrastructure.
        Thank you Senator Domenici.

        Senator Domenici. Thank you very much, Senator Reid.
        Let me ask the other Senators if they desire to speak. I'm
    more than willing to let them. This is a very, very serious
    budget.
        Senator Stevens and Senator Cochran were not here when I
    said this, and I will not repeat my remarks. I will just tell
    you that on both budgets, they are slim; but, in addition, in
    each of the two budgets, the OMB assumed that we would do
    something that we can't do. Power Marketing is assumed as
    something that will be done that will cause us to raise money.
    Since that won't happen, the net effect is that we're $180
    million short in the Corps and the Bureau combined, $180
    million. That's a lot of money, when you figure that that's
    below the line, less than what we would expect, based on last
    year's budget. I don't know how we're going to do it, but I
    just want you to know that.
        Now, who should go next, based----
        Senator Stevens. Senator, could I just make a comment?
        Senator Domenici. Absolutely.

                        STATEMENT OF SENATOR TED STEVENS

        Senator Stevens. I came by to tell the committee that I was
    privileged to attend a meeting about Brazil, and I was
    staggered to find that Brazil had changed its dependence on
    foreign oil, imported oil, from 70 percent to 17 percent by
    reassessing all its hydroelectric potential and by having a
    crash program of investment in hydro potential.
        I would like to ask that both of the panels--Mr. Keys and
    the Corps--deliver to the committee past studies of the
    hydroelectric potential of the United States. And I don't care
    where it is. If those lands have--some of these lands have been
    withdrawn now in order to prevent the hydro potential, I think
    we should have a complete review of the hydro potential. We're
    in a period of escalating gasoline prices, and we face, soon,
    escalation in even the price of natural gas because of our
    increased dependence upon imported natural gas.
        I do think it's one of our duties now to reassess all the
    alternative forms of energy that are available, and let the
    American public decide whether some of these hydroelectric
    projects should be constructed now, and that we should shift to
    a period of investment in future hydro potential.
        I would also ask your consent, your agreement, to let me
    place in the record the answers to a series of questions that
    General Flowers was kind enough to deliver to me. We did have a
    visit some time ago, before the recess, and I asked him some
    specific questions about Alaska, and he has delivered the
    answers to me, and I'd like those printed in the record.
        Thank you very much.
        Senator Domenici. Senator, they will be made a part of the
    record.
        And we will consider your two questions as if they were
    asked. And you understand, Commissioner, that that's been asked
    of you? Is General Flowers here yet?
        Senator Stevens. Well, I have the questions and answers
    right here.
        Senator Domenici. All right.
        Senator Stevens. I can put them in the record, if that's
    all right.
        Senator Domenici. Those are Alaska.
        Senator Stevens. They're Alaska Corps of Engineers project
    questions.
        Senator Domenici. Yes, but with reference to your request
    that there be an assessment of potential water projects, in
    terms of hydro----
        Senator Stevens. Well, I just want--they've done already--I
    know they did--they did some of them when I was down there, in
    the 1950's, but I think they updated those later.
        Senator Domenici. All right.
        Senator Stevens. All right?
        Senator Domenici. We'll get that.
        Senator Stevens. That was in the last century, Mr.
    President.
        Senator Domenici. Yes, I understand.
        I mean, you are very viable. I don't know how many more
    centuries you'll be here, but----
        You will outlive us.
        I want to comment, with reference to your last observation
    regarding hydro, that the Senator sitting by you, right there,
    Senator Larry Craig, has been working on hydro, the permitting
    process, which has been very cumbersome. He's been working on,
    in fact, the energy bill, had a tremendous reform that would
    have moved projects, of the type the Senator from Alaska's
    talking about, in a much more expedited--and yet safe, from the
    standpoint of the environment. It got through. If we don't do
    the energy bill, who knows where it will go, but we aren't
    going to give up on modernizing the permitting system.
        Senator Stevens. Well, Senator, God willing, if I'm able to
    so, I intend to invite Members of the Full Committee to take a
    trip to Brazil after the election and see what they have done.
    This is a staggering concept of reversing a total dependence--
    --
        Senator Domenici. Terrific.
        Senator Stevens [continuing]. On foreign oil and replacing
    it with alternative forms of energy in your own country.
        Senator Domenici. Well, Senator, I just want, before you
    leave, to reiterate to you, when you start allocating the
    money--and I know you have an insurmountable problem, but you
    should know that you can't use the administration numbers as if
    we can get the job done with them, because, in each case, there
    is a very big amount of money that is assumed in that budget
    that will not occur. In each case, they assume things like the
    Power Marketing, which is a big one--and what's the other one?
    Yucca Mountain piece that they assume, and other things.
        Now, Senators who are here--Senator Burns, would you like
    to comment?

                       STATEMENT OF SENATOR CONRAD BURNS

        Senator Burns. Thank you, Mr. Chairman, I just have one
    comment. When you look at this budget, knowing the projects
    we've got, I think we ought to try to do what we're supposed to
    do, and focus on our highest priorities. Now, I guess that's
    pretty easy to say when you come from a watershed State, where
    we're hurting a little bit in some of our irrigation districts,
    and we need some help.
        So, I just want to make sure we keep this in mind when we
    set the priorities on what we're about and what we're supposed
    to be doing. In our part of the country food production is very
    important, and we've got a big problem with the Milk River that
    we'd like to start addressing. This budget will not get
    everything done, but we want to work with you and do everything
    we can.
        There are some private entities that are willing to take
    over irrigation districts. Willing to take over. They've
    already paid them off. And yet we come to the government, and
    we say, ``Well, now, we'd like to turn these back and--turn
    them over to private entities, where they paid money in, where
    they pay for the water, they pay for everything, and willing to
    do it,'' and yet we run into a stone wall about getting these
    irrigation systems moved into private entities because--they
    just don't want to release it because they're afraid they'll
    lose their job or something. I don't know what it is. But
    anytime that you've got the private sector wanting to take over
    something that's costing us money, and they're willing to
    assume the responsibilities of it, I think we ought to look
    very closely at that and how it impacts on our budget, year in
    and year out.
        So I've got another meeting to go to now, but I just want
    to thank the Bureau of Rec. and also the Corps of Engineers.
    We've had a great year in Montana, and we've worked together on
    some projects that are really going to make a positive impact.
    But we also have some very serious problems that we have to
    look at and come up with some imaginative ways to deal with
    those problems. And I think we can do this in a way that
    benefits both the people who live there and also the American
    taxpayer.
        Thank you, Mr. Chairman.
        Senator Domenici. Thank you.
        Senator Cochran.

                       STATEMENT OF SENATOR THAD COCHRAN

        Senator Cochran. Mr. Chairman, thank you very much. I have
    a statement specifically dealing with the budget request for
    the Corps of Engineers, and I ask unanimous consent that it be
    printed in the record.
        Senator Domenici. It'll be made part of the record.
        [The statement follows:]
                   Prepared Statement of Senator Thad Cochran

        Mr. Chairman, I join you in welcoming the witnesses to this
    hearing.
        I appreciate the good work the Corps of Engineers does in the State
    of Mississippi. I do, however, have some serious concerns with the
    Corps' ability to continue to carry out its responsibilities due to
    declining levels of funding.
        The Corps' ability to accomplish their mission is becoming more
    than a serious challenge. I am disappointed in the budget request for
    the Civil Works program.
        More funding would provide greater economic and environmental
    benefits, as well as improved safety and security for our Nation's
    citizens.
        Locks and dams that allow for more efficient and environmentally
    responsible movement of goods on our waterways continue to deteriorate,
    and the Corps continues to struggle to find the resources to dredge
    waterways that carry commercial cargo such as the Mississippi and Ohio
    Rivers, not to mention many other smaller waterways. The maintenance
    backlog also continues to grow and become more serious.
        In addition, we are not adequately constructing or maintaining
    important flood control structures that are needed in many areas.
        I appreciate the efforts by General Flowers to meet the demands
    being made on the Corps, and I congratulate him on his exemplary
    service as Chief of Engineers. Since he's retiring later this year, it
    may be the last time he appears before the subcommittee. I congratulate
    him on his outstanding service to the country.

        Senator Domenici. Is that it?
        Senator Cochran. Yeah.
        Senator Domenici. All right.
        Senator Dorgan.

                      STATEMENT OF SENATOR BYRON L. DORGAN

        Senator Dorgan. Mr. Chairman, let me be brief, but I have
    another Appropriations subcommittee hearing going on just
    around the corner on this floor, and I'm involved in that, as
    well, so I won't be able to listen to all of the testimony. But
    I wanted to underscore the points you made. Water policy is
    critically important, and funding these represent not just
    ordinary expenditures, they represent good investments in the
    future that provide, in most cases, very high returns.
        And I wanted to say to Commissioner Keys that last
    Thanksgiving, as you know, the people of Fort Yates, on the
    Indian reservation, lost their water because of a problem with
    the Missouri River intake. And for several days, these folks,
    8,000 of them, had no water at all. And, Mr. Chairman, I should
    just tell you that the employees of the Bureau were down there
    working through the Thanksgiving holiday. They did a remarkable
    job. And your employees deserve a real big, hearty thank you.
    They worked around the clock during the Thanksgiving holiday,
    and they got water restored.
        But this relates to the need for a permanent solution down
    there. It relates to the management of the Missouri River by
    the Corps of Engineers. And it relates to bigger and broader
    issues that we have to address. We also need to deal with the
    rural water needs. Commissioner Keys, you were with us when we
    broke ground for the NAWS Project, which, by all accounts, is a
    great project, known as great to everyone except the Office of
    Management and Budget, apparently. Despite the fact that they
    don't allege there's anything wrong with it; they just put it
    as part of this PART process and don't fund it well enough. And
    then we also need to continue the flood-control project
    underway at Grand Forks, and complete that.
        So this subcommittee has an enormous charge, and all of it
    is critically important. Mr. Chairman, I look forward to
    working with you and other Members of the subcommittee to find
    ways to meet our obligations and to work with the Corps and the
    Bureau to get done what we need done. We need the Red River
    Valley studies in Eastern North Dakota. I won't recite my
    displeasure with the Corps and the master-manual rewrite right
    now, but----
        Senator Domenici. I understand.

                               PREPARED STATEMENT

        Senator Dorgan. I'll do that later.
        But thank you very much. And let me say, again, the part of
    the Chairman's statement and the part of Senator Reid's
    statement I heard is right on point. These are critically
    needed investments, and we need to find a way to do them.
        [The statement follows:]

                 Prepared Statement of Senator Byron L. Dorgan

        Assistant Secretary Woodley, Mr. Keys and General Flowers, I
    welcome you to our subcommittee, and I thank you for your testimony. In
    North Dakota, we have enormous water challenges and depend greatly on
    the assistance of the Corps of Engineers and the Bureau of Reclamation
    for flood control, irrigation, and municipal, rural and industrial
    water needs. The President's budget request for fiscal year 2005 does
    not give your agencies the funding you need to accomplish the great
    challenges ahead of you in my State and throughout the Nation.
        I am very concerned that the President's fiscal year 2005 budget
    submission for water projects falls dramatically short of the
    investment that will be needed. The President proposes cutting nearly
    $356 million from the Army Corps of Engineers and $28 million from the
    Bureau of Reclamation's Water and Related Resources program. These cuts
    are coming at a time when the Federal Drought Monitor shows that almost
    every western State, including North Dakota, remains in drought. In
    North Dakota, low lake levels at Lake Sakakawea and Lake Oahe, two
    major lakes on the Missouri River created by the Federal Government in
    an effort to eliminate annual flooding of river lowlands, are causing
    extreme problems for communities that depend on these lakes for their
    water supply. We had a crisis earlier this year at Standing Rock Indian
    Reservation when the community of Ft. Yates lost water due to the low
    lake levels on Lake Oahe. To respond to this emergency, the Bureau had
    to divert already limited municipal, rural and industrial funds
    designated for other tribal projects. Other communities along Lake
    Sakakawea and Lake Oahe are in danger of suffering the same fate.
    Already, economies dependent on recreational uses of the lake have been
    devastated due to low lake levels and now the water supplies are also
    in danger.
        I blame this on the Corps' mismanagement of the Missouri River. The
    Corps had the opportunity to change their management practices on the
    river to practices that would have produced a net benefit for the
    entire country. Instead, the Corps issued its revised Master Manual
    last month which simply kept the status quo.
        Needless to say, I am unhappy with this so called ``revision.'' In
    the President's Fiscal Year 2005 Budget Request for the Army Corps he
    stated, ``A concerted effort by this Administration and the Congress is
    needed to ensure that the ongoing and future efforts of the Corps are
    environmentally sustainable, economically responsible, and fiscally
    sound. Achieving this goal will require a transformation in cultural
    attitudes.'' The President is correct in his assumption that attitudes
    must change in order for us to reap the economic benefits from water
    projects such as the Missouri River Basin.
        The President's Budget Request further states, ``In developing its
    budget proposal for 2005, the Corps assessed the relative merits of
    each potential investment in each of its program areas. This approach
    represents an important step towards the President's goal of making
    fiscally responsible funding decisions based more on results and less
    on factors such as `what did they get last year.' This is the essence
    of the Corps' performance-based budget. The Administration funds
    activities that will yield the greatest net benefit to society per
    dollar invested.''
        I wish it could be said that the Corps actually took this type of
    approach when revising the Master Manual. Studies show that every
    dollar the public spends to operate and maintain the Missouri River
    only generates 40.6 cents in transportation savings to barge companies,
    export elevators, importers and grain producers. It has been further
    shown that the actual O&M expenses for the Missouri River ($7.1
    million) exceed the net benefits provided by the barging industry ($6.9
    million). This, to me, seems like a waste of taxpayer funding. (There
    are only three barging companies currently operating on the MO River).
    If the administration is serious in its efforts to focus funding on
    those activities that will yield the greatest net benefit to society as
    a whole, then it would seem that reforming the management practices on
    the Missouri River would be an initiative the Corps would take
    seriously and address in a manner more consistent with the
    administration's directive.
        I hope the ``revised'' Master Manual is something the Corps will
    continue to look at and is not something they feel no longer needs to
    be reevaluated. I believe the Corps should do more than simply reprint
    the 1979 Master Manual. The people of the Missouri River Basin deserve
    and expect more. The towns and communities that have grown dependent on
    the reservoirs and river need to know what they can expect from the
    Federal Government in the future. They need to know that the government
    is more concerned with the safety and welfare of the Nation, rather
    than simply a few downstream barge companies. We need to reevaluate and
    set the goals for our future use on the river and judging from the
    past, the status quo is no longer an option.
        As you know, my top priority within the Bureau of Reclamation's
    budget is adequate funding for the Garrison project. A total of 155,000
    acres of Ft. Berthold Indian Reservation land was taken for building
    the second-largest earth filled dam in America, the Garrison Dam-Lake
    Sakakawea project. The water divided the Reservation down the middle.
    The Federal Government owes this tribe and others in North Dakota for
    its sacrifice for the Nation. We have promised, in an authorization
    bill, to provide $200 million for Indian municipal, rural and
    industrial water needs and $200 million for State MR&I. But this
    administration's budget once again fails to come through on that
    promise recommending only recommending $22.1 million for the Garrison
    project which does not even maintain the historic funding level,
    ignores the needs of the current program and does not keep up with the
    price increases expected in the major programs as delays occur. This
    year, the budget only provides about $5.485 million for rural water
    projects--half for the State program which includes the Northwest Area
    Supply (NAWS) and the other half for Indian programs. This is almost
    $45 million short of what North Dakota needs for Indian and State MR&I.
    We simply must do better or the costs of this project are going to
    overwhelm us in the outgoing years. If the current funding trend, a
    disaster will occur in only a few years when an additional $30 million
    will be needed for the Red River Valley program.
        I am also very concerned about the impact of the President's budget
    recommendation for the Grand Forks/East Grand Forks Flood Control
    Project. This year, the President only recommends $31 million for this
    project which is nearly $24 million short of the amount that will be
    needed to bring the project to substantial completion. We are so close
    to providing this community permanent flood control protection and I
    just don't understand why the administration would not choose to finish
    the project this year. A wet spring recently caused severe flooding in
    areas just west of Grand Forks and we are once again reminded that the
    community is not safe from another flood until this permanent
    protection project is finished. This subcommittee has invested so much
    into that project and I will be asking for my colleagues for their help
    in getting this project substantially completed this year before FEMA
    remaps the area only to have to spend the money to do it again after
    the project is completed.
        As you'll see, I think we have a lot of challenges in front of us
    but I thank you for appearing before us today.

        Senator Domenici. Thank you very much.
        Senator Larry Craig.

                      STATEMENT OF SENATOR LARRY E. CRAIG

        Senator Craig. Thank you, Mr. Chairman. I'll be brief. I
    got here late, but I do want to make a couple of opening
    comments because it's an opportunity to have John before us to
    talk about issues that are obviously critical.
        And, let's see, Commissioner, have you gone to Idaho yet?
    When are you going?
        Commissioner Keys. I'm sorry, sir?
        Senator Craig. I thought you were going to go to Idaho this
    coming week.
        Commissioner Keys. I am there the 6th and 7th of May to----
        Senator Craig. Okay.
        Commissioner Keys [continuing]. Work with them on the
    groundwater issue.
        Senator Craig. Right. I knew that you were--that your trip
    out there was timely in relation to what's happening in Idaho,
    but also what's happening in the West, Mr. Chairman.
        I just, during this Easter break, spent time with the Twin
    Falls Irrigation Company, the Twin Falls Canal Company. For the
    record, Mr. Chairman, that is one of the largest irrigation
    companies in the State of Idaho, that irrigates all--from, you
    know, Bureau of Rec. development programs, the whole
    development of the central/mid Snake River Basin area.
        Here is what I concluded from them, and here is what we
    have to conclude in the West today. The West is drying up, and
    it's getting progressively drier. And it is now extended over a
    near 10-year period, Mr. Chairman. Lake Meade is--or Lake
    Powell is at an all-time low since it was filled. Lake Meade is
    down. There is a guesstimate now, and the figures would show
    the progressive decline in the flow of the Snake River is
    upwards of 500,000 acre feet now, on an annualized basis. Every
    chart I see over the last decade shows a decline in overall
    springs and spring recharge. You're going out to talk about the
    need to try to recharge the Snake River Plain Aquifer and the
    Federal impediments that may or may not exist there as it
    relates to doing that.
        It quit raining and snowing in Idaho the 1st of March after
    what appeared to be a very good wet winter, and it hasn't
    snowed or rained since.
        Senator Domenici. What was that date?
        Senator Craig. First of March. The snow is evaporating or
    going into the ground, our rivers are showing little to no
    spring surge, and many of our reservoirs are nearly empty. The
    great American Falls Reservoir irrigation system, that
    reservoir will not spill this year. It appears that it may get
    only to 70 percent capacity.
        The West is in deep water trouble. It's also an area where
    everyone else wants to share water that was once dedicated for
    another purposes, and so the conflicts are growing, whether it
    is fish, or whether it is human consumption. It also is a
    segment of the region that is growing the fastest of any in the
    United States. Whether it's Idaho and Idaho's growth, or New
    Mexico, or Arizona, or Nevada, all of it's growing, and growing
    faster than any segment. And yet the one resource that will
    dictate its growth or dictate how people live is the resource
    of water. And, frankly, we're doing nothing to add to the
    overall capacity of the systems.
        We started dewatering the State of Idaho a decade ago, when
    we decided that it was important that we leave some water in
    the system for purposes of flush for fish, and we haven't added
    any upstream capacity. We've brought more water in that was
    once dedicated for something else, which meant water was
    leaving the ground to go into the system.
        But it is an alarming figure. And I have a variety of
    charts here in front of me, but probably this is the most
    significant one. That's a decade of flow in the Snake River
    system, all of it in decline. Used to be we had 5- to 6-year
    cycles. It's very difficult to find a decade or more of
    progressive decline in overall flows.
        I say that today--Mr. Chairman, you've experienced it in
    New Mexico, throughout the West. The arid, high-desert West is
    getting drier. And the one agency that can play a role in
    helping is your agency. And the problem we have today is that
    the idea--and the chairman of the full committee talked about
    hydro projects and putting dams in rivers--oh, how dare we even
    think about that idea again--but there is capacity in the
    systems off main stem, in areas that would have little
    environmental impact, to increase the overall abundance of
    water in an arid West, and much of that could be dedicated to
    in-stream flow to increase water quality within the main-stem
    systems. And yet even some of our environmental friends will
    ignore the obvious, because they have dedicated themselves to
    being anti- and not pro-environment in many instances.
        That's a conflict we're into, but it was brought to reality
    this week, this past week, when I sat down with Idaho's largest
    irrigation company and saw their dramatic declines in overall
    resource. And they're now rushed to manage, rushed to conserve,
    as we grow increasingly drier in the West.
        Thank you, Mr. Chairman.
        Senator Domenici. Thank you very much.
        Now, when you say the Bureau of Reclamation can help with
    this, let me say publicly that this gentleman has tried
    mightily, but the truth of the matter is they've made some
    mistakes in the past year. The biggest one is the Animas-La
    Plata, which turns out to be Animas-La Plata Lite. And even
    with Animas-La Plata Lite, they have messed up the estimates
    terribly. They promise me that they're going to fix it, and
    they're going to come back with estimates that are right, and
    spread it out a little bit so it doesn't beat our budget up.
    How could we pay for it with what we've got? I mean, if they
    end up with 40 to 50 million dollars that they need, they can't
    get it. We can't pay for projects right now that have, you
    know, been going for a long, long time.
        My last remarks are directed at OMB. I honestly don't
    believe that, in considering the budget, that they consider any
    of the things we've been talking about here. It's pure numbers.
    You know, pure numbers. Can you imagine to come up and say
    we've got a new water program he put in it for the West, and we
    put $20 million in it? You know, $20 million? We need a
    revolving fund of a billion dollars, with grants and matching
    funds. Anybody that sees that--sees what's going on out there
    knows that.
        Now, enough of us. Let's hear the Commissioner.
        Proceed.

                     SUMMARY STATEMENT OF COMMISSIONER KEYS

        Commissioner Keys. Mr. Chairman, good morning. It's my
    absolute pleasure to be here today to talk about the
    President's fiscal year 2000 budget request for the Bureau of
    Reclamation.
        We do appreciate all the support that we've had from the
    committee, and certainly look forward to working with you on
    Bureau projects in the future.
        I have a statement for the record that has been sent
    forward that I would certainly appreciate your including as
    part of the record.
        Senator Domenici. It will be made part of the record.
        Commissioner Keys. Assistant Secretary Bennett Raley,
    Assistant Secretary of Water and Science, could not be here
    today, and he has also submitted a statement that we would
    appreciate being put in the record.
        Senator Domenici. It will be made part of the record.
        Commissioner Keys. And I have with me Ron Johnston, who is
    here to talk, if you would like, about the Central Utah Project
    Completion Act, and I have Bob Wolf and Pam Hayes, our budget
    folks, with us if we need further information from them.
        Mr. Chairman, before I get to the budget, we would like to
    update you on water-supply situation in the Western United
    States. This year, unfortunately, as we've talked about, the
    drought remains with us and--put the green one up first, the
    big one----
        Senator Domenici. I didn't read your testimony beforehand,
    I'm sorry, Mr. Commissioner, but thank goodness you're covering
    this. Please proceed.
        Commissioner Keys. Mr. Chairman, you talked about growth in
    the West, and this first chart shows exactly what you were
    talking about. In the decade between 1990 and 2000, State of
    Nevada grew by 60 percent, State of Arizona by 40 percent,
    Colorado and Idaho by 30 percent, New Mexico by 20 percent.
    That, in itself, tells you some of the crisis and conflict that
    we face in the Western United States.
        The next chart shows that annual precipitation that we have
    depended on for a number of years, and certainly you can see
    that in the Western United States it ranges somewhere from 3
    inches up to an average of less than 20 inches in most places.
        Now, if you consider the drought that we're in, it almost
    looks like a bulls-eye on the Western United States. In the
    year 2003, there was only one State out of the 17 that
    Reclamation works with that experienced normal or above
    precipitation; that was California. This year, we're started
    out, and there's even some dry in Southern California that was
    not there last year. We anticipate it being a dry year, and
    certainly we're trying to manage toward that.
        Now, one of the efforts that we have entered into in trying
    to look at the drought, look at the demands for water and the
    conflict and crisis that we could get into is the Water 2025
    Program. This is a chart that we put together as part of that
    to show those hot-spots in the Western United States. Hot-
    spots, meaning that they would have water requirements from
    exploding populations, from demands from the Endangered Species
    Act, demands from other fish and wildlife, from new industry,
    from new requirements that we didn't even know about. These are
    the hot-spots that we are trying to deal with in the Western
    United States.
        Now, with that said, I would go to the information on the
    fiscal year 2005 budget. The overall Reclamation budget totals
    $956 million in current authority and is offset by
    discretionary receipts from the Central Valley Project
    Restoration Fund of $46 million, and hydropower direct
    financing of $30 million. While the request is partially offset
    by underfinancing of $36 million, I'm concerned that increasing
    above this amount, as has occurred in the recent past, may
    adversely affect our ability to address activities at our aging
    infrastructure. And I look forward to working with the
    committee to identify ways to address this critical area.
        Our 2005 budget request continues the President's
    commitment----
        Yes, sir?
        Senator Domenici. Commissioner, did that last statement,
    that you want to work with us on these critical areas, were
    those presented to OMB?
        Commissioner Keys. Mr. Chairman, the under-financing is a
    figure that we work with the committee directly on every year.
    We propose a level of under-financing that we think makes good
    business sense, and then you work with us to see what it should
    be. In the past 2 years, it's actually been quite a bit more
    than we had recommended.
        Senator Domenici. Well, let me tell you, that's a very,
    very risky business. When you have a budget that's as tight as
    this budget, everywhere--you know, we don't know how we're
    going to do that, because every year the chairman of the
    committee that makes the allocations has mercy on us and gives
    us a little bit of allocation over an amount. But what if they
    don't do it this year? Then, you know, you better be prepared
    to tell us what can we cut or hold from your ongoing projects
    that we can use to keep this--you know, the parts that are
    desperate, to keep them alive.
        I don't know how. I've looked at it, and I don't know where
    the heck we're going to--I don't know where we're going to get
    the money.
        Commissioner Keys. Mr. Chairman, we certainly will work
    with you every step of the way on that.
        Senator Domenici. Good.
        Commissioner Keys. Our fiscal year 2000 continues the
    President's commitment to a more citizen-centered government
    founded on the principle of getting results rather than
    creating process, as well as the Secretary's four C's,
    ``conservation through consultation, cooperation, and
    communication.''
        The request also 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 address the water needs of a
    growing population.
        Mr. Chairman, the highlights of our budget are--the Water
    2025 Program in 2005 requests $20 million. That request would
    continue Secretary Norton's 2025 Initiative, building off of
    the fiscal year 2004 Western Water Initiative. Water 2025 is a
    high priority for Reclamation, focusing resources, both
    financial and technical, on areas of the West where conflict
    and crisis over water either exist now or can be predicted and
    prevented using the tools to deal with the realities outlined
    in the initiative.
        Water 2025 provides Federal seed money in the form of
    competitive grants with performance measures to empower local
    citizens and communities to do what the government cannot do
    alone. Our fiscal year 2004 budget included $4 million in the
    Western Water Initiative for these competitive grants. This
    request is about $20 million for those competitive grants.
        In the Klamath Project, in Oregon and California, we're
    asking for $25 million. The fiscal year 2005 request continues
    and increases funding for our efforts in the Klamath Basin that
    will improve water supplies to meet competing demands for water
    in the Basin and ensure continued delivery of water to this
    project. Coupled with efforts from other Federal agencies,
    Interior is proposing over $67 million in fiscal year 2005 to
    keep its commitment to help restore the Basin, provide water
    necessary to meet the needs of the farmers.
        Now, on the Middle Rio Grande Project, we're asking for $18
    million. The fiscal year 2005 request continues funding in
    support of the Endangered Species Collaborative Program. In
    addition, the request continues funding for requiring
    supplemental water, doing the necessary channel maintenance,
    and government-to-government consultation with Pueblos and
    tribes. The funding will continue efforts that support the
    protection and contribute to the recovery of the Rio Grande
    silvery minnow and the southwestern willow flycatcher.
        One effort that----
        Senator Domenici. How much less is that than the previous
    year?
        Commissioner Keys. Mr. Chairman, our request for fiscal
    year 2005 is $1 million more than it was in fiscal year 2004.
        Senator Domenici. We don't have that number. We ought to
    consult on that. We have a number that it's $14 million less.
    But, anyway----
        Commissioner Keys. Mr. Chairman, we'd certainly work with
    you on that number.
        Senator Domenici. Okay.
        Commissioner Keys. On the Animas-La Plata Project in
    Colorado and New Mexico, we're requesting $52 million. The
    Animas-La Plata Project is currently under construction and
    resolves, through authorizing legislation passed by the
    Congress in 2000, longstanding Indian water-right claims in the
    Basin.
        In response to your comments before, I can assure you that
    Reclamation has made changes in the personnel on the project
    and the procedures that we are using to complete the project as
    it was designed, and to ensure that we don't run into those
    problems on other projects throughout the Western United
    States. Those changes have been made. We are continuing to look
    at the organization and our engineering expertise to be sure
    that it is there for another century to come.
        On site security, we have asked for $43 million in fiscal
    year 2005. The funding request is necessary to cover the cost
    of site-security activities, including surveillance and law
    enforcement, antiterrorism activities, including physical,
    information, and personnel security, and threat management, and
    physical emergency security upgrades, with the primary focus on
    our national critical infrastructure facilities.
        I do want to call your attention to a change that will be
    occurring in how we address the cost of site-security
    activities. Beginning in fiscal year 2005, annual costs
    associated with activities for guarding our facilities will be
    treated as project operation and maintenance cost, subject to
    reimbursibility based upon project cost allocations. You'll be
    hearing more on this approach in the future.
        Our Safety of Dams Program, we ask for $64 million in
    fiscal year 2005. As our infrastructure ages, we must direct
    increasing resources toward upgrading and maintaining our
    facilities through the use of science and new technologies to
    ensure the continued reliability so important to our western
    stakeholders. The fiscal year 2005 request is being made to
    reduce risks to public safety, particularly those identified as
    having deficiencies.
        On the Rural Water Program, we have asked for $67.5
    million. The fiscal year 2005 funding for rural water projects
    emphasizes a commitment to completing ongoing municipal, rural,
    and industrial systems. This one, in fact, would complete the
    Mid-Dakota project in South Dakota that we've been working on.
    Funding is included for the Mni Wiconi, Mid-Dakota, Garrison,
    Lewis and Clark, and Perkins County projects.
        The administration will convene an interagency group to
    review programs of all Federal agencies with rural water
    infrastructure needs. We just, about 3 weeks ago, working with
    your office and Mr. Bingaman, submitted a new bill for which
    you have sponsored, Senate Bill 2218, the Reclamation Rural
    Water Act of 2004. That, we think, will give us a good
    structured approach to addressing rural water needs in the
    future, and give us a better way to handle them than we have
    been working with in the past.
        In talking about the hydropower direct financing, that's
    the $30-million figure that we had talked about before. The
    fiscal year 2005 budget proposes to finance the cost of
    operation and maintenance of certain Reclamation hydropower
    facilities directly from receipts collected by the Western Area
    Power Administration. Each year, Western Area Power
    Administration would transfer an agreed-upon amount to the
    Bureau of Reclamation for deposit in its ``water and related
    resources'' account. A direct-funding arrangement already is in
    place with the Bonneville Power Administration.

                              PREPARED STATEMENTS

        Mr. Chairman, in conclusion, I want to strongly reiterate
    that the fiscal year 2005 budget request demonstrates
    Reclamation's commitment to meeting the water and power needs
    of the West in a fiscally responsible manner. This budget
    continues Reclamation's commitment to sound water-resources
    management and the delivery and management of those valuable
    resources. Our goals for 2005 and accomplishments for fiscal
    year 2003 are described in my official statement, and I'd be
    glad to provide more detail if you would like.
        That concludes my prepared remarks, and I would certainly
    stand for any questions that you might have today.
        [The statements follow:]

                    Prepared Statement of John W. Keys, III

        Thank you, Mr. Chairman, Mr. Reid, and members of the subcommittee,
    thank you again for the opportunity to appear before you today to
    support the President's fiscal year 2005 budget request for the Bureau
    of Reclamation. With me today is Bob Wolf, Director of Program and
    Budget.
        Our fiscal year 2005 request has been designed to support
    Reclamation's mission of delivering water and generating hydropower,
    ``consistent with applicable state and Federal law, in an
    environmentally responsible and cost efficient manner.''
        Funding is proposed for key projects that 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 promote water conservation and sound
    water resource management, and help prevent conflict and crises over
    water in the west.
        The fiscal year 2005 current authority request for Reclamation
    totals $956.3 million and is offset by discretionary receipts in the
    Central Valley Project Restoration Fund of $46.4 million and proposed
    hydropower direct financing of $30.0 million. In addition,
    Reclamation's program includes permanent authority of $90.6 million.
    The total program, after offsets to current authority and the inclusion
    of permanent authority is $970.5 million.

                          WATER AND RELATED RESOURCES

        The fiscal year 2005 request for the Water and Related Resources
    account is $828.5 million. The request provides funding for five major
    program activities: Water and Energy Management and Development ($376.4
    million); Land Management and Development ($39.4 million); Fish and
    Wildlife Management and Development ($82.7 million); Facility
    Operations ($188.6 million); and Facility Maintenance and
    Rehabilitation ($178.0 million). The request is partially offset by an
    undistributed reduction of $36.6 million, commonly referred to as
    underfinancing, 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 meeting our requirements to sustain the health and
    integrity of ecosystems that are connected to those operations. It will
    also assist the States, tribes, and local entities in solving
    contemporary water resource issues in advance of crises over water.
        Highlights of the Fiscal Year 2005 Request for Water and Related
    Resources include:
        Water 2025 ($20 million).--The Water 2025 Initiative allows
    Reclamation to continue playing an important role in working with State
    and local communities to develop solutions that will help meet the
    increased demands for limited water resources in the West, and avoid
    water conflicts in areas particularly susceptible to an imbalance
    between supply and demand. The request will benefit fast growing
    western communities that are struggling with increased water demands,
    inadequate water supplies, and compliance with the Endangered Species
    Act and other ecosystem water needs. The monies for the precursor
    effort, the Western Water Initiative, will be awarded in the form of
    competitive grants; this 2004 effort will assist in developing grant
    criteria and tracking program impacts; the experience from this effort
    will then be used to refine the Water 2025 effort for 2005. The
    projects in fiscal year 2004 will facilitate and promote new or
    existing intrastate water banks and provide cost sharing monies to
    assist various stakeholders in implementing measures that will lead to
    improved water management and help avoid future water supply conflicts.
        Klamath Project in Oregon and California ($25.0 million).--The
    fiscal year 2005 funding request will provide on-the-ground initiatives
    to improve water supplies to meet agricultural, tribal, wildlife
    refuge, and environmental needs in the Klamath Basin and to improve
    fish passage and habitat. This is part of a $67.2 million Department of
    Interior request spread across several bureaus, focused on making
    immediate on-the-ground impacts, while the Department, in consultation
    with the Klamath River Basin Federal Working Group, led by Secretary
    Norton, develops a long-term resolution to conflict in the Basin that
    will provide water to farmers and tribes while protecting and enhancing
    the health of fish populations, and meeting other water needs, such as
    those of the adjacent National Wildlife Refuge.
        Middle Rio Grande ($18.0 million).--The fiscal year 2005 request
    continues funding in support of the Endangered Species Collaborative
    Program. In addition, the request continues funding for acquiring
    supplemental water, channel maintenance, and pursuing government-to-
    government consultations with Pueblos and Tribes. Finally, the funding
    will continue efforts that support the protection and contribute to the
    recovery of the Rio Grande silvery minnow and southwestern willow
    flycatcher.
        Animas-La Plata in Colorado and New Mexico ($52.0 million).--The
    fiscal year 2005 request includes $52.0 million for the continued
    construction of Ridges Basin Dam and Durango Pumping Plant and
    preconstruction activities for Navajo Nation Municipal Pipeline, Ridges
    Basin Inlet Conduit, utility relocations, and project support
    activities.
        Columbia/Snake River Salmon Recovery in Idaho, Oregon, Montana, and
    Washington ($17.5 million).--This program addresses the implementation
    of Reasonable and Prudent Alternatives (RPAs) included in two
    Biological Opinions issued in December 2000. The fiscal year 2005
    funding will address significantly increased regional coordination,
    off-site mitigation activities in selected sub-basins to offset
    hydrosystem impacts, and continue research, monitoring and evaluation
    efforts.
        Site Security ($43.2 million).--Since September 11, 2001,
    Reclamation has maintained heightened security at its facilities to
    protect the public, its employees, and infrastructures.
        The funding in fiscal year 2005 is necessary to cover the costs of
    site security activities including:
      --surveillance and law enforcement;
      --anti-terrorism activities including physical, information, and
            personnel security, and threat management; and
      --physical emergency security upgrades, with a primary focus on our
            National Critical Infrastructure facilities.
        Beginning in fiscal year 2005, annual costs associated with
    activities for guarding our facilities will be treated as project O&M
    costs subject to reimbursability based upon project cost allocations.
        Rural Water ($67.5 million).--The fiscal year 2005 funding for
    rural water projects emphasizes a commitment to completing ongoing
    municipal, rural, and industrial systems. Funding is included for Mni
    Wiconi, Mid-Dakota, Garrison, Lewis and Clark and Perkins County
    projects. Funding required for Mid-Dakota is sufficient to complete the
    project. The administration is convening an interagency group to review
    the rural water programs of all Federal agencies, with any
    recommendations coming out of this to be included in the President's
    Fiscal Year 2006 Budget. The administration has submitted legislation
    to formally establish a rural water program within Reclamation.
        Hydropower Direct Financing ($30.0 million).--The fiscal year 2005
    budget proposes to finance the costs of operation and maintenance of
    certain Reclamation hydropower facilities directly from receipts
    collected by the Western Area Power Administration from the sale of
    electricity. Western Area Power Administration would transfer an
    agreed-upon amount to the Bureau of Reclamation for deposit in its
    Water and Related Resources account. The transferred funds would be
    treated as an offsetting collection. A direct funding arrangement is
    already in place for the Bonneville Power Administration.
        Safety of Dams ($64.0 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 2005 request of $64.0 million
    for the Safety of Dams Program is being made to reduce risks to public
    safety at Reclamation dams, particularly those identified as having
    deficiencies. The slight reduction from the fiscal year 2004 level is a
    result of the completion of certain ongoing Safety of Dams actions, and
    does not reflect a reduced emphasis on the importance of this program.

                           POLICY AND ADMINISTRATION

        The request for Policy and Administration is $58.2 million. These
    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, by statute, cannot be
    charged to specific project or program activities covered by separate
    funding authority. These funds support general administrative and
    management functions.

                    CENTRAL VALLEY PROJECT RESTORATION FUND

        The fiscal year 2005 Reclamation budget includes a request for the
    CVP Restoration Fund of $54.7 million, and is expected to be offset by
    discretionary receipts totaling $46.4 million 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 funding request is calculated based on a
    3-year rolling average of collections. The increase is driven by
    formulas spelled out in the 1992 Act.
        Reclamation is seeking appropriations for the full amount of funds
    of the estimated collections for fiscal year 2005.

                        CALIFORNIA BAY-DELTA RESTORATION

        The fiscal year 2005 Reclamation budget includes a request of $15.0
    million for California Bay-Delta restoration. The funds will be used
    consistent with a 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. Further, the fiscal year 2005 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 studies, and program administration.

                     PROGRAM ASSESSMENT RATING TOOL (PART)

        Reclamation, in close cooperation with the Department and the
    Office of Management and Budget, completed one new PART analysis in
    conjunction with the fiscal year 2005 budget request, and revised a
    2004 PART. Our Science and Technology Program, with its emphasis on
    research with direct applicability to the operation of Reclamation
    facilities, received a favorable score of 87 percent. The PART review
    assisted the program by highlighting areas where more precise data
    gathering is needed, which will allow for increasingly accurate
    measures of performance.
        Also, the administration revised the PART analysis on our
    Hydropower Program, which had been one of three programs reviewed in
    the fiscal year 2004 budget request. As a result, improved performance
    measures were implemented and the program received a score of 92
    percent, indicative of a well-run effort.

                         PRESIDENT'S MANAGEMENT AGENDA

        E-Government.--Reclamation is actively participating in Recreation
    One-Stop, which provides citizens information about recreational
    activities on public lands; Geospatial One-Stop, which makes it easier,
    faster, and less expensive for all levels of government and the public
    to access geospatial information; and Volunteer.gov which provides
    information on volunteer activities. Reclamation program managers
    continue to work with stakeholders to leverage technology to accomplish
    our mission work.
        Financial Management Improvement.--Reclamation submitted its fiscal
    year 2003 Financial Statement on an accelerated schedule and received a
    clean audit opinion. We continue 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 database system to report summary and
    transactions data. Reclamation is enhancing its financial policies and
    procedures and is participating in the Department's development of a
    new financial management system.
        Competitive Sourcing.--Reclamation has completed competitive
    sourcing studies of 348.6 FTE and directly converted to contract 136.1
    FTE, for a reportable savings of approximately $1.1 million. Our goals
    for 2002, 2003, and 2004 have been completed and a strategy has been
    developed for completing competitive sourcing studies in 2005-2008.
        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, designed to address the serious
    challenges we face in terms of an aging workforce and increased
    competition for the engineering skills that Reclamation relies on to
    carry out our core activities. 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.
        Performance and Budget Integration.--Reclamation continues to
    integrate its budget, planning and performance processes by relating
    budget dollars to goals and performance.
        In October 2003, Activity Based Costing was fully implemented
    within Reclamation. The implementation of ABC will link our work to the
    Department activities, track the costs associated with those
    activities, and align cost and activities to strategic goals to further
    our integration of performance and budget. The availability of this
    information will provide Reclamation with additional tools for
    management and decisionmaking.

                  DEMONSTRATED COMMITMENT AND ACCOMPLISHMENTS

        In fiscal year 2003, 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 historic Colorado River Water Pact was signed on October 16,
    2003, by the Secretary, the governor of California and officials from
    San Diego County Water Authority, Imperial Irrigation District,
    Metropolitan Water District of Southern California and Coachella Valley
    Water District, embarking on a new era of cooperation on the river by
    fulfilling a promise the State of California made more than 70 years
    ago. Under Secretary Norton's leadership, California has agreed to take
    specific, incremental steps that will reduce its over-reliance on the
    Colorado River water in the next 14 years, allowing the State to live
    within its authorized annual share of 4.4 million acre-feet. The
    agreement allows the six other Colorado River Basin States to protect
    their authorized shares to meet future needs.
        The fiscal year 2005 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:'' ``Conservation through Cooperation,
    Communication, and Consultation''. 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.
        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.
        In fiscal year 2003, critical Safety of Dams modifications of
    significant cost and scope were initiated at Deadwood Dam, ID; and Deer
    Creek Dam, UT.
        The site security activities in fiscal year 2003 included
    integrated security system analysis to determine emergency security
    upgrades and long-term measures for four National Critical facilities
    and 14 of Reclamation's highest priority facilities. Facility
    fortifications totaling $5.5 million are now in place. In addition, we
    completed threat and physical security risk analyses and developed
    security plans.

                      FISCAL YEAR 2005 PLANNED ACTIVITIES

        In fiscal year 2005, Reclamation plans to continue making the
    required deliveries of water under Reclamation contracts; optimize
    hydropower generation, consistent with other project purposes,
    agreements, and the President's energy policy; and incorporate
    environmental, recreational, land management, fish and wildlife
    management and enhancement, water quality control, cultural resources
    management, and other concerns into the water supply and power
    generation actions of Reclamation. Finally, Reclamation plans to
    identify water supply needs for consumptive and non-consumptive
    purposes in Reclamation States in the next 25 years that are likely to
    be unmet with existing resources.
        Reclamation also plans to continue ranking within the upper 75th
    percentile of low cost hydropower producers; by comparing power
    production costs per megawatt capacity. Reclamation plans to achieve a
    forced outage rate of 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.

                                   CONCLUSION

        Mr. Chairman, Please allow me to express my sincere appreciation
    for the continued support that this committee has provided Reclamation.
    I would like to thank several members of the Appropriations staff that
    have provided invaluable support to Reclamation during this past year:
    Clay Sell, Drew Willison, Tammy Perrin, Erin McHale, and Roger
    Cockrell. We have enjoyed working with Clay Sell over the years and
    wish him well. This completes my statement. I would be happy to answer
    any questions you may have at this time.
                                     ______

     Prepared Statement of Bennett W. Raley, Assistant Secretary for Water
                    and Science, Department of the Interior

        Good morning. On behalf of the Secretary of the Interior, I am
    pleased to be here today before the Subcommittee on Energy and Water
    Development to discuss the fiscal year 2005 budget for the Department
    of the Interior. I appreciate the opportunity to highlight our
    priorities and key goals.
        The Department of the Interior's mission is complex and multi-
    faceted. We provide recreation opportunities. We provide access to
    resources. We protect some of the Nation's most significant cultural,
    historic, and natural places. We serve communities through science,
    wildland firefighting, and law enforcement. We deliver water and power.
    We fulfill trust and other responsibilities to American Indians, Alaska
    natives, and the Nation's affiliated island communities.
        Interior's mission is also challenging. It is challenging because
    the world around is increasingly complex as expectations evolve, new
    technologies emerge, and our responsibilities to the American people
    increase.
        Above all, our mission is inspiring. We have close connections to
    America's lands and people, whether American Indians and naturalists,
    hikers and hunters, ranchers and recreation enthusiasts, or
    environmentalists and entrepreneurs. Our responsibilities touch the
    lives of individuals 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; and
      --Whether we can warm our homes and fuel our transportation systems.
        By fulfilling Interior's mission, we can leave a legacy of healthy
    lands and waters, thriving communities, and dynamic economies. That
    legacy depends on our ability to work together across landscapes and
    with communities. It depends on the efforts of our 70,000 employees,
    200,000 volunteers and thousands of partners.

                                BUDGET OVERVIEW

        Our 2005 budget request for current appropriations is $11.0
    billion. The Department anticipates collection of $10.1 billion in
    receipts in 2005, equivalent to 92 percent of our current
    appropriations request.
        The 2005 request includes $10.0 billion for programs funded in the
    Interior and Related Agencies Appropriations Act, an increase of $228.4
    million or 2.3 percent over the 2004 enacted level.
        Our budget also includes $1.0 billion for programs funded in the
    Energy and Water Development Appropriations Act, an increase of $21.8
    million, or 2.2 percent above 2004.
        Interior's 2005 budget request provides the single clearest
    statement of how we plan to work toward our goals in the upcoming year.
    Our budget fulfills the President's commitments to fully fund the Land
    and Water Conservation Fund; address the backlog of park repair and
    maintenance needs; fix Bureau of Indian Affairs schools; and re-
    establish healthy forests and rangelands.
        Our 2005 budget also advances other key goals. It accelerates the
    cleanup of abandoned coal mine lands; expands opportunities for
    cooperative conservation; advances trust reform; seeks to avoid water
    conflicts throughout the West through Water 2025; and supports the
    goals of the National Energy Plan.

                             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, Reclamation has developed water
    supply facilities that 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 has 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 2005 request for current appropriations is $956.3 million, a
    net increase of $13.5 million above the 2004 enacted level. The request
    for current appropriations is offset by discretionary receipts in the
    Central Valley Project Restoration Fund and by a proposal to finance by
    direct funding certain hydropower operation and maintenance activities,
    resulting in a net discretionary request of $880.0 million, a decrease
    of $32.1 million from the 2004 enacted level. The request for permanent
    appropriations totals $90.5 million.
        The request for the Water and Related Resources account is $828.5
    million. The account total includes an undistributed reduction of $36.6
    million in anticipation of delays in construction schedules and other
    planned activities. The 2004 Energy and Water Development
    Appropriations Act, for the first time, directed Reclamation to prorate
    underfinancing to each project and program. In accordance with this
    direction, the basis for comparing the amount of 2005 funding changes
    is the 2004 enacted level with underfinancing applied.
        The 2005 request provides a total of $366.6 million for facility
    operations, maintenance, and rehabilitation. This includes $64.0
    million for the Dam Safety program to protect the downstream public by
    ensuring the safety and reliability of Reclamation dams. The 2005
    request also includes a total of $498.4 million for resource management
    and development activities.
        Water 2025.--Chronic water supply problems in the West will
    continue to challenge the Nation to find effective approaches to long-
    term management of water resources. Recent crises in the Klamath and
    Middle Rio Grande basins, where water shortages have affected American
    Indians, farmers, urban residents, and fish and wildlife vividly
    demonstrate the consequences of failing to address strategically the
    problem of competing demands for constrained water supplies.
        The 2005 budget includes $21.0 million for Water 2025 to minimize
    future western water crises by fostering conservation and interagency
    coordination, enhancing water supplies through improved technologies,
    and managing water resources in cooperation with others. Collaborative
    approaches and market-based water transfers will help address emerging
    needs. Federal investments in research and development will improve
    water treatment technologies such as desalination.
        A Water 2025 increase of $12.5 million for the Bureau of
    Reclamation will build on the 2004 Western Water Initiative, providing
    a total of $20.0 million to retrofit and modernize existing facilities,
    promote conservation and more efficient use of existing water supplies,
    improve water management by using excess capacity at Federal
    facilities, and facilitate research to provide alternative water
    supplies.
        The U.S. Geological Survey's 2005 budget includes $1.0 million for
    Water 2025 to conduct groundwater availability assessments, develop
    tools and techniques for protecting biological resources while meeting
    water supply needs, and to improve methods to characterize aquifers.
        Animas La Plata.--The 2005 budget proposes funding Animas La Plata
    at 2004 levels, prior to the application of underfinancing. This level
    of $52.0 million allows progress towards satisfying the Indian water
    rights settlement with the continued construction of Ridges Basin Dam
    and Durango Pumping Plant; road and utility relocations;
    preconstruction activities for the Navajo Nation municipal pipeline;
    and design and contract preparation for the Ridge Basin Inlet Conduit.
        In the fall of 2003, Reclamation completed an internal
    investigation into why Animas La Plata project costs were
    underestimated by $162 million or 48 percent. As a result of the
    investigation, Reclamation has recalculated the construction cost
    estimate and will review/reconfigure its internal organizational
    approach to the project; review its Indian Self-Determination and
    Assistance Act process to improve construction efficiencies; improve
    interaction and communication with the project sponsors; seek ways to
    reduce costs; and review its own procedures for developing construction
    cost estimates.
        CAP and CVP.--The request provides $34.1 million for the Central
    Arizona Project. The request also includes $162.9 million for
    operating, managing and improving California's Central Valley Project.
    This includes a total of $23.2 million for CVP's Replacement,
    Additions, and Extraordinary Maintenance program. The CVP request also
    includes the third and final $34.0 million payment to the plaintiffs
    for the settlement of Sumner Peck Ranch Inc. v. Bureau of Reclamation.
        Multiple-use Management.--The budget puts continued emphasis on
    Reclamation's core mission of delivering water and power, while
    focusing on ensuring site security and on maximizing efficient ways to
    conserve water for multiple uses, including endangered species
    protection. The Klamath, Columbia Basin, and Savage Rapids Dam
    projects, along with the Columbia/Snake Rivers salmon recovery and the
    ESA recovery implementation programs, are funded at $72.2 million,
    which is $15.7 million above 2004 enacted levels. These increases,
    together with the Water 2025 initiative, will help optimize water
    supply through effective and more efficient water management.
        The Middle Rio Grande project is funded at $18.0 million, $14.3
    million below the 2004 enacted level. This funding level is consistent
    with the President's budget request in recent years and addresses needs
    for ESA coordination, the Middle Rio Grande Endangered Species Act
    Collaborative program, and facility operations to manage and control
    water flow.
        Rural Water.--The 2005 budget request for rural water projects is
    $67.5 million, a decrease of $9.1 million from the 2004 enacted level
    (with underfinancing applied) and an increase of $49.5 million above
    the 2004 President's budget. The budget request supports the
    Department's strategy to complete construction projects to increase
    water delivery infrastructure and water availability. In the long-term,
    the water needs of rural communities may benefit from Water 2025 by
    helping communities look at new technologies and new management
    strategies for their water resources.
        Other Project Requests.--The budget includes $43.2 million, an
    increase of $15.4 million, for site security. This increase will be
    used to assure the safety and security of Reclamation facilities that
    will in turn lower the risk of harm to life and property. Beginning in
    2005, the budget assumes that the guards and surveillance-related
    security costs for Reclamation's facilities are reimbursed by project
    beneficiaries.
        The budget request also establishes a direct financing relationship
    between Reclamation hydropower facilities and their customers, for
    those facilities where such an arrangement is not already in place and
    includes an offsetting collection proposal of $30.0 million.
        Other funds are requested to assist the Bureau in meeting
    objectives in the areas of improved water management and environmental
    compliance. Examples include $15.3 million for the Lower Colorado River
    Operations program and $13.6 million for the Colorado River Storage
    Project.
        The 2005 Reclamation budget includes a request for $54.7 million
    from the Central Valley Project Restoration Fund, which is the
    estimated level of collections from CVP water and power users. This
    request is offset by collections estimated at $46.4 million from
    mitigation and restoration charges authorized by the Central Valley
    Project Improvement Act.
        The 2005 budget includes $15.0 million for the implementation of
    Stage one CALFED activities consistent with existing authorities. These
    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, water storage and conveyance studies, and program
    administration.

                      CENTRAL UTAH PROJECT COMPLETION ACT

        The Central Utah Project Completion Act provides for completion of
    the project by the Central Utah Water Conservancy District. The
    Completion Act also authorizes funding for fish, wildlife, and
    recreation mitigation and conservation activities; establishes the Utah
    Reclamation Mitigation and Conservation Commission to oversee
    implementation of those activities; and authorizes funding 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 2005 Central Utah Project requests $46.3 million, an increase
    of $8.3 million over the 2004 enacted level. Most of this increase is
    due to a transfer of budgetary authority and responsibility from the
    Western Area Power Administration to the Department. The request
    includes: $28.4 million for planning and construction activities
    administered by the District; $15.5 million for mitigation and
    conservation activities funded through the Mitigation Commission; and
    $2.4 million for activities administered by the program office, which
    includes $700,000 for mitigation and conservation activities funded
    through the program office.

                                 KLAMATH BASIN

        The Department's partnership efforts are bringing about change in
    the Klamath Basin. Interior bureaus, partnering with other Federal
    agencies, are restoring habitat, removing fish migration barriers,
    acquiring land, using water banking, and researching the ecology of the
    federally-listed fish species. Through these partnership efforts, the
    Department is seeking long-term resolution of conflicts over water and
    land management.
        The 2005 budget includes $67.6 million for this effort, a $17.9
    million increase over 2004 funding levels. Other government agencies
    will provide an additional $38 million, bringing a total of $105
    million to this effort. The budget includes funds to remove the
    Chiloquin Dam, which impedes passage of endangered suckers to 70 miles
    of spawning habitat on the Sprague River, and to acquire lands adjacent
    to Agency Lake Ranch to increase water storage and fisheries habitat
    restoration. Additional funding will also support water banking, water
    supply enhancement, and water quality improvement. Reclamation's budget
    contains $25.0 million for Klamath.

                 ADDRESSING LONG-STANDING DEPARTMENT CHALLENGES

        Abandoned Mine Lands.--Since enactment of the Surface Mining
    Control and Reclamation Act in 1977, the Department has partnered with
    States, Tribes, local governments, and others to reclaim over 225,000
    acres of damaged and dangerous lands. Despite these accomplishments
    over the past two and a half decades, dangerous abandoned coal mines
    remain within 1 mile of the homes of more than 3.5 million Americans.
    Since 1999 a total of 100 people have died in incidents related to
    abandoned coal mines.
        The primary impediment to completing reclamation of abandoned mines
    is the fundamental imbalance between the goals of the 1977 Act and the
    requirements for allocating funds under the Act. The statutory
    allocation formula limits the ability of the Office of Surface Mining
    to meet its primary objective of abating the highest-priority abandoned
    coalmines. The majority of funding in the program, or 71 percent, is
    distributed to States on the basis of current production. Yet there is
    no relationship between current production and the number of priority
    sites in each State, which is a function of pre-1977 production.
        Over the past 25 years, the allocation formula has enabled some
    States and Tribes to complete reclamation of all abandoned coal mines.
    Others are decades away from completing work on the most critical,
    high-priority sites. We estimate it will take 60 years to reclaim
    dangerous abandoned mine sites in Pennsylvania and 50 years in West
    Virginia.
        Our 2005 budget proposal seeks to correct this problem. We propose
    to direct reclamation grants to sites where the danger is greatest. The
    reauthorization proposal will allow all States to eliminate significant
    health and safety problems within 25 years and would remove 142,000
    people from risk annually. At the same time, by shifting funds to speed
    resolution of serious health and safety problems, the proposal will
    reduce fee collections and spending by $3 billion over the life of the
    program.
        Under our proposal, States and Tribes that have certified
    completion of high-priority projects will be paid their accumulated
    State share balances in the abandoned mine lands fund as of September
    30, 2004. These payments will be made over a 10-year period. Going
    forward, the grants would be distributed for high priority mine
    reclamation projects.
        The 2005 budget proposes an appropriation of $243.8 million for the
    abandoned mine lands program, including $53.0 million for the initial
    State share balance distribution to certified States and Tribes.
        Indian Trust Programs.--Fulfilling the Department's trust
    responsibilities continues as one of our highest priorities and
    greatest challenges. The assets of the trust today include over 56
    million acres of land. On these lands, the Department manages over
    100,000 leases for individual Indians and Tribes. We collect
    approximately $194 million per year from leasing, use permits, sale
    revenues, and interest for 260,000 open individual Indian money
    accounts. About $378 million per year is collected in 1,400 tribal
    accounts for 300 Tribes. In addition, the trust manages approximately
    $2.9 billion in tribal funds and $400 million in individual Indian
    funds.
        For 2005, we are seeking $614 million for our Unified Trust budget,
    a net increase of $161 million.
        In 2003 we began to reorganize trust functions in the Bureau of
    Indian Affairs and the Office of the Special Trustee for American
    Indians. The new organization is based on a detailed analysis and a
    year-long consultation process with tribal leaders. Our reorganization
    reflects a synthesis of the views heard during the consultation
    process. When fully implemented, the new organization will better meet
    fiduciary trust responsibilities, be more accountable at every level,
    and operate with people trained in the principles of fiduciary trust
    management.
        To support continued implementation of the new organization, the
    2005 budget proposes a net increase of $7.2 million, including funding
    for 85 new trust-related positions at the local level. We request an
    additional $4.0 million to quicken the pace at which probate cases are
    resolved.
        Improving our trust organization will not by itself resolve the
    issues that we face in managing the trust. A still greater challenge
    remains. That challenge is the fractionation, or continuing
    subdivision, of individual Indian interests in the land that the
    Federal Government holds in trust. Indian trust lands are primarily
    transferred through inheritance. With each passing generation,
    individual interests in the land become further subdivided among heirs,
    each of whom holds a smaller and smaller interest in the land. Many
    acres of trust land are already owned in such small ownership interests
    that no individual owner will derive any meaningful value from that
    ownership. Without corrective action, this problem will grow
    exponentially.
        As the number of interests grows, we expect the cost to the Federal
    Government for managing, accounting for, and probating these interests
    to increase substantially, possibly to as much as $1 billion at the end
    of the next 20 years.
        The Indian Land Consolidation program, which acquires small
    ownership shares in allotted land from willing sellers, is a critical
    component of trust reform. We have conducted this program as a pilot
    for several years. The pilot has taught valuable lessons about the need
    to target purchases to maximize return of land to productive use and
    allow closure of accounts associated with fractional interests.
        The 2005 budget proposes an unprecedented amount of $75.0 million
    for Indian land consolidation, an increase of $53.3 million. This
    funding will support an expansion beyond the seven pilot reservations
    to include additional reservations with the most highly fractionated
    lands. On a nationwide basis, we are targeting opportunities to
    purchase the most fractionated interests. Interior plans to use
    contractual arrangements with Tribes or private entities to acquire
    individual interests.
        This commitment to end fractionation will also require legislative
    action to provide for workable probate reform, disposal of unclaimed
    property, and partition of land. We want to continue to work with the
    Congress to find meaningful and constructive solutions to these issues.
        The 2005 budget also proposes funding to address the issue of
    accounting for past transactions in the trust. As the committee is
    aware, the American Indian Trust Management Reform Act of 1994 requires
    the Secretary of the Interior to ``account'' for ``the daily and annual
    balance of all funds held in trust by the United States for the benefit
    of an Indian Tribe or an individual Indian which are deposited or
    invested pursuant to the Act of June 24, 1938.''
        The Department is currently involved in a major class action,
    Cobell v. Norton, and 25 tribal suits over the Department's management
    of Indian trust funds. On January 6, 2003, as ordered by the District
    Court in the Cobell litigation, the Department filed The Historical
    Accounting Plan for Individual Indian Money Accounts. This plan
    provides for an historical accounting for about 260,000 individual
    Indian accounts over a 5-year period at a cost of approximately $335
    million. The accuracy of the transactions would be verified by
    reviewing support documentation on a transaction-by-transaction basis
    for all transactions over $5,000 and by statistically sampling
    transactions under $5,000. The sampling methodology would be designed
    to provide a 99 percent confidence level at any error rate.
        On September 25, 2003, the Cobell court issued a structural
    injunction directing a far more expansive accounting and requiring that
    it be completed under more constrained time lines. We estimate that the
    cost of compliance with the structural injunction would be between $6
    billion to $12 billion. An appeal from the September decision is
    pending. The Court of Appeals for the D.C. Circuit has stayed the
    structural injunction. In addition, the 2004 Interior Appropriations
    Act provides that the Department is not required to commence or
    continue an accounting for IIM accounts until 2004 or the Congress
    amends the Trust Management Reform Act to delineate the Department's
    historical accounting obligations or until December 31, 2004, whichever
    occurs first.
        The 2005 budget includes $109.4 million for historical accounting.
    This increase of $65.0 million over the enacted 2004 appropriation is
    targeted to provide $80.0 million for IIM accounting and $29.4 million
    for tribal accounting. The budget for IIM accounting is based on the
    estimate of the Department's costs to continue implementation of its
    historical accounting process. This amount may be revised depending on
    how the Court of Appeals rules with regard to the structural injunction
    in the Cobell case and on whether Congress acts to delineate the
    specific historical accounting obligations of the Department as
    suggested in the 2004 Appropriations Act. The Department will continue
    to work with the Congress and trust beneficiaries to consider
    settlement of the historical accounting and related issues.

                           INVESTING IN CONSERVATION

        Cooperative Conservation.--Among Interior's most inspiring roles is
    its mission to conserve lands and waters across America. As we are all
    aware, nature knows no jurisdictional boundaries. Conservation in the
    21st century depends increasingly upon partnerships across a mosaic of
    land ownerships. At Interior, we recognize that we cannot manage
    Federal lands successfully unless we are able to work with adjacent
    landowners, States, Tribes, and communities. We also recognize that the
    Nation cannot achieve its conservation goals solely by relying upon--
    and adding to--the Federal dominion of lands.
        These two perspectives underscore the importance of cooperative
    conservation. Through a variety of conservation partnerships,
    Interior's land managers are joining with citizen stewards to remove
    invasive species, reduce stream bank erosion, and enhance habitat for
    threatened and endangered species. Through these partnerships, the
    Department is building the new environmentalism of citizen stewards
    called for by President Bush. These partnerships leverage Federal
    dollars by a factor of two or more. They engage Americans in
    conservation. They help us work with citizens to find common ground and
    simultaneously achieve healthy lands, thriving communities, and dynamic
    economies. We look forward to working with members of Congress and
    their constituents in these conservation successes.
        The 2005 budget proposal expands opportunities for conservation
    partnerships with citizens, organizations, and communities throughout
    the Nation. The budget proposes to spend $507.3 million, a 20 percent
    increase, to expand opportunities for conservation partnerships with
    citizens, organizations and communities.
        A cornerstone of our conservation partnership budget is the
    Cooperative Conservation Initiative. The Department has a long history
    of working cooperatively with others to achieve its conservation
    mission. Yet the resources available to land managers to foster
    innovative and collaborative conservation have fallen short of the
    demand. Across the Nation, citizens are working to overcome conflict
    and, instead, work together to maintain healthy lands and waters. Our
    Cooperative Conservation Initiative seeks to address this growing,
    giving managers the support necessary to leverage funds with private
    citizens, States, Tribes, communities, and businesses to protect and
    restore habitats, wildlife and plants.
        Our Cooperative Conservation Initiative builds on existing
    conservation partnership programs that have established productive
    relationships with local communities and citizens. In total, we propose
    that this initiative will provide $129.5 million, an increase of $25.5
    million, for a suite of seven programs: the challenge cost share
    programs in the Bureau of Land Management, the Fish and Wildlife
    Service, and the National Park Service; the FWS Coastal program; FWS
    Migratory Bird Joint Ventures; FWS Partners for Fish and Wildlife; and
    Take Pride in America.
        The budget proposes $29.6 million for challenge cost-share
    activities, an increase of $8.4 million over 2004. This request will
    enable land managers to undertake additional natural resource
    restoration and species protection projects on or impacting Federal
    lands. Dynamic partnerships with individuals, Tribes, State and local
    governments, non-profit organizations, and others will support an array
    of projects to restore damaged habitats and lands and achieve the
    conservation goals of the Department's land management agencies.
    Projects require a one-to-one match or better, thereby at least
    doubling the benefits of Federal dollars. The request for the bureau
    traditional challenge cost-share programs is $24.4 million.
        In 2003, challenge cost-share programs funded 256 resource
    restoration projects with more than 700 partners in 40 States and
    Puerto Rico. The ratio of matching non-Federal funds to Federal funds
    was nearly 2 to 1, with the Federal portion at $12.9 million and total
    funding at $36.0 million.
        The 2005 budget includes $50.0 million for the Partners for Fish
    and Wildlife program. Through the Partners program, the Fish and
    Wildlife Service has established productive relationships with
    communities and over 30,000 landowners, providing financial and
    technical assistance and restoration expertise to private landowners,
    Tribes, and other conservation partners. Since its inception in 1987,
    the Partners program has restored 677,000 acres of wetlands; nearly 1.3
    million acres of prairie, native grassland, and other uplands; and
    5,560 miles of stream and streamside habitat.
        In 2005 the Partners program will leverage $5.0 million in the High
    Plans region through a public/private initiative that will restore
    grassland habitats and declining species over an 11-State region. In
    cooperation with landowners and other partners, the Fish and Wildlife
    Service will focus conservation efforts on restoring, enhancing, and
    protecting 2 million acres over the next 10 years. The 2005 Partners
    budget also includes $6.2 million for partnership efforts in the Upper
    Klamath basin.
        Augmenting our partnership achievements is the work of over 200,000
    volunteers who provide over 8 million hours to Interior's programs and
    projects throughout the Nation. These volunteers help repair and
    maintain trails, restore habitat, participate in monitoring and
    research programs, and assist our land managers in many other ways. To
    promote this spirit of volunteerism, the Department has reactivated the
    Take Pride in America program. In California, volunteers enlisted
    through Take Pride pledged 400,000 hours of service to help restore
    areas devastated by wild land fires. The 2005 budget includes $1.0
    million for the Take Pride program as part of the Cooperative
    Conservation Initiative.
        Also funded within the Cooperative Conservation Initiative is the
    Fish and Wildlife Service's Coastal program, for which we propose a
    funding increase of $2.9 million, bringing total funding to $13.1
    million. The Coastal program leads FWS conservation efforts in bays,
    estuaries, and watersheds around the U.S. coastline and leverages
    Federal funding at a rate of 4:1. We also propose to increase funding
    for the Migratory Bird Joint Ventures program by $1.2 million for a
    total of $11.4 million. The funding increase will allow FWS to enhance
    15 existing Joint Ventures and fund the Northern Great Plains and
    Central Hardwoods Joint Ventures.
        Endangered Species Grant Programs.--The Department's cooperative
    conservation efforts also include a number of grant programs that
    provide expanded opportunities for State, tribal, local and private
    partners to participate in conservation and protection of endangered,
    threatened, and at-risk species. These programs will help this nation
    invest habitat protection and recovery of species--the ultimate goal of
    the Endangered Species Act. Through these investments, we can achieve
    on-the-ground conservation results and help avoid the conflicts, land
    management stresses, and procedural workloads that ensue when species
    become endangered.
        The Landowner Incentive Program provides competitive matching
    grants to States, Territories, and Tribes to create, supplement, or
    expand programs to protect and manage habitats on private lands that
    benefit listed species or species at risk. The 2005 budget includes
    $50.0 million to assist private landowners in conserving and restoring
    habitat for endangered species and other at-risk plants and animals.
    This is an increase of $20.4 million over 2004.
        The Private Stewardship Grants program provides grants and other
    assistance to individuals and groups engaged in local, private, and
    voluntary conservation efforts that benefit federally listed, proposed,
    candidate or other at-risk species. A panel of representatives from
    State and Federal Government, agricultural and private development
    interests, and the scientific and conservation communities assess and
    make recommendations regarding these grants. The 2005 budget proposes
    $10.0 million for the program, a $2.6 million increase over 2004.
        The Cooperative Endangered Species Conservation Fund provides
    grants to States and Territories to participate in projects to conserve
    candidate, proposed, and threatened and endangered species. Grants to
    States and Territories allow them to participate in an array of
    voluntary conservation projects for candidate, proposed, and listed
    species. These funds may in turn be awarded to private landowners and
    groups for conservation projects. The CESCF grants include funding for
    States and Territories to implement conservation projects to support
    the development of Habitat Conservation Plans and to acquire habitat
    for threatened or endangered species. The 2005 budget proposes $90
    million, an increase of $8.4 million, for the appropriated portion of
    this program.
        Our grant programs also aid a wide variety of other wildlife. The
    2005 budget proposes $80.0 million for the State and Tribal Wildlife
    Grants program. These grants help develop and implement State and
    tribal programs for the benefit of wildlife and its habitat, not
    limited to species that are hunted or fished. The program exemplifies
    our cooperative conservation vision, allowing States and Tribes to
    tailor their conservation efforts in a manner that best fits local
    conditions. A $10.9 million increase for the program in 2005 will
    significantly advance efforts of State and tribal fish and game
    agencies to address on-the-ground wildlife needs. Based on the high
    level of interest in this program, we expect this program will have
    lasting benefits for fish and wildlife, while fostering stronger
    working relationships between Federal, State and tribal governments.
        Full Funding for the Land and Water Conservation Fund.--Our
    cooperative conservation programs are an important component of the
    2005 Land and Water Conservation Fund budget request. Overall, the
    Department's budget seeks $660.6 million from the Land and Water
    Conservation Fund for 2005, including $153.3 million for land
    acquisition and $93.8 million for the State grant program. The
    Department's request, combined with the request for the U.S. Forest
    Service, brings total government-wide LWCF funding to $900.2 million.
        The 2005 LWCF budget includes the same mix of programs proposed in
    2004. This mix strikes an effective balance between Federal land
    acquisition and cooperative efforts to fulfill LWCF goals.
        We believe effective conservation of lands and natural resources
    cannot rely primarily on expanding the Federal estate through land
    acquisition. Such acquisitions remove lands from the local tax base.
    Equally significant, each time we acquire more Federal lands, future
    operations and maintenance costs ensue in perpetuity. Supporting local
    recreation and conservation through partnership programs enables us to
    leverage Federal funding. In many cases, these programs match Federal
    funds at a ratio of more than 2:1. They give us an opportunity to work
    hand-in-hand with States, communities, and local landowners to build
    support for long-term conservation.

                                   CONCLUSION

        The budget plays a key role in advancing our vision of healthy
    lands, thriving communities, and dynamic economies. Behind these
    numbers lie people, places, and partnerships. Our goals become reality
    through the energy and creativity efforts of our employees, volunteers,
    and partners. They provide the foundation for achieving the goals
    highlighted in our 2005 budget.
        This concludes my overview of the 2005 budget proposal for the
    Department of the Interior and my written statement. I will be happy to
    answer any questions that you may have.
                                     ______

                    Prepared Statement of J. Ronald Johnston

        My name is Ronald Johnston. I serve as the Program Director of the
    Central Utah Project Completion Act Office under the Assistant
    Secretary--Water and Science in the Department of the Interior. I am
    pleased to provide the following information about the President's
    fiscal year 2005 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 (CUP) 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 responsibility
    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 2005 request for the Central Utah Project Completion Account
    provides $46.3 million for use by the District, the Commission, and the
    Department to implement Titles II-IV of the Act, which is $8.3 million
    more than the 2004 enacted level. Most of this increase is due to a
    transfer of budgetary authority and responsibility from the Western
    Area Power Administration to the Department of the Interior ($6.1
    million).
        The funds requested for the District ($28.4 million) will be used
    to continue the completion of the Diamond Fork System ($8.5 million);
    to continue construction on Uinta Basin Replacement Project ($13.0
    million); and to implement water conservation measures, local
    development projects, and continue planning and NEPA compliance for the
    Utah Lake System ($6.9 million). We are pleased to report that the
    problems in the Diamond Fork System associated with a cave-in and
    dangerous levels of hydrogen sulfide gas have been resolved, the
    construction of the alternative facilities is nearly complete, and
    water should be delivered through the facilities this summer. We are
    planning a celebration of the completion of these major facilities this
    summer. The members of the committee will be invited to attend.
        The funds requested for the Mitigation Commission ($15.5 million)
    will be used to implement the fish, wildlife, and recreation mitigation
    and conservation projects authorized in Title III ($7.4 million); to
    implement the fish and wildlife activities associated with the Uinta
    Basin Replacement Project ($1.0 million); to complete mitigation
    measures committed to in pre-1992 Bureau of Reclamation planning
    documents ($1.0 million); and to fulfill the mitigation obligations
    required under section 402(b)(3)(B) of the Act ($6.1 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 includes $2.4 million for the Program Office.
    This includes $1.7 million for program administration, $300,000 for
    mitigation and conservation projects outside the State of Utah, and
    $400,000 for operation and maintenance costs associated with instream
    flows and fish hatchery facilities.
        In conclusion, we appreciate the opportunity to testify before the
    committee and would be happy to respond to any questions.

        Senator Domenici. Yes, sir.
        Senator Craig, do you have some questions?
        Senator Craig. Just a couple.
        Senator Domenici. All right.
        Senator Craig. And, again, John, let me thank you for your
    presence here and the work you're doing. Your reality check, by
    the graphs and charts you've shown us, clearly demonstrate what
    is really at risk in the West, and the problems we all face.
        In the area of site security, $43.2 million, there is a
    growing concern that some of this is overdone. And while site
    security is critically important, and we all know that, my
    guess is, when the dust settles from 9/11, we'll learn how to
    do it better with less. But what are going to be the costs to
    the users of these facilities? How much of--is there going to
    be a cost pass-through to users in fees that they might be
    expecting?
        Commissioner Keys. Mr. Craig, out of the $43 million that
    we have requested, $18 million of that is associated with
    guards and surveillance. Of that $18 million, $12 million would
    be part of the operation and maintenance budgets, and we would
    expect to be reimbursed by the water users. Water users being
    from the power side, from--all of the water users that have an
    allocation from those Federal projects.
        Senator Craig. So it's a direct cost pass-through of $12
    million.
        Commissioner Keys. That's correct.
        Senator Craig. And I assume that, because you've arrived at
    a figure of $12 million, you know how that breaks out.
        Commissioner Keys. Mr. Craig, we do. It is based on the
    authorized purposes for the project and the cost allocations
    that have been done over--well, when the projects were
    completed or when the cost repayments started. So it's along
    the cost allocations that are already in place.
        Senator Craig. But an increase.
        Commissioner Keys. It would increase over what they were
    paying before 9/11/2001.
        Senator Craig. Okay. I'd like to see those figures. I'd
    like to know how that impacts both users, from the standpoint
    of water users, and then--and the utility. I assume you're
    talking about WAPA rate payers in that case, would you not be?
        Commissioner Keys. Mr. Craig, it is all of the power users.
    It's WAPA, it's Bonneville----
        Senator Craig. Yeah, all of them.
        Commissioner Keys [continuing]. Power Administration, and
    the other water users. We can provide that breakdown for you.
        [The information follows:]

        In referencing preliminary estimates for guard reimbursability,
    Senator Craig has requested to see the figures. I have agreed to
    provide that breakdown. Below are those figures:

                                     REIMBURSABILITY OF GUARD COSTS--APRIL 20, 2004
                                                [In millions of dollars]
    ----------------------------------------------------------------------------------------------------------------
                                                                                     Fiscal Year 2005
                                Projects                             -----------------------------------------------
                                                                        Power Users     Water Users    Reimb. Amount
    ----------------------------------------------------------------------------------------------------------------
    Hoover..........................................................             4.7  ..............             4.7
    Parker/Davis....................................................             1.6  ..............             1.6
    Yuma Area Projects..............................................  ..............  ..............  ..............
                                                                     -----------------------------------------------
          Lower Colorado Region.....................................             6.2  ..............             6.2
                                                                     ===============================================
    Grand Coulee....................................................             2.9  ..............             2.9
                                                                     -----------------------------------------------
          Pacific Northwest Region..................................             2.9  ..............             2.9
                                                                     ===============================================
    Central Valley Project..........................................             0.3  ..............             0.3
                                                                     -----------------------------------------------
          Mid-Pacific Region........................................             0.3  ..............             0.3
                                                                     ===============================================
    Great Plains Region.............................................  ..............  ..............  ..............
                                                                     ===============================================
    Colorado River Storage Project..................................             1.5             0.6             2.1
                                                                     -----------------------------------------------
          Upper Colorado Region.....................................             1.5             0.6             2.1
                                                                     ===============================================
          TOTALS....................................................            10.8             0.6            11.4
    ----------------------------------------------------------------------------------------------------------------

        These figures are generated from the best available information at
    the current time. They are preliminary estimates which will be further
    reviewed within the Bureau.
        After further refinement, the guards and surveillance costs remain
    at $18 million. There was a greater need identified with an armed
    response force at Grand Coulee, a National Critical Infrastructure
    facility. This was offset by changing needs at other facilities.
        After further review, the overall total reimbursable amount is now
    $17 million, based upon project cost allocations. The above table does
    not factor into account Mid-Pacific and Great Plains Region's shift to
    reimbursability, although the customers in these regions had been
    apprised that they would be subject to this new reimbursability policy.
        The table below clarifies the costs by region, as well as including
    the updated costs for guards and surveillance.

                                     REIMBURSABILITY OF GUARD COSTS--AUGUST 4, 2004
                                                [In millions of dollars]
    ----------------------------------------------------------------------------------------------------------------
                                                                                     Fiscal Year 2005
                                Projects                             -----------------------------------------------
                                                                        Power Users     Water Users    Reimb. Amount
    ----------------------------------------------------------------------------------------------------------------
    Hoover..........................................................             3.9  ..............             3.9
    Parker/Davis....................................................             1.6  ..............             1.6
    Yuma Area Projects..............................................  ..............  ..............  ..............
                                                                     -----------------------------------------------
          Lower Colorado Region.....................................             5.5  ..............             5.5
                                                                     ===============================================
    Grand Coulee....................................................             4.1             0.2             4.4
                                                                     -----------------------------------------------
          Pacific Northwest Region..................................             4.1             0.2             4.4
                                                                     ===============================================
    Central Valley Project..........................................             0.4             2.1             2.5
                                                                     -----------------------------------------------
          Mid-Pacific Region........................................             0.4             2.1             2.5
                                                                     ===============================================
    Great Plains Region.............................................             1.3             1.0             2.3
                                                                     ===============================================
    Colorado River Storage Project..................................             1.4             0.6             2.0
                                                                     -----------------------------------------------
          Upper Colorado Region.....................................             1.4             0.6             2.0
                                                                     ===============================================
          TOTALS....................................................            12.8             3.9            16.7
    ----------------------------------------------------------------------------------------------------------------

        We will continue to refine these numbers as Reclamation's Security
    Program continues to assess its vulnerabilities and take appropriate
    measures. We will also work closely with our stakeholders to share data
    and guidance in the areas of risk, and take the necessary responses to
    ensure the delivery of water service to multiple water users.

        Senator Domenici. Okay.
        The Water 2025, first of all, I obviously applaud the
    initiative. I want all Americans to become more aware of the
    realities of the arid West and to better understand water needs
    out there. At the same time, to be able to work cooperatively
    with all of the entities involved out there, in conflict
    resolution and reallocation needs and all of that, will be
    extremely important.
        As you mentioned, you're going out to Idaho this next
    month. The Idaho legislature spent a fair amount of time
    resolving, in the short term, for the short term, a growing
    problem in an area of Idaho, but that's a good example of where
    the Bureau can really be a facilitator and an assister. And
    what I would hope you would do, when you find conflicts
    impossible to resolve because of Federal legislative or
    regulatory impediments, that you'd come to us and let us know
    about them so that we might assist you in removing those
    impediments.
        The reality check in the West, if this continues, is that
    we may have to change some law, we may have to rethink where we
    are. It isn't a matter of just cutting the slices of the pie
    thinner; we might need to enlarge the pie a bit. And that is a
    reality that we're all going to have to face.
        I think the chairman spoke to that when he talked about
    budgets, and we need to know those kinds of things, because I'm
    looking at Animas-La Plata. It was 1982, and I was a freshman
    Congressman when I assisted a Congressman from Colorado in this
    initiative. Do the math. Idaho can't wait 30 years for a
    decision out of Washington, nor can New Mexico, when it comes
    to drought and water resources.
        But that's what happened in Animas-La Plata. It's nearly 30
    years since that idea went on the books and began to be a
    motivator of public policy, and I just happen to think that's
    an interesting reality check at a time when we're seeing
    unprecedented dry numbers.
        Thank you, Mr. Chairman.
        John, thank you.
        Senator Domenici. Thank you very much, Senator. I greatly
    appreciate your participation.
        I have about five questions. A couple of them are
    parochial, some are not.
        Senator Craig, I don't know whether my observation
    regarding improving the use of water by farmers applies to your
    State, but I want to suggest sometimes there are issues that we
    don't quite know, in the bureaucracy of the government, where
    they fit. So since they don't exactly fit, nothing's done.
        I believe that farmers could improve the system whereby
    they apply water, and save a lot of water in the process, by
    building systems that use the water better, those systems where
    you feed by a drip system, or you feed by an underground system
    that delivers the water, or a sprinkler system. And it seems to
    me that one reason the farmer doesn't do it is because it costs
    a lot. Now, I wonder if you might seek, in your official
    capacity, an analysis of whether tax relief for the farmer who
    enhances the application and use of water in a field of
    agriculture.
        I know a farmer in New Mexico that is a very progressive
    farmer, but he also has money. And he spent a huge amount of
    money to make his water go further and to make sure that the
    application to the soil used far less water to get the job
    done. He came to see us, and we were talking about this
    approach, about tax credit of some type, and he quickly said,
    ``Isn't it too bad that I've already made my expenditure before
    you consider this idea of giving us some kind of tax credit.''
        I would wonder--this may be a pipe dream, but I wonder if
    you would use your official hat to ask the Treasury Department
    and those who engage in agricultural funding whether this makes
    any sense, and get that for us.
        Commissioner Keys. Mr. Chairman, your suggestion makes all
    the sense in the world for us, because we are currently
    launched off on three major efforts on water conservation. The
    first one is one with the existing programs that we have in
    Reclamation, for which we have four or five already. And
    certainly we work mightily to not let the new initiative take
    monies away from those, so that we can keep working very
    closely with the farmers on our districts. The second effort is
    Water 2025, itself.
        Senator Domenici. Yes.
        Commissioner Keys. That is concentrating on trying to
    stretch those existing water supplies so that the new demands
    for water don't place undue pressure on the water supplies for
    our irrigation projects.
        If you look across the Western United States, about 80
    percent of our water rights are held for irrigation.
        Senator Domenici. Yes.
        Commissioner Keys. If we can do the conservation work and
    provide water for a lot of the new demands that are out there,
    we can keep that pressure off of the need for conversion, and
    that's one of the big goals of 2025.
        The third thing that we're doing is working very closely
    with Department of Agriculture. Reclamation's main focus is on
    the delivery facilities, the dams, the canals, the control
    facilities. We're working very closely with agriculture for the
    on-farm stuff.
        Senator Domenici. Well, they're not----
        Commissioner Keys. Your suggestion for a tax relief would
    fit very well into that, and we would certainly explore that
    with you and with Treasury.
        Senator Domenici. It may very well be that it fits one of
    the other agencies better than yours, but I'm not really
    interested in that; I'm interested in somebody finding out
    whether it makes sense to the farmer and makes sense to the
    Treasury. So if you would start that initiative, I----
        Commissioner Keys. Mr. Chairman, we will take the lead in
    talking with Treasury and working with you and trying to see
    what we can do there.
        Senator Domenici. It may very well be that it doesn't work.
        Middle Rio Grande, in New Mexico. First, I appreciate your
    support of our Endangered Species Collaborative Program with
    reference to that. I acknowledge your 2004 spending and the
    list of agencies and groups who have signed onto the memorandum
    of understanding. I'm very pleased that some of the tribes have
    signed up as participants.
        We spoke yesterday--``we,'' being you and our office, and
    you brought other people with you--we spoke about the idea of
    sanctuaries, which I came up with, for minnows, these
    endangered minnows. And I understand that the details are still
    being flushed out, and I look forward to your follow-up. There
    is a deficit of $1.5 million in your 2004 plan to do all that
    you have on the list of proposed activities for the year.
        Now, Senator Craig, I might tell you that we have an
    endangered species called a silvery minnow, and it generally
    saves itself and prevails by being very far downstream in a
    sandy, sandy river, so that we lose thousands of acres in
    carrying the water from upstream to the bottom, low stream in
    order to get it to the minnow's habitat. The idea of a
    sanctuary would be to build ponds upstream, where there is
    plenty of water, and let the water go in and out so you don't
    lose any, and prepare that water in a way that would fit the
    minnow, and then do what I thought of and recommended for a
    year and a half, that's take the water to the minnow--no, take
    the minnow to the water, instead of the reverse, of taking the
    water to the minnow.
        So I want to ask you, how do you plan to prioritize what
    can be done this year? And what kind of growing season do you
    see for this year for the farmers in my State? Will there be
    enough water for them? And where do the minnow sanctuaries
    figure into this?
        Commissioner Keys. Mr. Chairman, on the minnow sanctuary,
    we have a draft plan and a draft timeline for implementing that
    plan that we're meeting with your staff on to flesh out. There
    are four concerns that we're working with.
        Senator Domenici. Yes.
        Commissioner Keys. The turbidity, the biological opinion,
    the land area that it takes--those things, we're working on. We
    think that it will probably take about 2 years to get that
    done, and we're trying to find ways to accelerate that if we
    can.
        On the water year for the Basin, currently Mr. Craig's
    characterization of his State, for everything shutting off in
    March, has been true almost all over the West. We have seen all
    of our projected runoff figures drop about 20 percent since the
    first of March, and that is true in the Middle Rio Grande. We
    started out in the high 80 percent range, and we're below 70
    percent now.
        I would tell you that we have enough water identified to
    meet the requirements of the minnow for this year and to meet
    the requirements for the prior and paramount rights of the
    Pueblos. In looking at the water supply for the Middle Rio
    Grande Water Conservancy District, it appears that they have
    water to take them into and maybe through July, and then they
    may be out of water. We're working with some of the Water 2025
    monies to do conservation projects on that district and seeing
    if there are not some ways that we can stretch that supply.
        Senator Domenici. I have a very lengthy question about
    Animas-La Plata. I will submit it.
        For the last 2 years, this committee funded the
    rehabilitation of the Middle Rio Grande levies. What's the
    status of the rehabilitation?
        Commissioner Keys. Mr. Chairman, we are on schedule with
    that 10-year program that we discussed with you a couple of
    years ago. Our budget this year requests adequate money to keep
    us on that schedule. We are requesting about $11 million for
    those eight or ten levies that we are working with there.
        Senator Domenici. I have a Western Water Initiative
    question, and I have a contracting-out question.
        I'd like to talk about two issues that I think we ought to
    be worried about that come within the purview of seeing if we
    can get more water from existing sources that might help with
    the problem.
        In my State, Senator Craig, there is a huge basin called
    the Tularosa Basin. It's a salty water, underground basin. And
    on the edges, you can get it, just by going there and spooning
    it out. It's, in some places, not so salty; in other places,
    very salty. But I would submit that with the situation we've
    got, that somebody ought to take a lead in the desalinization.
    If we could desalinate that water, we would have huge
    quantities of water to move from that area to arid parts of New
    Mexico and maybe even some other States.
        So I think that you're aware of this issue. The schedules
    have slipped, such that an additional $1.8 million will be
    needed for the Tularosa Basin construction, and at least $7
    million for 2005. Have you been aware of the funding issues?
    And can you commit to bringing me a solution soon so that the
    partnership with ONR and DOE can be maintained?
        Commissioner Keys. Mr. Chairman, I am aware of that
    situation, and, yes, we can craft a solution that would provide
    the necessary money in 2004, and then we would work with you on
    the funding for 2005.
        Senator Domenici. Well, I don't know what you think about
    it, but I would submit to my friend, Senator Craig, that with
    our huge capacity and technology, it would seem rather
    unfortunate if, in the midst of a drought, if we had this huge
    underground basin right in the middle of the West, if we didn't
    set out sights using the best scientists and technologists to
    see if we can clean some of that up so we could use it,
    especially in the agriculture field.
        And my last one has to do with another source of saving
    water. That has to do with the salt cedar. This was brought to
    the West to help erosion. Unfortunately, there has been a
    considerable drain on the scarce water supply, approximately
    2.4 million acre-feet of water each year. I'm aware that you
    are using mechanical and chemical methods of removing them, and
    that you are replacing them with vegetation. Where are you with
    progress in this area? Is there a threat of erosion? And where
    are you with finding and certifying a biological control? Were
    you part of the recent Salt Cedar Conference in New Mexico?
        Commissioner Keys. Mr. Chairman, yes, we were part of that
    conference. I would tell you that the Department of the
    Interior has a large initiative on invasive species, and a
    large part of that initiative is on the salt cedar. And
    Reclamation is taking the lead for Interior in the efforts on
    salt cedar. We are part of that effort in Albuquerque earlier
    this year, and certainly we are looking at different ways to do
    it.
        You talked about the mechanical means. That is the
    traditional way of doing it. We have recently received approval
    to release the bugs. They have found a bug that eats salt
    cedar. And the problem is, they didn't know what he would eat
    after he ate up all of the salt cedar. And they think now that
    they have an answer to that. I think they think he'll drop
    dead. But we'll have to wait and see.
        But there are provisions----
        Senator Craig. John----
        Commissioner Keys [continuing]. For releasing him----
        Senator Craig [continuing]. It's possible that when the
    salt cedar is gone, he might become an endangered species.
        Commissioner Keys. Oh, my goodness.
        Senator Craig. There would be some who would be advocates
    of that, so be careful of the word use ``drop dead,'' okay?
        Don't mention it.
        Commissioner Keys. But it has been approved for release,
    and there are a number of control areas underway where they're
    trying that.
        On the erosion issue, it has been something that we're
    paying a large amount of attention to, and there are a number
    of ways--a number of different vegetations that you can put
    there that will control that erosion and not create the
    problems that the salt cedar did.
        Senator Domenici. Well, I just want to say--and I know that
    my friend, Senator Craig--and if we had the rest of this
    committee here, I think they would all agree that we can't
    ignore the problem of saving water that is being wasted, and
    converting water that is not too far from usable if it's there
    in large quantities, that we clearly ought to spend some money
    trying to fix it.
        I know if Israel is worried about it, we're just as bad
    off. It's just that they're a lot smaller, and they can focus;
    and we're a lot bigger, but, I'll tell you, if you saw a map of
    the United States, like I have, that showed the salty
    underground water repositories in America, you would be shocked
    at how much there is. Even over in your side, there's more than
    you think. But in my State, there just happens to be this
    monster underground basin, and I think it's worth some money.
    And we're sitting around rationing what we've got, and it might
    be equally as important to try to make what we have more
    functional. And I intend to pursue that with vigor. It's going
    to take some money, but so what? We've got the United States
    Navy working on it, incidentally. You know that.
        Commissioner Keys. Yes, sir.
        Senator Domenici. They have a very big interest, and
    they've got a major project going in this basin.
        I have no further questions. Do you have any, Senator
    Craig?
        Senator Craig. Just a parting observation. Your early
    discussion about conservation and water management is obviously
    going to be critical during shortages. And even with any
    abundance, with the kind of growth factors we're seeing in the
    western high-desert States, clearly management's going to be
    important.
        Interestingly enough, management and new ideas and new
    alternatives have consequences. The Commissioner is going to
    Idaho to look at the consequence. In the Snake River Plain
    Aquifer, when you use the old techniques of flood irrigation,
    Mr. Chairman, you once fed the aquifer directly by flowing
    water out over the ground. Starting in the 1970's, because of
    the Clean Water Act and because of PMDLs and all of that kind
    of thing, they shifted from flood irrigation to sprinkler
    irrigation, and that reduced the amount of water going into the
    aquifer.
        Senator Domenici. Right.
        Senator Craig. Now, that water flows out of the aquifer at
    a given point. And in the 1940's and the 1950's, people filed
    on the excessive flow as their source of water. It was an
    abnormal flow from normal flows----
        Senator Domenici. Water rights.
        Senator Craig. They developed water rights. Now that we are
    using the new technologies and sprinkler irrigation, and, some
    instances, drip, the water is no longer flowing underground
    into the aquifer and out to the point source that was filed on.
        So the value of 2025 is what we're calling it?
        Commissioner Keys. Yes.
        Senator Craig. Those kinds of initiatives that not only
    look at how you mitigate, but try to understand what the
    consequence of mitigation will produce, is going to be every
    bit as important, because we have traditional, we have western
    water law, we have fixed mandates, we have a whole complication
    of things that tie up inside this marvelous resource. And there
    are consequences for action and acts when the good intention is
    made. Now, when you dry these things up, are we going to dry up
    a wetland by that action, although it's positive? A wetland
    that was created by man's presence, not by Mother Nature, and
    on and on and on and on.
        Anyway, point made. It's interesting that as we work
    towards solution, we're now trying to find a way to solve a
    problem that is created by a positive action on the part of
    Idaho irrigators.
        Commissioner Keys. Mr. Craig, one of the real cornerstones
    of Water 2025 is looking at institutional barriers that are
    there, law-wise or whatever, trying to find ways to make it
    easier to address some of the problems you're talking about,
    especially the one on using government facilities to convey
    private water. The old Warren Act issue.
        Senator Craig. Um-hum.
        Commissioner Keys. And certainly we may have to come back
    for some help on the Warren Act one of these times. But we're
    looking at other laws that we can use to make that happen, like
    the 1906 Townsite Act----
        Senator Craig. Yeah.
        Commissioner Keys [continuing]. Or the 30--Section 14 of
    the 1939 act, or the 1958 act, trying to find ways to make that
    happen. In the end, we still may have to come back and work
    with you folks to see how we might change that Warren Act so
    that it's more compatible.
        Senator Craig. Well, we think you're headed in the right
    direction about those analyses. Thank you.

                         ADDITIONAL COMMITTEE QUESTIONS

        Senator Domenici. I thank you, Commissioner. We're finished
    with you, and----
        Commissioner Keys. Okay.
        Senator Domenici [continuing]. We'll be working with you,
    and thank you for your excellent testimony, and you were very
    well prepared.
        Commissioner Keys. Thank you, Senator.
        [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 Harry Reid

                                   WATER 2025

        Question. Commissioner Keys, we find that the budget request has
    effectively eliminated funding for Title XVI projects with the
    exception of ongoing projects. Even with that limited commitment, the
    level of funding has decreased. At the same time, the budget for Water
    2025 seeks almost $13 million in increases. What share of this increase
    will be dedicated to reuse projects and/or research projects?
        Answer. Improving desalination technology is important to purifying
    salty and brackish waters to increase their utility. Water 2025's goal
    is to aid technological advances and reduce the high costs that slow
    adoption of new desalination technologies. The fiscal year 2005 Water
    2025 budget includes $4.0 million for cost-shared demonstration
    projects for desalination. In addition, approximately $1.5 million for
    research relevant to desalination is included in the Title XVI budget.

                              WATER 2025/TITLE XVI

        Question. We also note that the bulk of the request is dedicated to
    conservation, efficiency, and markets and collaboration. Please explain
    how the Bureau intends to distribute these resources within the Water
    2025 program?
        Answer. With the support of Congress in the fiscal year 2004
    Budget, Secretary Norton has moved forward with the Western Water
    Initiative (precursor to Water 2025) Challenge Grant program that seeks
    projects that make real progress towards avoiding water crises in the
    West. The Challenge Grant Program requires a 50-50 cost share and
    targets irrigation and water districts in the West who are willing to
    leverage their money and resources with the Federal Government on
    projects that make more efficient and effective use of existing water
    supplies.
        For example, Water 2025 is seeking proposals that will retrofit and
    modernize existing water delivery facilities, and implement and use
    water banks and water markets as mechanisms to use our existing water
    more efficiently and effectively, providing such use is recognized by
    applicable State and Federal laws and authorities.
        Through the development of specific criteria and requirements,
    these projects and activities will focus, first and foremost on those
    areas where the competing demands for water by people and the
    environment mean that crises have the highest likelihood of occurring--
    based upon demographic or population trends combined with endangered
    species needs.

                 TITLE XVI WATER RECLAMATION AND REUSE PROGRAM

        Question. What role does the Bureau see itself playing in the
    advancement of research into recycling?
        Answer. Reclamation has requested $1.53 million for agency-wide
    activities associated with the Title XVI Water Reclamation and Reuse
    Program. This program allows Reclamation to conduct research on the
    treatment of impaired waters, including desalting, and to provide
    technical and financial assistance to local water agencies interested
    in investigating the potential for reusing impaired waters. In prior
    years, the program was focused on providing assistance to local
    agencies. In fiscal year 2005, the program's main emphasis will be on
    conducting research. The objective of this research will be to develop
    technologies that have broad application and that will help bring down
    the cost of treating all types of impaired water, including municipal
    and industrial wastewater used in water recycling.
        Question. We note that the Water and Energy Management and
    Development account includes support for desalination research as part
    of a new initiative begun in 2004. However, the funding for this
    account has been reduced from $4 million to $1.5 million to support the
    development of high priority recycling and desalination projects as
    well as research. How does this reduction affect the ability to
    maintain research project priorities underway and identify new needs
    that Congress has identified? (Page 56 of the justification)
        Answer. Reclamation's fiscal year 2005 Title XVI Water Reclamation
    and Reuse Program funding request for agency-wide activities is $1.53
    million. This is $100,000 more than was requested in fiscal year 2004.
    This account was increased to nearly $4.0 million due to Congressional
    action. Among other activities, Reclamation was directed to use these
    additional funds to continue support for the Water Reuse Foundation
    Research Program, which is focused primarily on research associated
    with the recycling of municipal and industrial wastewater. That
    research is currently underway and is expected to continue well into
    next year. The $1.53 million requested for fiscal year 2005 for agency-
    wide Title XVI activities would be used to continue research on
    developing low-cost treatment technologies needed to make all types of
    impaired water suitable for beneficial use, including wastewater.

                                  DESALINATION

        Question. Based on your response to question ``What role does the
    Bureau see itself playing in the advancement of research into
    recycling?'' How are we to interpret the Bureau's request of $100,000
    for desalination research from a current year level of $7.7 million?
        Answer. The administration continues to support desalination and
    water purification related research within the limitations of available
    funding, We also continue to support the development of other water
    supply and water management technologies that will ensure that
    Reclamation and other western water managers have a complete set of
    tools to tackle water supply problems. In fiscal year 2005, a request
    for desalination research and other water purification technologies has
    been submitted under the five programs as summarized in the following
    table:

    ------------------------------------------------------------------------
                                    Approximate
                                    Fiscal Year
                                       2005        Scope of Desalination and
               Program            Allocation for   Other Water Purification
                                    Desalination          Related R&D
                                    Related R&D
    ------------------------------------------------------------------------
    WATER 2025..................      $4,000,000  External R&D and
                                                   demonstration projects.
    Water Reclamation and Reuse       $1,500,000  External and internal R&D.
     Program (Title XVI).
    Desalination and Water              $100,000  External R&D.
     Purification Research
     Program (a.k.a.
     Desalination Act).
    Science and Technology            $1,200,000  Internal R&D Reclamation-
     Program.                                      wide.
    Colorado River Basin                $781,000  Internal R&D to reduce the
     Salinity Control Project                      costs of the Yuma
     (Title I).                                    Desalting Plant.
                                 ----------------
          Total.................      $7,581,000
    ------------------------------------------------------------------------

        The $7.375 million enacted under the Desalination and Water
    Purification Program for fiscal year 2004 specified that $4.0 million
    shall be used for the construction of the Tularosa Basin National
    Desalination Research Facility. The reduction between fiscal year 2004-
    fiscal year 2005 in the Desalination and Water Purification Program
    stems from the uncertainty of whether the Desalination Research Act
    will be reauthorized or extended and the uncertainty as to whether
    other authorities would allow us to continue this national program. The
    reduction has been partially offset by the increased allocation under
    Water 2025. In the event of no reauthorization of the Desalination
    Research Act, the Water Reclamation and Reuse Program (Title XVI)
    provides Reclamation with the general authority to continue to fund
    desalination research and demonstration activities.
        Question. What kind of work will not continue under the proposed
    budget cut? (Page 49 of the justification)
        Answer. For fiscal year 2005, the Water 2025 program has requested
    $4 million for desalination research with an emphasis on demonstration.
    The following work begun in fiscal year 2004 will continue under the
    fiscal year 2005 budget request: external research projects (bench-
    scale, pilot-scale, and demonstration to increase water supplies,
    reduce desalination costs, reduce concentrate management issues, and to
    increase energy efficiency), technology transfer (desalination
    clearinghouse, desalination research road mapping efforts with Sandia
    National Labs and the guidance of the National Academies of Science,
    and an internal study of the potential use of advanced water treatment
    technologies as a resource to create net new water supplies), and
    partnerships and collaborations (including the Water Reclamation,
    Recycling, and Reuse Task Force).

                 TITLE XVI WATER RECLAMATION AND REUSE PROGRAM

        Question. Overall, the West continues to face serious challenges in
    the development of alternative water supplies. A hallmark of
    confronting this challenge has been a strong Federal partnership in the
    form of Title XVI. Are we to assume that the Bureau no longer believes
    that a Federal partnership is advisable?
        Answer. Title XVI funding has helped local agencies offset the cost
    to plan, design, and construct water reclamation and reuse projects.
    These projects, when completed, will help local water agencies meet
    some of their existing and future water demand. Reclamation will
    continue to support those ongoing construction projects that were
    included in the President's budget request in prior years. We would
    rather focus resources on completing these projects, so that project
    benefits may be realized, rather than diffuse resources in support of
    the many new proposed Title XVI projects, many of which were developed
    with little, if any, Reclamation involvement.
        Question. If so, please explain the basis of this decision and how
    you propose to fill the gap created by this action.
        Answer. Through the Title XVI Water Reclamation and Reuse Program,
    Reclamation has helped demonstrate that water recycling is a successful
    means of increasing a municipality's water supply. Water recycling
    alone, however, will not be able to meet the anticipated future demand
    in all areas of the West, and other resources management strategies,
    such as conservation and desalination, will need to be pursued.
    Reclamation intends to focus its future new Title XVI activities on the
    development of treatment technologies that can be used to make all
    types of impaired water available for use, regardless of geographic
    location.
                                     ______

                 Questions Submitted by Senator Byron L. Dorgan

                      FORT YATES INTAKE STRUCTURE FAILURE

        Question. Mr. Keys, I am know you are familiar with the water
    crisis at Fort Yates when it experienced loss of water due to extended
    droughts and low lake levels on Lake Oahe. If unaddressed, low lake
    levels on both Lake Oahe and Lake Sakakawea will continue to devastate
    local economies and endanger communities that depend on this water
    source.
        What action will the Bureau of Reclamation take to resolve this
    issue for communities who depend on these lakes for their water supply?
        Answer. We recognize that the drought conditions throughout the
    Missouri River system are having significant impacts on community water
    supplies. However, Reclamation's authority to address these issues is
    limited by the Dakota Water Resources Act of 2000 to the design,
    construction, operation, maintenance and replacement of the Indian
    municipal, rural, and industrial (MR&I) water supply facilities. Given
    current drought conditions, particular attention is being devoted to
    the Fort Berthold and Standing Rock MR&I systems which rely on the
    Missouri River as their water supply source. Reclamation became
    involved with development of the rural water system on Standing Rock
    with the passage of the Garrison Diversion Unit Reformulation Act of
    1986. Reclamation is currently working with the Standing Rock Sioux
    Tribe on a contingency plan for responding to possible future drought
    related impacts to their water system.
        With respect to the water crisis at Fort Yates, Reclamation
    completed the installation of a new interim intake for the Fort Yates
    water treatment plant. The intake was put into operation on March 16,
    2004, and has operated reliably since that time. Reclamation expects
    this intake to provide water until decisions can be made to determine
    the water treatment plant and intake option that will serve the long-
    term needs of the Standing Rock MR&I system. Reclamation has also
    secured funding to investigate the feasibility of constructing
    horizontal wells as a replacement intake for the Fort Yates and Wakpala
    water treatment plants. These investigations began the week of April
    19, 2004.
        Question. Has there been any movement within your agency to find
    funds that have not been used and reallocate them to the tribal MR&I
    funding that had to be used during the water supply crisis last year?
        Answer. As noted in our letter to you dated April 27, 2004,
    Reclamation is monitoring other programs for potential surplus funding.

                           DAKOTA WATER RESOURCES ACT

        Question. Funding for the Dakota Water Resources Act is a top
    priority for me and for my constituents. Although Congress has promised
    to provide $200 million for Indian municipal, rural and industrial
    water needs and $200 million for State MR&I, the current budget fails
    to come anywhere close to what will be needed for the next fiscal year
    and provides only a total of $4.969 million for MR&I ($2.485 for State
    MR&I, including NAWS, and $2.484 for Tribal MR&I).
        Given the fact that this program is severely under funded, what do
    you plan to do to keep up with the current needs of the program, in
    light of expected price increases in the major programs if delays
    occur?
        Answer. It was recognized during the development of the Dakota
    Water Resources Act that funding would be provided over a number of
    years. To address the expected price increases caused by multi-year
    funding, the legislation authorized both the State and Indian MR&I
    project ceilings to be adjusted through the application of engineering
    cost indices. This measure, contained in Section 10, will account for
    ordinary increases in construction costs and ensure the appropriation
    ceiling continues to be adjusted to keep up with the current needs of
    the program.
        Reclamation recognizes that the State and the Tribes have
    construction capability that exceeds the funding level proposed by the
    President in the fiscal year 2005 budget. Furthermore, we understand
    that recent budget levels have not resulted in project accomplishment
    that keeps pace with the annual indexing of the appropriation ceiling
    previously described. However, the President's budget request seeks to
    continue progress on Garrison Diversion Unit, and other on-going
    construction projects throughout the agency, within the budget targets
    that have been established.

                     RED RIVER VALLEY WATER SUPPLY PROJECT

        Question. I am also very concerned about the status of the Red
    River Valley studies that will provide water to eastern North Dakota. I
    have heard some concerns that the BOR is scaling back on some of the
    key items it had planned on doing and cutting back on the
    investigations needed to prepare a comprehensive study.
        Can you update me on the status of these studies and assure me that
    the Bureau isn't taking shortcuts in this important matter?
        Answer. The purpose of the Red River Valley Water Supply Project is
    to meet the comprehensive water quality and quantity needs of the Red
    River Valley in North Dakota. As directed by the Dakota Water Resource
    Act of 2000 (DWRA), Reclamation is conducting analyses to identify
    future water needs for the Red River Valley and options for meeting
    those needs. The DWRA requires an analysis of Municipal Rural and
    Industrial Needs, Aquatic Environment Needs, Recreation Needs, Water
    Quality Needs and Water Conservation Needs. It also mandates two
    reports, the Needs and Options Report and an Environmental Impact
    Statement (EIS). Reclamation is the sole lead for analysis of Needs and
    Options and will complete the Needs and Options Report by November 30,
    2005. In accordance with DWRA, Reclamation and the State of North
    Dakota are preparing the EIS required to evaluate the environmental
    impacts of alternatives identified in the Needs and Options Report. The
    Draft EIS will be completed by December 31, 2005.
        Reclamation is placing a high priority on conducting all
    investigations required for the Needs and Options Report and the EIS
    using objective, scientifically sound analyses. The work needed to
    complete both reports is on schedule and being conducted in a rigorous
    and scientific manner. Reclamation is taking no shortcuts in the
    comprehensive evaluation of water quality and quantity needs of the Red
    River Valley, as well as, options for meeting those needs, and the
    environmental analysis required under NEPA and DWRA.

                             PICK-SLOAN HYDROPOWER

        Question. In Pick-Sloan the Bureau appears to be adding staff for
    hydropower activities. Please explain.
        Answer. Reclamation is adding staff for hydropower activities in
    Pick-Sloan. Reclamation has discussed this with the preference power
    customers on several occasions and they agree with our staffing
    proposal. This staff will perform operation and maintenance to ensure
    the necessary reliability and availability of the 20 Reclamation Pick-
    Sloan Powerplants. Reclamation is facing a 40 percent attrition rate in
    hydropower staffing in the next 5 years and preparation must be made
    for this. Reclamation continues to deliver power at a cost that is less
    than the production costs of three-fourths of the other Federal and
    non-Federal hydropower facilities in the United States and with
    reliability twice that of the industry average. The impact to the power
    rate by adding this staff is minimal and Pick-Sloan customers will
    continue to benefit from the low wholesale rates. Furthermore,
    attention to such long-term operation and maintenance issues is in line
    with the recommendations from the 2003 re-PART of Reclamation's
    hydropower program, which reiterated the need to engage in long-term
    planning and act with foresight in managing its hydropower facilities.
        Question. In addition, where are these employees being placed both
    geographically and as between technical field positions or
    administrative/policy and review positions?
        Answer. As discussed with and agreed to by the preference power
    customers, Reclamation filled three positions last year: two
    apprentices in Wyoming, and one power facility manager at the Green
    Mountain powerplant in Colorado. In addition, by fiscal year 2006, we
    are in agreement to hire three apprentices and one O&M manager at the
    Flatiron powerplant in Colorado, and two engineering positions in the
    Great Plains Regional Office. These positions will be working on
    powerplant O&M.
        Question. What cost saving measures is the Bureau planning to
    undertake?
        Answer. Reclamation continues to undertake cost saving measures
    such as further standardizing O&M business practices and procedures and
    continually seeking measures to improve the efficiency of water use and
    power generation. Reclamation has been successful in doing this through
    changes in operations and installation of more efficient equipment.
        Question. Is the Bureau attempting to coordinate activities with
    other Federal agencies to avoid duplication of plant equipment and
    services, e.g., WAPA and Corps of Engineers?
        Answer. Reclamation, in conjunction with other Federal and State
    agencies, is utilizing the same microwave and radio communication
    systems. This has eliminated equipment duplication and generated cost
    savings. Reclamation coordinates monthly powerplant and transmission
    line outages with WAPA to avoid unnecessary outages and to allow both
    agencies to schedule work during each other's outages. Reclamation and
    WAPA continue to communicate in an effort to avoid duplication and
    reduce costs. Reclamation-wide coordination of asset management and
    facility condition assessment activities has occurred with the Corps of
    Engineers, Hydro Quebec, and Bonneville Power Administration.
    Reclamation's Great Plains Region has recently revised its information
    sharing agreement with its federal power customers. The new agreement
    includes Reclamation, the Corps of Engineers, WAPA, as well as the
    power customers. Through the agreement the parties coordinate budget,
    operation, and maintenance activities.

                                 SITE SECURITY

        Question. The Bureau is proposing to spend $43 million for site
    security, including $12 million which will be reimbursable from Federal
    power customers. These appear to be annual costs and not one-time
    expenses.
        Since these multi-purpose projects are national assets, benefiting
    millions of Americans, why are they reimbursable from power customers?
        Answer. Beginning in fiscal year 2005, annual costs associated with
    activities for guarding our facilities will be treated as project O&M
    costs subject to reimbursability based upon project cost allocations
    and consistent with prior practices. The project beneficiaries who will
    be assigned these costs will be primarily power customers, water
    districts and some M&I water contractors.
        Reclamation recognizes there are challenges ahead of us, such as
    working with our stakeholders in analyzing security related O&M costs
    to determine the beneficiary's reimbursable obligation in fiscal year
    2005 consistent with project specific authorizations and contracts.
        Question. Why has the Bureau changed its existing policy on
    reimbursability and why should the power customers be required to pay
    these costs?
        Answer. Between September 11, 2001 and September 30, 2004,
    Reclamation has or will spend $124 million in anti-terrorism dollars,
    which include guard and surveillance activities.
        Reclamation's existing policy has always stated that upon project
    construction completion, the responsibility of O&M of single-purpose
    facilities transfers to the water-user entities responsible for the
    project's construction costs. Beginning in fiscal year 2005, annual
    costs associated with activities for guarding our facilities will be
    treated as project O&M costs subject to reimbursability based upon
    project cost allocations.
        The majority of Reclamation's expenditures for anti-terrorism
    measures, such as security reviews and subsequent implementation of
    anti-terrorism measures as a result of these reviews, are still
    considered non-reimbursable expenditures.

                                   HYDROPOWER

        Question. The budget proposes that hydropower customers assume the
    cost of research and development expenses of the science and technology
    program. This program has always been a non-reimbursable activity of
    the Bureau.
        Why is the Bureau adding yet more costs to hydropower users?
        Answer. As a result of the Reclamation Science and Technology
    Program Assessment Rating Tool (PART) review by the Office of
    Management and Budget (OMB), we believe that it is appropriate to
    include hydropower research and development expenses as reimbursable
    costs in the Power Marketing Administrations' rates since the power
    customers directly benefit from the successes of Reclamation's
    hydropower research and development program related to hydropower.
    These research developments have resulted in significant cost savings
    to project customers.
        Question. Are there any activities with respect to reliability that
    you are not undertaking that you believe are appropriate?
        Answer. Reclamation continues to assess the reliability and long-
    term viability of our generating facilities. We believe that we are
    doing everything that is appropriate at this time. We have recently
    conducted a condition assessment of our major equipment and have found
    that 46 percent of our major power components are in poor condition. As
    a result of the 2003 re-assessment of the PART on hydropower, we have
    revised our long-term performance measures and goals, and aim to reduce
    this percentage to 40 percent by 2014. Reducing the number of
    components rated in poor condition will increase generating
    reliability, and help avoid costly unplanned maintenance and
    replacement due to component failure. We will be scheduling funding to
    address this issue over the next several years to assure that our
    plants remain reliable. Another area we are evaluating is the
    responsiveness of our governors and excitation systems. Many of our
    governors are mechanical and as these governors are replaced, we are
    looking at replacing them with digital equipment, which improves our
    unit's responsiveness during periods of system distress.
        Finally, North American Electric Reliability Council (NERC) and
    Western Electricity Coordinating Council (WECC) policy require
    generation owners to perform reactive capability and limit verification
    of generators with a capacity of 10 megawatts or greater every 5 years.
    The policy further requires dynamic testing, maintenance, and
    calibration of voltage regulators, limit functions, power system
    stabilizers, and governor controls. Also, NERC and WECC policy require
    organizations to develop and maintain documented ratings of power
    equipment including powerplant equipment. The ratings must be
    consistent with documented rating methodology. Reclamation is striving
    to meet these requirements.

                             FIVE-YEAR EXPENDITURES

        Question. Please provide a specific breakdown of expenditures
    during the past 5 years by function and authorized project purposes.
        Answer. The Bureau appreciates the continued support the committee
    has provided over the years. The information requested, expenditures by
    function and authorized project purpose for the past 5 years, is
    voluminous. We would welcome the opportunity to discuss this request
    further with the committee staff and tailor the response to ensure it
    is suitable and useful.
        Question. I can be more specific, but it turns into three
    questions. The answer to these three questions should be a chart,
    probably with footnotes, explaining what has taken place with the
    funding provided. It should also show how they applied underfinancing
    to the project. Hope this helps.
        How much money has been allocated, and spent, on the MR&I program
    for the past 5 years?
        Answer. The attached worksheet provides the information you
    requested on the MR&I program for the Great Plains Region.

                                                                                       PROJECTS WITH RURAL WATER COMPONENTS--WATER & RELATED RESOURCES \1\
                                                                                                            [In thousands of dollars]
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                      Fiscal Year                Fiscal Year                Fiscal Year                Fiscal Year                Fiscal Year                                                        Fiscal
                                                          1999                       2000                       2001                       2002                       2003                     Fiscal     Fiscal     Fiscal Year   Year 2004
                                                        Enacted/    Fiscal Year    Enacted/    Fiscal Year    Enacted/    Fiscal Year    Enacted/    Fiscal Year    Enacted/    Fiscal Year  Year 2004  Year 2004       2004         Enacted
                                                         Final         1999         Final         2000         Final         2001         Final         2002         Final         2003        Enacted   U/F \2\   Rescission \2\    w/ U/F
                                                      Expenditure  Expenditures  Expenditure  Expenditures  Expenditure  Expenditures  Expenditure  Expenditures  Expenditure  Expenditures    Budget     Budget       Budget      and Resc.
                                                         Budget                     Budget                     Budget                     Budget                     Budget                                                          Budget
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    Mni Wiconi Rural Water Component (only).........     *31,344   ............     *29,400   ............     *33,735   ............     *37,489   ............     *38,800   ............    *31,471     -2,547         -171       *28,753
                                                          32,706       32,131        28,429       27,306        31,715       31,681        34,234       34,080        37,115       36,011    .........  .........  ..............  .........
    Mid-Dakota Rural Water Component  (only)........     *15,000   ............     *14,000   ............      *8,000   ............     *15,000   ............     *17,860   ............    *15,000     -1,450          -80       *13,490
                                                          19,208       19,195        13,882       13,847         9,539        9,459        14,384       14,020        17,297       17,295    .........  .........  ..............  .........
    Garrison Rural Water Component (only)...........     *13,413   ............     *17,386   ............     *14,059   ............     *16,305   ............     *13,933   ............     *9,031        -63          -17        *8,951
                                                          17,966       14,566        17,431       16,678        13,707       13,456        14,349       14,183        11,214       11,134    .........  .........  ..............  .........
    Fort Peck Rural County Water System.............      *1,500   ............      *3,000   ............      *1,500   ............          *0   ............          *0   ............         *0         *0            0             0
                                                           1,126          590         3,412           84         4,687        4,508           397          331           107           -3    .........  .........  ..............  .........
    Fort Peck Reservation/Dry Prairie...............        *360   ............          *0   ............        *435   ............      *4,000   ............      *7,500   ............     *7,500      *-719          -40         6,741
                                                             550          329           221          199           578          500         3,697        3,627         4,840        4,492    .........  .........  ..............  .........
    Lewis and Clark Rural Water System..............          *0   ............          *0   ............      *1,000   ............      *2,000   ............      *7,000   ............    *17,000    *-1,630          -91        15,279
                                                               0            0           600           10         1,524        1,499         1,835        1,824         5,800        5,800    .........  .........  ..............  .........
    Perkins County Rural Water System...............          *0   ............          *0   ............          *0   ............      *3,400   ............      *4,300   ............     *1,000       *-96           -5           899
                                                               0            0             0            0             0            0         3,077        3,050         3,622        3,619    .........  .........  ..............  .........
                                                     ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    Rural Water Program--GREAT PLAINS REGION:
          Enacted Budget............................     *61,617   ............     *63,786   ............     *58,729   ............     *78,194   ............     *89,393   ............    *81,002    *-6,505        *-404       *74,113
          Expenditure Budget/Expenditures...........     *71,556      *66,811       *63,975      *58,124       *61,750      *61,103       *71,973      *71,115       *79,995      *78,348           *0         *0           *0            *0
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    * Figures marked with an *: see footnote 1.
    \1\ Columns entitled ``Enacted/Final Expenditure Budget'': The first number in the column is marked with an asterisk to clearly show what was Enacted by Congress. The second number in the column, represents what was Enacted plus
      adjustments which can include prior year funds, carryover, underfinancing, rescissions, and fund transfers.
    Expenditure information must be compared to the Expenditure Budget in order to receive an accurate picture.
    \2\ The columns entitled Fiscal Year 2004 U/F and Fiscal Year 2004 Rescission provide a breakdown of how the reductions associated with underfinancing and the rescission were applied.
    In both instances, each project received an across-the-board reduction per the Fiscal Year 2004 Water and Energy Appropriation Act. For Garrison, the majority of the reductions were applied to the non MR&I components not shown on
      the chart. No reductions were applied to the $6 million allocated to the construction MR&I program.

        Question. Did the extra $10 million that was provided by Congress
    in fiscal year 2004 get spent on the MR&I program?
        Answer. The Great Plains Region's fiscal year 2004 Enacted MR&I
    program was $81,917,000 which was $63,915,000 over the President's
    requested amount of $18,002,000. Garrison was the only project that
    received a Congressional write-in of $10 million. Therefore, the
    following response is based on the assumption that the $10 million
    referred to is related to Garrison. However, we would welcome the
    opportunity to discuss this request further with the committee staff
    and tailor the response to ensure it is suitable and useful. The fiscal
    year 2004 President's request for the Garrison project included zero
    dollars for MR&I construction and $3,031,000 for MR&I operation and
    maintenance for the Tribal program. Of the additional $10 million
    received for the Garrison project, $6 million was allocated for the
    MR&I construction program (bringing the total Garrison MR&I program to
    $9,031,000); $2 million was allocated for Red River Valley to complete
    the studies and EIS on the schedule testified to in the December 2002
    Senate Field Hearing; and $2 million was allocated to complete work at
    the Arrowwood National Wildlife Refuge.
        Question. If not, is there any likelihood of the same occurring in
    fiscal year 2005?
        Answer. If Congress provided additional funds for general Garrison
    program purposes, we anticipate they would be allocated to the MR&I
    programs.
                          DEPARTMENT OF DEFENSE--CIVIL

                             DEPARTMENT OF THE ARMY

                           Corps of Engineers--Civil

    STATEMENT OF JOHN PAUL WOODLEY, JR., ASSISTANT
                SECRETARY OF THE ARMY (CIVIL WORKS)
    ACCOMPANIED BY LIEUTENANT GENERAL ROBERT B. FLOWERS, CHIEF OF ENGINEERS

        Senator Domenici. Now, Senator Craig, I have to step out
    with some constituents. I wonder if you would let Panel Two,
    Mr. John Woodley, Assistant Secretary, and Lieutenant General
    Robert Flowers--although he's not here, is that right? He'll be
    here?--Chief of Engineers, U.S. Army Corps of Engineers. If
    you'd start that, I'll be back very, very soon.
        Senator Craig [presiding]. So if the second panel would
    come forward, we'll proceed with testimony from the Army Corps.
    Army first, yeah.
        Well, thank you all very much. Assistant Secretary Woodley,
    we appreciate you being here.
        We'll allow you to proceed with your testimony, and then
    we'll move to--I assume both you and the General are the ones
    prepared for the testimony. Is that correct?
        General Flowers. Yes, sir.
        Senator Craig. All right, fine. Please proceed.

                      STATEMENT OF JOHN PAUL WOODLEY, JR.

        Mr. Woodley. Mr. Chairman, I appreciate the opportunity to
    testify before the subcommittee about the President's fiscal
    year 2005 budget for the Civil Works function of the Army Corps
    of Engineers.
        I'm especially delighted to be accompanied this morning by
    a very distinguished soldier, Lieutenant General Robert
    Flowers, the 50th Chief of Engineers. Mr. Chairman, this is
    General Flowers' last opportunity to appear before the
    subcommittee, and so I think that should be made note of in the
    record, and I'd like to express my particular appreciation, on
    behalf of the President, for his very fine service as Chief of
    Engineers.
        May I also ask leave to summarize my statement and put a
    complete statement----
        Senator Craig. Yeah----
        Mr. Woodley [continuing]. In the record?
        Senator Craig [continuing]. Your full statements will
    become a part of the committee record. Thank you.
        Please proceed.
        Mr. Woodley. Our total fiscal year 2005 Civil Works budget
    is $4.2 billion, which is about the same as last year's Civil
    Works budget request. This year, to develop the budget, we
    began the use of a performance-based approach built around
    programmatic goals for our eight business programs. This
    approach, we feel, has and will continue in the future to
    enable us to make the most effective use of the limited funding
    available to us.
        For new projects, the budget focuses on commercial
    navigation, flood and storm damage reduction, and aquatic
    ecosystem restoration. The budget directs substantial funding
    to the ongoing construction projects that have among the
    highest economic and environmental returns to the Nation. We
    also have given priority to 11 projects that we are able to
    complete in fiscal year 2005, and to eight projects that we
    consider high-priority projects, and to a number of dam safety
    and seepage correction projects.
        Funding to plan or design new projects this year is
    limited, and is targeted to the most productive study and
    design activities, including five new studies, 23 design
    efforts, and the current phases of ongoing studies, including
    an expanded Louisiana Coastal Area study.
        Mr. Chairman, the 2005 budget does not include a request
    for funding for beach renourishment. Our view is that non-
    Federal interests should carry out renourishment activities
    once the initial construction of the beaches has been
    completed. We have an exception to this, at a case in which we
    are obliged to perform renourishment under a court order.
        We have also asked for leave, to free up funding for
    higher-priority needs, to cancel unobligated balances of
    projects that may not be the best--the top investments, or, for
    one reason or another, are not ready to proceed. This
    recommended cancellation, if it's approved, would take effect
    with the enactment of the fiscal year 2005 appropriations.
        The budget also includes a number of initiatives for
    operation and maintenance of our existing projects. We ask
    leave to finance, up front, the operation and maintenance cost
    of hydropower facilities, with funds provided by three Federal
    Power Marketing Administrations. Second, we would ask to
    accomplish recreation modernizations by using new fees and by
    entering into planning and management partnerships. Third, we
    would continue antiterrorist protection at key projects and
    facilities. And finally, we ask to reserve a pool of funds for
    unforeseen and urgent maintenance and repairs at key projects.
        Mr. Chairman, I have three priorities in mind for the Civil
    Works program during my time as Assistant Secretary. You will
    see these priorities reflected, in part, in this budget, and I
    believe to a greater extent in the next. One priority is to
    develop the Civil Works budget and manage the program based on
    objective performance measures. In that regard, General Flowers
    and I have recently provided our Civil Works strategic plan to
    the committee, and we look forward to working with you on
    developing it further and hearing your views on it. A second
    priority is to improve the analytical tools that we use for
    water resource planning and decision-making. And my third
    priority is to improve the effectiveness and efficiency of the
    Corps' regulatory program, the primarily wetlands and
    navigation regulatory program.

                               PREPARED STATEMENT

        Mr. Chairman, this is a frugal budget that reflects the
    priorities of a Nation at war. Understandably, and I will say
    immediately, it does not fund all the good things that the
    Corps of Engineers is capable of doing, but it does move ahead
    with many important investments that will yield enormous
    returns for the Nation next year and in the future.
        Thank you, Mr. Chairman.
        [The statement follows:]

                  Prepared Statement of John Paul Woodley, Jr.

        Mr. Chairman and distinguished members of the subcommittee, thank
    you for the opportunity to testify before the Energy and Water
    Development Subcommittee of the Appropriations Committee and to present
    the President's budget for the Civil Works program of the Army Corps of
    Engineers for fiscal year 2005.

              OVERVIEW OF FISCAL YEAR 2005 ARMY CIVIL WORKS BUDGET

        The fiscal year 2005 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 efforts
    to develop atomic weapons.
        The fiscal year 2005 budget for Army Civil Works includes new
    discretionary funding requiring appropriations of $4.215 billion and an
    estimated $4.132 billion in outlays from discretionary funding (see
    Table 1). These figures are approximately the same as in the fiscal
    year 2004 budget.
        The new discretionary funding includes $610 million from the Harbor
    Maintenance Trust Fund for harbor operation and maintenance and dredged
    material disposal facility construction. The discretionary funding also
    includes $115 million from the Inland Waterways Trust Fund for
    construction and rehabilitation on the inland waterways.
        The budget includes proposed appropriations language for direct
    funding of hydropower facility operation and maintenance by Federal
    power marketing administrations. New discretionary funding of $150
    million would be derived from direct funding in fiscal year 2005. This
    proposal is described in greater detail below.
        Other sources of new discretionary funding include $3.303 billion
    from the general fund and $37 million from Special Recreation User
    Fees.
        Additional program funding, over and above funding from the sources
    requiring discretionary appropriations, is estimated at $437 million.
    This total includes $71 million from the Bonneville Power
    Administration (BPA) for operation and maintenance of hydropower
    facilities in the Pacific Northwest, $287 million contributed by non-
    Federal interests for their shares of project costs and for project-
    related work, $63 million from the Coastal Wetlands Restoration Trust
    Fund, and $16 million from miscellaneous permanent appropriations.
        The budget proposes cancellation of at least $100 million of
    previous discretionary budget authority. Net discretionary budget
    authority, including this proposal and the direct funding proposal, is
    $3.965 billion.

                          PERFORMANCE-BASED BUDGETING

        Performance-based budgeting is one of the President's Management
    Initiatives, and the one that is most central to the preparation of the
    budget. For the Army Civil Works program, performance planning is built
    around eight program areas: Navigation (including inland waterway
    navigation and coastal channels and harbors); Flood and Storm Damage
    Reduction (including from riverine flooding and coastal storms);
    Environment (including aquatic ecosystem restoration, stewardship of
    natural resources at operating projects, and the Formerly Utilized
    Sites Remedial Action Program); Hydropower; Recreation; the Regulatory
    Program, Emergency Management; and Water Supply (storage at existing
    reservoirs).
        The first element in our performance planning is a strategic plan,
    which is required by the Government Performance and Results Act (GPRA).
    I am happy to announce that on March 22, 2004, General Flowers and I
    provided our strategic plan to the committees and subcommittees of
    Congress responsible for water development authorizations and
    appropriations, including this committee and subcommittee. This plan is
    a work in progress. We will continue to work with the Office of
    Management and Budget to establish program goals, objectives, and
    performance measures that are called for by GPRA and that provide a
    sound basis for setting performance targets and building future
    budgets.
        The second element in our performance planning is the use of a
    government-wide process to assess program performance, which first was
    instituted for the fiscal year 2004 budget. These assessments are
    intended to improve the effectiveness of programs and to improve the
    quality of their management and oversight. Five business programs,
    program components, or sets of activities were assessed for the fiscal
    year 2004 budget: the Hydropower program; the riverine flood damage
    reduction component; the inland waterway navigation component; the
    Emergency Management program; and wetlands-related activities apart
    from the Regulatory Program. For fiscal year 2005, the Regulatory
    Program was assessed. Two of the programs--the Regulatory Program and
    Emergency Management--have been rated as moderately effective and have
    received substantial funding in the fiscal year 2005 budget.
        The third element is to develop the Civil Works budget and manage
    the program based on objective performance measures. The fiscal year
    2005 budget for Army Civil Works focuses funding on the most productive
    investments. This is reflected, for instance, in the allocation of
    funding to the most productive design activities, construction
    projects, and maintenance activities. At the same time, I recognize
    that we can do a better job of performance-based budgeting, and one of
    my priorities is to improve our capabilities in this area. I have
    placed a priority on making significant progress on further development
    of sound performance measures for each business program and on using
    the measures to build our fiscal year 2006 budget. A great deal of hard
    work is in store for us as we transition to this approach, but the
    advantages are enormous, and the Army is fully committed to this
    effort.

                      FOCUS ON HIGH-RETURN NEW INVESTMENTS

        The fiscal year 2005 budget for Army Civil Works targets funding to
    the new investments that have very high economic or environmental
    returns. The budget does so by emphasizing priority missions and
    allocating substantial funding to new and continuing high return
    continuing construction projects while de-emphasizing the design and
    initiation of new projects. However, the budget funds three new
    projects that have high economic or environmental returns and several
    new high priority studies that competed successfully for funding. The
    budget also discontinues Federal participation in beach renourishment
    activities, and proposes to cancel unobligated balances for projects
    that do not provide high returns or that are not Civil Works
    responsibilities.
    Priority Missions
        The budget emphasizes ongoing studies, projects and programs that
    provide substantial benefits in the priority missions of the Civil
    Works program for new investments, namely, 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.
    Ongoing, Budgeted Construction Projects
        In recent years, ongoing construction projects that the budget
    funds have had to compete for funding with numerous new construction
    starts. To maximize the net returns of the construction program and
    finish the construction backlog more quickly than under current trends,
    the budget directs funding to complete 11 ongoing projects in fiscal
    year 2005, and continues progress on projects consistent with long-
    established policies, including eight projects that are the highest
    priorities in the Nation. It also provides substantial funding for dam
    safety investments. In addition, the budget funds three new projects
    with high economic and environmental returns.
        Altogether, the budget includes funding for construction of 149
    projects, not including the projects constructed under the Continuing
    Authorities Program.
        Consistent with this focus on projects already under construction,
    the budget includes funding to continue or complete design of 23
    proposed projects that were selected based on their economic and
    environmental returns. The budget defers work on all lower priority
    design efforts. Similarly, we made an effort to prioritize studies of
    proposed projects. In general, funding is targeted to the most
    productive study and design activities, including $8 million for the
    expanded Louisiana Coastal Area Study. Funding is provided for five new
    studies that competed successfully with ongoing work.
    Beach Renourishment
        The budget does not include any funding for beach renourishment.
    The administration's view is that non-Federal interests should carry
    out renourishment activities once the initial nourishment has been
    accomplished, just as they operate and maintain other types of projects
    once the installation is complete. This policy applies to all types of
    projects involving beach renourishment, including projects for which
    Project Cooperation Agreements already have been executed. Work under
    such agreements is subject to the availability of funding, and the new
    policy specifies that funding no longer will be sought for
    renourishment phases.
        We will continue to plan for and design shore protection projects,
    and we will continue to construct initial nourishment phases as well as
    the structural measures for coastal projects. We also will continue to
    deposit dredged material from navigation projects on the adjacent
    shores when it is the least-cost, environmentally acceptable disposal
    method. In addition, we will participate financially in one-time
    placements of dredged material for the beneficial use of shore
    protection, and we will perform follow-on placements for the beneficial
    use of shore protection if non-Federal interests finance the
    incremental costs. Within these ground rules, we will continue to
    participate in regional sediment management activities.
        There is one exception to the policy in fiscal year 2005, for the
    Westhampton Shores, New York, area. We are funding periodic
    renourishment program as ordered by the district court in the
    settlement of the case of Rapf et al. vs. Suffolk County of New York et
    al.

    Cancellation of Unobligated Balances
        To free up funding for higher priority needs, the budget proposes
    to cancel the unobligated balances of 41 projects that are not
    consistent with current policy. The cancellation would take effect with
    enactment of fiscal year 2005 appropriations.

          FINANCING AND MANAGEMENT INITIATIVES FOR OPERATING PROJECTS

        The Operation and Maintenance program includes funding for four
    significant initiatives: direct funding of hydropower operation and
    maintenance costs; recreation modernization; a new emergency
    maintenance reserve fund; and anti-terror facility protection.

    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.
        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, in consultation with the Corps, would make funding
    available for those hydropower operation and maintenance expenditures
    that they believe are justified in order to provide economical,
    reliable hydropower to power customers. We believe that, as a
    consequence, unplanned outages would decline over time to levels
    comparable to the industry average. The administration is submitting
    this as an appropriations proposal. Under current Congressional Budget
    Office and Office of Management and Budget scoring, the funds provided
    by the power marketing administrations offset appropriated funds
    without PAYGO consequences.

    Recreation Modernization
        The second initiative is to modernize recreation facilities. The
    recreation modernization initiative has three components. The first is
    a legislative proposal that: 1) authorizes the Corps to establish a
    permanent recreation fee program that is consistent with the existing
    Federal Recreation User Fee Demonstration program; 2) authorizes the
    Corps to collect entrance fees; and 3) authorizes the Corps to retain
    all recreation use fees over $37 million per year and to use the
    retained fees for its recreation facilities. To support this proposal,
    we currently are developing a proposed schedule of recreation use fees,
    lease receipts, and other sources of revenue, showing the locations
    where we expect to collect revenue and the kinds and amounts of revenue
    we expect to collect at each location.
        The second is six recreation demonstration projects, at Texoma Lake
    in Texas, Shelbyville Lake in Illinois, Rathbun Lake in Iowa, W. Kerr
    Scott Lake in North Carolina, Cumberland Lake in Kentucky, and Beaver
    Lake in Arkansas. At each location, the Corps will demonstrate new
    planning, management and financing partnership arrangements with State
    and local government park authorities and private sector
    concessionaires. These will be designed to upgrade Corps recreation
    facilities at little or no cost to the Federal Government. If these six
    demonstration projects are a success, the Corps will expand the model
    to other Corps facilities in the future.
        The third is $6 million to upgrade Corps recreation facilities
    related to the Lewis and Clark Bicentennial commemoration.

    Emergency Maintenance Reserve
        The budget includes $35 million for an emergency maintenance
    reserve fund, from which the Assistant Secretary of the Army for Civil
    Works will make allocations to meet high-priority, unexpected, and
    urgent maintenance needs at key facilities. When an unexpected
    emergency occurs under current practice, it is sometimes difficult to
    find the needed funds on a timely basis. The new arrangement will
    enable us to respond to these situations promptly, without interfering
    with other program commitments.
        The Assistant Secretary will make the allocation decisions based on
    the urgency of the maintenance or repair requirements, the relative
    availability of funding from lower-priority work, and the likelihood
    that additional high-priority needs would be identified in the
    remainder of the fiscal year.

    Anti-Terrorist Facility Protection
        Since the events of September 11, 2001, the Civil Works program has
    received appropriations of $278 million to provide facility protection
    measures that have recurring costs (such as guards), 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 2005, with a budget of $84 million
    for facility protection. Of the $84 million, $72 million is for
    projects funded from the Operation and Maintenance account and $12
    million is for other projects and facilities.

                         PRESIDENT'S MANAGEMENT AGENDA

        We are pleased with the progress we are making on the President's
    Management Agenda. Like most agencies, we started out in 2002 with
    ``red'' ratings across the board. Our status rating for the human
    capital initiative is now ``yellow.'' We now have ``green'' or
    ``yellow'' progress ratings for all five of the President's Management
    Agenda initiatives.
        The Army Corps of Engineers has developed a sound, comprehensive
    human capital plan and has implemented its ``USACE 2012'' plan. The
    2012 plan is the Corps guiding document for organizational changes and
    process changes to improve service delivery.
        The Corps continues to be a strong supporter of E-Gov initiatives
    such as Recreation One-Stop, Geospatial, and Disaster Management. It is
    aggressively working to improve the overall management of its
    information technology investments by extensively using the Federal
    Enterprise Architecture to identify opportunities to identify like
    systems and identify possible opportunities to collaborate.
        The Corps has developed a plan and management infrastructure to
    conduct competitive sourcing and has completed all preliminary planning
    steps for its first two standard competitions to be announced in fiscal
    year 2004.
        To identify problems identified in its audits for 2002 and 2003,
    the Corps is improving documentation to support older assets.
        We are confident that our work on the President's initiatives will
    yield greater program efficiency and effectiveness in the years to
    come.

                             APPROPRIATION ACCOUNTS

        Although the budget was formulated largely by program area, it is
    presented to Congress by traditional appropriation account.

    General Investigations
        The budget for the General Investigations program is $90.5 million.
    This funding level reflects 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.
        Within this amount, $8.6 million is to continue or complete
    preconstruction engineering and design of the 22 projects with the
    highest expected economic or environmental returns. The remaining
    funding will be used to continue the ongoing phases of policy-
    consistent reconnaissance and feasibility studies, and to continue
    coordination, technical assistance, and research and development. The
    budget funds four new studies that competed successfully with ongoing
    work. These studies are as follows: Southern California Wetlands
    Restoration, California; Boulder Creek, Colorado; Chesapeake and
    Delaware Canal Environmental Restoration, Delaware and Maryland; and
    Mississippi River-Gulf Outlet Ecosystem Restoration, Louisiana.
        One of my priorities is to improve analytical tools to support
    water resource planning and decision-making. The budget addresses this,
    for instance, by increasing funding for research and development on
    modeling and forecasting tools, including $2.5 million for the
    Navigation Economic Technologies research program funded in this
    account.

    Construction
        The fiscal year 2005 budget for the Construction program is $1.4215
    billion. Of that total, $115 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 $10 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.
        The budget proposes funding for three new starts that have very
    high economic and environmental returns: the Washington, DC, and
    Vicinity flood damage reduction project; the Rio Guanajibo, Puerto
    Rico, flood damage reduction project; and the Everglades Pilot Projects
    Program, Florida. The pilot projects program is part of the
    Comprehensive Everglades Restoration Plan, which in turn is part of the
    Central and South Florida project.
        Substantial funding is provided for the 11 projects completing
    construction in fiscal year 2005, for dam safety assurance, seepage
    correction, and static instability correction projects, and for eight
    high priority projects nationwide. The high priority projects are the
    New York and New Jersey Harbor deepening project ($103 million); the
    Olmsted Locks and Dam, IL & KY, project ($75 million); projects to
    restore the Florida Everglades ($125 million) and the side channels of
    the Upper Mississippi River system ($28 million); two projects to
    provide flood damage reduction to urban areas, namely, the Sims Bayou,
    Houston, TX, project ($16 million) and the West Bank and Vicinity, New
    Orleans, LA, project ($37 million); and projects to meet environmental
    requirements in the Columbia River Basin ($107 million) and the
    Missouri River basin ($69 million). The Everglades work actually is
    comprised of three distinct projects, as is the Columbia River Basin
    work.
        The budget provides $52.9 million for the 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,
    project modifications for improvement of the environment, and
    beneficial uses of dredged material (including beneficial uses for
    environmental purposes as well as beneficial use for coastal storm
    damage reduction).

    Flood Control, Mississippi River and Tributaries
        The budget includes $270 million for the Flood Control, Mississippi
    River and Tributaries account.
        The budget includes funding for preconstruction engineering and
    design for the Morganza to the Gulf, Louisiana, project. The budget
    also includes funding for one new study of opportunities for the
    acquisition of additional real property interests in the Atchafalaya
    Basin.

    Operation and Maintenance
        The budget for Operation and Maintenance emphasizes essential
    operation and maintenance activities at Corps facilities, including
    maintenance dredging and structural repairs. The overall budget for the
    Operation and Maintenance account is $1.926 billion.
        The budget continues the past policy of directing funding for
    navigation maintenance primarily to those harbors and waterways that
    have high volumes of commercial traffic. For small ports and
    recreational harbors, the budget funds maintenance work where needed to
    support significant commercial navigation, commercial or subsistence
    fishing, or public transportation benefits.
        Approximately $1.103 billion is to fund projects and programs
    supporting navigation for commercial cargo, commercial or subsistence
    fishing, and public transportation. Within this amount, the budget
    provides about $539 million for deep draft harbors (harbors with
    authorized depths of greater than 14 feet); $28 million for shallow
    draft harbors; $411 million for inland waterways with commercial
    traffic of more than 1 billion ton-miles per year; and $49 million for
    waterways with less commercial traffic. An additional $74 million
    represents joint use costs at multi-purpose projects that are allocated
    to navigation.
        Approximately $823 million is for projects and programs other than
    navigation, including flood damage reduction ($286 million), recreation
    ($253 million), natural resources management ($92 million),
    hydroelectric power generation ($153 million), and emergency management
    ($40 million, including the $35 million emergency maintenance reserve).

    Regulatory Program
        The recent performance assessment of this program concluded that it
    is moderately effective overall. The budget provides $150 million,
    which is a substantial increase over the fiscal year 2004 enacted
    amount and reflects our assessment that this program needs additional
    funding. The activities funded in the budget include permit evaluation,
    enforcement, oversight of mitigation efforts, administrative appeals,
    watershed studies, special area management plans, and environmental
    impact statements.
        One of my priorities for the Civil Works program is to improve the
    effectiveness of aquatic resource protection and the efficiency of
    permit reviews and decision-making. The budget will enable us to reduce
    permit evaluation times, improve protection of aquatic resources, and
    continue wetlands protection 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 $167 million.
    These funds will 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,
    $7 million is to audit the Civil Works financial statements, a function
    formerly carried out by the Army Audit Agency (AAA) using its own
    funding. The AAA has done this work in the past, but it is not
    sufficiently independent of the Corps to conduct this audit under new
    General Accounting Office auditing standards.

    Flood Control and Coastal Emergencies
        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. Accordingly, the fiscal year 2005
    budget includes $50 million, which is the approximate amount the Corps
    of Engineers spends on flood and coastal storm emergency preparedness,
    response, and recovery activities in a typical year. This funding will
    reduce the likelihood of having to borrow from other accounts or obtain
    supplemental appropriations.

                                   CONCLUSION

        The Army Civil Works budget for fiscal year 2005 will enable us to
    move ahead with many important investments that will yield enormous
    returns for the Nation in the future.

     TABLE 1.--DEPARTMENT OF THE ARMY CORPS OF ENGINEERS--CIVIL WORKS FISCAL
                                YEAR 2005 BUDGET
    ------------------------------------------------------------------------

    ------------------------------------------------------------------------
    Requested New Appropriations:
        General Investigations..........................        $90,500,000
        Construction....................................      1,421,500,000
        Operation and Maintenance.......................      1,926,000,000
        Regulatory Program..............................        150,000,000
        Flood Control, Mississippi River and Tributaries        270,000,000
        General Expenses................................        167,000,000
        Flood Control and Coastal Emergencies...........         50,000,000
        Formerly Utilized Sites Remedial Action Program.        140,000,000
                                                         -------------------
          TOTAL.........................................      4,215,000,000
                                                         ===================
    Sources of New Appropriations:
        General Fund....................................      3,303,000,000
        Harbor Maintenance Trust Fund...................        610,000,000
            (O&M).......................................       (600,000,000)
            (Construction--Disposal Facilities).........        (10,000,000)
        Inland Waterways Trust Fund.....................        115,000,000
        Special Recreation User Fees....................         37,000,000
        Power Marketing Administration Direct Funding...        150,000,000
                                                         -------------------
          TOTAL.........................................      4,215,000,000
                                                         ===================
    Additional New Resources:
        Rivers and Harbors Contributed Funds............        287,000,000
        Bonneville Power Administration.................     \1\ 71,000,000
        Coastal Wetlands Restoration Trust Fund.........         63,000,000
        Permanent Appropriations........................         16,000,000
                                                         -------------------
          TOTAL.........................................        437,000,000
                                                         ===================
          Total New Program Funding.....................      4,652,000,000
    Proposed Cancellation of Prior-Year Funds...........       (100,000,000)
    ------------------------------------------------------------------------
    \1\ Beginning in fiscal year 2005, budget authority from BPA is limited
      to budget authority for joint use costs. Funding for the specific
      costs of hydropower will be executed in a BPA account and will not
      count as Corps budget authority. Accordingly, the amount of $71
      million for fiscal year 2005 appears to be a reduction from the total
      fiscal year 2004 amount of $143.205 million, but in fact is a slight
      increase from the corresponding fiscal year 2004 amount of $69.5
      million for joint use costs.

        Senator Domenici [presiding]. Thank you very much.
        General, would you like to comment also? Excuse me, I
    didn't have my mike on. Would you like to comment also?
        General Flowers. Yes, sir.
        Senator Domenici. Your statement will be made a part of the
    record.

               STATEMENT OF LIEUTENANT GENERAL ROBERT B. FLOWERS

        General Flowers. Sir, I am honored, again, to be testifying
    before you, along with the Secretary, on the President's fiscal
    year 2005 budget for the Army's Civil Works program.
        Today, thanks to this subcommittee's strong support, this
    Civil Works program is balanced, responsive, and highly
    productive. I look forward to your continued partnership in
    this important program, so broadly beneficial to the Nation.
        My complete statement covers more details on the fiscal
    year 2005 program, including the backlog, transforming the
    Corps, our business-management system----
        Senator Domenici. Oh, yeah.
        General Flowers [continuing]. And the Corps' overall value
    to the Nation's economy, the environment, and national defense.
    With your permission, I'll summarize some of the main points.
        First, a word about the President's budget and the value of
    the Civil Works program to the Nation's economy and the
    environment. This 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 national economic well-being.
    The sum of benefits realized as reduced transportation costs,
    avoided flood and storm damages, and improvements in
    environmental value is considerable.
        And I'd like to share some numbers with you that illustrate
    the direct effect of the Civil Works mission.
        First, the navigation program enables 2.4 billion tons of
    commerce to move on navigable waterways. The U.S. Department of
    Transportation estimates that these cargo movements have
    created jobs for 13 million people.
        Second, the Corps flood-damage reduction structures have
    saved lives and property loss. Taxpayers save $21 billion in
    damages each year.
        And, third, almost all of our construction work and over
    half of our civil planning and engineering is completed by
    private-industry contractors funneling money 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
    approximately $11 billion to complete the construction projects
    funded in the fiscal year 2005 construction general budget. The
    maintenance backlog continues to be challenging. The work the
    Corps is completing on our infrastructure is a critical element
    to a strong economy. Sustaining this level of service becomes
    more of a challenge as our infrastructure ages. The fiscal year
    2005 budget includes $1.926 billion for the operations and
    maintenance program. I can assure you that I will continue to
    do all that I can to make these programs as cost effective as
    possible.
        There are many who are 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.
    What I'd like to make clear is that we're listening. I've met
    with individuals, industry groups, and interest groups to hear
    what they have to say. The Corps is undergoing sweeping changes
    as a result of our customer and stakeholder input. We are
    becoming a team of teams within the organization focusing on
    eight regional business centers, which will more efficiently
    deliver service to the public and the Armed Forces. And let me
    assure you, I'm committed to working with you and all who are
    interested, and to doing all in my power to transform the Corps
    to meet the Nation's needs.
        I'm very proud of the Civil Works program and its support
    to the national security strategy. The Corps' Civil Works
    experience is proving invaluable as soldiers and civilians of
    the Corps of the Engineers help to rebuild Iraqi
    infrastructure. To date, over 1,000 civilian volunteer members
    have served in Iraq, sharing their knowledge and expertise with
    Iraqi engineers and other professionals, assisting the
    Coalition Provisional Authority and the Combined Joint Task
    Force in repairing and rebuilding Iraqi infrastructure.

                               PREPARED STATEMENT

        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, Mr. Chairman, members of the committee. That
    concludes my statement.
        [The statement follows:]

           Prepared Statement of Lieutenant General Robert B. Flowers

        Mr. Chairman and distinguished members of the subcommittee, I am
    honored to be testifying before your subcommittee today, along with the
    Assistant Secretary of the Army for Civil Works, the Honorable John
    Paul Woodley, Jr., on the President's fiscal year 2005 (fiscal year
    2005) Budget for the United States Army Corps of Engineers' Civil Works
    Program.
        My statement covers the following 6 topics:
      --Summary of Fiscal Year 2005 Program Budget,
      --Civil Works Construction Backlog,
      --Civil Works Program Transformation,
      --Need for a More Robust Business Management System,
      --Value of the Civil Works Program to the Nation's Economy, and
      --Value of the Civil Works Program to the Nation's Defense.

                   SUMMARY OF FISCAL YEAR 2005 PROGRAM BUDGET

    Introduction
        This budget provides new funding for the Civil Works Program,
    including the Direct and Reimbursed programs, is expected to approach
    $5.602 billion.
        Direct Program funding, including discretionary and mandatory
    funding appropriated directly to the Corps, totals $4.652 billion.
    Discretionary funding, including amounts ultimately replaced by
    mandatory funding, totals $4.215 billion; additional mandatory funding
    totals $437 million.
        Reimbursed Program funding is projected to be $950 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 studies and
    projects underway, including many started in fiscal year 2005. It also
    provides for funding of 4 new 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 2005 is projected to be $950
    million. The largest share--nearly $250 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 2005 is
    24,800 FTEs, unchanged from fiscal year 2004. 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 CONSTRUCTION BACKLOG

        In the broadest sense, the ``construction backlog'' is unfunded
    work. For the Civil Works Program, it is defined more specifically, as
    the Federal share of unfunded continuing and future construction work
    at some point in time, e.g., the beginning of some funding period, such
    as fiscal year 2005. 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.
        At the end of fiscal year 2005, it will cost approximately $11
    billion in non-inflated dollars to complete the construction projects
    of the Construction, General, Program funded in the fiscal year 2005
    budget, which represents a decrease from last year. The decrease partly
    reflects a decision to display the backlog in fiscal year 2005 dollars
    rather than inflating amounts to future dollars. The decrease is also
    the result of project completions, as well as the decision not to
    budget for periodic renourishment of shore protection projects.
        As part of a comprehensive strategy to reduce the construction
    backlog, the Fiscal Year 2005 Budget focuses on completing those
    ongoing construction projects that are consistent with current policies
    and accelerating work on eight high-priority projects. We believe that
    narrowing the focus on funding and completing a smaller, more
    beneficial set of projects will bring higher net benefits to the Nation
    sooner. We need to be careful that we do not continually start new
    projects and subsequently stretch out the completion of existing ones.
    That is why the Budget proposes only three new starts of projects that
    have a very high benefit-cost ratio.

    Maintenance Program
        Water and related land resource management facilities of the Civil
    Works Program are aging. 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 expensive as infrastructure ages.
        The ``Operation and Maintenance (O&M) Program'' includes costs
    funded under the Operation and Maintenance, General, and Mississippi
    River and Tributaries, Maintenance, appropriation accounts, for the
    operation, maintenance and security of existing river and harbor, flood
    and storm damage reduction, aquatic ecosystem restoration, owned and
    operated by, or on behalf of, the Corps of Engineers, including
    administrative buildings and facilities and laboratories. Funds are
    also included for surveys and charting of northern and northwestern
    lakes and connecting waters, clearing and straightening channels, and
    removal of obstructions to navigation. Work to be accomplished includes
    dredging, repair, and operation of structures and other facilities, as
    authorized in the various River and Harbor, Flood Control, and Water
    Resources Development Acts. Related activities include aquatic plant
    control, monitoring of completed coastal projects and, removal of
    sunken vessels.
        The fiscal year 2005 budget includes $1.926 billion for the
    Operation and Maintenance Program. In an effort to improve the
    efficiency of our investment in operation and maintenance, we are
    looking closely at how we determine the appropriate level of service
    and the amount of spending needed to support that level of service.
    Furthermore, we are searching for ways to reduce costs and thereby
    accomplish more with available resources.

                       CIVIL WORKS PROGRAM TRANSFORMATION

        Throughout its long and distinguished history, the Civil Works
    Program has continually changed in response to 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.
        We have been working very hard internally, within the Corps of
    Engineers, to transform. We are making our processes more open, and
    more collaborative. We are working to revitalize our planning
    capabilities, and to become more efficient, more centralized, with one
    planning center for each of our eight divisions.
        We are becoming a team of teams within the organization, focusing
    on eight regional business centers, which will move efficiently and
    deliver service to the public and the armed forces.
        Let me tell you about some of the major steps we've already taken:
      --We are continuing to spread the spirit and the word of 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 are continuing 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,
            the first class graduated last year.
      --Our Fiscal Year 2005 Budget for the Research and Development (R&D)
            Program includes funding to improve economic models. One of our
            principal efforts will be to focus 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 have redoubled our efforts to engage Federal, State, and local
            agencies, stakeholders, and the public in meaningful dialogue.
            We have brought the major resource agencies to the table to
            assist in decision-making.
      --The Corps and ASA(CW) have allocated additional resources to
            strengthen our internal review capability, and are considering
            other measures to further improve such capability. With our
            restructuring under USACE 2012, we have just created an Office
            of Water Project Review here in Headquarters which effectively
            doubled the size of our policy compliance review staff. The
            goal is to have our economists, plan formulation specialists,
            and environmental reviewers focus on early involvement in study
            development to assure compliance with established policy as
            projects are being developed. This group is equipped to
            additionally oversee administration of external independent
            review on controversial and complex projects through contracts
            with outside experts. Over the past year, we have also
            developed a series of policy compliance checklists to assist
            District and Division Commanders in the early identification
            and resolution of issues. I am committed to working with field
            commanders in providing training, lessons learned and other
            tools to strengthen the policy compliance quality control/
            quality assurance process.
      --We are making good progress on developing a new Civil Works
            Strategic Plan that emphasizes the sustainable development,
            management and protection of our Nation's water and related
            land resources.
      --We have established 5 national planning centers of expertise
            staffed with engineers and scientists--a step that is essential
            for successfully addressing the issues that increasingly arise
            in planning a water resources project, especially those that
            are costly, complex, or controversial, or which otherwise
            require very specialized planning work.
        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 established 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. In short we call our
    Project Management AIS ``P2''.

                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.

                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 ``P2''
        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 and enabling compliance to our
    PMBP Business Manual. P2 will become the principal tool of Corps
    project and technical managers in collecting, manipulating and storing
    program and project data. P2 provides 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. P2 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 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. We are currently in the process of deploying
    P2 throughout the Corps. P2 is scheduled to be fully deployed during
    June of this year. Once fully deployed, the PMBP system will greatly
    enhance our ability to better support the Army, other Federal agencies,
    and the Nation.
      value of the civil works program to the nation's economy and defense

    The National Welfare
        Water resources management infrastructure has improved the quality
    of our citizens' lives and supported 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 net
    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
    defenses 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.
        The Corps of Engineers continues to contribute to the ongoing war
    on terrorism, as our civil works experience proves invaluable in
    restoring and rebuilding Iraqi and Afghanistan infrastructure. To date,
    over 1,000 Corps soldiers and civilians have volunteered to serve in
    Iraq, sharing their technical knowledge and expertise along with their
    project management skills and experience with Iraqi Engineers and other
    professionals. Corps employees have also served in other Central
    Command areas of operations providing a wide range of services and
    support to the CENTCOM commander's efforts.
        In Iraq, we have been deeply involved in the restoration of the
    Iraqi Oil industry. Our involvement has helped ensure that more than
    268 Million Barrels of crude oil have been exported, resulting in more
    than $7 billion being returned to the Iraqi economy. This income is
    forming the basis of the emerging national economy in Iraq, with much
    of the profit being reinvested in restoring Iraqi infrastructure. We
    are also assisting in the procurement of refined oil products in Iraq,
    which are essential to every day life in Iraq.
        The Corps is proud to have worked closely with the Coalition
    Provisional Authority, U.S. Agency for International Development, and
    the Iraqi Governing Council in restoring reliable electricity
    throughout Iraq. When it became obvious that years of neglect and
    sabotage had brought the Iraqi electrical power production and
    transmission to near collapse, the Corps, working with the CPA and
    USAID exercised its time-proven civil emergency response capabilities
    and provided a much-needed boost to electricity delivery across Iraq.
    We continue to assist the CPA and USAID in electrical power production
    and distribution, and today, the average Iraqi has greater access to
    electricity than he had before the war. No longer is access to
    electricity a measure of loyalty to the Iraqi regime.
        The Corps is also playing a major role in securing and making safe
    the more 600,000 tons of former regime munitions spread cross Iraq
    through our Captured Enemy Ammunition mission. As of February 10,
    350,000 tons of captured enemy ammunition had been secured and
    protected from the hands of saboteurs and terrorists. Another 43,00
    tons has been destroyed. This mission is vital to the safety of our
    soldiers, coalition partners, and innocent citizens of Iraq, as it
    helps deny terrorists access to raw materials they need to make weapons
    and explosives.
        We are also contributing to the continuous improvement of the
    safety and quality of life for soldiers, sailors, airmen and marines in
    both Iraq and Afghanistan as we continue to construct and upgrade their
    living and working areas. In Afghanistan, we are also working with the
    USAID and the Ministry of Transportation as they restore the
    infrastructure necessary for a prosperous Nation.

                               HOMELAND SECURITY

        In addition to playing an important role in supporting the war on
    global terrorism. We are providing security for critical physical
    infrastructure, throughout the Nation, including components of
    transportation, water, and power systems vital to our Nation's welfare.
    The Corps is also a key member of the Federal Response Plan team with
    proven experience in support of disaster response.
        The Civil Works Program has completed over 300 security reviews and
    assessments of our inventory of locks, dams, hydropower projects and
    other facilities. We have improved our security engineering capability
    and prioritized infrastructure and are currently implementing
    recommended features at the highest priority security improvement
    projects.
        For fiscal year 2005, $84 million is targeted for security
    enhancements at key Corps facilities. Facility security systems can
    include cameras, lighting, fencing, structure hardening, and access
    control devices designed to improve detection and delay at each
    facility.

                                   CONCLUSION

        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 Corps-wide.
        Thank you, Mr. Chairman and Members of the committee. This
    concludes my statement.

        Senator Domenici. Senator Craig, would you come down with
    me? We have a Senate photographer. This is the last appearance
    of the General, and we'd like to take a picture.
        Senator Craig. I'm sure he'll want this committee etched
    firmly in his memory banks.
        Senator Domenici. Come on, we'll do it up here. Actually, I
    think that his appearance before us will be memorable.
        And good, not bad. Right here. Gosh, I've got to straighten
    up here. I don't look like a general, but--thank you. He came
    in a hurry.
        General Flowers. Thank you, sir.
        Senator Domenici. Okay. Mr. Secretary, we're not going to
    take your picture. You're probably going to be around here a
    little while.
        Mr. Woodley. You're very optimistic.
        Senator Craig. We're hoping.
        Senator Domenici. I am. Why not?
        Well, I want to say that all of these good things that you
    all have talked about may not get done, because the President's
    budget is pretty weak. We may be challenged, but we're doing
    the best we can on the numbers, and we figure that the fiscal
    year 2004 enacted is $4.571 billion, and the real request for
    2005 is $4.065 billion. The difference is $506 million. That's
    the cut. Now, I hope that's wrong, but that's what my staff
    tells me. Now, I don't know how we can do all the things we
    have to do with those kinds of budgets.
        General, I want to say, for the record, that you've gone
    through some hard times. You've gone through a period of time
    when you were strained by accusations and allegations that
    turned out to be much, much less than the hullabaloo made about
    them. But the Corps continues on.
        And I would like to share with my colleagues, who may not
    already be aware, that the Corps is the project management in
    Iraq. They are the agent. They are the agency directly tasked
    with the physical reconstruction of Iraq because of both its
    expertise and in management, on a large scale, and its
    rehabilitation of critical infrastructure. I find it ironic
    that the Corps' talent that we are heavily relying on in Iraq
    is the very same one that is most negatively impacted by the
    budget of the administration.
        I believe the administration, if it had its way, the Corps
    would merely become an operations and maintenance agency. I
    will tell you, Mr. Secretary, that the very core talent we are
    utilizing in Iraq was only developed as a direct result of the
    domestic work that we're doing in all of our States.
        I think the administration is missing the point, that this
    country's economic well-being is closely linked to the
    waterways, be they rivers, harbors, or wetlands. Further, it's
    our interest to ensure that we maintain these resources for our
    continued successful competition with the world marketplace. We
    talk a lot about it, but we never mention that our waterways,
    our harbors are terrifically important as that goes on in the
    world.
        This country has an aging water-resource infrastructure.
    For example, 50 percent of the Bureau of Reclamation's dams
    were built from 1900 into the 1950's, before the current state-
    of-the-art construction and the techniques that go with it;
    therefore, they require maintenance of a special type. Even
    though the budgets are tight, I am concerned that no one is
    working to address the longer-term problem, an aging
    infrastructure, one of these problems that we all put off. We
    absolutely have to address them.
        It costs us more when we delay them, and we are going to
    wait around until something drastic happens, and then
    somebody's going to be blamed. At least we know it, at least
    you tell us, at least you warn us. Nobody seems terribly
    interested, from what I can tell.
        Now, I note that in my opening statement, which I'll make
    part of the record that the administration's budget is about 11
    percent, that's what that number is, below the 2004 funding
    level. Now, that's my evaluation, because I take into
    consideration some things the administration assumes we're
    going to get, that will be moved over to the budget and be a
    plus. Same thing with the Bureau of Reclamation.
        Mr. Woodley, if the Congress were to enact the President's
    request--I don't intend to put you, as an administration
    appointee, in too much of a bind--but if we were to enact the
    President's request, without modification, can you tell us now,
    or would you prefer to tell us in writing, what the impact on
    the Corps of Engineers would be?
        Mr. Woodley. Mr. Chairman, I'll explain--I'll give you my
    views to the maximum extent possible now. If you'd like for me
    to elaborate in writing, I'd be delighted to.
        Senator Domenici. Well, we need to know.
        Mr. Woodley. Yes. This is a very frugal budget that will
    allow us to continue generally with the things that are
    underway in 2005, with contracts that are already in place in
    2004. It will allow us to move forward in an appropriate way on
    the 11 projects that are expected to be completed in 2005. It
    will allow us to continue in an aggressive way with the
    priority projects that we've identified, that are very good
    projects. But it will cut back substantially on our ability to
    do studies that are needed for future work, going forward, and
    it definitely will not allow us to make a great deal of headway
    on deferred maintenance, for instance. It is a very frugal
    budget.
        Senator Domenici. Well, let me tell you, Mr. Secretary, the
    budget contains multiple proposals, which, if enacted as
    proposed, would terminate many ongoing projects. You know that.
        Mr. Woodley. Yes, sir.
        Senator Domenici. The Energy and Water bill, and the
    proposal is to carry a general provision as part of that to
    cancel specific projects. States affected are Alabama, Alaska,
    Mississippi, North Dakota, West Virginia, just to name a few.
    Specifically, there are 29 projects which would be
    legislatively terminated. How this list was arrived at, I don't
    know. Maybe you know. Do you?
        Mr. Woodley. Yes, sir, I do.
        Senator Domenici. Do you want to tell us?
        Mr. Woodley. These are projects that, for a variety of
    reasons, it was felt were not the best investment at the time
    or were not prepared and fully vetted and ready to proceed with
    the investment in fiscal year 2005.
        Senator Domenici. Well, I'll tell you, I hope you know that
    this committee and this chairman are put in a terrific bind
    because you may not know, but the General knows; he's been
    around here long enough, but we don't have complete control
    over this. Senators want projects. Senators have approved of a
    number of these projects. And you can sit around all you want
    over there saying they don't make sense, et cetera, but there
    are none of them that don't fit the cost-benefit ratios
    required by the Corps.
        You now say they don't fit, whatever you just said--but the
    cost benefit was established as a way to clear projects so they
    would not be irrelevant, pork-barrel, and whatever else you
    call them. How many of these projects are under construction,
    if you know? And what would be the impact of terminating?
        Mr. Woodley. I would have to provide that for you, unless--
    --
        Senator Domenici. Do you know, on the Corps side, General?
        General Flowers. I think there are 12 projects currently
    under contract, and 5 more were planned to be awarded in fiscal
    year 2004, so 17 projects, sir.
        Senator Domenici. Seventeen projects, between those that
    are in-being, ongoing, and five that were ready to go that
    Senators and their States are expecting.
        General Flowers. That's correct, sir.
        Senator Domenici. Okay.
        The Corps is carrying out a study to restore the Bosque
    along the Rio Grande, in Albuquerque. That's our green way that
    runs through it. You've been there, General, I think.
        General Flowers. Yes, sir.
        Senator Domenici. Can you update me on the status of the
    study and next steps? And when do you anticipate the project
    will be ready for construction authorization?
        Anybody know?
        General Flowers. Yes, sir. We have completed the
    reconnaissance phase through--or will complete that, through
    fiscal year 2004 funding. And fiscal year 2005 funds are used
    to initiate the feasibility study. And so the budget does
    include $175,000 toward completing the study.
        Senator Domenici. Okay. Now, I'm fully aware, General and
    Mr. Secretary, that we are short of money, but, I'll tell you,
    I don't intend to wait around forever for this project. It's
    very important. It's one that will establish, for the city of
    Albuquerque, kind of what the city is, and that's pretty
    important, if you know about cities.
        I want to ask a question about the internal operation of
    the OMB versus the Corps. What I've heard is startling, but I'd
    like you to tell me.
        Mr. Woodley, how many OMB examiners does the Corps, which
    is a $4.5 billion agency, have? And how many does the rest of
    the Department of Defense have? Who knows?
        Mr. Woodley. I don't know the answer to that.
        Senator Domenici. General?
        General Flowers. Sir, I think the last count I had, there
    were eight Corps examiners. That includes the two supervisors
    that are a part of that group.
        Senator Domenici. Okay.
        General Flowers. And I am not sure on the number for the
    rest of the Department of Defense, but I believe that number to
    be three.
        Senator Domenici. Three. Well, I wonder who makes the
    decision that the Corps of Engineers needs eight examiners, and
    all of the Department of Defense has three. Who makes that kind
    of decision? Who knows? You don't know?
        Mr. Woodley. I would have to ask the director of the----
        Senator Domenici. OMB.
        Mr. Woodley [continuing]. Of the office, Mr. Chairman.
        Senator Domenici. Well, we're going to ask him.
        Mr. Woodley. I don't know.
        Senator Domenici. If the committee doesn't mind, we'll ask
    him now, as a result of this hearing. And if he doesn't answer,
    we'll haul him up here and ask him why.
        I'm of the opinion that they're out to get you and it's
    rather strange to me that this goes on, and nobody raises any
    Cain. But we will. That's an unfortunate situation, unless they
    have some justification that I'm not aware of.
        I want to close by telling you I have about eight or nine
    questions, but we're close to lunch, and we have two Senators
    who want to ask questions, and I want to let 'em.
        Senator Craig, would you mind if we let the Senator proceed
    with a few questions? She's told me it's going to take 6
    minutes.
        But then she suggested 6 minutes on Senate time.
        And then I suggested 6 minutes on the chairman's time.
        Senator Murray. And I'm not sure which is better. I'll take
    the better one.
        Senator Domenici. Okay. Proceed.

                       STATEMENT OF SENATOR PATTY MURRAY

        Senator Murray. Thank you, Mr. Chairman. Thank you to all
    of you for being here today.
        General Flowers, as you know, I and my Northwest colleagues
    have been supporting the Columbia River Channel Improvement
    Project. With the support of Chairman Domenici and Senator
    Reid, I've been able to provide $10 million for that project
    over the past 4 years. Each time, this subcommittee has had to
    add money, because the President's budget never provides any
    funds for the project, and this year is no different.
        This page from the budget shows that, once again, the
    administration's budget is zero for this project, and I wanted
    to be here today to ask you a series of questions about the
    Columbia River Channel Improvement Project and the
    administration's lack of funding.
        First, General Flowers, is it true that the recon study,
    feasibility study, authorization, and Chief of Engineer's
    report on the Columbia River Channel Improvement Project are
    all complete?
        General Flowers. Yes, ma'am, it is.
        Senator Murray. Thank you. General, in its original budget
    submittal to the Office of Management and Budget, did the Corps
    request funding for the Columbia River Channel Improvement
    Project in fiscal year 2005? And if they did, how much did they
    ask for?
        General Flowers. Ma'am, there are a number of internal
    deliberations that go on inside the Agency and Administration,
    and there's a process that's put together to vet projects
    before--and clear them--before they can be included in the
    budget, and this one was not fully vetted and cleared, so it
    was not.
        Senator Murray. So the Corps did not request funding for
    this project.
        General Flowers. No, ma'am.
        Senator Murray. Well, it was my understanding that the
    Corps did want to move on this project. Can you tell us why the
    President's budget did not contain any funding for this?
        General Flowers. We were--the project was not cleared by
    OMB.
        Senator Murray. Was not cleared by OMB. General, what would
    be the minimum funding level necessary to move on this project
    in fiscal year 2005?
        General Flowers. It's $15 million, ma'am.
        Senator Murray. Okay. Well, I want to ask you about a Texas
    project, called Brazos Island. And let me be clear with the
    committee, I don't know anything about that project, I have no
    position on it, but I do find its situation really interesting
    in comparison to the Columbia River Project.
        Have the recon study and feasibility study been completed
    for the Brazos Island Project?
        General Flowers. No, ma'am.
        Senator Murray. Has not. Has the Chief Engineer's report
    been completed for that project?
        General Flowers. Has not.
        Senator Murray. Well, in its original 2005 budget submittal
    to the Office of Management and Budget, did the Corps request
    construction funding for Brazos Island?
        General Flowers. No, ma'am. We--I would not request funds
    for a project that did not have a favorable Chief's report.
        Senator Murray. Well, who put funding in, then, for Brazos
    Island?
        General Flowers. I do not know.
        Senator Murray. Well, in light of the Brazos Island budget,
    it seems clear that OMB could have provided funding for the
    Columbia River Channel Improvement Project based on same
    criteria. Would you agree with that?
        General Flowers. Yes, ma'am.
        Senator Murray. The Corps budget has language suggesting
    that the administration may propose construction funding in
    fiscal 2005, pending OMB review. Has the ASA report been
    submitted to OMB for review?
        Mr. Woodley. Do you want me to answer that, ma'am?
        Senator Murray. Yes. Well, I would prefer that the General
    did.
        General Flowers. Yes. The answer is yes, ma'am.
        Senator Murray. Okay. Should we expect a fiscal year 2005
    revised budget request supporting construction for Columbia
    River Channel Project? And if so, when?
        Mr. Woodley. Well, I'm sorry, I must not have understood
    the prior question----
        Senator Murray. Should----
        Mr. Woodley [continuing]. Senator.
        Senator Murray. Well----
        Mr. Woodley. I apologize. Let me say, Senator, that I have
    just returned----
        Senator Murray. I----
        Mr. Woodley [continuing]. From the region.
        Senator Murray. I understand.
        Mr. Woodley. I spoke with the directors of the ports and
    with the leaders of the division and district. We are very
    anxious to get that project moving forward, in spite of the
    fact that, as you know, we are facing litigation with respect
    to the project that I certainly hope will not be any kind of
    impediment to us.
        Senator Murray. Well, I understand that, but----
        Mr. Woodley. As I understand the status right now, the
    report is under review in my office. I have given it the
    highest priority, and I want it to be sent to OMB as soon as
    possible. And I want it to be sent this month.
        Senator Murray. So are we to expect a revised budget
    request supporting construction?
        Mr. Woodley. That is certainly something that is seriously
    under consideration. I certainly am not in a position to make a
    commitment to that, but it is under very serious consideration,
    and it will be done as soon as possible.
        Senator Murray. Well, given the shortfall in the Corps
    overall budget, what projects that are included are going to
    give up funding for the Channel River Improvement Project?
        Mr. Woodley. I think that we would have to consult on that
    and see what other adjustments can be made elsewhere in our
    budget, or elsewhere, working very closely with the Office of
    Management and Budget to provide the funding at the appropriate
    level for fiscal year 2005, but that is a----
        Senator Murray. Well----
        Mr. Woodley [continuing]. Project that I am anxious to move
    forward. I am----
        Senator Murray. So you can't----
        Mr. Woodley [continuing]. Doing everything I can----
        Senator Murray [continuing]. Tell us where the money'll
    come from right now?
        Mr. Woodley. Not today. No, ma'am.
        Senator Murray. Well, General Flowers, another project, the
    Green/Duwamish Restoration Program, was given a new start by
    this subcommittee in 2004. It's authorized, and its studies are
    complete. Can you tell me if the Chief of Engineer's report on
    that program is complete?
        General Flowers. Yes, it is.
        Senator Murray. Can you tell me why OMB has not provided an
    administration position on that program, and not provided any
    funding for that program?
        General Flowers. No, ma'am, I cannot. To my knowledge, it's
    still under OMB review.
        Senator Murray. Well, General--Mr. Chairman, really--I am
    concerned about the role that OMB seems to be playing in
    delaying or advancing these projects, and I'm wondering if OMB
    is also playing a role in the final position of the Chief of
    Engineer's report.
        Can we be assured, General, that the Corps alone is
    determining all final reports and can stand before a judge and
    swear to each one's integrity?
        General Flowers. Ma'am, until this year, the answer to that
    question would have been absolutely yes, but I am now
    concerned. And I would like to give a very brief explanation.
        No intent to beat up on OMB. I think they are civil
    servants, who are trying to do their job. And in so doing, they
    are now trying to take a more active role in looking at
    projects as the Corps is going through its process. And I
    commit to you that I will resist the--I will resist any attacks
    on the integrity of the Chief's report, because my job is to
    provide you the best engineering and science and
    recommendations----
        Senator Murray. Sure.
        General Flowers [continuing]. Based on that, that's
    possible. But there is a tendency now for the Office of
    Management and Budget to try to clear pieces of our process
    before we are permitted to continue. And we are internally
    debating that right now, and I can't tell you what the outcome
    will be.
        Senator Murray. Well, thank you, General, for your honesty.
        Mr. Chairman, I find that deeply disconcerting, and I hope
    this committee pursues that.
        Senator Domenici. You heard me awhile ago.
        Senator Murray. I did.
        Senator Domenici. The reason they can do it is because they
    have so many of their people, OMB's people, hanging around the
    Corps----
        Senator Murray. Yeah.
        Senator Domenici [continuing]. Doing all kinds of
    investigations and analysis, and that's a lot. I mean, there
    are some big departments that don't have eight, I can tell you
    that. If they did, they wouldn't have enough space for OMB.
    They'd be coming out--they'd have to have an office of their
    own.
        Senator Craig.
        Senator Craig. Thank you, Mr. Chairman.
        General Flowers, what the Senator from Washington has just
    led you through is something that is strongly supported by the
    delegations of the three States affected by that Lower Columbia
    Basin--or Lower Columbia River dredging. If we want to render
    the Port of Portland and Tacoma, and all of that area down
    through there, ineffective after hundreds of millions of
    dollars of investment, all the way through to Lewiston, Idaho,
    which is the last port facility in that series of facilities
    along the Snake and the Columbia system, then we will do so by
    simply not dredging that stretch from Portland, west to the
    mouth. And it's been a long time coming, a tremendous
    investment has been made, phenomenal efforts at environmental
    mitigation have occurred. It is ripe and ready, and there is no
    reason it should not move forward.
        Or you simply turn the lights out at the Port of Portland,
    and then you progressively turn the lights out up the system,
    and that is not our intent. It will not be our intent. And I'm
    glad to hear that it's under critical review again. I hope it
    becomes a priority, posthaste, as it relates to funding. Enough
    said about that.
        All I will comment, Mr. Secretary--as it relates to the 41
    projects that are not consistent with current policy, here's
    the operative question. And the question goes like this.
    Senator x says to this Chairman, ``Mr. Chairman, is one of my
    projects of the 41?'' And if it is, then that Senator is going
    to put phenomenal pressure on this chairman to deny you what
    you're attempting to do. I've not yet asked that operative
    question of the chairman ``Are any one of these 41 in Idaho?'',
    but the question will get asked. Here is----
        Senator Domenici. And then, besides, when you get the
    answer, if it is that it is, you will go to work----
        Senator Craig. Of course.
        Senator Domenici [continuing]. In the committee to try to
    get it.
        Senator Craig. Yeah.
        Senator Domenici. Not just me. If you go to work on me, I
    don't have all the votes; I might say I won't do that, Senator
    Craig. But then you'll go to work on Senators, and they will
    have what we always have, and that's that Senators of the
    United States want it.
        Senator Craig. Yeah.
        Senator Domenici. All right?
        Senator Craig. Yeah.
        Mr. Secretary, here is--before I close, General Flowers,
    let me again thank you for your service to this country and to
    this area, and, most importantly, your work before this
    committee, your forthright-fulness. We appreciate it greatly,
    and we thank you, and we hope you have success in a different
    role in a different life.
        General Flowers. Thank you, sir.
        Senator Craig. Mr. Secretary, let me turn to you for my
    last question, and it's a bit involved, but I think it's an
    important one. And, Mr. Chairman, for the work that you've been
    doing the last good number of years, along with me and others,
    I think this is an important question.
        Congress has been working on a comprehensive energy bill
    for over 3 years now, and this chairman has led a phenomenal
    effort. There is no question that our country needs an energy
    policy, and we've been trying to deliver that to the American
    people. One of the key elements of the pending legislation is
    infrastructure reform.
        Although we've focused on infrastructure nationwide, there
    is a growing concern about natural-gas infrastructure in the
    Northeast. The market for natural gas has grown considerably in
    the Northeast, and new pipeline construction is critical to
    meet this growth. The Federal Energy Regulatory Commission is
    the jurisdictional agency for reviewing and approving natural-
    gas pipeline construction in the United States.
        Like the hydroelectric licensing process at FERC, the
    pipeline construction process at FERC is substantial and
    complicated, but I'm learning that the process is becoming even
    more complicated because other agencies, like the Corps are
    also involved in the pipeline construction process and bringing
    their own understanding of purpose and need to the project. In
    the Corps' case, your agency is involved in a--is a
    consequence--the Corps' involvement is a consequence of the
    Clean Water Act authority to issue Section 404 permits before
    construction can take place.
        Here's my problem. FERC is the agency given the
    responsibility to determine whether a pipeline project can--
    should be constructed. That determination must include an
    assessment of need, as well as environmental impact. By law,
    the Corps, as well as other interested Federal and State
    agencies, have been given the opportunity to participate in the
    process.
        Here are the questions. Why, then, would it take over 17
    months since the issuance of the FERC certificate for the
    Islander East Pipeline for the Corps to act on a Section 404
    permit for that project? If you don't have the answer, I'd like
    to know the answer. Seventeen months. A year and a half, or
    nearly that. Why would you act in a sequential fashion after
    the Commission has acted on this project?
        My bigger question is--and one more focused on the purpose
    of this hearing today--why are you using resources to redo work
    already done by a Federal agency with the exclusive
    jurisdiction of determining the need and environmental
    sufficiency of a pipeline project? This is government
    redundancy run amok. Or by at least appearance, it is.
        What expertise does your district office have in pipeline
    siting and construction that would put your staff in a position
    to second-guess the Commission's staff, public review, and
    determination of what constitutes a reasonable set of viable
    alternatives? Would you support the concept of one Federal--one
    lead Federal agency record for the review of infrastructure
    proposals by all agencies?
        Those are the series of questions that we're trying to
    address in the energy bill. And in sorting through what's going
    on out there, the Islander East Pipeline appears to be a
    perfect example of why we ought to be changing the way this
    system doesn't work.
        Your response?
        Mr. Woodley. Senator, certainly the question of taking 17
    months on a single permit cries out for an investigation, and I
    will investigate that. I am not aware of the details of the
    project as I sit here before you. We are very much in need of a
    streamlined process, and the administration has been working on
    streamlining our processes in many arenas. I'm aware of
    transportation work, I'm aware of some work in the energy
    arena, and the Corps has been part of that, and I want to
    continue that and foster it and support it in every way.
        We have to proceed very carefully, however, because of the
    potential for litigation in these contexts. I'm concerned. For
    instance, if you look at the situation that we're facing with
    coal mining in the Appalachian region, where we have the Office
    of Surface Mining, for many years the Corps deferred to their
    expertise in this arena, which I believe was entirely
    appropriate. Unfortunately, a Federal court decided that it was
    not appropriate, and we have a very difficult situation that we
    are trying to manage in that region to get a permitting
    operation in place there that will be effective and efficient,
    and will survive Federal court scrutiny.
        Senator Craig. Well, I've asked a series of questions, and
    I would hope that you would search for answers----
        Mr. Woodley. I will, indeed.
        Senator Craig [continuing]. Because the reason it is asked
    is, in part, to be critical, but it is also to point out that
    you may be part of a problem. And it's a problem we're trying
    to solve. And when you have district offices who would assume
    to have the expertise that a national office who specializes in
    a given area has, and would second-guess them or third-guess
    them, that's a kind of duplication this country can ill afford.
    And I've not even talked about State agencies' roles yet, or
    role that they play in these siting situations. While they are
    critical--and we're trying to bring a major delivery system
    down out of Alaska into the Lower 48 to distribute gas and
    drive down costs and hopefully drive up employment and avoid
    the dislocation of industries that are today employing
    thousands of people that are now going offshore, and we can't--
    and we have to wait 17 months for a process, why should we do
    our effort? Unless we go right down to the system and clean it
    out.
        Now, I know that the administration is very intent on
    trying to streamline and organize. We've talked about
    centralizing and--so that we can get a certification or a
    movement process that isn't redundant upon--this idea of time,
    time, time. The chairman spoke of my effort in hydro
    relicensing. Perfect example is right here now in pipeline. You
    know, 2, 3, 4, 5, 6, 7 years? Because agencies upon agencies
    thought they knew better than somebody else and could dot an
    ``i'' better than somebody else could? It would seem to me
    almost easier to do it within your authority, to do it
    reasonably. And if you get locked up in the courts, you might
    get into court and get a decision sooner than 17 months. And
    you're not even guaranteed now that you will get that after the
    fact. So another 17 months from now, we may still be waiting
    for this to be processed by a court.
        Senator Domenici. Yup.
        Senator Craig. And now we're into another couple of years.
    I mean, I've spoken my frustration here. I'm very happy to work
    with you on this. These kinds of problems have to get resolved,
    unless our country just implodes on its own ability to produce
    and supply energy, and we drive everything offshore. Shame on
    us if we do. But if we can solve it, and we're trying to, and
    we want you to work with us, here's a good example. And maybe
    this ought to be a template by which we can make a decision on
    what ought to be improved and changed.
        Mr. Woodley. Yes, sir.
        Senator Craig. I thank you all very much.
        Senator Domenici. Well, General, you got by without me
    asking you about our famous Acequias in New Mexico, but I think
    we've at least taught you how to say it.
        General Flowers. Yes, sir.
        Senator Domenici. These are these little ditches in New
    Mexico that are historic, and it's one of the few projects that
    you don't have to have a cost-benefit ratio, because there's a
    statute saying we want to protect them. They're 400 years old.
        But I will say, just ask, there's nothing holding this
    project up other than budgeting, is that right?
        General Flowers. No, sir, there's nothing holding it up.
        Senator Domenici. All right. And this is another year where
    the administration didn't fund it. Didn't even fund $2 million
    worth. We'll find it and keep it going.
        Let me ask, General, what's the difference between the
    Corps that you are part of and the soldiers that are part of
    the Corps that are going to Iraq? Aren't they all the same?
        General Flowers. Yes, sir. We have a way of describing
    ourselves. We call ourselves the Engineer Regiment, and it's
    made up of soldiers from all components--active, guard, and
    reserve--Department of the Army civilians, and contractors, who
    work, in some cases as part of our staff, and who perform all
    of the work that we do. Then the Civil Works program that is a
    great part of the Corps of Engineers is a capability that the
    Nation leverages, particularly when it transitions from peace
    into conflict, or conflict back into peace. And, as I
    mentioned, we've had over a thousand of our civilian employees
    volunteer and serve, many from our Civil Works program, and
    have served both in Iraq and Afghanistan.
        Senator Domenici. I tell you why it comes to my mind. You
    know there's such a rotation system, and it's so firm that we
    lose our colonel in New Mexico just about the time he
    understands how to say Acequia and just about the time he knows
    what New Mexico's problems are. But this last time, he was down
    on the Rio Grande River, where such a beautiful job was being
    done in cutting down salt cedar and burned-down trees, and he
    didn't look too happy. And I asked him what was the matter. He
    said, ``Well, I'm going to leave here in a couple of weeks, and
    I have a wife and one baby--and she's pregnant--and I'm going
    to Iraq.'' I had no idea, at that point, that somebody like
    that would go to Iraq, but I found out from him that he's very
    much needed, and he'll go over there and fit right in and be
    part of the team that's building things, right?
        General Flowers. Yes, sir.

                         ADDITIONAL COMMITTEE QUESTIONS

        Senator Domenici. And they're good at it, and it is
    amazing, to me. And I'm going to find out why that the Office
    of Management and Budget spends so much time and effort and so
    many people dedicated to trying to find out what you do and how
    you do it, and what you do right and what you do wrong. I just
    don't understand it. I'm going to ask them how many they'd need
    if they gave this ratio to all the departments in the
    government. It would be a very interesting fact. In fact, we'll
    submit that question to them as a result of this meeting, just
    tell them we've heard about this and found out about this and
    we'd like to know.
        [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 Ted Stevens

        Question. The Corps started studying the Tatitlek breakwater and
    harbor in 1994, it was approved as a Section 107 project in 1995, the
    study phase was almost completed in 2001, with a draft report
    circulated within the Corps and submitted to the Pacific Ocean
    Division. Since then it has been stalled with little progress in the
    last 2 years. Does the Corps plan to get this project back on track?
        Answer. A Draft Detailed Project Report and EIS was presented to
    the Local Sponsor and the Village of Tatitlek on March 11, 2004
    regarding development of a harbor at Tatitlek using the Section 107
    Continuing Authority Program for small navigation projects. The cost
    for the National Economic Development plan was estimated at $10.3
    million of which a non-Federal sponsor would need to provide about $6.8
    million due to the $4 million statutory Federal limit on Section 107
    projects. The Local Sponsor (Alaska DOT and PF) and the Village of
    Tatitlek are currently evaluating their options and trying to identify
    potential sources of funds to build a harbor. Due to depletion of
    existing funds, if the Local Sponsor decides to continue the Section
    107 study, the Local Sponsor will be required to provide additional
    matching funds (as required by the Water Resources Development Act of
    1986) to finalize the Detailed Project Report and EIS.
        Question. Language was included in the fiscal year 2004 Omnibus
    Appropriations Bill to waive the matching requirements for the City of
    Sitka to correct the design deficiency for the breakwater for the
    Thomsen Harbor. However, the Corps has informed us that the language
    was not sufficient to waive the local match and that Sitka must still
    provide a match to redesign the breakwater that was not designed/
    constructed properly in the first place. Does the Corps intend to
    require Sitka to fund the local match of the breakwater for a second
    time?
        Answer. The State of Alaska, rather than the City and Borough of
    Sitka (CBS), funded construction of the Thomsen Harbor breakwaters. The
    breaks in the breakwaters were installed at the request of
    environmental resource agencies with the full knowledge of the State
    and the CBS. At the time the State and the CBS did not want to spend
    the money and take the time required to conduct a physical model study
    of the breakwaters configuration. If physical modeling were performed
    at that time, the deficiency in the breakwaters would have been
    apparent. A technical study, which includes physical modeling and
    updates of the economics and environmental aspects of Thomsen Harbor,
    would need to be performed before design and construction could be
    initiated. Unfortunately, the language to waive cost sharing in the
    fiscal year 2004 Appropriation Bill Senate Report does not override the
    cost sharing law of WRDA 1986.
        Question. All of the Alaska District construction projects require
    additional funding for the projects to stay on track. Why is there such
    limited funding for construction projects in Alaska?
        Answer. The Alaska District has received almost $20 million from
    other Districts in fiscal year 2004 for construction projects. The
    Alaska District has funding for four construction projects in the
    fiscal year 2005 budget proposal, Chignik, Nome, St. Paul, and Sand
    Point harbors. The funding for these projects was limited to the
    appropriate amount consistent with the administration's assessment of
    national priorities for Federal investments. Additional capabilities
    have been expressed for each of these projects as follows: Chignik--$3
    million, Nome--$23 million, St. Paul--$16 million, and Sand Point
    harbor--$10 million. Kake Dam, False Pass, Seward, and Wrangell harbors
    will also be under construction in fiscal year 2005 but have not been
    budgeted. Kake Dam's outcome is not considered a high priority by the
    administration and the remaining projects will not be budgeted until
    after OMB review of the respective decision documents is complete.
    Capabilities for these projects are Kake Dam--$7 million, False Pass--
    $10 million, Seward--$6 million, and Wrangell harbor--$10 million.
        Question. There is $50,000 in fiscal year 2005 budget for the
    Anchorage Harbor Deepening. Is the Corps coordinating this work with
    the Port of Anchorage with regard to the port expansion?
        Answer. Yes, we have been working closely with the Port of
    Anchorage and congressional staffers to develop authorizing language
    for dredging that will be required as a result of the port expansion.
        Question. There is no funding in the fiscal year 2005 budget for
    ongoing construction work at Seward Harbor. Does the Corps intend to
    complete this project?
        Answer. Please refer to the response to question No. 3. The
    construction contract for Seward Harbor was awarded on Feb. 3, 2004 in
    the amount of $8.47 million. Alaska District was given authority and
    funding (Public Law 108-7) to award the construction contract even
    though OMB has not approved the feasibility report. The Corps will not
    be allowed to budget for this project until it receives OMB approval of
    the project. The anticipated construction placement in fiscal year 2005
    for this project is $6 million, which will complete this project. If
    sufficient funding is available, the Corps intends to complete
    construction activities in fiscal year 2005.
        Question. The Permit for King Cove road was issued on January 22,
    2004 and the preferred alternative for the road is one supported by the
    community which extends the road 17 miles and utilizes a hover craft to
    cross Cold Bay to King Cove. Do you anticipate any further problems or
    potential delays for King Cove road?
        Answer. There is no reason to expect any delays caused by
    permitting requirements. Aleutian East Borough has awarded the
    construction contract to SKW (Arctic Slope Regional Corporation-
    Nugget); they are scheduled to start fieldwork in June 2004. The Corps
    has received no indication from any organization or group indicating
    that there would be any legal challenge to the permit authorization.
        Question. I understand there are some concerns with work being done
    at St. Paul Harbor regarding NOAA requesting the Corps to perform
    diesel seep site remediation. What is the status of these discussions?
        Answer. NOAA did ask the Alaska District to modify the existing
    Saint Paul Harbor, Phase II, contract. We had several concerns about
    modifying the existing contract, and suggested that we use another
    contract mechanism that would allow the diesel seep work to be awarded
    in fiscal year 2004 and performed in fiscal year 2005. NOAA has
    verbally informed us that they will use one of their own contracts to
    perform the work in fiscal year 2004. We will continue to work closely
    with NOAA to assure that our respective work that is in the same area
    proceeds smoothly.
        Question. It is my understanding that the Corps does not believe
    that there will be any Federal interest in the proposed Knik Arm
    Bridge. What is your understanding of this matter and do you believe
    the Corps should be involved in the planning, be it greater dredging
    and deepening in the Cook Inlet, or otherwise for the Knik Arm Bridge?
        Answer. The Corps is still performing the Knik Arm Bridge
    reconnaissance study. Funding is being used to complete a 905(b)
    assessment that will determine if there is Federal interest in further
    studies. However, the addition of bridge approaches, abutments, and
    piers could greatly affect the sediment deposition patterns and tidal
    currents at the Port of Anchorage, which in turn will affect the
    ongoing operation and maintenance of the Corps' navigation project. If
    the 905(b) assessment recommends proceeding with a feasibility study,
    these affects on the port will be included in the future study. Due to
    the large tides and complex tidal currents in Cook Inlet, a detailed
    hydrodynamic mathematical and physical model would be needed to
    identify the most acceptable design for the bridge length, abutments,
    and pier configuration required to maintain efficient operations at the
    Port of Anchorage. Other authorities that would enable Corps assistance
    in future planning studies in Cook Inlet include Section 216 of the
    Flood Control Act of 1970 (Public Law 91-611) which authorizes the
    Corps to assess modification of existing projects due to changed
    physical or economic conditions. The Section 216 language is as
    follows.

        ``The Secretary of the Army, acting through the Chief of Engineers,
    is authorized to review the operation of projects the construction of
    which has been completed and which were constructed by the Corps of
    Engineers in the interest of navigation, flood control, water supply,
    and related purposes, when found advisable due to significantly changed
    physical or economic conditions, and to report thereon to Congress with
    recommendations on the advisability of modifying the structures or
    their operation, and for improving the quality of the environment in
    the overall public interest.''

        We have also met with members of the Knik Arm Bridge Authority to
    discuss future Corps assistance. There was some interest expressed in
    using our physical model capabilities, engineering services such as
    surveying and drilling, and gathering data, developing, and performing
    portions of the EIS. Unless other specific Congressional instructions
    and funding are provided, these services could be provided under such
    programs as Planning Assistance to States and cost shared 50/50 with
    the Sponsor.

                             CONCLUSION OF HEARINGS

        Senator Domenici. Okay, we're in recess until the call of
    the Chair. Thank you.
        [Whereupon, at 12:15 p.m., Tuesday, April 20, 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 2005

                                  ----------

                                           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 2005
    Energy and Water Development Appropriations Act.]

                          DEPARTMENT OF DEFENSE--CIVIL

                             Department of the Army

                               Corps of Engineers

         Prepared Statement of the City of Los Angeles Board of Harbor
                     Commissioners and Port of Los Angeles

        Mr. Chairman and members of the subcommittee, thank you for the
    opportunity to submit testimony in support of the Channel Deepening
    Project at the Port of Los Angeles, the largest container seaport in
    the United States. Our testimony speaks in support of an fiscal year
    2005 appropriation of $35 million for the Federal share of continued
    construction of the Channel Deepening Project at the Port of Los
    Angeles. This critical Federal navigation improvement project underpins
    the United States' decisive role in international trade. Consistent
    with the goals and priorities of the administration and Congress, the
    Channel Deepening Project will provide immediate and significant
    economic return to the Nation, fulfill the commitment to environmental
    stewardship, and foster positive international relations. We
    respectfully request the subcommittee to fully fund our fiscal year
    2005 appropriation request of $35 million.
        The Corps of Engineers recently revised the cost of the Channel
    Deepening Project, and the Federal share, to account for credits for
    in-kind services provided by the Port and other project modifications.
    The Corps issued these credits before the Port and Corps' execution of
    the Project Cooperation Agreement. The modifications include
    adjustments to the disposal costs for dredged material, adjustments for
    construction contract changes, and project administration costs. The
    Corps' revised cost is now $222,000,000, representing a Federal share
    of $72,000,000 and a local share of $150,000,000. Furthermore, in
    fiscal year 2003, we experienced a funding shortfall challenging the
    Port to meet construction contract earnings. As such, under authority
    provided by Section 11 of the Rivers and Harbors Act of 1929, the Port
    of Los Angeles advanced more than $13,000,000 to the Corps of Engineers
    to cover the shortfall, and avoid costly construction shutdown or debt
    service due to interest accruals. Similarly, fiscal year 2004 funding
    shortfalls may also prove to be insufficient to meet construction
    contract earnings and could significantly slow the current construction
    schedule for this year. Mr. Chairman, while we are so grateful that the
    President's fiscal year 2005 budget includes $23 million for the
    Channel Deepening Project, the previous funding shortfalls and the
    increased project costs compel us to request the higher funding level.
    As you may be aware, the Corps of Engineers reprogrammed $23 million
    from the South Pacific Division last year without allocating any
    portion of those dollars to the Channel Deepening project that is
    performing well.
        Dramatic increases in Pacific Rim and Latin American trade volumes
    have made infrastructure development at the Port of Los Angeles more
    critical than ever, with more than 42 percent of containerized cargo
    entering the United States through the San Pedro Bay port complex. The
    Port of Los Angeles, alone, handled more than 7.2 million 20-foot
    equivalent units of containers (TEUs) in calendar year 2003 (a 20
    percent increase over 2002), representing ongoing unprecedented growth
    for any American seaport. This burgeoning trade has resulted in the
    manufacture of larger state-of-the-art container ships. As such, the
    Port embarked upon the Channel Deepening Project--along with its
    Federal partner, the Army Corps of Engineers--to deepen its Federal
    channel from -45 feet to -53 feet. Currently, more than 50 of these
    state-of-the-art container ships are on order to serve the United
    States West Coast container fleet. The first of these deeper-draft
    ships is scheduled to call at the Port of Los Angeles in August of this
    year, carrying 8,000 TEUs and drafting at -50 feet.
        As we have testified before, cargo throughput for the San Pedro
    Bay--and the Port of Los Angeles in particular--has a tremendous impact
    on the United States economy. We at the Port of Los Angeles cannot over
    emphasize this fact. The ability of the Port to meet the spiraling
    demands of this phenomenal growth in international trade is dependent
    upon the speedy construction of sufficiently deep navigation channels
    to accommodate the new container ships. These new ships provide greater
    efficiencies in cargo transportation, carrying more than 8,000 TEUs and
    one-third more cargo and making available to the American consumers
    more product inventory at lower prices on imported goods. In addition,
    exports from the United States become more competitive in foreign
    markets. However, for American seaports to keep up, they must,
    immediately, make the necessary infrastructure improvements that will
    enable them to participate in this rapidly changing global trading
    arena.
        Mr. Chairman, these state-of-the-art container ships represent the
    new competitive requirements for international container shipping
    efficiencies in the 21st Century, as evidenced by the increased volume
    of international commerce and the new deeper-draft container ships now
    on order for service at ports across the United States within the next
    few years. It is imperative that Congress appropriates the requested
    funding that will enable the Channel Deepening Project to continue on
    schedule through the project's anticipated completion in 2006 to meet
    these new efficiencies.
        The Channel Deepening Project is clearly a commercial navigation
    project of national economic significance and one that will yield
    exponential economic and environmental returns to the United States
    well into the future. The national economic benefits are evidenced by
    the creation of more than 1 million permanent well-paying jobs across
    the United States; more than $1 billion in wages and salaries, as well
    as local, State and Federal sales and income tax revenues deposited
    into the Federal treasury. As an aside, the 7.2 million TEUs handled by
    the Port of Los Angeles in 2003 had a commercial value of more than
    $300 billion in container cargo, with significant tax revenues accruing
    to the Federal Government. Similarly, according to the U.S. Customs
    Service, users of the Port pay approximately $12 million a day in
    Customs duties, with the Los Angeles Customs District leading the
    Nation in total duties collected for maritime activities. As you can
    see, the return on the Federal investment at the Port of Los Angeles 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 international
    trade network well into the 21st Century. The Channel Deepening Project
    marks the second phase of the 2020 Infrastructure Development Plan that
    begun with the Pier 400 Deep-Draft Navigation and Landfill Project. The
    Port of Los Angeles is moving forward with the 2020 Plan designed to
    meet the extraordinary infrastructure demands placed on it in the face
    of the continued explosion in international trade. Mr. Chairman, the
    Port of Los Angeles respectfully urges your subcommittee to include an
    earmark of $35 million for fiscal year 2005 to support the U.S. Army
    Corps of Engineers' continued construction of the Channel Deepening
    navigation project on behalf of the Port of Los Angeles.
        Thank you, Mr. Chairman, for the opportunity to submit this
    testimony in support of continued Congressional support of the Channel
    Deepening Project at the Port of Los Angeles. The Port has long valued
    the support of your subcommittee and its appreciation of the port
    industry's importance to 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 strength.
                                     ______

                  Prepared Statement of the City of Stillwater

        Chairman Domenici and members of the Energy and Water Development
    Subcommittee, I thank you for the opportunity to submit this testimony
    requesting the $1.8 million needed to construct Stage 3 of the
    Stillwater, Minnesota flood control project. In 2001, the City
    experienced its seventeenth flood since 1941, immediately after the
    Corps completed construction work on Lock and Dam No. 3 20 miles South
    of the convergence of the Mississippi River and the St. Croix River.
        The first two stages of the project have been completed, and
    Congress appropriated $2.3 million in the fiscal year 2002
    Appropriations Bill to begin construction the critical Stage 3 of the
    project. The $1.5 million in Federal funds requested this year, plus
    State appropriated, and local funds should be sufficient to complete
    the $13.2 million project.
        The project is divided into three stages. Stage 1 included the
    repair and reconstruction of the existing retaining wall which extends
    1,000 feet from Nelson Street on the South to the gazebo on the North
    end of the levee wall system. Stage 2 consists of the extension of the
    levee wall about 900 feet from the gazebo North around Mulberry Point.
        The completion of Stage 2 was delayed by floods of 1997, costing
    the City and the Federal Government nearly a half million dollars.
    After the waters subsided, it was discovered that the soil beneath the
    planned levee extension was very unstable, requiring a revision of
    plans, and the addition of another stage in the construction process.
        The flood waters of the St. Croix River did not recede until August
    of 1997. The construction area remained under water preventing
    construction work to proceed as scheduled. Lowell Park, which extends
    the full length of the levee wall system, several structures, and the
    emergency roadway which is used to provide emergency medical assistance
    for those using the recreational St. Croix River, and as a water source
    for local fire departments, were all either under water or
    inaccessible.
        Phase I, the repair and reconstruction of the original levee wall,
    was completed in the Summer of 1998. Work on Stage 1 was completed in
    late Summer of 1997, and additional soil borings were taken for Stage
    2. The soil was found to be very unstable, and unable to support the
    levee system designed for Stage 2 of the project. The construction of
    Stage 2 required remedial action, and was been designated as Stage 2S.
    A contract was awarded for Phase 2S in November, 1998, and was
    completed in 1999. Phase 2 was begun in the late Fall of 1999, and the
    major construction work was completed at the end of the year 2000. Only
    some landscaping, and finishing work on the levee wall system remains
    to be done. The Design Memorandum schedule calls for the construction
    of Stage 3 in fiscal year 2002, and to be completed in fiscal year
    2003, according to the Corps schedule.
        Stage 3 expands the flood protection system by constructing a 3
    foot flood wall, and driving sheet piling below the surface to reduce
    seepage and to provide a base for the wall. The flood wall will be
    constructed about 125 feet inland from the riverbank. Stages 1 and 2
    were critical to the protection of the fragile waterfront, and also, to
    prevent minor flooding on the North end of the riverfront. Stage 3 is
    the component that provides the flood protection for the City. The
    rising elevation of the terrain, the flood wall, and minimal emergency
    measures are designed to provide the City with up to 100 year flood
    protection.
        The Mayor, City Council Members, and Engineering staff all
    understand that Stage 3 of the flood control project is essential for
    the protection of life and property of the citizens, that the Stage 3
    flood wall is a critical phase of the project, and that the project
    must be completed at the earliest possible date. The Corps acknowledged
    the necessity for all three stages of the project when the Design
    Memorandum included plans for all three stages.
        The U.S. Congress directed the Secretary of the Army acting through
    the Chief of Engineers to proceed with the design and construction to
    complete the Stillwater Levee and Flood Control Project under Section
    124 of the Omnibus Appropriations Act for fiscal year 2005. The City
    and the State of Minnesota have allocated matching funds for this work,
    and it is in an escrow account for that purpose. The Corps of Engineers
    have said the monies appropriated to begin this work on Stage 3 have
    been redirected, and Federal funds are not available.
        This fact is born out by the support of the Minnesota Department of
    Natural Resources, the Governor of Minnesota, and the State
    Legislature. The Minnesota Department of Natural Resources made funds
    available based on this premise. The State has appropriated half of the
    Non-Federal matching funds needed to complete Stage 3 of the project,
    as well as for Stages 1 and 2. The City has provided the remainder of
    the required matching funds, consequently, only the Federal share is
    missing to complete the project.

                      STILLWATER--A NATIONAL HISTORIC SITE

        The City of Stillwater is recognized for the 66 historic sites on
    the National Register of the U.S. Department of Interior, as well as
    other historic structures. Many of these sites are located in the flood
    plain of the St. Croix River. Designated the ``Birthplace of
    Minnesota,'' the City of Stillwater was founded in 1843.
        When Wisconsin became a State in 1848, a portion of land West of
    the St. Croix and Mississippi Rivers, including much of what is now the
    Twin Cities of Minneapolis and St. Paul, was excluded. The prominent
    citizens of the excluded area convened in Stillwater on August 26,
    1848, passed a resolution to be presented to Congress asking that a
    ``new territory be formed,'' and that the territory be named
    ``Minnesota.'' Henry Sibley carried the petition to Washington, DC, and
    in March, 1849, Minnesota Territory was established. Stillwater then
    became the only city in the Nation to become the county seat of two
    different territories, St. Croix County in Wisconsin, and Washington
    County, Minnesota. The Stillwater Convention firmly established
    Stillwater as the ``Birthplace of Minnesota.''
        Stillwater grew and prospered as the Lumber Capitol of the Midwest.
    Billions of feet of timber was cut, and floated down the St. Croix to
    the nine sawmills that were located on the riverbank of the St. Croix
    at Stillwater between 1848 and 1914. More logs were carried through the
    boom site North of Stillwater than any other place in the United
    States. Three billion feet of lumber was produced by the nine lumber
    mills in the 1880's alone. All nine lumber mills wee located on the
    riverfront The lumber from the Stillwater mills were the primary source
    of wood-constructed buildings throughout the Midwest.
        Much of the lumber was carried down the St. Croix to the
    Mississippi River, and on to St. Louis, the ``jumping off'' point for
    the Westward movement. Sawdust and wood debris from these mills helped
    created the fragile riverbank that the levee wall system protects
    today.
        Later in the 19th Century, five railroads carried lumber from
    Stillwater Westward to Nebraska, North and South Dakota, and points
    West, as the Nation expanded beyond the Mississippi River into the
    plains States. Many of the Midwest's oldest buildings still carry the
    mark of the Stillwater mills.
        As a result of Stillwater's place in the history of the Midwest,
    the lumber industry, the unique homes built by Minnesota's first
    millionaires, and the birthplace of both Minnesota Territory and the
    State of Minnesota, 66 sites are included on the National Register of
    Historic Places. All of the downtown area, which is located in the 100-
    year flood plain, is included in this recognition.

             THE IMPACT OF LOCK AND DAM NO. 3 ON FLOODS--STILLWATER

        The Lock and Dam No. 3 was constructed in 1937-38 on the
    Mississippi River at Red Wing, Minnesota. The Lock and Dam construction
    raised the level of the St. Croix at Stillwater by 8 to 10 feet. It has
    made the City of Stillwater vulnerable during periods of high water and
    flooding of the St. Croix since that time. Records prove that the lock
    and dam construction, raising the water levels of both the Mississippi
    and the St. Croix River, has markedly increased the incidence of
    flooding at Stillwater. The culpability of the Corps is clearly
    evident.
        The Mississippi and the St. Croix Rivers merge about 14 miles South
    of Stillwater. When constructing the Lock and Dam at Red Wing in 1938,
    the Federal officials recognized that detaining the flow of the
    Mississippi would back up the water in the St. Croix at Stillwater. A
    1,000 foot levee wall system was constructed at Stillwater by the WPA
    under the supervision of the Corps to protect the fragile waterfront.
        From 1850 to 1938, the 88 years prior to the construction of Lock
    and Dam No. 3, only four floods were reported by historians. None were
    the result of Spring snow melts. The 1852 flood was the result of a
    cloudburst, the destruction of a dam built on McKusick Lake above the
    City, and was not the result of the flooding of the St. Croix River.
    The floods of June 14, 1885, and May 9, 1894, as well as the 1852
    flood, were all the result of cloudbursts in or above Stillwater. These
    floods resulted in both loss of life and significant property losses in
    the City.
        Since the completion of the Lock and Dam 60 years ago, the St.
    Croix has flooded on 17 occasions, and only four times in the 90 years
    preceding the construction of the Lock and Dam. None of the four were
    the result of high water on the St. Croix River. Four floods were
    recorded in the 1940's, immediately after the completion of the lock
    and dam at Red Wing. The 1952, 1965, and 1969 floods were record-
    breaking floods, the result of a heavy snow fall, and early Springs
    rainfall, coupled with warm weather. Record flooding was avoided in
    1997, by the early planning of City officials, the construction of a
    huge emergency levee requiring thousands of truck loads of clay and
    sand, the work of hundreds of volunteers, and luck in the avoidance of
    a severe rainstorm in or around the flood event.
        The 2001 flood was second worst flood in the 160 year history of
    the City. It was only topped only by the flood of 1965. The careful
    planning and preparation by the City, hundreds of volunteer workers
    included high school students and younger, local citizens from
    Minnesota and Wisconsin, and dozens of inmates from the near-by State
    prison were given credit for preventing a major catastrophe for the
    City. The water pump rental, thousands of yards of sand and fill, and a
    ``round the clock'' line up of trucks, cost the Federal, State, and
    local governments nearly $1.3 million.
        The planning and preparation of City officials, and adequate lead
    time have allowed the construction of levees high enough to avoid
    massive flooding in the historic section of the City during most of the
    floods, and to prevent further loss of life. However, a 4-5 inch
    rainfall during high water levels would be devastating to the City.
    Such rainfalls are not infrequent in the St. Croix Valley, and can not
    be anticipated. A major concern is the safety of the volunteers.
    Working around heavy equipment and massive trucks, day and night, and
    on top of 20 foot emergency levees over swirling flood waters, it is
    only a matter time until we have serious injuries or loss of life.
        A wet Fall that saturates the soil, heavy snows during the Winter,
    extended warm spells in the Spring, coupled with persistent Spring
    rains, and cloudbursts as experienced in the past, will all come
    together in the same year at some point in time. At that point, the
    City's emergency responses to flood control will not be sufficient to
    cope with the flood waters.
        History bears out the City's contention that the raising of the
    river levels by ten feet in 1938, when Lock and Dam No. 3 was
    constructed, greatly increases the flooding potential faced by the City
    during the past 60 years. On this basis alone, the Federal Government
    must share in the responsibility for providing a remedy. The
    construction of the Stage 3 flood wall at Stillwater will provide this
    safety.

                   ENVIRONMENT THREATENED DURING FLOOD EVENTS

        The St. Croix River was designated as one of the first Wild and
    Scenic Rivers by Congress and is protected under both Federal and State
    laws, as well as by local ordinances. The St. Croix River is carefully
    monitored by the Federal Government, an Interstate Commission, and the
    DNR's by both the States of Wisconsin and Minnesota.
        The City's concern is the trunk sanitary sewer line and pumping
    stations for the City of Stillwater. The sewer line runs adjacent to
    the riverfront and is frequently under water during major flood events.
    More than 2 million gallons of raw sewage is handled daily by the sewer
    line and pumping stations that follow the riverfront. Engineers have
    advised the City that extended flooding of the flood plain could result
    in the rupturing of the trunk line or the surcharging of the pumping
    stations.
        Either of these event would result in the direct flow of raw sewage
    into the St. Croix River. It would be impossible to repair the system
    during the high water of a flood event. During the 1997 floods, one
    pumping station and a portion of the trunk sewer line remained under
    water for 95 days, and required careful monitoring by the City workers.
        The protection of the river is not only the dominant theme of the
    State and Federal governments, but also by the counties and
    municipalities that line the riverbanks of the St. Croix. However, the
    greatest protectors of the river are the citizens themselves who take
    advantage of the crystal blue waters of the St. Croix for fishing,
    boating, and other recreational and scenic purposes.
        The topography of the City of Stillwater requires the location of
    the trunk sanitary sewer line and pumping stations at the base of the
    City's hub, adjacent to the riverfront. The City is built on two hills
    that slope toward the river, abruptly interrupted by sandstone bluffs
    extending 50-75 feet high above the river level. The sanitary sewer
    system serving the 16,000 Stillwater residents flows into the trunk
    sewer line that runs parallel to the riverfront. It can not be moved.
    The 2 million gallons of raw sewage handled by the system each day, is
    gathered in the trunk sewer line and pumped Southward to the water
    treatment plant.
        According to engineering studies, the trunk line and the pumping
    stations are both susceptible to rupture or surcharging during periods
    of flooding. Little could be done to stop the flow of raw sewage into
    the St. Croix until the water receded. During recent floods, it is not
    unusual for high water levels to persist for as much as 2-5 months.
    Such an event could release 120 million gallons of raw sewage into one
    of America's most pristine rivers over that period of time. If for no
    other reason than the protection of the river, the City believes the
    Stage 3 flood wall must be constructed with no delay.

                             LEGISLATIVE BACKGROUND

        The Stillwater Flood Control and Retaining Wall project first was
    authorized in section 363 of the Water Resources Development Act (WRDA)
    of 1992. An allocation of $2.4 million was made in the Energy and Water
    Development Appropriations Act of 1994.
        A Committee Report described the project in three parts--to repair,
    extend, and expand the levee wall system on the St. Croix River at
    Stillwater, Minnesota:
      --``To repair'' (Stage 1) the original existing levee wall system
            constructed in 1936;
      --``To extend'' (Stage 2) the original wall by approximately 900 feet
            to prevent the annual flooding that occurs at that location;
            and
      --``To expand'' (Stage 3) the system by constructing the flood wall
            about 125 feet inland from the levee wall system to protect the
            downtown and residential section in the flood plain.
        In 1995, the Design Memorandum confirmed the cost estimate for the
    project was much too low, and the project was reauthorized for $11.6
    million by Congress in the 1996 WRDA legislation. In 2001, the Corps
    estimated the Federal cost at $9.86 million, the non-Federal cost at
    $3.29 million, and the total cost of the project to be $13.15 million.
    Congress appropriated $2 million in fiscal year 2002 for the
    construction of the Stage 3 flood wall. The Corps chose not to use
    these funds for that purpose, and were redirected to other projects.
    Congress then directed the Corps to design and construct the Stage 3
    flood wall in Section 124 of the Omnibus Appropriations Act for fiscal
    year 2005. While the Corps has now met with the City, and appears
    willing to move ahead as Congress as instructed, we are awaiting Corps
    action to prepare a Project Cooperation Agreement for all to sign.
        Since the reauthorization of the project 5 years ago, and the
    completion of the feasibility study, both Stage 1 and 2 have been
    completed. Only the completion of Stage 3 will provide the City with
    the flood protection that is critically needed. The reconstruction of
    the existing levee wall system, the extension of the levee wall, and
    the construction of the flood wall are all critical to the safety of
    the citizens, the protection of property, and the preservation of
    historic sites that contributed to the growth and expansion of the
    Midwest in the last half of the 19th Century.

                                    SUMMARY

        The Mayor and Council for the City of Stillwater, Washington County
    Officials, the Governor and Minnesota State Legislature, and bipartisan
    support of Minnesota Representatives and Senators in Congress, all
    recognize the significant importance of completing this project by
    constructing the Stage 3 flood wall on the St. Croix River at
    Stillwater. They are committed to the completion of the Flood Wall
    Project at Stillwater. It is critical to the protection of property,
    the preservation of our history, the respect of historic Indian sites,
    and the safety of our citizens and their homes and business.
        We respectfully urge the Energy and Water Development Subcommittee
    for Appropriations to allocate the $1.8 million needed to begin
    construction of the Stage 3 flood wall in the fiscal year 2005
    Appropriations Bill. If you have questions or would like additional
    information regarding this project, please call on us.
                                     ______

           Prepared Statement of the City of Granite Falls, Minnesota

        Chairman Domenici and members of the Appropriations Subcommittee, I
    appreciate the opportunity to submit this testimony on behalf of the
    City Council and the citizens of Granite Falls, Minnesota. We are
    requesting $1.2 million in Federal funds for the development of the
    Detailed Design Report (DDR) plans and specifications, and critical
    preventative measures to protect the city from future flooding of the
    Minnesota River.
        This request is based on the ``Supplement to the Locally Preferred
    Plan for Flood Damage Reduction, January, 2002'' prepared on behalf of
    FEMA, the City, and information from the U.S. Army Corps of Engineers,
    Section 205 study not yet completed. This project was authorized in the
    Transportation and Infrastructure Committee bill, the Water Resources
    Development Act of 2003. The project has now been authorized for $8
    million in Federal funds in H. Res. 2557, Sec. 3061 as a Section 205
    project, in accordance with the Water Resources Development Act of 1986
    (100 Stat. 4184) as needed.
        The problems confronting the City require a carefully planned
    project. The geological features of the terrain discourages the
    construction of diversion channels due to the granite subsurface of the
    soil. Homes and businesses are being relocated using FEMA, State and
    local resources. The existing uncertified and inadequate levee system
    will be improved to provide adequate protection for the communities,
    and the Municipal Power Plant adjacent to the Minnesota River will
    require relocation.

                           THE CITY OF GRANITE FALLS

        The City of Granite Falls is a community of slightly more than
    3,000 citizens, is located in West Central Minnesota about 122 miles
    west of St. Paul. The Minnesota River runs through the northern and
    eastern portions of the City, and is directly adjacent to the downtown
    area. The majority of the City's residential and commercial properties
    are located on the west bank of the Minnesota River in Yellow Medicine
    County. Low-lying residential areas on the north end of the City,
    structures in the commercial business district along the river, and
    residences located next to the secondary river channels in the
    southwest part of the City are especially vulnerable to flooding.

                                RECENT DISASTERS

        While the river represents a valuable resource to the community, it
    has taken a severe toll on residents and businesses during Spring
    floods. The 1997 floods which devastated much of Western Minnesota and
    North Dakota did not spare Granite Falls. The Flood drove many from
    their homes and their downtown businesses, and resulted in millions of
    dollars in damages. Virtually every downtown business was flooded. More
    than $850,000 was spent by the city, and another $175,000 by the Corps
    of Engineers to fight the flood.
        Hundreds of volunteers from Granite Falls area and the State
    prevented further devastation as the Minnesota River has a peak
    discharge of 53,000 cubic feet per second. That's more than 3 million
    cubic feet of flood water per minute. The rushing water was within
    inches of the top of the temporary dike as volunteers continued to
    stack sand bags. If the water had topped the dike, literally dozens of
    the workers' lives would have been severely endangered. Total costs and
    damages exceeded $5 million.
        In July of 2000, the city was hit by an F-4 tornado. An F-5 tornado
    is the top of the scale. One person was killed, 14 badly injured, and
    325 homes were either totally destroyed or severely damaged. The
    tornado caused more than $26 million in damages in the community.
        The following year, 2001, the City was again hit by another record
    flood event. Though not as severe as the 1997 flooding, damage was
    reduced significantly by careful City planning and preparation with
    Federal and State governmental units. Even so, the costs to fight the
    flood exceeded half a million dollars for the City and the Corps of
    Engineers, and much of the downtown commercial area was evacuated.
        Other significant floods have occurred in 1951, 1952, 1965, 1969,
    and 1994. While floods have cost the community millions of dollars in
    extensive property damage and economic hardship, the primary concern is
    the significant risk to the hundreds of volunteers whose work is
    required building levees during flood events to protect the homes and
    business.
        Preparation for fighting disaster costs have reached nearly $4
    million in the past 4 years. That amounts to thousands of dollars to
    every property owner in the City. Other significant flood events have
    occurred in 1951, 1962, 1965, 1969, and 1994.
        While floods have cost the community millions of dollars in
    extensive property damage and economic hardship, the primary concern is
    the significant risk to the hundreds of volunteers whose work is
    required building levees during flood events to protect the homes and
    businesses. Total flood damages and costs are more than $30 million
    from 1997 through 2001.
        Granite Falls has received financial support from FEMA, the Corps
    of Engineers, and the State of Minnesota to clean up after the
    disasters and to repair damages. Funds have been received to repair
    streets, housing rehabilitation and construction, economic development,
    and special services. All the help has been directed toward restoration
    after the floods and tornado event, but no funds have been available to
    prevent future flooding.

                      CORPS OF ENGINEERS SECTION 205 STUDY

        Following the 1997 flood, the Corps of Engineers initiated a
    Section 205 study in May, 1998, to evaluate the extent of the flooding
    problem in Granite Falls, and to explore possible remedies. The study
    is essentially complete, but has not been released to date. The major
    problems of cost and funding level addressed in the 205 study have been
    resolved in the project authorization in H. Res. 2557.

                               STUDIES CONDUCTED

        The City, through a FEMA project grant under the direction of the
    Minnesota Department of Natural Resources MN/DNR, conducted a study of
    the flood problems confronting Granite Falls. The overall objective of
    the study was to evaluate hazards for the Granite Falls area, and to
    develop preliminary evaluation and prioritization for those hazards.
        The Report states, ``Because of the tremendous impacts of flooding
    on the Granite Falls community, and the relative frequency of flooding
    events, the report begins with an all hazard evaluation, but then
    focuses on flood hazards, and presents mitigation options and
    preliminary costs for implementing those options.''
        The Report evaluated each area of the community, determined the
    risk factors, and suggested options available to protect the area
    against flooding. In the conclusion of the Report, it was recommended
    the most economical solution to provide the necessary protection was
    buy out many of the properties and move them to a location outside the
    flood plain. This work is currently in progress.
        The elevation of other areas would have to be raised, pump stations
    would need to be installed, some levees constructed, and the sanitary
    lift station and the water plant would need to be relocated. It is
    estimated the cost of this work would be approximately $12 million.
        The Supplement to the Locally Preferred Plan (SLPP) provides a
    level of flood protection for flood events up to the 500-year event.
    The 1998 Corps of Engineers 205 study indicates the 500-year level of
    protection is about the same as the 100-year flood plus 3 feet of
    freeboard. This level of protection is necessary as the result of a
    reevaluation by FEMA which indicated that the current level of
    protection for Granite Falls was violated in both the 1997 and the 2001
    flood events.
        The SLPP identifies seven areas severely impacted by flooding,
    suggests the remedial action needed, and the cost of such work.
    Relocation costs are not included in this report. The City believes
    that with the financial assistance received from FEMA to relocate many
    of the structures in low lying areas, the remaining project needs are
    appropriately addressed under flood protection programs administered by
    the Corps of Engineers.
        The Locally Preferred Plan includes the removal of about 41
    structures in the lower areas of the City, including several in the
    commercial district. FEMA has provided the funds for 25 structure
    moves, leaving only 15 additional structures to be moved as a part of
    the project.

                             APPROPRIATION REQUEST

        The city requests $1.2 million from the committee for the purpose
    of the development of the Detailed Design Report, preparation of plans
    and specifications, and the placement of pumps stations at two of three
    critical locations in the city. These pump stations will provide some
    immediate flood relief during an emergency, but are also needed
    permanently as a part of the total project.
        Thank you for your consideration of this request. And may I also
    take this opportunity to express our appreciation to the St. Paul
    District Office of the Army Corps of Engineers for their help and
    assistance during the crisis we have experienced in recent years. We
    will be happy to respond to any questions you may have regarding the
    needs of the city, and the flood protection project.
                                     ______

             Prepared Statement of the City of Crookston, Minnesota

        Chairman and members of the Appropriations Subcommittee, I
    appreciate the opportunity to submit this testimony on behalf of the
    City Council and the citizens of Crookston, Minnesota. We are
    requesting $1.2 million in Federal funds for the development of the
    supplement to the environmental assessment study, to prepare the
    design, and to initiate construction work in the fiscal year 2004
    Appropriations Bill. The purpose of this request is to provide flood
    protection for the Chase/Loring and Sampson neighborhoods in the City.
    This request is based on the Feasibility Report Supplement: Local Flood
    Control completed on April 30, 2002.
        First, we would like to thank you and the members of this committee
    for the $2.202 million appropriation you provided for the Crookston
    Flood Control Project in the fiscal year 2003 Appropriation Conference
    Report. These funds made it possible to complete the work on Stage 2 of
    the project.
        Stages 1 and 2 of the project has provided 100-year flood
    protection for Thorndale, Woods, and Downtown/Riverside neighborhoods.
    This is a tremendous step forward, and we are very appreciative of the
    support given us by this committee and the Army Corps of Engineers.
    However, the project still leaves two of our most vulnerable
    neighborhoods, Sampson and Chase/Loring, fully susceptible to future
    flooding when the Red Lake River again leaves its banks.
        The City of Crookston is located in the Red River Valley of Western
    Minnesota, in Polk County, 25 miles East of Grand Forks, North Dakota.
    The Red Lake River winds its way through the City from its source at
    the Upper and Lower Red Lakes, and flows into the Red River at Grand
    Forks. The early settlers in Crookston built their homes in the crooks
    of the river to be close to the water supply vital to their existence.
    As a result, five neighborhoods were established that became the City
    of Crookston. The population of the City has remained constant over the
    past decade at about 8,200 citizens.
        The community was settled in 1872, when the first railroad route
    was announced crossing the Red Lake River where Crookston now stands,
    and later, extending to Canada. The economy of Crookston is based
    primarily on agriculture. It is the home of the University of Minnesota
    Crookston, a technology oriented school with a full academic program
    enrolling approximately 2,500 students.
        The City of Crookston has two recent major flood events--1997 and
    again in 2001. The flood of record was at a stage of 27.3 feet in 1969,
    and the 1997 flood exceeded it with a stage of 28.6. The 2001 flood on
    the Red Lake River at Crookston was 26.38 feet or 11 feet above flood
    stage. For both flood events, the city was able with the help of the
    Corps of Engineers and the State of Minnesota to take extreme emergency
    actions to prevent catastrophic losses throughout the community.
        The 1997 flood came within inches of inundating the community with
    huge potential for loss of life. This flood further emphasized the need
    for a long-term flood damage reduction project to protect the citizens
    and the community.
        These floods also demonstrated that flood damage reduction must be
    at a 100-year level, consistent with the authorized project, and needs
    to be looked at from a total community perspective. ``Piecemealing'' a
    project, by protecting only certain areas, will not eliminate the need
    for significant federally subsidized flood emergency reimbursements in
    the future. Not including State and local expenditures, use of
    resources, and purchase of materials, the Federal costs alone incurred
    in 1997, totaled nearly $1.5 million. State and local costs were
    estimated at a similar amount, whereby, the 1997 flood costs totaled
    nearly $3 million.
        Both floods contributed to the progressive deterioration of the
    emergency levee system. The reliability of this system is now much
    worse than what was reported in the pre-flood 1997 feasibility report.
    The recent flood and the documented and visual impact of the 1997 flood
    at Grand Forks, ND, and East Grand Forks, MN demonstrated that failure
    of the emergency system would be catastrophic. Not only would many
    structures incur irreparable damage, the social and economic impact
    from the loss of property value/tax base and cohesion would devastate
    the community, potentially threatening the long-term viability and
    survival of Crookston.
        Due to recent flood events, the views of the City and its
    residents, the emphasis of the State of Minnesota Department of Natural
    Resources through the flood mitigation program, an efforts of the
    Minnesota Flood Relief Task Force, there is a renewed commitment to
    provide long-term flood damage reduction for the three remaining
    neighborhoods.
        The reason that these areas were not included in the 1997
    feasibility study was because these areas were incorrectly considered
    independent, and concern that the overall benefits may not cover the
    costs to provide protection. The primary reason was a low cost-to-
    benefit ratio was real estate costs. There were too many structures
    that needed to be relocated or purchased.
        Reassessing earlier alternative flood damage reduction plans, there
    are further justifications for protecting a larger portion of
    Crookston, and ways to reduce costs, while continuing to maintain the
    necessary degree of flood damage reduction. Likewise, the benefits in
    some of these areas increased, based on new benefit categories
    identified in the Grand Forks, ND, and East Grand Forks, MN December
    1997 feasibility study. The State of Minnesota has already committed to
    full protection for all of the six neighborhoods in the City of
    Crookston.
        The cost/benefit ratio for the three stages of the project is 1.03.
    Evaluation by the Corps of Engineers determined a cost benefit ratio
    for the Chase/Loring and Sampson authorized in the House WRDA at 1.25.
    Continuing assessment of the project plans will increase the project
    benefits even further. The City believes that the project should not be
    assessed incrementally, but as a total project as were other
    communities severely affected by the 1997 and 2001 floods in the Red
    River Valley.
        All of the property owners in Crookston have assessed themselves
    flood protection fees for the past 11 years to provide the local funds
    needed to make their families safe during flood events. Without
    providing the protection needed for the Sampson and Chase/Loring
    Neighborhoods, the work is only half done. Since all of the citizens
    have been paying these assessments, it is not right that the Crookston
    Flood Control Project would protect only half the community.

                          CONDITIONS CHANGE SINCE 1997

        Since the completion of the feasibility report in early 1997,
    events have greatly impacted flood damage reduction for the city. The
    floods of 1997 and 2001 have been a wake up call regarding the
    vulnerability of the City and its residents. There is no way that the
    1997 feasibility study could have predicted these events. They
    demonstrated the extent of the deterioration of the existing emergency
    system, and new thinking on how to more cost effectively reduce flood
    damages in unprotected areas. The replacement of the city dam is now
    underway.
        The revised engineering assessment of the trunk sanitary sewer
    system located in the Sampson addition, and the electrical distribution
    substation located in the Chase/Loring addition. Although, not a
    change, the revised engineering assessment of the sanitary sewer system
    found conditions that were slightly different from the analysis in the
    1997 feasibility report. Several key essential features of the sanitary
    sewer system for the entire community are located in the Sampson
    neighborhood. Losses to these features would certainly cause the system
    to fail, including the system located in areas protected by the Federal
    project.
        Similarly, the electrical distribution substation located in the
    Chase/Loring neighborhood services those areas protected by Stages 1
    and 2 of the project. The loss of the substation would at least affect
    most of the neighborhoods, including those protected by the original
    authorized project. It would at least temporarily result in a loss of
    power, and the loss of critical flood damage reduction measures (i.e.
    pump stations) of the permanent project and to the sanitary sewer
    system.

                        FLOODING EVENTS AND THEIR CAUSES

        Floods occurring over the past 40 years have created significant
    damage to homes and businesses, and have resulted in the loss of lives
    as well. They include the flood events of 1965, 1966, 1967, 1969, 1978,
    1979, 1996, and 1997. Floods have been documented at Crookston as early
    as 1887. The 1950 flood, though not the maximum flood of record,
    created the most damage to the City and resulted in the deaths of two
    citizens from the community.
        Between 1950 and 1965, clay levees were constructed through local
    efforts in an attempt to ameliorate the damages from the flooding of
    the Red Lake River. The floods of 1965, however, demonstrated these
    efforts were not adequate to hold back the torrents of water during
    significant flood events. While certain areas of the City received some
    flood protection, severe damages occurred in the South Main Street
    area. This section of the City has since been totally cleared.
        The 1969 flood established new high water marks, and again, it was
    necessary to carry out extreme emergency measures. These efforts were
    successful in protecting the community from severe damages. Recognizing
    the need for more protection, another locally financed project was
    initiated, extending, enlarging, and raising the height of the levee
    wall system.
        The flood of 1997, was the ``grandaddy'' of all floods. It
    established the highest water mark in recorded history when the Red
    Lake River crested at 28.6 feet above flood stage, the equivalent of a
    three-story building. It is described as a 500-year flood event.
        Only the careful planning and preparation by City officials in
    cooperation with the Corps of Engineers, the State of Minnesota, FEMA,
    the National Guard, and many private citizens, were damages reduced,
    and fortunately, no lives were lost. Prior to the crest of the flood,
    the City of Crookston completed the work of adding two feet of clay and
    sandbags to the entire levee system throughout the town. The Corps of
    Engineers constructed clay dikes as a second line of defense,
    sacrificing a few homes for the good of many others. As a precautionary
    measure, 400 residents evacuated from their homes during the height of
    the flood. These efforts spared Crookston from the devastation
    experienced by neighboring towns, allowing the City to provide for
    8,000 persons evacuated from their homes in nearby communities, But
    this disaster and the potential devastation that such floods can bring,
    emphasized the critical importance of replacing the temporary earthen
    and clay dikes with a well-planned, permanent flood control system.
        There are several causative factors that have created flood
    conditions for the Red River Valley and the City of Crookston. The Red
    River of the North did not carve out the valley, it merely meanders
    back and forth through the lowest parts of the floor of the ancient
    Glacial Lake Agassiz.
        With no definitive flood plain to channel flood torrents, the slow-
    moving flood waters quickly overrun the shallow river banks and spread
    out over the flat floor of the former glacial lake bed. The small
    river's gradient is on one-half foot per mile, as opposed to areas in
    Southwestern Minnesota where in one instance, the gradient establishes
    a 19 foot drop in one mile. Both extremes have created problems.
        The Red Lake River flows into Crookston from the Northeast, winds
    it way through the City, and flows out of the City, turning in a
    Northwesterly direction toward its confluence with the Red River at
    Grand Forks, North Dakota. The merged rivers then flow due North into
    Winnipeg, Manitoba, Canada. As the snow melts in the Southern portion
    of the valley, ice often remains in the channel to the North. Ice and
    other debris flowing North pile up against the river ice creating ice
    dams. These barriers back up the water and increase the flood crest
    upstream.
        The extremely level terrain also creates a phenomenon during the
    Spring thaw which is called ``overland flooding.'' As the snow melts,
    the huge volume of water can overwhelm the network of shallow ditches
    and creeks. Unable to enter the choked stream channels, the water
    travels overland until it meets small terrain barriers such as railroad
    beds and road grades, creating huge bodies of water.
        In addition to the topography of the area, a combination of factors
    such as agricultural drainage, the loss of wetlands, the Federal
    governments work in the Red River Basin, and the construction of the
    county ditch systems, all these factors have contributed to the
    vulnerability of the area.

                       KEY POINTS OF PROJECT DEVELOPMENT

        1992--Feasibility Cost Share Agreement signed.
        1997--Feasibility Report and Environmental Assessment completed.
        1997--National Economic Development optimizational analysis waived
    to provide the entire project with 100-year flood protection.
        1998--Preconstruction engineering and design efforts begun.
        1999--Project authorized for construction in the Water Resource
    Development Act of 1999.
        2000--Plans, specifications, and design work for Stage 1 completed.
        2000--Congress appropriates $1 million for Stage 1 construction.
        2000--Plans and Specifications for Stage 2 commenced.
        2001--Corps of Engineers total cost estimates for the project to be
    $10.8 million.
        2001--Congress provides $2 million for the construction of Stage 2
    of the Crookston Flood Control Project in the fiscal year 2002 Energy
    and Water Appropriations Bill.
        2002--Bids were accepted and construction contract awarded for
    Stage 2 work.
        2002--Congress provides $3.202 million to complete Stage 2
    construction work.
        2002--The Feasibility Report Supplement was completed.
        2003--Construction work continues on Stage 2.
        2003--House Transportation and Infrastructure Committee
    reauthorizes Crookston Flood Control Project to include Sampson and
    Chase/Loring neighborhoods.
        2003--Request made to Congress for $1.2 million to provide flood
    protection for the Sampson and Chase/Loring neighborhoods.
        2003--Senate delays passage of the Water Resources Development Act
    until 2004.
        2004--Senate Environment and Public Works schedule WRDA mark-up for
    Spring, 2004.

                    NON-FEDERAL CONTRIBUTIONS TO THE PROJECT

        The citizens of Crookston have demonstrated their commitment to the
    project each year since 1997. Every year for since 1997, they have
    voted to assess themselves a flood control project fee, over and above
    their property taxes. This action by the community has resulted in
    raising about $1.4 million up to the present time. One third of these
    local funds were used to meet part of the 50 percent match for the $1.2
    million feasibility study, and the remainder will be used as a part of
    the non-Federal match for the construction Stages of the flood control
    project.
        The State of Minnesota has also made a significant contribution to
    the project. They have appropriated $3.3 million for the dual purpose
    of providing funds to match the Federal contribution, and to buy out
    homes that have been lost in the construction of the flood control
    measures. Nineteen families were required to lose their homes to the
    project, including one farm. The State funds were used both for the
    purchase of the homesteads, and the relocation of the affected
    families.
        For these reasons, we respectfully request this subcommittee to
    appropriate $1.2 million of Federal funds in the fiscal year 2004
    Appropriations Act to be used for the environmental assessment,
    preconstruction costs, and immediate work on the protection of the
    electrical substation and the pumping stations to avoid severe
    personal, ecological and environmental disasters in the Community. The
    committee's favorable response to this request will prevent any delays
    affecting the completion of the project, and avoid cost overruns that
    inevitably occur when construction is delayed.
        In closing, I would like to say there is nothing more important to
    me as Mayor, and to each Member of the Crookston City Council, than the
    safety of our citizens, and the protection of their homes and property.
    We can not give them this assurance until we have completed this flood
    control project. May I also say that our association with the St. Paul
    District of the Army Corps of Engineers throughout this process has
    been outstanding. They are an extraordinary organization, working on
    the scene during flood conditions, and assisting us as we attempt to
    resolve this problem that threatens our citizens. We could not ask for
    a better partner in this project.
        Thank you for the opportunity to bring this important matter to
    your attention through this statement. I will be delighted to respond
    to any questions you may have about the project.
                                     ______

      Prepared Statement of the Southeastern Federal Power Customers, Inc.

        Mr. Chairman and members of the subcommittee, on behalf of the
    Southeastern Federal Power Customers, Inc. (``SeFPC''), I am pleased to
    provide testimony in reference to the administration's fiscal year 2005
    budget request for the Army Corps of Engineers (``Corps''). My
    testimony will focus primarily on the budget request for the Corps'
    South Atlantic Division (``SAD'') and the Nashville District of the
    Great Lakes and Ohio River Division (``LRD''). In addition, the SeFPC
    customers would like to express our interests related to proposed
    legislation that would authorize direct funding for Corps' Operations
    and Maintenance (``O&M'') activities at Federal hydropower projects.
        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 of the 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, and 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, who greatly rely on
    this power.

                       DRASTIC CUTS IN THE CORPS' BUDGET

        The SeFPC membership is dedicated to providing reliable and
    economic power for its consumers. We therefore are concerned that the
    President has proposed a 13 percent reduction in the Corps' budget for
    fiscal year 2005. With these reductions in funding, the Corps will not
    be able to undertake the O&M and Renewals and 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
    infrastructure of hydropower projects whose output is marketed by SEPA.
    The proposed reductions will particularly 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.
    We remain especially troubled by the badly needed rehabilitation of
    generating facilities in the Cumberland River System operated and
    maintained by LRD, as well as other Federal hydropower generating
    facilities throughout the Southeast. The age of many of the
    hydroelectric generating facilities in SEPA's service area is nearing
    the 50-year mark, when major rehabilitations are critical if the
    projects are to continue. Regrettably, the fiscal year 2005 budget
    request does not place a high priority on these critical needs.
        When a generating unit becomes inoperable, SEPA may be forced to
    pursue the purchase of expensive replacement power; this could result
    in a reduction of energy and capacity, forcing the SeFPC members to
    purchase expensive capacity elsewhere. This has occurred so frequently
    in the last several years that the new SEPA rate design now includes a
    charge by customers to cover this replacement power. Such a result is
    inappropriate because preference customers already have contributed to
    the Corps' O&M and R&R expenses, in essence double-charging the
    customers and their consumers. In fact, revenue from the rates paid by
    the preference customers has enabled SEPA to repay on time the original
    investment incurred to construct these projects. However, when
    generating units deteriorate, reliability decreases, and O&M expenses
    greatly increase.
        We are working on a long-term customer funding proposal that would
    facilitate this badly needed R&R work at hydroelectric facilities in
    the LRD. We anticipate, however, that this long-term initiative will
    not be finalized for a number of years. In the meantime, some of these
    facilities will not be able to continue generating 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 U.S. 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
    hydropower share of joint costs of dam activities that also benefit
    recreation, navigation and flood control. To date, preference customers
    have paid in SEPA rates over $114 million in excess of amounts spent by
    the Corps on O&M and R&R.
        The administration's fiscal year 2005 budget request proposes to
    alter this funding arrangement. This year's budget includes a provision
    from the President's fiscal year 2003 and fiscal year 2004 requests
    calling for direct funding of routine O&M for hydropower facilities
    marketed by SEPA and the other Federal PMAs. While we support the
    concept of direct funding for O&M expenses, we want to ensure that any
    direct funding legislation would include safeguards to prevent the
    Corps from utilizing an alternative source of funding that could lead
    to significant rate increases. Specifically, we believe the PMAs must
    have the final say in determining the amount of funding available for
    the Corps each year. In this regard, funds provided for Corps' O&M
    should under this new mechanism have a neutral effect on rate levels.
    Also, the Corps and the PMAs must consult with the PMA customers
    regarding amounts the PMAs will collect for O&M activities. Finally,
    the Corps must be prohibited statutorily from reprogramming funds
    provided by the PMAs under this direct funding mechanism.
        In advancing the direct funding proposal, the administration has
    reduced funds in the Corps' O&M budget by $150 million. Therefore, in
    the event the proposed legislation is not enacted, this funding should
    be restored to the Corps' O&M budget.
        Thank you in advance for your consideration of our comments on the
    administration's fiscal year 2005 budget request for the Corps.
                                     ______

              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 $10 million in the Army
    Corps of Engineers budget for the Rio de Flag flood control project in
    fiscal year 2005. 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 $3.5 million to continue 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 2005.
        Like many other projects under the Army Corps' jurisdiction, Rio de
    Flag received no funding in the president's fiscal year 2005 budget,
    although the Corps has expressed capability of $10 million to continue
    construction on the project. We are hopeful that the subcommittee will
    fund the Rio de Flag project at $10 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 devastated the West
    during 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. This is
    why the City believes it is important to ensure that this project
    remains on schedule and that the Corps is able to maximize its
    capability of $10 million in fiscal year 2005 for construction of this
    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 consider this
    advice and also place the project high on its priority list and fully
    fund the project at $10 million for fiscal year 2005.
        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 cost is estimated to be $30,000,000 in and
    above the reconnaissance study or the feasibility study. The Non-
    Federal share is currently $10,500,000 and the Federal share is
    currently $19,500,000. Final project costs must be adjusted based on
    Value Engineering and final design features. It is important to note
    the City of Flagstaff has already committed more than $10,500,000 to
    this project, and an additional $2,000,000 in excess of its cost share
    agreement. This clearly demonstrates the City's commitment to
    completing this important project.
        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 2004. 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
    construction will commence in 2004. Phase II of the project is
    scheduled to commence in April of 2005.
        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 $19 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 $10 million for this project in the fiscal year 2005 Energy
    and Water Development Appropriations bill. Thank you in advance for
    your consideration.
                                     ______

            Prepared Statement of the Fifth Louisiana Levee District

        In order to continue the essential level of construction on the
    Mississippi River and Tributaries Project (MR&T), and to provide proper
    maintenance of the completed portions, it is crucial that the $450
    million, as requested by the Mississippi Valley Flood Control
    Association for fiscal year 2005 (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.
        We urge Congress to increase the $4.21 billion contained in the
    President's Budget Request for the entire Corps of Engineers' Works
    Program. At least $6.00 billion is required in order that the Corps not
    halt or delay contracts, shut down facilities, or otherwise disrupt the
    economic well-being of this Nation. Failure to provide this much needed
    additional funding will have a serious detrimental effect on the
    economic conditions in our already depressed area.
        We continue to emphasize our objection to dividing the U.S. Army
    Corps of Engineers into separate, smaller entities and transferring to
    the administration of other established departments. 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.
        We urge your support for protection of the structure of the U.S.
    Army Corps of Engineers as it currently exists.
        We respectfully request that funds be increased for the Corps of
    Engineers' Works Program and $450 million be appropriated for the MR&T
    Project for the coming fiscal year.

      MISSISSIPPI VALLEY FLOOD CONTROL ASSOCIATION--FISCAL YEAR 2005 CIVIL
       WORKS REQUESTED BUDGET--MISSISSIPPI RIVER AND TRIBUTARIES PROJECT--
                                   MAINTENANCE
    ------------------------------------------------------------------------
                                                President's
                     Project                      Budget       MVFCA Request
    ------------------------------------------------------------------------
    Wappapello Lake, MO.....................      $4,046,000      $6,352,000
    Mississippi River Levees................       7,665,000      14,915,000
    Dredging................................      20,515,000      20,515,000
    Revetment and Dikes.....................      48,760,000      48,760,000
    Memphis Harbor, TN......................       1,205,000       2,010,000
    Helena Harbor, TN.......................         385,000         510,000
    Greenville Harbor, MS...................          29,000         412,000
    Vicksburg Harbor, MS....................          32,000         345,000
    St. Francis River & Tribs, AR...........       6,080,000       8,805,000
    White River Backwater, AR...............       1,316,000       2,260,000
    North Bank, Arkansas River, AR..........         146,000         146,000
    South Bank, Arkansas River, AR..........         122,000         122,000
    Boeuf & Tensas Rivers, LA...............       2,160,000       2,160,000
    Red River Backwater, LA.................       3,083,000       7,390,000
    Yazoo Basin, Sardis Lake, MS............       7,046,000      19,322,000
    Yazoo Basin, Arkabutla Lake, MS.........       5,710,000      12,900,000
    Yazoo Basin, Enid Lake, MS..............       4,954,000      13,679,000
    Yazoo Basin, Grenada Lake, MS...........       5,553,000      10,101,000
    Yazoo Basin, Greenwood, MS..............         585,000       2,035,000
    Yazoo Basin, Yazoo City, MS.............         729,000         729,000
    Yazoo Basin, Main Stem, MS..............       1,013,000       3,966,000
    Yazoo Basin, Tributaries, MS............         923,000         923,000
    Yazoo Basin, Whittington Aux Channel, MS         400,000         400,000
    Yazoo Basin, Big Sunflower, MS..........         139,000       2,139,000
    Yazoo Basin, Yazoo Backwater, MS........         440,000         926,000
    Lower Red River, South Bank, LA.........         105,000         105,000
    Bonnet Carre, LA........................       2,310,000       3,100,000
    Old River, LA...........................       7,350,000      29,900,000
    Atchafalaya Basin, LA...................      13,000,000      25,000,000
    Atchafalaya Basin Floodway, LA..........       2,775,000       4,200,000
    Baton Rouge Harbor Devil's Swamp, LA....          14,000         300,000
    Miss Delta Region, LA...................         588,000         588,000
    Bayou Cocodrie & Tribs, LA..............          65,000          65,000
    Inspection of Completed Works...........       1,500,000       1,700,000
    Mapping.................................       1,112,000       1,325,000
                                             -------------------------------
          Total MR&T Maintenance............     151,855,000     248,105,000
    ------------------------------------------------------------------------

      MISSISSIPPI VALLEY FLOOD CONTROL ASSOCIATION--FISCAL YEAR 2005 CIVIL
    WORKS REQUESTED BUDGET--MISSISSIPPI RIVER AND TRIBUTARIES APPROPRIATIONS
    ------------------------------------------------------------------------
                                                President's
                Project and State                 Budget       MVFCA Request
    ------------------------------------------------------------------------
    Surveys, Continuation of Planning and
     Engineering & Advance Engineering &
     Design:
        Memphis Harbor, TN..................  ..............  ..............
        Germantown, TN......................         $27,000         $27,000
        Millington, TN......................         100,000         100,000
        Fletcher Creek, TN..................          93,000          93,000
        Memphis Metro Storm Water             ..............         100,000
         Management, TN.....................
        Bayou Meto, AR......................  ..............       2,447,000
        Germantown, TN......................  ..............         200,000
        Southeast Arkansas..................  ..............         600,000
        Coldwater Basin Below Arkabutla              203,000         750,000
         Lake, MS...........................
        Quiver River, MS....................  ..............         100,000
        Spring Bayou, LA....................         500,000         600,000
        Point Coupee to St. Mary Parish, LA.  ..............         100,000
        Atchafalaya Basin Floodway System,           100,000         100,000
         LA*................................
        Alexandria, LA to the Gulf of Mexico         435,000         435,000
        Morganza, LA to the Gulf of Mexico..       1,500,000      10,000,000
        Donaldsonville, LA to the Gulf of            800,000       1,200,000
         Mexico.............................
        Tensas River, LA....................  ..............         500,000
        Donaldsonville Port Development, LA.  ..............         100,000
        Collection & Study of Basic Data....         700,000         700,000
                                             -------------------------------
          Subtotal, Surveys, Continuation of       4,458,000      18,152,000
           Planning & Engineering & Advance
           Engineering & Design.............
                                             ===============================
    Construction:
        St. John's Bayou-New Madrid                8,300,000       8,300,000
         Floodway, MO.......................
        Eight Mile Creek, AR................       1,357,000       3,293,000
        Helena & Vicinity, AR...............  ..............  ..............
        Grand Prairie Region, AR............  ..............      20,000,000
        Bayou Meto, AR......................  ..............      18,000,000
        West Tennessee Tributaries, TN......  ..............         700,000
        Nonconnah Creek, TN.................       2,153,000       2,753,000
        Wolf River, Memphis, TN.............  ..............       2,400,000
        August to Clarendon Levee, Lower      ..............       2,000,000
         White River, AR....................
        St. Francis Basin, MO & AR..........       3,000,000       9,500,000
        Yazoo Basin, MS.....................       5,850,000      62,775,000
        Atchafalaya Basin, LA...............      22,495,000      32,500,000
        Atchafalaya Basin Floodway, LA......       7,200,000      10,000,000
        MS Delta Region, LA.................       1,800,000       4,700,000
        Horn Lake Creek, MS.................  ..............         203,000
        MS & LA Estaurine Area, MS & LA.....  ..............          50,000
        Channel Improvements, IL, KY, MO,         36,882,000      44,082,000
         AR, TN, MS & LA....................
        Mississippi River Levees, IL, KY,         38,960,000      54,800,000
         MO, AR, TN, MS & LA................
                                             -------------------------------
          Subtotal, Construction............     127,997,000     276,056,000
          Subtotal, Maintenance.............     151,855,000     248,105,000
                                             -------------------------------
          Subtotal, Mississippi River &          284,310,000     542,313,000
           Tributaries......................
          Less Reduction for Savings &           -14,310,000      92,313,000
           Slippage.........................
                                             -------------------------------
          Grand Total, Mississippi River &       270,000,000     450,000,000
           Tributaries......................
    ------------------------------------------------------------------------

                                     ______

     Prepared Statement of the Louisiana Department of Transportation and
                                  Development

        On behalf of the State of Louisiana and its twenty levee boards, we
    present recommendations for fiscal year 2005 appropriations for 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. When combined with the other interstate rivers
    flowing through the State, almost 50 percent of the contiguous land
    mass of this Nation drains through Louisiana. This same river drainage
    system forms the backbone of the federally constructed Inland Waterway
    System that provides our heartland cost effective access to the global
    marketplace via the 230 mile deepwater channel of the lower Mississippi
    River from Baton Rouge to the Gulf. This strategic gateway to
    international markets is the largest port complex in the world ranking
    Louisiana first in the Nation in volume of waterborne traffic. We are
    distressed that the Administration's budget proposals in recent years
    indicate a lack of concern for the preservation and efficient operation
    of this system. The Inland Waterway System--the whole system--allowed
    industrial facilities scattered throughout the central portion of the
    Nation to obtain raw materials and fuel from distant locations and to
    reach worldwide markets. These industries, and most of the agricultural
    industries in mid-America, are heavily dependent on the federally
    maintained navigable waterways to remain globally competitive in
    transporting their products. To consider maintenance of only the main-
    stem portion of the waterway system at the expense of the connector
    branches will wreak havoc on the economies of all the communities
    located on these so-called low-use branch waterways.
        A comprehensive and extensive flood control system is required to
    protect the landside facilities and related industries supporting that
    waterborne commerce. In Louisiana there are almost 3,000 miles of
    levees (1,500 in the MR&T system) constructed jointly by Federal, State
    and local entities that provide protection from riverine and tidal
    flooding. 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. 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. But these same levees
    and channel improvements that benefit the entire Nation have been
    blamed for the rapid deterioration of our coastal wetlands. The loss of
    these wetlands is adversely impacting both the area's natural resources
    and the effectiveness of our hurricane protection system. These
    wetlands are not Louisiana's alone; they constitute 40 percent of the
    Nation's wetlands and their restoration must be considered a national
    priority.
        The Mississippi River and Tributaries Project (MR&T) has been
    underway since 1928 and isn't scheduled for completion until beyond
    2031. The Administration's proposed budget of $270 Million for fiscal
    year 2005 is totally unacceptable. We strongly support the Mississippi
    Valley Flood Control Association's request for $450 Million for the
    MR&T Project. We urge support of this requested level of funding.
        In making the following funding recommendations for Louisiana
    projects 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 continue to fund our requests. It is appropriate that
    the Federal Government has committed to providing combined flood
    control and navigation measures that benefit the economy of both
    Louisiana and the rest of the Nation. We believe these types of water
    resources projects are the most cost effective projects in the Federal
    budget, having to meet stringent economic criteria not required by
    other programs.
        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 for fiscal year 2005.
    We solicit your favorable consideration and request this statement be
    included in the formal hearing record.
        The State of Louisiana requests funding for the following projects
    that differs from what is in the fiscal year 2005 Administration Budget
    or is a project 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 & WATER RESOURCES
       PROJECTS SUMMARY OF RECOMMENDED APPROPRIATIONS FISCAL YEAR 2005 FOR
                                    LOUSIANA
    ------------------------------------------------------------------------
                                              Administrative     Louisiana
                    Louisiana                     Budget          Request
    ------------------------------------------------------------------------
    GENERAL INVESTIGATIONS:
        STUDIES:
            Amite River-Ecosystem                   $250,000        $250,000
             Restoration, LA................
            Amite River & Tributaries, LA--          100,000       1,000,000
             Bayou Manchac..................
            Atchafalaya River, Bayous Chene,         350,000         800,000
             Boeuf & Black, LA..............
            Calcasieu Lock, LA..............         200,000       1,000,000
            Calcasieu River Basin, LA.......         350,000         350,000
            Calcasieu River Pass Ship                 50,000         500,000
             Channel Enlargement, LA........
            Hurricane Protection, LA........  ..............         200,000
            LCA--Ecosystem Restoration, LA..       8,000,000      12,000,000
            Mississippi River Gulf Outlet,           225,000         225,000
             LA.............................
            Plaquemines Parish, LA..........         300,000         500,000
            Port of Iberia, LA..............         350,000         730,000
            St. Bernard Parish Urban Flood           300,000         550,000
             Control, LA....................
            St. Charles Parish Urban Flood           300,000         800,000
             Control, LA....................
            St. John the Baptist Parish, LA.  ..............         600,000
            Southwest, AR (AR, LA)..........  ..............         427,000
            Bossier Parish Levee & FC.......  ..............         385,000
            Cross Lake Water Supply.........  ..............         500,000
            JBJWW...........................  ..............         100,000
            Pearl River, MS & LA............  ..............         100,000
            Pearl River, Bogalusa (MS)......  ..............         100,000
    PED:
        Bayou Sorrel Lock, LA...............         550,000         550,000
        Lafayette Parish, LA................  ..............         327,000
        West Shore--Lake Pontchartrain, LA..  ..............         400,000
        West Baton Rouge Parish, LA.........  ..............         500,000
    NEW STUDIES:
        Bayou Nezpique Watershed, LA........  ..............         100,000
        Millennium Port, LA.................  ..............         100,000
        Port Fourchon Enlargement, LA.......  ..............         100,000
        Port of West St. Mary...............  ..............         100,000
        Southwest La Multi-Purpose Water      ..............         100,000
         Resources, LA......................
        Tangipahoa River Ecosystem            ..............         100,000
         Restoration, LA....................
    CONSTRUCTION GENERAL:
        Comite River, LA....................       1,500,000       9,900,000
        East Baton Rouge Parish, LA.........  ..............       8,000,000
        Grand Isle, LA......................  ..............       1,900,000
        Inner Harbor Navigation Canal Lock,       10,000,000      24,000,000
         LA (IWWTF & CG)....................
        Lake Pontchartrain, LA..............       3,937,000      22,500,000
        Larose to Golden Meadow, LA.........         583,000       1,500,000
        New Orleans to Venice, LA...........       2,965,000       6,600,000
        Southeast, LA.......................      30,000,000      78,000,000
        West Bank and Vicinity, New Orleans,      37,000,000      59,800,000
         LA.................................
        Red River Below Den Dam (AR, LA)....  ..............       7,000,000
        Red River Emergency (AR, LA)........  ..............      10,000,000
        J Bennett Johnston Waterway, MS            4,000,000      20,000,000
         River to Shreveport................
        Ouachita River Levees...............  ..............       3,800,000
    OPERATIONS & MAINTENANCE GENERAL:
        Atchafalaya River, Bayous Chene,          13,813,000      26,600,000
         Boeuf & Black......................
        Barataria Bay Waterway..............  ..............       4,600,000
        Bayou Lacombe.......................  ..............         860,000
        Bayou Lafourche.....................  ..............       1,100,000
        Bayou Segnette......................  ..............       1,400,000
        Bayou Teche.........................  ..............         300,000
        Calcasieu River & Pass..............      13,285,000      21,800,000
        (T) Chefuncte River.................  ..............         800,000
        Freshwater Bayou....................       1,678,000       3,700,000
        Grand Isle, LA & Vicinity...........  ..............         800,000
        Gulf Intracoastal Waterway..........      17,476,000      27,300,000
        Houma Navigation Canal..............       3,070,000       3,300,000
        Mermentau River.....................       4,410,000       6,500,000
        Mississippi River, Baton Rouge to         59,125,000      74,400,000
         the Gulf...........................
        Mississippi River--Gulf Outlet......      13,004,000      45,000,000
        Mississippi River, Outlets at Venice         424,000       3,700,000
        Tangipahoa River....................  ..............         800,000
        Waterway Empire to the Gulf.........  ..............         240,000
        Waterway Intracoastal Waterway to     ..............         200,000
         Bayou Dulace.......................
        Ouachita & Black Rivers (AR, LA)....       1,974,000      18,123,000
        Bayou Bodcau........................         776,000         776,000
        Caddo Lake..........................         182,000         182,000
        Wallace Lake........................         290,000         290,000
        Bayou Pierre........................          28,000          28,000
        J Bennett Johnston Waterway.........      10,600,000      18,098,000
        Lake Providence Harbor..............          38,000         451,000
        Madison Parish Port.................          20,000        120,000
    ------------------------------------------------------------------------
    Note.--The projects listed above are only those in Louisiana (except
      where noted) and directly affect the State.

     MISSISSIPPI RIVER AND TRIBUTARIES SUMMARY OF RECOMMENDED APPROPRIATIONS
                         FISCAL YEAR 2005 FOR 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...........       1,500,000      10,000,000
        Collection & Study Data.............         200,000         200,000
        Collect & Study of Basic Data (AR,           300,000         300,000
         LA, MS)............................
        Spring Bayou Area, LA...............         500,000         600,000
        Tensas River Basin, LA..............               0         500,000
    NEW STUDIES: Atchafalaya Basin Floodway                0         100,000
     System Land Study, LA..................
    FC, MR&T CONSTRUCTION:
        Atchafalaya Basin...................      22,495,000      32,500,000
        Atchafalaya Basin Floodway System...       7,200,000      10,000,000
        Channel Improvement.................      10,105,000      10,105,000
        Mississippi Delta Region (FED)......       1,800,000       4,700,000
        Mississippi River Levees, LA........       2,680,000       2,680,000
        MS--LA Estuarine Area...............               0          50,000
        Mississippi River Levees (AR, LA,         20,850,000      30,850,000
         MS)................................
        Channel Improvement (AR, LA, MS)....      13,582,000      16,782,000
    FC, MR&T MAINTENANCE:
        Atchafalaya Basin...................      13,000,000      25,000,000
        Atchafalaya Basin Floodway System...       2,775,000       4,200,000
        Baton Rouge Harbor (Devil's Swamp)..          14,000         300,000
        Bayou Cocodrie and Tributaries......          65,000          65,000
        Bonnet Carre Spillway...............       2,310,000       3,100,000
        Channel Improvement.................      15,675,000      15,675,000
        Dredging............................         700,000         700,000
        Inspection of Completed Works.......         383,000         383,000
        Mapping.............................         396,000         396,000
        MS Delta Region.....................         588,000         588,000
        Mississippi River Levees, LA........         790,000       5,200,000
        Old River...........................       7,350,000      29,900,000
        Mississippi River Levees (AR, LA,          2,670,000       3,270,000
         MS)................................
        Revetments & Dikes (AR, LA, MS).....      13,400,000      13,400,000
        Dredging (AR, LA, MS)...............       6,265,000       6,265,000
        Mapping (AR, LA, MS)................         329,000         329,000
        Inspection of Completed Works (AR,           338,000         338,000
         LA, MS)............................
        Boeuf & Tensas Rivers...............       2,160,000       2,160,000
        Red River Backwater.................       3,083,000       7,390,000
        Lower Red River.....................         105,000         105,000
    ------------------------------------------------------------------------
    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.

                                     ______

      Prepared Statement of the Association of State Dam Safety Officials

        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 2005. 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 2000 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 this data to compute State grant assistance funds, in
    accordance with the National Dam Safety Program and to assess the
    status of Federal and non-Federal dams.
        There are over 78,000 dams on the National Inventory of Dams in the
    country. It is essential that this data be current and accurate in
    order to have access to this critical data when needed and to be able
    to track trends in assessing dam safety improvements. The NID can meet
    this need, but it is only as accurate as the last update. The NID has
    not been updated since 2000. The database must be continually updated
    as 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 agencies 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.
        Correct and timely data is vital to the national effort to assess
    and protect our critical infrastructure, including dams, from
    intentional acts of terrorists. The Homeland Security Presidential
    Directive No. 7 requires the Federal Government to ``protect critical
    infrastructure and key resources'' and includes a ``strategy to
    identify, prioritize and coordinate the protection of critical
    infrastructure.'' This cannot be accomplished without an accurate NID.
        Continuing updates and improvements to this database resource
    should be a higher 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
    NID is also an integral part of the biennial report to Congress which
    evaluates the performance of the National Dam Safety Program and status
    of the safety of the Nation's dams.
        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 $222,000 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 700 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 applauds the administration's recognition of the
    importance and value of the USACOE's Dam Safety Program and the need to
    fund dam maintenance of USACOE dams. ASDSO 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 that the subcommittee:
      --Support the administration's increase in appropriations for the
            USACOE Dam Safety Program non-project management funds at
            $250,000;
      --Increase in appropriations for the USACOE Dam Security Program non-
            project management funds to $100,000 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;
      --Restore the USACOE ``Planning Assistance to States Program'' to the
            $6,500,000 of fiscal year 2004 from the proposed $4,650,000 to
            provide much needed assistance to the States to cost-share
            dambreak modeling, flood studies, developing emergency
            evacuation plans and to jointly conduct security vulnerability
            assessments; and
      --Support the administration's fiscal year 2005 budget for
            $35,000,000 for emergency maintenance/repairs.
        Finally, while the security of the USACOE dams is currently a major
    priority, the continued safety, repair and maintenance of the USCOE
    dams should also continue as a major appropriations priority and 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.
        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 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 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.
    In this regard, we must maintain our inland waterway transportation
    system. We ask that the Congress restore adequate funding to the Corps
    of Engineers budget--$5.5 billion in fiscal year 2005--to keep the
    Nation's navigation system from further deterioration. If this
    catastrophic problem is not addressed immediately, we are in real
    danger of losing the use of this most important transportation mode.
        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.

    Backlog of Channel Structure Maintenance McClellan-Kerr Arkansas River
            Navigation System
        A $10 million Congressional add to the fiscal year 2005 Operation
    and Maintenance budget is urgently needed for critical repairs to
    damaged and deteriorated dikes and revetments to maintain channel
    alignment and provide original channel configuration while reducing the
    need for dredging.

    Equus Beds Aquifer--Kansas
        Equus Beds Aquifer Storage and Recovery Project.--Continuation of a
    City of Wichita, Groundwater Management District No. 2 and State of
    Kansas project to construct storage and recovery facilities for a major
    groundwater resource supplying water to more than 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 of the project and
    continued Federal funding is requested in the minimum amount of $1.5
    million for fiscal year 2005.

    Arkansas River System Operations Feasibility Study, Arkansas and
            Oklahoma
        This study will evaluate how to 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 will
    accommodate tows. It will also investigate the impacts of deepening and
    widening the navigation channel. We request funding in the amount of
    $1.253 million to complete the study in fiscal year 2005. This is
    $735,000 above the President's budget request of $500,000.
        The testimony we present reveals our firm belief that our inland
    waterways and the Corps of Engineers' efforts are especially important
    to our Nation in this time of trial. Transportation infrastructure like
    the inland waterways, need to be operated and maintained for the
    benefit of the populace. Without adequate annual budgets, this is
    impossible.
        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

         prepared 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.
        We call to your attention three projects on the McClellan-Kerr
    Arkansas River Navigation System (the ``System'') that are especially
    important to navigation and the economy of this multi-State area:
    Backlog of Channel Structure Maintenance, Maintenance Dredging, and
    Ark-White Cutoff as related to the Arkansas River.
    Backlog of Channel Structure Maintenance
      --A $10 million Congressional Add to the fiscal year 2005 Operation
            and Maintenance Budget is urgently needed for critical repairs
            to damaged and deteriorated dikes and revetments to maintain
            channel alignment and provide original channel configuration
            while reducing the need for dredging.
      --More than a decade of neglect to our navigation structures while
            funding the construction of Montgomery Point Lock & Dam has
            created a critical backlog of channel structure work that
            threatens the viability of the McClellan-Kerr Arkansas River
            Navigation System.
      --Current grain prices offer a rare potential for our farming mid-
            section of the Nation yet a failure to deliver these
            commodities to market due to neglect of our transportation
            system would have serious economic impacts rippling through the
            entire Arkansas River Basin.

    Maintenance Dredging
      --A $3 million Congressional Add is needed for Maintenance Dredging
            in known problem areas with siltation capable of restricting or
            closing the navigation channel.
      --A closure of the System for even a short period would create
            transportation problems with devastating economic impacts on
            Arkansas and our Nation at a time when commodity shipments are
            at record levels.
      --These funds will help ensure the System remains open and allow
            users to maximize tonnage by preventing the need for light
            loading.

    Ark-White Cutoff
      --A cutoff is developing between the Arkansas and White Rivers which,
            if not corrected, could have dramatic adverse effects on the
            navigation system as well as significant bottomland hardwoods
            and pristine environment that provides unique wildlife habitat
            in southeast Arkansas.
      --Unless corrected, it is inevitable that a major cutoff will occur
            negatively impacting navigation on the river, significantly
            increasing siltation and dredging requirements and, at worst,
            cutting off the lower end of the Navigation System from the
            Mississippi River.
      --Therefore, a $2 million Congressional Add is needed to further the
            study of this area and lead to a solution, which will prevent
            erosion, cutoffs, and detrimental siltation.
        In addition to these three vital requests, we urge you to continue
    to support funding for the Construction, and Operation and Maintenance
    of the McClellan-Kerr Arkansas River Navigation System which provides
    low-cost and dependable transportation for farm products, construction
    aggregates, raw materials and finished products important to our
    Nation's economic recovery.
        It is also most important that you continue construction authority
    of the McClellan-Kerr Project until remaining channel stabilization
    problems identified by the Little Rock District Corps of Engineers have
    been resolved. The Corps needs to develop a permanent solution to the
    threat of cutoffs developing in the lower reaches of the navigation
    system and to use environmentally sustainable methods under the
    existing construction authority.
        Mr. Chairman, we appreciate the work of this essential committee
    and thank you for your efforts that contribute so much to the social
    and economic well-being of the United States of America.
        We fully endorse the statement presented to you today by the
    Chairman of the Arkansas River Basin Interstate Committee and urge you
    to favorably consider these requests that are so important to the
    economic recovery of our region and Nation.

                                    COLORADO
          PREPARED STATEMENT OF JAMES BRODERICK, CHAIRMAN FOR COLORADO

        Mr. Chairman and members of the committee, we greatly appreciate
    the opportunity to present testimony before this committee. My name is
    James Broderick, I am the Executive Director of the Southeastern
    Colorado Water Conservancy District and serve as Colorado Chairman for
    the Interstate Committee.
        The critical water resource projects in the Colorado portion of the
    Arkansas River Basin are summarized below. The projects are
    environmental and conservation oriented and have regional and multi-
    State impact. We are grateful for your leadership and your past
    commitment to our area.
        This request is for two projects $554,000 to provide for:
      --Design, installation, and operation of weighing lysimeters at the
            Colorado State University Agricultural Experiment Station at
            Rocky Ford, Colorado ($422,000).--Install and operate a set of
            three monolithic continuous weighing (direct load cell)
            lysimeters to accurately measure evapotranspiration of a
            reference crop and of production crops under a variety of field
            conditions typical of the lower Arkansas River Valley in
            Colorado.
      --Enhancement of the CoAgMet Electronic Weather Station Network in
            the Lower Arkansas River Basin ($132,000).--Enhance and improve
            the existing and new Colorado Agriculture Meteorological
            (CoAgMet) weather in the Lower Arkansas River Basin and provide
            for its adequate operation and maintenance in order to provide
            accurate data for predicting evapotranspiration using the
            Penman-Monteith method.
        In recent litigation the Penman Monteith method has been recognized
    as the preferred procedure for calculating crop water use, replacing
    the Blaney-Criddle method historically used in Colorado. The importance
    of this change is that the Penman Monteith method, requires more data
    and information than Blaney-Criddle in order to be used properly. The
    Penman-Monteith method will increasingly be used to calculate crop
    consumptive use to determine the transferable consumptive use for
    changes of agricultural water rights to municipal use in the Arkansas
    River Basin and elsewhere in the State.
        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 our request for needed
    infrastructure investments in the natural and transportation resources
    of our Nation.

                                     KANSAS
          PREPARED 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
    other Arkansas River Basin States to form the multi-State Arkansas
    Basin Development Association. We fully endorse the summary statement
    presented to you by the Chairman of the Arkansas River Basin Interstate
    Committee.
        We are pleased to report that the Montgomery Point Lock and Dam
    Project will be operational by July 2004 and that a formal dedication
    ceremony is scheduled for July 16, 2004. Completion of this critical
    project through your support will 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. The Federal
    Government invested $1.3 billion in the project. Other public and
    private investment totals in excess of $4.2 billion and over 50,000
    jobs have been created. Increasing the depth of the navigation channel
    to 12 feet will increase the performance of the navigation system by
    allowing shippers to move one-third more cargo per barge. We request
    funding in the amount of $1.235 million to complete Phase II of the
    Arkansas River System Operations Feasibility Study which will examine
    the feasibility of increasing the channel depth.
        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 past commitment to
    critical needs in Kansas.
        We ask for your continued support for this important Bureau of
    Reclamation project 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 one 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;
            and
      --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 2005.
        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 Corps of Engineers projects in Kansas 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 but the
            funding is not adequate in the President's budget. We request
            your continued support in the amount of $3.619 million, which
            is $2.619 million above the President's budget request so the
            Corps of Engineers can complete this project.
      --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 need for fiscal
            year 2005 is $305,000 which is $86,000 more than the
            President's budget request.
      --Silver-Grouse Creek Reconnaissance Study.--The Silver-Grouse Creek
            area in south central Kansas is a location of natural geologic,
            archaeological and biologic attributes of the watershed.
            Periodic flooding downstream of the reconnaissance area impacts
            neighboring Oklahoma. Smaller Kansas communities without
            technical, financial and managerial capacities are all
            investigating future sources of water supply which potentially
            could be satisfied through impoundment of water. A
            reconnaissance study will identify water resource, flooding and
            ecosystem restoration issues and will also establish whether
            there is Federal interest in feasibility level studies. The
            Cowley County Commission has requested a feasibility study be
            conducted by the Corps. The Lt. Governor of Kansas has
            requested an evaluation through the State Water Planning
            Process and the Kansas Water Authority has supported this
            request. Funding is requested in the amount of $100,000 for
            fiscal year 2005.
      --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 $450,000 in fiscal
            year 2005 to fully fund Feasibility studies evaluating
            solutions to upstream flooding associated with existing
            easements necessary for flood control operations of Grand Lake.
            Although this has been a Congressional add for the past 2
            years, no money was made available in the fiscal year 2005
            President's budget request.
      --Grand (Neosho) Basin 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. A federal interest has been determined from the
            reconnaissance study as a result from a Congressional add in
            fiscal year 2003 and another add appropriated in fiscal year
            2004. Additional funds are needed to continue the feasibility
            stage of the project. The 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 $225,000 in fiscal year 2005.
      --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),
            Aquatic Ecosystem Restoration (Section 206 of the 1996 Water
            Resources Development Act, as amended), Ecosystem Restoration
            (Section 1135 of the 1986 Water Resources Development 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 the Section 205
            and Section 14 programs. The City of Wichita is also requesting
            funding through these programs to address flooding problems. We
            urge you to support an increase of these programs to a $65
            million programmatic limit for the Small Flood Control Projects
            Program, $35 million for Aquatic Ecosystem Restoration, $35
            million for the Ecosystem Restoration Program and $25 million
            for the Emergency Streambank Stabilization Program.
          The 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.
          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 $10 million programmatic limit
            which will allow the State of Kansas to receive the $500,000
            limit.
        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
       PREPARED 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, who also serves as Chairman of the combined Arkansas
    River Basin Interstate Committee.
        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.--We have
    come to you with requests for funding for this much-needed project for
    many years now. We are pleased to tell you this year we will not ask
    for additional funds for this project as it is due to be operational by
    July. We will have a formal dedication on July 16, 2004 at the site. We
    are very grateful for your help and support to see this project through
    to its completion.
        There may well be some funds needed for final cleanup and
    additional maintenance and operational equipment. In that event the
    Corps of Engineers should be able to schedule those funds from their
    regular appropriations.
        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 three decades.
        In addition to the system-wide 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 $3.8 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 No. 14, Robert S. Kerr Lock and Dam
    No. 15, and Webbers Falls Lock and Dam No. 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. Phase II of this study will also examine the
    feasibility of increasing the depth of the navigation channel to 12.
    This will allow the shippers to move one-third more cargo per barge
    drafting 11\1/2\ at near the current rate for 8\1/2\ draft barges.
    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
    $1.235 million, which is greater than shown in the budget, to complete
    feasibility studies in fiscal year 2005.
        The Power Plant at Webbers Falls Lock and Dam on the Arkansas River
    has suffered from greatly reduced reliability due to turbine design
    problems. Because this is a run-of-the-river facility with no storage,
    energy spilled due to off-line units is energy that is lost forever. A
    feasibility study recommending major rehabilitation of this unit has
    been approved by the office of the Chief of Engineers.
        Similar problems have been experienced at Ozark-Jeta Taylor Lock
    and Dam on the Arkansas River in Arkansas. Congress approved a new
    start and funding to begin the major rehabilitation of the Ozark
    powerhouse in fiscal year 2003. The administration's fiscal year 2005
    budget request includes $5 million in Construction General funding to
    continue this major rehabilitation.
        The turbines at the Ozark project are identical to the slant-shaft
    turbines employed at Webbers Falls. The major rehabilitation plans for
    both projects call for bidders to submit plans for new turbine designs,
    with the two best bidders selected to proceed to model testing of their
    designs before choosing the best and winning bid. By combining the
    design selection for both projects into a single bid selection process
    the Corps estimated that millions of dollars could be saved. To achieve
    these savings, Congress would have to approve a new construction start
    and initial funding for the major rehabilitation of the Webbers Falls
    powerhouse. We respectfully urge the committee to approve the new start
    and provide $4 million in initial Construction, General funding for the
    appropriations bill. Please know that every dollar appropriated to this
    project, plus interest, will be repaid to the U.S. Treasury through the
    rates charged for the sale of this hydroelectricity.
        Miami, Oklahoma and Vicinity Feasibility Study.--We request funding
    of $750,000 to move into the feasibility stage 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.
        Oologah Lake Watershed Feasibility Study.--We request funding of
    $326,000 which is $129,000 more than the President's budget request 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 $225,000 to conduct a feasibility 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 indicated that there is a
    Federal interest in this project and the feasibility will 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. The reconnaissance study was a
    Congressional add new start, but no funding was put into the fiscal
    year 2005 President's budget request to continue into the feasibility
    stage.
        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
    $450,000 to fund feasibility studies for this important project in
    fiscal year 2004 and to direct the Corps of Engineers to execute the
    study at full Federal expense. This project has been a Congressional
    add for the past 2 years, but there are no funds in the fiscal year
    2005 President's budget request to continue this project.
        Tenkiller Dam Safety Project.--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 Tenkiller Ferry Lakes Dam Safety Assurance Project in
    Oklahoma. This project is slated to be complete in fiscal year 2006 and
    continued funding is necessary for safety purposes and economic
    efficiencies. We would like to see Tenkiller funded at the $4.4 million
    level, which is the Corps' capability for fiscal year 2005.
        Canton Dam Safety.--We request that funding in the amount of $5.0
    million be provided to continue the Canton Lake Dam Safety Project. The
    stability of the existing spillway requires restrictions on the flood
    control pool. The flood pool can only be held to a 17-year flood event.
    Installation of steel anchors is required to stabilize the existing
    spillway so that the project can be operated as originally designed.
    Funds were provided by Congress in the fiscal year 2004 Appropriations
    Bill to work on this important project, but the administration has not
    included any funds in the fiscal year 2005 President's budget.
        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 increased to an annual limit of
    $65 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.
        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 Tennessee-Tombigbee Waterway Development
                                   Authority

        Mr. Chairman, I am Donald G. Waldon, Administrator of the
    Tennessee-Tombigbee Waterway Development Authority. I am honored to
    submit the authority's recommendations to you and your committee
    concerning fiscal year 2005 funding needs for the operation and
    maintenance of the Tenn-Tom Waterway and the Tennessee River system as
    well as construction of new locks at Kentucky and Chickamauga Dams.
    This is the 44th consecutive year the waterway compact has provided its
    recommendations to the U.S. Congress.
        The Tennessee-Tombigbee Waterway Development Authority is a Federal
    interstate compact ratified in 1958 by the Congress to promote the
    development of the Tenn-Tom and its economic and commerce potential. It
    is comprised of the States of Alabama, Kentucky, Mississippi, and
    Tennessee.
        We, like most other water resources development interests, are most
    concerned if not alarmed about the Office of Management and Budget's
    continued indifference to ports and waterways as a national budget
    priority. The proposed budget for fiscal year 2005 for these and other
    programs of the U.S. Army Corps of Engineers is no exception. While the
    proposed budget adequately funds construction of some new locks it
    woefully under funds others, such as Kentucky and Chickamauga Locks on
    the Tennessee River. However, the proposed budget's most serious
    deficiency is its inability to adequately fund the operation and
    maintenance of completed projects. More Federal investments in the
    Nation's infrastructure, including its ports and waterways, will help
    stimulate our economy and create more job opportunities. Yet the
    administration's budget if approved will result in further
    deterioration of locks and other waterway structures, many that were
    built over 50 years ago, resulting in more closures and disruption of
    commercial shipments and less economic growth. Given the importance of
    these projects for helping the Nation to achieve full economic
    recovery, we recommend that the Congress increase the Corps' total
    funding next year to $5.5 billion or about $600 million more than that
    available this year.

                                         TENNESSEE-TOMBIGBEE WATERWAY, AL AND MS
                                                [In millions of dollars]
    ----------------------------------------------------------------------------------------------------------------
                                                                    Fiscal      Fiscal         Fiscal Year 2005
                                                                   Year 2003   Year 2004 ---------------------------
                                                                    Approp.     Approp.      Bud. Req.      Recomm.
    ----------------------------------------------------------------------------------------------------------------
    Operation & Maintenance.....................................        24.0        22.5          22.254        25.6
    Wildlife Mitigation Payments To Alabama and Mississippi.....         2.0         1.5           2.0           2.0
    ----------------------------------------------------------------------------------------------------------------

        We greatly appreciate the support your committee and the Congress
    have given to the Tenn-Tom in the past. The waterway saves shippers
    some $90 million in transportation costs each year. It has helped
    attract over $5 billion in new private investments since its
    completion, creating over 50,000 new jobs in the waterway region. Its
    attractive recreational facilities draw nearly 3 million visitors
    annually. Your continued strong support is critically important in
    fiscal year 2005 if the waterway is to continue to generate economic
    benefits at this level.
        The proposed budget will not provide sufficient funds for the Corps
    to adequately maintain the navigation channel. Three locks are
    scheduled for closure and repairs this fall that will cost over $1.5
    million. With no increase in funding provided, this extraordinary
    expense will preclude other important maintenance activities such as
    dredging and resource management.
        We are pleased that $2 million has been budgeted to reimburse the
    States of Alabama and Mississippi to manage nearly 126,000 acres of
    wildlife habitat that is part of the Tenn-Tom Wildlife Mitigation
    Project. These funds are sufficient for the management of these lands.
    However, no funds are available for the Corps to manage some 46,000
    acres of other Federal lands that are an important part of the
    mitigation project.
        The $25.6 million recommended for the operation and maintenance of
    the Tenn-Tom will ensure the waterway is adequately maintained during
    2005 and generates its expected benefits. While there are other needs,
    the recommended increase of $3,246,000 is important to keep the
    waterway channel open to commercial navigation, the Corps' top priority
    program as shown below:

                            [In millions of dollars]
    ------------------------------------------------------------------------
                                                                    Amount
    ------------------------------------------------------------------------
    Provide adequate capacity of upland disposal areas to              1.0
     accept dredged materials..................................
    Additional dredging needed to keep channel open to commerce        1.3
    Determine measures to limit shoaling in Aberdeen Lake, the         0.5
     waterway's most costly silting problem....................
    Initiate corrective measures to eliminate a serious safety         0.3
     problem at Bevill Lock and Dam............................
    Eradicate noxious aquatic weeds in lakes and channels (the         0.146
     public's No. 1 complaint about the waterway...............
                                                                ------------
          Total................................................        3.246
    ------------------------------------------------------------------------

        The Corps of Engineers could efficiently use an additional $10
    million to begin addressing some of the $12 million of urgently needed
    but indefinitely deferred repairs to the waterway's facilities that
    have accumulated due to of severe budget constraints since fiscal year
    1997.
    Tennessee River, TN, AL, MS, and KY
        The administration's budget does not provide sufficient funds to
    adequately maintain the commercial navigation features of the Tennessee
    River system. Funds are not available to make scheduled repairs at most
    all of the nine locks. Maintenance dredging needed at public ports at
    Florence and Decatur, AL will be deferred as well as replacement of a
    mobile crane needed at Nickajack Lock, TN.
        We recommend that $21,449,000 or an increase of $6,239,000 be
    appropriated to fund the above activities. This recommended increase
    includes $350,000 and $200,000 to dredge the public ports at Florence
    and Decatur, AL, respectively. The Tennessee River is one of the
    busiest waterways in the Nation.
    Kentucky Lock, KY
        Completion of a new lock to replace the nearly 60-year-old,
    outmoded lock at Kentucky Dam will eliminate one of the most costly
    bottlenecks on the entire waterway system. A commercial tow now waits
    an average of 4 hours to transit the lock. These delays continue to
    worsen as commerce grows each year. We are very disappointed the
    proposed budget effectively mothballs construction of this most
    important waterway improvement. The proposed budget of $25,000,000 not
    only precludes award of any new contracts it is $10,000,000 short of
    that needed to reimburse contractors for work now underway. Such a
    budget decision is unconscionable.
        We recommend that $55,000,000 be appropriated to keep construction
    of this high priority project on a more reasonable and efficient
    schedule. This level of funding will maintain a schedule in fiscal year
    2005 that will enable the lock to be completed in fiscal year 2013
    compared to 2023 or 10 years later based on a schedule anticipated by
    the administration budget. This is unacceptable, especially when the
    commercial users are paying for one-half of the new lock's cost.
    Chickamauga Lock, TN
        We greatly appreciate the Congress authorizing construction of a
    new lock to replace the old and deteriorating chamber at Chickamauga
    Dam in last year's bill. The $5,400,000 appropriated this year will
    permit the Corps of Engineers to initiate construction and continue the
    detailed design needed for the new 110  600 lock. Regrettably, the
    proposed budget does not provide any funds for construction in 2005,
    effectively delaying start of construction until at least 2006. Unless
    work begins soon, the new lock will not be available when the old
    structure is taken out of operation during the next decade because of
    safety concerns. This closure would land lock 175 miles of the
    Tennessee River, crippling industries, including defense-related, and
    other shippers, located in east Tennessee.
        We respectfully urge the committee to provide $17,000,000 to
    continue construction of this much needed lock replacement. It is also
    recommended that $1,480,000 be provided to allow the Corps to continue
    repairs to the existing lock to ensure its continued operation until
    the new lock is completed.
        Thank you again for allowing the Tennessee-Tombigbee Waterway
    Development Authority to submit these recommendations to you for your
    consideration.
                                     ______

                  Prepared Statement of Kansas City, Missouri

        Mr. Chairman, the City of Kansas City, Missouri, welcomes this
    opportunity to provide written testimony to the Subcommittee on Energy
    and Water Development regarding appropriations for fiscal year 2005 and
    requests that this written testimony be included in the formal hearing
    record.
        The City of Kansas City, Missouri, in cooperation with the Corps of
    Engineers, presently have six major flood damage reduction projects
    underway. All of these projects are essential to the sustainment and
    revitalization of prominent and long-standing commercial, business and
    industrial communities in this region, and when complete will provide
    substantially increased levels of flood protection. Some of these
    projects are located on urban streams subject to severe flash flooding,
    which run along major roadways, resulting in an extremely hazardous
    threat to public safety.
    Blue River Channel, Kansas City, Missouri--$8,000,000; Continue
            Construction
        The Blue River Channel project, currently under construction,
    represents our most pressing need and for fiscal year 2005 we are
    requesting that this project be appropriated $8,000,000. This will
    allow the Corps to complete work that is already under construction,
    and to make some progress on the next phase of the Blue River project,
    which includes a grade control structure. That structure is necessary
    to drop the flow line of the existing channel bed to that of the newly
    deepened channel downstream, which prevents the flow in the stream from
    eroding the channel bed upstream.
        The Blue River Channel project when complete will significantly
    reduce the flood threat to inhabitants of the Blue Valley.
    Additionally, the river winds through a long-standing business district
    that, after much severe flooding, has now been partially abandoned. The
    channel improvement will bring many of these sites out of the
    floodplain and will reduce flooding depths by 6 to 8 feet. This will
    serve as a means to help reclaim Brownfield sites in the valley for
    redevelopment and help to rebuild a once thriving Blue Valley
    community.

    Turkey Creek Basin, Kansas and Missouri--$2,500,000; Continue
            Construction
        Another very important project in the Kansas City region is the
    Turkey Creek Basin, Kansas and Missouri. As mentioned above this area
    suffered a devastating flood in 1998, which is typical every 3 to 5
    years. Providing flood protection for this highly traveled business
    corridor has proven to be very complex and that problem had been
    studied for nearly 35 years. Finally in 2003 the project received
    reauthorization at a total cost of $74,000,000, with a defined cost
    share of $46,000,000 Federal and $28,000,000 local. Major features of
    the Federal project include channel widening, a levee, hillside
    interceptors, and modifications to the Turkey Creek tunnel.
        Funding is requested in the amount of $2,500,000 to continue
    construction of a flood damage reduction project that will serve to
    protect the community along Southwest Blvd. in the Kansas City
    metropolitan area of both Kansas and Missouri. In the alternative, if
    an amount less than that requested can be appropriated, language is
    requested such that ``The non-Federal Interest shall receive credit
    toward the non-Federal share of project costs for construction work
    performed by the non-Federal interest before execution of the project
    cooperation agreement if the Secretary finds that the work performed by
    the non-Federal interest is integral to the project.''
        This language will allow for the Unified Government of Kansas City,
    Kansas and Wyandotte County, and the City of Kansas City, Missouri to
    proceed with the Turkey Creek Tunnel modifications identified in the
    Final Report of the Chief of Engineers. These modifications are
    necessary to insure that the increased flow carried to the tunnel by
    the widened channel upstream can be safely passed through the tunnel to
    the Kansas River. This channel widening was designed by the Corps of
    Engineers and included in the Chief's report, and is currently under
    construction by the Kansas Department of Transportation.

    Blue River Basin, Kansas City, Missouri--$4,000,000; Continue
            Construction
        The Blue River Basin, Kansas City, Missouri project, commonly known
    as the Dodson Industrial District Levee, is also located along the Blue
    River. Construction is currently underway on the floodwall portion and
    associated work, which is scheduled to be complete in 2005. Funding is
    required to pay for this work already under contract. The project
    requires modification of two major 96-inch diameter sewer structures in
    order for the levee-floodwall to function properly. The work on these
    elements needs to proceed in such a manner to assure that these
    facilities are protected during construction, are able to continue to
    function properly, and are not unnecessarily exposed to damage during
    an extended construction schedule.
        The City has been working aggressively to honor our commitments to
    this project, and supports it moving forward in the most expeditious
    manner possible in order that this flood protection, which is essential
    to our having safe emergency access to a large portion of the City
    south of the Missouri River during flooding situations, can be
    maintained via access from the newly completed midtown expressway known
    as Bruce R. Watkins Drive. The City has programmed $5 million over 3
    years to meet our local sponsor cost share. The project consists of a
    $17 million levee that will protect $240 million in property investment
    from the 500-year flood.

    Kansas Citys, Kansas and Missouri--$650,000; Continue Feasibility Study
        Study area encompasses two major rivers and seven levee units, and
    has four local sponsors. The levees are located along the Missouri and
    Kansas Rivers through the heart of the Kansas City metropolitan area,
    and protect its most densely developed business regions from floods.
    The 1993 flood came within inches of topping the Central Industrial
    District Levee, evidencing a need to evaluate how the seven levee units
    comprising the flood protection system for the Kansas City area
    functions as a whole, and to determine inadequacies and inconsistencies
    in the levels of protection. The units are Argentine, Armourdale, and
    Fairfax-Jersey Creek, all in Kansas; Central Industrial District, in
    Kansas and Missouri; and North Kansas City, Birmingham and East
    Bottoms, all in Missouri. Construction of these levees began in the
    1940's and was completed in 1980. The Feasibility Study began in
    September 2000, with an estimated cost of $2,782,323 cost shared 50
    percent Federal--50 percent local funds. Funding is requested to
    continue the Feasibility Study to develop and study possible project
    alternatives, perform environmental studies, and select the plan
    recommended for construction. The 1970 Flood Control Act, Section 216,
    provides a continuing authority to reexamine completed Federal
    projects.

    Brush Creek Basin, Kansas and Missouri--$200,000; Continue
            Reconnaissance Study
        Because this project provides the mechanism by which the region can
    work cooperatively using a watershed based approach to achieve the
    allied purposes of flood damage reduction, ecosystem restoration and
    other purposes, it is important that adequate funding be provided to
    collect the relevant data, coordinate among the many stakeholders, and
    establish cost sharing relationships needed to move forward. The City
    of Kansas City, Missouri and Johnson County, Kansas have committed
    significant local resources toward the completion of the flood
    mitigation and stream restoration work along Brush Creek, and are
    committed to continuing to support this effort and working together
    with the Mid-America Regional Council, Corps of Engineers,
    Environmental Protection Agency, Brush Creek Community Partners, and
    other stakeholders to achieve the goals established and agreed upon as
    part of the Brush Creek Basin Wide Study. Brush Creek is known as the
    ``Cultural Corridor'' in Kansas City and serves as a highly traveled
    business, residential and recreational corridor. This study effort
    aligns with the goals established by the residents, corporations,
    cities and other stakeholders along the creek.

    Swope Park Industrial Area, Kansas City, Missouri--$200,000; Continue
            Design
        Development of the 53-acre Industrial Park was substantially
    completed prior to enactment of the Federal Flood Insurance Act, and
    the entire area is now located within the 100-year floodplain as
    currently mapped by FEMA, and is largely within the floodway. The Swope
    Park Industrial Area has limited access, one-way in and out, with an
    active railroad track crossing near the entrance to the Park, in any
    given year there is a 1 in 5 chance that flooding will interrupt
    roadway access to the Park, and an approximately 1 in 7 chance that
    buildings will be flooded. Especially hazard flood conditions, and a
    threat to public safety, exist as people and businesses must decide
    whether to evacuate the Park during the initial stages of flooding, or
    risk being stuck with no surface means of egress if the water continues
    to rise.

    Main Street Sewer Outfall/Riverfront Heritage Trail/Missouri River Bank
            Stabilization--$7,000,000; Continue Construction
        We are also seeking funding for these projects to provide a safe
    and viable Kansas City Riverfront. This Missouri Riverfront project is
    comprised of five components being accomplished through a coordinated
    effort by public, private and non-profit organizations including Kansas
    City River Trails, Inc., the Port Authority of Kansas City, United
    States Corps of Engineers and the City of Kansas City, Missouri.
    Funding to complete this essential link between development both East
    and West of the project site is being sought from a variety of public
    and private sources to create a revitalized riverfront.
        The bank of the Missouri River collapsed in May of 2003 causing
    significant damage to the Main Street Sewer Outfall that drains a large
    portion of the downtown Kansas City basin. The City is in the process
    of constructing repairs for the sewer outfall and some slope
    stabilization. This East/West trail connector is a vital segment of the
    Kansas City Riverfront Heritage Trail system within the Riverfront West
    area, and when constructed it will complete a bi-State bicycle,
    pedestrian and green space trail system stretching from the Richard L.
    Berkley Riverfront Park and Isle of Capri Casino at the east to the
    original settlement of the Town of Kansas and the Indian Cemetery in
    Kansas City, Kansas at the west. The Trail includes a series of
    interpretive artworks, kiosks and signs commemorating Lewis and Clark's
    Corps of Discovery journey and Kansas City's relationship to its
    rivers. The Habitat Restoration will be constructed by the U.S. Corps
    of Engineers in corporation with the Port Authority of Kansas City
    Missouri. Project estimates and funding availabilities are shown in the
    table below.

    ----------------------------------------------------------------------------------------------------------------
                                                                                          Funding
                            Project Component                            Estimate        Available    Funding Sought
    ----------------------------------------------------------------------------------------------------------------
    Main Street Sewer Outfall.......................................      $3,500,000        $220,000      $3,280,000
    Slope Stabilization.............................................       2,400,000         380,000       2,020,000
    East-West Trail Connection......................................       1,750,000          30,000       1,720,000
    Interpretive Center.............................................       1,600,000         200,000       1,400,000
    Habitat Restoration.............................................       2,500,000         500,000       2,000,000
                                                                     -----------------------------------------------
          Total.....................................................      11,750,000       1,330,000      10,420,000
    ----------------------------------------------------------------------------------------------------------------

        The City of Kansas City, Missouri appreciates the past assistance
    we have received with local water resource projects. We are prepared to
    provide our share of funding in the future, and respectfully request
    that Federal funding adequate to keep these very important projects
    moving toward the soonest possible completion be appropriated in the
    upcoming year.
                                     ______

      Prepared Statement of the Upper Mississippi River Basin Association

                            [In millions of dollars]
    ------------------------------------------------------------------------
                                                President's        UMRBA
                                                  Request     Recommendation
    ------------------------------------------------------------------------
    Construction General:
        Upper Miss. River System                      28.000          33.250
         Environmental Mgt. Program.........
        Major Rehabilitation of Locks and             13.600          13.600
         Dams 19 and 24.....................
        Major Rehabilitation of Locks and     ..............          21.700
         Dams 3, 11, and 27.................
        Continuing Authorities (Section               13.500          25.000
         1135)..............................
        Continuing Authorities (Section 206)          10.000          25.000
    Operation and Maintenance:
        O&M of the Upper Mississippi                 167.733         231.759
         Navigation System..................
    General Investigations:
        Upper Mississippi and Illinois        ..............          18.000
         Waterway Navigation and Ecosystem
         Improvements PED...................
        Upper Mississippi River                         .994           1.400
         Comprehensive Plan.................
        Research and Development............          20.800          20.800
        Stream Gaging (U.S. Geological                  .600            .600
         Survey)............................
    ------------------------------------------------------------------------

        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:

                              CONSTRUCTION GENERAL

    Environmental Management Program
        For the past 17 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 has requested $28 million for
    the EMP in fiscal year 2005. 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.
    Yet annual appropriations for the EMP have fallen short of the
    authorized funding levels for the past 8 years and the program is still
    suffering from the dramatic 40 percent cut it suffered in fiscal year
    2003. Thus, the UMRBA strongly urges Congress to appropriate full
    funding of $33.52 million for the EMP in fiscal year 2005.
        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 administration's funding level of $28 million,
    approximately $17.7 million would be allocated to the planning, design,
    and construction of such habitat projects. In particular, this level of
    investment will support planning and design for 20 projects and
    construction work on 18 projects, bringing construction to completion
    on 5 of these projects. Approximately $8.7 million would be devoted to
    the EMP Long Term Resource Monitoring program (LTRMP) under an EMP
    budget of $28 million. This funding is critical to the future viability
    of the EMP's monitoring component, which has suffered from funding
    shortfalls in recent years. Data collection related to water quality,
    sediment, fish, invertebrates, and vegetation has been reduced or
    suspended; bathymetric surveys have been eliminated; laboratory
    analysis has been cut back; data analyses and science planning has been
    curtailed; and land cover mapping has been postponed. Planning is
    currently underway to restructure and redesign the program to enhance
    its ability to meet increasing demands for information with decreasing
    resources. But it is essential that funding be increased in fiscal year
    2005 to revive many of the essential functions that have been
    eliminated or deferred.
        Meeting the ecological restoration and monitoring needs on the
    Upper Mississippi River with renewed commitment and enhanced investment
    is critical. Within the next few months, the Corps is expected to
    release the draft feasibility report from its Navigation Study on the
    Upper Mississippi River and Illinois Waterway System, including a
    recommended plan for improving both the 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
    fully funded at $33.52 million in fiscal year 2005.

    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 18 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 2005 budget request for
    major rehabilitation work at Lock and Dam 19 ($4.8 million) and Lock
    and Dam 24 ($8.8 million). Lock and Dam 19, at Keokuk, Iowa, is in
    particular need of rehabilitation given the deterioration of its gates,
    resulting in dangerous conditions. 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 be completed in fiscal year 2005. In addition, fiscal year
    2005 funding will support continued dam tainter gate rehabilitation.
        The UMRBA also supports funding for major rehabilitation of Lock
    and Dam 3 ($5 million), Lock and Dam 11 ($10.9 million), and Locks 27
    ($5.8 million), none of which are currently funded in the
    administration's fiscal year 2005 budget request. In the case of Lock
    and Dam 11, the lack of funding is particularly problematic because
    work is already underway. Continued funding is needed in fiscal year
    2005 to proceed with bulkhead construction and installation and lock
    repair. With regard to Lock and Dam 3, funds are needed in fiscal year
    2005 to complete the reevaluation report and begin plans and
    specifications for correcting safety problems at this facility. 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 three earthen embankments connecting the gated
    dam to high ground on the Wisconsin side. Rehabilitation of Locks 27 is
    also critical, given its location at a critical juncture in the inland
    waterway system, through which traffic on the Mississippi, Illinois,
    and Missouri Rivers passes. The rehabilitation plan calls for
    rehabilitation of various structural, electrical, and mechanical
    components of this structure, which is over 50 years old.

    Continuing Authorities (Section 1135 and 206)
        The Corps of Engineers' Section 1135 and Section 206 continuing
    authorities provide an important tool for addressing ecosystem
    restoration needs, particularly in riverine environments. The three
    Corps Districts in the Upper Mississippi River Basin have undertaken
    many such projects over the past few years. While some projects are on
    the Mississippi River, others are located on tributaries, wetlands, and
    watersheds throughout the basin. There are currently more projects than
    can be supported with the limited funding proposed in fiscal year 2005.
    While the Section 1135 and Section 206 programs are each authorized to
    be funded at $25 million annually, the President's fiscal year 2005
    budget requests only $13.5 million for Section 1135 and $10.0 million
    for Section 206. Given that this relatively small amount is intended to
    support projects nationwide, it is not surprising that many projects in
    the 5 States of the Upper Mississippi River Basin remain unfunded. For
    example, in the Rock Island District alone, there are 5 new and 15 on-
    going Section 206 projects and 2 on-going Section 1135 projects that
    could utilize funding in fiscal year 2005. The total costs of the
    Section 206 projects in this one district far exceed the funding for
    Section 206 nationwide. Thus, the UMRBA supports funding for both the
    Section 1135 and Section 206 programs at their fully authorized amount
    of $25 million.

                           OPERATION AND MAINTENANCE

    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 2005 budget totals approximately $169
    million for O&M of this river system, which includes $111.410 million
    for the Mississippi River between Minneapolis and the Missouri River,
    $21.236 million for the Mississippi River between the Missouri River
    and Ohio River, and $35.087 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 evaluated other upper river pools, is a
    promising new approach for enhancing aquatic plant growth and
    overwintering conditions for fish, without adversely affecting
    navigation.
        The UMRBA is pleased that the President's fiscal year 2005 funding
    request for O&M of the Upper Mississippi River System is above fiscal
    year 2004 appropriations for some of the river reaches. Unfortunately,
    the request is well below what is needed. In particular, there is a
    growing backlog of maintenance needs as a result of historically flat
    line budgets. In addition, as a result of unusual funding constraints
    in the St. Paul District in fiscal year 2004, that District is
    deferring contractor payments and all new contract awards.
        Unmet needs include such items as major maintenance at Lock and Dam
    5, land acquisition for dredged material disposal sites, replacement of
    dam gates and lift gates, repair of operating components, and lockwall
    resurfacing.

                                                [In millions of dollars]
    ----------------------------------------------------------------------------------------------------------------
                                                                        Fiscal Year                     Fiscal Year
               Upper Mississippi River System O&M Accounts                 2004         Fiscal Year      2005 Full
                                                                      Appropriations   2005 Request     Capability
    ----------------------------------------------------------------------------------------------------------------
    Mississippi River Between MO River and Minneapolis:
        St. Paul District (MVP).....................................          36.056          51.030          61.340
        Rock Island District (MVR)..................................          45.000          42.473          53.287
        St. Louis District (MVS)....................................          18.000          17.907          25.916
    Mississippi River Between Ohio and MO Rivers....................          18.099          21.236          31.793
    Illinois Waterway:
        Rock Island District (MVR)..................................          25.726          33.273          57.274
        St. Louis District (MVS)....................................           1.889           1.814           2.149
    ----------------------------------------------------------------------------------------------------------------

        The UMRBA supports increased funding for O&M of the Upper
    Mississippi and Illinois River System to meet routine on-going
    operations and maintenance needs, and to begin to address the growing
    unfunded maintenance backlog. Full capability funding in fiscal year
    2004 for all three Upper Mississippi River districts totals $231.7
    million.

                             GENERAL INVESTIGATIONS

    Upper Mississippi River System Navigation and Ecosystem PED
        The Upper Mississippi River and Illinois Waterway Navigation Study,
    which began in 1993 is nearing completion. The draft feasibility report
    is scheduled for release April 30, 2004 and the final Chief's Report is
    expected in November 2004. Since the study was restructured in 2001, it
    is designed to yield an integrated plan, incorporating both navigation
    improvements and ecosystem restoration. It has also been a truly
    collaborative process involving five Federal agencies, five States, and
    representatives from a broad spectrum of stakeholder groups. The
    recommendations resulting from this extraordinarily complex planning
    process promise to be the most important investment for the future of
    the Upper Mississippi River that this region has had in decades.
        The President's fiscal year 2005 budget request includes no funding
    for this critically important planning effort. While the feasibility
    study phase will be essentially complete by fiscal year 2005, there
    will be on-going planning and design needs. Thus, the UMRBA supports
    funding of $18 million, which we understand is the Corps' capability,
    to advance the planning and initiate design. Such funding would enable
    significant progress to be made on both the navigation and ecosystem
    improvements, including planning and design work for switch boats,
    mooring cells, locks, system mitigation, and ecosystem restoration
    projects.

    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. Since planning began in
    December 2001, funding shortfalls have been significant and the study
    has been suspended a number of times. In addition, only $944,000 has
    been requested in fiscal year 2005. It is thus doubtful that the study
    will be completed within the 3-year time frame Congress directed when
    the study was first authorized in WRDA 1999, and later reaffirmed in
    WRDA 2000.
        Although the assessment of alternative plans is underway,
    substantial work remains to be done, including completing that
    alternatives evaluation and conducting public meetings. Of particular
    interest to the States, is development and evaluation of an ``Emergency
    Action Scenario'' that will help the Corps and State agencies
    understand the implications of decisions they may be faced with making
    when fighting a flood such as the one in 1993. Such ``what if''
    analysis, in combination with the evaluation of structural and
    nonstructural systemic flood damage reduction options, is critical.
    Thus, the UMRBA supports funding of $1.4 million for the Upper
    Mississippi River Comprehensive Plan in fiscal year 2005.

    Research and Development
        The President's fiscal year 2005 budget request for Research and
    Development includes funding to support the Navigation Economic
    Technologies (NETS) research program. NETS is working to develop a
    standardized and defensible suite of economic tools to evaluate
    navigation improvements. The goal is to develop simulation models and
    data gathering techniques that are reasonably transparent and
    computationally accurate, yield nationally consistent results, and are
    acceptable to outside peer review. The need for such research has
    become increasingly obvious over the past few years, as the Corps has
    struggled to address the economic complexities and uncertainties
    associated with navigation improvements on the Upper Mississippi and
    Illinois Rivers. Significant advances in economic modeling have been
    made as part of that feasibility study. Yet additional work is needed
    to help inform future decisions. Thus, the UMRBA strongly supports
    funding for the NETS program, which is programmed for $2.5 million in
    fiscal year 2005 under the Corps' Research and Development budget.

    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 2004, the Corps' share of the cost of these gages is $1.946
    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 $600,000 requested under
    General Investigations to support the Corps' share of non-project USGS
    stream gages, many of which are located in the five States of the Upper
    Mississippi River Basin. In fiscal year 2004, approximately $108,000
    was provided by these ``General Coverage Funds'' for gages in the St.
    Paul and Rock Island Districts.
                                     ______

                Prepared Statement of the Ventura Port District

        The Ventura Port District respectfully requests that the Congress:
      --Support the administration's request for $2,910,000 to be included
            in the fiscal year 2005 Energy and Water Development
            Appropriations Bill for the U.S. Army Corps of Engineers
            maintenance dredging of the Ventura Harbor Federal channel and
            sand traps.
      --Include $300,000 in the fiscal year 2005 Energy and Water
            Development Appropriations Bill to complete a cost shared
            Feasibility Study to determine the advisability of modifying
            the existing Federal navigation project at Ventura Harbor to
            include a sand bypass system.

                                   BACKGROUND

        Ventura Harbor, homeport to 1,500 vessels, is located along the
    Southern California coastline in the City of San Buenaventura,
    approximately 60 miles northwest of the City of Los Angeles. The harbor
    opened in 1963. Annual dredging of the harbor entrance area is usually
    necessary in order to assure a navigationally adequate channel. In
    1968, the 90th Congress made the harbor a Federal project and committed
    the U.S. Army Corps of Engineers to provide for the maintenance of the
    entrance structures and the dredging of the entrance channel and sand
    traps.
        The harbor presently generates more than $40 million in gross
    receipts annually. That, of course, translates into thousands of both
    direct and indirect jobs. A significant portion of those jobs are
    associated with the commercial fishing industry (the harbor is
    consistently amongst the top ten commercial fishing ports in the United
    States), and with vessels serving the offshore oil industry.
    Additionally, the headquarters for the Channel Islands National Park is
    located within the harbor, and the commercial vessels transporting the
    nearly 100,000 visitors per year to and from the Park islands offshore,
    operate out of the harbor. All of the operations of the harbor,
    particularly those related to commercial fishing, the support boats for
    the oil industry, and the visitor transport vessels for the Channel
    Islands National Park are highly dependent upon a navigationally
    adequate entrance to the harbor.

                         OPERATIONS & MAINTENANCE NEEDS

    Maintenance Dredging
        It is estimated that $2,910,000 will be required to perform routine
    maintenance dredging of the harbor's entrance channel and sand traps
    during fiscal year 2005. This dredging work is absolutely essential to
    the continued operation of the harbor.

                                  STUDY NEEDS

        It is estimated that $300,000 will be required during fiscal year
    2005 to complete a cost shared Feasibility Study to determine the
    advisability of modifying the existing Federal navigation project at
    Ventura Harbor to include a sand bypass system. Given the continuing
    need for maintenance dredging, it is appropriate to determine if a sand
    bypass system or other measures can accomplish the maintenance of the
    harbor in a manner that is more efficient and cost effective than the
    current contract dredging approach.
                                     ______

                  Prepared Statement of the Port of Garibaldi

        Mr. Chairman and members of the subcommittee, my name is William
    Schrieber. I am an elected Commissioner 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, 2003
    and 2004, and we also appreciate the opportunity to present our views
    on fiscal year 2005 appropriations issues.

                             APPROPRIATIONS REQUEST

        The Port of Garibaldi requests a $2,600,000 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 continue 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, $300,000 for Plans and
    Specifications in fiscal year 2003, and $300,000 to begin construction
    of the revetment in fiscal year 2004. The final amount provided by
    Congress for fiscal year 2004 was $400,000. These appropriations were
    made above the administration's budget requests for the project. The
    Major Maintenance Report was completed in December 2003. The total cost
    to build the revetment and 100 ft. caps at the North and South Jetty
    heads will be approximately $16,700,000. These have been identified by
    the Portland District of the U.S. Army Corps of Engineers as among the
    minimum and necessary repairs to achieve a stable project. To undertake
    all necessary repairs would cost approximately $41,300,000. The
    administration did not request funding for this project for fiscal year
    2005.

                    REPORT ON THE TILLAMOOK BAY JETTY SYSTEM

        There are serious problems with both jetties. The Corps' ongoing
    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 crew members 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 2003, the Corps completed a Major Maintenance Report
    for the Tillamook North and South Jetties. The following paragraphs are
    included in the executive summary of the report.

        ``The north and south jetties at the entrance to Tillamook Bay have
    experienced damage to both jetty heads, trunks, and north jetty root. A
    recent apparent increase in the Pacific Ocean wave climate has exposed
    both jetties to more extreme storm waves, especially the south jetty
    which is more exposed to southwesterly storm events. In addition to the
    increases concern regarding jetty stability, there is concern that
    further recession of the jetty heads will contribute to already
    hazardous navigation conditions over the ebb tital shoal or bar.
        ``Erosion of the shoreline along the north jetty is a major concern
    in terms of a potential breach at the jetty root. The jetty root has a
    smaller cross-section and the proximity of the deep channel (40 ft. in
    depth) to this section of jetty is of increasing concern. The
    increasingly severe shore erosion at the north jetty root appears to be
    related to the north jetty head recession.
        ``The north jetty has lost 384 ft. of jetty from the seaward end of
    its 5,700 ft. authorized length. The south jetty has lost 666 ft. from
    the seaward end of its 8,025 ft. authorized length. By 2006, at
    historical jetty head recession rates, the north jetty will be 480 ft.
    shorter than the authorized length. The south jetty will be 890 ft.
    shorter than the authorized length. The south jetty has never been
    repaired since its construction in 1969 to 1979 (25 to 35 years). The
    north jetty damage reach includes 1,050 ft. that has not been repaired
    since construction in 1918 (86 years).''

        Background.--Since settlement in the 1800's, 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.

                            ECONOMIC CHARACTERISTICS

        The following was also included in the Corps December 2003 Major
    Maintenance Report.

        ``Entrance and Port Usage.--The Tillamook entrance is one of the
    most heavily used on the Oregon Coast and recent surveys indicate than
    the Port of Garibaldi is the third busiest recreational port in Oregon,
    behind the Port of Brookings and the Port of Umpqua. Total visitation
    to the Port of Garibaldi was 64,350 (Party Days) in 2002. Visitors in
    the area spent $6,747,000 on trip related expenditures to the port.
    Sixty-nine percent of this spending was captured by local economy
    yielding $4,666,000 in direct sales to tourism related firms. These
    sales generated $1,847,000 in direct personal income and supported 118
    direct jobs. With multiplier effects, visitor spending resulted in
    $6,446,000 total sales, $2,543,000 in total personal income, and
    supported 143 jobs.
        ``Port Fleet Considerations.--Total number of boats associated with
    the Port of Garibaldi was 619 in 2002. Boat owners in this area spent
    $1,127,000 on boat related annual and fixed expenditures in the region.
    Thirty-nine percent of this spending was captured by local economy
    yielding $434,000 in direct sales to related industries. These sales
    generated $168,000 in direct personal income and supported 08 direct
    jobs. With multiplier effects, visitor spending resulted in $589,000
    total sales, $223,000 in total personal income, and supported 11 jobs.
    The Port of Garibaldi is also an active commercial fishing port.
    Garibaldi's total landing volume and value in the year 2000 was 1.7
    million pounds and $2.0 million. The share of landing volume for
    groundfish was 16 percent. There were a total of 1,548 fishing trips
    made by 92 different vessels in the year 2000. There were nine
    different processors, buyers, restaurants, etc. issuing more than
    $10,000 in fish tickets.
        ``Marine Facilities.--The Port of Garibaldi has over 300 slips
    available, with 60 slips available for vessels over 40 feet in length.
    The port also has 300 feet of dock available for transient vessels. The
    Coast Guard Tillamook Bay Station reports search and rescue cases
    annually. From 1995 to 2001, the station reported an average of 215
    cases each year, with a high of 282 cases in 1999 and, a low of 152
    cases in 2000.''

                                   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 Louisiana Governor's Task Force on Maritime
                                    Industry

    THE LOWER MISSISSIPPI RIVER AND CONNECTING WATERWAYS AND THE J. BENNETT
                               JOHNSTON WATERWAY

        Mississippi River Ship Channel, Gulf to Baton Rouge, LA.--Recommend
    the Corps be funded $537,000 (Construction General) to perform required
    work on the saltwater intrusion Phase 1 mitigation plan and to prepare
    a report on deepening the river to its authorized depth of 55-foot
    depth.
        Mississippi River, Baton Rouge to the Gulf--Maintenance Dredging.--
    The President's Fiscal Year 2005 Budget is $59,125,000 under O&M
    General. Recommend that the Corps be funded $74,400,000 to construct
    foreshore rock dike, repair South Pass jetties, and to repair Southwest
    Pass pile dike and tie-in.
        Mississippi River Gulf Outlet (MRGO), LA--Maintenance Dredging.--
    The President's Fiscal Year 2005 Budget is $13,004,000 under O&M
    General. Recommend that the Corps be funded $38,400,000 for maintenance
    dredging and bank stabilization.
        Inner Harbor Navigation Canal (IHNC) Lock, LA.--The President's
    Fiscal Year 2005 Budget is $10,000,000 in Construction General funds.
    Recommend that the Corps be funded $24,000,000 to continue
    construction, design and mitigation for the IHNC Lock replacement.
        Mississippi River Outlets at Venice, LA.--The President's Fiscal
    Year 2005 Budget is $424,000 under O&M General. Recommend that the
    Corps be funded $3,700,000 to perform critical maintenance dredging and
    to repair jetties.
        Bayou Sorrel Lock, LA.--The President's Fiscal Year 2005 Budget is
    $550,000 under General Investigation Studies 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.
        Gulf Intracoastal Waterway, LA and TX.--The President's Fiscal Year
    2005 Budget is $17,476,000 under O&M General. Recommend that the Corps
    be funded $27,300,000 to perform critical maintenance at the navigation
    locks.
        MRGO Reevaluation Study, LA.--The President's Fiscal Year 2005
    Budget is $225,000 (General Investigation) to initiate an ecosystem
    restoration study of the MRGO.
        J. Bennett Johnston Waterway, Mississippi River to Shreveport,
    LA.--The President's Fiscal Year 2005 Budget is $4,000,000
    (Construction General) and $10,600,000 (O&M General). Recommend that
    the Corps be funded $20,000,000 (Construction General) and $18,000,000
    (O&M, General) to initiate new work and complete work already underway.
        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 and the J. Bennett Johnston Waterway and the maritime
    interests related thereto of the State of Louisiana relative to
    congressional appropriations for fiscal year 2005.
        The U.S. Army Corps of Engineers reports that in 2002 a total of
    421.1 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 20.5 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 293,000 barges through the Port of New Orleans
    annually. In 2002, 1,967 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 (40.5 percent); Asia (28.7 percent); Europe (20 percent);
    Africa (9.4 percent) and North America (1.4 percent). During the same
    year, 5,448 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
    2002, the region's ports and port facilities handled 227.5 million tons
    of foreign waterborne commerce. Valued at $39.2 billion, this cargo
    accounted for 18.1 percent of the Nation's international waterborne
    trade and 27 percent of all U.S. exports. Bulk cargo, primarily
    consisting of tremendous grain and animal feed exports and petroleum
    imports, made up 88.3 percent of this volume. Approximately 50.2
    million tons of grain from 17 States, representing 62.4 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 91.2 million short tons of
    petroleum and petroleum products, 15.9 percent of U.S. waterborne
    imports of petroleum products.
        In 2002, public and private facilities located within the
    jurisdiction of the Board of Commissioners of the Port of New Orleans,
    the fifth largest port in the United States, handled a total of 85
    million tons of international and domestic cargo. International general
    cargo totaled 9.6 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 2005 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 216.4 million tons of foreign and
    domestic cargo in 2002, and the Port of Baton Rouge, the Nation's ninth
    largest port with 60.6 million tons of foreign and domestic cargo in
    2002, 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 2005 Budget is
    $59,125,000 under O&M General. We, however, strongly recommend that the
    Corps be funded $74,400,000 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
    container and cold storage facilities and generates significant
    economic impact for the region. In 2002, 374 general cargo vessels
    calling on the Port's MRGO terminals accounted for 31.5 percent of the
    general cargo tonnage handled over public facilities at the Port and 70
    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 2005 Budget is $13,004,000 under O&M General. We, however,
    strongly recommend that the Corps be funded $38,400,000 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. We strongly
    recommend that the Corps 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 1 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 2005 Budget of
    $10,000,000 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
    $24,000,000 to 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 2002, these channels accommodated cargo
    movements exceeding 2.6 million tons. In addition to routine traffic,
    shallow draft vessels use Baptiste Colette Bayou as an alternate route
    between the MRGO, GIWW and the Mississippi River. The President's
    Fiscal Year 2005 Budget is $424,000 under O&M General. We, however,
    strongly recommend that the Corps be funded $3,700,000 to perform
    critical maintenance dredging.
        More than 72.4 million tons of cargo transverse the GIWW in the New
    Orleans District annually. The President's Fiscal Year 2005 Budget is
    $17,476,000 under O&M General. We, however, strongly recommend that the
    Corps be funded $27,300,000 to perform critical maintenance at the
    navigation locks.
        The President's Fiscal Year 2005 Budget for the Bayou Sorrel Lock,
    LA project is $500,000 in GI funds. To assure the efficient flow of
    commerce on the GIWW, we urge that the Corps be funded $500,000 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 $1,000,000 in GI funds to
    advance the completion of the feasibility phase of the study to replace
    Calcasieu Lock on the GIWW.
        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 2005 Budget is
    $4,000,000 (Construction General) and $10,600,000 (O&M General). We,
    however, strongly recommend that the Corps be funded $20,000,000
    (Construction General) and $18,100,000 (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 that 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 also 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.
        Supporting statements from Mr. Gary P. LaGrange, Executive Director
    of the Port of New Orleans; Mr. Joseph Accardo, Jr., Executive Director
    of the Port of South Louisiana; Mr. Roger Richard, Executive Director
    of the Greater Baton Rouge Port Commission; Mr. Channing Hayden,
    President of the Steamship Association of Louisiana; Capt. A. J. Gibbs,
    President of the Crescent River Port Pilots Association and Capt.
    Michael R. Lorino, Jr., President, Associated Bar Pilots are attached.
    Please make these statements along with my statement part of the
    record. Supplemental graphics relating to my statement have been
    furnished separately for staff background use. Thank you for the
    opportunity to comment to the subcommittee on these vital projects.

             PRESIDENT'S BUDGET REQUEST & RECOMMENDED FUNDING LEVELS
                            [In thousands of dollars]
    ------------------------------------------------------------------------
                                                President's     Recommended
                     Project                  Budget Request  Funding Levels
    ------------------------------------------------------------------------
    Mississippi River Ship Channel Gulf to    ..............             537
     Baton Rouge, LA (Construction General).
    Mississippi River, Baton Rouge to the             59,125          74,400
     Gulf, Maintenance Dredging &
     Stabilization (O&M General)............
    Mississippi River-Gulf Outlet (MR-GO),            13,004          38,400
     LA (O&M General).......................
    Inner Harbor Navigation Canal Lock, LA            10,000          24,000
     (Construction General).................
    Mississippi River Outlets at Venice, LA              424           3,700
     (O&M General)..........................
    Bayou Sorrel Lock, LA (GI Funds)........             550             550
    Gulf Intracoastal Waterway LA & TX (O&M           17,476          27,300
     General)...............................
    MRGO Reevaluation Study, LA (General                 225             225
     Investigation).........................
    J. Bennett Johnston Waterway                       4,000          20,000
     (Construction General).................
    J. Bennett Johnston Waterway (O&M                 10,600          18,100
     General)...............................
                                             -------------------------------
          TOTAL.............................         115,404         207,212
    ------------------------------------------------------------------------

                                     ______

            Prepared Statement of the Port San Luis Harbor District

        On December 22, 2003, a magnitude 6.5 earthquake jolted the central
    California coast. The epicenter was about 40 miles northeast of the
    Port San Luis Harbor federally-owned breakwater. This earthquake caused
    significant damage to the structure, which prior to that date, had been
    in good condition. Based on its preliminary survey, the U.S. Army Corps
    of Engineers (USACE) estimated that repairs will cost $4 million. USACE
    owns and is responsible for maintaining this breakwater. President Bush
    declared our region a disaster area (DR 1505) on January 13, 2004;
    however, FEMA does not provide financial assistance to other Federal
    agencies.

                                    HISTORY

        Construction of a breakwater at Port San Luis was authorized by
    Congress in 1888 and USACE began construction in 1893. The Federal
    breakwater was completed in 1913. It was destroyed by severe storms in
    1923, and redesigned and rebuilt to the current specifications in 1927.
        USACE has repaired damages to the breakwater three times:
      --In 1935 after storms from earlier years.
      --In 1984 after severe 1982 El Nino storms that also sunk 27 vessels
            and destroyed 2 piers.
      --In 1992 after 1991 El Nino storms. (Port San Luis Harbor District
            was the local sponsor and contributed in-kind services for
            maintenance and repair.)

                             NATIONAL SIGNIFICANCE

        A small local government, Port San Luis Harbor District has limited
    funds. We have made the breakwater repair project our highest priority
    because of its significant regional, State, and national importance for
    the following reasons.
      --Port San Luis Harbor is the nearest safe harbor of refuge to Point
            Conception, the ``Cape Horn of the Pacific.''
      --Port San Luis Harbor is a U.S. Customs and Border Protection (CBP),
            Port of Entry station. A Port of Entry is a designated place
            where a CBP officer is authorized to accept entries of
            merchandise, collect duties, and enforce the various provisions
            of the customs and navigation laws (19 CFR 101.1).
      --Port San Luis Harbor is the closest port to the Diablo Canyon
            Nuclear Power Plant. The land entrance to the power plant is at
            Port San Luis; our Security personnel are on the frontline
            monitoring threats to homeland security. The harbor is used to
            receive and transport heavy equipment for the nuclear power
            plant. Two 120-ton rotors are scheduled for delivery through
            Port San Luis in 2006 and 2008. Calm water is essential to
            offload this equipment. There is also the matter of
            transferring spent nuclear fuel from the power plant to a
            Federal depository sometime in the future. As currently
            proposed by the Department of Energy (DOE), this high level
            nuclear waste will either be barged out of Port San Luis or
            shipped by road. Either way, without the breakwater, access to
            the harbor by road or ship will be severely restricted.
      --Port San Luis is home to the California Polytechnic State
            University's Center for Coastal Marine Science (CCMS) Pier
            located on the former Unocal Oil Pier. This Pier Structure is
            valued at $23 million. Agencies currently providing funding to
            the CCMS are: California Department of Health Services,
            National Air Space Administration, National Oceanic and
            Atmospheric Administration, National Science Foundation, Office
            of Naval Research; Naval Surface Warfare Center, The National
            Oceanographic Partnership Program, California Regional Water
            Quality Control Board, National Estuary Program/EPA, and Unocal
            Corporation.
      --In 2000 the California legislature designated Port San Luis Harbor
            one of several ports along the California coast as a harbor of
            safe refuge. This legislation recognizes the critical role our
            harbor plays in affording a safety zone for commercial and
            industrial vessels transiting the California coast. U.S. Coast
            Guard vessels, scientific research vessels, oil-industry
            related vessels and other large vessels stop at the Port,
            especially during storms, to find calm water protected by the
            Federal breakwater.
      --Port San Luis is one of the primary facilities on the central
            California coast used by fiber optic cable ships to install and
            repair transpacific fiber optic cables. Several cable landings
            are in waters near the port and are serviced by large cable-
            laying ships. This international communication support facility
            (harbor) is critical to the national security and global
            commerce. A safe harbor to resupply and moor cable-laying ships
            and associated watercraft is critical.
      --The Port is home to 240 commercial and recreational fishing vessels
            that contribute to the economy and job markets in central
            California. The supporting landside businesses are dependent on
            the local fleet to generate jobs and revenue producing goods
            and services--including ships chandleries, vessel haul-out and
            repair facilities, fueling stations, seafood buying stations,
            and ancillary services.
        For these reasons, we request a congressional ``add'' of $4 million
    to the fiscal year 2005 Budget to repair the earthquake damage to the
    Federal breakwater.
                                     ______

    Prepared Statement of the Coosa-Alabama River Improvement Association,
                                      Inc.

        Mr. Chairman and distinguished committee members, I request the
    President's fiscal year 2005 Budget be adjusted to reflect
    appropriations to U.S. Army Corps of Engineers civil works projects on
    the Alabama River as follows:

    ------------------------------------------------------------------------
                                                       Amount
    ------------------------------------------------------------------------
    Alabama-Coosa....................  $4,549,000 (add of $4,000,000).
    Millers Ferry L&D................  4,863,000 (add of $320,000).
    Robert F. Henry L&D..............  4,890,000 (add of $300,000).
    ------------------------------------------------------------------------

        I make these requests as President of an Association formed in 1890
    to promote commercial navigation on the Coosa and Alabama Rivers. Our
    members are the cities, counties, businesses, and individuals from
    Rome, Georgia to Mobile, Alabama. We value our inland waterways and are
    very distressed that the President's proposed cuts on our projects are
    being done with no thought as to consequences to the citizens of this
    river basin.
        Alabama-Coosa.--The President's Budget proposal for fiscal year
    2005 eliminates funding for dredging the Alabama River navigation
    channel as well as for maintaining the lock at Claiborne Dam. Not
    funding these projects will close the Alabama River navigation channel,
    sever the only waterway link between the capital city of Montgomery and
    the Port of Mobile, and isolate three-fourths of the river basin from
    the Gulf of Mexico.
        Severing the channel will have major negative economic effects in
    central Alabama, an area bustling with expansion of new industries and
    subsidiaries. Hyundai Motor Company located its first American-based
    automobile manufacturing plant, a $1 billion investment, in the
    Montgomery area because of the available infrastructure, including the
    waterway. Hyundai has plans this calendar year and in 2005 to move
    several pieces of outsized equipment, weighing up to 125,000 pounds
    each and part of a $20 million stamping press, to its plant via the
    Alabama River, the only transportation artery capable of safely moving
    equipment of that size. The channel is essential to Hyundai operations.
        The Gulf Logistics and Projects Company of Houston, Texas, which
    will be a major transporter of raw materials to Hyundai, indicates that
    closing the navigation channel will cause ``painful economic distress
    if the barge delivery system is denied to foreign manufactures (sic)
    trying to relocate their factories into the United States, near
    Montgomery, Alabama . . . Without the Alabama River, quantity raw
    materials movements may become too expensive and production be
    curtailed.'' This is a strong statement from a Korean firm planning to
    establish an office in Mobile just to support Hyundai, and I believe is
    a compelling argument to keep the navigation channel fully operational.
        Another major industry that will be hard hit is Alabama River Pulp
    Company of Perdue Hill, Alabama, a $1.4 billion investment and one of
    the largest paper manufacturing plants in the world. Alabama River Pulp
    receives fuel oil via barge. If the channel closes, that fuel oil will
    have to be trucked in at an additional annual cost of $1.5 million
    while putting 2500 additional trucks of fuel oil on Alabama's highways.
    Why would we want to do that?
        Closing Claiborne Lock has other consequences for ARP, which is
    located only about three miles downstream of Claiborne Dam and is
    heavily reliant on predictable and controlled flows and river levels.
    Not funding the lock operation means the personnel operating that lock
    and who also control the dam flow control gates would be cut,
    imperiling the flow control procedures on which ARP relies to provide
    cooling water to its plant. ARP strongly objects to any cuts that
    jeopardize that flow management.
        Closing the channel is a direct threat to some sand and gravel
    companies. Two companies that currently move approximately 100,000 tons
    on the Alabama annually have the resources to move over 300,000 tons,
    but are stymied because reduced dredging the past 2 years has allowed
    the river to silt in, causing severe navigation safety problems. Couch
    Ready Mix USA, which has a $5 million investment on the river near
    Montgomery, has stated in writing that, if the channel were fully
    maintained, it alone has an annual capacity of over 300,000 tons to
    move on the river to the Gulf of Mexico.
        One of the major benefits of barge transportation is its
    contribution to traffic and pollution safety. A May 2001 Latin American
    Trade and Transportation Study, sponsored by the Southeastern
    Transportation Alliance, predicts that imports into the Gulf of Mexico
    from Latin America will triple by 2020. It is reasonable to assume that
    the Port of Mobile will get its fair share of that increased traffic,
    much of which will be containers. Those commodities will have to move
    out of Mobile by rail, road, or waterway. Rail is limited in its
    capacity to absorb these increases. Truck congestion on the highway
    system leading out of Mobile will be intolerable, as should be the
    additional pollution. (Per ton-mile, barges emit only 10 percent of
    emissions produced by trucks and 25 percent of that produced by rail.)
    It makes sense, from economic, environmental, and safety views, to move
    some of that cargo, including containers, onto the waterways, including
    the Alabama River, an option not available if the waterway is closed.
        The proposal to close Claiborne Lock alone has dire consequences
    beyond the effect on commercial navigation. The Alabama River is the
    only waterway connecting the capital city of Montgomery to the Gulf of
    Mexico. Severing the channel will stop ever-increasing recreational
    traffic from Montgomery to the Gulf. Eighty percent of the vessels
    locking through Claiborne are recreational craft. There is a strong
    move within the basin to develop a system of marinas to support
    recreational vessels from bass boats to 80-foot cruisers. Wilcox
    County, one of the least developed and highest unemployment (16.4
    percent) counties in the State, is planning to construct a full-service
    marina and lodging facility on the Alabama to attract and serve
    recreational craft of all sizes, a facility that will provide jobs
    Closing the navigation channel will kill that project as well as well
    as projected revenue for this depressed area.
        Millers Ferry Lock and Dam and Robert F. Henry Lock and Dam.--The
    President's Budget also eliminates funding to maintain several of the
    Corps' recreational areas along the Alabama River. Over 3 million
    people visited these sites last year and spent over $60 million within
    30 miles of the facilities, 66 percent of which was a direct input into
    the local economy. With proposed cuts in maintenance of $320,000 at
    Millers Ferry and $300,000 at Robert F. Henry, the Mobile District will
    be forced to scale back maintenance at all sites, close three of the
    six campgrounds 6 months out of the year, reassign park rangers, and
    drop contracted maintenance.
        Without maintenance, these facilities will deteriorate.
    To``save''$620,000, the administration is willing to sacrifice a strong
    economic multiplier in an economically-depressed area of the country.
    This kind of ``saving'' doesn't make economic sense.
        Attached is a list of businesses, individuals, and local and State
    government agencies expressing concern about these proposed cuts in the
    Alabama River civil works projects. To a person, these citizens view
    the proposed cuts as ``devastating for industrial development in the
    State of Alabama.'' Any ``savings'' from the proposed cuts will be a
    Pyrrhic victory, dwarfed by staggering losses to the State of Alabama.
        In summary, the President's Budget proposal for fiscal year 2005
    will be a major economic blow to Central Alabama. For the appearance of
    ``savings'', the administration is willing to eliminate an important
    transportation asset for the State of Alabama and put in jeopardy
    businesses sorely needed in an economically depressed area with
    unemployment up to 15 percent. I request funding be placed into the
    fiscal year 2005 Energy and Water Appropriations Act to allow the Corps
    of Engineers to maintain the authorized navigation channel on the
    Alabama River and to keep the recreation areas open year around for the
    benefit of our citizens.

                 LETTERS SUPPORTING CARIA STATEMENT--MARCH, 2004
    ------------------------------------------------------------------------

    ------------------------------------------------------------------------
    The Honorable Otha Lee Biggs....  Monroe County       Monroeville, AL.
                                       Commission.
    The Honorable Jim Byard.........  Mayor, City of      Prattville, AL.
                                       Prattville.
    Mr. F. Slaton Crawford..........  Dir, Wilcox County  Camden, AL.
                                       C of C.
    Mr. Elton N. Dean...............  Montgomery County   Montgomery, AL.
                                       Commission.
    Mr. Ken Fairly..................  Alabama River Pulp  Monroeville, AL.
                                       Company.
    The Honorable Anne Farish.......  Mayor, City of      Monroeville, AL.
                                       Monroeville.
    Mr. Trey Glenn..................  Alabama Office of   Montgomery, AL.
                                       Water Resources.
    The Honorable Sue Glidewell.....  Mayor, City of      Rainbow City, AL.
                                       Rainbow City.
    Mr. Lynn A. Gowan...............  Montgomery County   Montgomery, AL.
                                       Commission.
    Mr. Robert F. Henry, Jr.........  Robert F. Henry     Montgomery, AL.
                                       Tile Co..
    Mr. Slade Hooks, Jr.............  Waterways Towing &  Mobile, AL.
                                       Offshore Svcs.
    The Honorable John W. Jones, Jr.  Dallas County       Selma, AL.
                                       Probate Judge.
    Mr. Wm. F. Joseph, Jr...........  Montgomery County   Montgomery, AL.
                                       Commission.
    Captain Jeong Dae Kim...........  Gulf Logistics &    Houston, TX.
                                       Projects.
    Mr. James Lyons.................  Alabama State       Mobile, AL.
                                       Docks.
    Ms. Ellen McNair................  Montgomery Area C   Montgomery, AL.
                                       of C.
    Mr. Donald L. Mims..............  Montgomery County   Montgomery, AL.
                                       Commission.
    The Honorable James Perkins.....  Mayor, City of      Selma, AL.
                                       Selma.
    Mr. Phillip A. Sanguinetti......  The Anniston Star.  Anniston, AL.
    Mr. Steven D. Shaw..............  Couch Ready-Mix     Dothan, AL.
                                       USA.
    Ms. Sandy Smith.................  Monroeville Area C  Monroeville, AL.
                                       of C.
    Mr. J. Craig Stepan.............  Warrior & Gulf      Mobile, AL.
                                       Navigation.
    Mrs. Anne Henry Tidmore.........  ..................  Montgomery, AL.
    Mr. Wayne Vardaman..............  Selma & Dallas      Selma, AL.
                                       County Cntr. for
                                       Co..
    Mr. Jiles Williams, Jr..........  Montgomery County   Montgomery, AL.
                                       Commission.
    Mr. Sam H. Wingard..............  Montgomery County   Montgomery, AL.
                                       Commission.
    ------------------------------------------------------------------------

                                     ______

       Prepared Statement of the Board of Mississippi Levee Commissioners

        Mr. Chairman and members of the committee, 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
    seven 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 provinces 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 $450
    million for fiscal year 2005 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.
        Thanks to the additional funding over and above the
    administration's budget that has been provided by the Congress over the
    last several years, work on the Mainline Mississippi River Levee
    Enlargement Project is continuing. This funding has resulted in having
    7.6 miles of work completed and returned to the Levee Board for
    maintenance, and 24.4 miles are currently under contract. Right of way
    is being acquired on the next 3.4 miles with the contract being
    scheduled for award in September of this year. This will result in over
    half of the deficient 69 miles in our District being completed or under
    contract. We are requesting $54.8 million for construction on the
    Mainline Mississippi River Levees in the Mississippi Valley Division
    which will allow the Vicksburg and Memphis districts to keep existing
    contracts on schedule and award contracts to avoid any unnecessary
    delays in completing this vital project. We are all well aware that the
    Valley some day will have to endure a Project Flood, we just don't know
    when. We must be prepared.
        Three projects in Mississippi are on the list included in the
    administration's budget targeted for cancellation by the Office of
    Management and Budget. These are all projects authorized and funded so
    wisely by the Congress. The administration's proposal includes language
    to return unobligated funds to the Treasury. This action is especially
    difficult to understand during a time when our Nation needs an economic
    boost. All of these projects are encompassed in the footprint of the
    Delta Regional Authority, an area recognized by the Congress as
    requiring special economic assistance to keep pace with the rest of our
    great Nation. We can not lose sight of the fact that all of these
    projects are required to return more than a dollar in benefits for each
    dollar spent. No project authorized and funded by the Congress should
    be indiscriminately terminated without the benefit of having the
    opportunity to complete with the study process and subsequent
    construction after complying with the Corps Policy and Guidelines.
        One of the projects on this list will provide benefits to parts of
    six counties in the south part of the Mississippi Delta who continue to
    patiently wait for the completion of the Yazoo Backwater Project. This
    work authorized by the Congress to provide protection from higher
    stages on the Mississippi River resulting from changes made to the
    Mississippi River and Tributaries Project, must safely pass flood water
    from 41 percent of the continental United States. Also, the same change
    in the flow line of the Mississippi River that is requiring the
    Enlargement of the Mainline Mississippi River Levee will also increase
    stages in the South Delta. The Corps and EPA have made an extraordinary
    effort to resolve differences in wetland impacts resulting from the
    construction of the Corps recommended plan for this project. This plan
    has received the support of all six county Boards of Supervisors in the
    project area. We are requesting this project be funded by the Congress
    in the amount of $12 million. These funds will allow the Corps to begin
    acquisition of the reforestation easements and initiate the award of
    the pump supply contract.
        Another project on the administration's hit list is the Big
    Sunflower River Maintenance Project. The first item of work has been
    completed and right-of-way has been acquired for the next item of work.
    Our request for $2.139 million will allow right-of-way acquisition to
    continue and for the award of the first dredging contract. The
    residents in South Washington County continue to suffer damages from
    flooding while they continue to wait for this maintenance project to
    reach their area.
        The third project in Mississippi targeted by the administration for
    cancellation is the Delta Headwaters Project, formerly the
    Demonstration Erosion Control Project. Work carried out as part of this
    project has proven effective in reducing sediments to downstream
    channels. To discontinue this project will only increase sediment in
    downstream channels, reducing the level of protection to the citizens
    of the Delta and increasing required maintenance. We are requesting $25
    million to continue this project.
        The Upper Yazoo Project is critical to the Delta. The Corps of
    Engineers operates 4 major flood control reservoirs on the bluff hills
    overlooking the Mississippi Delta. These reservoirs hold back heavy
    spring rains and must have adequate channel capacity to pass this
    excess runoff during the summer and fall months. Without completion of
    the Upper Yazoo Project, the Corps is forced to hold flood water from
    the previous spring, thereby reducing the ability to provide protection
    from the current year's flood water. The administration's budget of
    $3.85 million will require the Vicksburg District to suspend
    construction of three ongoing contracts. We urge the Congress to
    provide additional funds to increase the budget amount to $20 million
    allowing construction to continue and the award of additional channel
    items that will extend construction upstream to Glendora, Mississippi.
        Maintenance of completed works can not be over looked. The four
    flood control reservoirs over looking the Delta have been in place for
    50 years and have functioned as designed. Required maintenance must be
    performed to avoid any possibility of failure during a flood event. The
    recent dam failure in south Mississippi less than 2 weeks ago can only
    magnify the need to adequately maintain our infrastructure. We are
    asking for $12.9 million for Arkabutla Lake, $19.322 million for Sardis
    Lake, $13.679 million for Enid Lake, and $10.101 million for Grenada
    Lake. Additional funding will be used to replace rip rap at all 4
    reservoirs, repair the spillways at Arkabutla and Sardis, and upgrade
    other infrastructure around all the lakes.
        We are requesting $14.915 million for Maintenance of the Mainline
    Mississippi River Levees which will provide for repair of levee slides,
    slope repair, and repair of the gravel maintenance roadway which is so
    vital to access during high water.
        Other Mississippi projects that require additional funding to keep
    on schedule include:

                            [In thousands of dollars]
    ------------------------------------------------------------------------
                                Project                               Amount
    ------------------------------------------------------------------------
    Big Sunflower River (Upper Steele Bayou).......................    5,000
    Yazoo Basin Reformulation Unit.................................      450
    Yazoo Basin Main Stem..........................................       25
    Yazoo Backwater (Greentree Reservoirs).........................      300
    ------------------------------------------------------------------------

        I have reviewed a great deal of information regarding the needs of
    providing flood protection to our area. Another major feature of the
    Mississippi River & Tributaries Project relates to navigation interest
    along the Mississippi River. Several of our ports have been informed
    that the President's budget does not include funding for Critical
    Harbor Dredging necessary to keep these harbors opened for navigation.
    Our port commissioners have been notified that lack of dredging will
    cause these ports to be shut down and be a hazard to navigation. This
    will impact the movement of over 4.5 million tons of cargo being
    shipped on our waterways annually from these ports. This equates to an
    additional 180,000 truck loads of products on our highways. It is
    imperative that funding be made available for Critical Harbor Dredging
    to allow continued operation of these facilities, which are key
    features to the economic growth of the region.
        As members of the Congress representing the citizens of our Nation
    who live with the Mississippi River everyday, you clearly understand
    both the benefits provided by this resource, and the destructive force
    that must be controlled during a flood. On behalf of the Mississippi
    Levee Board, I can not express enough, our appreciation for your
    efforts in providing adequate funding over the last several years that
    has allowed construction to continue on our much needed projects.
                                     ______

               Prepared Statement of the Blue Valley Association

        The Blue Valley Association has 164 members representing thousands
    of employees in the Blue Valley industrial area. These high paying jobs
    have been put at risk from past flooding in the valley. Since 1920 the
    association has been dedicated to improving our industrial area and
    maintaining jobs. Continued funding of the Blue River Project is
    essential to this goal.
        The project, which began in 1983, is located along the Blue River
    from its mouth at the Missouri River continuing approximately 12 miles
    upstream to 63rd Street, running through an industrial area of Kansas
    City, which is a long-standing business district employing 12,000
    people, and containing many residential neighborhoods.
        The progress made to date has provided significant benefits to
    those businesses downstream. But much work remains. Delays in funding
    will increase the risk of flooding as rapid development of the
    watershed in the State of Kansas increases the run off. Increased
    flooding has forced many businesses to abandon the valley and relocate
    to new ``Greenfields''. The project's completion date has already been
    delayed from 1998 to 2008.
        This is an economically sound project with a benefit to cost ratio
    of 3 to 1. Therefore, we urge you to provide the $8,000,000 in funding
    needed to continue this project.
                                     ______

                  Prepared Statement of the Mo-Ark Association

        Mr. Chairman, the Mo-Ark Association welcomes this opportunity to
    provide written testimony to the Subcommittee on Energy and Water
    Development regarding appropriations for fiscal year 2005 and requests
    that this written testimony be included in the formal hearing record.
        The Mo-Ark Association is a long-standing organization that
    promotes beneficial use of water and land related resources in the
    Missouri and portions of the Arkansas River Basins, primarily within
    the States of Kansas and Missouri. We have advocated for flood damage
    reduction projects in our region since severe flooding ravaged the
    Midwest in 1951.
        The Mo-Ark Association requests the following General Investigation
    and Construction General Funding for Corps of Engineers' Water Resource
    projects underway in our region. Our fiscal year 2005 Federal
    appropriations request for these projects is presented in the following
    table, together with the activity to be performed with those funds by
    the Corps of Engineers. The projects with the highest priority are
    shown in cap type.

    ------------------------------------------------------------------------
                                         Fiscal Year
                  Project                    2005            Activity
                                           Request
    ------------------------------------------------------------------------
    BLUE RIVER CHANNEL.................   $8,000,000  CONTINUE CONSTRUCTION.
    TURKEY CREEK BASIN.................    2,500,000  CONTINUE CONSTRUCTION.
    Brush Creek Basin..................      200,000  Complete Study Effort.
    BLUE RIVER BASIN...................    4,000,000  CONTINUE CONSTRUCTION.
    SWOPE PARK INDUSTRIAL AREA.........      600,000  COMPLETE DESIGN.
    Kansas Citys (7 Levees)............      650,000  Continue Feasibility
                                                       Study.
    Upper Turkey Creek.................      500,000  Continue Feasibility.
    St. Joseph Levee...................      250,000  Complete Feasibility.
    Topeka Levee.......................      100,000  Complete Feasibility.
    Jefferson City Levee L-142.........    6,200,000  Begin Construction.
    RIVERSIDE LEVEE L-385..............   12,000,000  COMPLETE CONSTRUCTION.
    Missouri River Mitigation..........   20,000,000  Design & Construction.
    Missouri River Bank Stabilization &    5,000,000  Rehabilitation &
     Navigation Support.                               Construction.
    MISSOURI RIVER CHANNEL DEGRADATION       500,000  BEGIN STUDY.
     STUDY.
    ------------------------------------------------------------------------

        Mo-Ark also requests that the several key programs which provide
    Federal assistance for water related projects continue to be made
    available to local communities and that they are supported with annual
    appropriations. Among these: Small Flood Control Authority, Section 205
    of the 1948 Flood Control Act as amended; Flood Plain Management
    Services, Section 206 of the 1960 Flood Control Act; Planning
    Assistance to States, Public Law 93-251; and Emergency Bank
    Stabilization, Section 14 of the 1946 Flood Control Act as amended.
    Communities in our region have made use of these programs in the past
    and will continue to seek out beneficial uses for them in the future.
                                     ______

            Prepared Statement of the Kansas City Industrial Council

        The Kansas City Industrial Council (KCIC) supports the U.S. Army
    Corps of Engineers and local sponsor, Kansas City, Missouri, in the
    completion of the Feasibility Report on the Swope Park Industrial Area.
    We encourage the approval of this report as urgently as possible.
        The safety of many lives is directly affected by the Blue River as
    experienced in the May 15, 1990, flooding in the Swope Park Industrial
    Park. The Feasibility Report accurately defines this unique area by
    having only one way to enter and exit, land being surrounded by river
    and railroad tracks. This report also accurately depicts that the
    business owners and managers of Swope Park Industrial Park have
    continued to maintain property and employment while keeping flood
    protection the number one priority for employee safety.
                                     ______

                   Prepared Statement of DECO Companies, Inc.

        DECO Companies, Inc. has 90 employees currently in the Blue River
    Valley. Our affiliate companies have ownership of over a million square
    feet of industrial space leased to small ``Started Businesses''. To
    keep these businesses, valuable property and employees safe from floods
    continued funding of the Blue River project is essential.
        The project, which began in 1983, is located along the Blue River
    from its mouth at the Missouri River continuing approximately 12 miles
    upstream to 63rd Street, running through an industrial area of Kansas
    City, which is a long-standing business district employing 12,000
    people, and containing many residential neighborhoods.
        The progress made to date has provided significant benefits to
    those businesses downstream. But much work remains. Delays in funding
    will increase the risk of flooding as rapid development of the
    watershed in the State of Kansas increases the run off. Increased
    flooding has forced many businesses to abandon the valley and relocate
    to new ``Greenfields''. The project's completion date has already been
    delayed from 1998 to 2008.
        This is an economically sound project with a benefit to cost ratio
    of 3 to 1. Therefore, we urge you to provide the $8,000,000 in funding
    needed to continue this project.
                                     ______

                   Prepared Statement of Vance Brothers Inc.

        On behalf of the 200 employees of Vance Brothers Inc., I am
    requesting that you provide the funding necessary to continue the Blue
    River Channel Project.
        In 1993 and again in 1995 the water was so high that we had to
    initiate our Emergency Flood Plan. Besides costing thousands of
    dollars, it put employees out of work for several days.
        Because of the residential and commercial development of the upper
    Blue River basin in the State of Kansas, along with their paved parking
    lots and new storm sewer systems, we had up to 8 feet of water in our
    plant in 1990.
        Increased flooding has forced many businesses to abandon the
    valley. Delays in funding will increase the risk of flooding as rapid
    development of the watershed in the State of Kansas increases the run
    off. The project's completion date has already been delayed from 1998
    to 2008.
        This project will benefit the workers in our area creating good
    paying jobs.
        This is an economically sound project with a benefit to cost ratio
    of 3 to 1. Therefore, we urge you to provide the $8,000,000 in funding
    needed to continue this project.
                                     ______

                   Prepared Statement of Warehouse One, Inc.

        On behalf of the 55 associates of Warehouse One, Inc., and the
    thousands of other Kansas City workers and residents in the Blue
    Valley, I am requesting that you provide the $8,000,000 in funding
    necessary to continue the Blue River Channel Project.
        The Blue River flows through the historical and industrial heart of
    Kansas City with its lower stretch in the Enterprise Zone. Increased
    flooding from upstream development has forced many businesses to
    abandon the valley at a cost of thousands of jobs and lowered property
    values. The Army Corps of Engineers' revised completion date has now
    been extended from 1998 to 2008. This delay will only cause more
    companies and residents to leave our neighborhoods.
        In areas where the project has been completed, redevelopment is
    significant. Hundreds of millions of dollars of public and private
    money have been invested to reclaim abandoned properties providing
    jobs, homes, and tax dollars.
        The Blue River Channel Project, with a benefit to cost ratio of 3
    to 1 has already proven to be economically sound. I urge you to provide
    the $8,000,000 in funding to continue the project.
                                     ______

          Prepared Statement of the Bi-State Turkey Creek Association

        We received a NEW START APPROPRIATION in the Fiscal Year 2004
    Appropriations Bill and construction is underway.
        We MUST have funds to continue this project which affects hundreds
    of privately held company and thousands of employees.
        Major Interstate Highways 35 and 635 flood along with U.S. Highways
    69 and 169. The Main Lines of the Burlington-Northern and Santa-Fe
    railroads flood.
        We request that $2,500,000 be appropriated for fiscal year 2005 for
    continued construction.
                                     ______

                  Prepared Statement of the Livers Bronze Co.

        Livers Bronze Co. moved into Swope Industrial in 1999. We purchased
    two buildings that house our lifetime investments and the futures for
    many families. Coming into this we needed FEMA flood insurance but also
    knew there was a project under way to give us flood protection which at
    some point would eliminate this costly insurance. We have an active
    association and go to regular meetings with the U.S. Corps of Engineers
    and our sponsor, Kansas City, MO. At this time we have completed both
    Reconnaissance and Feasibility studies.
        The Blue River has a history of flooding in Kansas City. Downstream
    of 63rd Street the work has nearly been finished; the Bannister project
    at 95th Street has completed and the Dodson project at 85th Street has
    just started. This leaves the Swope project at 75th Street in between,
    not started and could possibly put us at higher risk during high water
    events. The Swope project is truly the last piece of the Blue River
    puzzle with regard to the flood protection of industrial sites along
    the Blue in Kansas City.
        We request that the $600,000 be appropriated to complete the design
    phase of the Blue River, Swope Industrial project. The ongoing expenses
    and threats of future floods in our park are detrimental to the
    different industries in our park. Without your help, our businesses and
    the lives of our employees and associates will always have the threats
    of flooding in our future. Please help us complete this last segment of
    the Blue River project.
                                     ______

                   Prepared Statement of The Salvajor Company

        The Swope Park Industrial Association member companies have
    collectively worked for flood protection for many years, even prior to
    our flooding in 1990. We have met many times with our sponsor, Kansas
    City, MO, and the U.S. Army Corps of Engineers, and have completed both
    Reconnaissance and Feasibility studies.
        Our location is separate of the Blue River Channel project that is
    from the mouth of the Blue River upstream to 63rd Street. As you know
    there are two other projects on the Blue River, the completed Bannister
    project at 95th Street and the newly under construction, Dodson project
    at 85th Street. Our location on 75th Street is between Bannister/Dodson
    and Blue River Channel projects. This location, between two active
    projects, puts us at higher risk than any other industrial area on the
    Blue River during high water events. Our project, when constructed,
    will complete the protection of industrial sites on the Blue River--the
    last piece of the puzzle.
        Even though we continue to work for the protection of our employees
    and the preservation of our business, we are now mostly concerned about
    continued funding of our project. We are a small project, and the only
    industrial area on the Blue River with the risk of not realizing
    construction since our project is still in design phase, a phase that
    is in most risk of not being funded for the upcoming year.
        Without funding, Swope Park Industrial area companies will
    definitely lose investments in property and jobs that were created here
    long before we were designated flood plains. We realize we are only one
    of many projects that need funding, but our project is unique in our
    location, our size, and we are the key to completion of a great program
    that has already shown positive results in retaining business and
    reducing blight in the completed areas. We request that the $600,000 be
    appropriated to complete the design phase of the Blue River; Swope Park
    Industrial project.
                                     ______

        Prepared Statement of the Clay and Bailey Manufacturing Company

        On behalf of the 60 employees of Clay & Bailey Manufacturing
    Company, I am requesting that you provide the $8,000,000 in funding
    necessary to continue the Blue River Channel Project.
        Our company, like many others in the valley, were ``high & dry'' in
    the record floods of 1961 and 1977. However, because of the residential
    and commercial development of the upper Blue River basin in the State
    of Kansas, along with their paved parking lots and new storm sewer
    systems, we had 5 feet of water in our plant in 1990. The $1.5 million
    in damages almost closed us down.
        The rainfall in 1990 was considerably less than in 1977, yet the
    extent of the flooding throughout the lower valley was much more
    severe. In 1993 and again in 1995 the water was so high that we had to
    initiate our Emergency Flood Plan. This involves shutting down, raising
    motors and moving material. Besides costing thousands of dollars, it
    put employees out of work for several days.
        The Blue River flows through the industrial heart of Kansas City
    with most of the lower stretch in the Enterprise Zone. Increased
    flooding over the years has forced many industries to abandon the
    valley. The Army Corps of Engineers' new estimated completion date has
    been extended from 1998 to 2008. The delay will cause more companies to
    move out of the valley either because they see the risk as unacceptable
    or they are washed away by a flood that should have been prevented.
    Likewise redevelopment of abandoned properties continues to be delayed.
        Meanwhile, remediation and redevelopment in the areas where the
    project is complete has been tremendous. Hundreds of millions of
    dollars of private money has already been expended to recover the
    abandoned industrial properties providing jobs and tax dollars.
        This is an economically sound project with a benefit to cost ratio
    of 3 to 1. Again we urge you to provide the $8,000,000 in funding to
    continue the project.
                                     ______

     Prepared Statement of the Board of Levee Commissioners For the Yazoo-
                               Mississippi Delta

        This statement, made on behalf of the citizens represented by the
    Yazoo-Mississippi Delta Levee Board (YMD), is not only in support of
    the funding requests contained herein, but also for the general funding
    testimony offered for Fiscal 2005 by the Mississippi Valley Flood
    Control Association. I would ask that this statement be made part of
    the record.
        The Mississippi Valley Flood Control Association is requesting of
    Congress funding in the amount of $450 million for the Mississippi
    River 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.
        While we recognize that this is a time when the Federal budget is
    being inordinately strained by both a slowly recovering economy, the
    continued hostilities in Iraq and the ongoing war against terrorism, we
    also recognize both the Nation's economy and the lives and livelihoods
    of its citizen's rests upon the continued provision of adequate flood
    control for its heartland.
        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 events ever happening again in the Lower
    Mississippi Valley. As we look back, the MR&T has returned $284180
    billion in benefits for the $11.90 billion invested--truly an American
    public works success story.
        However, much work remains uncompleted, and if the MR&T success
    story is to continue, Congress must give it a higher priority than has
    the administration in its budget. For the totality of the MR&T, the
    president proposes only $270 million, an amount which we find
    critically austere.
        The YMD Levee Board urges the 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. We urge Congress to provide funding in the amount of $450
    million so that this national promise can be kept.
        A line item chart reflecting existing and needed funding levels for
    MR&T projects in the Lower Mississippi Valley follows, with special
    emphasis herein given to those projects most critical to our levee
    district:
        Mississippi River Levees.--Life as we know it simply could not
    continue in the Lower Mississippi Valley without its levee system. The
    need to keep our levee system strong and secure must be given a top
    priority. The administration's budget earmarks only $7.665 million to
    maintaining our levees and we ask Congress to allocate $14.915 million
    for this critical need.
        Upper Yazoo Projects (UYP).--The top priority for the YMD Levee
    Board, the Upper Yazoo Projects, was conceived in 1936. The overall
    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 into the Mississippi River. Perhaps the least
    contentious major flood control project in the country, the UYP is
    progressing smoothly, with virtually no public opposition. However, the
    proposed budget funds this project at only $3.850 million and we urge
    Congress to fully fund at the capability of the Corps of Engineers--$20
    million--so that it might progress and the following be accomplished:
      --Complete Channel Item 5B;
      --Complete Item 7A and 7B structures;
      --Purchase project and mitigation lands;
      --Continue Channel Items 6A and 6B and;
      --Initiate bridge relocation.
        Delta Headwaters Project.--Formerly known as the Demonstration
    Erosion Control Project, this is a proven concept which works, and
    should continue, yet is unfunded and would be phased out. We urge
    Congress not to allow this. Vast amounts of sediments which would be
    controlled by this project would in its absence end up within the
    Coldwater/Tallahatchie/Yazoo river system. We urge Congress to
    appropriate $25 million for this badly needed effort.
        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 by allowing excess waters to
    be released at controlled rates. All four are aging and require both
    routine maintenance and upgrading and we ask that the Congress do so at
    the following levels:
      --Arkabutla--$12.9 million;
      --Sardis--$19.322 million;
      --Enid--$13.679 million;
      --Grenada--$10.101 million.
        Big Sunflower River.--We ask that Congress fund at the level of $5
    million so that Item 66 A/B at Swan Lake Levee might be completed and
    that, the purchase of mitigation lands mitigation and reforestation
    might continue.
        Big Sunflower River Maintenance Project.--We request Congress fund
    at the level of $2.139 million so that Items 2 and 4 might be initiated
    and design might continue.
        Yazoo Backwater Pumps.--Of critical concern to South Delta
    residents and our sister levee board, the Mississippi Levee Board; this
    project would alleviate backwater flooding. We support that effort and
    join in requesting funding at a level of $12 million so that planning
    and acquisition may continue and a pump supply contract might be
    initiated.
        Yazoo Backwater.--We ask Congress to appropriate $300,000 to
    continue pump operations at Greentree reservoirs and to appropriate
    $926,000 to rehabilitate bulkheads and provide environmental
    mitigation.
        Main Stem.--We seek $3.966 million to rehabilitate and replace
    drainage structures and we request $25,000 to monitor Sheley Bridge
    bank stabilization.
        Coldwater Basin.--We ask $750,000 so that a feasibility study might
    continue.
        Quiver River.--We seek $100,000 to continue a reconnaissance phase
    of this effort.
        Reformulation Unit.--We request $450,000 to complete reform of the
    backwater unit and continue work in the tributaries phase of this
    project.
        Finally, in an overall statement on proposed Peer Review Policy
    within the Corps of Engineers, we would prefer that any such reviews be
    mandated by Congress to take place only during the study phase of
    projects and not when actual work has begun.
                                     ______

         Prepared Statement of the Green Brook Flood Control Commission

        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 2005 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.
        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.
        The first actual construction of the Project began in late fiscal
    year 2001, in which an old bridge over the Green Brook, connecting the
    Boroughs of Bound Brook and Middlesex, was replaced with a new and
    higher bridge. That work is now complete.
        The second construction contract, known as Segment T, began in
    2002, and is now nearing completion. This work will complete the
    protection for the eastern portion of Bound Brook Borough.
        The next following segment of the Project is planned for
    construction to begin this year. This next construction, known as
    Segment U, will begin the protection for the western portion of Bound
    Brook Borough.
        When Congress authorized the Project for construction, it did so
    only for the lower and Stony Brook portions. This was the result of the
    objections raised in 1997 by the Municipality of Berkeley Heights,
    located in the highest elevation portion of the Green Brook Basin.
        In 1998 a Task Force was formed to seek a new consensus for
    protection of the upper portion of the Basin.
        Following the recommendations of the Task Force, in calendar year
    2003, Resolutions of Support for protection of the upper portion of the
    Basin were adopted, along the lines of the recommendations of the Task
    Force. These new Resolutions of Support for the protection of the upper
    portion of the Basin, principally the Municipalities of Plainfield and
    Scotch Plains, were adopted by those Municipalities, and by the two
    affected Counties of Union and Somerset.
        A final design for a new plan to protect these upper basin
    Municipalities remains to be done. This work will involve a new effort
    by the Corps of Engineers, and of course will require that the Corps of
    Engineers enlist technical support for surveying, environmental
    investigations, and design studies, by the placing of appropriate
    contracts with qualified outside consulting engineering firms.
        This work will require many months, and contracts for actual
    construction of these protective measures for the upper portion of the
    region are not likely to be ready until several more years. It is
    understood that when these studies have been completed, it will be
    necessary for Congress to specifically authorize the final design of
    the recommended plan. That likely cannot happen until fiscal year 2006,
    or later.
        Meantime, it is essential that this preparatory work continue. And
    it is thus essential that the Corps of Engineers be authorized and
    allowed to place contracts for environmental and engineering studies in
    order to develop an acceptable plan for the protection of the upper
    portion of the Green Brook Basin.
        It is understood that specific action by the Congress is required
    at this time to authorize the Corps of Engineers to continue this work
    in fiscal year 2005 and beyond. It is also understood that before final
    design for protection of the upper portion of the Green Brook Basin can
    proceed, it will be necessary that a Project Cooperation Agreement be
    entered into between the Corps of Engineers and the State of New
    Jersey. Presumably, this Project Cooperation Agreement will be similar
    to the Agreement now in force between the Corps of Engineers and the
    State of New Jersey, which was made for the lower and Stony Brook
    portions of the Green Brook Basin.
        Page one of the Syllabus contained in the approved Final General
    Re-evaluation Report of May 1997 contains the following:

        ``Accordingly, this final document is considered a decision
    document for construction of the lower and Stony Brook portions of the
    Basin, with continued planning and engineering of the separable upper
    portion of the Basin. The decision to construct the upper portion
    features will be deferred until such time that evaluations of
    additional information and views are completed and local interests have
    the opportunity to review findings.''

        To carry this work forward, it is essential that the Corps of
    Engineers be authorized, within the funds appropriated to them in
    fiscal year 2005, to place contracts for engineering and environmental
    studies pertaining to the protection of the upper portion of the Basin.
        It is to be noted that the Estimated Damages caused by the Flood of
    1973, in the upper portion Municipalities only, reported in the final
    GRR of May 1997, page 33, showed that Estimated Damages in Plainfield,
    Scotch Plains and Watchung (the upper portion of the Basin) amounted to
    an estimated $357 million.
        We urge the members of Congress to direct the Corps of Engineers,
    within the funds made available to them for fiscal year 2005, to
    continue the necessary investigations and studies, and to authorize the
    Corps of Engineers to place contracts for such investigations as may be
    necessary, so that the preparatory work for the ultimate protection of
    the people and property within the upper portion of the Basin can be
    carried forward.
        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 33 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 2005.
        We urgently request an appropriation for the Project in fiscal year
    2005 of $10,000,000.
        With your continued support, the Green Brook Flood Control
    Commission is 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.

                                     ______

             Prepared Statement of the Moss Landing Harbor District

        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 2005 energy and water regular appropriations measure.
        The commission recognizes and expresses its gratitude to our two
    senators, the Honorable Dianne Feinstein, a valuable member of this
    committee, and the Honorable Barbara Boxer for their continued
    assistance and support on our behalf.
        We express our profound appreciation to the subcommittee and full
    committee for its inclusion of $600,000 in fiscal year 2004
    appropriated funds for the preparation of a screening level Ecological
    Risk Assessment under U.S. Army Corps of Engineers Waterways Experiment
    Station supervision. The assessment was recently critiqued by a
    preeminent peer group of experts scholars representing a broad cross
    section of professional disciplines.
        This sets the stage--with the committee's support--for the
    preparation 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 next year and over the next 20
    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 for contaminated dredged material. The
    SF-12 aquatic disposal site is grandfathered for sanctuary purposes. It
    is located 50 yards offshore at the apex of the Monterey Bay Submarine
    Canyon which plunges to a depth of 8,000 feet in less than 1 mile.
    Every year. Periodic 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 $600,000 has been
    expended to begin the ERA process. Most of that was transferred to the
    Corps of Engineers Waterways Experiment Station (WES) to prepare a
    preliminary Ecological Risk Assessment (ERA). Previously appropriated
    operations and maintenance funds have already been expended to
    reimburse the San Francisco district for program management costs,
    conduct of the required economic analysis (including a finding of a
    very favorable current project 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 most significant findings of the screening comparative ERA were
    that in most cases the environmental impacts associated with periodic
    maintenance dredging and disposal at the SF-12 site were less than the
    no action alternative as periodic dredging removes the accumulation of
    contaminated material in the first few centimeters thereby reducing its
    bioavailability to benthic organisms at the base of the food web
    thereby precluding its absorption in the lipid tissue of higher trophic
    level organisms.
        With the committee's support 2 years we completed a periodic
    dredging cycle of the Federal channel work and the Inner Harbor using a
    combination of beach replenishment and ocean disposal at the SF-12
    historic disposal site for the first time in a decade. We anticipate
    that next year we will finally returned to a normal 3-year maintenance
    cycle of the Federal channel while local berth dredging of our all-
    important commercial fishing and oceanographic vessel berths continues
    on an annual basis.
        During the next year we will be analyzing exiting data from a
    variety of sources including USGS, Moss Landing Marine Laboratory, and
    the Naval Post Graduate School among others filling in identified data
    gaps in the screening ERA to drive the WES model, as necessary
    completing complementary local site-specific scientific studies, and
    integrating all those results into the DMMP process.
        To this end we request the subcommittee's approval of $600,000 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 2006.
        With the assistance of the local scientific community, we are
    fortunate to have as much as 3 years of scientific data in the form of
    benthic community biomass and tissue sampling, and first-ever near-
    shore 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 able to
    take advantage of last 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.
        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, a tracer study using
    European technology was synchronized with the last disposal event that
    demonstrated the rapid dispersion of dredged material at the SF-12
    site. We are confident that on the basis of our preliminary review--and
    that of the peer group--of the screening level ERA supported by local
    site specific analysis of data already collected and focused studies to
    augment the WES risk assessment model, the end result will be a
    document that will ultimately prove persuasive and compelling 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.
        Based upon our experience thus far, the funds expended completing
    the DMMP/ERA process in developing a persuasive case to the various
    constituencies and decision document supporting continued aquatic
    disposal for all but a very small fraction of total dredged material in
    exceptional circumstances over a 20 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:
        (1) 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
        (2) serve as a model for collaborative effort in dredged material
    disposal consensus decision-making 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.
                                     ______

      Joint Prepared Statement of The Port Commerce Department, The Port
      Authority of New York & New Jersey; New Jersey Maritime Resources,
        Department of Transportation, State of New Jersey; Empire State
    Development Corporation, State of New York; and New York City Economic
                            Development Corporation

        On behalf of the Port of New York and New Jersey, we thank you for
    your continued support of the Nation's navigation system. We appreciate
    the consistent level of funding that the committee has provided this
    bi-State gateway that we are preparing for tomorrow's commerce in
    partnership with the Federal Government. We were very pleased that
    Chairman David Hobson and Rep. Rodney Frelinghuysen were able to visit
    the port earlier this year. We would welcome all members of the
    subcommittee to get a first-hand look at the harbor and its role in the
    U.S. transportation system.
        We are gratified that in the fiscal year 2005 budget the
    administration maintains the deepening of the Port's main system of
    channels as a priority. As such, we strongly endorse the President's
    request for $103,000,000 for the NY & NJ Harbor Deepening Project. As
    pleased as we are with that, we also share the concerns of many in the
    national water resources sector that the overall civil works program is
    shrinking. That is happening even as demand for navigation and other
    water resource projects remains high. Our transportation and economic
    systems will remain strong as long as the Nation's infrastructure is up
    to the task and natural resources are in good condition. The long-term
    capacity of the Corps of Engineers to help non-Federal governments
    tackle infrastructure needs depends on strong funding.
        Business in the Port of NY/NJ continues to increase at a strong
    pace, lending credence to the government's view that investing in port
    channels is good for the Nation. In 2003, our region's marine terminals
    handled a record 4 million TEUs, an increase of roughly 300,000 TEUs
    over 2002. More steamship lines are starting all-water service to the
    East Coast to reduce costs and their reliance on ports of only one U.S.
    coast. This continuing trend promises greater cargo throughput in the
    years ahead. The Port and industry are preparing for the influx with a
    $1.46 billion redevelopment program that includes underwater, terminal,
    and access improvements. That public/private investment illustrates the
    partnership between the Federal and non-Federal investors in the
    Nation's economic future. The bi-State Port supports almost 40,000
    terminal-based jobs and over 189,000 off-terminal positions, but the
    benefits are not limited to our region. Nationwide, almost 186,000
    additional jobs are supported by the Port. The Port directly serves the
    Northeast and Midwest as well as most States in the continental United
    States. The channel projects will improve transportation efficiency
    that will benefit those markets and our national defense.
        Crucial to the Port redevelopment program is the support of
    Governor James McGreevey and Governor George Pataki. They made strong
    commitments to investing Port Authority and other resources to make the
    Port and regional freight transportation more efficient, and the Port's
    natural resources healthier. We are proud of the support that
    businesses, labor, local government and others, listed at the top of
    this statement, have given to this most productive port on the Atlantic
    Ocean.
        Below are our comments on the fiscal year 2005 budget request. We
    enthusiastically support the administration's request with respect to
    the Harbor Deepening Project and respectfully request that the
    subcommittee appropriate funds at higher levels for select projects as
    noted and discussed below. Projects in bold lettering are requests
    beyond the fiscal year 2005 budget levels.

    ------------------------------------------------------------------------
                                                  Budget       Port Request
    ------------------------------------------------------------------------
    Construction: New York & New Jersey         $103,000,000    $103,000,000
     Harbor.................................
                                             -------------------------------
    Surveys (Studies):
        Hudson-Raritan Estuary, NY & NJ.....         450,000       2,500,000
        Hudson-Raritan Estuary, Lower                 50,000       1,500,000
         Passaic River, NJ..................
        Hudson-Raritan Estuary, Gowanus              150,000       1,500,000
         Canal, NY..........................
        Hudson-Raritan Estuary, Meadowlands,         100,000         850,000
         NJ.................................
                                             -------------------------------
          TOTAL.............................         750,000       6,350,000
                                             -------------------------------
    Operation and Maintenance:
        Buttermilk Channel, NY..............       1,030,000       1,030,000
        East River, NY......................         370,000         370,000
        East Rockaway Inlet, NY.............       2,100,000       2,100,000
        Flushing Bay & Creek, NY............  ..............      11,000,000
        Hudson River Channel................  ..............       4,500,000
        Jamaica Bay, NY.....................       2,200,000       2,200,000
        New York Harbor, NY & NJ Drift             5,414,000       5,914,000
         Removal............................
        New York Harbor, NY.................       4,235,000       4,235,000
        New York & New Jersey Channels......       5,700,000       7,000,000
        Newark Bay, Hackensack & Passaic             120,000       3,000,000
         Rivers, NJ.........................
        Project Condition Surveys, NJ.......       1,670,000       1,670,000
        Project Condition Surveys, NY.......       1,075,000       1,075,000
        Raritan River, NJ...................  ..............       2,500,000
        Westchester Creek, NY...............  ..............         100,000
                                             -------------------------------
          TOTAL.............................      23,914,000      46,744,000
    ------------------------------------------------------------------------

                                  CONSTRUCTION

    New York and New Jersey Harbor
        This project was authorized by Section 101(a)(2) of WRDA 2000
    (Public Law 106-541). It includes deepening the Ambrose Channel from
    deep water to the Verrazano-Narrows Bridge to 53 feet mlw, and
    deepening the Anchorage Channel and those channels that lead to the
    principal general cargo and breakbulk marine terminal areas to 50 feet
    mlw. The Corps of Engineers and the intended project sponsor are
    engaged in pre-construction engineering and design work to bring this
    project into construction seamlessly as the Kill Van Kull and Newark
    Bay deepening to 45 feet is concluded in late 2004. To facilitate
    project transition, the intended project sponsor is completing a
    construction contract to deepen to 50-feet portions of the Kill Van
    Kull and Newark Bay channels as a complement to the Corps' 45-foot
    project. These efforts and the overall commitment of the Port to the
    projects are strong testimony to our desire to advance this project
    with the Federal Government. We urge adoption of the budget request.

                               SURVEYS (STUDIES)

    Hudson-Raritan Estuary Studies
        These studies were authorized by House Committee Resolution dated
    April 15, 1999, Docket Number 2596. Increases are requested for the
    studies in order to achieve the completion schedules of 2005 for the
    New York & New Jersey and Lower Passaic studies and 2004 for the
    Gowanus study.
      --New York & New Jersey.--The study purpose is to identify projects
            to restore estuarine, wetland and adjacent upland buffer
            habitat throughout the port region to the extent practicable
            and in keeping with existing port and regional management
            plans. The Corps and the Port Authority signed the Feasibility
            Cost Sharing Agreement on July 12, 2001, and immediately began
            the study. Natural resource areas, degraded as a result of
            historic damage, need to be returned to their full potential.
            The continued loss of wetlands, not only through development
            but due to inexplicable causes, will require further analysis,
            monitoring and restoration. One project that can move on a fast
            track is Liberty State Park, where the State of New Jersey has
            all of its required project funds on hand, ready to provide to
            the Corps for construction. Given the past funding levels, the
            Corps is unable to proceed both with the Liberty State Park and
            the comprehensive regional study. We respectfully request that
            the budget be augmented to $2,500,000 to allow the Corps to
            keep its commitments to place the environment on an equal
            footing with navigation improvements.
      --Lower Passaic.--Local communities throughout the Passaic River
            Basin requested a program of improvements to remediate and
            restore the river. The river and adjacent shorelines have been
            degraded by historic industrial/commercial activity and
            associated impacts of urban development. The Corps initiated
            the Reconnaissance Phase in January 2000 that recommended a
            separate study for the tidal influence of the Lower Passaic
            River. In June 2003, the Corps, in partnership with EPA and the
            NJDOT/Office of Maritime Resources, completed a comprehensive
            Project Management Plan (PMP) that integrates the work of all
            three agencies into a single study to determine the best
            approach. In the same month, the Corps signed the Feasibility
            Cost-Sharing Agreement (FCSA) with the Office of Maritime
            Resources and began the feasibility study. This project also
            has been designated as a pilot project under the joint Corps-
            EPA Urban Rivers Restoration Initiative. Despite the
            outstanding coordination between the three agencies, Federal
            funding is a concern. We are pleased that the non-Federal
            matching funding will be available as the project requires. EPA
            expects sufficient funding from PRPs to begin field
            investigations by Fall 2004. As such, lack of Federal funding
            will jeopardize the Corps' ability to participate in the joint
            fieldwork envisioned in the PMP. For that reason, we request
            that the budget be augmented to $1,500,000 for this study.
      --Gowanus.--The feasibility study will assess the environmental
            problems and potential solutions in the Gowanus Canal and Bay.
            Restoration measures will assess hot spot clean-up of off-
            channel contaminated sediments, contaminant reduction measures,
            creation of wetlands, water quality improvements, and
            alteration of hydrology/hydraulics to improve water movement
            and quality. This has been designated as a pilot project under
            the joint Corps-EPA Urban Rivers Restoration Initiative. A FCSA
            was executed with the NYC Department of Environmental
            Protection in March 2002. The City has committed its full share
            to the project, and awaits the Federal match. In order to
            continue the study restoration of this highly contaminated,
            visible urban body of water (including benefits to human
            health), we request that the budget be augmented to $1,500,000.
      --Hackensack.--This study will look at the feasibility of restoring
            wetlands in the Hackensack Meadowlands area and will assess
            toxic waste remediation potential. The area's existing wildlife
            habitat preserves are threatened by dwindling open marshes. The
            local sponsor is the NJ Meadowlands Commission, which has
            committed funding, and looks toward the Federal share. We
            respectfully request that the budget be augmented to $850,000
            for this study aimed at protecting marshes, tidal creeks and
            open spaces.

                           OPERATION AND MAINTENANCE

        Operation and maintenance projects are critical to the commerce,
    navigation and security of the Port as well as the Nation's security.
    If channels are not maintained to official depths and as needed by
    today's commerce, the efficiency of the Federal system of channels is
    lost and the risk of groundings increases. The Corps deepened the
    Newark Bay channel that leads to the Port Newark/Elizabeth terminal
    complex from 35 feet to 40 feet in 1995 as part of Phase 1 of the Kill
    Van Kull-Newark Bay 45-foot deepening project. In fiscal year 2002,
    Congress appropriated funds that enabled only partial maintenance of
    that channel, leaving significant areas at shallow and potentially
    unsafe depths. Unfortunately, the proposed budget would provide
    insufficient funding to adequately maintain Federal channels in the
    Port. The Port is one the Nation's busiest petroleum ports and the
    Arthur Kill and Raritan River channels are critical to that trade.
    Maintenance of the two channels is needed to support the industry,
    which serves not only the greater New York metropolitan area but much
    of the American northeast. Of course, maintenance also protects and
    perpetuates the Federal infrastructure investment.
        With the above concerns in mind, we think it is important to be on
    the record as to how this part of the fiscal year 2005 budget is
    insufficient to meet the practical needs of commerce. We respectfully
    request that the budget be augmented by $22,830,000 to $46,744,000 for
    Port channel operation and maintenance work. This also would enable the
    Corps to address serious shoaling problems in industrial and commercial
    portions of Flushing Creek, the Arthur Kill, the Hudson River Channel
    and the Raritan River, and to maintain on-going activities and upgrade
    the operational facilities at the Corps' Caven Point facility relative
    to the important, ongoing New York Harbor Drift Removal efforts.

                                   CONCLUSION

        The Port of New York & New Jersey continues to be a major gateway
    for a substantial part of the country. Cargo volume has grown, even
    while the economy struggles, and has been a source of increased jobs
    and commercial investment. The civil works program in the Port, coupled
    with public and private sector investments, has served well the
    Nation's economic and security interests for the better part of two
    centuries. The same is true in ports across the United States. We are
    proud of that history and commit to continuing this productive
    partnership with the Federal Government so that our region will serve
    the Nation for centuries to come.

                                     ______

     Prepared Statement of the Mississippi Valley Flood Control Association

        My name is M.V. Williams, I serve as President of the West
    Tennessee Tributaries Association and submit this statement on behalf
    of the Mississippi Valley Flood Control Association. It is my privilege
    to serve as Chairman of the Executive Committee for the Association.
        The Mississippi Valley Flood Control Association was first
    organized in 1922 and played a very large role in gaining authorization
    for the first major Federal water resources bill, the Flood Control Act
    of 1928 that established the Mississippi River and Tributaries Project.
    This statement is in support of additional funding for that project.
        Today our Nation is faced with a war on terror and we are also
    mindful of the fact that we must rectify an economic condition that
    needs immediate attention. Even faced with those facts, we feel that we
    are justified in urging additional appropriations for the Mississippi
    River and Tributaries Project because the assets and resources of this
    great Nation must not be neglected during these times. We know of no
    other appropriation which contributes as much to national wealth and
    resources as does flood control and navigation for the major rivers of
    this country.
        Millions of acres which were overflow lands decades ago are now
    highly productive and contributing to our national wealth. These lands
    by reason of their geographic location are the most fertile of the
    Nation. They produce an abundance of food and fiber for the general
    welfare and prosperity of the country. This is only possible because of
    the coordinated work performed by the United States Corps of Engineers
    and the local people.
        The inland waterways of the Nation provide the cheapest and in some
    cases the only method to move bulk commodities that are absolutely
    essential to the general welfare and prosperity of the country. Moneys
    appropriated by Congress for flood control and navigation has and will
    augment our natural resources and improve our economic well-being. The
    appropriations made by Congress for the Mississippi River and
    Tributaries Project are investments in this Nation's future.
        Since the productivity of the millions of acres of low lying lands
    adjacent to the main stem of the Mississippi River are totally
    dependent upon the integrity of the flood control works, any major slow
    down in the completion of this work will represent economic
    strangulation to this productive portion of our Nation.
        If no funds are added to the President's budget request, the Corps
    of Engineers will be forced to curtail operations of locks and some
    harbors may be closed from lack of maintenance dredging. This will mean
    the loss of jobs and possible closure of plants that have millions of
    dollars invested in their facilities. Recreational areas will be forced
    to close, disrupting the lives of millions of citizens from all walks
    of life.
        In addition to the problems with the inadequate funding in the
    President's budget request, we also have a tremendous problem with the
    fact that the Office of Management and Budget is attempting to dictate
    policy matters by the use of the budget submission. The greatest damage
    from this policy change would be to take the Congress out of its
    historical role of legislating policy for the flood control and
    navigation programs that have played a large part in making the United
    States the greatest industrial and commercial nation on the globe--with
    its resources, its wealth and productive capability that has saved the
    world in war and sustained it through years of troubled peace.
        The executive department is again attempting to supplant this
    historical Congressional role and assume these policy making functions.
    In past attempts, the Congress in its wisdom has soundly rejected these
    attempts. We would urge this Congress to do the same.
        In closing let me reemphasize that Federal works projects with
    proven merit such as the Mississippi River and Tributaries Project
    represent a sound Federal investment which has and will return to the
    tax payers of this country generous dividends. Such Federal investments
    contribute to the economic well being of the Nation by reducing
    unemployment; adding to the stability and economic growth of
    agriculture and industry; and providing a flood free environment for
    the welfare of the people of the Mississippi River Valley.
        For these and other reasons, we are firmly convinced that the
    amount of appropriations required in fiscal year 2005 for the
    Mississippi River and Tributaries Project is $450,000,000. An attached
    sheet to this statement reflects our request in more detail.
        Speaking for the entire Mississippi Valley Flood Control
    Association, I wish to thank the subcommittee for the opportunity to
    present this statement and special thanks for the actions that this
    group has taken in the past to assist us with our problems and concerns
    with water resources.

      MISSISSIPPI VALLEY FLOOD CONTROL ASSOCIATION--FISCAL YEAR 2005 CIVIL
       WORKS REQUESTED BUDGET--MISSISSIPPI RIVER AND TRIBUTARIES PROJECT--
                                   MAINTENANCE
    ------------------------------------------------------------------------
                                                President's
                     Project                      Budget       MVFCA Request
    ------------------------------------------------------------------------
    Wappapello Lake, MO.....................      $4,046,000      $6,352,000
    Mississippi River Levees................       7,665,000      14,915,000
    Dredging................................      20,515,000      20,515,000
    Revetment and Dikes.....................      48,760,000      48,760,000
    Memphis Harbor, TN......................       1,205,000       2,010,000
    Helena Harbor, TN.......................         385,000         510,000
    Greenville Harbor, MS...................          29,000         412,000
    Vicksburg Harbor, MS....................          32,000         345,000
    St. Francis River & Tribs, AR...........       6,080,000       8,805,000
    White River Backwater, AR...............       1,316,000       2,260,000
    North Bank, Arkansas River, AR..........         146,000         146,000
    South Bank, Arkansas River, AR..........         122,000         122,000
    Boeuf & Tensas Rivers, LA...............       2,160,000       2,160,000
    Red River Backwater, LA.................       3,083,000       7,390,000
    Yazoo Basin, Sardis Lake, MS............       7,046,000      19,322,000
    Yazoo Basin, Arkabutla Lake, MS.........       5,710,000      12,900,000
    Yazoo Basin, Enid Lake, MS..............       4,954,000      13,679,000
    Yazoo Basin, Grenada Lake, MS...........       5,553,000      10,101,000
    Yazoo Basin, Greenwood, MS..............         585,000       2,035,000
    Yazoo Basin, Yazoo City, MS.............         729,000         729,000
    Yazoo Basin, Main Stem, MS..............       1,013,000       3,966,000
    Yazoo Basin, Tributaries, MS............         923,000         923,000
    Yazoo Basin, Whittington Aux Channel, MS         400,000         400,000
    Yazoo Basin, Big Sunflower, MS..........         139,000       2,139,000
    Yazoo Basin, Yazoo Backwater, MS........         440,000         926,000
    Lower Red River, South Bank, LA.........         105,000         105,000
    Bonnet Carre, LA........................       2,310,000       3,100,000
    Old River, LA...........................       7,350,000      29,900,000
    Atchafalaya Basin, LA...................      13,000,000      25,000,000
    Atchafalaya Basin Floodway, LA..........       2,775,000       4,200,000
    Baton Rouge Harbor Devil's Swamp, LA....          14,000         300,000
    Miss Delta Region, LA...................         588,000         588,000
    Bayou Cocodrie & Tribs, LA..............          65,000          65,000
    Inspection of Completed Works...........       1,500,000       1,700,000
    Mapping.................................       1,112,000       1,325,000
                                             -------------------------------
          Total MR&T Maintenance............     151,855,000     248,105,000
    ------------------------------------------------------------------------

      MISSISSIPPI VALLEY FLOOD CONTROL ASSOCIATION--FISCAL YEAR 2005 CIVIL
    WORKS REQUESTED BUDGET--MISSISSIPPI RIVER AND TRIBUTARIES APPROPRIATIONS
    ------------------------------------------------------------------------
                                                President's
                Project and State                 Budget       MVFCA Request
    ------------------------------------------------------------------------
    Surveys, Continuation of Planning and
     Engineering & Advance Engineering &
     Design:
        Memphis Harbor, TN..................  ..............  ..............
        Germantown, TN......................         $27,000         $27,000
        Millington, TN......................         100,000         100,000
        Fletcher Creek, TN..................          93,000          93,000
        Memphis Metro Storm Water             ..............         100,000
         Management, TN.....................
        Bayou Meto, AR......................  ..............       2,447,000
        Germantown, TN......................  ..............         200,000
        Southeast Arkansas..................  ..............         600,000
        Coldwater Basin Below Arkabutla              203,000         750,000
         Lake, MS...........................
        Quiver River, MS....................  ..............         100,000
        Spring Bayou, LA....................         500,000         600,000
        Point Coupee to St. Mary Parish, LA.  ..............         100,000
        Atchafalaya Basin Floodway System,           100,000         100,000
         LA*................................
        Alexandria, LA to the Gulf of Mexico         435,000         435,000
        Morganza, LA to the Gulf of Mexico..       1,500,000      10,000,000
        Donaldsonville, LA to the Gulf of            800,000       1,200,000
         Mexico.............................
        Tensas River, LA....................  ..............         500,000
        Donaldsonville Port Development, LA.  ..............         100,000
        Collection & Study of Basic Data....         700,000         700,000
                                             -------------------------------
          Subtotal, Surveys, Continuation of       4,458,000      18,152,000
           Planning & Engineering & Advance
           Engineering & Design.............
                                             -------------------------------
    Construction:
        St. John's Bayou-New Madrid                8,300,000       8,300,000
         Floodway, MO.......................
        Eight Mile Creek, AR................       1,357,000       3,293,000
        Helena & Vicinity, AR...............  ..............  ..............
        Grand Prairie Region, AR............  ..............      20,000,000
        Bayou Meto, AR......................  ..............      18,000,000
        West Tennessee Tributaries, TN......  ..............         700,000
        Nonconnah Creek, TN.................       2,153,000       2,753,000
        Wolf River, Memphis, TN.............  ..............       2,400,000
        August to Clarendon Levee, Lower      ..............       2,000,000
         White River, AR....................
        St. Francis Basin, MO & AR..........       3,000,000       9,500,000
        Yazoo Basin, MS.....................       5,850,000      62,775,000
        Atchafalaya Basin, LA...............      22,495,000      32,500,000
        Atchafalaya Basin Floodway, LA......       7,200,000      10,000,000
        MS Delta Region, LA.................       1,800,000       4,700,000
        Horn Lake Creek, MS.................  ..............         203,000
        MS & LA Estaurine Area, MS & LA.....  ..............          50,000
        Channel Improvements, IL, KY, MO,         36,882,000      44,082,000
         AR, TN, MS & LA....................
        Mississippi River Levees, IL, KY,         38,960,000      54,800,000
         MO, AR, TN, MS & LA................
                                             -------------------------------
          Subtotal, Construction............     127,997,000     276,056,000
          Subtotal, Maintenance.............     151,855,000     248,105,000
                                             -------------------------------
          Subtotal, Mississippi River &          284,310,000     542,313,000
           Tributaries......................
          Less Reduction for Savings &           -14,310,000      92,313,000
           Slippage.........................
                                             -------------------------------
          Grand Total, Mississippi River &       270,000,000     450,000,000
           Tributaries......................
    ------------------------------------------------------------------------

                                     ______

    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 2005 appropriation of $1.5 million 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 2004. 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 2005 with an appropriation of
    $1.5 million, which will initiate the pre-construction engineering and
    design portion (PED) of the project.
        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 $349,000 for the project in fiscal year 2004, the
    Corps has a capability of $1.5 to initiate PED 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.
        SRPMIC 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
    $1.5 million to initiate PED on this project in fiscal year 2005. On
    behalf of the SRPMIC and the City of Mesa, we ask that you fully fund
    the Va Shly'ay Akimel project at $1.5 million in fiscal year 2005.
                                     ______

              Prepared Statement of the Seminole Tribe of Florida

        The Seminole Tribe of Florida is pleased to submit this statement
    regarding the fiscal year 2005 budget for the Army Corps of Engineers
    (Corps). The Tribe asks that Congress provide $27,000,000 in the Corps'
    construction budget for critical projects in the South Florida
    Ecosystem, as authorized in section 528 of the Water Resources
    Development Act (WRDA) of 1996, and amended by section 208 of WRDA
    1999. The critical projects program is tasked with completing ten
    projects, one of which is complete, and the remaining nine either
    completing planning and design or construction. The Seminole Tribe has
    partnered with the Corps to design, build, and operate the critical
    project on the Big Cypress Reservation, located in the western basins
    of the Everglades, directly north of the Big Cypress National Preserve.
        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. The
    project is divided into two phases; construction of the first phase is
    complete and planning and design on the second phase will be complete
    in a few months, allowing construction to begin in fiscal year 2005.
        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. This 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 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.
        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 seven
    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 completed 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 Volusia County, Florida

        On behalf of our citizens and fishermen, Volusia County, Florida
    requests that the Energy & Water Subcommittee appropriate:
      --$3,500,000 in fiscal year 2005 to the U.S. Army Corps of Engineers'
            (Corps) Construction account to fund an 1,000 foot seaward
            extension of the South Jetty of the Ponce DeLeon Inlet. The
            South Jetty seaward extension, along with the North Jetty
            landward extension funded in fiscal years 1999, 2000, and 2002
            and completed in June 2003, is essential for safe inlet
            navigation and protection of the Federal investment in the
            Inlet channel.
      --$3,000,000 in fiscal year 2005 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.
      --$500,000 in fiscal year 2005 to the Corps' General Investigations
            account to fund the feasibility study for the Volusia County
            Shore Protection project for the shore protection of 49.5 miles
            of Volusia County beaches.
        A more detailed case history and description of the situation and
    projects follow below.

                               PONCE DELEON INLET

        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.
        In fiscal year 2004, Congress provided $500,000 in the Corps'
    Construction account for construction of the South Jetty oceanward
    extension, as authorized by WRDA 1999.
        For fiscal year 2005, Volusia County requests that the Corps
    receive $3.5 million for the balance of the Federal share of
    construction funds for the South Jetty oceanward extension. The project
    manager expects the South Jetty to be constructed in one fiscal year.
    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
    South Jetty, to complement the North 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.

                    VOLUSIA COUNTY BEACH PROTECTION PROJECT

        In August 1991, the Corps of Engineers completed a favorable
    reconnaissance report for the shore protection study to address the
    critical erosion along the County's 49.5 miles of ocean shoreline, as
    authorized by the House Transportation and Infrastructure Committee in
    September 1988. The County declined to act as the non-Federal sponsor
    for the feasibility study at that time. The Corps modified the 1991
    reconnaissance study in 1994. As a result of heavy damage to the
    County's shoreline sustained during the 1999 hurricane season, the
    County recognized the critical need to address the growing impact of
    the storm-induced erosion. The Corps will need to modify the earlier
    studies. A new reconnaissance study for the Volusia County Shore
    Protection project (formerly known as the Daytona Beach Shores project)
    was authorized by a resolution adopted by the House Transportation and
    Infrastructure Committee on February 16, 2000. In fiscal year 2003,
    Congress provided the Corps with $100,000 to complete the
    reconnaissance study. The Corps has completed the draft reconnaissance
    study, which is currently undergoing final review and is expected to be
    completed during fiscal year 2004. The draft reconnaissance study
    recommends further action. A feasibility study is the next step.
        The feasibility study will include, among other things, plan
    formulation, surveys, geotechnical analysis, beach modeling, and
    environmental analysis for Volusia County's 49.5 mile shoreline. The
    Corps estimates the cost of the feasibility study to be $3 million and
    expects to complete the study in 3 to 4 years. The cost share for the
    feasibility study is 50 percent Federal and 50 percent non-Federal. In
    fiscal year 2005, the Corps will spend $1 million for the Volusia
    County Shore Protection Project, of which the Federal share is
    $500,000.
        While previous studies to address beach erosion were not acceptable
    to the County as the local sponsor, the County seeks the Corps'
    assistance now to address continuing erosion damage initiated during
    the 1999 hurricane season. The County recognizes its dire need in
    having its beaches renewed, preserved, and protected.
        Thank you for your consideration of this request.
                                     ______

             Prepared Statement of the National Mining Association

        The National Mining Association's (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
    2002, approximately 2.34 billion tons of commerce moved in the U.S.
    marine system (inland waterways, Great Lakes, coastal and deep-draft
    ports). Of that total, approximately 1.02 billion tons were domestic
    movements with coal comprising approximately 227 million tons or 22
    percent of all commodities. Of the 227 million tons of coal, 175
    million tons were carried on the inland and intracoastal waterways,
    19.4 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 159 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 Ohio basin. In addition, 48.7
    million tons of coal was exported in 2002.
        Iron ore, phosphate rock, and other minerals also utilize the
    inland waterways system. In 2002, 73.1 million tons of iron ore moved
    on the system. Of the total, 52.4 million tons moved domestically with
    46.8 million tons moved on the Great Lakes and 5.6 million tons on the
    inland system. More than 6.2 million tons of phosphate rock moved on
    the waterways system with 3.5 million tons by coastwise movements.
        NMA is very concerned that the proposed fiscal year 2005 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. The 25,000 miles of waterways and harbor channels are a major
    component of the transportation infrastructure system in the United
    States. The Nation's waterways system is an efficient and timely method
    to move commerce throughout the United States. It currently moves 2.4
    billion tons of cargo annually.
        Each year, barges on the waterways handle cargo equal to 40 million
    trucks or 10 million railcars. Without the waterways system, the
    Nation's already overcrowded and in some cases gridlocked highways,
    would not be able to be used. In addition, there would be a significant
    increase in air and noise pollution from the additional trucks on the
    roads. A river barge with a 1,500-ton capacity can transport up to 58
    large trucks or 15 large jumbo rail hopper cars worth of cargo. Barge
    transport also saves shippers on average $11 per ton, compared to
    shipping the same amount of cargo by truck or rail.
        In addition, the waterways system is critical to our Nation's
    national defense. Manufacturing and industrial facilities providing the
    military with needed weapons and materials are located near the
    Nation's water system. Many of our Nation's large commercial ports also
    serve as the home to the U.S. Navy's fleets.
        NMA is concerned that the full amount appropriated by Congress to a
    specific project is not always what is actually available to a project
    for a specified fiscal year. For example, in fiscal year 2004, the
    Kentucky Lock was appropriated $29.9 million but the project actually
    received $23.1 million for fiscal year 2004. Because of the reduced
    funding levels, projects are taking longer and the benefits are being
    lost to shippers and to the U.S. economy. NMA requests that projects
    receive the full amount appropriated in a given fiscal year.
        NMA continues to be very concerned with the surplus in the Inland
    Waterways Trust Fund (IWTF). One-half of the lock and dam construction
    and major rehabilitation funds come from the Inland Waterways Trust
    Fund (IWTF), which receives 20 cents from a 24.3 cents per gallon tax
    on the fuel used for inland waterways barge operations. The General
    Treasury receives the remaining 4.3 cents. Commercial users are the
    only beneficiaries of the inland waterways system who pay a fuel tax,
    while beneficiaries who receive flood control, water supply,
    recreational and other benefits do not contribute to the construction
    or maintenance of the system providing these benefits. For the last 12
    years, the Federal Government has not allocated sufficient funds to
    these projects to keep up with revenues flowing into the IWTF. The
    result as of September 30, 2001 is a Fund surplus of approximately $392
    million according to The Bureau of Public Debt, U.S. Department of the
    Treasury. A constraint on the funding for construction and
    rehabilitation projects has not been the revenue collected from the
    fuel tax but the limited level of funding appropriated from the IWTF.
    It is time to seriously address the backlog and to appropriate funds to
    finish the projects underway.
        NMA reviewed the proposed fiscal year 2005 request for the U.S.
    Army Corps of Engineers and the Civil Works Program and has the
    following general recommendations.
      --A minimum of $5.5 billion should be appropriated in fiscal year
            2005 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 needs for jobs, economic growth,
            homeland security and national defense.
      --A level of $150 million should be appropriated from the Inland
            Waterways Trust Fund to be matched by an equal expenditure from
            the general fund for the construction and major rehabilitation
            of locks and dams on the inland waterways 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 and timely completion of these required
            navigation projects will accelerate the national economic
            benefits from the projects and minimize cost increases.
      --The fiscal year 2005 appropriations for the Corps' General
            Investigations account should be increased to $200 million. The
            proposed fiscal year 2005 level of $90.5 million will not
            permit the Corps to undertake any new studies. These studies
            are critical to ascertaining and developing future projects. 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 2005 proposed funding in the amount of $1.926
            billion for the Corps' Operations and Maintenance functions
            should be increased. At the beginning of fiscal year 2004, it
            was estimated that critical maintenance backlog was $1.01
            billion. This is a $127 million or 12.7 increase from the
            previous year. It is anticipated the backlog will grow to $1.1
            billion under the administration's fiscal year 2005 request.
            This increase is of great concern given that the backlog was
            approximately $200 million in fiscal year 1998. Currently, more
            than half of the locks and dams on the system are 50 years
            older or more. With the funding constraints for new
            construction and rehabilitation projects, it is imperative that
            existing locks and dams be 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.
        The problems of an aging system were exemplified at Greenup Locks
    and Dam when significant problems were encountered during ongoing
    repairs to the gates on the main chamber. What began on September 8,
    2004 as a scheduled 3-week outage lasted 54 days and cost the
    navigation industry an estimated $14 million in lost revenue due to
    significant delays. For Dayton Power and Light, the delays cost $7
    million to find alternative rail transportation for its coal.

    NMA'S FISCAL YEAR 2005 PROJECT APPROPRIATIONS LEVELS NEEDING ADDITIONAL
                                     FUNDS

    Construction and Rehabilitation Projects
                Olmsted Locks & Dam--Fiscal Year 2005 Request: $75 million,
                        Efficient Funding Level: $110 million
        According to the U.S. Army Corps of Engineers Waterborne Commerce
    Statistics for 2001, more tonnage passes through this point than any
    other place in the inland waterways system with 96.7 million tons
    valued at $20 billion in 2001. Coal comprises 25 percent of the
    tonnage, moving to more than 50 power plants on the Ohio River System
    and 17 power plants in eight States on the Upper or Lower Mississippi
    River. The total project cost is $1.40 billion with a balance of $800
    million. The project is 6 years behind schedule with lost benefits of
    $2.7 billion. If the project continues to be funded at constrained
    levels and not at efficient funding levels, the project could be
    delayed another 8 years with a total of loss of $7.2 billion in
    navigation benefits.

                McAlpine Locks--Fiscal Year 2005 Request: $58 million,
                        Efficient Funding Level: $120 million
        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. With 20 million
    tons, coal was the leading commodity comprising 37 percent of all
    shipments. Thirteen million tons went to 30 power plants in 8 States.
    The total project cost is $350 million with a balance of $241 million.
    The project is 5 years behind schedule with lost benefits of $228
    million. If the project continues to be funded at constrained levels,
    it could be delayed another 5 years (2012) resulting in an additional
    loss of $163 million in navigation benefits.

                Locks & Dams 2, 3 and 4--Fiscal Year 2005 Request: $31
                        million, Efficient Funding Level: $60 million
        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 where shipped through any or all of the locks. Coal
    comprised 86 percent of the tonnage with 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. The
    total cost is $750 million with a balance of $500 million. The project
    is 9 years behind schedule resulting in $870 million in lost navigation
    benefits. If the project continues to be funded at constrained levels,
    the project could be further delayed to 2020 and a total of $1.2
    billion in lost navigation benefits.

                Marmet Locks & Dams--Fiscal Year 2005 Request: $50 million,
                        Efficient Funding Level: $75 million
        The U.S. Army Corps of Engineers Waterborne Commerce Statistic for
    2001 indicate 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. The project
    cost is $333 with a 2010 completion date (originally 2007). There is a
    balance of $219 million. Marmet has already experienced a 2-year
    completion delay and continued constrained funding levels, the project
    could be delayed another 5 years at loss of $201 million in navigation
    benefits.

                Kentucky Lock--Fiscal Year 2005 Request: $25 million,
                        Efficient Funding Level: $55 million
        The U.S. Army Corps of Engineers Waterborne Commerce Statistics for
    2001 indicate 35 million tons of commodities valued at $6.2 billion
    moved through the lock. Coal was the number one commodity with 12.6
    million tons or 36 percent of all shipments. The value was almost $500
    million. The coal moved to 9 power plants in the south including
    several owned by the Tennessee Valley Authority. Total project cost is
    $642 million. The project is already 5 years behind schedule. If the
    project continues to be funded at constrained levels then the project
    could be delayed until 2025 with $780 million in lost navigation
    benefits.

    Preconstruction Engineering and Design
        J.T. Myers Locks & Dam--Fiscal Year 2005 Request: $700,000,
    Efficient Funding Level: $2 million.

    Surveys
        Emsworth, Dashields & Montgomery Lock and Dams Fiscal Year 2005
    Request: $3.1, Efficient Funding Level: $1.5 million.

                                   CONCLUSION

        NMA is very concerned that the Nation's inland waterways system is
    not receiving sufficient funds in the fiscal year 2005 budget to keep
    critical navigation projects on schedule and to address the very large
    maintenance backlog for existing navigation projects. 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.
                                     ______

     Prepared Statement of the Board of Commissioners of the Pontchartrain
                                 Levee District

       FLOOD CONTROL, NAVIGATION, HURRICANE PROTECTION AND WATER RESOURCE
                                    PROJECTS
    ------------------------------------------------------------------------
                             Project                            Recommended
    ------------------------------------------------------------------------
    General Investigations:
        Amite River & Tributaries Bayou Manchac, LA.........        $800,000
        West Shore, Lake Pontchartrain & Vicinity, LA, St.           400,000
         John the Baptist Parish............................
    General Construction:
        Lake Pontchartrain & Vicinity, LA (Hurricane              22,000,000
         Protection)........................................
    ------------------------------------------------------------------------

                              COMMENTS ON PROJECTS

    Lake Pontchartrain & Vicinity, LA
        Around Lake Pontchartrain there are several segments under
    construction with this major title. All segments are nearing completion
    except St. Charles Parish Hurricane Protection of which the local
    sponsor is the Pontchartrain Levee District. The St. Charles project
    has 10 miles of levee, 5 major floodgate structures and a construction
    cost of $100 million. If Congress provides maximum funding capability
    for 2004 and 2005, then the first lift levees would be complete and
    much of the second lift and all structures can be completed. A closed
    system would be complete, except for some second lift levees, by the
    2005 hurricane season. Of the recommended appropriations requested
    above for Lake Pontchartrain and Vicinity, about $6,000,000 could be
    scheduled for the St. Charles Parish segment. Any reduction in the
    recommended budget would certainly reduce the amount that would be
    assigned to St. Charles Parish and result in a disappointing slow down.
    Non-Federal funds for participation are in place now.

    West Shore, Lake Pontchartrain & Vicinity, LA, St. John the Baptist
            Parish
        This segment is currently under study with the Pontchartrain Levee
    District acting as local sponsor. Preliminary indications are the
    hurricane protection project will have 18 miles of levee and 3 drainage
    pump stations. The Feasibility Study should be completed in fiscal year
    2004. Protection will be provided from the west levee of the Bonnet
    Carre Floodway westward to the LaPlace area, and will include
    protection of portions of I-10, I-55 and U.S. 51, designated hurricane
    evacuations routes for this area and the New Orleans Metropolitan area.
    This intersection has been previously flooded from storm tides.
    Amite River & Tributaries, Bayou Manchac, LA
        This investigation is being made as a result of a number of homes
    being flooded from rains produced by tropical storm Allison in late May
    and early June 2001 along the Bayou Manchac Watershed. A few homes
    remained flooded for as much as a month or more because of very slow
    receding waters. A highly sensitive area of Spanish Lake and
    surrounding swamp also remained flooded for an extensive period which
    caused extensive ecosystem damages. The affected area covers portions
    of Ascension, Iberville and East Baton Rouge parishes and all have
    joined with the Pontchartrain Levee District to provide non-Federal
    funding with the Levee District acting as local sponsor.

                                    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 our pleadings. 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 this pattern will revert back
    to the 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.
                                     ______

     Prepared Statement of the Board of Commissioners of the Pontchartrain
                                 Levee District

                     MISSISSIPPI RIVER & TRIBUTARIES PROJECT
    ------------------------------------------------------------------------
                             Project                            Recommended
    ------------------------------------------------------------------------
    Mississippi River & Tributaries: Flood Control Project..    $435,000,000
    ------------------------------------------------------------------------

                              COMMENTS ON PROJECTS

    Mississippi River & Tributaries Flood Control Project
        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.
                                     ______

             Prepared Statement of the Red River Valley Association

        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.
        The Resolutions contained herein were adopted by the Association
    during its 79th Annual Meeting in Bossier City, Louisiana on February
    19, 2004, and represent the combined concerns of the citizens of the
    Red River Basin area as they pertain to the goals of the Association.
        The President's budget included $4.215 billion for civil works
    programs, which is $700 million (14.3 percent) less than what the Corps
    expended in fiscal year 2004 ($4.905 million). 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 in fiscal
    year 2005. 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.
        We are very concerned with the way in which the administration has
    determined what they term ``low use waterways''. Included in the fiscal
    year 2005 Civil Works Budget, published February 2004, is a table
    indicating ``net benefits/current costs'' and ``remaining benefits/
    remaining costs''. The J. Bennett Johnston Waterway, LA is shown at the
    bottom of the table with an unfavorable ratio. Nowhere in the document
    do they explain the criteria used for these ratios. This is the
    criterion used to justify the priorities to fund waterway projects and
    we do not agree with it.
        If they are using ``ton-miles'', as we suspect, this is just a
    small factor of determining the success of a waterway. Ton-miles is
    simply the tons moved the length of the waterway. It does not give
    credit to the waterway for the miles moved to the final destination,
    for outbound cargo, or origin, for inbound cargo. Just using tonnage
    moved on a waterway neglects the main benefit that justified the
    project, transportation cost savings. Currently there is no analysis to
    consider ``water compelled rates'' (competition with rail). We know
    that there are industries not using our waterway because the rail rates
    dropped, to match the waterborne rates, the same year our waterway
    became operational. If our waterway were discontinued the rail rates
    would increase. Many industries have experienced great transportation
    savings without using the waterway.
        The main problem is that there is no post-project evaluation for
    navigation projects. We support the development of such an evaluation
    and volunteer our waterway and our efforts to develop one. We request
    that both Houses of Congress direct that this be accomplished. The
    Corps of Engineers should take the lead to develop a true evaluation
    that considers all benefits of a waterway. We also believe any
    evaluation adopted must have input from and be validated by the
    administration, Congress and industry.
        The current criteria used to prioritize funding for projects, both
    Construction General and Operations and Maintenance, is incomplete and
    inaccurate. Too much money has been expended to use an evaluation that
    is unfair and disregards the true benefits realized from these waterway
    projects.
        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, less expensive 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. The four public ports had a 20 percent increase in tonnage
    from calendar year 2002 to calendar year 2003. New opportunities were
    announced in calendar year 2003 at each of the ports, which will
    further increase annual tonnage. You are reminded that the Waterway is
    not complete, 6 percent remains to be constructed, $118 million. We
    appreciate Congress's appropriation level in fiscal year 2004 of $10.4
    million, however, the President's fiscal year 2005 budget drastically
    cuts that to $4 million, which is unacceptable. There is a capability
    for $20 million of work, but we realistically must have a minimum of
    $10-15 million to keep the project moving toward completion.
        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 2003 we succeeded in getting electronic charts
    completed and they are now in use. Permanent channel markers have also
    been completed. Both of these initiatives will provide additional aids
    to navigation necessary to insure safe and efficient navigation,
    especially during high water events, when commercial operations have
    ceased in past years.
        Now that the J. Bennett Johnston Waterway is reliable year round we
    must address efficiency. Presently a 9-foot draft is authorized for the
    J. Bennett Johnston Waterway. Our Waterway feeds into the Mississippi
    River, Atchafalaya River and Gulf Inter-coastal Canal, which are all
    authorized at a 12-foot draft. A 12-foot draft would allow an
    additional one-third cargo capacity, per barge, which will greatly
    increase the efficiency of our Waterway and reduce transportation
    rates. This one action would have the greatest, positive impact to
    reduce rates to a competitive level that would bring more industries to
    use waterborne transportation. 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 will be completed in
    calendar year 2004. We appreciate that Congress appropriated adequate
    funding to complete this study. 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 this navigation
    project, although not the total solution, will help revitalize the
    economy. We request funding $400,000 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 2004 and request you fund this project at a level of $10
    million in fiscal year 2005.
        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 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 safety standards. 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 which can
    create conditions for the levees to fail. A gravel surface will insure
    inspection personnel can check the levees during the saturated
    conditions of a flood. Funding has been appropriated and 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 2004. 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
    $2,500,000 to continue this important environmental monitoring and to
    complete plans and specifications 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. Due to siltation the available storage of
    water has been impacted. A $750,000 reallocation study is requested to
    determine water distribution needs and raising the conservation pool.
    $375,000 is requested in fiscal year 2005 to initiate this 2-year
    study.
        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.
        Our major project for O&M is the J. Bennett Johnston Waterway. From
    this project four public ports and three private terminals have been
    established. The tonnage at the public ports increased by 20 percent
    from calendar year 2002 to calendar year 2003. Even though we continue
    to show growth the administration continues to reduce our O&M budget
    and not include maintenance dredging. Without dredging the Waterway
    would effectively close down terminating our ports and terminal. The
    President's budget included $10,600,000; however, a minimum of
    $14,000,000 is required to address our annual dredging needs and
    operational costs for the five locks and dams.
        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.
        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 2 previous fiscal years.
                                     ______

            Prepared Statement of the Crescent City Harbor District

        The Crescent City Harbor District is requesting $3 million in
    funding in the fiscal year 2005 Energy and Water Development
    appropriations bill. These funds are needed for maintenance dredging of
    our harbor and for completing our Dredging Materials Management Plan.
        Dredging funds are critical for the future of our harbor. Crescent
    City has long been a key port for the landing of Pink shrimp, Dungeness
    crab, and groundfish. In 2001, commercial landings exceeded $6 million.
    In 2002, even with reduced fishing opportunities, our fleets landed
    over five and $500,000 worth of seafood. The most recent Dungeness crab
    season, from December 2003 until the present, very likely set a record
    for production and value. Although some groundfish and Salmon species
    are at relatively low levels, many others are abundant. We look forward
    to harvesting the sustainable yield of our natural resources once the
    weaker stocks are rebuilt. But we must dredge the harbor now to take
    advantage of these future opportunities.
        Over the years our community has made a substantial investment in
    the harbor. Our major dock is called ``Citizens Dock'' because it was
    built entirely by local volunteers in 1950. Since then, we have built a
    modern boat basin, fish processing plants, and a superb vessel repair
    facility. Our harbor is the safest, most convenient harbor in Northern
    California for both recreational and commercial fishermen. But the
    economic viability of these facilities depends on dredging the harbor.
        Currently we are in the midst of developing a master plan that will
    help identify and then implement new opportunities to diversify the
    economic base of our harbor. Both the City of Crescent City and the
    County of Del Norte are actively supporting our master plan efforts. We
    hope to identify several opportunities that will expand and revitalize
    our struggling local economy. But the success of our planning process
    depends on dredging the harbor.
        All our efforts, investments, and plans will come to nothing if we
    cannot dredge our harbor. We look forward to working together to ensure
    that dredging funds are in place in next year's appropriations cycle so
    that our harbor can remain a key part of the economy of Del Norte
    County and Northern California.
                                     ______

                    Letter From the Arizona Power Authority
                                      Phoenix, Arizona, March 23, 2004.
    Senate Subcommittee on Energy and Water Development,
    126 Dirksen Senate Office Bldg., Washington, DC 20510.
        Re: Increased security costs at Reclamation, Corps of Engineers and
    Western Area Power Administration facilities

        Dear Chairman Domenici and Ranking Member Reid: Enclosed please
    find a copy of a resolution passed by the Arizona Power Authority
    Commission at its March meeting urging that increased costs for
    security at Hoover Dam and similar Federal projects be made non-
    reimbursable. Would you please enter this letter and the attached
    resolution in the record of your proceedings.
                Sincerely,
                                          Joseph W. Mulholland,
                                                    Executive Director.
                  arizona power authority resolution no. 04-2
        security costs at hoover dam and other federal power facilities
        Hoover Dam, one of the most famous structures in the world, is one
    of a number of Federal dams that were developed to provide benefits to
    millions of citizens in the Western United States, including flood
    control, irrigation, municipal and industrial water supplies,
    hydropower generation, recreation and environmental benefits.
        Ensuring the safety and security of Hoover Dam and other similar
    Federal projects is of vital importance to all of the citizens of the
    United States.
        The Arizona Power Authority and other State agencies and consumer-
    owned electric utilities already shoulder the majority of the
    reimbursable cost of these facilities, including subsidizing irrigation
    features, environmental programs, and repayment of the Federal debt
    associated with construction, operation, maintenance and replacements.
        NOW THEREFORE, BE IT RESOLVED:
        That the Commissioners of the Arizona Power Authority call upon the
    Federal Government to ensure that all costs associated with the safety
    and security of Hoover Dam and similar Federal facilities in the
    aftermath of the events of September 11, 2001, be treated as
    nonreimbursable and that payment of such costs be funded through
    Federal appropriations as a national obligation.
        UNANIMOUSLY ADOPTED by the Arizona Power Authority Commission this
    sixteenth day of March 2004.
                                     ______

        Prepared Statement of the St. Francis Levee District of Arkansas

                               EXECUTIVE SUMMARY

        The Mississippi Valley Flood Control Association Fiscal Year 2005
    Civil Works Budget, Mississippi River and Tributaries Appropriations--
    Requesting Appropriations of $9,500,000 for Construction and $8,805,000
    for Maintenance and Operation in the St. Francis Basin Project and a
    total of $450,000,000 for the Mississippi River and 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 flood control for 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 Nation-wide 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 $450,000,000 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 $9,500,000 for the St. Francis
    Basin Project construction funds and $8,805,000 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
    2005 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.
                                     ______

           Prepared Statement of the City of Virginia Beach, Virginia

        I am writing on behalf of the City of Virginia Beach, Virginia, to
    request funding for three critical projects in the fiscal year 2005
    Energy and Water Development Appropriations Bill. These three projects
    are:
      --$7 million for the Virginia Beach Erosion Control and Hurricane
            Protection Project under the Construction account of the Army
            Corps of Engineers.
      --$5.5 million for the City's Beach Renourishment for Sandbridge
            Beach under the Construction account of the Army Corps of
            Engineers.
      --$1.25 million for the maintenance of Rudee Inlet under the
            Operation and Maintenance account of the Army Corps of
            Engineers.
        virginia beach erosion control and hurricane protection project
        Funding for this project was originally authorized under the Water
    Resources Development Act of 1992, and a Public Cooperation Agreement
    was reached and signed between the City and the Army Corps of Engineers
    in August 1993. The Water Resources Development Act of 1992 authorized
    $112 million for Virginia Beach Erosion Control and Hurricane
    Protection project for the City.
        To date, the Federal Government has invested over $80 million for
    this project, matched by over $40 million in City funds. The results of
    the investment are a magnificent beach and seawall system, providing
    flood damage protection for the City's tourism industry infrastructure,
    which is important for the economic vitality of the City. The resulting
    beach is a showpiece for the region.
        The project has proven it works, most recently after Hurricane
    Isabel. The 100-year hurricane event protection level in this project
    did indeed protect the whole commercial beach area with no sustainable
    damage. If this project had not been in place there would have been
    huge losses.
        The Federal Government has a long-term (50-year) commitment with
    the City to maintain this project. However, in the President's Fiscal
    Year 2005 Budget no funding was included. The Federal and City
    government have spent too much money to build this project to let it
    all go to waste by not renourishing the beach with sand for protection.
    It is important to maintain this project, both to protect the
    investments already made and to minimize damages from future storm
    events.

                    BEACH RENOURISHMENT FOR SANDBRIDGE BEACH

        The Sandbridge Beach Replenishment project was created after
    decades of flood damage from storm events. Once the beach was
    replenished, flooding due to storms significantly decreased. The most
    recent example of the project's benefit is the reduced damage from
    Hurricane Isabel. Our request of $5,500,000 is needed to honor the
    previous Federal commitments for the programmed maintenance of these
    projects.
        The Sandbridge project was first approved by the Army Corps of
    Engineers and the North Atlantic Division of the Corps and subsequently
    authorized by Congress as a part of the Water Resources Development Act
    of 1992. The initial Public Cooperation Agreement was executed on
    February 3, 1998.
        When the beach was first replenished in 1998, the City funded 100
    percent of the total cost ($8.1 million). In 2002, the City covered 35
    percent of the cost while the Federal Government covered the remaining
    65 percent (total of $12 million). To date, the total amount of money
    invested (including City funds and funds from the Federal Government)
    is almost $20 million.
        As with the Hurricane Protection Project, the President's Fiscal
    Year 2005 Budget did not include funding for the Sandbridge Beach
    project. It is imperative that the City be able to maintain this
    project in order to protect the large number of family homes and rental
    properties in the area and minimize overall damages from future storm
    events. Today, only due to past efforts, Sandbridge is a vital and
    vibrant public beach.

                                  RUDEE INLET

        Rudee Inlet, which was authorized under the Water Resources and
    Development Act of 1992, is a vital commercial and recreational
    resource to the City. But its special significance from a Federal
    standpoint is that it is used by the U.S. Navy Special Operations for
    training and equipment testing. The Army Corps of Engineers has been
    maintaining Rudee Inlet since 1991.
        Over the years there has been funding included in the President's
    budget for Rudee Inlet, however there was no funding included in the
    President's fiscal year 2005 budget. It is important to ensure that the
    inlet receives proper funding because failure to continue the
    maintenance on Rudee Inlet would negatively impact the City and the
    U.S. Navy special operations.
        It is vital to the City of Virginia Beach that the Federal
    Government maintain funding for these projects. All businesses located
    in the City, including hotels and restaurants, along with recreational
    activities, military operations, and tourism would be negatively
    impacted without the proper maintenance of these projects.
        I appreciate your time and consideration regarding this matter.
                                     ______

          Prepared Statement of the Santa Clara Valley Water District

                    SOUTH SAN FRANCISCO BAY SHORELINE STUDY

        Background.--Congressional passage of the Water Resources
    Development Act of 1976, originally authorized the San Francisco Bay
    Shoreline Study, and Santa Clara Valley Water District (District) was
    one of the project sponsors. In 1990, the U.S. Army Corps of Engineers
    (Corps) concluded that levee failure potential was low because the
    existing non-Federal, non-engineered levees, which were routinely
    maintained by Leslie Salt Company (subsequently Cargill Salt) to
    protect their industrial interests, had historically withstood
    overtopping without failure. As a result, the project was suspended
    until adequate economic benefits could be demonstrated.
        Since the project's suspension in 1990, many changes have occurred
    in the South Bay. The State and Federal acquisition of approximately
    15,000 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 and levee maintenance
    activities, which were assumed to be constant in the Corps' 1990 study.
    In addition to the proposed restoration project, considerable
    development has occurred in the project area. Many major corporations
    are now located within Silicon Valley's Golden Triangle, lying within
    and adjacent to the tidal flood zone. Damages from a 1 percent high
    tide are anticipated to far exceed the $34.5 million estimated in 1981,
    disrupting business operations, infrastructure, and residences. Also,
    historical 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.
        In July 2002, Congress authorized a review of the Final 1992 Letter
    Report for the San Francisco Bay Shoreline Study. The final fiscal year
    2004 appropriation for the Corps included funding for a new start
    Reconnaissance Study.
        Project Synopsis.--At present, large areas of Santa Clara, Alameda
    and San Mateo Counties would be impacted by flooding during a 1 percent
    high tide. The proposed restoration of the South San Francisco Bay salt
    ponds will result in the largest restored wetland on the West Coast of
    the United States, and also significantly alter the hydrologic regime
    adjacent to South Bay urban areas. The success of the proposed
    restoration is therefore dependent upon adequate tidal flood
    protection, and so this project provides an opportunity for multi-
    objective watershed planning in partnership with the California Coastal
    Conservancy, the lead agency on the restoration project. Project
    objectives include: restoration and enhancement of a diverse array of
    habitats, especially several special status species; tidal flood
    protection; and provision of wildlife-oriented public access.
        Fiscal Year 2004 Funding.--$100,000 was appropriated in fiscal year
    2004 to conduct a Reconnaissance Study.
        Fiscal Year 2005 Funding Request.--It is requested that the
    congressional committee support an appropriation add-on of $500,000 for
    the South San Francisco Bay Shoreline Study to initiate a Feasibility
    Study to evaluate integrated flood protection and environmental
    restoration.

                       THOMPSON CREEK RESTORATION PROJECT

        Background.--Thompson Creek, a tributary of Coyote Creek, flows
    through the City of San Jose, California. 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.
        The upstream project limits start at Aborn Road and the downstream
    project limit is Quimby Road where Thompson creek has been modified as
    a flood Protection project. The project distance is approximately 1
    mile.
        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
    ------------------------------------------------------------------------
                                                             Date
    ------------------------------------------------------------------------
    Request Federal assistance under Sec. 206    Feb. 2002
     Aquatic Ecosystem Restoration Program.
    Initiate Study.............................  Jan. 2003
    Public Scoping Meeting and Local             Sept. 2004
     Involvement.
    Final Detailed Project Report to South       May 2006
     Pacific Division of Corps.
    Initiate Plans and Specifications..........  July 2006
    Project Cooperation Agreement signed.......  Dec. 2006
    Certification of Real Estate...............  Mar. 2007
    Advertise Construction Contract............  May 2007
    Complete Plans and Specifications..........  July 2007
    Award Construction Contract................  July 2007
    Construction Start.........................  Sept. 2007
    Complete Physical Construction.............  Dec. 2008
    ------------------------------------------------------------------------

        Fiscal Year 2004 Funding.--$100,000 earmark was received in the
    fiscal year 2004 Section 206 appropriation to complete the PRP.
        Fiscal Year 2005 Funding Recommendation.--It is requested that the
    congressional committee support an earmark of $300,000 within the
    Section 206 Aquatic Ecosystem Restoration Program.

                          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 was completed by the San
    Francisco District of the Corps in fiscal year 2002. The decision to
    continue onto a cost-shared feasibility study is currently delayed
    pending the Corps resolution of the flooding problems on the lower
    Pajaro River (Murphy's Crossing to the Ocean) and defining feasibility
    study goals that meet the interests of all Authority members.
        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 2004 Funding.--$100,000 was authorized in fiscal year
    2004 for the Pajaro Watershed Feasibility Study.
        Fiscal Year 2005 Funding Recommendation.--It is requested that the
    congressional committee support an appropriation add-on of $100,000 in
    fiscal year 2005 for the Pajaro River Watershed Study.

                         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 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 an earlier study of
    Guadalupe River. 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 (NED) 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 NED 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 NED 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 NED 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. 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.
        Fiscal Year 2004 Funding.--$150,000 was authorized in fiscal year
    2004 for the Upper Guadalupe River Project to continue preconstruction
    engineering and design.
        Fiscal Year 2005 Funding Recommendation.--It is requested that the
    congressional committee support an appropriation add-on of $3.5 million
    in fiscal year 2005 for the Upper Guadalupe River 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, 1998, and
    2002. 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 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 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 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
    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 2004 Funding.--$250,000 was appropriated in fiscal year
    2004 for the Llagas Creek Flood Protection Project for planning and
    design.
        Fiscal Year 2005 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 $1.35
    million in fiscal year 2005 for planning, design, and environmental
    updates for the Llagas 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 2004 Funding.--No Federal funding was received in
    fiscal year 2004.
        Fiscal Year 2005 Funding Recommendation.--It is requested that the
    congressional committee support an appropriation add-on of $100,000 to
    initiate a multi-purpose Reconnaissance Study within the Coyote Creek
    Watershed.

                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. However, due to funding constraints at the District and
    concerns raised by regulatory agencies, the design was stopped and
    turned over to the Corps to complete.
        Fiscal Year 2004 Funding.--$460,000 was appropriated in fiscal year
    2004 for the Upper Penitencia Creek Flood Protection Project for
    project investigation.
        Fiscal Year 2005 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 an appropriation add-on of $535,000 million, in
    addition to the $46,000 in the administration's fiscal year 2005
    budget, for a total of $600,000 for the Upper Penitencia Creek Flood
    Protection 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 2004 Funding.--$250,000 was appropriated in fiscal year
    2004 for the Coyote/Berryessa Creek Flood Protection Project to
    continue the General Reevaluation Report and environmental documents
    update.
        Fiscal Year 2005 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.

                    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 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. 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. 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. 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.
        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 organization, 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 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.
        Fiscal Year 2004 Funding.--$100,000 was appropriated to San
    Francisquito Creek in fiscal year 2004 to conduct a Watershed
    Reconnaissance Study.
        Fiscal Year 2005 Funding Recommendation.--It is requested the
    congressional committee support an appropriation add-on of $200,000 in
    fiscal year 2005 budget to initiate a Feasibility Study for the San
    Francisquito Creek Watershed.

                            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 2004 Funding.--$14 million was authorized in fiscal
    year 2004 to continue Guadalupe River Project construction.
        Fiscal Year 2005 Funding Recommendation.--It is requested that the
    congressional committee support an appropriation add-on of $6 million,
    in addition to the $6 million in the administration's fiscal year 2005
    budget, for a total of $12 million to continue construction of the
    final phase of the Guadalupe River Flood Protection Project.
                                     ______

      Prepared Statement of the Riverside County Flood Control and Water
                             Conservation District

    ------------------------------------------------------------------------
                             Project                              Request
    ------------------------------------------------------------------------
    Murrieta Creek Flood Control Project: Construction            $5,000,000
     General................................................
    San Jacinto & Santa Margarita River Watersheds Special         1,000,000
     Area Management Plan (SAMP): General Investigations....
    Santa Ana River--Mainstem: Construction General.........      58,060,000
    ------------------------------------------------------------------------

                      MURRIETA CREEK FLOOD CONTROL PROJECT

        Murrieta Creek poses a severe flood threat to the cities of
    Murrieta and Temecula. Over $12 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 provided $1
    million for a new construction start for this critical public safety
    project. Construction activities on Phase 1 of the project commenced in
    the Fall of 2003 and the Groundbreaking Ceremony was held on November
    12, 2003. The appropriations for fiscal year 2004 allowed the Corps to
    continue construction on Phase 1 and initiate 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 2005. The District, therefore, respectfully requests the
    committee's support of a $5 million appropriation in fiscal year 2005
    so that the Corps may complete construction on Phase 1, complete the
    design work for Phase 2 and initiate construction on Phase 2 of the
    long awaited Murrieta Creek Flood Control, Environmental Restoration
    and Recreation Project.

    SAN JACINTO & SANTA MARGARITA RIVER WATERSHEDS SPECIAL AREA MANAGEMENT
                                      PLAN

        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 Project (RCIP) to determine how best to balance these
    factors. The plan will create regional conservation and development
    reserves that will 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 a Special Area
    Management Plan (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 permitting process 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 and multiple
    species habitat conservation 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. The $200,000 appropriations
    received for fiscal year 2004 allowed for some of the management of the
    preparation of the NEPA document to continue.
        Further funding is now needed to continue the SAMP effort. We,
    therefore, respectfully request that the committee support a combined
    $1,000,000 appropriation of Federal funding for fiscal year 2005 for
    the Corps to continue its work on the Special Area Management Plan for
    the San Jacinto and Santa Margarita River Watersheds.

                           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 2005, an appropriation of $4.46 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.
        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 a fiscal year 2005 appropriation of $4.3
    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 $5 million appropriation.
        An appropriation of $7.0 million is being requested to fund the
    required mitigation for the operation and maintenance of the Seven Oaks
    Dam project.
        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 2005 appropriation of $37.3
    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 $58,060,000 appropriation of Federal funding for fiscal year
    2005 for the Santa Ana River Mainstem project including Prado Dam.
                                     ______

              Prepared Statement of the Standing Rock Sioux Tribe
        Project.--Standing Rock MRI and Irrigation Systems, Garrison
    Diversion Unit (Public Law 99-294).
        Agency.--Corps of Engineers, Missouri Basin Pick Sloan, OMR.

                        FISCAL YEAR 2005 BUDGET REQUEST

        The Standing Rock Sioux Tribe requests $6,500,000 in the Corps of
    Engineers' budget for fiscal year 2005 for the Missouri Basin Pick
    Sloan Project from the operation, maintenance and replacement (OMR)
    account to reconstruct three intakes made inoperable by siltation
    caused by the operation of water levels in Lake Oahe in the months
    August through December 2003 as set out below:

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

    ------------------------------------------------------------------------
    Cannonball Irrigation Intake............................      $2,000,000
    Fort Yates Irrigation Intake............................       1,500,000
    Fort Yates Municipal and Industrial Intake..............       3,000,000
                                                             ---------------
          Total.............................................       6,500,000
    ------------------------------------------------------------------------

                                   BACKGROUND

        The construction and operation of Garrison and Oahe dams, principle
    components of the Missouri River Pick Sloan Program, by the Corps of
    Engineers has caused considerable damage to the Standing Rock Sioux
    Tribe of the Standing Rock Indian Reservation, North and South Dakota.
    The following activities have caused the siltation of three major
    intakes owned and operated by the Tribe for irrigation and domestic
    water use and threatens proposed downstream intakes:
      --The construction of Garrison Dam, upstream from Lake Oahe, has
            caused the erosion of the bed and banks of the free flowing
            Missouri River between Garrison Dam and Bismarck;
      --The construction of Oahe Dam and the filling of Lake Oahe has
            caused the deposition of sediment eroded from the bed and banks
            of the Missouri River between Garrison Dam and Bismarck at the
            upper end of Lake Oahe. This deposition has been estimated by
            the U.S. Bureau of Reclamation at 14,600 acre feet annually
            (equivalent to 560,000 acre of deposition over the past 40
            years);
      --Lowering the Lake Oahe water levels to historic minimums in fall
            2003 caused the transport of sediments deposited in the upper
            end of Lake Oahe to more downstream locations in Lake Oahe
            within the Standing Rock Indian Reservation and inundated the
            Cannonball irrigation intake and the Fort Yates municipal,
            rural and industrial water intake, the principle source of
            domestic water supply for the Standing Rock Sioux Tribe, The
            Fort Yates irrigation intake was likewise stranded in fall
            2003;
      --The Cannonball irrigation intake was inundated with 11 feet of
            sediment between August and December 2003, and the Fort Yates
            municipal, rural and industrial water intake was rendered
            unusable by the deposition of sediment creating a water supply
            emergency for 10,000 members of the Standing Rock Sioux Tribe.
        The Corps of Engineers was fully knowledgeable with respect to the
    erosion of the bed and bank of the Missouri River between Garrison Dam
    and Bismarck and the subsequent deposition of sediments on the Standing
    Rock Indian Reservation in the upper end of Lake Oahe as evidenced by
    the following documents, among others:
      --Alfred S. Harrison and Warren J. Mellema, May 1984, Aggradation and
            Degradation Aspects of the Missouri River Mainstem Dams, MRD
            Sediment Series, Number 34, U.S. Army Corps of Engineers, Omaha
            District.
      --Corps of Engineers, December 1983, Deposition at the Heads of
            Reservoirs, MRD Sediment Series, Number 31, Omaha District.
      --Sedimentation and Channel Stabilization Section, November 1999,
            Sedimentation Impacts in the Cheyenne River Arm--Lake Oahe,
            Phase II, Projected to 2058, MRR Sediment Memorandum, 20, U.S.
            Army Corps of Engineers, Omaha District.
      --U.S. Geological Survey, 1995, Transport and Sources of Sediment in
            the Missouri River between Garrison Dam and the Headwaters of
            Lake Oahe, North Dakota, May 1988 through April 1991 Water-
            Resources Investigations Report 95-4087.
        The Standing Rock Sioux Tribe, pursuant to the Treaties of 1851 and
    1868 possesses prior and superior rights to the use of water in the
    Missouri River, its tributaries and its aquifers for present and future
    purposes and has exercised those water rights for the present
    development of irrigation and domestic water supply by the construction
    of intakes on the Missouri River where the natural channel of the river
    crosses the Standing Rock Indian Reservation, which intakes are
    submerged at the upper end of Lake Oahe.

    DEPLETION OF TRIBES' FUNDS APPROPRIATED PURSUANT TO PUBLIC LAW 99-294,
                                   AS AMENDED

        The Standing Rock MRI project funds (Public Law 99-294) have been
    depleted to make interim, emergency corrections to restore the drinking
    water supply for the Tribal membership and other residents served in
    Fort Yates, Cannonball, Porcupine and intermediate rural areas.
        Questions also arise with respect to the viability of the new
    irrigation intake in the Kenel area where the next phase of the Public
    Law 99-294 irrigation project is to be implemented. It is not known how
    long an intake as far south as Kenel will be viable because the rate of
    progress of sediment movement from the upper to middle segments of Lake
    Oahe is not known. Kenel has been under consideration as a possible
    site for long-term MRI intake, but this option must be reevaluated
    after better information is in hand to determine if the migration of
    sediment will reach Kenel in the near term.
        The cost of a long-term solution is not yet known. Far more
    information is needed on the phenomenon of sediment movement in Lake
    Oahe before a permanent location and elevation for a new intake can be
    established. Sound cost estimates can be prepared thereafter.
        The Cannonball Irrigation Unit was to begin operation in spring
    2004. It appears the Tribe will not be able to meet those expectations
    because 11 feet of silt now resides atop that intake. Funds for
    corrective measures at this site in fiscal year 2004 will further
    deplete the irrigation authority of Public Law 99-294 intended for
    development of additional parts of the 2,380 authorized acres.

                  STANDING ROCK SEDIMENT ANALYSIS IN LAKE OAHE

        When Garrison Dam closed in 1955, a streamflow of 10,000 cubic feet
    per second (cfs) produced a water level elevation in the Missouri River
    downstream from the dam of approximately 1,676 feet above mean sea
    level. In 1990 a streamflow of 10,000 cfs produced a water level
    elevation in the Missouri River of approximately 1,668 feet, a decline
    in water level elevation of 8 feet. The reason for the decline in water
    level elevation for the same flow rate of 10,000 cfs was the excavation
    of the bed of the River below the dam. (See Figure 1 from the Corps of
    Engineers). With entrapment of all incoming sediment in the reservoir
    upstream from the dam, releases from the dam are free of sediment and
    have the capability to capture material from the bed and banks of the
    downstream river channel. Over a long period of time (1955 to 2003)
    this predictable activity has lowered the bed of the Missouri River and
    eroded the banks.

        When Oahe Dam closed and began filling in 1962, material excavated
    from the Missouri River below Garrison Dam was deposited by the slowing
    velocity of the River as it entered the upper end of the Oahe pool.
    Over a 30-year period an unknown volume and tonnage of sediment was
    excavated upstream and deposited downstream from Bismarck. (See Figure
    2 from USGS with independent modifications to show zones of excavation
    and deposition upstream and downstream from Bismarck, respectively.)
    The following statement confirms that Bismarck is near the transition
    between upstream excavation or ``degradation'' and downstream
    deposition or ``aggradation'' of the channel.

        ``. . . there have been no marked changes in stage at this station
    [Bismarck] except for discharges of 30,000 cfs or greater, which have
    exhibited a slight upward trend . . . a study completed by the Corps
    [of Engineers] in 1985 `Oahe-Bismarck Area Studies' indicated that
    aggradation has reduced the size of the channel in the study area,
    resulting in higher stages for the same discharge. The study concluded
    that for discharges of 50,000 to over 100,000 cfs, the stages have
    increased by 1 to 2 feet in the study area. It was also estimated that
    future aggradation will further increase stages for those discharges by
    an additional 0.8 to 1.4 feet.'' (U.S. Geological Survey, 1995,
    Transport and Sources of Sediment in the Missouri River Between
    Garrison Dam and the Headwaters of Lake Oahe, North Dakota, May 1988
    through April 1991, Water-Resources Investigations Report 95-4087).

        During the drought of the last few years, including 2003, water
    levels in Lake Oahe fell from average elevations of 1,605 feet to
    historic minimums. Only in year 1990 had water levels reached as low
    (1,582 feet) as in 2003. In 2002, water levels in the October through
    December time frame reached averages of 1,584 feet. In November 2003,
    water levels reached as low as 1,576 feet, the lowest on record.

        Sufficient information is not in hand (but should be available) to
    determine the elevation of the bed of the Missouri River before
    sediment began to accumulate in the upper end of Lake Oahe. When the
    intake for the Cannonball Irrigation Project was constructed in the
    late 1990's, the intake was placed underwater in the former channel of
    the Missouri River (the lowest point at that River-mile). The top of
    the intake screen was at 1,573 feet. Similarly, the intake for the
    Standing Rock MRI Project was reportedly constructed in the former
    channel of the River at a known elevation not available at the time of
    this writing.
        Sediment moved downstream in fall 2003 as the reservoir levels in
    Lake Oahe were lowered and the Missouri River was required to flow
    across areas normally inundated and filled with sediment over the past
    40 years. In this zone at the upper end of the lowered Lake Oahe, the
    Missouri River eroded artificially deposited sediments and moved them
    further downstream in the Reservoir. This caused the failure of the
    intake for the Tribe's MRI Project and deposited as much as 11 feet of
    sediment in the former Missouri River channel at the Cannonball intake
    site. Sediment has reached elevation 1,584 feet or 11 feet above the
    bottom of 1,573 feet measured at the irrigation intake in August 2003.
        Elements of the phenomenon reported here have been studied by
    agencies of the United States, including the U.S. Geological Survey and
    the Corps of Engineers. It is believed that the Corps of Engineers knew
    or should have known that the lowering of water levels in Lake Oahe
    would cause the redistribution of sediments from the upper end of the
    Reservoir, where they knew sediments were deposited, to further
    downstream locations. At a minimum, the Tribe should have been notified
    in advance of the risk to its intakes as the Corps began its operations
    in the critical October to December period. Reasonable management of
    reservoir levels may have avoided the exigent conditions that existed
    for the Tribe in December and the considerable expense to redesign,
    reconstruct and relocate both MRI and irrigation intakes due to the
    releases from Garrison and management of water levels in Lake Oahe.
    When the emergency occurred, the Corps of Engineers increased releases
    from Garrison Dam from approximately 13,000 cfs (River stage at 4.2
    feet) to 18,000 cfs (River stage at 6.2 feet), the most marked change
    in releases during the October to December 2003 time frame. (See Figure
    3 from USGS).

        Long-term solutions for the Tribe require collection of information
    not in the Tribe's hands and revision of the procedures for Garrison
    releases and management of Lake Oahe during drought conditions.
    Specifically, a sediment survey in the upper reaches of Lake Oahe is
    needed to document the current position of sediment deposits. Analysis
    is needed to determine where those deposits will move in the future and
    how the Tribe can locate and build dependable intakes. This problem
    affects at least two existing irrigation intakes (Cannonball and Fort
    Yates) and the MRI intake. The future irrigation intake at Kenel is
    also subject to an unknown level of risk. New operating procedures are
    needed that raised the minimum operating water levels. A diking system
    may be needed to contain upstream sediment.
        The Corps of Engineers is the responsible Federal agency that
    constructed and operated the Federal facilities causing the degradation
    of the bed of the Missouri River, the aggradation of the upper end of
    Lake Oahe, and the redistribution of sediments in the upper end of Lake
    Oahe to the destruction of the Tribe's intakes in fall 2003.
    Legislation is be needed to authorize the appropriation of funds to
    reconstruct new intakes of the Tribe in a manner to insure their
    dependability. Appropriate investigations will be needed of the
    baseline sediment conditions and the probable future redistribution in
    advance of permanent reconstruction. Mitigation measures and changes in
    the Master Manual are needed, including diking and new minimum
    operating water levels.
                                     ______

                  Prepared Statement of the City of Morro Bay

        During World War II the Army Corps of Engineers (ACOE) designed and
    constructed a new harbor entrance at Morro Bay with two rock
    breakwaters. Since the initial construction, over 60 years ago, the
    Federal Government has maintained the harbor entrance, breakwaters and
    navigational channels. In fiscal year 1995 the ACOE completed the Morro
    Bay Harbor entrance improvement project to improve safety for
    commercial fishing and coastal navigation.
        The City of Morro Bay contributed almost $1,000,000 in local cost
    share to the ACOE Entrance Improvement Project. Since 1995 the Federal
    Government has funded maintenance dredging of Morro Bay Harbor every
    year. The most cost-effective manner to conduct this dredging has been
    using the ACOE dredge Yaquina every year in the Entrance Area due to
    rapid shoaling in that area, and scheduling a larger project to
    maintain the Morro and Navy Navigation channels every 3 to 4 years as
    those channels accumulate sediment at a slower rate.
        Below is a summary of dredging history for the federally designated
    navigation channels in Morro Bay.

    ------------------------------------------------------------------------
     Date                     Area Dredged                     Cubic Yardage
    ------------------------------------------------------------------------
      1997 Outer Entrance                                        63,009.00
      1998 Entrance, Main, Navy, Morro & Sand Trap              579,692.00
      1998 Entrance, Main                                       115,388.00
      1999 Entrance & Transitional Channel                      134,234.00
      2000 Entrance & Transitional Channel                      236,883.00
      2001 Entrance & Transitional Channel                      180,467.00
      2002 Entrance, Navy, Morro & Sand Trap                    868,483.10
      2003 Entrance & Transitional Channel                      170,817.00
    ------------------------------------------------------------------------

        Morro Bay Harbor is the only all-weather harbor of refuge between
    Santa Barbara and Monterey on the West Coast. Our Harbor directly
    supports almost 250 home-ported fishing vessels and marine dependent
    businesses. We provide critical maritime facilities for both
    recreational and commercial interests. Businesses that depend on the
    harbor generate $50,000,000 annually and employ over 700 people. The
    United States Coast Guard (USCG) maintains a 32 person National
    Security Base and Search and Rescue Station at Morro Bay Harbor to
    provide the Coast Guard services for the entire Central California
    Coast, including port safety coverage for the Diablo Canyon Nuclear
    Power Plant and Vandenberg Air Force Base.
        In 2000 the California legislature designated Morro Bay and several
    other small ports along the California coast as ``Harbors of Safe
    Refuge''. This legislation recognizes the critical role many small
    harbors play in affording a safety zone for commercial and recreational
    vessels transiting the California coast.
        Exposure to the open ocean and strong winter currents carrying
    sediment into the harbor create the need for a routine maintenance
    schedule to insure that the harbor entrance and federally designated
    navigation channels remain safe and navigable. The Morro Bay National
    Estuary Program recognizes the need to maintain the navigational
    channels in the harbor both for the viability of the commercial fishing
    industry and to maintain adequate tidal exchange for the health of the
    Morro Bay Estuary. It is imperative that the federally constructed
    navigation channels, entrance area and protective jetties be maintained
    to insure safe commerce and navigation on a 300-mile stretch of the
    California Coast and to maintain a safe port for the Coast Guard to
    operate from. Without continued Federal maintenance, all of the past
    local and Federal investment will be lost.
        Last year the budget included $1.4 million for dredging of the
    navigational channels including the Entrance Channel, the Navy Channel
    and the Morro Channel. This year the proposed budget eliminates all
    funding for the Morro Bay navigation channel maintenance dredging.
        The Army Corps of Engineers has the capability to execute $4.11
    million in maintenance dredging operations for fiscal year 2005. The
    entrance area has shoaled significantly since the last dredge cycle and
    will require dredging next year to sustain safe navigation in our area.
    We respectfully request that your distinguished subcommittee include
    $4.11 million in dredging funds for Morro Bay Harbor to keep our harbor
    open and safe in all conditions and to provide a safe base of
    operations for the United States Coast Guard.
        In addition to being homeport to over 250 commercial fishing
    vessels, Morro Bay Harbor is part of the federally designated National
    Estuary Program. The Morro Bay Estuary was the subject of an ACOE
    reconnaissance study (funded by Congress in 1998) of potential projects
    to restore sensitive habitat through improving tidal circulation and
    decreasing sedimentation. The County of San Luis Obispo and the Bay
    Foundation are acting as local sponsors for the Feasibility Phase. We
    support the funding of $250,000 to continue work on the feasibility
    study for the Morro Bay Habitat Restoration project in fiscal year
    2005.
        Thank you for your actions and support, and for the opportunity to
    present these requests to your subcommittee on behalf of the citizens
    of the City of Morro Bay.
                                     ______

            Prepared Statement of the Port of Sacramento, California

        The Port of Sacramento requests a fiscal year 2005 appropriation of
    $8.5 million for the continued deepening of the Sacramento River Deep
    Water Ship Channel.
        After a hiatus in construction, the Port has been actively working
    with the San Francisco District Corps of Engineers to reinvigorate this
    important project. The fiscal year 2005 appropriation will complete a
    Limited Re-Evaluation Report and provide funding to continue the
    deepening of the Ship Channel from 30 to 35. This 5 additional feet
    will greatly expand the accessability of the Port of Sacramento to the
    world fleet which will allow better service to existing customers and
    will improve the of diversify cargoes and customers, both which
    increase the revenues at the Port.
        This project is vital to the economic future of the Port of
    Sacramento, which has provided international waterborne cargo services
    in the Greater Sacramento region for 40 years. In the future,
    California will also ``re-discover'' that its ports, and particularly
    its inland Ports, are an environmentally friendly alternative to the
    burgeoning highway traffic. ``Short sea shipping'' is concept in
    waterborne transportation that is increasing in application in Europe
    as a means to reduce highway congestion.
        We would greatly appreciate your support of our appropriation
    request.
                                     ______

       Prepared Statement of the Washington Suburban Sanitary Commission

                            ARMY CORPS OF ENGINEERS

    ------------------------------------------------------------------------
                             Project                              Request
    ------------------------------------------------------------------------
    Middle Potomac River Study..............................        $200,000
    Patuxent River Watershed Study..........................         200,000
    ------------------------------------------------------------------------

                    WASHINGTON SUBURBAN SANITARY COMMISSION

        The Washington Suburban Sanitary Commission (Commission or WSSC),
    established in 1918, is a public, bi-county agency providing water and
    wastewater services to Montgomery and Prince George's Counties in the
    Washington Capital region. WSSC is governed by six Commissioners with
    equal representation from each county and has developed its systems to
    the point where it is a national leader in the water and sewerage
    industry. The Commission is the among the ten largest water and
    wastewater utilities in the country, serving approximately 1.6 million
    people in a 1,000 square mile service area. In addition, the Commission
    provides services to 26 key Federal installations and facilities in the
    Washington area, including such important military facilities as
    Andrews Air Force Base; the National Imagery and Mapping Agency; the
    National Naval Medical Center; the Naval Surface Warfare Center; the
    U.S. Army Research Center. Numerous other State and local security-
    related installations and offices also receive service from the
    Commission.
        Water treatment and distribution facilities operated by the
    Commission include three water supply reservoirs; two water filtration
    plants; 14 water pumping stations; 5,100 miles of water mains; and 54
    treated-water storage facilities. Water production at Commission
    facilities is 166 million gallons per day. In terms of wastewater
    facilities, the Commission operates six wastewater treatment plants; 41
    wastewater pumping stations; and approximately 4,900 miles of sewer
    mains.

                           MIDDLE POTOMAC RIVER STUDY

        The Commission is committed to ensuring that the residents of the
    Montgomery and Prince George's Counties continue to have a clean, safe
    supply of drinking water. Consistent with that commitment is the need
    to improve that quality of the environment in the regions river basins
    and increase the ability to store water to meet increasing demand,
    particularly in times of drought.
        The Corps of Engineers' Baltimore District (District) has recently
    completed a reconnaissance study of the water resources needs of the
    Middle Potomac River Watershed. The District found that there is a
    Federal interest in pursuing further study opportunities within the
    Middle Potomac study area and recommended that the study continue into
    the feasibility phase to begin the planning process for the restoration
    of the Middle Potomac Watershed. One of the objectives identified for
    the feasibility phase was further study of the status of the region's
    water resources as they relate to water supply needs. One of the
    specific recommendations for further study is an effort to identify
    stresses on the Middle Potomac Watershed ecosystem at varying levels of
    water flows and the development of sustainable watershed management
    plans and planning tools. The Corps specifically mentioned WSSC as a
    potential non-Federal sponsor for this study. The Commission believes
    that such an effort, including an analysis of opportunities for
    additional water supply storage in the basin, is critical to the long-
    term health of the region. The Corps has estimated that the total cost
    of this feasibility study is $3 million and the Commission supports an
    initial request of $200,000 in fiscal year 2005 to begin conducting
    this study.

                         PATUXENT RIVER WATERSHED STUDY

        The Commission owns and operates the Triadelphia and Rocky Gorge
    Reservoirs on the Patuxent River. Together these reservoirs hold 14
    billion gallons of drinking water serving 700,000 people in Montgomery,
    Howard, and Prince Georges Counties in Maryland. Maintaining and
    improving the quality of the water in these reservoirs is a major
    objective of the Commission. The current buffer zones around these two
    reservoirs are relatively narrow. Expanding and restoring the habitat
    of these buffer zones would help ensure the long-term quality of the
    water in the reservoirs and also provide environmental benefits to the
    entire Patuxent River Basin. Improving the quality of the water in the
    Patuxent River would also prove beneficial to efforts to restore the
    health of the Chesapeake Bay.
        In July of 1995, the Corps of Engineers completed the ``Patuxent
    River Water Resources Reconnaissance Study'', which was authorized by
    House Committee on Public Works and Transportation Resolution dated
    September 28, 1994. The purpose of the study was to develop a watershed
    plan for managing the water and related land resources of the Patuxent
    River watershed. The watershed plan that was developed addresses multi-
    purpose environmental solutions for the improvement of riparian,
    wetland, and aquatic habitat, improvements to water quality, recreation
    development and flood damage reduction measures. Among the actions
    recommended for implementation were riparian buffer projects and
    streambank protection and restoration projects. Such activities would
    reduce sedimentation and the runoff of pollutants.
        The Commission believes that more detailed study of the areas
    around the Triadelphia and Rocky Gorge Reservoirs would be consistent
    with the watershed plan developed as part of the Patuxent River Water
    Resources Reconnaissance Study and could lead to environmental
    restoration activities that would prove beneficial to the entire
    region, including Chesapeake Bay. Therefore, the Commission supports a
    request of $200,000 to conduct a feasibility study.
                                     ______

     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 2005 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 $43,300,000 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 are the
    inevitable result. More critically, larger storms generate back flows
    to Lake Michigan and pollute water supply for the six-county area. 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 101.5 miles of tunnels,
    constructed at a total cost of $2.2 billion, are operational. 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 6 years of operation, O'Hare CUP Reservoir has
    taken water in 18 storm events, and yielded $62.8 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, 741 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. 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 appreciate that the subcommittee has included critical levels of
    funds for these important projects. We were delighted to see the
    $19,500,000 in construction funds for the McCook and Thornton
    Reservoirs included in the Fiscal Year 2004 Energy and Water
    Development Appropriations Act. In addition, an additional $1,000,000
    was included in the Fiscal Year 2004 Consolidated Appropriations bill.
    However, it is important that we receive a total of $43,300,000 in
    construction funds in fiscal year 2005 to maintain the schedule of
    these critical 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 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. 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 2 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 $43,300,000 in
    construction funds be made available in the Fiscal Year 2005 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 Napa County Flood Control and Water
                             Conservation District

                            SUMMARY RECOMMENDATIONS

    ------------------------------------------------------------------------
                                                                  Funding
                             Project                              request
    ------------------------------------------------------------------------
    Napa River Flood Control: Construction..................     $20,000,000
    Napa Valley Watershed Management: Feasibility Study.....         200,000
    ------------------------------------------------------------------------

                        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, 27 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 3 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 2004 Funding
        The Fiscal Year 2004 Energy and Water Development Appropriations
    Act included $10,000,000 to continue construction of the project. In
    addition, the Fiscal Year 2004 Consolidated Appropriations bill
    included $2,750,000 for 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 $110 million, as compared to Federal sponsor expenditures to
    date of approximately $35 million.
                Necessary Fiscal Year 2005 Funding
        Funding for the Napa River Project during 2005 in the amount of
    $20,000,000 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;
      --Construct two railroad bridges, one over the bypass and one over
            the Napa River and relocate approximately 3,100 feet of
            railroad track replacement;
      --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 74 percent of the total project
    costs to date. By the end of June, 2003 the non-Federal sponsor will
    have expended $110 million. By the end of June, 2004 the non-Federal
    sponsor will have spent $130,000,000.

                        NAPA VALLEY WATERSHED MANAGEMENT

    Background
        The 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 2004 Budget Funding
        The fiscal year 2004 Energy and Water Development Appropriations
    Act included $200,000 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 2005 Funding
        Funding for the Napa Valley Watershed Management Study during
    fiscal year 2005 in the amount of $200,000 is needed to continue work
    on the Napa Valley Watershed Resource Analysis & Report. The purpose of
    this work is to provide a foundation assessment for resource allocation
    that improves the habitat and water quality in the Napa River
    watershed. This program was begun in fiscal year 2004. Prior year
    activities have included aerial photography/mapping of the watershed.
    This work has been successfully completed and is in use by Napa County,
    its residents, resource groups and interested parties. It provides a
    Geographical Information System (GIS) base for the management of
    watershed information. Also previous watershed funding has developed an
    internet based information system, the Watershed Information Center
    (WIC). This web based communication allows the resources of watershed
    studies to be available to all interested persons. The system has been
    developed and is currently being put online for general use. These
    first activities of the Napa Valley Watershed Management Study are
    cornerstones of future watershed planning and enhancement.
                                     ______

            Prepared Statement of the City of St. Helena, California

    ------------------------------------------------------------------------
                             Project                              Request
    ------------------------------------------------------------------------
    St. Helena NAPA River Restoration Project: (Section 206         $800,000
     Aquatic Ecosystem Restoration Program).................
    York Creek Dam Removal and Restoration Project: (Section         800,000
     206 Aquatic Ecosystem Restoration Program).............
    ------------------------------------------------------------------------

                               CITY OF ST. HELENA

        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 6,041. 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's 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 $800,000 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 have 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, alternatives under consideration 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
    to allow the continuation of the Detailed Project Report can stay on
    schedule for the York Creek Dam Removal and Restoration Project.
                                     ______

           Prepared Statement of the Calaveras County Water District

    ------------------------------------------------------------------------
                             Project                              Request
    ------------------------------------------------------------------------
    CALAVERAS COUNTY WATERSHEDS STUDY.......................      $1,500,000
    ------------------------------------------------------------------------

                        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 but rapidly developing population and limited
    agricultural and industrial development. Calaveras County is located
    within the watersheds of the Mokelumne, Calaveras, and Stanislaus
    Rivers. All three 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 on-going Calaveras County Watersheds Study under the authority of
    the Corps of Engineers' Sacramento and San Joaquin Comprehensive Basin
    Study is 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 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
    wastewater 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.

         CALAVERAS COUNTY WATERSHEDS STUDY--UNDER THE AUTHORITY OF THE
              SACRAMENTO AND SAN JOAQUIN COMPREHENSIVE BASIN STUDY

    Project Need
        The Calaveras County Watersheds Study CCWD is being pursued through
    the Corps of Engineers' program under the authority of the Sacramento
    and San Joaquin Comprehensive Basin Study and includes a review of
    project needs and opportunities within the Mokelumne River, Calaveras
    River and Stanislaus River Watersheds.
        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. One of the
    overriding themes of the watershed study is to identify and maximize
    the use of District surface water resources on the Mokelumne, Calaveras
    and Stanislaus Rivers in conjunction with the groundwater supply to
    improve supply reliability.
        Historically, groundwater has been used only to meet demands of
    scattered single family homes. This 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.
    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.
        In an effort to gain better understanding of the condition of the
    water sources, and issues and opportunities including flooding and the
    use of return flows, water supply and conjunctive use, as well as, the
    surrounding environment, the comprehensive watershed approach is being
    pursued.
        While this is a watershed study, the approach is to focus in on the
    CCWD's stated priority areas to develop project resolutions. The first
    three critical project areas to be studied include the following:
    Cosgrove Creek, Wallace Lake Estates and the Burson area.
    Cosgrove Creek
        Cosgrove Creek is an intermittent stream within the Calaveras River
    watershed. The creek enters the lower Calaveras River downstream from
    the spillway of New Hogan Lake. During average precipitation years,
    stream flow is present from late fall through early to mid-summer.
        Cosgrove is approximately 9.8 miles long and has a drainage area of
    21 square miles. The upper two-thirds of the Cosgrove Creek watershed
    is used for grazing and the lower third has been subject to urban
    development. A portion of this lower reach, which passes through the
    adjacent communities of Valley Springs, La Contenta and Rancho
    Calaveras, has experienced many incidents of flooding and resulting
    damage to residential properties.
        The objective of this effort is to produce a feasibility study on
    project alternatives for diverting Cosgrove Creek during peak flow
    periods to provide for flood protection while putting the diverted
    water to beneficial use. The solution will be a unique multiple purpose
    project in that it would both divert flood flows and put the yield to
    beneficial use for higher community needs such as creating wetlands and
    environmental restoration, and developing complementary recreational
    uses, such as ball fields and hiking or equestrian trails.
    Wallace Lake Estates
        Wallace Lake is located near the western edge of Calaveras County,
    just north of Highway 26. The lake is part of the Wallace Lake Estates
    subdivision.
        Wallace Lake is also situated between East Bay Municipal Utility
    District's (EBMUD's) Camanche Reservoir and Mokelumne aqueduct.
    Qualitative observations have noted that, after filling, lake volume
    appears to diminish far more rapidly than would be expected. The
    Wallace Lake Community Services District would like to maintain the
    lake at full capacity all year. It is reported that pumping well water
    into the lake does not maintain desired levels. This has led to
    speculation regarding the possibility that, if the lake is percolating
    into the local groundwater table, this could be an attribute that could
    intentionally be put to use to facilitate groundwater recharge and
    development of a conjunctive use project.
        The primary focus of this study is to assess both the local
    hydrogeological conditions with respect to using the lake for
    groundwater recharge and the means of transporting Mokelumne River
    water to the lake.
        The objective of this investigation is to produce an assessment and
    feasibility study as a basis for developing project alternatives for
    bringing Mokelumne water to Wallace Lake and the viability of utilizing
    the lake for the purpose of demonstrating a groundwater infiltration
    gallery, as well as environmental restoration.
    Burson Area
        Most of the area within Calaveras County north of Highway 12 and
    south of the Mokelumne River, including the Burson area, is currently
    wholly dependent upon groundwater and has experienced critical water
    shortages for the last 20 years. Issues include low volume or no water
    at all in some wells and degradation of water quality involving taste,
    smell and chemical contamination. The problems have continued to
    worsen.
        One possible alternative project solution is conjunctive use of
    Mokelumne River water to recharge the groundwater basin with high
    quality surface water. (It appears unlikely that use of Wallace Lake
    for recharge purposes will assist this particular area of need.)
        A second alternative is to investigate the possible presence of and
    potential use for high yielding zones, including an ancient underground
    river within the defined aquifer area, that could be tapped without
    detrimentally impacting existing users. These project alternatives
    would include an environmental restoration component. The objective of
    this investigation is to produce an assessment and feasibility study as
    a basis for developing a drinking water system for the Burson area of
    Calaveras County.
        CCWD is working closely with the Sacramento Corps District in the
    development of a Feasibility Cost Sharing Agreement in order for the
    Calaveras County Watersheds Study to advance and for these projects to
    proceed. In an effort for the feasibility study to move towards project
    formulation, CCWD is seeking $1.5 million for the Calaveras County
    Watersheds Study, as a separately identified effort under the authority
    of the Sacramento and San Joaquin Comprehensive Basin Study, in the
    Fiscal Year 2005 Energy and Water Development Appropriations Bill.
                                     ______

                  Prepared Statement of Cameron County, Texas

        We express full support of the inclusion in the fiscal year 2005
    budget for the full capability of the USACE for $831,000.

                             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.
        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 would allow 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 could foresee the terrible accident that occurred on September 15.
    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. The $831,000 that must be added to
    the fiscal year 2005 appropriations bill will allow the Corps of
    Engineers to continue to study a preferred plan to remedy this
    dangerous situation. The government has already invested $400,000 to
    move this project forward. 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 Brazos River Harbor Navigation District

        We express full support of the inclusion in the fiscal year 2005
    budget for the full capability of the USACE of $700,000.
        President's budget included $300,000.
        Additional funds needed for fiscal year 2005 $400,000.

                             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, 5 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. The fiscal year 2003 budget fully funded the Corps capability
    of $500,000 to begin the feasibility study. The fiscal year 2004 budget
    included $250,000 with an additional $250,000 reprogrammed by the USACE
    to continue the feasibility study without delay.
        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 sixteenth in foreign tonnage in the United States
    and twenty-fourth in total tonnage. The port handled over 25 million
    tons of cargo in 2003 and an additional 75,000 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 2005

        The administration's budget included $300,000 for the continuation
    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 2005 of $700,000 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 $400,000 for fiscal year 2005. Most Corps projects
    indicate a 10 to 1 and below benefit to cost ratio. This project
    estimates nearly twice that benefit to cost ratio and deserves to be
    tagged a ``priority project''.
                                     ______

       Prepared Statement of the Chambers County-Cedar Bayou Navigation
                                    District

        We express full support of the inclusion of the full capability of
    the USACE for fiscal year 2005 to complete PED for the project to
    deepen and widen Cedar Bayou, Texas.
        President's Budget Included $135,000.
        Additional Funds Needed in Fiscal Year 2005 $311,000.

                             HISTORY AND BACKGROUND

        The Rivers and Harbor Act of 1890 originally authorized navigation
    improvements to Cedar Bayou. The project was reauthorized in 1930 to
    provide a 10 ft. deep and 100 ft. 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 ft. by 125 ft. 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 and $374,000 in fiscal year 2004
    to support the feasibility study. This project is environmentally sound
    and economically justified. We would appreciate the subcommittee's
    support of the required add of the $311,000 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 Nature Conservancy

        Mr. Chairman and members of the subcommittee, I appreciate this
    opportunity to present The Nature Conservancy's recommendations for the
    Army Corps of Engineers and Bureau of Reclamation's fiscal 2005
    appropriations. We understand and appreciate that the subcommittee's
    ability to fund programs within its jurisdiction is limited by the
    tight budget situation 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 27 foreign countries. We have protected more than 15
    million acres in the United States and approximately 102 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 Conservancy urges the subcommittee to support the following
    appropriation levels in the fiscal 2005 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 Conservancy is the non-Federal cost
    share partner on nine Section 1135 projects including Spunky Bottoms, a
    floodplain restoration/reconnection project on the Illinois River, for
    which we seek an earmark in the amount of $200,000 in fiscal 2005. This
    program is in extremely high demand and severely oversubscribed in
    fiscal 2004 with millions of dollars of requests beyond what was
    appropriated. This financial shortfall has stopped many projects. The
    Conservancy strongly encourages full funding of $25 million for the
    Section 1135 program in fiscal 2005, an increase over the President's
    $13.5 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 Conservancy is the non-Federal cost-
    share partner on four Section 206 projects. These projects restore
    important fish and wildlife habitats, including a $5 million project at
    Mad Island in Texas, and a $1.4 million riparian habitat restoration
    project at Bootheel Creek in Florida. This program is in extremely high
    demand and severely oversubscribed in fiscal 2004 with millions of
    dollars of requests beyond what was appropriated. This financial
    shortfall has stopped many projects. The Conservancy strongly
    encourages full funding of $25 million for this valuable program in
    fiscal 2005, an increase over the President's $10 million request.
        Upper Mississippi River System Environmental Management Program.--
    The Environmental Management Program (EMP) is an important Corps
    program that constructs habitat restoration projects and conducts long-
    term resource monitoring of the Upper Mississippi and Illinois Rivers.
    The EMP operates as a unique Federal-State partnership affecting five
    States (Illinois, Iowa, Minnesota, Missouri, and Wisconsin). The EMP
    was reauthorized in WRDA 1999 with an increased authorization in the
    amount of $33.2 million. The Conservancy supports full funding of $33.2
    million for fiscal 2005, an increase over the President's $28 million
    request.
        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
    Conservancy supports $10 million in fiscal 2005. This program was not
    included in the President's budget.
        Florida Keys Water Quality Program.--The Florida Keys Water Quality
    Program is a unique restoration program designed to protect the Florida
    Keys' fragile marine and coral ecosystem. This nationally significant
    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 million for fiscal 2005.
    This program was not included in the President's budget.
        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 Conservancy supports the President's $69 million
    request for fiscal 2005.

                        GENERAL INVESTIGATION PRIORITIES

        Middle Potomac River Watershed Study.--The preliminary Middle
    Potomac Watershed Section 905(b) analysis identified 14 feasibility
    studies to address flood control needs and environmental restoration
    opportunities within the Middle Potomac Watershed. The study team
    identified three study goals for the development of project management
    plans: (1) to conserve, restore, and revitalize the Potomac River
    basin; (2) to develop sustainable watershed management plans; and (3)
    to cooperate with and support public and private entities in developing
    watershed management plans. The Conservancy supports $1 million in
    fiscal 2005 to continue the development of these plans. This study was
    not included in the President's budget.
        Savannah 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 Corps and its
    cost share partners Georgia and South Carolina, developed a set of
    ecosystem flow recommendations for the Savannah River Basin. A test
    release of the new flow recommendation was conducted March 15-18, 2004.
    The Conservancy supports $436,000 in fiscal 2005, an increase over the
    President's $250,000 request.

                         REGULATORY PROGRAM PRIORITIES

        Southern California Special Area Management Plan (SAMP).--For the
    past 4 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 significant natural resources and 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 Conservancy
    supports a $2 million earmark within the Corps' regulatory program for
    fiscal 2005.

                        BUREAU OF RECLAMATION PRIORITIES

        Recovery Implementation Program for Colorado Endangered Fish
    Species.--The Recovery Program is in its fourteenth 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
    Conservancy supports $4 million in fiscal 2005 for the Bureau of
    Reclamation's portion of this multiagency program.
        Thank you for the opportunity to present The Nature Conservancy's
    comments on the Energy and Water 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 me.
                                     ______

                           DEPARTMENT OF THE INTERIOR

                             Bureau of Reclamation

          Prepared Statement of the Colorado River Board of California

        Your support and leadership are needed in securing adequate fiscal
    year 2004 funding for the Department of the Interior with respect to
    the Federal/State 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 successful and cost effective program is
    carried out pursuant to the Colorado River Basin Salinity Control Act
    and the Clean Water Act. California's Colorado River water users are
    presently suffering economic damages in the hundreds of million of
    dollars per year due to the river's salinity.
        The Colorado River Board of California (Colorado River Board) is
    the State agency charged with protecting California's interests and
    rights in the water and power resources of the Colorado River System.
    In this capacity, California along with the other six Basin States
    through the Colorado River Basin Salinity Control Forum (Forum), the
    interstate organization responsible for coordinating the Basin States'
    salinity control efforts, established numeric criteria in June 1975,
    for salinity concentrations in the River. These criteria were
    established to lessen the future damages in the Lower Basin States, as
    well as, assist the United States in delivering water of adequate
    quality to Mexico in accordance with Minute 242 of the International
    Boundary and Water Commission. The goal of the Colorado River Basin
    Salinity Control Program is to offset the effects of water resource
    development in the Colorado River Basin after 1972 rather than to
    reduce the salinity of the River below levels that were caused by
    natural variations in river flows or human activities prior to 1972. To
    maintain these levels, the salinity control program must remove
    1,800,000 tons of salt loading from the River by the year 2020. In the
    Forum's last report entitled 2002 Review, Water Quality Standards for
    Salinity, Colorado River System (2002 Review) released in October 2002,
    the Forum found that additional salinity control measures that remove
    salt from the River in the order of 1,000,000 tons are needed to meet
    the implementation plan. The plan for water quality control of the
    River has been adopted by the States and approved by the Environmental
    Protection Agency. To date, Reclamation has been successful in
    implementing projects for preventing salt from entering the River
    system; however, many more potential projects for salt reduction have
    been identified that can be controlled with Reclamation's Basin-wide
    Salinity Control Program. The Forum has presented testimony to Congress
    in which it has stated that the rate of implementation of the program
    beyond that which has been funded in the past is necessary.
        In 2000, Congress reviewed the salinity control program as
    authorized in 1995. Following hearings, and with the administration's
    support, the Congress passed legislation that increased the ceiling
    authorization for this program by $100 million. Reclamation has
    received proposals to move the program ahead and the seven Basin States
    have agreed to up-front cost sharing on an annual basis, which adds 43
    cents for every Federal dollar appropriated.
        In previous years, the President has supported, and Congress has
    funded the Bureau of Reclamation's Basinwide Salinity Control Program
    at about $12 million. The Forum has indicated that the President's
    request for funding for fiscal year 2005 in the amount of $9,064,000 is
    inappropriately low. The Forum has requested a total of $17.5 million
    for fiscal year 2005 to implement the needed and authorized program.
    The Colorado River Board supports the Forum's recommendation and
    believes that failure to appropriate these funds may result in
    significant economic damages in the United States and Mexico. Water
    quality commitments to downstream U.S. and Mexican users must be
    honored while the Basin States continue to develop their Compact
    apportioned waters from the Colorado River. For every 30 mg/l increase
    in salinity concentration in the River, there is $75 million in
    additional damages in the United States.
        Based upon past appropriations, implementation of salinity control
    measures has fallen behind the needed pace to prevent salinity
    concentration levels from exceeding the numeric criteria adopted by the
    Forum and approved by the EPA. The seven Colorado River Basin States
    have carefully evaluated the Federal funding needs of the program and
    have concluded that an adequate budget is needed for the plan of
    implementation to maintain the salinity standards for the River. With
    the newly authorized USDA EQIP program, more on-farm funds are
    available and adequate funds for Reclamation are needed to maximize
    Reclamation's effectiveness. The Forum, at its meeting in San Diego,
    California, in October 2002, recommended a funding level of $17,500,000
    for Reclamation's Basinwide Salinity Control Program to continue
    implementation of needed projects and begin to reduce the ``backlog''
    of projects.
        In addition, the Colorado River Board recognizes that the Federal
    Government has made significant commitments to the Republic of Mexico
    and to the seven Colorado River Basin States with regard to the
    delivery of quality water to Mexico. In order for those commitments to
    be honored, it is essential that in fiscal year 2005 and in future
    fiscal years, that Congress provide funds to the Bureau of Reclamation
    for the continued operation of completed projects.
        The Colorado River is, and will continue to be, a major and vital
    water resource to the 17 million residents of southern California.
    Preservation of its water quality through an effective salinity control
    program will avoid the additional economic damages to users in
    California.
        The Colorado River Board greatly appreciates your support of the
    Federal/State Colorado River Basin Salinity Control Program and again
    asks for your assistance and leadership in securing adequate funding
    for this program.
                                     ______

      Prepared Statement of the Department of Natural Resources, State of
                                      Utah

        As the Governor of Utah's representative on Colorado River Issues
    and the senior Utah member of the Colorado River Salinity Control
    Forum, I wish to convey Utah's support for funding the Salinity Title
    II Program, authorized in 1995 (Public Law 104-20) at the level of
    $17,500,000 for 2005 for the United States Bureau of Reclamation (BOR).
    In addition, Utah requests funds be provided the BOR for General
    Investigations and the Operation and Maintenance of salinity facilities
    at sufficient funding levels to meet the objectives of the Salinity
    Control Act as amended.
        This vital program has been a mainstay in improving water use
    efficiency in the Colorado River Basin of Utah. During the past 5 years
    of drought, the facilities funded by the BOR program have been a
    significant reason for agriculture in the Uinta and Price/San Raphael
    basins maintaining productivity and stimulating these rural economies.
        In addition, the Salinity Control Program helped to meet the
    salinity related water quality standards for the Colorado River and
    U.S. treaty obligation with Mexico. This important program helps meet
    national and international obligations and needs to be funded at the
    $17,500,000 level with additional funds for investigations and
    operation and maintenance.
        Thank you.
                                     ______

         Prepared Statement of the Irrigation & Electrical Districts'
                             Association of Arizona

        We are pleased to present this written testimony on behalf of our
    25 members and associate members which serve water and power from the
    Colorado River and other sources to rural and urban Arizona
    communities, farms and businesses. Our comments are directed to the
    budgets of the U.S. Bureau of Reclamation (Reclamation) and the Western
    Area Power Administration (Western), whose budget requests we generally
    support with certain specific reservations, which we will note.

                             BUREAU OF RECLAMATION

        We do not support the proposed Reclamation budget as to four
    specific items: Security Costs, Animas-La Plata, Yuma Desalter, and
    Central Arizona Project Tucson Reliability Division.
        Security Costs.--We oppose the shift of approximately $12 million
    for guards and surveillance to reimbursable status. Congress has
    approved this post-9/11 expense increase as non-reimbursable for the
    last 2 years. This change unfairly saddles local power and water users
    in some projects with the costs of this national obligation. If the
    Homeland Security budget can provide in excess of $3 billion (fiscal
    year 2004) for the Nation's airports, surely the West's premier
    Reclamation dams deserve the same treatment. We endorse and support the
    testimony of the Colorado River Energy Distributors' Association
    (CREDA) on this subject.
        Animas-La Plata.--This project requires some $10 million for
    electric transmission system construction. We join CREDA in requesting
    that this amount not be imposed on Colorado River Storage Project power
    contractors whose customers will derive no benefit from this facility.
    Forcing them to pay for this non-irrigation use facility will
    constitute a serious departure from over 100 years of Reclamation law.
        Yuma Desalter and Tucson Reliability Division.--We support the
    testimony of the Central Arizona Water Conservation District (CAWCD)
    generally, and specifically on these subjects. Without the Desalter,
    Central Arizona's 4.5 million people will continue to be penalized some
    100,000 acre-feet per year of water supply due to the Central Arizona
    Project's junior status as a Colorado River water user. Additionally,
    Reclamation needs to request Tucson Reliability Division funds only
    after consultation with CAWCD and not jeopardize its pending lawsuit
    settlement and the associated Gila River Indian Settlement.

                       WESTERN AREA POWER ADMINISTRATION

        Our comments on Western's budget will track the order in which the
    subjects appear in Western's budget justification document.
        Use of Receipts.--We oppose Use of Receipts authority for Western
    at this time. Western has offered no check and balance proposal to
    substitute for reduced Congressional oversight. Retail competition in
    the West is problematic, to say the least, and the bare notice and
    comment Western rate process has never generated effective cost
    control. Moreover, Western believes it has the authority to require
    advance funding in its contracts (Federal Register 5/5/03). If true,
    contract renewals and amendments will gradually shift Western totally
    off-budget.
        Security Costs.--Western's $1.4 million in security costs should be
    non-reimbursable for the same reasons that Reclamation's should be. As
    a dichotomy of a former uniform Reclamation program, Western's role is
    tied to Reclamation's. It is hard to believe that over 17,000 miles of
    Federal transmission system do not rise in importance to a national
    obligation, given the essential place this system occupies in 15
    Western States.
        Quartzsite Line Relocation.--We oppose this expenditure at this
    time. There is no electrical need for this action. Alternative routes
    are still being negotiated with the Bureau of Land Management and the
    necessary environmental clearance processes haven't even started. The
    encroachments have existed for many years without incident. This
    project should be postponed until Western identifies an electrical
    need, a negotiated route, and a true cost estimate based on that route.
        Transmission Lines.--The Black Point Mesa--Blythe No. 1 request may
    be insufficient since the Fish and Wildlife Service is insisting that
    Western purchase land for the Desert Tortoise in southeastern
    California because Western wants to replace aging wood poles (a routine
    operation and maintenance function) in an area that is not critical
    habitat for this species.
        South of Phoenix.--We vigorously support work programmed for
    substations in this portion of Western's Parker-Davis Project
    transmission system. The area in question is growing like Topsy and
    Western's integrated facilities are aged and undersized. Congress has
    earmarked funds for this work for the last 3 years.
        Davis-Mead, Davis-Topock.--We would oppose the addition of any
    reimbursable construction funding for this line replacement using the
    3M aluminum matrix composite conductor. Adding this cost would more
    than double Western's rehabilitation and construction budget. We
    anticipate a request for this expenditure. If done as a non-
    reimbursable experiment, we would not object. We note, however, that
    replacing one line yields little extra capacity since reliability
    standards require the new line to carry no more power than the second
    adjacent line could absorb in a first line outage.
        Purchase Power and Wheeling.--Once again, Western proposes chopping
    funding for this vital activity even though Congress has repeatedly
    provided the funding. The scoring problem has been fixed. There is no
    sound policy reason for not funding this activity. The position that
    somehow small public power, Indian and other customers can magically
    find over $200 million to borrow and/or advance fund this critical
    firming program is absurd. Most of Western's customers are small and
    resource limited. Western can't be allowed to summarily abandon them to
    their fate.
        Thank you for the opportunity to present our views. Please feel
    free to get in touch with us if we can be of any further service,
    answer any questions, or supply additional detail on our comments.
                                     ______

       Prepared Statement of the Garrison Diversion Conservancy District

        Mr. Chairman and members of the committee, my name is Dave Koland;
    I serve as the manager of the Garrison Diversion Conservancy District.
    The mission of the District 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 the
    District. I would like to comment on the impact the President's fiscal
    year 2005 budget request for the Garrison Diversion Unit has on the
    effort to provide reliable, high quality and affordable water supplies
    to the citizens of North Dakota.
        The President's fiscal year 2005 budget request was pitifully
    inadequate in meeting the commitments the Federal Government has made
    to North Dakota. In return for accepting a permanent flood on 500,000
    acres of prime North Dakota river valley the Federal Government
    promised the State and tribes that they would be compensated as the
    dams were built. The dams were completed 50 years ago and still we wait
    for the promised compensation. At the rate of payment the President's
    budget proposes the Federal Government will not even be able to stay
    current with the indexing applied by law on their commitment to North
    Dakota.
        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 State-wide MR&I program has
    focused on providing grant funds for water systems that provide water
    service to previously 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 that has been 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

        More importantly, people are living 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. Rural communities offer the experiences and
    lifestyle many people seek to raise their family.
        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 design and 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 being affected by the problem. The
    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 has 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), providing
    system design oversight 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 very
    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. Engineering services are typically provided by local firms
    that have experience in designing and constructing systems in North
    Dakota.
        Across North Dakota, we have seen the impact of providing high
    quality 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 just a dream in many rural North Dakota
    communities. Turning on the tap each morning brings brown, smelly water
    instead of the clear, fresh water a majority of people in North Dakota
    enjoy.
        The opportunity to have an impact in 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 that is 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.
        Indeed the MR&I program in North Dakota would 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 2005 budget
    submission of $828.5 million for the Bureau of Reclamation's Water and
    Related Resources program is $57.5 million better than their request
    for fiscal year 2004. It is $171.5 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 1990's 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 that the current level of funding will have on the current
    program.
        Attachment 1 shows the funding history over the last 8 years for
    the Garrison Diversion Unit. The average is approximately $26.6
    million. The President's budget request for fiscal year 2005 is $22.1
    million. A continuation of that 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 the price increases expected in the 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 $6.9 million. 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 $77.3 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 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 $22 million annually when you include
    underfinancing. 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. It is our intent that each program reaches the conclusion of
    the funding authorization at 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. They generally run in the $20 million
    category. Some are, of course, smaller and others somewhat larger, but
    one that is considerably larger is the Northwest Area Water Supply
    Project (NAWS). The first phase of that 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 that program is $43 million. On the average, the annual funding
    for that 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 it is not,
    we simply run the cost up 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 but also by
    protracting the engineering and administration costs and ``interest-
    during-construction'' 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 greater 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 frames 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. That 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 the 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. A
    smoother, more efficient construction program over time will be the
    result.
        Attachment 5 shows such a program. It begins with a $77.3 million
    budget this year and gradually builds over time to over $140 million
    when the RRV construction could be in full swing (fiscal year 2010).
    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
    $171.4 million in fiscal year 2005 to a total of $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.
    This cost-effective partnership of local control, State-wide guidance
    and Federal support have combined to provide safe, clean, potable water
    to hundreds of communities and thousands of homes across North Dakota.

                                  ATTACHMENT 1

     ATTACHMENT 2.--GARRISON DIVERSION UNIT (GDU) JUSTIFICATION FOR $77.3
                     MILLION APPROPRIATION FISCAL YEAR 2005

        North Dakota's Municipal, Rural and Industrial (MR&I) water program
    funds construction projects State-wide under the joint administration
    of the Garrison Diversion Conservancy District (GDCD) and the State
    Water Commission (SWC).
        Northwest Area Water Supply Project (NAWS) is under construction
    after 15 years of study and diplomatic delay. Construction costs are
    estimated to be $81 million.
        Designs are based on a 5-year construction period; thus, over $16
    million is needed for NAWS alone. Indian MR&I programs are also under
    construction. Tribal and State leaders have agreed to split the Indian
    and non-Indian MR&I allocation on a 50/50 basis.
        Williston Water Treatment Plant, Williams Rural Water and Tribal
    MR&I programs are under construction.

                            [In millions of dollars]
    ------------------------------------------------------------------------
                                                                     Amount
    ------------------------------------------------------------------------
    Operation and Maintenance of Indian MR&I Systems plus                3.4
     Jamestown Dam...............................................
    Breakdown of $73.9 million Construction Request:
        Operation and Maintenance of existing GDU system.........        5.0
        Wildlife Mitigation & Natural Resources Trust............        6.0
        Red River Valley Special Studies and EIS.................        2.6
        Indian and non-Indian MR&I...............................       50.0
        Indian Irrigation........................................        2.7
        Recreation...............................................        0.6
        Under financing 10 percent...............................        7.0
                                                                  ----------
          Total for Construction.................................       73.9
                                                                  ----------
          Grand Total............................................       77.3
    ------------------------------------------------------------------------

    ATTACHMENT 3.--ELEMENTS OF THE BASE OPERATIONS PORTION OF THE GARRISON
                     DIVERSION UNIT BUDGET FISCAL YEAR 2005

                            [In millions of dollars]
    ------------------------------------------------------------------------
                                                                     Amount
    ------------------------------------------------------------------------
    Operation and Maintenance of Indian MR&I systems and                 3.4
     Jamestown Dam...............................................
    Operation and Maintenance of Existing GDU facilities.........        5.0
    Wildlife Mitigation & Natural Resources Trust................        6.0
    Red River Valley Special Studies and EIS.....................        2.6
    Indian Irrigation............................................        2.7
    Recreation...................................................        0.6
    Under financing at 10 percent................................        2.0
                                                                  ----------
          Total..................................................       22.3
    ------------------------------------------------------------------------

                                  ATTACHMENT 4

                                  ATTACHMENT 5

                                     ______

         Prepared Statement of the Provo River Water Users Association

        Chairman Domenici and Senator Reid, I am writing to request your
    support for an appropriation in fiscal year 2005 of $5,234,000 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 2005
    includes this line-item amount. Of these funds, I respectfully request
    the designation of $4,008,000 for the Upper Colorado River Endangered
    Fish Recovery Program; $691,000 for the San Juan River Basin Recovery
    Implementation Program and $535,000 for Fish and Wildlife Management
    and Development, consistent with the President's budget request. The
    requested fiscal year 2005 appropriation will allow construction of
    fish passage, floodplain restoration activities, screening of existing
    diversion canals, propagation facilities, endangered fish stocking, and
    non-native fish management.
        These funds are authorized by Public Law 106-392. Substantial non-
    Federal cost sharing funds are provided by the States of Colorado,
    Wyoming, Utah, and New Mexico, power users, and water users in support
    of these recovery programs. These programs are carried out consistent
    with State law and interstate water compacts.
        The past support and assistance of your subcommittee has greatly
    facilitated the success of these multi-State, multi-agency programs. I
    request the subcommittee's assistance relative to fiscal year 2005
    funding to ensure the Bureau of Reclamation's continuing financial
    participation in these vitally important programs.
                                     ______

      Prepared Statement of the Duchesne County Water Conservancy District

        I am writing to request your support for an appropriation in fiscal
    year 2005 of $5,234,000 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 2005 includes this line-item amount.
    Of these funds, I respectfully request the designation of $4,008,000
    for the Upper Colorado River Endangered Fish Recovery Program; $691,000
    for the San Juan River Basin Recovery Implementation Program and
    $535,000 for Fish and Wildlife Management and Development, consistent
    with the President's budget request. The requested fiscal year 2005
    appropriation will allow construction of fish passage, floodplain
    restoration activities, screening of existing diversion canals,
    propagation facilities, endangered fish stocking, and non-native fish
    management.
        These funds are authorized by Public Law 106-392. Substantial non-
    Federal cost sharing funds are provided by the States of Colorado,
    Wyoming, Utah, and New Mexico, power users, and water users in support
    of these recovery programs. These programs are carried out consistent
    with State law and interstate water compacts.
        The past support and assistance of your subcommittee has greatly
    facilitated the success of these multi-State, multi-agency programs. I
    request the subcommittee's assistance relative to fiscal year 2005
    funding to ensure the Bureau of Reclamation's continuing financial
    participation in these vitally important programs.
                                     ______

       Prepared Statement of the Jordan Valley Water Conservancy District

        I am writing to request your support for an appropriation in fiscal
    year 2005 of $5,234,000 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 2005 includes this line-item amount.
    Of these funds, I respectfully request the designation of $4,008,000
    for the Upper Colorado River Endangered Fish Recovery Program; $691,000
    for the San Juan River Basin Recovery Implementation Program and
    $535,000 for Fish and Wildlife Management and Development, consistent
    with the President's budget request. The requested fiscal year 2005
    appropriation will allow construction of fish passage, floodplain
    restoration activities, screening of existing diversion canals,
    propagation facilities, endangered fish stocking, and non-native fish
    management.
        These funds are authorized by Public Law 106-392. Substantial non-
    Federal cost sharing funds are provided by the States of Colorado,
    Wyoming, Utah, and New Mexico, power users, and water users in support
    of these recovery programs. These programs are carried out consistent
    with State law and interstate water compacts.
        The past support and assistance of your subcommittee has greatly
    facilitated the success of these multi-State, multi-agency programs. I
    request the subcommittee's assistance relative to fiscal year 2005
    funding to ensure the Bureau of Reclamation's continuing financial
    participation in these vitally important programs.
                                     ______

                Prepared Statement of Colorado Springs Utilities

        I am writing to request your support for an appropriation in fiscal
    year 2005 of $5,234,000 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 2005 includes this line-item amount.
    Of these funds, I respectfully request the designation of $4,008,000
    for the Upper Colorado River Endangered Fish Recovery Program; $691,000
    for the San Juan River Basin Recovery Implementation Program and
    $535,000 for Fish and Wildlife Management and Development, consistent
    with the President's budget request. The requested fiscal year 2005
    appropriation will allow construction of fish passage, floodplain
    restoration activities, screening of existing diversion canals,
    propagation facilities, endangered fish stocking, and non-native fish
    management.
        These funds are authorized by Public Law 106-392. Substantial non-
    Federal cost sharing funds are provided by the States of Colorado,
    Wyoming, Utah, and New Mexico, power users, and water users in support
    of these recovery programs. These programs are carried out consistent
    with State law and interstate water compacts.
        The past support and assistance of your subcommittee has greatly
    facilitated the success of these multi-State, multi-agency programs. I
    request the subcommittee's assistance relative to fiscal year 2005
    funding to ensure the Bureau of Reclamation's continuing financial
    participation in these vitally important programs.
                                     ______

          Prepared Statement of the Dolores Water Conservancy District

        I am writing to request your support for an appropriation in fiscal
    year 2005 of $5,234,000 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 2005 includes this line-item amount.
    Of these funds, I respectfully request the designation of $4,008,000
    for the Upper Colorado River Endangered Fish Recovery Program; $691,000
    for the San Juan River Basin Recovery Implementation Program and
    $535,000 for Fish and Wildlife Management and Development, consistent
    with the President's budget request. The requested fiscal year 2005
    appropriation will allow construction of fish passage, floodplain
    restoration activities, screening of existing diversion canals,
    propagation facilities, endangered fish stocking, and non-native fish
    management.
        These funds are authorized by Public Law 106-392. Substantial non-
    Federal cost sharing funds are provided by the States of Colorado,
    Wyoming, Utah, and New Mexico, power users, and water users in support
    of these recovery programs. These programs are carried out consistent
    with State law and interstate water compacts.
        The past support and assistance of your subcommittee has greatly
    facilitated the success of these multi-State, multi-agency programs. I
    request the subcommittee's assistance relative to fiscal year 2005
    funding to ensure the Bureau of Reclamation's continuing financial
    participation in these vitally important programs.
                                     ______

       Prepared Statement of the Perkins County Rural Water System, Inc.

        Perkins County Rural Water System, Inc. respectfully submits this
    written testimony to the Appropriations Subcommittee on Energy and
    Water Development for appropriations of $5.0 million for fiscal year
    2005. This project was authorized under Public Law 106-136.
        Perkins County Rural Water System, (PCRWS) has the approval of the
    Office of Management and Budget and the Bureau of Reclamation to
    proceed with construction in 2004. We have been appropriated $7.6
    million in years 2002 and 2003. We were appropriated $1.0 million in
    2004. The administration has approved us in the budget for $500,000 for
    fiscal year 2005. We would not be able to keep our construction on
    schedule if we are appropriated this amount of money. Cost share for
    the system is 75 percent Federal, 15 percent local and 10 percent
    State. The State of South Dakota has offered to loan PCRWS the local
    share for 40 years at 3 percent interest to keep costs down to the
    customer.
        Breakdown for the project for 2005 is as follows:

                                   2005 BUDGET
    ------------------------------------------------------------------------
                                                                  Amount
    ------------------------------------------------------------------------
    Income:
        Bureau of Reclamation...............................      $5,000,000
        State of South Dakota...............................       1,250,000
        Misc................................................          75,000
                                                             ---------------
          Total.............................................       6,325,000
                                                             ===============
    Expense:
        Mainline to Bison...................................       1,300,000
        Mainline to Lemmon..................................       1,200,000
        North Dakota State Water Comm.......................       1,000,000
        Reservoir...........................................         500,000
        Lemmon Rural Pipe...................................         280,000
        Bison & Prairie City Rural..........................       1,500,000
        Administration, Engineering.........................         545,000
                                                             ---------------
          Total.............................................       6,325,000
    ------------------------------------------------------------------------

        PCRWS will need $5.0 million for each of the next 3 years to
    complete our project on time. This consists of 550 miles of various
    size pipes ranging from 8 inches to 1.5 inches, one pump station
    capable of moving 800 gallons per minute, a 1.0 million gallon tank and
    telemetry to operate the whole system from one localized location.
        The quality of water in Northwest South Dakota is the main concern
    for the health and well being of the people. Although the water
    typically meets primary standards established by the USEPA, most of the
    chemicals in the water are exceedingly high by the State of South
    Dakota standards. 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 life a lot easier for those in the rural
    area. Due to the isolation from major water supplies, this may be our
    only chance to obtain water at an affordable cost.
        On the behalf of the Board of Directors of PCRWS and the people of
    Perkins County, South Dakota, thank you for allowing us to enter this
    testimony in the subcommittee's report.
                                     ______

     Prepared Statement of the Northern Colorado Water Conservancy District

        Chairman Domenici and Senator Reid, I am writing to request your
    support for an appropriation in fiscal year 2005 of $5,234,000 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 2005
    includes this line-item amount. Of these funds, I respectfully request
    the designation of $4,008,000 for the Upper Colorado River Endangered
    Fish Recovery Program; $691,000 for the San Juan River Basin Recovery
    Implementation Program and $535,000 for Fish and Wildlife Management
    and Development, consistent with the President's budget request. The
    requested fiscal year 2005 appropriation will allow construction of
    fish passage, floodplain restoration activities, screening of existing
    diversion canals, propagation facilities, endangered fish stocking, and
    non-native fish management.
        These funds are authorized by Public Law 106-392. Substantial non-
    Federal cost sharing funds are provided by the States of Colorado,
    Wyoming, Utah, and New Mexico, power users, and water users in support
    of these recovery programs. These programs are carried out consistent
    with State law and interstate water compacts.
        The past support and assistance of your subcommittee has greatly
    facilitated the success of these multi-State, multi-agency programs. I
    request the subcommittee's assistance relative to fiscal year 2005
    funding to ensure the Bureau of Reclamation's continuing financial
    participation in these vitally important programs.
                                     ______

               Prepared Statement of the Four Corners Power Plant

        Chairman Domenici and Senator Reid, I am writing to request your
    support for an appropriation in fiscal year 2005 of $5,234,000 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 2005
    includes this line-item amount. Of these funds, I respectfully request
    the designation of $4,008,000 for the Upper Colorado River Endangered
    Fish Recovery Program; $691,000 for the San Juan River Basin Recovery
    Implementation Program and $535,000 for Fish and Wildlife Management
    and Development, consistent with the President's budget request. The
    requested fiscal year 2005 appropriation will allow construction of
    fish passage, floodplain restoration activities, screening of existing
    diversion canals, propagation facilities, endangered fish stocking, and
    non-native fish management.
        These funds are authorized by Public Law 106-392. Substantial non-
    Federal cost sharing funds are provided by the States of Colorado,
    Wyoming, Utah, and New Mexico, power users, and water users in support
    of these recovery programs. These programs are carried out consistent
    with State law and interstate water compacts.
        The past support and assistance of your subcommittee has greatly
    facilitated the success of these multi-State, multi-agency programs. I
    request the subcommittee's assistance relative to fiscal year 2005
    funding to ensure the Bureau of Reclamation's continuing financial
    participation in these vitally important programs.
                                     ______

         Prepared Statement of the Public Service Company of New Mexico

        I am writing to request your support for an appropriation in fiscal
    year 2005 of $5,234,000 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 2005 includes this line-item amount.
    Of these funds, I respectfully request the designation of $4,008,000
    for the Upper Colorado River Endangered Fish Recovery Program; $691,000
    for the San Juan River Basin Recovery Implementation Program and
    $535,000 for Fish and Wildlife Management and Development, consistent
    with the President's budget request. The requested fiscal year 2005
    appropriation will allow construction of fish passage, floodplain
    restoration activities, screening of existing diversion canals,
    propagation facilities, endangered fish stocking, and non-native fish
    management.
        These funds are authorized by Public Law 106-392. Substantial non-
    Federal cost sharing funds are provided by the States of Colorado,
    Wyoming, Utah, and New Mexico, power users, and water users in support
    of these recovery programs. These programs are carried out consistent
    with State law and interstate water compacts.
        The past support and assistance of your subcommittee has greatly
    facilitated the success of these multi-State, multi-agency programs. I
    request the subcommittee's assistance relative to fiscal year 2005
    funding to ensure the Bureau of Reclamation's continuing financial
    participation in these vitally important programs.
                                     ______

         Prepared Statement of the Grand Valley Water Users Association

        I am writing to request your support for an appropriation in fiscal
    year 2005 of $5,234,000 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 2005 includes this line-item amount.
    Of these funds, I respectfully request the designation of $4,008,000
    for the Upper Colorado River Endangered Fish Recovery Program; $691,000
    for the San Juan River Basin Recovery Implementation Program and
    $535,000 for Fish and Wildlife Management and Development, consistent
    with the President's budget request. The requested fiscal year 2005
    appropriation will allow construction of fish passage, floodplain
    restoration activities, screening of existing diversion canals,
    propagation facilities, endangered fish stocking, and non-native fish
    management.
        These funds are authorized by Public Law 106-392. Substantial non-
    Federal cost sharing funds are provided by the States of Colorado,
    Wyoming, Utah, and New Mexico, power users, and water users in support
    of these recovery programs. These programs are carried out consistent
    with State law and interstate water compacts.
        The past support and assistance of your subcommittee has greatly
    facilitated the success of these multi-State, multi-agency programs. I
    request the subcommittee's assistance relative to fiscal year 2005
    funding to ensure the Bureau of Reclamation's continuing financial
    participation in these vitally important programs.
                                     ______

     Prepared Statement of the Colorado River Basin Salinity Control Forum

        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 (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 2005 to implement the needed and authorized
    program. Failure to appropriate these funds will result in significant
    economic damage in the United States and Mexico.
        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
    judgment of the Colorado River Basin Salinity Control Forum (Forum), is
    inappropriately low. This year's administration request is for
    $9,064,000. 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 (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, 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 Program was authorized by Congress in 1974. The Title I portion
    of the 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 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 Program, in
    addition to proceeding to implement their own salinity control efforts
    in the Colorado River Basin.
        The Forum is composed of gubernatorial appointees from Arizona,
    California, Colorado, Nevada, New Mexico, Utah and Wyoming. The Forum
    has become the seven-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 in Mexico, and will be very significant.
        Although the Program thus far has been able to implement salinity
    control measures that comply with the approved plan, recent drought
    years have caused salinity levels to rise in the river. Predictions are
    that this will be the trend for the next several years. This places an
    added urgency for the acceleration of the implementation of the
    Program.

                                 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 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 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 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 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 Mni Wiconi Project

                  FISCAL YEAR 2005 CONSTRUCTION BUDGET REQUEST

        The Mni Wiconi Project beneficiaries (as listed below) respectfully
    request appropriations and can demonstrate capability for construction
    in fiscal year 2005 in the amount of $39,317,000 as follows:

    ------------------------------------------------------------------------
                                                                  Amount
    ------------------------------------------------------------------------
    Oglala Sioux Rural Water Supply System:
        Core Facilities (Pipelines and Pumping Stations)....      $8,128,000
        Distribution System on Pine Ridge...................      10,224,000
    West River/Lyman-Jones Rural Water System...............      11,020,000
    Rosebud Sioux Rural Water System........................       7,325,000
    Lower Brule Sioux Rural Water System....................       2,620,000
                                                             ---------------
          Total Mni Wiconi Project..........................      39,317,000
    ------------------------------------------------------------------------

        The project sponsors were provided by the 107th Congress (Public
    Law 107-367) with all the authority necessary to finish this project at
    the level of development originally intended on a schedule through
    fiscal year 2008. Completion of the project is now clearly achievable
    as shown in the table below:

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

    ------------------------------------------------------------------------
    Total Federal Required (October 2003 Dollars)...........    $409,523,000
    Estimated Federal Spent Through Fiscal Year 2004........    $278,110,000
    Percent Spent...........................................            67.9
    Amount Remaining........................................    $131,413,000
    Years to Completion.....................................               4
    Average Required for Fiscal Year 2008 Finish............     $32,853,000
    ------------------------------------------------------------------------

        The administration's budget for this project in fiscal year 2005
    ($18.2 million for construction) is a disappointment for a second year
    in a row. The amount requested by the administration falls far short of
    the average amount needed to complete the project in fiscal year 2008.
    The needs and merits of this project are considerable as described in
    section 3.
        The project's operation, maintenance and replacement request from
    the sponsors is in addition to the construction request and is
    presented in section 8.

     OSRWSS CORE PIPELINE TO REACH PINE RIDGE INDIAN RESERVATION IN FISCAL
                                   YEAR 2005

                  OGLALA SIOUX WATER SUPPLY SYSTEM CORE REQUEST
    ------------------------------------------------------------------------
                                                                  Amount
    ------------------------------------------------------------------------
    South Core:
        Stamford to Kadoka:
            Reservoir to Kadoka Pipeline....................      $1,036,000
            Pump Station, 2 Reservoirs......................       2,111,000
        Kadoka to White River Pipeline......................       2,587,000
    North Core:
        WTP toward Hayes Pipeline...........................       2,394,000
                                                             ---------------
          Total.............................................       8,128,000
    ------------------------------------------------------------------------

        The Pine Ridge Indian Reservation and parts of West River/Lyman-
    Jones remain without points of interconnection to the OSRWSS core. The
    requested funding level for the OSRWSS core of $8.128 million will
    complete the project from Stamford to the northeast corner of the Pine
    Ridge Indian Reservation where, in combination with the western part of
    West River/Lyman-Jones, the remaining 50 percent of the design
    population resides. Funds will also be used by the Oglala Sioux Tribe
    to build the North Core westerly toward Hayes in the West River Lyman
    Jones service area with the intent to complete the OSRWSS North Core
    and all other core facilities in fiscal year 2007. Two additional years
    of funding will be required to complete the OSRWSS North Core system to
    serve the Reservation.
        The 2000 census confirms that the Oglala Sioux population on Pine
    Ridge is growing at a rate of 27 percent per decade or 1\1/2\ times
    greater than projected from the 1990 census. Delivery of Missouri River
    water to this area is urgently needed.
        All proposed OSRWSS construction activity will build pipelines that
    will provide Missouri River water immediately to beneficiaries. In many
    cases, construction of interconnecting pipelines by other sponsors is
    ongoing, and fiscal year 2005 funds are required to complete projects
    that will connect with the OSRWSS core and begin others.
        Funding for OSRWSS core and distribution facilities is necessary to
    bring economic development to the Pine Ridge Indian Reservation,
    designated as one of five national rural empowerment zones by the
    previous administration. The designation serves to underscore the level
    of need. Economic development is largely dependent on the timely
    completion of a water system, which depends on appropriations for this
    project.
        Finally, the subcommittee is respectfully requested to take notice
    of the fact that fiscal year 2005 will significantly advance
    construction of facilities that continues our progress toward the end
    of the project. The subcommittee's past support has brought the project
    to the point that the end can be seen. Key to the conclusion of the
    project in fiscal year 2008 is the completion of the OSRWSS core to the
    Pine Ridge Indian Reservation. Toward this end, funds are included in
    the fiscal year 2005 budget to build the connecting pipelines between
    the northeast corner of the Pine Ridge Indian Reservation and the
    central portion of the Reservation near Kyle. Rosebud is similarly
    engaged in the construction of major connecting pipelines that will
    deliver water southerly to the central portions of the Rosebud Indian
    Reservation and to service areas for West River/Lyman-Jones.

                          UNIQUE NEEDS OF THIS PROJECT

        This project covers much of the area of western South Dakota that
    was formerly the Great Sioux Reservation established by the Treaty of
    1868. Since the separation of the Reservation in 1889 into smaller more
    isolated reservations, including Pine Ridge, Rosebud and Lower Brule,
    tensions between the Indian population and the non-Indian settlers on
    former Great Sioux lands have been high with little easing by
    successive generations. The Mni Wiconi Project is perhaps the most
    significant opportunity in more than a century to bring the sharply
    diverse cultures of the two societies together for a common good. Much
    progress has been made due to the good faith and genuine efforts of
    both the Indian and non-Indian sponsors. The project is an historic
    basis for renewed hope and dignity among the Indian people. It is a
    basis for substantive improvement in relationships.
        Each year our testimony addresses the fact that the project
    beneficiaries, particularly the three Indian Reservations, have the
    lowest income levels in the Nation. The health risks to our people from
    drinking unsafe water are compounded by reductions in health programs.
    We respectfully submit that our project is unique and that no other
    project in the Nation has greater human needs. Poverty in our service
    areas is consistently deeper than elsewhere in the Nation. Health
    effects of water borne diseases are consistently more prevalent than
    elsewhere in the Nation, due in part to (1) lack of adequate water in
    the home and (2) poor water quality where water is available. Higher
    incidences of impetigo, gastroenteritis, shigellosis, scabies and
    hepatitis-A are well documented on the Indian reservations of the Mni
    Wiconi Project area. At the beginning of the third millennium one
    cannot find a region in our Nation in which social and economic
    conditions are as deplorable. These circumstances are summarized in
    Table 1. Mni Wiconi builds the dignity of many, not only through
    improvement of drinking water, but also through direct employment and
    increased earnings during planning, construction, operation and
    maintenance and from economic enterprises supplied with project water.
    We urge the subcommittee to address the need for creating jobs and
    improving the quality of life on the Pine Ridge and other Indian
    reservations of the project area.

                              TABLE 1.--PROFILE OF SELECTED ECONOMIC CHARACTERISTICS: 2000
    ----------------------------------------------------------------------------------------------------------------
                                                                         Income               Percent
                                       2000        Percent  --------------------------------  Families     Percent
      Indian Reservation/State      Population      Change                       Median        Below    Unemployment
                                                  From 1990    Per Capita       Household     Poverty
    ----------------------------------------------------------------------------------------------------------------
    Pine Ridge Indian                     15,521      27.07          $6,143         $20,569       46.3         16.9
     Reservation................
    Rosebud Indian Reservation..          10,469       7.97          $7,279         $19,046       45.9         20.1
    Lower Brule Indian                     1,353      20.48          $7,020         $21,146       45.3         28.1
     Reservation................
    Star of South Dakota........         754,844       8.45         $17,562         $35,282        9.3          3.0
    Nation......................     281,421,906      13.15         $21,587         $41,994        9.2          3.7
    ----------------------------------------------------------------------------------------------------------------

        Employment and earnings among the Indian people of the project area
    are expected to positively impact the high costs of health-care borne
    by the United States and the Tribes. Our data suggest clear
    relationships between income levels and Federal costs for heart
    disease, cancer and diabetes. During the life of the Mni Wiconi
    Project, mortality rates among the Indian people in the project area
    for the three diseases mentioned will cost the United States and the
    Tribes more than $1 billion beyond the level incurred for these
    diseases among comparable populations in the non-Indian community
    within the project area. While this project alone will not raise income
    levels to a point where the excessive rates of heart disease, cancer
    and diabetes are significantly diminished, the employment and earnings
    stemming from the project will, nevertheless, reduce mortality rates
    and costs of these diseases. Please note that between 1990 and 2000 per
    capita income on Pine Ridge increased from $3,591 to $6,143, and median
    household income increased from $11,260 to $20,569, due in large part
    to this project, albeit not sufficient to bring a larger percentage of
    families out of poverty (Table 1).
        Financial support for the Indian membership has already been
    subjected to drastic cuts in funding programs through the Bureau of
    Indian Affairs. This project is a source of strong hope that helps off-
    set the loss of employment and income in other programs and provide for
    an improvement in health and welfare. Tribal leaders have seen that
    Welfare Reform legislation and other budget cuts Nation-wide have
    created a crisis for tribal government because tribal members have
    moved back to the reservations in order to survive. Economic conditions
    have resulted in accelerated population growth on the reservations.
        The Mni Wiconi Project Act declares that the United States will
    work with us under the circumstances:

        ``. . . the United States has a trust responsibility to ensure that
    adequate and safe water supplies are available to meet the economic,
    environmental, water supply and public health needs of the Pine Ridge,
    Rosebud and Lower Brule Indian Reservations . . .''.

        Indian support for this project has not come easily because the
    historical experience of broken commitments to the Indian people by the
    Federal Government is difficult to overcome. The argument was that
    there is no reason to trust and that the Sioux Tribes are being used to
    build the non-Indian segments of the project and the Indian segments
    would linger to completion. These arguments have been overcome by
    better planning, an amended authorization and hard fought agreements
    among the parties. The subcommittee is respectfully requested to take
    the steps necessary the complete the critical elements of the project
    proposed for fiscal year 2004.
        The following sections describe the construction activity in each
    of the rural water systems.
              oglala sioux rural water supply system--distribution

              OGLALA SIOUX WATER SUPPLY SYSTEM DISTRIBUTION REQUEST
    ------------------------------------------------------------------------
                                                                  Amount
    ------------------------------------------------------------------------
    West Boundary Supply....................................        $506,000
    Manderson Loop..........................................       1,454,000
    Rockyford to Redshirt...................................         179,000
    White River to HWY 73/44 Junction:
        Pump Station, Service Lines and Reservoirs..........       3,127,000
    HWY 73/44 Junction to Kyle..............................       4,923,000
    Indefinite Quantities...................................          35,000
                                                             ---------------
          Total.............................................      10,224,000
    ------------------------------------------------------------------------

        With the conclusion of projects under construction in fiscal year
    2002, the Oglala Sioux Tribe completed all facilities that can be
    supported from local groundwater. The Tribe, representing more than 40
    percent of the project population will rely on the OSRWSS core to
    convey Missouri River water to and throughout the Reservation. Much
    pipeline has been constructed, primarily between Kyle, Wounded Knee and
    Red Shirt and between Pine Ridge Village and the communities of Oglala
    and Slim Buttes. Additional construction of the Manderson Loop is
    proposed in fiscal year 2005.
        Of particular importance to the Oglala Sioux Tribe is the
    continuation of the main transmission system from the northeast corner
    (Highway 73/44 junction) of the Reservation to Kyle in the central part
    of the Reservation. The transmission line is needed to interconnect the
    OSRWSS core system with the distribution system within the Reservation
    in order to deliver Missouri River water to the populous portions of
    the Reservation. This critical segment of the project can be continued
    in fiscal year 2005 to coincide with the westward construction of the
    OSRWSS core to the northeast corner of the Reservation (see section 2).
    It will require funds in fiscal year 2006 and fiscal year 2007 to
    complete. This component of the Oglala system has been deferred for
    several years due to inadequate funding. The component is urgently
    needed for the OSRWSS core system to be utilized on the Pine Ridge
    Indian Reservation.
            west river/lyman-jones rural water system--distribution

                  WR/LJ RURAL WATER SYSTEM DISTRIBUTION REQUEST
    ------------------------------------------------------------------------
                                                                  Amount
    ------------------------------------------------------------------------
    Mellette East...........................................        $533,000
    Moenville...............................................       9,566,000
    Quinn Town Distribution.................................         176,000
    Vivian Town.............................................         441,000
    Indefinite Quantities...................................         304,000
                                                             ---------------
          Total.............................................      11,020,000
    ------------------------------------------------------------------------

        Continued drought conditions in the project area have created
    serious health and economic hardships for WR/LJ members waiting to
    receive Mni Wiconi water service. A survey of members attending the WR/
    LJ annual meeting on October 8, 2003 in Midland revealed that, of those
    members not receiving project water, 67 percent were hauling water for
    domestic use and 45 percent were hauling water for livestock. Their
    current source of water, highly mineralized wells and dried up dams,
    present a serious health hazard and unaffordable increases in
    production costs due to the time and cost of hauling water.
        The requested appropriation is directed to serving members between
    Ft. Pierre and Philip. The highest priority is completion of the
    Moenville project. Houston Rose, prior to his death, pioneered initial
    efforts to bring quality water to this WR/LJ service area closest to
    the Mni Wiconi water treatment plant. The economy of the area he
    represented is based on livestock operations that are dependent on
    quality water supplies.
        WR/LJ is now the water service provider in the towns of Quinn and
    Vivian, however, the existing distribution piping is over 50 years old
    and is a very high priority for replacement. Funding is also requested
    for the construction of pumping station and reservoirs required to
    deliver the full design capability of the pipelines under construction.
    As a testimony to public recognition of the advantages of quality water
    and the reliability of the system WR/LJ continues to add users within
    those areas previously constructed. These additions are being financed
    by member contributions as part of the statutory non-Federal matching
    requirement.
        The Mni Wiconi project, due to continued Congressional support, has
    progressed to where the project beneficiaries can look forward to its
    timely completion and receive the intended project benefits. We
    sincerely appreciate your support.

                ROSEBUD RURAL WATER SYSTEM (SICANGU MNI WICONI)

                    ROSEBUD SIOUX RURAL WATER SYSTEM REQUEST
    ------------------------------------------------------------------------
                                                                  Amount
    ------------------------------------------------------------------------
    Hidden Timber...........................................      $1,317,000
    Rosebud Improvements....................................         737,000
    Rural Antelope..........................................         866,000
    Okreek..................................................       2,030,000
    Mission Northwest.......................................         447,000
    Livestock Water.........................................       1,271,000
    Service Connections.....................................         657,000
                                                             ---------------
          Total.............................................       7,325,000
    ------------------------------------------------------------------------

        Fiscal year 2005 efforts build upon the successes of the past 2
    years. The Rosebud Core pipeline will begin providing water from the
    OSRWSS at Murdo to Rosebud and WR/LJ water users in Mellette County. As
    a result, the limited supply of high quality ground water available
    from the Rosebud wellfield can be used as a source of supply for
    northeast Todd County.
        The Rosebud Sioux Tribes efforts in fiscal year 2005 focus on
    connecting additional homes to new and existing pipelines. The Antelope
    to Okreek Pipeline, completed in late 2003, provides a supply of high
    quality ground water to the rural Antelope, northwest Mission, Hidden
    Timber and Okreek project areas. In this portion of northern Todd
    County, the Oglala Aquifer is not present and ground water is of poor
    quality and limited quantity where available. Private and community
    wells have failed in the area and while the Antelope to Okreek Pipeline
    solved the problem for the community of Okreek, many rural residents
    are anxiously waiting for water.
        The problems are exacerbated in the Hidden Timber area. Where
    ground water occurs, nitrate concentrations are frequently in excess of
    the Safe Drinking Water Act primary standard. The high nitrate
    concentrations pose an acute threat to the unborn and young children.
        The major features of the proposed fiscal year 2005 work plan focus
    on distribution and service lines for this area. Proposed projects for
    this area include Rural Antelope, Mission Northwest, Okreek and Hidden
    Timber. It is envisioned that both private contractors and the tribal
    construction program would be responsible for construction.
        The other major project proposed for fiscal year 2005 address
    improvements needed in the community of Rosebud. In fiscal year 2004,
    the Tribe will be connecting the lower older part of Rosebud to the
    rural water system. While this will improve the quality and reliability
    of supply, improvements are needed to ensure water reaches the users.
    In several areas, older cast iron pipe has corroded and needs to be
    replaced. In other areas, older asbestos concrete pipe is still in use
    and felt to be a health threat. The focus of the work in Rosebud in
    fiscal year 2005 is to provide a reliable source of high quality water
    to all service connections.
        The Tribe will also expand its service line program. The focus of
    this effort is new homes and homes that have been constructed since
    transmission or distribution lines have been installed. It is also
    proposed to start developing livestock watering facilities. The Tribe
    has not constructed any of these facilities to date with Mni Wiconi
    funding and the realty of prolonged drought is having an affect on
    historic livestock watering sources of supply. A reliable source of
    water for livestock is necessary to maintain one of the more viable
    components of the reservation economy.
        The total amount requested for the Sicangu Mni Wiconi in fiscal
    year 2005 is $7,325,000.

                  LOWER BRULE RURAL WATER SYSTEM--DISTRIBUTION

        The Lower Brule Rural Water System (LBRWS) has gained the support
    of the other sponsors to complete its share of the project with funds
    appropriated in fiscal year 2005 budget, based on an appropriation of
    funds for the project in the range generally received. This support is
    not only a benefit for LBRWS and its users but to the project as a
    whole. By funding LBRWS in this manner, a savings of approximately $1.5
    million will be experienced by the project.
        With the funds received in fiscal year 2004, LBRWS will complete
    the design, cultural resource evaluation and the securing of easements
    for the remaining service areas and installing mainlines and service
    lines required to provide water to all of the homes on the Lower Brule
    Indian Reservation. The fiscal year 2004 funds will also allow LBRWS to
    begin installing water lines to pasture taps. Since the area has
    experienced 2 years of drought conditions, many of the dams are dry.
    The provision of water will allow some pastures to be utilized that
    would have otherwise been of no benefit to the ranchers.
        The fiscal year 2005 funds will allow the completion of the
    installation of pasture taps and a new 400,000 gallon elevated water
    tank in Lower Brule. The existing tank is in a location where the
    slides (soil movement) have occurred. As a result, the stability of the
    tank's foundation is in question.

                 OPERATION, MAINTENANCE AND REPLACEMENT BUDGET

        The sponsors have and will continue to work with Reclamation to
    ensure that their budgets are adequate to properly operate, maintain
    and replace (OMR) their respective portions of the overall system. The
    sponsors will also continue to manage OMR expenses in a manner ensuring
    that the limited funds can best be balanced between construction and
    OMR. In fiscal year 2003, the approved budget for OMR was $8.228
    million, which was adequate. Funding was not adequate in fiscal year
    2004 at the $6.254 level and will not be adequate at the same leveling
    the administration's proposed fiscal year 2005 budget of $6.254 million
    for OMR.
        The project has been making significant progress especially over
    the last 2 years with the initiation of operation of the OSRWSS Water
    Treatment Plant near Ft. Pierre and the installation of a significant
    quantity of pipeline. The result is the need for sufficient funds to
    properly operate and maintain the functioning system throughout the
    project. As a result, the OMR budget must continue to be adequate to
    keep pace with the portion of the system that is placed in operation.
        In addition to ongoing operation and maintenance activities, water
    conservation is an integral part of the OMR of the project. Water
    conservation not only provides immediate savings from reduced water use
    and production, it also extends the useful life and capacity of the
    system. Proposed funding is not adequate to perform water conservation
    functions.
                                     ______

     Prepared Statement of the City of Watsonville, California and Pajaro
                         Valley Water Management Agency

        On behalf of the City of Watsonville and the Pajaro Valley Water
    Management Agency (PVWMA), we are submitting this testimony in support
    of Federal funding for the Watsonville Area Water Recycling Project.
    The project has been targeted to receive $2.0 million as part of the
    fiscal year 2003 and fiscal year 2004 Energy and Water appropriations
    bills through the Bureau of Reclamation's Title XVI program. This year,
    we respectfully request your support for the inclusion of $6.3 million
    in the Bureau of Reclamation's Title XVI program in the fiscal year
    2005 Energy and Water Development Appropriations bill.
        The City of Watsonville and the PVWMA continue to make great
    progress on the project. We are working diligently with the Bureau of
    Reclamation to develop solutions to the seawater intrusion problem
    affecting the water supply of our agricultural and urban water users.
    We need not convince you of the vital nature of this project that will
    protect the Pajaro Valley's fresh water supply from continued
    degradation.
        To address the water resource needs of our area, PVWMA is
    implementing the Revised Basin Management Plan Project (project).
    Capital costs of the project are estimated at $165 million, of which
    $80 million is eligible for Federal cost sharing under the Title XVI
    program (in 2006 dollars). The Watsonville Water Area Recycling Project
    components that have qualified for funding through the Title XVI
    program include:
      --Recycled Water Treatment Facility;
      --Distribution System; and
      --Salinity Control Pipeline.
        The next several years will be critical for the project and we
    anticipate that all construction will be completed by fiscal year 2007.
    Certification of the Watsonville Water Area Recycling Project
    Feasibility Study is pending a Record of Decision on the Basin
    Management Plan Environmental Impact Statement, which is expected by
    May 2004.
        The following table summarizes projected expenditures for design
    and construction of the Title XVI eligible project components.

                            [In millions of dollars]
    ------------------------------------------------------------------------
                                                                 Projected
                                                               Expenditures
    ------------------------------------------------------------------------
    Fiscal year 2004........................................             9.8
    Fiscal year 2005........................................            25.3
    Fiscal year 2006........................................            31.3
    Fiscal year 2007........................................            13.4
    ------------------------------------------------------------------------

        We continue to be concerned by the administration's lack of support
    for Title XVI projects including the Watsonville Area Water Recycling
    Project. The Bureau's fiscal year 2005 budget recently submitted to
    Congress includes no funding for our project. In fact, the Bureau
    failed to budget for 12 of the 18 eligible projects while requesting
    over $1.5 million for itself to administer the program. We strongly
    believe that the Title XVI program in general and the Watsonville Area
    Water Recycling Project specifically offer effective solutions to the
    water supply crisis in our State. Indeed, without the Title XVI
    program, water recycling in our area might not be feasible and would
    force increased reliance on an already oversubscribed Central Valley
    Project. We question the wisdom of reducing the Bureau's participation
    in Title XVI and ask that you work with your colleagues in support of
    the program as well as funding for the Watsonville Area Water Recycling
    Project.
        We are excited to report that the project is moving ahead on
    schedule. Approximately $18 million of project components have been
    constructed through fiscal year 2003. The accelerated construction of
    these project components allows PVWMA to deliver water early and
    demonstrate continued progress. In fiscal year 2004, we initiated work
    on the final design of the distribution system, the recycled water
    facilities, blending facilities and water wells, and salinity control
    pipeline. The design for each component will be completed in early
    fiscal year 2005 and construction of the projects will commence
    immediately thereafter.
        Please feel free to contact PVWMA's Washington Representative or us
    if you have any questions or require additional information.
                                     ______

          Prepared Statement of the Lewis and Clark Rural Water System

                                   BACKGROUND

        The Lewis and Clark Rural Water System is requesting $35 million
    through the Bureau of Reclamation in Federal funding for continuing
    construction activities in 2005. These funds will be used for
    construction, acquisition of easements and property, engineering, and
    associated legal and professional costs. The project has completed
    required planning and environmental reviews, and major construction
    will begin this year. The $17 million secured in fiscal year 2004 will
    enable Lewis and Clark to install the first segments of the raw water
    pipeline, provide emergency water connections for communities in Iowa,
    and various other interconnections throughout the water system. The
    three member-states and the local project sponsors have also
    contributed much to this project, with roughly $11 million in local
    funds to be made available in fiscal year 2005.
        The President's budget requests $17.5 million for Lewis and Clark,
    which reflects a commitment he made to the project last summer. While
    this request is a welcome starting point, $35 million is necessary to
    fully-fund the project this year to ensure construction activities will
    continue in 2005. Even though we are in the early stages of
    construction, it is important to keep the project on schedule in order
    to provide this much-needed water source to area communities as soon as
    possible.
        The Lewis and Clark Rural Water System Act became law in July 2000
    (Public Law 106-246). When complete, the project will provide safe,
    reliable drinking water to approximately 200,000 people in South
    Dakota, Minnesota, and Iowa. Lewis and Clark represents a unique
    regional approach by three States to address common problems with area
    water resources in a more effective and cost-efficient way than each
    State could do alone. Regional water problems include shallow wells and
    aquifers prone to contamination, compliance with new Federal drinking
    water standards, and increasing water demand due to population growth
    and economic expansion.
        The Lewis and Clark project will utilize an aquifer adjacent to the
    Missouri River near Vermillion, South Dakota, and will distribute water
    to member communities in an area of approximately 5,000 square miles,
    roughly the size of Connecticut. When complete, the drinking water will
    pass through a well system, a water treatment plant, and a non-looped
    distribution system. The system also will include water storage tanks
    that will provide approximately a 1-day supply. The project will
    require an estimated 10 to 12 years to complete.

                    PLANS FOR CONSTRUCTION IN 2004 AND 2005

        Lewis and Clark developed a schedule for construction and related
    services to be performed during the next 2 years. The following work is
    anticipated in fiscal year 2004 and fiscal year 2005, subject to the
    availability of funding.
    Projects Planned for Fiscal Year 2004
        Raw Water Pipeline--Segment 1.--This project has been awarded to
    Winter Brothers Underground for $1,850,000. Construction will begin in
    May and will be completed by the end of September.
        Raw Water Pipeline--Segments 2 and 3.--This project is currently in
    the final design phase. Permit applications and easements are currently
    being processed. It is anticipated this project would be awarded to a
    contractor in the early summer and construction start in late summer/
    early fall 2004.
        Site J Production Pump Test Well.--Lewis & Clark currently plans to
    drill another test production well south and west of Vermillion. The
    well will be a +/-105 deep vertical well and will be sized to be an
    actual production well for the project. The construction period will be
    from August 15 through November 15.
        Treated Water Pipeline--SD Segment 1.--The Treated Water Pipeline
    Segment 1 will involve construction of a pipeline from west of Sioux
    Falls to Tea, South Dakota. The project will include construction of
    the main 48" treated water transmission pipeline for the Lewis & Clark
    System. Lewis & Clark plans to bid and award this project in September
    2004.
        Treated Water Pipeline--IA Segment 1 (Iowa Emergency Connection).--
    The first phase of the Iowa Emergency Connection will involve a
    pipeline from the Sioux Center water treatment plant to Hull, Iowa. The
    project will include construction of the main treated water
    transmission pipeline for the Lewis & Clark System and service
    connection lines for Sioux Center and Hull. Lewis & Clark plans to bid
    and award this project in September 2004 or 2005, depending upon
    funding levels.
        Water Treatment Plant Pre-design.--This task includes a preliminary
    design and evaluation of the treatment plant. The goal is to complete
    the pre-design and provide drawings, draft specifications and technical
    memoranda for a Value Engineering review in early 2005.
    Projects Planned for Fiscal Year 2005
        Fiscal year 2005 activities will include a continuation of the
    projects listed above for 2004, plus the following additional system
    components:
        Treated Water Pipeline--SD Segment 2.--The second phase of the
    treated water pipeline construction in South Dakota would include
    construction of the main 48" pipeline from Tea south to Lennox. Part or
    all of this segment may be included in the 2004 construction if delays
    are experienced elsewhere in the project. Lewis & Clark would bid and
    award this project in the summer of 2005.
        Treated Water Pipeline--SD Segment 3.--The third phase of the
    treated water pipeline construction in South Dakota would be a
    continuation of the main 48" pipeline south from Lennox to Highway 18.
    Lewis & Clark would bid and award this project in the summer of 2005.
        (Under Consideration) Treated Water Pipeline--SD Segment 4 (portion
    of Parker service line).--This phase would include a portion of the
    service line to Parker, South Dakota. Initial construction of this line
    would be constructed to the turnout for South Lincoln RWS. If pursued,
    Lewis & Clark would bid and award this project in the summer of 2005.
        (Under Consideration) Treated Water Pipeline--SD Segment 5 (South
    Dakota Emergency Connection).--The South Dakota Emergency Connection
    may include construction of a pipeline from the east side of Sioux
    Falls to connect to Lincoln County Rural Water System. The project
    would include construction of the main treated water transmission
    pipeline for the Lewis & Clark System. This part of the emergency
    connection will permit temporary transmission of water from Minnehaha
    Community Water Corporation (MCWC) to the Lincoln County RWS.
    Additional water could be provided to Tea, Lincoln County RWS and
    Harrisburg. If pursued, Lewis & Clark would bid and award this project
    in the summer of 2005.
        (Under Consideration) Treated Water Pipeline--IA Segments 2 (Iowa
    Emergency Connection).--The next phase of the Iowa Emergency Connection
    may include building a short section of Lewis & Clark pipeline to
    connect Sheldon, Iowa to a temporary source of water. If pursued, Lewis
    & Clark plans to bid and award this project in the summer of 2005.
        Treated Water Pipeline--MN Segment 1 (Minnesota Emergency
    Connection).--The Minnesota Emergency Connection will involve
    construction of a pipeline from Magnolia to east of Adrian, Minnesota.
    The project will include construction of the main treated water
    transmission pipeline for the Lewis & Clark System. The emergency
    connection will pump water from Rock County RWS to Lincoln-Pipestone
    RWS and other Minnesota water systems under future contracts. Lewis &
    Clark plans to bid and award this project in the summer of 2005 or
    2006, depending on funding levels.
        Water Treatment Plant Design.--The Value Engineering (VE) review
    will be performed in early 2005. The design team will proceed with
    design of the water treatment plant incorporating the results and
    recommendations from the VE review.
                                     ______

            Prepared Statement of the Mid-Dakota Rural Water System

                        FISCAL YEAR 2005 FUNDING REQUEST

        The Mid-Dakota Project is requesting an appropriations of $17.015
    million provided through the Bureau of Reclamation's project
    construction program for fiscal year 2005. As with our past submissions
    to this subcommittee, Mid-Dakota's fiscal year 2005 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.
        An appropriation of $17.015 million for fiscal year 2005 will
    complete the Federal Government's funding obligation for the initial
    construction of the authorized Project. It is with pleasure that Mid-
    Dakota agrees with President Bush's $17.015 million request for Mid-
    Dakota in fiscal year 2005.

              TENTATIVE FISCAL YEAR 2005 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
    1,500 more people than are currently receiving or scheduled to receive
    Project drinking water.

     MID-DAKOTA RURAL WATER SYSTEM STATEMENT OF CAPABILITIES FISCAL YEAR 2005 (OCTOBER 2004 THROUGH SEPTEMBER 2005)
    ----------------------------------------------------------------------------------------------------------------
                                                                 Inspection--Percent    Engin. and
                                                  Construction        of Const.            Legal         Subtotals
    ----------------------------------------------------------------------------------------------------------------
        Source and Intake (Percent)            ..............                 12                 2  ..............
        Expansion                                     $80,000            $57,600            $9,600        $547,200
                                              ----------------------------------------------------------------------
              Subtotals                              $480,000             $7,600            $9,600        $547,200
                                              ----------------------------------------------------------------------
        Water Treatment (Percent)              ..............                 12                 2  ..............
        Expansion                                    $710,000           $445,200           $74,200      $4,229,400
        VFD IEEE comp.                               $250,000            $30,000            $5,000        $285,000
                                              ----------------------------------------------------------------------
              Subtotals                            $3,960,000           $475,200           $79,200      $4,514,400
                                              ----------------------------------------------------------------------
        Main Trans. Pipe (Percent)             ..............                  8                 2  ..............
        Expansion--BPS                             $2,175,000           $174,000           $43,500      $2,392,500
                                              ----------------------------------------------------------------------
              Subtotals                            $2,175,000           $174,000           $43,500      $2,392,500
                                              ----------------------------------------------------------------------
        Dist. Pipeline (Percent)               ..............                  6                 6  ..............
        Wolsey (4-3P (2))                          $2,610,000           $156,600          $156,600      $2,923,200
        Pearl Creek                                $1,815,000           $108,900          $108,900      $2,032,800
        Staum Dam                                  $1,450,000            $87,000           $87,000      $1,624,000
        Redfield East                                $415,000            $24,900           $24,900        $464,800
        Vaults and stations                          $280,000            $16,800           $16,800        $313,600
                                              ----------------------------------------------------------------------
              Subtotals                            $6,570,000           $394,200          $394,200      $7,358,400
                                              ----------------------------------------------------------------------
        Water Storage (Percent)                ..............                 12                 6  ..............
        Canning Tank                               $1,120,000           $134,400           $67,200      $1,321,600
                                              ----------------------------------------------------------------------
              Subtotals                            $1,120,000           $134,400           $67,200      $1,321,600
                                              ----------------------------------------------------------------------
        SCADA and Controls (Percent)           ..............                  8                 8  ..............
        Controls & SCADA                             $295,000            $23,600           $23,600        $342,200
                                              ----------------------------------------------------------------------
              Subtotals                              $295,000            $23,600           $23,600        $342,200
                                              ----------------------------------------------------------------------
              TOTAL                                $4,600,000         $1,259,000          $617,300     $16,476,300
        Administration as a Percent of         ..............                1.5    ..............        $219,000
         Construction
        Bur. of Rec. as a Percent of           ..............                3.0    ..............        $438,000
         Construction
        Contingencies as a percent of          ..............               10.0    ..............      $1,460,000
         Construction
                                              ----------------------------------------------------------------------
              TOTAL CONSTRUCTION               ..............  ...................  ..............     $18,593,300
               CAPABILITIES--FISCAL YEAR 2005
        WETLAND COMPONENT REQUEST--FISCAL      ..............  ...................  ..............        $317,000
         YEAR 2005
                                              ----------------------------------------------------------------------
              TOTAL FISCAL YEAR 2005           ..............  ...................  ..............     $18,910,300
               CAPABILITIES--FISCAL YEAR 2005
    ----------------------------------------------------------------------------------------------------------------

        Total capabilities are greater than the amount remaining in
    authorized funds. If a funding shortfall is realized, Mid-Dakota will
    examine its options for funding the shortfall when the amount is known.

                       IMPACTS OF FISCAL YEAR 2005 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 $17.015 million will allow for the completion
    of the Mid-Dakota Project as it is currently authorized. The requested
    appropriation will provide the necessary funds to proceed with
    construction of multiple contracts summarized earlier in this
    testimony.

                           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)
    ------------------------------------------------------------------------
                                                                  Amount
    ------------------------------------------------------------------------
    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 2005 figures were not available at the
    time of writing this testimony). All Federal funding considered, the
    Government has provided 89 percent of its commitment ($126.726 \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 89 percent complete, in terms of financial
    commitments.
    ---------------------------------------------------------------------------
        \2\ Includes $15.0 million appropriated in fiscal year 2004, but
    does not include Agency ``underfinancing'' or 2005 Indexing.

                                                                SUMMARIZATION OF FEDERAL FUNDING
                                                                    [In millions of dollars]
    --------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                     Total
                                                                        Mid-      Pres.                            Conf.      Bureau   Additional     Fed.
                            Fed. Fiscal year                           Dakota     Budg.      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     16.129       0.800     16.929
    2004...........................................................     23.869      2.040     12.040     15.040     15.040     13.522  ..........     13.522
    2005...........................................................     17.015     17.015  .........  .........  .........  .........  ..........  .........
                                                                    ----------------------------------------------------------------------------------------
          Totals \1\...............................................  .........     75.175     116.16     127.52     127.52    117.242       9.484    126.726
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    \1\ 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:

    ----------------------------------------------------------------------------------------------------------------
                                             Contract Amount                      Percent
                   Contract                    with Change      Work Complete to  Dollars   Contract Completion Date
                                                  Orders              Date         Comp.
    ----------------------------------------------------------------------------------------------------------------
    1-1, Intake Station...................      $3,944,961.74      $3,944,961.74      100  02/28/97
    1-1A, Intake Rip-Rap..................         $87,178.75         $87,178.75      100  05/02/98
    1-1B, Intake Road.....................         $26,187.50         $26,187.50      100  10/01/99
    2-1, Water Treat. Plant...............     $10,242,564.00     $10,242,564.00      100  04/28/98
    2-1A, WTP Controls....................         $14,628.98         $14,628.98      100  08/03/00
    O&M Center Paving.....................         $58,473.87         $58,473.87      100  06/13/00
    3-1A, Raw Water Pipe..................      $1,719,251.30      $1,719,251.30      100  03/29/96
    3-1B, Main Trans. Pipe................      $7,022,055.73      $7,022,055.73      100  12/21/97
    3-1C, Main Trans. Pipe................      $4,793,104.90      $4,793,104.90      100  11/10/97
    3-1D, CP System.......................        $214,651.00        $214,651.00      100  11/01/00
    3-2A, Main Trans. Pipe................      $3,155,454.93      $3,155,454.93      100  12/03/99
    3-2B, Main Trans. Pipe................      $3,356,564.67      $3,356,564.67      100  12/09/99
    3-3A, Main Trans. Pipe................      $2,383,513.37      $2,383,513.37      100  11/01/02
    3-3B, Main Trans. Pipe................      $3,881,892.39      $3,871,671.00       99  11/13/03
    3-3C, Main Trans. Pipe................      $2,630,672.25      $2,601,234.00       99  11/13/03
    4-1A/B (1-5) Dist. Pipe...............     $10,572,231.62     $10,572,231.62      100  10/20/97 \1\
                                                                                           11/15/97 \1\
                                                                                           11/15/98
                                                                                           05/30/99
    4-1A/B (6) Dist. Pipe.................      $9,027,572.49      $9,027,572.49      100  10/22/99 \1\
                                                                                           12/03/00
    4-2 (1) Dist. Pipe....................      $4,707,394.81      $4,707,394.81      100  11/10/00
    4-2 (2) Dist. Pipe....................      $3,000,176.49      $3,000,176.49      100  11/13/00
    4-2 (4-5) Dist. Pipe..................      $5,134,974.43      $5,134,974.43      100  10/31/01
    4-2A (4) Dist. Pipe...................      $1,191,329.30      $1,191,329.30      100  10/31/01
                                                                                           07/01/02
    4-2AP (2-3) Dist. Pipe................     $11,435,814.24     $11,114,781.91       97  11/17/02
                                                                                           12/31/03
    4-2AV (2-3) Dist. Pipe................        $686,749.00        $686,749.00      100  11/01/03
    5-1, Highmore Tank....................      $1,433,000.00      $1,433,000.00      100  10/20/97
    5-1A (1) Onida Tank...................        $397,688.00        $397,688.00      100  06/30/99
    5-1A(2--4) Oko. Agar Getty. Tanks.....      $1,526,453.00      $1,526,453.00      100  09/18/00
    5-2 (1) Mac's Corner Tank.............        $561,100.69        $561,100.69      100  10/16/00
    5-2 (2-3) Rezac Lake & Collins Slough         $911,720.00        $911,720.00      100  09/01/01
     Tanks.
    5-2A (1-3) Ames & Wess. Springs Tanks.        $868,490.00        $868,490.00      100  09/01/02
                                                                                           09/01/03
    5-2A (2) Cottonwood Lake Tank.........        $695,862.98        $695,862.98      100  09/01/02
    5-3 Wolsey Tank.......................      $2,021,414.00      $1,281,594.00       63  11/01/04
    6-1 SCADA System......................        $888,260.50        $837,680.72       94  12/01/03
                                           -------------------------------------------------------------------------
          TOTAL...........................     $98,591,386.93     $97,440,295.18
    ----------------------------------------------------------------------------------------------------------------
    \1\ Intermediate completion date.

                                    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 finally consider the fact that fully funding the fiscal
    year 2005 appropriation request as submitted by the President and by
    Mid-Dakota will fully fund the initial authorized components of the
    Mid-Dakota Project.
        Again, we thank the subcommittee for its strong support, both past
    and present.
                                     ______

       Prepared Statement of the New Mexico Interstate Stream Commission

                                    SUMMARY

        This statement is submitted in support of appropriations for the
    Colorado River Basin salinity control program of the Department of the
    Interior's Bureau of Reclamation. Congress designated the Bureau of
    Reclamation to be the lead agency for salinity control in the Colorado
    River Basin by the Colorado River Basin Salinity Control Act of 1974.
    Public Law 104-20 reconfirmed the Bureau of Reclamation's role. A total
    of $17.5 million is requested for fiscal year 2005 to implement the
    authorized salinity control program of the Bureau of Reclamation. The
    President's appropriation request is inadequate because studies have
    shown that the implementation of the salinity control program has
    fallen behind the pace needed to control salinity. An appropriation of
    $17.5 million for Reclamation's salinity control program is necessary
    to protect water quality standards for salinity and to prevent
    unnecessary levels of economic damage from increased salinity levels in
    water delivered to the Lower Basin States and Mexico.

                                   STATEMENT

        The water quality standards for salinity of the Colorado River must
    be protected while the Basin States continue to develop their compact
    apportioned waters of the river. Studies have shown that the
    implementation of the salinity control program has fallen below the
    threshold necessary to prevent future exceedence of the numeric
    criteria of the water quality standards for salinity in the Lower Basin
    of the Colorado River. The salinity standards for the Colorado River
    have been adopted by the seven Basin States and approved by EPA. While
    currently the standards have not been exceeded, salinity control
    projects must be brought on-line in a timely and cost-effective manner
    to prevent future effects that would cause the numeric criteria to be
    exceeded.
        The Colorado River Basin Salinity Control Act was authorized by
    Congress and signed into law in 1974. The seven Colorado River Basin
    States, in response to the Clean Water Act of 1972, had formed the
    Colorado River Basin Salinity Control Forum, a body comprised of
    gubernatorial representatives from the seven States. The Forum was
    created to provide for interstate cooperation in response to the Clean
    Water Act, and to provide the States with information necessary to
    comply with Sections 303(a) and (b) of the Act. The Forum has become
    the primary means for the Basin States to coordinate with Federal
    agencies and Congress to support the implementation of the salinity
    control program for the Colorado River Basin.
        Bureau of Reclamation studies show that damages from the Colorado
    River to United States water users are about $300,000,000 per year.
    Damages are estimated at $75,000,000 per year for every additional
    increase of 30 milligrams per liter in salinity of the Colorado River.
    Control of salinity is necessary for the Colorado River Basin States,
    including New Mexico, to continue to develop their compact-apportioned
    waters of the Colorado River.
        It is essential that appropriations for the funding of the salinity
    control program be timely in order to comply with the water quality
    standards for salinity to prevent unnecessary economic damages in the
    United States, and to protect the quality of the water that the United
    States is obligated to deliver to Mexico. An appropriation of only the
    amount specified in the President's budget request is inadequate to
    protect the quality of water in the Colorado River and prevent
    unnecessary salinity damages in the States of the Lower Colorado River
    Basin. Studies have shown that the implementation of the salinity
    control program has fallen behind the pace needed to control salinity.
    Although the United States has always met the water quality standard
    for salinity of water delivered to Mexico under Minute No. 242 of the
    International Boundary and Water Commission, the United States through
    the U.S. Section of IBWC is currently addressing a request by Mexico
    for better quality water.
        Congress amended the Colorado River Basin Salinity Control Act in
    July 1995 (Public Law 104-20). The salinity control program authorized
    by Congress by the amendment has proven to be very cost-effective, and
    the Basin States are standing ready with up-front cost sharing.
    Proposals from public and private sector entities in response to the
    Bureau of Reclamation's advertisement have far exceeded available
    funding. Basin States cost sharing funds are available for the $17.5
    million appropriation request for fiscal year 2005. The Basin States
    cost sharing adds 43 cents for each Federal dollar appropriated.
        Public Law 106-459 gave the Bureau of Reclamation additional
    spending authority for the salinity control program. With the
    additional authority in place and significant cost sharing by the Basin
    States, it is essential that the salinity control program be funded at
    the level requested by the Forum and Basin States to protect the water
    quality of the Colorado River.
        Maintenance and operation of the Bureau of Reclamation's salinity
    control projects and investigations to identify new cost-effective
    salinity control projects are necessary for the success of the salinity
    control program. Investigation of new opportunities for salinity
    control are critical as the Basin States continue to develop and use
    their compact-apportioned waters of the Colorado River. The water
    quality standards for salinity and the United States water quality
    requirements pursuant to treaty obligations with Mexico are dependent
    on timely implementation of salinity control projects, adequate funding
    to maintain and operate existing projects, and investigations to
    determine new cost-effective projects.
        I urge the Congress to appropriate $17.5 million to the Bureau of
    Reclamation for the Colorado River Basin salinity control program,
    adequate funding for operation and maintenance of existing projects and
    adequate funding for general investigations to identify new salinity
    control opportunities. Also, I fully support testimony by the Forum's
    Executive Director, Jack Barnett, in request of this appropriation, and
    the recommendation of an appropriation of the same amount by the
    federally chartered Colorado River Basin Salinity Control Advisory
    Council.
                                     ______

                Letter From the State Engineer's Office, Wyoming
                                       Cheyenne, Wyoming, May 18, 2004.
    The Honorable Pete V. Domenici,
    Chairman,
    The Honorable Harry Reid,
    Ranking Member,
    Energy and Water Development Subcommittee, Committee on Appropriations,
            United States Senate, 127 Dirksen Senate Office Building,
            Washington, DC 20510.
        Dear Chairman Domenici and Senator Reid: This letter is sent in
    support of fiscal year 2003 funding for the Bureau of Reclamation's
    Colorado River Basin Salinity Control Project--Title II Program. Thank
    you in advance for inclusion of this letter in the formal hearing
    record concerning fiscal year 2005 appropriations.
        The Colorado River provides municipal and industrial water for 27
    million people and irrigation water to nearly 4 million acres of land
    in the United States. The River is also the water source for some 2.3
    million people and 500,000 acres in Mexico. Limitations on users'
    abilities to make the greatest use of that water supply due to the
    River's high concentration of total dissolved solids (hereafter
    referred to as the salinity of the water) are a major concern in both
    the United States and Mexico. Salinity in the water source especially
    affects agricultural, municipal, and industrial water users. While
    economic detriments and damages in Mexico are unquantified, the Bureau
    of Reclamation presently estimates salinity-related damages in the
    United States to amount to $330 million per year. The River's high salt
    content is in almost equal part due to naturally occurring geologic
    features that include subsurface salt formations and discharging saline
    springs; and the resultant concentrating effects of our users man's
    storage, use and reuse of the waters of the River system. Over-
    application of irrigation water by agriculture is a large contributor
    of salt to the Colorado River as irrigation water moves below the crop
    root zone, seeps through saline soils and then returns to the river
    system.
        The 1944 Mexico Treaty obligates the United States to provide 1.5
    million acre-feet of water to Mexico, but does not address quality.
    Mexico filed a formal protest in the 1960's when the salinity levels of
    water being delivered pursuant to the Treaty increased sharply. Several
    minutes, including Minute 242 to the Treaty, were negotiated to address
    the water quality concerns voiced by Mexico. Minute 242 requires the
    average annual salinity of the Colorado River water delivered to Mexico
    upstream of Mexico's principal diversion dam (Morelos Dam) can be no
    more than 115 parts per million (PPM), plus or minus 30 PPM higher than
    the average salinity of the water arriving at Imperial Dam, the
    lowermost point of major water diversion in the United States.
        The Environmental Protection Agency's interpretation of the 1972
    amendments to the Clean Water Act required the seven Basin States to
    adopt water quality standards for salinity levels in the Colorado
    River. In light of the EPA's regulation to require water quality
    standards for salinity in the Basin, the Governors of Arizona,
    California, Colorado, Nevada, New Mexico, Utah and Wyoming created the
    Colorado River Basin Salinity Control Forum as an interstate
    coordination mechanism in 1973. To address these international and
    regionally important salinity problems, the Congress enacted the
    Colorado River Basin Salinity Control Act of 1974. Title I addressed
    the United States' obligations to Mexico to control the River's
    salinity to ensure the United States' water deliveries to Mexico are
    within the specified salinity concentration range. Title II of the Act
    authorized control measures upstream of Imperial Dam and directed the
    Secretary of the Interior to construct several salinity control
    projects, most of which are located in Colorado, Utah, and Wyoming.
    Title II of the Act was again amended in 1995 and 2000 to direct the
    Bureau of Reclamation to conduct a basin-wide salinity control program.
    This program awards grants to non-Federal entities, on a competitive-
    bid basis, which initiate and carry out salinity control projects. The
    basin-wide program has demonstrated significantly improved cost-
    effectiveness, as computed on $1 per ton of salt basis, as compared to
    the prior Reclamation-initiated projects. The Forum was heavily
    involved in the development of the 1974 Act and its subsequent
    amendments, and continues to actively oversee the Federal agencies'
    salinity control program efforts.
        During the past 31 years, the seven State Colorado River Basin
    Salinity Control Forum has actively assisted the Federal agencies,
    including the Bureau of Reclamation, in implementing this unique and
    important program. At its October 2003 meeting, the Forum recommended
    that the Bureau of Reclamation seek to have appropriated and should
    expend for Colorado River Basin salinity control the sum of $17,500,000
    in fiscal year 2005. We strongly believe these efforts constitute one
    of the most successful Federal/State cooperative non-point source
    pollution control programs in the United States.
        The State of Wyoming greatly appreciates the subcommittee's support
    of the Colorado River Salinity Control Program in past years. We
    suggest this important basin-wide water quality improvement program
    merits continued funding and support by your subcommittee.
                With best regards,
                                       John W. Shields,
                                       Interstate Streams Engineer, for
                                       Patrick T. Tyrrell,
          Wyoming State Engineer, Wyoming Member, Colorado River Basin
                                                Salinity Control Forum.
                                     ______

                   Prepared Statement of the State of Wyoming

        I write to request your support for an appropriation in fiscal year
    2005 of $5,234,000 to the Bureau of Reclamation within the budget line
    item entitled ``Endangered Species Recovery Implementation Program''
    for the Upper Colorado Region. The President's recommended budget for
    fiscal year 2005 includes this line-item amount. The funding
    designation we seek is as follows: $4,008,000 for the Upper Colorado
    River Endangered Fish Recovery Program; $691,000 for the San Juan River
    Basin Recovery Implementation Program and $535,000 for Fish and
    Wildlife Management and Development.
        These highly successful, cooperative programs are ongoing
    partnerships among the States of Colorado, New Mexico, Utah and
    Wyoming, Indian tribes, Federal agencies and water, power and
    environmental interests. The programs' objectives are to recover
    endangered fish species while water development proceeds in compliance
    with the Endangered Species Act. The programs reflect a prudent
    approach to providing endangered species conservation and recovery
    within the framework of the 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 2005 appropriation will allow
    construction of fish passage structures at the Grand Valley Project and
    Price-Stubb diversion dams on the Colorado River near Grand Junction,
    Colorado. Fish passage will provide access to an additional 50 miles of
    historic habitat upstream of these dams. Floodplain restoration
    activities will continue at high-priority sites and is especially
    important for the survival of the razorback sucker species. Screening
    of existing diversion canals, needed to prevent endangered fish from
    being drawn out of the river and into canal and power plant intake
    structures, will proceed at the Redlands Water and Power Company and
    Bureau of Reclamation-constructed Grand Valley Project facilities. The
    requested funding for the San Juan River Recovery Program will be used
    for program management, propagation facilities, stocking efforts, non-
    native management efforts and construction of a fish screen in the
    Hogback Irrigation Project canal. Additional hatchery facilities,
    restoring floodplain habitat and fish passage, regulating and supplying
    instream habitat flows, installing diversion canal screens and
    controlling non-native fish populations are key components of the
    capital construction efforts ongoing in both programs.
        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,
    authorizes 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. 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. On
    behalf of the citizens of Wyoming, I thank you for that support and
    request the subcommittee's assistance for fiscal year 2005 funding to
    ensure the Bureau of Reclamation's continuing financial participation
    in these vitally important 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 2005 Energy and Water Development appropriations request by
    the U.S. Bureau of Reclamation, Lower Colorado Region.
        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.
    CAWCD was created in 1971 as the local governmental entity responsible
    for contracting with the United States to repay the reimbursable
    construction costs of the CAP and, subsequently to operate and maintain
    the completed 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, and represents
    roughly 80 percent of the water users and taxpayers of the State of
    Arizona. CAWCD is 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.
        Project repayment is provided for through a Master Repayment
    Contract between CAWCD and the United States. Project repayment began
    in 1994. To date, CAWCD has repaid $740 million of CAP construction
    costs to the United States.

                            CENTRAL ARIZONA PROJECT

        In its fiscal year 2005 budget request, Reclamation seeks
    $34,087,000 for the CAP. Of this amount, $21,358,000 is requested for
    the continuation of construction of water distribution systems for
    various Indian water users. CAWCD supports full funding for this
    important program.
        Reclamation is also requesting $1,849,000 to continue tendon
    repairs to the Centennial, Jackrabbit, and Hassayampa siphons.
    Completing the tendon repairs to these siphons is critical to the long
    term reliability of the CAP water delivery system; therefore, CAWCD
    strongly supports this appropriation request.
        An amount of $6,692,000 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.
    $1,951,000 and $28,000, respectively, are requested to complete
    environmental activities at Modified Roosevelt Dam and to complete a
    reservoir limnology follow-up study at Lake Pleasant. CAWCD supports
    these budget requests.
        Reclamation is requesting $959,000 to begin land acquisition and
    right-of-way activities, and to continue coordination and design
    elements for the water supply reliability features of the Tucson
    Reliability Division, also known as Tucson Terminal Storage. A
    stipulation that settles a 1995 lawsuit between CAWCD and Reclamation
    over CAP costs requires Reclamation to consult with CAWCD before
    proceeding with the development of these features because of their
    potential impact on CAWCD's repayment obligation for CAP. Reclamation
    has not consulted with CAWCD, the city of Tucson, or other Tucson area
    customers about these activities. Until such consultation occurs, CAWCD
    opposes any funding for land acquisition and right of way activities
    for the Tucson Reliability Division.

             COLORADO RIVER BASIN SALINITY CONTROL PROJECT--TITLE I

        In its fiscal year 2005 budget request, Reclamation is requesting
    $10,869,000 under the Colorado River Basin Salinity Control Project--
    Title I. This program supports maintenance 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, the YDP is not operational. 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 not accounted for as deliveries to Mexico under the 1944
    Mexican Treaty 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. The Colorado River system is
    now in its fifth consecutive year of below normal runoff, and water
    levels in Lake Powell and Lake Mead are at their lowest levels in over
    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 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 annual subcontract entitlement to CAP
    water.
        The House of Representatives Report accompanying the fiscal year
    1995 Energy and Water Development Appropriations bill directed
    Reclamation to maintain the YDP so as to be capable of operating at
    one-third capacity with a 1-year notice of funding. Conference Report
    108-357 that accompanied the fiscal year 2004 Energy and Water
    Development Appropriations Act directed the Bureau of Reclamation to
    expedite its modifications to the YDP to enable state of the art
    operation and to accelerate permitting and environmental compliance
    activities. A report to the House and Senate Committees on
    Appropriations was due within 180 days. Reclamation indicates that this
    report is currently being prepared.
        Reclamation's fiscal year 2005 budget justification documents again
    provide no indication that it has any intention of actually operating
    the YDP. The budget request for fiscal year 2005 is $381,000 less than
    Reclamation's fiscal year 2004 budget request. Of this amount, $781,000
    is requested for Title I research technology to ``. . . promote less
    expensive operation of the YDP and exploration of new technology to
    keep the YDP viable as a tool to address future water resource needs.''
    According to Reclamation's budget justification documents, research
    advancements have already realized a cumulative savings of $10,000,000
    in full plant operating expenses. This is an interesting statement in
    light of the fact that the plant is not being operated. It is also
    interesting to note that while Reclamation estimates $24 million per
    year would be needed to operate the plant, it is requesting about $10
    million in order not to operate it. The $781,000 should be redirected
    toward activities necessary to make the YDP operational.
        Reclamation is requesting $1,780,000 for continuing data gathering
    and analysis regarding the salinity of flows arriving at Imperial Dam
    and flows going into Mexico as well as work associated with minimizing
    Wellton-Mohawk drainage flows. Work also includes operation of sludge
    disposal equipment and activities required to purify feed water to the
    plant. CAWCD understands that most of this work is necessary, but not
    directly related to YDP operations. However, since the YDP is not
    operational, it is not clear what is being done for sludge disposal and
    feed water purification. If this is pretreatment for water treated at
    the research facility that is already included in the $781,000
    previously mentioned, then that portion of the $1,780,000 requested
    should be redirected to YDP rehabilitation.
        Reclamation is requesting $5,771,000 for continuing efforts to
    ensure the Yuma Desalting Plant can operate to meet Mexican Treaty
    requirements. This is $147,000 more than Reclamation's fiscal year 2004
    budget request for this same line item. Work includes long-term
    maintenance of Yuma Desalting Plant infrastructure and facilities,
    maintenance of sections of the Bypass Drain, Protective and Regulatory
    Pumping Unit and mitigation features. Reclamation's narrative does not
    provide enough information to determine how much of this total amount
    is needed for features other than YDP; however, past spending reports,
    prepared by Reclamation, indicate about 50 percent or $2.9 million
    might be available for necessary maintenance and rehabilitation to
    restore operational capability at YDP.
        Reclamation is requesting $483,000 to continue a long-term program
    to bank water and/or pursue short-term agricultural water right leases
    to offset the need to operate the plant. This is $2,759,000 less than
    Reclamation's fiscal year 2004 budget request for the same line item.
    There is no possibility for a program to bank water in 2005. Any plans
    for water right leases/land fallowing will require several million
    dollars. Reclamation also notes these funds would complete the
    permitting and environmental compliance process for YDP operations.
    CAWCD supports this request only to the extent needed to complete the
    actions, documentation and permits necessary to operate YDP.
        Reclamation has included a line item in its appropriations request
    for $2,054,000 for replacement of high pressure reverse osmosis pumps
    to correct corrosion problems and to continue to improve plant
    readiness and correct design deficiencies. CAWCD supports Reclamation's
    efforts to repair any design deficiencies. We encourage Reclamation to
    ensure that they have a comprehensive plan in place.
        Using the information provided in Reclamation's appropriation
    request, it appears that of the $10,869,000 requested about $6,735,000
    could be used for rehabilitation and modernization of the YDP with a
    goal of one-third operational capability by the end of 2006. That
    presumes Reclamation will spend $2 to $3 million of 2004 appropriations
    on such activities and that the budget will remain relatively level in
    2006.
        CAWCD requests that language be included in the fiscal year 2005
    Energy and Water Appropriations bill directing Reclamation to take the
    necessary steps to bring the Yuma Desalting Plant into operation at no
    less than one-third capacity by the end of fiscal year 2006. CAWCD
    believes Reclamation's budget is sufficient to accomplish this goal.

                      COLORADO FRONT WORK AND LEVEE SYSTEM

        Reclamation is requesting $3,647,000 for the Colorado River Front
    Work and Levee System. This project regulates, stabilizes, and
    maintains the river channel and includes the existing offstream storage
    feature, Senator Wash Dam. This budget request also includes continuing
    work to plan and design additional offstream storage on the All
    American Canal. CAWCD supports the budget request for these activities.

                ENDANGERED SPECIES CONSERVATION/RECOVERY PROJECT

        Reclamation is requesting $1,298,000 for its ongoing Endangered
    Species Conservation/Recovery Project. This program provides for the
    development and implementation of projects for the stewardship of
    endangered, threatened, proposed, and candidate species that are
    resident or migratory to habitats within the lower Colorado Region.
    These activities are complementary to the Lower Colorado River Multi-
    Species Conservation Program (MSCP). CAWCD supports this request.

                    LOWER COLORADO RIVER OPERATIONS PROGRAM

        In its fiscal year 2005 budget request, Reclamation seeks
    $15,322,000 for its Lower Colorado River Operations Program. This
    program provides for Reclamation to continue its activities as the
    ``water master'' on the lower Colorado River and provides Reclamation's
    funding for the lower Colorado River Multi-Species Conservation Program
    (MSCP). $2,018,000 is for administration of the Colorado River and
    $3,177,000 is for water contract administration and decree accounting.
    Under Fish and Wildlife Management and Development, $9,027,000 is
    requested, of which $6,234,000 is earmarked for the MSCP. It is
    anticipated that a similar amount will be contributed by non-Federal
    parties. In addition, $1,184,000 is requested for Southwestern Willow
    Flycatcher and Yuma Clapper Rail Protection, $1,199,000 is for
    Razorback and Bonytail Chub protection, $410,000 for riparian
    restoration and research, $150,000 for NEPA compliance activities.
        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 provide habitat for hundreds of threatened and endangered
    species and, at the same time, allow current water and power operations
    to continue.
        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. These are critical programs upon which lower Colorado River
    water and power users depend.
        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.
                                     ______

      Prepared Statement of the Colorado River Water Conservation District

        Chairman Domenici and Senator Reid, I am writing to request your
    support for an appropriation in fiscal year 2005 of $5,234,000 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 2005
    includes this line-item amount. Of these funds, I respectfully request
    the designation of $4,008,000 for the Upper Colorado River Endangered
    Fish Recovery Program; $691,000 for the San Juan River Basin Recovery
    Implementation Program and $535,000 for Fish and Wildlife Management
    and Development, consistent with the President's budget request. The
    requested fiscal year 2005 appropriation will allow construction of
    fish passage, floodplain restoration activities, screening of existing
    diversion canals, propagation facilities, endangered fish stocking, and
    non-native fish management.
        These funds are authorized by Public Law 106-392. Substantial non-
    Federal cost sharing funds are provided by the States of Colorado,
    Wyoming, Utah, and New Mexico, power users, and water users in support
    of these recovery programs. These programs are carried out consistent
    with State law and interstate water compacts.
        The past support and assistance of your subcommittee has greatly
    facilitated the success of these multi-State, multi-agency programs. I
    request the subcommittee's assistance relative to fiscal year 2005
    funding to ensure the Bureau of Reclamation's continuing financial
    participation in these vitally important programs.
                                     ______

     Prepared Statement of the Fort Peck Assiniboine and Sioux Tribes and
                            Dry Prairie Rural Water

                        FISCAL YEAR 2005 BUDGET REQUEST

        The Fort Peck Assiniboine and Sioux Tribes and Dry Prairie Rural
    Water respectfully request fiscal year 2005 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 $25,000,000, based on
    capability to spend the requested funds as set out below:

      FISCAL YEAR 2005 WORK PLAN--FORT PECK RESERVATION RURAL WATER SYSTEM
                              (PUBLIC LAW 106-382)
    ------------------------------------------------------------------------
                                                 Funding           Costs
    ------------------------------------------------------------------------
    Appropriations Requested...............     $25,000,000
    Estimated Rescission and Underfinancing      (2,545,000)
     @ 10.18%..............................
                                            -----------------
          Available Federal Funds..........      22,455,000
                                            =================
    Fort Peck Tribes:
        Federal Funds......................      15,911,000
        Work Plan:
            Design and Reclamation           ...............      $1,136,000
             Oversight.....................
            Missouri River Water Treat       ...............      14,775,000
             Plant.........................
                                                             ---------------
                                             ...............      15,911,000
                                                             ===============
    Dry Prairie:
        Federal Funds......................       6,544,000
        Non-Federal Funds..................       2,067,000
                                            -----------------
          Total............................       8,611,000
                                            =================
        Work Plan:
            Design and Reclamation           ...............         609,000
             Oversight.....................
            Complete Culbertson to Medicine  ...............         331,000
             Lake Pipeline.................
            Dane Valley and E. Med. Lake     ...............       7,671,000
             Pipelines.....................
                                                             ---------------
                                             ...............       8,611,000
    ------------------------------------------------------------------------

    The sponsor Tribes and Dry Prairie greatly appreciate the previous
    appropriations from the subcommittee that have permitted building the
    Missouri River intake, the critical water source, and the first phase
    of the Culbertson to Medicine Lake Pipeline Project.
        The request is less than the average annual appropriations needed
    to complete the project in fiscal year 2012, as provided by the
    authorizing legislation:

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

    ------------------------------------------------------------------------
    Total Federal Funds Authorized (October 2003 Dollars)...    $207,333,000
    Federal Funds Expended Through Fiscal Year 2004.........      $1,804,000
    Percent Complete........................................            0.87
    Amount Remaining........................................    $205,529,000
    Average Required for Fiscal Year 2012 Finish (Public Law     $25,691,000
     106-382)...............................................
    ------------------------------------------------------------------------

                              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 in
    October 27, 2000. The request for fiscal year 2005 will continue the
    construction of the Missouri River water treatment plant, which will
    require fiscal year 2006 funds in the estimated amount of $5 million
    for completion. The request will also complete the Culbertson to
    Medicine Lake Project, which was initiated in fiscal year 2003, and
    advance the construction of the Dane Valley/Bainville/East Medicine
    Lake Projects.
        The project also has the capability beyond the amount requested,
    based on current status of design, to build the first portion of the
    pipeline leaving the water treatment plant at a cost of $10 million.
    The pipeline 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 responsible
    non-Tribal oil company. 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 2005 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 2005 will also provide the capability to connect Bainville, Dane
    Valley and East Medicine Lake residents. The latter 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 as approved by the Bureau of Reclamation.

                         PROJECT STATUS AND COMPLETION

        The Final Engineering Report (FER), water conservation plan and
    Finding of No Significant Impact were completed in fiscal year 2002.
    Congressional review of the project ended in August 2003, and
    construction began immediately. The Missouri River intake and the
    Culbertson to Medicine Lake pipeline projects are under construction
    and are scheduled for completion in October 2004.
        Design of the water treatment plant is now well advanced. The
    design of the lagoons at the water treatment plant and the site
    landscaping will be completed in third-quarter fiscal year 2004, and
    construction of these preliminary facilities will begin in late fiscal
    year 2004. The main facility will begin construction in fiscal year
    2005 at a cost of $20 million.
        Design of the Poplar to Big Muddy pipeline is well advanced and can
    be completed to utilize first quarter fiscal year 2005 funds, but the
    appropriation requirements to undertake this pipeline construction in
    combination with the water treatment plant are 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 2006 or fiscal year 2007. The discussion of
    this pipeline is intended to demonstrate the capability of the project
    to use funds prior to fiscal year 2007 if funding were available.
        Similarly, the design of the branch pipelines that will serve rural
    residents between Culbertson and Medicine Lake is well ahead of
    funding. There is more capability to use funds than will be available
    in either fiscal year 2004 or fiscal year 2005.
        The project master plan is provided for review on the following
    page.

                             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 expected development of meaningful
    water 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 authorizations and appropriations
    necessary for 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 previously designated as an
    ``Enterprise Community'', underscoring the level of poverty and need
    for economic development in the region. The success of 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 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 2005

        The administration's budget for fiscal year 2005 was severe
    disappointment. It was the only authorized project in the rural water
    category with construction underway that did not receive funding. Other
    projects authorized at the same time in both the rural water and water
    and related resources categories, of similar nature to this project,
    were generously funded. Of greatest concern now is the need for
    Reclamation to justify the zero funding amount. In all previous
    meetings with the Commissioner and his representatives and with OMB, no
    concerns with the project were raised other than the concerns raised
    with all projects that the Federal Budget is too constrained, non-
    Indians should bear a greater cost share and other priorities, such as
    homeland security, are more demanding of Federal funds. OMB
    specifically stated in our favor that the project had provided more
    support and justification of its benefits and costs than most Corps of
    Engineers and the Bureau of Reclamation projects prior to
    authorization. Under the circumstances, there is considerable concern
    on our part that previously undisclosed issues will be generated in
    support of the absence of a budget request.
        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, and all 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. Bureau of Reclamation reviewed in
    writing all of these items thoroughly and formally 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 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 is well
    supported by the Bureau of Reclamation planners. Congress authorized
    the project with a plan formulated in full cooperation and
    collaboration with the Bureau of Reclamation, and major project
    features are under construction.
                                     ______

         Prepared Statement of the Colorado River Energy Distributors
                                  Association

        The Colorado River Energy Distributors Association (CREDA)
    appreciates the opportunity to submit its views on funding for specific
    programs of the Bureau of Reclamation and the Western Area Power
    Administration in the fiscal year 2005 Energy and Water Development
    appropriations bill. We look forward to working with you and the
    subcommittee on these issues of importance to electric consumers in the
    Colorado River Basin States. The first issue is a request for Federal
    funds to pay for costs of increased security at Federal multi-purpose
    dams. The Bureau of Reclamation has requested $43 million for dams
    under its jurisdiction for fiscal year 2005. CREDA is attempting to
    determine whether this represents the total amount that will be spent
    by the Bureau for increased security in fiscal year 2005 or not. The
    second issue is a request for $10,000,000 of additional funds for the
    Western Area Power Administration of the Department of Energy relating
    to the Animas-La Plata project.
        CREDA is a non-profit, regional organization representing consumer-
    owned municipal and rural electric cooperatives, political
    subdivisions, irrigation and electrical districts and tribal utility
    authorities that purchase hydropower resources from the Colorado River
    Storage Project (CRSP). CRSP is a multi-purpose Federal project that
    provides flood control; water storage for irrigation, municipal and
    industrial purposes; recreation and environmental mitigation, in
    addition to the generation of electricity. CREDA was established in
    1978, and serves as the ``voice'' of CRSP contractor members in dealing
    with resource availability and affordability issues. CREDA represents
    its members in dealing with the Bureau--as the owner and operator of
    the CRSP--and the Western Area Power Administration--as the marketing
    agency of the CRSP.
        CREDA members serve nearly 3 million electric consumers in the six
    western States of Arizona, Colorado, Nevada, New Mexico, Utah and
    Wyoming. CREDA's member utilities purchase more than 85 percent of the
    power produced by the CRSP. In addition, several Indian tribes have
    joined CREDA as affiliate members prior to receiving allocations of
    CRSP power on October 1, 2004.
        With regard to the President's proposed fiscal year 2005 budget
    request, CREDA has two primary concerns:

            NON-REIMBURSABILITY OF POST-9/11 SECURITY COST INCREASES

        Federal multipurpose projects across the country provide millions
    of citizens with a multitude of benefits, including flood control,
    municipal, rural, and industrial water supply, navigation, recreation,
    and, of course, hydropower. Providing adequate security for these
    multi-purpose, federally owned facilities is important to all U.S.
    citizens. In the aftermath of the attacks on September 11, 2001,
    Federal agencies involved in the Federal power program (the U.S. Bureau
    of Reclamation, the U.S. Army Corps of Engineers, and the Federal Power
    Marketing Administrations) have determined that significant increases
    in security are needed, and will continue for years to come.
        Adequately protecting and securing national assets, such as the
    Federal multi-purpose dams, comes with a price tag. In 1941 and 1942,
    Congress treated increased security costs before and after Pearl Harbor
    as non-reimbursable (e.g., as costs to be borne by the Federal
    Government and financed through appropriations, rather than reimbursed
    by hydropower customers) because of the obvious national security
    interest at stake and the benefits these projects offer to all
    Americans. Thus far, Congress has agreed with this historical
    precedent, as evidenced by Senate Appropriations report language for
    fiscal year 2003 and fiscal year 2004, which stated that funds made
    available to respond to the September 11, 2001, terrorist attacks shall
    be non-reimbursable and indicates these costs ``are recurring'' (S.
    Rept. 107-220 and S. Rept. 108-105). House report language for fiscal
    year 2003 also supported this view (H. Rept. 107-681).
        The Bureau of Reclamation received $28.4 million in the fiscal year
    2003 Energy and Water Appropriations bill and an additional $25 million
    in the 2003 Supplemental Appropriations bill to cover increased costs
    to protect Reclamation dams and other facilities post September 11. The
    Bureau also received $28.5 million for increased security costs in the
    fiscal year 2004 Energy and Water bill that was signed into law in
    December 2003. The Bureau of Reclamation recognized the above
    historical precedent and the sound policy behind it and, in fiscal year
    2003 and 2004, administratively determined that additional security
    costs should be non-reimbursable (Bureau of Reclamation Commissioner
    Keys, April 2002). The Corps of Engineers did not, treating additional
    security investments at Corps facilities as reimbursable.
        Due to budget constraints and pressures to control costs from the
    Office of Management and Budget (OMB), the President's fiscal year 2005
    budget directs the Bureau and the Corps to recover some of the costs of
    increased security measures from entities that benefit from the multi-
    purpose projects. Given our past experience with the Bureau and the
    Corps, we believe that power customers will be unfairly singled out to
    pay the reimbursable costs.
        The reasons that security costs at Federal dams should continue to
    be non-reimbursable are: (1) these facilities are Federal and multi-
    purpose in nature, and the benefits accrue to a vast number of citizens
    in many States; (2) protection of these Federal facilities is clearly
    in the national interest and should remain a Federal responsibility;
    and (3) by taking this funding stream out of the appropriations
    process, congressional oversight of Reclamation's use of the funds
    would be greatly diminished, thereby reducing accountability for the
    type and expense of the security measures imposed.
        CREDA urges the committee to include the following statutory
    language in the fiscal year 2005 Water and Energy Development
    Appropriations bill, to clarify that the additional costs of securing
    facilities of the Bureau of Reclamation, the Corps of Engineers and the
    Federal power marketing administrations are a Federal responsibility
    and should be non-reimbursable:

        ``For fiscal year 2005 and each fiscal year thereafter, the
    increased costs of ensuring security of Bureau of Reclamation dams,
    federal power marketing administration facilities and Corps of
    Engineers multipurpose facilities in the aftermath of the events of
    September 11, 2001, shall be non-reimbursable and non-returnable.''

                            ANIMAS-LA PLATA PROJECT

        The Colorado Ute Settlement Act Amendments of 2000 (Title III,
    Section 301(b)(10), Public Law 106-554, December 21, 2000) authorized
    development of the Animas-La Plata Project to satisfy water right
    claims of the Southern Ute and Ute Mountain Ute Tribes in southwest
    Colorado (known collectively as the ``Colorado Ute Indian Tribes'').
    The project requires construction of a reservoir, pumping plant and
    appurtenant facilities to provide water supply and delivery of
    municipal and industrial water and other benefits to the Tribes.
        In order to provide power from the CRSP to the Durango Pumping
    Plant, transmission facilities will need to be constructed, operated
    and maintained by the Western Area Power Administration. These
    transmission facilities do not provide any benefit to CRSP power
    customers; they are required solely to deliver water to project
    beneficiaries.
        The Western Area Power Administration will be responsible for
    construction, operation and maintenance of these transmission
    facilities, and requires additional appropriations in the amount of
    $10,000,000 in fiscal year 2005 to meet the construction timetable
    established by the U.S. Bureau of Reclamation, the project manager.
    Since the transmission lines will power the pumping plant required for
    delivery of water to Native American and non-Native American municipal
    and industrial users, the costs related to the transmission facilities
    and services should not be borne by the CRSP power customers and should
    be considered non-reimbursable and nonreturnable. To do otherwise could
    turn 102 years of Reclamation law on its head. Failure to address this
    issue in the fiscal year 2005 appropriations cycle could jeopardize the
    current construction schedule for the Animas-La Plata project and
    subject CRSP power customers and the consumers they serve to an unfair
    financial burden.
        The Western Area Power Administration, the Bureau of Reclamation,
    the Colorado River Energy Distributors Association, the water users and
    the Colorado Ute Indian Tribes all support the inclusion of the
    following language in the fiscal year 2005 Energy and Water Development
    Appropriations bill:

        ``For carrying out the functions authorized by title III, section
    302(a)(1)(E) of the Act of August 4, 1977 (42 U.S.C. 7152), and other
    related activities including conservation and renewable resources
    programs as authorized, including official reception and representation
    expenses in an amount not to exceed $1,500, $183,100,000 to remain
    available until expended, of which $170,756,000 shall be derived from
    the Department of the Interior Reclamation Fund: Provided, That all
    authorities and future contributions described in Section 402,
    subparagraph (b)(3)(B) of the Reclamation Projects Authorization and
    Adjustment Act of 1992 previously assigned to the Secretary of Energy,
    Western Area Power Administration, shall be transferred to the
    Secretary of the Interior, Bureau of Reclamation: Provided further,
    That of the amount herein appropriated, $10,000,000 shall be available
    until expended on a nonreimbursable basis to the Western Area Power
    Administration to design, construct, operate and maintain transmission
    facilities and services for the Animas-La Plata Project as authorized
    by sections 301(b)(10) of Public Law 106-554.''
                                     ______

                  Prepared Statement of the Mni Wiconi Project

                  FISCAL YEAR 2005 CONSTRUCTION BUDGET REQUEST

        The Mni Wiconi Project beneficiaries (as listed below) respectfully
    request appropriations and can demonstrate capability for construction
    in fiscal year 2005 in the amount of $39,317,000 as follows:

    ------------------------------------------------------------------------
                                                                  Amount
    ------------------------------------------------------------------------
    Oglala Sioux Rural Water Supply System:
        Core Facilities (Pipelines and Pumping Stations)....      $8,128,000
        Distribution System on Pine Ridge...................      10,224,000
    West River/Lyman-Jones Rural Water System...............      11,020,000
    Rosebud Sioux Rural Water System........................       7,325,000
    Lower Brule Sioux Rural Water System....................       2,620,000
                                                             ---------------
          Total Mni Wiconi Project..........................      39,317,000
    ------------------------------------------------------------------------

        The project sponsors were provided by the 107th Congress (Public
    Law 107-367) with all the authority necessary to finish this project at
    the level of development originally intended on a schedule through
    fiscal year 2008. Completion of the project is now clearly achievable
    as shown in the table below:

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

    ------------------------------------------------------------------------
    Total Federal Required (October 2003 Dollars)...........    $409,523,000
    Estimated Federal Spent Through Fiscal Year 2004........    $278,110,000
    Percent Spent...........................................            67.9
    Amount Remaining........................................    $131,413,000
    Years to Completion.....................................               4
    Average Required for Fiscal Year 2008 Finish............     $32,853,000
    ------------------------------------------------------------------------

        The administration's budget for this project in fiscal year 2005
    ($18.2 million for construction) is a disappointment for a second year
    in a row. The amount requested by the administration falls far short of
    the average amount needed to complete the project in fiscal year 2008.
    The needs and merits of this project are considerable as described in
    section 3.
        The project's operation, maintenance and replacement request from
    the sponsors is in addition to the construction request and is
    presented in section 8.

     OSRWSS CORE PIPELINE TO REACH PINE RIDGE INDIAN RESERVATION IN FISCAL
                                   YEAR 2005

                  OGLALA SIOUX WATER SUPPLY SYSTEM CORE REQUEST
    ------------------------------------------------------------------------
                                                                  Amount
    ------------------------------------------------------------------------
    South Core:
        Stamford to Kadoka:
            Reservoir to Kadoka Pipeline....................      $1,036,000
            Pump Station, 2 Reservoirs......................       2,111,000
        Kadoka to White River Pipeline......................       2,587,000
    North Core:
        WTP toward Hayes Pipeline...........................       2,394,000
                                                             ---------------
          Total.............................................       8,128,000
    ------------------------------------------------------------------------

        The Pine Ridge Indian Reservation and parts of West River/Lyman-
    Jones remain without points of interconnection to the OSRWSS core. The
    requested funding level for the OSRWSS core of $8.128 million will
    complete the project from Stamford to the northeast corner of the Pine
    Ridge Indian Reservation where, in combination with the western part of
    West River/Lyman-Jones, the remaining 50 percent of the design
    population resides. Funds will also be used by the Oglala Sioux Tribe
    to build the North Core westerly toward Hayes in the West River Lyman
    Jones service area with the intent to complete the OSRWSS North Core
    and all other core facilities in fiscal year 2007. Two additional years
    of funding will be required to complete the OSRWSS North Core system to
    serve the Reservation.
        The 2000 census confirms that the Oglala Sioux population on Pine
    Ridge is growing at a rate of 27 percent per decade or 1\1/2\ times
    greater than projected from the 1990 census. Delivery of Missouri River
    water to this area is urgently needed.
        All proposed OSRWSS construction activity will build pipelines that
    will provide Missouri River water immediately to beneficiaries. In many
    cases, construction of interconnecting pipelines by other sponsors is
    ongoing, and fiscal year 2005 funds are required to complete projects
    that will connect with the OSRWSS core and begin others.
        Funding for OSRWSS core and distribution facilities is necessary to
    bring economic development to the Pine Ridge Indian Reservation,
    designated as one of five national rural empowerment zones by the
    previous administration. The designation serves to underscore the level
    of need. Economic development is largely dependent on the timely
    completion of a water system, which depends on appropriations for this
    project.
        Finally, the subcommittee is respectfully requested to take notice
    of the fact that fiscal year 2005 will significantly advance
    construction of facilities that continues our progress toward the end
    of the project. The subcommittee's past support has brought the project
    to the point that the end can be seen. Key to the conclusion of the
    project in fiscal year 2008 is the completion of the OSRWSS core to the
    Pine Ridge Indian Reservation. Toward this end, funds are included in
    the fiscal year 2005 budget to build the connecting pipelines between
    the northeast corner of the Pine Ridge Indian Reservation and the
    central portion of the Reservation near Kyle. Rosebud is similarly
    engaged in the construction of major connecting pipelines that will
    deliver water southerly to the central portions of the Rosebud Indian
    Reservation and to service areas for West River/Lyman-Jones.

                          UNIQUE NEEDS OF THIS PROJECT

        This project covers much of the area of western South Dakota that
    was formerly the Great Sioux Reservation established by the Treaty of
    1868. Since the separation of the Reservation in 1889 into smaller more
    isolated reservations, including Pine Ridge, Rosebud and Lower Brule,
    tensions between the Indian population and the non-Indian settlers on
    former Great Sioux lands have been high with little easing by
    successive generations. The Mni Wiconi Project is perhaps the most
    significant opportunity in more than a century to bring the sharply
    diverse cultures of the two societies together for a common good. Much
    progress has been made due to the good faith and genuine efforts of
    both the Indian and non-Indian sponsors. The project is an historic
    basis for renewed hope and dignity among the Indian people. It is a
    basis for substantive improvement in relationships.
        Each year our testimony addresses the fact that the project
    beneficiaries, particularly the three Indian Reservations, have the
    lowest income levels in the Nation. The health risks to our people from
    drinking unsafe water are compounded by reductions in health programs.
    We respectfully submit that our project is unique and that no other
    project in the Nation has greater human needs. Poverty in our service
    areas is consistently deeper than elsewhere in the Nation. Health
    effects of water-borne diseases are consistently more prevalent than
    elsewhere in the Nation, due in part to (1) lack of adequate water in
    the home and (2) poor water quality where water is available. Higher
    incidences of impetigo, gastroenteritis, shigellosis, scabies and
    hepatitis-A are well documented on the Indian reservations of the Mni
    Wiconi Project area. At the beginning of the third millennium one
    cannot find a region in our Nation in which social and economic
    conditions are as deplorable. These circumstances are summarized in
    Table 1. Mni Wiconi builds the dignity of many, not only through
    improvement of drinking water, but also through direct employment and
    increased earnings during planning, construction, operation and
    maintenance and from economic enterprises supplied with project water.
    We urge the subcommittee to address the need for creating jobs and
    improving the quality of life on the Pine Ridge and other Indian
    reservations of the project area.
        Employment and earnings among the Indian people of the project area
    are expected to positively impact the high costs of health care borne
    by the United States and the Tribes. Our data suggest clear
    relationships between income levels and Federal costs for heart
    disease, cancer and diabetes. During the life of the Mni Wiconi
    Project, mortality rates among the Indian people in the project area
    for the three diseases mentioned will cost the United States and the
    Tribes more than $1 billion beyond the level incurred for these
    diseases among comparable populations in the non-Indian community
    within the project area. While this project alone will not raise income
    levels to a point where the excessive rates of heart disease, cancer
    and diabetes are significantly diminished, the employment and earnings
    stemming from the project will, nevertheless, reduce mortality rates
    and costs of these diseases. Please note that between 1990 and 2000 per
    capita income on Pine Ridge increased from $3,591 to $6,143, and median
    household income increased from $11,260 to $20,569, due in large part
    to this project, albeit not sufficient to bring a larger percentage of
    families out of poverty (Table 1).

                              TABLE 1.--PROFILE OF SELECTED ECONOMIC CHARACTERISTICS: 2000
    ----------------------------------------------------------------------------------------------------------------
                                                                              Income
                                                              Change  ----------------------  Families
           Indian Reservation/State              2000       from 1990     Per       Median     Below    Unemployment
                                              Population    (Percent)    Capita   Household   Poverty     (Percent)
                                                                       (Dollars)  (Dollars)  (Percent)
    ----------------------------------------------------------------------------------------------------------------
    Pine Ridge Indian Reservation.........          15,521     27.07       6,143     20,569      46.3         16.9
    Rosebud Indian Reservation............          10,469      7.97       7,279     19,046      45.9         20.1
    Lower Brule Indian Reservation........           1,353     20.48       7,020     21,146      45.3         28.1
    State of South Dakota.................         754,844      8.45      17,562     35,282       9.3          3.0
    Nation................................     281,421,906     13.15      21,587     41,994       9.2          3.7
    ----------------------------------------------------------------------------------------------------------------

        Financial support for the Indian membership has already been
    subjected to drastic cuts in funding programs through the Bureau of
    Indian Affairs. This project is a source of strong hope that helps off-
    set the loss of employment and income in other programs and provide for
    an improvement in health and welfare. Tribal leaders have seen that
    Welfare Reform legislation and other budget cuts Nation-wide have
    created a crisis for tribal government because tribal members have
    moved back to the reservations in order to survive. Economic conditions
    have resulted in accelerated population growth on the reservations.
        The Mni Wiconi Project Act declares that the United States will
    work with us under the circumstances:

        ``. . . the United States has a trust responsibility to ensure that
    adequate and safe water supplies are available to meet the economic,
    environmental, water supply and public health needs of the Pine Ridge,
    Rosebud and Lower Brule Indian Reservations . . .''.

        Indian support for this project has not come easily because the
    historical experience of broken commitments to the Indian people by the
    Federal Government is difficult to overcome. The argument was that
    there is no reason to trust and that the Sioux Tribes are being used to
    build the non-Indian segments of the project and the Indian segments
    would linger to completion. These arguments have been overcome by
    better planning, an amended authorization and hard fought agreements
    among the parties. The subcommittee is respectfully requested to take
    the steps necessary the complete the critical elements of the project
    proposed for fiscal year 2004.
        The following sections describe the construction activity in each
    of the rural water systems.

              OGLALA SIOUX RURAL WATER SUPPLY SYSTEM--DISTRIBUTION

              OGLALA SIOUX WATER SUPPLY SYSTEM DISTRIBUTION REQUEST
    ------------------------------------------------------------------------
                                                                  Amount
    ------------------------------------------------------------------------
    West Boundary Supply....................................        $506,000
    Manderson Loop..........................................       1,454,000
    Rockyford to Redshirt...................................         179,000
    White River to HWY 73/44 Junction:
        Pump Station, Service Lines and Reservoirs..........       3,127,000
    HWY 73/44 Junction to Kyle..............................       4,923,000
    Indefinite quantities...................................          35,000
                                                             ---------------
          TOTAL.............................................      10,224,000
    ------------------------------------------------------------------------

        With the conclusion of projects under construction in fiscal year
    2002, the Oglala Sioux Tribe completed all facilities that can be
    supported from local groundwater. The Tribe, representing more than 40
    percent of the project population will rely on the OSRWSS core to
    convey Missouri River water to and throughout the Reservation. Much
    pipeline has been constructed, primarily between Kyle, Wounded Knee and
    Red Shirt and between Pine Ridge Village and the communities of Oglala
    and Slim Buttes. Additional construction of the Manderson Loop is
    proposed in fiscal year 2005.
        Of particular importance to the Oglala Sioux Tribe is the
    continuation of the main transmission system from the northeast corner
    (Highway 73/44 junction) of the Reservation to Kyle in the central part
    of the Reservation. The transmission line is needed to interconnect the
    OSRWSS core system with the distribution system within the Reservation
    in order to deliver Missouri River water to the populous portions of
    the Reservation. This critical segment of the project can be continued
    in fiscal year 2005 to coincide with the westward construction of the
    OSRWSS core to the northeast corner of the Reservation (see section 2).
    It will require funds in fiscal year 2006 and fiscal year 2007 to
    complete. This component of the Oglala system has been deferred for
    several years due to inadequate funding. The component is urgently
    needed for the OSRWSS core system to be utilized on the Pine Ridge
    Indian Reservation.

            WEST RIVER/LYMAN-JONES RURAL WATER SYSTEM--DISTRIBUTION

                  WR/LJ RURAL WATER SYSTEM DISTRIBUTION REQUEST
    ------------------------------------------------------------------------
                                                                  Amount
    ------------------------------------------------------------------------
    Mellette East...........................................        $533,000
    Moenville...............................................       9,566,000
    Quinn Town Distribution.................................         176,000
    Vivian Town.............................................         441,000
    Indefinite Quantities...................................         304,000
                                                             ---------------
          Total.............................................      11,020,000
    ------------------------------------------------------------------------

        Continued drought conditions in the project area have created
    serious health and economic hardships for WR/LJ members waiting to
    receive Mni Wiconi water service. A survey of members attending the WR/
    LJ annual meeting on October 8, 2003 in Midland revealed that, of those
    members not receiving project water, 67 percent were hauling water for
    domestic use and 45 percent were hauling water for livestock. Their
    current source of water, highly mineralized wells and dried up dams,
    present a serious health hazard and unaffordable increases in
    production costs due to the time and cost of hauling water.
        The requested appropriation is directed to serving members between
    Ft. Pierre and Philip. The highest priority is completion of the
    Moenville project. Houston Rose, prior to his death, pioneered initial
    efforts to bring quality water to this WR/LJ service area closest to
    the Mni Wiconi water treatment plant. The economy of the area he
    represented is based on livestock operations that are dependent on
    quality water supplies.
        WR/LJ is now the water service provider in the towns of Quinn and
    Vivian, however, the existing distribution piping is over 50 years old
    and is a very high priority for replacement. Funding is also requested
    for the construction of pumping station and reservoirs required to
    deliver the full design capability of the pipelines under construction.
    As a testimony to public recognition of the advantages of quality water
    and the reliability of the system WR/LJ continues to add users within
    those areas previously constructed. These additions are being financed
    by member contributions as part of the statutory non-Federal matching
    requirement.
        The Mni Wiconi project, due to continued congressional support, has
    progressed to where the project beneficiaries can look forward to its
    timely completion and receive the intended project benefits. We
    sincerely appreciate your support.

                ROSEBUD RURAL WATER SYSTEM (SICANGU MNI WICONI)

                    ROSEBUD SIOUX RURAL WATER SYSTEM REQUEST
    ------------------------------------------------------------------------
                                                                  Amount
    ------------------------------------------------------------------------
    Hidden Timber...........................................      $1,317,000
    Rosebud Improvements....................................         737,000
    Rural Antelope..........................................         866,000
    Okreek..................................................       2,030,000
    Mission Northwest.......................................         447,000
    Livestock Water.........................................       1,271,000
    Service Connections.....................................         657,000
                                                             ---------------
          Total.............................................       7,325,000
    ------------------------------------------------------------------------

        Fiscal year 2005 efforts build upon the successes of the past 2
    years. The Rosebud Core pipeline will begin providing water from the
    OSRWSS at Murdo to Rosebud and WR/LJ water users in Mellette County. As
    a result, the limited supply of high quality ground water available
    from the Rosebud wellfield can be used as a source of supply for
    northeast Todd County.
        The Rosebud Sioux Tribes efforts in fiscal year 2005 focus on
    connecting additional homes to new and existing pipelines. The Antelope
    to Okreek Pipeline, completed in late 2003, provides a supply of high
    quality ground water to the rural Antelope, northwest Mission, Hidden
    Timber and Okreek project areas. In this portion of northern Todd
    County, the Ogallala Aquifer is not present and ground water is of poor
    quality and limited quantity where available. Private and community
    wells have failed in the area and while the Antelope to Okreek Pipeline
    solved the problem for the community of Okreek, many rural residents
    are anxiously waiting for water.
        The problems are exacerbated in the Hidden Timber area. Where
    ground water occurs, nitrate concentrations are frequently in excess of
    the Safe Drinking Water Act primary standard. The high nitrate
    concentrations pose an acute threat to the unborn and young children.
        The major features of the proposed fiscal year 2005 work plan focus
    on distribution and service lines for this area. Proposed projects for
    this area include Rural Antelope, Mission Northwest, Okreek and Hidden
    Timber. It is envisioned that both private contractors and the tribal
    construction program would be responsible for construction.
        The other major project proposed for fiscal year 2005 address
    improvements needed in the community of Rosebud. In fiscal year 2004,
    the Tribe will be connecting the lower older part of Rosebud to the
    rural water system. While this will improve the quality and reliability
    of supply, improvements are needed to ensure water reaches the users.
    In several areas, older cast iron pipe has corroded and needs to be
    replaced. In other areas, older asbestos concrete pipe is still in use
    and felt to be a health threat. The focus of the work in Rosebud in
    fiscal year 2005 is to provide a reliable source of high quality water
    to all service connections.
        The Tribe will also expand its service line program. The focus of
    this effort is new homes and homes that have been constructed since
    transmission or distribution lines have been installed. It is also
    proposed to start developing livestock watering facilities. The Tribe
    has not constructed any of these facilities to date with Mni Wiconi
    funding and the realty of prolonged drought is having an affect on
    historic livestock watering sources of supply. A reliable source of
    water for livestock is necessary to maintain one of the more viable
    components of the reservation economy.
        The total amount requested for the Sicangu Mni Wiconi in fiscal
    year 2005 is $7,325,000.

                  LOWER BRULE RURAL WATER SYSTEM--DISTRIBUTION

        The Lower Brule Rural Water System (LBRWS) has gained the support
    of the other sponsors to complete its share of the project with funds
    appropriated in fiscal year 2005 budget, based on an appropriation of
    funds for the project in the range generally received. This support is
    not only a benefit for LBRWS and its users but to the project as a
    whole. By funding LBRWS in this manner, a savings of approximately $1.5
    million will be experienced by the project.
        With the funds received in fiscal year 2004, LBRWS will complete
    the design, cultural resource evaluation and the securing of easements
    for the remaining service areas and installing mainlines and service
    lines required to provide water to all of the homes on the Lower Brule
    Indian Reservation. The fiscal year 2004 funds will also allow LBRWS to
    begin installing water lines to pasture taps. Since the area has
    experienced 2 years of drought conditions, many of the dams are dry.
    The provision of water will allow some pastures to be utilized that
    would have otherwise been of no benefit to the ranchers.
        The fiscal year 2005 funds will allow the completion of the
    installation of pasture taps and a new 400,000 gallon elevated water
    tank in Lower Brule. The existing tank is in a location where the
    slides (soil movement) have occurred. As a result, the stability of the
    tank's foundation is in question.

                 OPERATION, MAINTENANCE AND REPLACEMENT BUDGET

        The sponsors have and will continue to work with Reclamation to
    ensure that their budgets are adequate to properly operate, maintain
    and replace (OMR) their respective portions of the overall system. The
    sponsors will also continue to manage OMR expenses in a manner ensuring
    that the limited funds can best be balanced between construction and
    OMR. In fiscal year 2003, the approved budget for OMR was $8.228
    million, which was adequate. Funding was not adequate in fiscal year
    2004 at the $6.254 level and will not be adequate at the same leveling
    the administration's proposed fiscal year 2005 budget of $6.254 million
    for OMR.
        The project has been making significant progress especially over
    the last 2 years with the initiation of operation of the OSRWSS Water
    Treatment Plant near Ft. Pierre and the installation of a significant
    quantity of pipeline. The result is the need for sufficient funds to
    properly operate and maintain the functioning system throughout the
    project. As a result, the OMR budget must continue to be adequate to
    keep pace with the portion of the system that is placed in operation.
        In addition to ongoing operation and maintenance activities, water
    conservation is an integral part of the OMR of the project. Water
    conservation not only provides immediate savings from reduced water use
    and production, it also extends the useful life and capacity of the
    system. Proposed funding is not adequate to perform water conservation
    functions.
                                     ______

            Prepared Statement of the Redlands Water & Power Company

        Chairman Domenici and Senator Reid, I am writing to request your
    support for an appropriation in fiscal year 2005 of $5,234,000 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 2005
    includes this line-item amount. Of these funds, I respectfully request
    the designation of $4,008,000 for the Upper Colorado River Endangered
    Fish Recovery Program; $691,000 for the San Juan River Basin Recovery
    Implementation Program and $535,000 for Fish and Wildlife Management
    and Development, consistent with the President's budget request. The
    requested fiscal year 2005 appropriation will allow construction of
    fish passage, floodplain restoration activities, screening of existing
    diversion canals, propagation facilities, endangered fish stocking, and
    non-native fish management.
        These funds are authorized by Public Law 106-392. Substantial non-
    Federal cost sharing funds are provided by the States of Colorado,
    Wyoming, Utah, and New Mexico, power users, and water users in support
    of these recovery programs. These programs are carried out consistent
    with State law and interstate water compacts.
        The past support and assistance of your subcommittee has greatly
    facilitated the success of these multi-State, multi-agency programs. I
    request the subcommittee's assistance relative to fiscal year 2005
    funding to ensure the Bureau of Reclamation's continuing financial
    participation in these vitally important programs.
                                     ______

             Prepared Statement of the Red River Valley Association

        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.
        The Resolutions contained herein were adopted by the Association
    during its 79th Annual Meeting in Bossier City, Louisiana on February
    19, 2004, and represent the combined concerns of the citizens of the
    Red River Basin Area as they pertain to the goals of the Association.
        Our western rivers played a very important part in the development
    and economic success of the States west of the Mississippi River. An
    agency responsible for the development of those water resources has
    been the Bureau of Reclamation. In our four State region they have been
    most active in Oklahoma.
        I would like to comment on two specific requests for the future
    economic well being of the citizens residing in the Red River Valley
    region in Oklahoma. We support the following two studies and request
    that the Bureau of Reclamation be funded at their full fiscal year 2005
    capability.
        North Fork of the Red River, OK, Investigation Study.--The W.C.
    Austin (Altus Lake and Dam) Project in southwestern Oklahoma, is
    authorized to provide water for irrigation to approximately 48,000
    acres of privately owned land in southwestern Oklahoma; control
    flooding on the North Fork of the Red River and augment municipal water
    supply for the City of Altus. Secondary benefits include fish and
    wildlife conservation and recreation opportunities. Project features
    include Altus Dam, four canals, a 221-mile lateral distribution system
    and 26 miles of drains. The Lugert-Altus Irrigation District (LAID) is
    responsible for operation and maintenance of the project.
        Water demand in the District and region is growing which, in turn,
    is reducing future water availability and economic development
    opportunities. This proposed investigation would: (1) develop a
    hydrologic model of the NFRR watershed; and (2) evaluate opportunities
    for augmenting water availability in the project region.
        We support a 3-year comprehensive evaluation of water resources in
    the North Fork of the Red River in Oklahoma for a total study cost of
    $670,000. We sincerely appreciate your support in allocating $150,000
    in the fiscal year 2004 appropriations.
        An allocation of $150,000 is requested for the fiscal year 2005
    appropriations.
        Arbucle-Simpson Aquifer Study.--The Arbuckle-Simpson Aquifer has
    been designated a sole source aquifer by EPA and a large number of
    Oklahomans depend on its protection for their health and economic
    future. This is an important source of water supply for: the citizens
    of Ada, Sulphur, Mill Creek and Roff; the Chickasaw National
    Recreational Area; Chickasaw and Choctaw Tribal members; and many
    farmers and ranchers owning land overlying the basin. Contributions
    from the aquifer also provide the perennial flow for many streams and
    natural springs in the area. The Arbuckle-Simpson Aquifer underlines
    approximately 500 square miles of south-central Oklahoma.
        During recent years, a number of issues have emerged which have
    caused concerns about the utilization and continued health of the
    aquifer. These concerns include issues over water use, exportation of
    water out of the area, impacts of groundwater development on the flows
    in the significant springs and rivers, and competition for water and
    water quality.
        In order to assure the future well-being of the aquifer we support
    a 5-year study to include detailed assessments of; the formation's
    hydrogeology, water quality and vulnerability; groundwater-surface
    water interactions; land use changes and related impacts; Tribal-State
    water rights; and overall management of the resources. The initial
    estimates put the total study cost at $2.7 million; however, due to its
    complexity and new issues concerning Chickasaw and Choctaw Tribal
    interest, a better cost estimate will be known after the second year of
    the study. We appreciate your support of this study by funding the
    first year of the study in the fiscal year 2004 appropriations for
    $700,000.
        We request $1,000,000 be appropriated for fiscal year 2005 and
    support that the study be cost shared, 90 percent Federal and 10
    percent State/Local funds.
        The Red River Valley Association understands these are difficult
    times with our Nation's budget, so we appreciate your support for these
    studies in fiscal year 2004. We feel they are extremely important to
    the welfare of the citizens in Oklahoma and request that you again
    support these studies in fiscal year 2005.
        We are always available to provide additional information and
    answer whatever questions you may have.
                                     ______

          Prepared Statement of the Santa Clara Valley Water District

            CALFED BAY-DELTA PROGRAM, SANTA CLARA COUNTY, CALIFORNIA

        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 2004 Funding.--An amount of $9 million was appropriated
    for CALFED activities under the various units of the Central Valley
    Project in fiscal year 2004.
        Fiscal Year 2005 Funding Recommendation.--It is requested that the
    committee support an appropriation add-on of $15 million, in addition
    to the $15 million in the administration's fiscal year 2005 budget, for
    a total of $30 million for California Bay-Delta Restoration.

                SAN LUIS RESERVOIR LOW POINT IMPROVEMENT PROJECT

        Background.--San Luis Reservoir is one of the largest reservoirs in
    California, and is the largest ``off-stream'' water storage facility in
    the world. The Reservoir has a water storage capacity of more than 2
    million acre-feet and is a key component of the water supply system
    serving the Federal Central Valley Project (CVP) and California's State
    Water Project. San Luis is used for seasonal storage of Sacramento-San
    Joaquin delta water that is delivered to the reservoir via the
    California Aqueduct and Delta-Mendota Canal. The San Luis Reservoir is
    jointly owned and operated by the U.S. Bureau of Reclamation and the
    California Department of Water Resources.
        The San Luis Reservoir provides the sole source of CVP water supply
    for the San Felipe Division contractors--Santa Clara Valley Water
    District (District), San Benito County Water District and, in the
    future, Pajaro Valley Water Management Agency. When water levels in San
    Luis Reservoir are drawn down in the spring and summer, high water
    temperatures result in algae blooms at the reservoir's water surface.
    This condition degrades water quality, making the water difficult or
    impractical to treat and can preclude deliveries of water from San Luis
    Reservoir to San Felipe Division contractors. In order to avoid the low
    point problem, the reservoir has been operated to maintain water levels
    above the critical low elevation--the ``low point''--resulting in
    approximately 200,000 acre-feet of undelivered water to south of the
    Delta State and Federal water users. The frequency of the low point
    problem will increase in the future as delta pumping becomes more
    restricted and demands grow for full allocation and use of all of the
    water in San Luis Reservoir.
        Project Goals and Status.--The goal of the project is to increase
    the operational flexibility of storage in San Luis Reservoir and ensure
    a high quality, reliable water supply for San Felipe Division
    contractors. The specific project objectives are to:
      --Increase the operational flexibility of San Luis Reservoir by
            increasing the effective storage.
      --Ensure that San Felipe Division contractors are able to manage
            their annual Central Valley Project contract allocation to meet
            their water supply and water quality commitments.
      --Provide opportunities for project-related environmental
            improvements.
      --Provide opportunities for other project-related improvements.
    From the Public Scoping meetings held in August 2002 and working with a
    Stakeholder Committee and Regulatory Agencies, the District identified
    approximately 75 conceptual solutions to the low point problem. From
    these, the District has narrowed down the list of conceptual solutions
    to seven feasible alternatives to be studied in the environmental
    review process.
        Fiscal Year 2004 Funding.--No appropriation was requested in fiscal
    year 2004.
        Fiscal Year 2005 Funding Recommendation.--It is requested that the
    committee support authority for the U.S. Bureau of Reclamation to
    conduct feasibility studies of the San Luis Reservoir low point problem
    and an appropriation add-on of $5.5 million.

      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. Summertime
    2003 deliveries averaged 10 million gallons per day of recycled water.
    The system now serves over 450 customers and delivers over 7,000 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 $26.5 million of the $35 million
    authorization.
        Fiscal Year 2004 Funding.--An amount of $3 million was appropriated
    in fiscal year 2004 for project construction.
        Fiscal Year 2005 Funding Recommendation.--It is requested that the
    congressional committee support an appropriation add-on of $3 million
    in fiscal year 2005 budget to fund the work.
                                     ______

       Prepared Statement of the Southwestern Water Conservation District

        Chairman Domenici and Senator Reid, the Southwestern Water
    Conservation District (the ``District'') is a political subdivision of
    the State of Colorado formed by the Colorado legislature in 1937 under
    C.R.S. 37-47-101, et seq. The District is charged with conserving and
    developing the waters of the San Juan and Dolores Rivers, tributaries
    to the Colorado River.
        On behalf of the District, we are writing to request your support
    for an appropriation in fiscal year 2005 of $5,234,000 included as an
    item in the administration's proposed budget for the Bureau of
    Reclamation (``Reclamation'') labeled ``Endangered Species Recovery
    Programs and Activities for the Upper Colorado River Region''. Of that
    amount, $691,000 is designated for construction activities under the
    San Juan River Basin Recovery Implementation Program (``San Juan
    Program'') and $4,008,000, is designated for similar construction
    activities under the Recovery Implementation Program for Endangered
    Fish Species in the Upper Colorado River Basin (``Upper Basin
    Program''). In addition, $535,000 is designated for Fish and Wildlife
    Management and Development, consistent with the President's budget
    request. The requested fiscal year 2005 appropriation will allow
    construction of endangered fish passages, floodplain restoration
    activities, screening of existing diversion canals, endangered fish
    propagation facilities, endangered fish stocking, and non-native fish
    management.
        These cooperative programs involving the States of Colorado, New
    Mexico, Utah and Wyoming, four Indian tribes, Federal agencies and
    water, power and environmental interests are ongoing in the Upper
    Colorado River and San Juan River Basins and have as their objective
    recovering endangered fish species while water development proceeds in
    compliance with the Endangered Species Act, State water law, and inter-
    State water compacts.
        The San Juan Program is supported by the States of Colorado and New
    Mexico, the Southern Ute Indian, Jicarrilla Apache and Ute Mountain Ute
    Tribes and the Navajo Nation, water development interests, Reclamation,
    the Bureau of Indian Affairs, the Bureau of Land Management, and the
    U.S. Fish and Wildlife Service (``FWS''). The Program provides
    Endangered Species Act compliance for new depletions and for 600,000
    acre-feet of existing depletions in Colorado and New Mexico, including
    the Animas-La Plata and the San Juan-Chama Projects, which are to
    provide water as part of tribal reserved water rights settlements. In
    addition, the Program provided the ESA compliance for a 121,000 acre-
    foot/year depletion to complete the Navajo Indian Irrigation Project.
        In fiscal year 2005, the San Juan Program will continue substantial
    recovery activities that include habitat restoration, endangered fish
    propagation, and the development of fish passage structures in the San
    Juan River to expand the available habitat for the endangered fish.
        The Upper Basin Program is supported by the States of Colorado,
    Utah and Wyoming, environmental organizations, power users, water
    development interests, Reclamation, the FWS, and the Western Area Power
    Administration. This Recovery Program, now in its fifteenth year of
    operation, has the objective of cooperatively recovering four
    endangered fish in compliance with the Endangered Species Act while
    water development moves forward. Beginning in fiscal year 1994, the
    Upper Basin Program initiated specific studies and actions in
    preparation for the construction activities necessary to recover the
    endangered fish.
        The fiscal year 2005 funds for both Programs will enable their
    vital activities to continue and to be successfully completed in
    subsequent fiscal years. The past support and assistance of your
    subcommittee has greatly facilitated the success of these multi-State,
    multi-agency programs. We request the subcommittee's assistance
    relative to fiscal year 2005 funding to ensure the Bureau of
    Reclamation's continuing financial participation in these vitally
    important programs.
                                     ______

       Prepared Statement of the Southeastern Colorado Water Conservancy
                                    District

        Chairman Domenici and Senator Reid, I am writing to request your
    support for an appropriation in fiscal year 2005 of $5,234,000 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 2005
    includes this line-item amount. Of these funds, I respectfully request
    the designation of $4,008,000 for the Upper Colorado River Endangered
    Fish Recovery Program; $691,000 for the San Juan River Basin Recovery
    Implementation Program and $535,000 for Fish and Wildlife Management
    and Development, consistent with the President's budget request. The
    requested fiscal year 2005 appropriation will allow construction of
    fish passage, floodplain restoration activities, screening of existing
    diversion canals, propagation facilities, endangered fish stocking, and
    non-native fish management.
        These funds are authorized by Public Law 106-392. Substantial non-
    Federal cost sharing funds are provided by the States of Colorado,
    Wyoming, Utah, and New Mexico, power users, and water users in support
    of these recovery programs. These programs are carried out consistent
    with State law and inter-State water compacts.
        The past support and assistance of your subcommittee has greatly
    facilitated the success of these multi-State, multi-agency programs. I
    request the subcommittee's assistance relative to fiscal year 2005
    funding to ensure the Bureau of Reclamation's continuing financial
    participation in these vitally important programs.
                                     ______

       Prepared Statement of the Upper Gunnison River Water Conservancy
                                    District

        Chairman Domenici and Senator Reid, I am writing to request your
    support for an appropriation in fiscal year 2005 of $5,234,000 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 2005
    includes this line-item amount. Of these funds, I respectfully request
    the designation of $4,008,000 for the Upper Colorado River Endangered
    Fish Recovery Program; $691,000 for the San Juan River Basin Recovery
    Implementation Program and $535,000 for Fish and Wildlife Management
    and Development, consistent with the President's budget request. The
    requested fiscal year 2005 appropriation will allow construction of
    fish passage, floodplain restoration activities, screening of existing
    diversion canals, propagation facilities, endangered fish stocking, and
    non-native fish management.
        These funds are authorized by Public Law 106-392. Substantial non-
    Federal cost sharing funds are provided by the States of Colorado,
    Wyoming, Utah, and New Mexico, power users, and water users in support
    of these recovery programs. These programs are carried out consistent
    with State law and interstate water compacts.
        The past support and assistance of your subcommittee has greatly
    facilitated the success of these multi-State, multi-agency programs. I
    request the subcommittee's assistance relative to fiscal year 2005
    funding to ensure the Bureau of Reclamation's continuing financial
    participation in these vitally important programs.
                                     ______

               Prepared Statement of the Colorado River Congress

        Chairman Domenici and Senator Reid, I am writing to request your
    support for an appropriation in fiscal year 2005 of $5,234,000 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 2005
    includes this line-item amount. Of these funds, I respectfully request
    the designation of $4,008,000 for the Upper Colorado River Endangered
    Fish Recovery Program; $691,000 for the San Juan River Basin Recovery
    Implementation Program and $535,000 for Fish and Wildlife Management
    and Development, consistent with the President's budget request. The
    requested fiscal year 2005 appropriation will allow construction of
    fish passage, floodplain restoration activities, screening of existing
    diversion canals, propagation facilities, endangered fish stocking, and
    non-native fish management.
        These funds are authorized by Public Law 106-392. Substantial non-
    Federal cost sharing funds are provided by the States of Colorado,
    Wyoming, Utah, and New Mexico, power users, and water users in support
    of these recovery programs. These programs are carried out consistent
    with State law and interstate water compacts.
        The past support and assistance of your subcommittee has greatly
    facilitated the success of these multi-State, multi-agency programs. I
    request the subcommittee's assistance relative to fiscal year 2005
    funding to ensure the Bureau of Reclamation's continuing financial
    participation in these vitally important programs.
                                     ______

                       Prepared Statement of Denver Water

        Chairman Domenici and Senator Reid, I am writing to request your
    support for an appropriation in fiscal year 2005 of $5,234,000 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 2005
    includes this line-item amount. Of these funds, I respectfully request
    the designation of $4,008,000 for the Upper Colorado River Endangered
    Fish Recovery Program; $691,000 for the San Juan River Basin Recovery
    Implementation Program and $535,000 for Fish and Wildlife Management
    and Development, consistent with the President's budget request. The
    requested fiscal year 2005 appropriation will allow construction of
    fish passage, floodplain restoration activities, screening of existing
    diversion canals, propagation facilities, endangered fish stocking, and
    non-native fish management.
        These funds are authorized by Public Law 106-392. Substantial non-
    Federal cost sharing funds are provided by the States of Colorado,
    Wyoming, Utah, and New Mexico, power users, and water users in support
    of these recovery programs. These programs are carried out consistent
    with State law and interstate water compacts.
        The past support and assistance of your subcommittee has greatly
    facilitated the success of these multi-State, multi-agency programs. I
    request the subcommittee's assistance relative to fiscal year 2005
    funding to ensure the Bureau of Reclamation's continuing financial
    participation in these vitally important programs.
                                     ______

                              DEPARTMENT OF ENERGY

       Prepared Statement of the Health Physics Society (HPS) and Health
                 Physics Program Directors Organization (HPPDO)

        This written testimony for the record for fiscal year 2005 requests
    $500,000 for the Health Physics Graduate Fellowship program through the
    Department of Energy's Office of Nuclear Energy, Science and Technology
    (DOE-NE) to help address the shortage of Health Physicists, which is an
    issue of extreme importance to the safety of our Nation's workers,
    members of the public, and our environment.
        The Department of Energy has recognized that 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. The
    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), are very
    pleased that DOE-NE brought this crisis to the attention of the
    committee and has committed to take action to address it. In his
    testimony to the committee on March 3, 2004, William D. Magwood, IV,
    Director of the Office of Nuclear Energy, Science and Technology,
    stated, ``The Department is concerned that the Nation may soon not have
    the trained health physicists who are needed to assure the safety of
    all nuclear and radiological activities. With this budget, we begin
    building a program to reverse the negative trends in this field as we
    have already done in nuclear engineering.''
        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. In Senate
    Report 108-105, the committee also recognized the need to support
    health physics academic programs as part of this effort when it wrote,
    ``The Committee recommendation strongly encourages the Department to
    request sufficient funding in future years to fund all meritorious
    proposals, including appropriate proposals to support health physics
    university programs.''
        We applaud DOE's response to the committee's encouragement by
    including, in the words of Director Magwood, ``. . . a small but
    important element to provide scholarships and graduate fellowships to
    students studying the vital and too-often overlooked discipline of
    health physics'' and we are appreciative of having the $200,000 in the
    President's proposed budget applied to health physics programs.
        However, the HPS and HPPDO believe that in order to meet the supply
    needs of health physicists funding for the health physics programs
    should be at least $500,000 in order to build a program to reverse the
    negative trend.
        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, projecting a shortage of over 100 health physicists by 2011.
    The number of health physics program graduates in 2001 was one-half the
    number in 1996. A matter of great concern is that the NEI study does
    not address the impact that the lack of sufficient qualified radiation
    safety professionals will have on our Nation's health and homeland
    security programs. For example, the homeland security effort to provide
    training and radiation detection instruments to first responders, to
    establish guidelines for responding to a radiological terrorist event,
    to develop and deploy measures for the interdiction of radioactive
    materials beyond our borders, and to employ nuclear and radiation
    technology in screening for contraband materials requires health
    physics professionals. A recent survey conducted by the Health Physics
    Society indicates that present demand for radiation safety
    professionals is approximately 130 percent of supply. The NEI study
    projects a growth in that number to 400 percent by 2011 in the nuclear
    industry alone.
        We submitted testimony to the committee last year that requested
    approximately $2 million in fiscal year 2005 and included a plan we
    felt would stem the decline of health physics university academic
    programs, and would assist in the public's understanding of radiation
    safety as it is applied to the Nation's energy, health, and security
    policies. That plan included academic program support for HP Graduate
    Fellowship Programs, HP Undergraduate Scholarship Programs, Health
    Physics Education & Research (HPER) Grants, and HP Minority-Majority
    Partnerships. It also included Health Physics Society program support
    for academic program ABET-ASAC Accreditation and HPS Science Teacher
    Workshops. We are realistic about the pressures of this year's budget
    and realize all six of these of these programs cannot be supported this
    fiscal year.
        We consider it important program to address immediately the HP
    Graduate Fellowship program. We need between 15 and 20 fellows in a 2-
    year Masters Degree program to start meeting our Nation's manpower
    needs for radiation safety personnel. A single fellowship would be
    about $30,000 annually, considering stipend, tuition and fees. Funding
    of $500,000 would allow for approximately 15 fellows and allowance for
    overhead administration costs. Funding at the administration's budget
    request of $200,000 would support approximately 6 fellows, less than
    half of the minimum need.
        The committee's favorable consideration of this request will help
    meet our Nation's radiation safety needs of the future.
                                     ______

               Prepared Statement of the American Nuclear Society

        Mr. Chairman and members of the subcommittee, on behalf of the
    American Nuclear Society, I would like to express our concern regarding
    recent changes in the direction of U.S. fusion research. In a letter
    exchange with Dr. John Lindl of the Lawrence Livermore National
    Laboratory, Dr. Raymond Orbach, the Director of the DOE Office of
    Science stated the current administration position: ``now is not the
    right time for us to invest in energy related R&D for fusion, for
    either MFE (magnetic fusion energy) or for IFE (inertial fusion
    energy)''. This position has been reflected in the Office of Fusion
    Energy Science fiscal year 2005 budget request in which the so-called
    ``long-range'' fusion technology research activities have been
    terminated. DOE has also been reducing its efforts on the advanced
    design of fusion energy systems. The total funding cut in these areas
    is about $9 million from the fiscal year 2003 level.
        With these changes, U.S. magnetic fusion energy research will
    become effectively a plasma physics research program while inertial
    fusion energy research will become a high-energy-density physics
    program. As the eliminated programs represent less than 5 percent of
    fusion research expenditures, their elimination is based mainly on
    policy grounds (as opposed to cost saving reasons).
        It is difficult to understand this decision to terminate the fusion
    technology program given the support for fusion energy research at the
    highest administration levels,\1\ the plan for the United States to
    join construction of the ITER device which is the highest priority
    facility listed in DOE Office of Science's Strategic Plan,\2\ and the
    continuing construction of the National Ignition Facility (NIF).
    ---------------------------------------------------------------------------
        \1\ See for example President Bush's February 2003 statement at
    http://www.whitehouse.gov/news/releases/2003/02/20030206-12.html:
        ``We're also going to work to produce electricity and hydrogen
    through a process called fusion. Fusion is the same kind of nuclear
    reaction that produces--that powers the sun. The energy produced will
    be safe and clean and abundant. We've spent quite a bit of money, as
    the senators here will tell you, on whether or not fusion works. And
    we're not sure if it will be able to produce affordable energy for
    everyday use. But it's worth a try. It's worth a look. Because the
    promise is so great.
        ``So the United States will work with Great Britain and several
    European nations, as well as Canada, Japan, Russia and China, to build
    a fusion test facility and create the largest and most advanced fusion
    experiment in the world. I look forward to working with Congress to get
    it funded. I know you all have considered this in the past. It's an
    incredibly important project to be a part of.
        ``Imagine a world in which our cars are driven by hydrogen and our
    homes are heated by electricity from a fusion power plant. It'll be a
    totally different world than what we're used to . . .''.
        See also Secretary Abraham's January 2003 statement (at http://
    fire.pppl.gov/) specifically stating that: ``It is imperative that we
    maintain and enhance our strong domestic research program . . .
    Critical science needs to be done in the U.S., in parallel with ITER,
    to strengthen our competitive position in fusion technology.''
        Also, the U.S. Department of Energy (DOE) Office of Science 2004
    Strategic Plan states: ``The President has made achieving commercial
    fusion power the highest long-term priority for our Nation. Our
    challenge is to develop a science-based solution that harnesses fusion
    energy to power our industry and homes. We will do this by joining an
    international burning plasma experiment, ITER, and exploring other
    promising technologies.''
        \2\ See http://wwwofe.er.doe.gov/Sub/Mission/Mission_Strategic.htm.
    ---------------------------------------------------------------------------
        It would seem prudent to maintain some balance in the program
    between science and technology and between MFE and IFE. This is
    reflected in several statements from the Fusion Energy Science Advisory
    Committee (FESAC, which provides advice and recommendations to the DOE
    Office of Science Director) in regard then to the fiscal year 2004
    budget. At that time, DOE had proposed to terminate the fusion
    technology effort in fiscal year 2004 but a Congressional add-on and a
    strongly-worded letter from FESAC \3\ helped to provide a reprieve. The
    fiscal year 2005 budget request includes the same fusion technology
    funding cuts which, as part of the fiscal year 2004 budget, were
    criticized by FESAC in 2003.
    ---------------------------------------------------------------------------
        \3\ In a March 5, 2003 letter to Dr. Orbach, the FESAC said, ``. .
    . devastating cuts to certain program elements are alarming; this note
    expresses our most serious concerns,'' and commented, ``Thus, FESAC is
    puzzled by the elimination in the fiscal year 2004 budget of funding
    for fusion technology.'' The FESAC said, ``Similarly, inertial fusion
    energy (IFE) is an important element of a balanced U.S. fusion program:
    it provides the principal alternative to magnetic fusion and takes
    advantage of NNSA investments in the National Ignition Facility. The
    fiscal year 2004 budget, however, eliminates (fusion) chamber
    technology for both MFE (magnetic fusion energy) and IFE.'' With
    respect to the Advanced Design and Analysis program, the FESAC said,
    ``The study of future energy systems is a central component of fusion
    research. Its evolving conceptualization of an eventual fusion power
    plant has helped us visualize our target, while allowing us to identify
    key scientific challenges.'' ``In summary,'' the 2003 FESAC letter
    said, ``FESAC finds the Presidential request for fusion research
    funding in fiscal year 2004 to be not only meager but also harmfully
    distorted. It terminates components of the program that are truly
    essential.'' (see http://www.ofes.fusion.doe.gov/More_HTML/
    FESAC_Charges_Reports-
    .html).
    ---------------------------------------------------------------------------
        Fusion technology research addresses the fundamental scientific
    issues that will be encountered in fusion systems with substantial
    amount of fusion energy (including such fusion facilities as ITER and
    NIF). It provides solutions to near term technology issues that will
    certainly arise in building and operating facilities like the NIF and
    ITER. The advanced design and analysis of fusion energy systems provide
    a vision of the ultimate fusion energy goal and a tool that is useful
    for guiding the highest leverage near term scientific research.
        Other participants in ITER, in particular the E.U. and Japan, have
    strong programs in fusion technology R&D in preparation for testing in
    ITER and leading to a power reactor in the future. It would be
    regretful at this stage for the United States to pull out of this R&D
    area and to be left in the precarious position of having to catch-up
    with our international partners in the future once we decide to
    seriously develop the advanced technology required for attractive
    fusion power plants (of either MFE or IFE types).
        I hope that this subcommittee will share our concern about this
    apparent disconnect between the administration fusion energy goals and
    this recent fusion energy funding policy change as well as about the
    increasing gap in fusion technology expenditure and expertise between
    the United States and its international partners. We strongly recommend
    additional funding to the Department of Energy, Office of Science,
    Fusion Energy Sciences fiscal year 2005 budget, with at least $5
    million specifically allocated to restoring the funding in the Fusion
    Technologies and Advanced Design categories. We also recommend a strong
    accompanying statement of support from the subcommittee on these
    activities.
                                     ______

         Prepared Statement of the Coalition of Northeastern Governors

        Dear Mr. Chairman, the Coalition of Northeastern Governors (CONEG)
    is pleased to provide this testimony for the record to the Senate
    Appropriations Subcommittee on Energy and Water Development as it
    considers fiscal year 2005 funding for the Office of Energy Efficiency
    and Renewable Energy (EERE) of the U.S. Department of Energy (DOE).
    While we recognize the many demands being placed upon Federal resources
    in the coming year, we urge the subcommittee to provide the increased
    Federal funding support for renewable energy programs, particularly the
    national and regional partnerships that advance research, development,
    demonstration and deployment of renewable energy technologies. The
    Governors appreciate the subcommittee's previous support for one of
    these partnerships, the Regional Biomass Energy Program (RBEP), and the
    decision of the EERE to continue this valuable Federal-State-private
    partnership for bioenergy. We request the subcommittee to fund the
    EERE's renewable programs at a level that will enable DOE to continue
    its support of the RBEP program at $5 million in fiscal year 2005.
        Renewable energy plays an increasingly vital role in a strategy to
    meet the country's near and longer-term energy needs. It is an
    important component of the diverse mix of fuels essential for a
    reliable energy supply. Today, biomass provides a larger percentage of
    the Nation's total energy mix than do hydroelectric sources; and it is
    responsible for more energy output than all other renewable
    technologies combined. Ethanol and electricity generation from biomass
    feedstocks contribute over 3 percent of the Nation's energy
    consumption. In the Northeast, bioenergy produced from the region's
    forest and agricultural resources contributes to approximately 5
    percent of the region's energy consumption. Some of the most promising
    technologies which can meet renewable energy needs in the near-term and
    lessen the Nation's dependence on fossil fuels use biomass.
        While the CONEG Governors recognize Federal support for bioenergy
    can take many forms, we specifically support a level of funding for the
    EERE's renewable energy programs that will enable the DOE to continue
    its support of the Regional Biomass Energy Program and its effective
    network of regional host organizations at a level of $5 million in
    fiscal year 2005. This RBEP network is an important partner in the
    Federal Government's multi-faceted initiatives to encourage a diverse
    energy resource mix and energy efficiency across the country. Funding
    for the RBEP program will allow this valuable Federal-State-private
    sector initiative to continue--without interruption--the pioneering
    regional projects and technical assistance networks which help bring
    bioenergy into regional energy markets across the Nation.
        The revitalized RBEP encompasses all 50 States in five regional
    programs. It is an important tool in the Nation's effort to realize the
    opportunities which bioenergy offers for energy production, economic
    development and sound environmental management. The regional program is
    uniquely situated to target program resources to the specific biomass
    opportunities of each part of the country. Through a blend of projects
    and technical assistance networks, the RBEP identifies opportunities
    for and helps reduce barriers to the commercialization of biomass
    technologies; promotes coordinated State and Federal public policies in
    support of bioenergy; and educates consumers on the opportunities and
    benefits of biomass energy.
        The RBEP's success is closely tied to its use of State-based
    regional organizations to administer and coordinate program resources
    and activities. These organizations, with their direct ties to elected
    and appointed State decision-makers and agencies, are uniquely able to
    leverage Federal, State and private sector resources and cooperation
    across State and Federal agencies, among various States, and between
    the public and private sector. These organizations have:
      --the ability to gain governors' and State legislators' attention and
            commitment to bioenergy;
      --the capacity to leverage resources and cooperation for
            collaborative policy and technical projects from private
            companies and multiple State and Federal agencies--
            transportation, environmental protection, public utility
            commission, and agriculture;
      --the capability to move quickly to address emerging issues; and
      --the ability to offer staff with extensive biomass program
            management experience.
        The CONEG Policy Research Center is pleased to be part of the
    Northeast Regional Biomass Program (NRBP) and its work to advance
    renewable biomass energy, the region's most abundant resource. From
    Maine to Maryland, the NRBP encompasses a wide range of activities that
    cover all biomass resources and technologies. The NRBP makes possible
    State-level working groups that promote public-private partnerships for
    biomass development, and it helps promote policies that support
    renewable biomass. It encourages demonstrations of leading edge
    technologies, and conducts public education and outreach that helps
    condition the marketplace for new bioenergy technologies and biobased
    products. A major strength of the NRBP is its ability to link biomass
    development to other public policy goals, such as creating new economic
    opportunities, preserving agricultural or forest lands for current use,
    and reducing air and water pollution. As Renewable Portfolio Standard
    programs have and continue to be promulgated in the Northeast States,
    biomass power has recently begun to be a focus of new and significant
    project development. The contributions of the NRBP program over the
    years has played, and will continue to play, an essential role in
    stimulating and facilitating this market development through its
    working groups, extensive networking, and leadership of its regional
    coordinator.
        Congressional funding for EERE's renewable energy programs at a
    level in fiscal year 2005 that will permit $5 million for the RBEP will
    allow these partnerships, with their administration by proven host
    agency organizations, to strengthen the established bioenergy networks
    that transfer experience and coordinate activities within a State,
    throughout a region and across the Nation.
        We thank the subcommittee for this opportunity to share the views
    of the Coalition of Northeastern Governors, and we stand ready to
    provide you with any additional information on the importance of the
    Regional Biomass Energy Program and the Northeast Regional Biomass
    Program to the Northeast and the rest of the Nation, as well as the
    vital role biomass can play in meeting the Nation's energy needs.
                                     ______

             Prepared Statement of Bob Lawrence & Associates, Inc.

                     COST/BENEFITS OF GEOTHERMAL ENERGY R&D

        Mr. Chairman and members of the subcommittee, my name is Dr. L.R.
    (Bob) Lawrence, Jr., and I am President of Bob Lawrence & Associates,
    Inc., a consulting firm in Alexandria, Virginia. I, and my firm, have
    been working with the Department of Energy's Geothermal program since
    1990, and during the past 14 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 $30 million for the
    program for fiscal year 2005, the same level that was appropriated for
    fiscal year 2003, of which, $6 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 $30
    million annually to accelerate increased geothermal use for energy
    purposes. The fiscal year 2004 appropriation of $25.5 million was,
    unfortunately, a step backward, causing cuts in numerous, high quality,
    ongoing programs.
        At $30 million, it gives the Geothermal program the chance to move
    forward with industry on several fronts. At the $30 million level,
    strong programs, heavily cost shared with industry, 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 $30 million, the Geothermal program
    will be the lowest funded of all Renewables, even though the program
    returns the most revenue to the government and 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;
      --uses over $500 million worth of steel structures;
      --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 to $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 to 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 fourth 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 and should be expanded to $6 million for fiscal
    year 2005.
        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 projects 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. $30 million is required for fiscal year 2004.
                                     ______

             Prepared Statement of Bob Lawrence & Associates, Inc.

        REQUIRED REPLACEMENT OF THE TOPOCK-DAVIS-MEAD TRANSMISSION LINE

        Mr. Chairman and members of the subcommittee, my name is Bob
    Lawrence, and I am President of Bob Lawrence & Associates, Inc., a
    consulting firm in Alexandria, VA. Our company is involved in a variety
    of high technology subjects largely related to the Energy sector.
        I am here, today, to request an appropriation of $20 million for
    fiscal year 2005 for replacement of the Topock-Davis-Mead transmission
    line with Aluminum Matrix Composite Conductor (AMC). The Topock-Davis-
    Mead line runs along the Colorado River on the Western boundary of
    Arizona and serves the electricity needs of the communities there
    including Havasu City (pop. 50,000), Bullhead City (33,769), Mohave
    Valley (13,694), Needles, CA (5193) and the Mohave Indian Tribe. It is
    the primary load server for this region. The line also provides needed
    service to Kingman, AZ (22,092) and Blythe, CA (21,376). The line is
    operating with all of its capacity allocated. The $20 million requested
    would be the first of two increments for a total of $35 million to
    replace this line with AMC conductor. Studies accomplished by WAPA and
    others show that to double the capacity of this transmission corridor
    would cost $10 million to $17 million more with conventional
    technologies than it would using the AMC conductor option. A simple
    line for line replacement, using the AMC option, will increase the
    capacity by well over a factor of 3, and some studies indicate a factor
    of 8.
        WAPA ratepayers presently pay about $80 million more to the
    government than WAPA receives in appropriations on an annual basis. If
    WAPA were a private utility, these funds would be available to upgrade
    their system. In the WAPA case, the ``surplus'' goes back to the
    Federal treasury. Yet, the WAPA budget request to Congress contains
    only $12 million for ``construction'' which is woefully inadequate to
    maintain their system with needed upgrades. Therefore, it is requested
    that the funding to pay for the upgrading of this line come from the
    annual ``surplus,'' and be designated ``non-reimbursable.''
        The service area for this line is one of the hottest regions of the
    United States. Without air conditioning, individuals of fragile health
    in the region could be at considerable risk. The region served by
    Topock-Davis-Mead is populated largely by retirees, causing a greater
    than normal percentage of elderly in the population. These are the
    people that could be particularly, negatively affected by a
    transmission shutdown, causing a loss of electrical service, and air
    conditioning, during peak summer temperatures. The situation is now
    approaching critical.
        The region is experiencing load growth, as much as 10 percent per
    year in some areas. The Parker-Davis dam system is operating at full
    capacity, and all of the generated power is being delivered through the
    transmission system. There is no capability for additional transmitted
    power in the immediate region above what is presently demanded.
        WAPA is legislatively responsible for ``system reliability,'' but
    is not required to provide for load growth beyond the generation of the
    Parker-Davis dam system.
        The Topock-Davis-Mead line, when running at peak capacity, is
    thermally limited and limited by the sag. If additional power is
    transmitted, the line would sag beyond the safe limits established by
    national electrical safety code standards. It was excessive sag in a
    transmission line that triggered the blackout event of August 14, 2003,
    in the Northeast and Midwest. It is essential that this be avoided in
    this WAPA DSR transmission trunk.
        The conventional solution to this problem would be to construct a
    new transmission line in the area, requiring new right-of-way, new
    towers, and new lines. The transmission path is in an archeologically
    significant and environmentally sensitive area, which makes new right-
    of-way an unattractive option.
        The Department of Energy has been evolving this potential solution
    at the request of Congress. Since 1998, DOE has been developing and
    testing the Aluminum Matrix Composite Conductor (AMC), also called
    Aluminum Conductor Composite Reinforced (ACCR). This is a high capacity
    transmission line conductor that could provide very substantial
    capacity increases by simply replacing the old technology lines with
    the new, AMC/ACCR option. Field testing of this option, now underway,
    has met all needed utility specifications. AMC/ACCR is in operational
    service in Hawaii, North Dakota, Minnesota and Arizona. AMC/ACCR is now
    available for commercial sale and application.
        The use of this new technology on the Topock-Davis-Mead line would
    offer key benefits including:
      --Ensure delivery of power to the citizens of the surrounding
            communities.
      --Improve the reliability of the region by addressing a known
            problem.
      --Elimination of a bottleneck resulting in an 8-fold increase in
            power transfer capability (in this case the flow would be north
            to Mead, the most critical 500kV feed into Southern California)
      --Preserve the visual landscape since no visual change to the
            existing line would occur and no additional land is required.
      --Avoid the environmental impact associated with building a new line
            and time delays that can occur during the permitting process.
      --Provide additional revenue to the Federal Government in the form of
            increased power sales or additional wheeling charges for
            carrying power from other producers.
        Finally, this project would provide a ``showcase installation'' for
    a new, well tested, technology and would spur further adoption. The
    experiences of the past 2 years have clearly shown that our Nation
    needs an affordable option that will improve, upgrade, and increase the
    capacity of our national grid without adding to the environmental
    insult of overhead, electric transmission lines. The Aluminum Matrix
    Composite Conductor appears to be the most near term option available.
        The program to develop this option was begun in fiscal year 2002
    with $4 million, and was continued through fiscal year 2003 and fiscal
    year 2004 at $4 million per year. Substantial cost sharing from both
    industry and utilities occurred. The need for the Congressionally
    mandated $4 million per year has now ended. Accessories tailored for
    each conductor installation were also developed and tested. The testing
    included 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 are now demonstrating medium and large size
    conductor performance under different conditions, such as various
    voltages, mechanical loading conditions, and operating conditions. The
    testing is proceeding flawlessly. WAPA is hosting two of the ongoing
    field trials which began in fiscal year 2002 under this program.
        In conclusion, I would like to thank the chairman and his staff for
    having the foresight to provide the needed funding to bring the
    development program and the status of the technology to this point.
    Clearly, it is the best option to replace outdated, conventional
    technology lines in critical locations such as the Topock-Davis-Mead
    corridor.
                                     ______

             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 2005.

                                   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 have moved into government-industry partnerships
    aimed at accelerating superconducting products into the electrical
    marketplace with concurrent, dramatic, energy efficiency and
    environmental improvements. Energy Committee Chairman Pete Domenici
    summed up the promise and accomplishments of this program, earlier this
    year, when he noted that, 20 years ago, superconducting material only
    came in 1 centimeter lengths, whereas today, they are making cables out
    of it. This is exceptional progress in research.
        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 superconducting 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 superconducting 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''
    superconducting (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, 1800 rpm synchronous motor
    using HTS windings operating at 27K 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.

                        EFFECTS OF FISCAL YEAR 2004 CUTS

        As is well known, the Department of Energy, for fiscal year 2004,
    elected to fund the Superconductivity program at $32 million, even
    though the final, Conference version of the fiscal year 2004
    appropriations bill ``urged'' a funding level of $48 million. This
    decision has been devastating to the program and the industry, and if
    it isn't corrected, the damage to the program will be such that it will
    take many years to recover. This type of action must absolutely be
    avoided in the future.

                               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 2005.
                                     ______

         Prepared Statement of the Solar Energy Industries Association

        The Solar Energy Industries Association represents photovoltaic,
    concentrating solar power, and solar thermal manufacturers,
    distributors, contractors, and installers nationwide. I am writing to
    request research funding of $100 million for photovoltaics, $20 million
    for Concentrating Solar Power, and $5 million for Solar Heating and
    Lighting, as well as potential future Federal procurement programs.
    This is a substantial increase over current funding levels, but in line
    with funding proposed in the conference Energy Bill, as supported by
    SEIA.

                                 PHOTOVOLTAICS

        Our industry is at a critical decision point. While clean energy
    industries soar worldwide, the United States is increasingly left
    behind. Worldwide solar production in 2003 was more than 760 million
    watts, up from just over 550 million in 2002. However, the United
    States produced just 109 megawatts--the first U.S. production decline
    in recent memory. We must stop this trend, before we become dependent
    on importing yet another source of energy.
        The overall industry is supercharged; world PV production is now
    doubling almost every 2 years. Bell Labs produced the first watt of
    commercial PV in 1954, and we expect to produce more than one billion
    watts in 2004. However, increasingly, that production occurs in Japan
    and Germany.

        Leaving aside environmental and energy security concerns, this is a
    major issue. The Renewable Energy Policy Project estimates that each
    megawatt of solar produced supports 35.5 jobs over 10 years--more than
    any other energy source. At that rate, a solar industry which continues
    to grow at current rates would support more than 100,000 jobs by 2020;
    an industry half the size of General Motors. Many of these are very
    high value-added manufacturing jobs, with major manufacturing in TN,
    NJ, MI, IL, MA, OH, MD, WA, DE, CA, and elsewhere. Federal R&D has a
    real impact on where these plants develop. My members tell me that the
    opportunity to participate in DOE's world-class research is one of
    their primary considerations when deciding where to locate
    manufacturing.
        Other nations have noted this industry's potential, and are
    coupling incentive programs with increasingly aggressive research
    funding. However, while the photovoltaics industry has more than
    doubled in size since 2000, U.S. research funding for photovoltaics has
    remained essentially flat; this makes even less sense when you consider
    the program's impressive results. The DOE PV research program has been
    a major reason why solar manufacturing prices have dropped by more than
    half in the last 10 years alone. (Below--DOE's PV Roadmap is now
    predicting that solar electricity will be available for less than $.08/
    kWh within the next 10 years.) These innovations occur in a competitive
    cost-sharing environment that ensures rapid development of technologies
    that would not likely emerge otherwise. As a result of this excellent
    work, PV electricity is now cost-competitive in a growing number of
    markets for homes, businesses, and remote applications alike--the
    number and size of these markets will only increase as costs continue
    to fall.

        Continuing advances in crystalline silicon technologies could bring
    prices down by half again, while DOE's Systems-Driven Approach squeezes
    optimum efficiency and reliability out of every part of the solar
    system, from panels to connectors to inverters. Meanwhile, the Thin
    Film Partnership is beginning large-scale commercialization of their
    products, which use much less raw material and more rapid continuous-
    line production processes. Equally exciting are the ``generation beyond
    next'' nanostructured and organic solar cells being developed by many
    domestic companies and labs--these flexible cells offer the possibility
    of manufacturing millions of watts of solar on machines similar to
    today's printing presses, out of chemicals we currently use to make
    paint and toothpaste.
        The 2003 Peer Review of DOE's Photovoltaics subprogram, assembled
    by a team of eminent scientists and researchers including a retired
    Scientific Advisor for Exxon Corporate Research, heaped praise upon the
    program's achievements, noting ``The role of the laboratories in the
    projects reviewed has been outstanding in terms of quality of science,
    technology and engineering; relevance to national needs and DOE
    mission; and programmatic performance, management and planning.''
    However, they felt the need to note that DOE is now in the position of
    having to choose between research and basic equipment needs:

        ``Equipment and facilities are aging and failing at the
    laboratories . . . Funds for personnel and current research are being
    cannibalized to sustain equipment that should have been replaced long
    ago . . . An exceptional research capability at both Sandia and NREL is
    at risk in the immediate future unless DOE develops a strategy for
    dealing with these ongoing strains . . . the panel heard frequent
    references to specific equipment and facilities that were:
      ``--Aging and less capable than new equipment.
      ``--Failing from lack of maintainability.
      ``--Being kept in operation at the expense of funds to support staff
            patent applications, conferences and publications.
        ``It appears that the operating budgets at NREL and Sandia are
    being partly cannibalized to keep basic equipment operating.''
    (Emphasis added.)

        The current fiscal year 2005 administration request for the
    photovoltaics program--ca. $75 million--is insufficient to support the
    research needs of the evolving technology and growing industry behind
    these programs. If we are to meet DOE's goal of PV-generated
    electricity for $.06/kWh by 2020, funding needs to be increased
    substantially. SEIA requests $100 million for the photovoltaics program
    in total.

                           CONCENTRATING SOLAR POWER

        CSP systems currently produce 354 MW of clean, reliable, and
    relatively inexpensive power in the California desert--enough for ca.
    120,000 homes. New companies are now entering this 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 in early negotiations now, and the
    Western Governor's Association has stated that they support further
    developing this resource. Recently, New Mexico Governor Bill Richardson
    announced he plans to use $3 million in capital outlay funds to attract
    concentrating solar power plants to his State.
        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:

        ``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 . . . 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 to 8 cents/kWh range.''

        Given this degree of support and promise, a closeout budget request
    (ca. $2 million) is unjustifiable. The funding rollercoaster for the
    CSP program has damaged its ability to make long-term investments and
    retain high quality staff. Laboratory staff has been reduced by 70
    percent, a staggering loss of knowledge and expertise. Priceless
    equipment goes unused or will be soon dismantled.
        Funding of $20 million would allow the Department of Energy to
    revitalize this program, maintaining an ability to validate technology
    and components as well as lowering operations and maintenance costs in
    a stable environment. We expect that CSP plants could generate massive
    amounts of electricity for prices in the neighborhood of $.07 to $.09/
    kWh by the end of the decade. (For instance, using CSP on less than
    one-quarter of 1 percent of Arizona's land area could meet the State's
    entire electrical needs.) 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 recent conference
    Energy Bill that provides substantial research support for using
    Concentrating Solar Power as a source of new hydrogen fuel. Solar will
    undoubtedly be one of the critical cornerstone technologies of the
    hydrogen economy, giving us the ability to produce zero-emissions motor
    fuels when and where we want them. Concentrating Solar Power offers two
    unique opportunities in this regard; conventional electrolysis of water
    to generate hydrogen, and, unique to solar, inexpensive thermochemical
    processes that use a direct catalytic conversion.

                SOLAR HEATING AND LIGHTING/ZERO ENERGY BUILDINGS

        SEIA also strongly supports the Solar Buildings projects, including
    the visionary Zero Energy Buildings Program. The multi-year goal of ZEB
    is to allow widespread adoption of zero energy residences by 2010 and
    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 and materials, and including solar technologies which will
    achieve zero finite fuel source energy consumption. For these programs
    we request $8 million in funding, and we support the administration's
    attempts to move this program into its logical niche in the Interior
    appropriations budget, where partnerships with DOE's Buildings program
    could make the most of relevant equipment and expertise. 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 electricity and natural
    gas consumption. Solar water heating technologies are already
    ubiquitous in many other countries, thereby saving other energy sources
    for higher value purposes.
        Within this program, emphasis is placed on reducing the cost of
    solar water heating by using lightweight polymer materials to replace
    the heavy copper and glass materials in today's 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 by the end of 2004. We
    recommend that this program be funded explicitly at the $5 million
    level.

                             FUTURE APPROPRIATIONS

        While they are not yet law, we would like to draw the
    subcommittee's attention to two areas of the proposed energy bill as
    supported by SEIA (both H.R. 6 and the new S. 2095). Sec. 205 would
    authorize substantial purchases of photovoltaics on the part of the
    Federal Government, driving down costs nationwide and giving the
    government a good long-term energy investment. Sec. 902 would cost-
    share the installation of renewable energy systems in State or local
    buildings, improving the energy independence and financial situation of
    State and local governments with new clean energy devices.

                                   CONCLUSION

        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 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. Modular and simple to install, it can provide
    quick answers to grid congestion or supply inadequacy, while
    sidestepping environmental and NIMBY issues. The high coincidence of
    solar panels' peak output with daily peak demand makes them an
    attractive solution for load pockets or seasonal demand spikes,
    avoiding the dirtiest and least efficient conventional generators.
        Increased investment in solar also ties us more closely to a source
    of energy that can be used anywhere in the Nation, and which becomes
    less expensive, not more, every single year. These are nontrivial
    considerations when the Chairman of DuPont recently declared that high
    natural gas costs will prompt the company to shift its ``center of
    gravity'' overseas, and when the Conference Board, the Chicago Fed, and
    Federal Reserve Chairman Greenspan all publicly cite volatility and
    escalation in energy costs as a major uncertainty as well as a drag on
    economic growth.
        Expanded use of renewable energy is also a key recommendation of
    the report on mitigating the natural gas market crisis, as issued in
    September 2003 by the Secretary of Energy's National Petroleum Council
    (NPC). The NPC report set as its number one recommendation to ``Improve
    Demand Flexibility and Efficiency'' with an emphasis on the use of
    renewable fuels and technologies for power generation.
        Clean energy is the most likely next tech boom, and other nations'
    research and incentive spending shows that they are very much aware of
    this fact. As Business Week correctly observed in their March 22 issue,
    economically viable solar power could drive a transformative ``job
    boom'' in the coming century, maintaining American leadership in the
    world economy as did the automobile and the commercial aircraft earlier
    this century. I urge the subcommittee to make the most of this historic
    opportunity.
                                     ______

         Prepared Statement of the American Society of Plant Biologists

        The American Society of Plant Biologists (ASPB) is a non-profit
    society of nearly 6,000 scientists. My name is Mary Lou Guerinot,
    President of ASPB and Professor at Dartmouth College. ASPB urges the
    subcommittee to support the fiscal year 2005 budget request of the
    Department of Energy of $228,422,000 for the Chemical Sciences,
    Geosciences and Biosciences Division of the Office of Basic Energy
    Sciences. This represents an increase of $8.8 million or 4 percent.
        The Biosciences program within the Chemical Sciences, Geosciences
    and Biosciences Division supports fundamental research needed to
    develop future biotechnologies related to energy. The supported
    research focuses on the biological mechanisms occurring in plants and
    microorganisms.
        Plants and microbes fit readily into the energy context by virtue
    of serving as renewable resources for fuel and other fossil resource
    substitutes, as vehicles to restore previously disrupted environmental
    sites, and as potential components of industrial processes to produce
    new products and chemicals in an environmentally benign manner.
        The Biosciences program is devoted to the fundamental science
    underlying the use of biological systems to produce and conserve
    energy.
        Biosciences research on plants and microbes opens the opportunity
    to synthesize an almost limitless variety of energy-rich organic
    compounds and polymers. DOE's biosciences fundamental research could
    lead to higher quality plant products, more environmentally benign
    products and a reduction in the increasing demand for imported
    petroleum.
        The DOE Office of Science, Office of Basic Energy Sciences'
    Division of Chemical Sciences, Geosciences and Biosciences is a
    competitive grants program in which awards are made based on merit. The
    Division and its Biosciences program select the best research proposals
    as determined in a process of peer review. Leading researchers at
    universities throughout the Nation are funded by the Biosciences
    program.
        The Biosciences program currently supports research in the
    following areas:

    Plant Science
      --Structure and function of the plant cell wall (cellulose, lignin,
            hemicellulose, and protein)
      --Biophysical and biochemical mechanisms of photosynthesis
      --Plant primary and secondary metabolism
      --Genetic and biochemical mechanisms of plant growth and development
      --Bioenergetics, ion uptake, and other membrane-related phenomena
      --Arabidopsis genome sequencing
      --Functional plant genomics

    Fermentation Microbiology
      --Bioenergetics and metabolic properties of anaerobic microbes
      --Degradation of lignin, cellulose, and hemicellulose
      --Biochemistry, genetics, and physiology of microbes that metabolize
            one and two carbon compounds
      --Mechanisms of plant symbiotic and pathogenic interactions
      --Functional microbial genomics

    Extremophilic Organisms
      --Biochemistry, genetics and physiology of hyperthermophilic microbes
      --Mechanisms of life under extreme conditions, temperature, salt, pH,
            etc.
      --Metabolism of inorganic compounds

    Biomaterials and Biocatalysis
      --Biosynthesis of novel materials
      --Catalytic antibodies
      --Structural and kinetic characterization of energy-related enzymes
      --Bioadhesion
        The Biosciences program has sponsored many leading research
    efforts. For example, Biosciences program grant support led to a
    breakthrough in cellulose biosynthesis research. Plant cell walls are
    the major energy component of renewable biological resources. Cellulose
    is the major constituent of the plant cell wall and represents the most
    abundant biopolymer on earth.
        Dr. R. Malcolm Brown, Jr. and colleagues at the University of Texas
    at Austin gave the first experimental confirmation of an important
    structure involved in cellulose biosynthesis. This work featured a
    combination of molecular biology and immunocytochemistry techniques.
    This research provides an exciting springboard for future applications
    in the efficient design of specific complex carbohydrates and other
    renewable carbon resources.
        As another example, research sponsored earlier by the Biosciences
    program led to new findings on the capture of energy from
    photosynthesis. This research led to the presentation to Biosciences-
    program-grantee Dr. Paul Boyer of the shared award of the 1997 Nobel
    Prize in Chemistry (biochemistry). Photosynthesis is nature's way of
    utilizing sunlight to produce chemical energy and to bring carbon
    dioxide into biological organisms. Increased knowledge in this area
    could lead to a better understanding of how to manage carbon dioxide in
    the atmosphere. Further research in this area could also contribute to
    development of alternative energy sources.
        At the latter part of the 19th Century, people throughout the world
    were dependent upon plants and other contemporaneous biological sources
    for the production of organic materials. Plants and animals provided
    the only sources of fibers, coatings, lubricants, solvents, dyes,
    waxes, fillers, insulation, fragrances, detergents, sizing, wood,
    paper, rubber and many other types of materials. In 1930, fully 30
    percent of industrial organic chemicals were still derived from plants.
        The discovery of extensive petroleum reserves and advances in
    chemistry and petroleum engineering resulted in a major shift to
    reliance on fossil sources of organic feedstocks such as petroleum.
    These developments also led to the development of petroleum-based
    materials, such as inexpensive plastics, with properties that could not
    be duplicated at the time by abundantly available natural materials.
        Advances in modern plant research made possible by support from the
    Biosciences program can result in a shift toward use of feedstocks from
    domestically grown plants for chemical products. Plant-produced
    products can provide the chemical industry with much greater diversity
    than is available from the comparatively limited structures found in
    crude oil.
        Knowledge gained from Biosciences-supported research is leading to
    enhanced plants that will provide the feedstocks for new types of
    polyurethane, new biodegradable lubricants and superior quality nylon
    having stronger and more flexible fibers. The United States produces
    nylon, polyurethane and other plastics to supply multi-billion dollar
    markets. Genetically modified crop production of nylon alone could
    create over $2 billion in new income for America's growers.
        Plants are a major source of renewable and alternative fuels in the
    United States. Greater knowledge of the basic biology of plants will
    lead to further economies in domestic production of renewable fuels.
        The science community deeply appreciates the continued strong
    support of the subcommittee for innovative research on plants and
    microbes sponsored by the Chemical Sciences, Geosciences and
    Biosciences Division.
                                     ______

        Prepared Statement of Southeastern Federal Power Customers, Inc.

        Mr. Chairman and members of the subcommittee, on behalf of the
    Southeastern Federal Power Customers (``SeFPC'' or ``Customers''), I am
    pleased to provide testimony in reference to the administration's
    fiscal year 2005 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 Illinois, 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 ZERO OUT PURCHASED POWER AND WHEELING

        The administration has proposed 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 100 percent in the upcoming fiscal
    year, from the current level of $34.5 million to the proposed level of
    $0. 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.

          PROPOSAL WOULD YIELD NO COST SAVINGS FOR FEDERAL GOVERNMENT

        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. Moreover, if PP&W funds are
    eliminated, SEPA's annual return to the U.S. Treasury of roughly $155
    million would likely be reduced significantly.
        Thank you in advance for considering our comments on the
    President's proposed fiscal year 2005 budget for SEPA.
                                     ______

          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 2005 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 1.8 cents when adjusted
    for inflation) from electricity generated from solar, wind, geothermal
    and biomass projects. According to DOE sources, in order to fully fund
    all past and current REPI applicants, $60 million would be needed for
    fiscal year 2005. Despite the demonstrated need, however, DOE has again
    asked for only $4 million for fiscal year 2005, citing budgetary
    constraints.
        Approximately 25 percent of electric utility customers are served
    by not-for-profit public power systems and rural electric cooperatives.
    Fully funding REPI is an issue of comparability for the communities
    served by these systems. 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 over a decade 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 of existing landfills into landfill-
    gas-to-energy projects. In order to ensure that these efforts and other
    renewable energy goals are achieved 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.

                FEDERAL POWER MARKETING ADMINISTRATIONS (PMA'S)

    Purchase Power and Wheeling
        We urge the subcommittee to authorize appropriate levels for use of
    receipts so that the Western Area Power Administration (WAPA), the
    Southeastern Power Administration (SEPA) and the Southwestern Power
    Administration (SWPA) can continue to purchase and wheel electric power
    to their municipal and rural electric cooperative customers.
        The fiscal year 2005 DOE budget proposes to eliminate the ability
    of WAPA, SEPA, and SWPA to use receipts--which do not score in the
    Federal budget process--to provide these services to their customers.
    Although appropriations are no longer needed to initiate the purchase
    power and wheeling (PP&W) process, the subcommittee continues to
    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 PMA's often make purchases in the spot market to
    ``firm'' the resource when generation is less than the amount
    contracted for delivery. Additionally, in low-water years, the PMA's
    often purchase additional power to fulfill their contracts with
    customers. The PMA's then must negotiate to transmit this power to
    their customer--often over non-Federal transmission lines (wheeling is
    the charge that the PMA's pay to move electricity over a non-Federal
    transmission line). For individual PMA customers--many of whom are the
    distribution utility of very small towns--to be forced to perform these
    purchase power and wheeling functions would be extremely inefficient,
    and would almost certainly result in rate increases for the retail
    customers of these small utilities.
        The PP&W arrangement is effective, has no impact on the Federal
    budget, and is supported by the PMA customers who pay the costs.
    Therefore, we request that the subcommittee authorize the use of
    receipts in fiscal year 2005 as follows:
      --Western Area Power Administration (WAPA).--$227.6 million
            authorization needed in the fiscal year 2005 bill.
      --Southeastern Power Administration (SEPA).--$32.7 million
            authorization needed in the fiscal year 2005 bill.
      --Southwestern Power Administration (SWPA).--$2.9 million
            authorization needed in the fiscal year 2005 bill.
    Security Costs
        We urge the subcommittee to reaffirm the Federal Government's
    responsibility to pay the costs of increased security measures at
    Federal, multi-purpose facilities and delivery systems and include
    language to ensure that such costs are non-reimbursable.
        Following the September 11, 2001 attacks, the U.S. Bureau of
    Reclamation moved aggressively to strengthen security measures at
    Federal dams throughout the West, including such facilities as Hoover,
    Grand Coulee and Glen Canyon dams. These multipurpose facilities
    provide important flood control, water storage for irrigation,
    municipal and industrial uses, power generation, recreation and
    environmental mitigation benefits, and are a linchpin of the regional
    economy.
        To date, funds appropriated in fiscal year 2003 and fiscal year
    2004 for anti-terrorism/site security measures at Bureau of Reclamation
    facilities have been treated as non-reimbursable pursuant to an
    administrative determination. This decision found that counter-
    terrorism protections are not considered normal operation and
    maintenance activities and that the national security interests
    justifies making the expenditures a Federal responsibility.
        This determination is also consistent with how similar costs were
    treated in the aftermath of the attacks on Pearl Harbor in World War
    II. To ensure that the costs of increased security at Federal
    facilities continue to be treated as a non-reimbursable Federal
    expenditure, we request that you include the following language in the
    fiscal year 2005 Energy and Water Appropriations bill:

        ``For fiscal year 2005 and each fiscal year thereafter, the
    increased costs of ensuring security of Bureau of Reclamation and Corps
    of Engineers dams and the Federal power marketing administrations in
    the aftermath of the events of September 11, 2001, shall be non-
    reimbursable and provided through appropriated funds.''

    Animas-La Plata
        The Colorado Ute Settlement Act Amendments of 2000 (Title III,
    Section 301(b)(10), Public Law 106-554, December 21, 2000) authorized
    development of the Animas-La Plata Project to satisfy water right
    claims of the Southern Ute and Ute Mountain Tribes in southwest
    Colorado (known collectively as the ``Colorado Ute Indian Tribes.'')
    The project requires construction of a reservoir, pumping plant and
    appurtenant facilities to provide water supply and delivery of
    municipal and industrial water and other benefits to the Tribes.
        In order to provide power from the Colorado River Storage Project
    (CRSP) to the Durango Pumping Plant, transmission facilities will need
    to be constructed, operated and maintained by the Western Area Power
    Administration. Because these transmission facilities are associated
    with the satisfaction of the Tribes' water rights claims, all amounts
    expended for their construction, operation and maintenance should be
    considered non-reimbursable and non-returnable. If Congress does not
    clarify that these costs are non-reimbursable and non-returnable, CRSP
    power customers run the risk that the costs of the transmission
    facilities and services will be shifted to them, despite the fact that
    they receive no benefit from them.
        WAPA will be responsible for the construction, operation and
    maintenance of these transmission facilities, and requires additional
    appropriations in the amount of $10,000,000 in fiscal year 2005 to meet
    the construction timetable established by the Bureau of Reclamation,
    the project manager. WAPA, the Bureau of Reclamation, the Colorado
    River Energy Distributors Association, the water users, the Colorado
    Ute Indian Tribes and APPA all support the inclusion of the following
    language in the fiscal year 2005 Energy and Water Development
    Appropriations bill:

        ``For carrying out the functions authorized by title III, section
    302(a)(1)(E) of the Act of August 4, 1977 (42 U.S.C. 7152), and other
    related activities including conservation and renewable resources
    programs as authorized, including official reception and representation
    expenses in an amount not to exceed $1,500, $183,100,000 to remain
    available until expended, of which $170,756,000 shall be derived from
    the Department of the Interior Reclamation Fund: Provided, That all
    authorities and future contributions described in Section 402,
    subparagraph (b)(3)(B) of the Reclamation Projects Authorization and
    Adjustment Act of 1992 previously assigned to the Secretary of Energy,
    Western Area Power Administration, shall be transferred to the
    Secretary of the Interior, Bureau of Reclamation: Provided further,
    That of the amount herein appropriated, $10,000,000 shall be available
    until expended on a nonreimbursable basis to the Western Area Power
    Administration to design, construct, operate and maintain transmission
    facilities and services for the Animas-La Plata Project as authorized
    by sections 301(b)(10) of Public Law 106-554.''

                      STORAGE FOR HIGH-LEVEL NUCLEAR WASTE

        Since 1982, the Nation's electricity customers have contributed $22
    billion to the Nuclear Waste Fund 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.
        The President requested $880 million for fiscal year 2005 for the
    nuclear waste repository at Yucca Mountain. While we support the
    President's budget request of $880 million, if legislation is not
    enacted to take $749 million of the requested funds ``off-budget'' as
    the administration assumes, we hope that resources are available to the
    subcommittee to adequately fund Yucca, but not at the expense of other
    valuable programs, such as the Renewable Energy Production Incentive
    and other programs mentioned in this statement.

                      ADVANCED HYDROPOWER TURBINE PROGRAM

        APPA supports the administration's budget request of $6 million for
    the Advanced Hydropower Turbine Program for fiscal year 2005. 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 emission-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 emission-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 $210
    million for fiscal year 2005 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 2005 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 $3 million for
    fiscal year 2005 to spur innovation of technologies that will reduce,
    avoid, or capture greenhouse gas emissions.
                                     ______

         Prepared Statement of the Biomass Energy Research Association

        This testimony pertains to the fiscal year 2005 appropriation for
    biomass research, development, and deployment (RD&D) conducted by the
    Department of Energy's (DOE) 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, and on forest biomass production research performed by the U.S.
    Department of Agriculture Forest Service (USDAFS).
        BERA recommends appropriations of $92,500,000 for biomass RD&D in
    fiscal year 2005 under EERE's Biomass and Biorefinery Systems program
    and Hydrogen Technology program as follows:
      --$2,000,000 for Feedstock Infrastructure R&D.
      --$26,000,000 for Platforms R&D: Thermochemical Conversion
            ($13,000,000) and Bioconversion ($13,000,000).
      --$19,000,000 for Utilization of Platform Outputs, Integration of
            Biorefinery Technologies at PDU and pilot scales:
            Thermochemical Conversion ($9,000,000) and Bioconversion
            ($10,000,000).
      --$39,000,000 for State-Industry Partnerships: Biorefinery Systems
            Development ($34,000,000 demonstration facilities) and State &
            Regional Partnerships (SRP, formerly the Regional Biomass
            Energy Program, RBEP) ($5,000,000).
      --$6,500,000 for biomass-related projects 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.
        The level of earmarks in the last few years has resulted in
    premature reductions of scheduled programs by EERE. BERA respectfully
    asks the subcommittee to carefully consider the impacts of all earmarks
    on EERE's RD&D. If they are for projects that are not included in DOE's
    formal funding request, BERA urges that they be add-ons to the baseline
    funds rather than deductions. In fiscal year 2004, about 35 percent of
    the appropriation for EERE's RD&D is provided as earmarked funds.
    EERE's planned objectives are therefore extremely difficult or
    impossible to achieve because the appropriation provided for fiscal
    year 2004 is only about 7.5 percent more than the baseline funding
    requested.
        The original goal of the Biomass and Bioproducts Initiative (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 was 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 and energy
    security and 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. For
    example, biomass energy consumption in 2002 was about 1.66 million
    barrels of oil equivalent (BOE) per day. BERA strongly urges that the
    BBI be continued in fiscal year 2005 at the funding level recommended
    by BERA for the cost-shared demonstration projects shown in the table
    on page 3. The highest priority should be given to 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 2004. BERA congratulates DOE on the progress
    made in restructuring the program and its management. BERA also
    congratulates DOE and USDA for the cooperation and joint coordination
    of 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 United
    States into major sources of renewable energy, fuels, and chemicals.
        However, without full incorporation of the BBI into DOE's and
    USDA's biomass research programs, 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 convince the private sector to get involved
    in developing even modest size projects in the field. So to help
    implement this essential 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 and each agency's
    programs and expenditures, as is done by the DOE and USDA today. This
    is an on-going activity that should be expanded to include other
    agencies and departments to help fine-tune the critical pathways to
    program goals. Continuous 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 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 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.
        Although progress has been made, EERE has terminated research in
    several critical thermochemical and microbial 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 3, 4
    and 5. Other mission-oriented biomass RD&D programs are funded through
    EERE's Industrial Technologies Program by 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 FOR FISCAL YEAR 2005

        BERA recommends that the appropriations for biomass RD&D in fiscal
    year 2005 be allocated as shown in the accompanying table. For fiscal
    year 2005, EERE has again incorporated revisions in nomenclature and
    has zeroed-out, consolidated, or moved some programs within EERE. So
    our recommendations are generally listed in the same order as the
    funding requests under EERE's headings and program area titles except
    several program areas are included that are either new or that BERA
    recommends be restored to maintain a balanced program. Note that the
    recommended budgets for the demonstration projects do 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
    for these 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 for
       Office of Energy Efficiency and Renewable              Program Area           -------------------------------
                        Energy                                                           Research        Scale-Up
    ----------------------------------------------------------------------------------------------------------------
    Biomass/Biorefinery Systems:
        Feedstock Infrastructure..................  Harvesting Equipment/Storage/         $2,000,000  ..............
                                                     Logistics.
        Platforms R&D.............................  Thermochemical Conversion:
                                                      Advanced Combustion & Controls       2,000,000  ..............
                                                      Oxygenates from Syngas........       4,000,000  ..............
                                                      Liquid Fuels from Pyrolysis...       4,000,000  ..............
                                                      Chemicals from Syngas &              3,000,000  ..............
                                                     Pyrolysis.
                                                    Bioconversion:
                                                      Pretreatment and Hydrolysis...       4,000,000  ..............
                                                      Organisms and Enzymes.........       4,000,000  ..............
                                                      Fermentation (Ethanol)........       4,000,000  ..............
                                                      Fermentation (Methane)........       1,000,000  ..............
    Utilization of Platform Outputs...............  Integration of Biorefinery
                                                     Technologies:
                                                      Thermochemical Conversion:
                                                        Small Modular Power           ..............      $2,000,000
                                                     Generation \2\.
                                                        Biomass Cofiring Power        ..............       2,000,000
                                                     Generation \2\.
                                                        Oxygenates and Mixed          ..............       5,000,000
                                                     Alcohols \2\.
                                                      Bioconversion:
                                                        Ethanol from Cellulosics \2\  ..............       5,000,000
                                                        Value-Added Products \2\....  ..............       5,000,000
    State-Industry Partnerships...................  Biorefinery Systems Development:
                                                     \3\
                                                      Design Optimization,             \3\ 1,000,000  ..............
                                                     Efficiencies.
                                                      Product Slates, Economics,       \3\ 1,000,000  ..............
                                                     Markets.
                                                      Siting, Acquisition,             \3\ 2,000,000  \3\ 20,000,000
                                                     Construction.
                                                      Operations....................  ..............  \3\ 10,000,000
                                                    State & Regional Partnerships...               0       5,000,000
                                                                                     -------------------------------
          Subtotal................................  ................................      32,000,000      54,000,000
                                                   =================================================================
    Hydrogen Technology \1\.......................  Thermal Processes (Reforming)...         500,000       1,000,000
                                                    Photolytic Processes (Algae)....       1,000,000  ..............
                                                    Innovative Conversion Processes.       4,000,000               0
                                                                                     -------------------------------
          Subtotal................................  ................................       5,500,000       1,000,000
                                                                                     -------------------------------
          Totals..................................  ................................      37,500,000      55,000,000
                                                                                     ===============================
          Grand Total.............................  ................................  ..............     92,500,000
    ----------------------------------------------------------------------------------------------------------------
    \1\ BERA's recommendations pertain only to the biomass-based portion of Hydrogen Technology.
    \2\ BERA's recommendations should be used for scale-up at the PDU and pilot-plant scales, preferably with
      industry cost-sharing.
    \3\ All demonstration projects should be cost-shared with industry and state participation.

        Feedstock Infrastructure, Harvesting Equipment, Storage, and
    Logistics.--DOE terminated biomass production research a few years ago
    and is concentrating on infrastructure development, including novel
    systems for collecting agricultural residues, the analysis of
    sustainable feedstock systems, and regional and national cost-supply
    relationships. In fiscal year 2005, EERE plans to continue work on the
    harvesting and logistics roadmap, the sustainability roadmap, and
    policy considerations, and is expected to include work on one-pass
    harvesting systems for wheat straw and corn stover, innovative
    densification and storage systems, and regional modeling that
    integrates economic and environmental considerations. BERA recommends
    that EERE continues to develop the feedstock infrastructure, while the
    USDA Forest Service initiates and continues RD&D on woody biomass for
    energy.
        Platforms R&D, Thermochemical Conversion.--Continuation of
    thermochemical conversion R&D to develop advanced biomass combustion
    and gasification methods could have environmental and economic benefits
    that can lead to significant growth in power generation from waste
    biomass and combined energy recovery-disposal methods for certain kinds
    of high-moisture waste biomass such as biosolids (municipal sewage),
    and for MSW, agricultural residues, and wood wastes. Most of this
    research has been phased out by EERE. Completion of the development of
    medium-Btu biomass gasification technologies is also an essential
    component for the production of fuel gases including synthesis gas
    (syngas) and hydrogen, power, and chemicals. BERA recommends
    restoration of this R&D with the goal of developing the next generation
    of advanced combustion and gasification processes for power generation.
        Several thermochemical conversion methods are available for
    liquefaction of waste and virgin biomass feedstocks to afford storable
    liquid fuels and chemicals. Included among them are the catalytic
    conversion of syngas from biomass to liquid products such as ethanol,
    mixed alcohols, and other oxygenates; the catalytic hydrogenation of
    biomass and biomass derivatives such as natural oils and waste
    triglycerides for the direct production high-cetane diesel fuels; and
    biomass liquefaction under supercritical conditions of pressure and/or
    temperature in aqueous media. These technologies offer a wide range of
    options for liquefaction of all categories of waste and virgin biomass.
    Note also that syngas production from biomass is established
    technology, and that several processes are commercially available. For
    several years, BERA has recommended that EERE support thermochemical
    liquefaction processes. This should have been a key component of EERE's
    research, but has been a minimally funded R&D effort, particularly when
    compared with the effort expended on other conversion technologies. It
    is noteworthy that EERE has significantly increased this activity for
    fiscal year 2005.
        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 continuously increasing prices of natural gas
    and crude oils, a few small-scale commercial biomass pyrolysis systems
    have recently been installed and operated under innovative conditions
    that increase product flexibility to yield cost-competitive products.
    BERA recommends that R&D on both waste and virgin biomass pyrolysis be
    added to EERE's program to help perfect advanced processes. It is
    encouraging to note that pyrolytic oils have been added to EERE's
    project roster for fiscal year 2005. All of the basic data compiled at
    DOE on biomass pyrolysis in the 1970's and 1980's should be reexamined
    in this work.
        BERA urges that thermochemical conversion R&D for both biomass
    liquefaction and gasification processes be restored, expanded, and
    continued and be given a higher priority by EERE.
        Platforms R&D, Bioconversion.--The goal of achieving efficient
    hydrolysis of low-cost cellulosic feedstocks to obtain the sugars and
    of simultaneous conversion of the resulting pentoses and hexoses to
    fermentation ethanol requires the use of special processes for
    producing genetically engineered organisms and cellulase systems at
    acceptable costs and performance on a commercial scale. Research by
    industry and academe should continue to perfect these technologies for
    incorporation into the overall conversion systems used for these
    processes. This will ensure that the best possible skills and
    technologies are brought to bear.
        Methane fermentation (anaerobic digestion) is unique in that it
    produces methane, the major component in natural gas, at high
    concentrations in the medium-Btu product gas from a full range of
    virgin and waste biomass. DOE has terminated most of this research,
    which can lead to advanced waste disposal-energy recovery processes as
    well as the alleviation of numerous environmental problems encountered
    during waste treatment in urban communities and agricultural
    facilities. This research should be restored.
        Bioconversion is useful for converting a variety of biomass and
    derivatives to a wide range of commodity or high-value 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 Bioconversion R&D. BERA recommends
    that part of this research effort should focus on this field.
        Utilization of Platform Outputs, Integration of Biorefinery
    Technologies, Thermochemical Conversion and Bioconversion.--BERA
    recommends that this effort utilize the best available information
    produced by the Platforms R&D programs for testing, confirming, and
    perfecting the conversion technologies at the PDU and pilot-plant
    scales shown in the table on page 3. This will generate the information
    needed to support the design, construction, and operation of
    demonstration facilities under State-Industry Partnerships, Biorefinery
    Systems Development (see following section).
        Commentary on the value of intermediate scale process R&D is in
    order. For example, several projects performed at semi-commercial plant
    scales or that involved modules of commercial plants have been funded
    to develop processes for converting low-cost cellulosic feedstocks to
    fermentation ethanol. Unfortunately, the results of this effort have
    not led to operating systems despite the excessive time and relatively
    large budgets that have been provided to conduct the work. It is
    apparent that although the science is feasible, the scale-up projects
    have not yet been successful. But it is still important to
    commercialize this technology to help reduce the cost of fermentation
    ethanol. Intermediate-scale projects such as those conducted at the PDU
    and pilot-plant scales can more readily focus on efficient development
    of the critical information and operating data needed to overcome or
    eliminate existing scale-up barriers. It is also essential that
    integrated feedstock acquisition-biorefinery systems be designed and
    built using this information for demonstration in the field on a
    sustainable basis. The pathways to successful development of these
    systems are in hand now. They should be implemented.
        State-Industry Partnerships, Biorefinery Systems Development.--
    Overall, this program component should focus on the ultimate objective
    of sustainable operation of biorefineries integrated with biomass
    acquisition systems in relatively large field demonstration facilities
    (energy plantations). This effort should address siting, plant design,
    financing, permitting, construction, environmental controls, waste
    processing and disposal, and sustained operations; feedstock selection,
    transport, storage, and delivery; all waste disposal and emissions
    issues; and storage and delivery of the salable products to market.
    BERA recommends that industrial partners and States be carefully
    selected for participation in this cost-shared program. This work
    should be given the highest priority. BERA recommends that 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. Since only a
    minimal effort has been conducted to date in the United States on this
    type of program, BERA recommends that the first demonstration facility
    target the acquisition of waste and/or virgin biomass feedstocks for
    conversion into electricity, liquid and gaseous fuels, and chemicals.
    Existing moderate- and large-scale facilities from terminated and
    continuing EERE projects, such as biomass cofiring, gasification,
    liquefaction, and fermentation, should be carefully examined to
    determine whether one or more are suitable for these projects. The
    partnerships should be in place at the start of each demonstration
    project.
        State and Regional Partnerships (Formerly Regional Biomass Energy
    Program).--The Regional Biomass Energy Program (RBEP) was a model
    outreach program for more than 20 years. No other DOE program had the
    information transfer role, capabilities, level of experience, or
    widespread networks of the RBEP, nor has there been a partnership
    program so closely affiliated with the highest levels of State and
    regional government energy organizations. DOE has replaced the RBEP
    with a new program, State and Regional Partnerships (SRP), that will
    involve collaboration with States on technology transfer, research,
    development, field testing, and other needed efforts to overcome market
    barriers. BERA feels that RBEP can provide a strong foundation for the
    SRP, and that adequate funding should be provided to sustain the new
    SRP because of the history and successful track record of the RBEP.
        Hydrogen Technology.--Research on the thermal reforming of biomass
    and on splitting water with algae, 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 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.
        More than 200 Museum scientists, 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
    undergraduate, graduate, and postdoctoral training programs in
    conjunction with a host of distinguished universities.
        The AMNH collections are a major 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. 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.
        The Museum interprets the work of its scientists, highlights its
    collections, addresses current scientific and cultural issues, and
    promotes public understanding of science through its renowned permanent
    and temporary exhibits as well as its comprehensive education programs.
    These programs attract more than 400,000 students and teachers and more
    than 5,000 teachers for professional development opportunities. The
    Museum also takes its resources beyond its walls through the National
    Center for Science Literacy, Education, and Technology, launched in
    1997 in partnership with NASA.

           SUPPORT FOR DEPARTMENT OF ENERGY SCIENCE MISSION AND GOALS

        As one of the world's leading science organizations, DOE's primary
    strategic goals include maintaining a world class scientific research
    capability and protecting the Nation's security. Its science program
    supports fundamental research in energy, matter, and the basic forces
    of nature and the advanced computational tools critical to research.
    The American Museum shares DOE's fundamental commitments to cutting-
    edge research and technology in support of science and education.
    Genomic Science
        DOE's scientific leadership encompasses genomics research and
    advanced sequencing technologies. With the historic completion of the
    first draft of the human genome, work on the frontiers of genome
    science continues as a critical element of 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.'' DOE focus areas include 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. The Genomes to Life program is based on the understanding
    that genomes, especially those of the simplest organisms, provide a
    window into the basic mechanics of life. The program addresses energy,
    environmental, and national security needs and also promises advances
    in medical treatment.
        The American Museum is home to a preeminent molecular research
    program and is deeply engaged in genome research closely tied to DOE's
    mission areas and research priorities. 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.

    Frozen Tissue Collection
        The Museum offers unique research resources in support of its
    molecular program. It has expanded 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
    research resource 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. Since it
    was launched 3 years ago, 22,000 specimens not available at any other
    institute or facility have already been accessioned.

    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 700-processor computing
    facility that is the fastest parallel computing cluster in an
    evolutionary biology laboratory and one of the fastest installed in a
    non-defense environment. 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 and other disciplines.

    Institute of Comparative Genomics
        Building on its strengths in comparative genomics, and in concert
    with the scientific goals of DOE, in 2001 the Museum established an
    Institute for Comparative Genomics so as to contribute its unique
    resources and expertise to the Nation's genomic research enterprise.
    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. These include obtaining a patent for an
    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; building a comprehensive database of all
    known finished and incomplete genomes of microbial species; developing
    effective methods of culturing difficult to culture species as well as
    new methods for obtaining embryos for antibody staining; conducting
    whole genome analysis of disease causing microorganisms to understand
    the evolutionary changes that take place in a genome to make it more or
    less virulent; and developing phylogenetic techniques to advance
    understanding of bacterial genomics and the evolution of pathogenicity.
    Institute scientists have also won major grants to lead international
    research teams in assembling the ``tree of life.''
        The Institute's research programs are complemented by an ambitious
    agenda of genomics-related exhibitions, conferences, and public
    education programming, including the landmark exhibition, The Genomic
    Revolution in 2001. Education and afterschool programs introduce
    students to genome science, and the Museum has held 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. The
    March 2004 symposium presents Expanding the Ark: The Emerging Science
    and Practice of Invertebrate Conservation.
        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 constructing large
    genomic databases, and 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. Development of Institute activities entails
    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 exhibits.
        As the foregoing makes clear, the research interests and expertise
    of DOE and the Museum are closely aligned in key areas pertinent to the
    agency's biological and environmental research, including comparative
    and microbial genomics, bioinformatics, and computational science. We
    are mutually committed to the importance to humans of nonhuman
    organisms' DNA sequences, to developing the computational tools to
    integrate and understand data, and to modeling complex biological
    systems. We seek a partnership with DOE to further these mutual goals,
    advancing projects such as the following:
      --New strategies for studying complex microbial communities.--
            Investigations into the molecular characterization and
            phylogenic analysis of genes involved in biofilm formation to
            offer new insights into the formation, properties, and
            evolution of microbial communities.
      --New approaches to bioinformatics and algorithm development.--Using
            statistical physics analogues to model NP-hard problems in
            evolutionary tree construction in order ultimately to aid in
            the design of novel approaches to long-standing biological
            problems and generate new insights into the processes of
            interest to DOE.
      --New strategies for characterizing microbial communities in
            nature.--Analysis of samples of uncultured microbial
            communities, stored in the Museum's frozen tissue collection at
            temperatures that preserve nucleic acids and proteins, to
            complement field analysis, and to provide access for the
            scientific community to this information through the
            collection's database and informatics tools.
        The Museum requests $3 million to partner with DOE and to employ
    the unique capacities of the Institute of Comparative Genomics for
    advancing shared research and education priorities in genomics science.
    The Institute's comparative and microbial research programs support
    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. The Museum intends to support the Institute with
    funds from non-Federal as well as Federal sources and proposes to use
    the requested $3 million towards overall costs for the Institute's
    microbial genomics research program, including equipping the molecular
    laboratories to accommodate additional senior scientists, graduate and
    postdoctoral trainees; upgrading instrumentation with the latest high-
    throughput technology; and scientific outreach and dissemination via
    website, online databases, and other means.
                                     ______

     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 State-wide 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 healthcare delivery system, and affiliations with
    more than 200 health care and educational institutions State-wide.
        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 State-wide in
    scope and include collaborations both within the University system and
    with our affiliates.
        Our first priority is the development of the Regional
    Biocontainment Laboratory at UMDNJ-New Jersey Medical School in Newark.
    The 2001 terrorist attacks on the United States, the release of anthrax
    through the United States mail, and the proliferation of biological
    weapons materials and technologies have resulted in an unprecedented
    sense of urgency for greater bioterrorism preparedness. In 2003 the
    NIH-National Institute for Allergy and Infectious Diseases (NIAID)
    selected the Northeast BioDefense Center (NBC), a consortium of
    research organizations spread across four States, as one of eight
    Regional Centers of Excellence for BioDefense and Emerging Infectious
    Diseases Research. Scientists at UMDNJ, along with researchers at
    Rutgers University and the Public Health Research Institute, are key
    partners in helping the NBC frame practical solutions to public health
    threats emanating from both bioterror and emerging infectious diseases.
        Following NIAID's designation of the Northeast BioDefense Center as
    a Regional Center of Excellence, UMDNJ-New Jersey Medical School was
    awarded almost $21 million from the NIH to build a 13,000-square-foot
    regional biocontainment (Bio Safety Level-3) laboratory at the
    International Center for Public Health (ICPH) in Newark, New Jersey.
    NIH views the construction of the regional biocontainment laboratories
    as critical components of the planned network of extramural Regional
    Centers of Excellence to accelerate research on the highly dangerous
    and infectious pathogens in the biodefense field.
        This new BSL-3 facility augments two other existing laboratory
    facilities at the ICPH and on the UMDNJ Newark campus, and once
    operational, will bring the total BSL-3 space in Newark to 21,500
    square feet, creating one of the largest focal points of containment
    space in the country. Of the 208 scientists participating in the NBC
    program, more than 50 percent work within 25 miles of Newark. The
    construction of the laboratory will allow a critical mass of biodefense
    scientists to be assembled in Newark, forming the heart of biodefense
    and infectious disease research in the region. The strategic location
    of the new laboratory is well suited to provide infrastructure support
    to regional public health agencies in the event of a national
    bioterrorism emergency. UMDNJ respectfully seeks $10 million in
    targeted appropriations to supplement the NIAID award as the received
    funds do not fully provide for the laboratory's construction.
        Our second priority is the development of the Child Health
    Institute of New Jersey at 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 will be the cornerstone institution of a
    major research and clinical effort to understand, prevent and treat
    childhood diseases. It 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
    Bristol-Myers Squibb 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.
        Research at the Child Health Institute will focus on molecular
    mechanisms of early embryonic development, a natural, but vulnerable,
    water-based environment. Normal child development is a water dependent
    process, reflecting water quality, quantity and its ``management'' by
    cells and tissues. A critical component of the research infrastructure
    being developed within the Child Health Institute is an Imaging Core
    Facility. Through this facility researchers will be able to better
    visualize the dynamics of structures within cells and cells within
    developing tissues. Understanding these dynamics is crucial to
    expanding knowledge of the processes involved in embryonic and later
    development.
        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 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 more than $40 million to
    fund its building and programs through a strong partnership among
    private, corporate and government entities. 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 for the Imaging Core Facility within
    the Child Health Institute.
        Support is also requested in fiscal year 2005 to enable the
    Informatics Institute of the University of Medicine and Dentistry of
    New Jersey to recruit additional faculty and build core research
    facilities for modern drug discovery. This initiative will strengthen
    the University's graduate program in bioinformatics that is training
    the next generation of scientists in the field, and will accelerate the
    work of UMDNJ scientists to convert research findings into novel drug
    candidates.
        Bioinformatics is revolutionizing biomedical research by
    integrating mathematics, computer science, molecular biology and
    genetics. Scientists use bioinformatics to accelerate the discovery of
    new drugs and vaccines for the prevention and treatment of many
    diseases. The Informatics Institute was established in 2001 to
    strengthen informatics-driven activities at the University of Medicine
    and Dentistry of New Jersey and to forge new academic/industry
    partnerships in this emerging area. The University's first graduate
    program in bioinformatics, funded by a $2.3 million grant from the
    State of New Jersey, is helping to meet a critical shortage of skilled
    workers in bioinformatics and related disciplines.
        Academic collaborations already established by the Informatics
    Institute are advancing priority Federal goals in homeland security and
    the discovery of cures and treatments for major diseases. Partnerships
    forged by the Institute complement and enhance significant Federal
    resources that have strengthened UMDNJ's centers of excellence in
    biodefense and infectious disease research, cancer research and
    treatment, environmental health and toxicology, and biomedical polymer
    engineering.
        UMDNJ presently supports a broad array of research programs engaged
    in the discovery and characterization of potential drug targets (genes,
    proteins). However, the full value of these substantial research
    accomplishments is often lost, due to the absence of capacity for
    translating these targets into novel drug candidates. This capability
    can be provided only through major investment in resources for modern
    drug discovery: bioinformatics, computer-aided molecular modeling and
    design, medicinal chemistry, and high-throughput synthesis and
    screening of drug candidates. The opportunity is especially compelling
    in New Jersey, which is home for 15 of the world's largest
    pharmaceutical companies and more than 150 biotechnology companies and
    which ranks highest in per capita number of scientists and engineers in
    the Nation.
        The sustained growth of our graduate program and other informatics
    initiatives requires a major investment in computational facilities and
    the recruitment of additional bioinformatics faculty and staff. We
    respectfully seek Federal participation of $6 million in fiscal year
    2005 to recruit additional bioinformatics and medicinal chemistry
    faculty and postdoctoral researchers, and to build core research
    facilities for modern drug discovery.
        We thank this committee for its strong support of biomedical
    research and for the University's programs.
                                     ______

      Prepared Statement of the California Government and Private Sector
       Coalition for Operation Clean Air's 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 2005
    funding request of $11,000,000 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 $11,000,000 from DOE for alternative fuels and utility
    infrastructure funding.
        California's great San Joaquin Valley is in crisis. Home to over
    3.3 million people, its 25,000 square miles now has the unhealthiest
    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 ozone 8-hour Federal health standard.
        A combination of geography, topography, meteorology, tremendous
    population growth, urban sprawl and a NAFTA corridor of two major
    highways with over 5 million diesel truck miles per day, have collided
    to produce an air basin in which over 300,000 people, nearly 10 percent
    of the population, suffer 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 creates 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. In December 2003, the San Joaquin Valley Air Pollution
    Control District Board decided to become the first Air District in the
    Nation to voluntarily declare itself an ``extreme'' non-attainment
    area. This designation, if approved by USEPA, will defer until 2010 the
    date for attainment of Federal standards of air quality, but comes at a
    cost of imposing permitting on thousands of more businesses and even
    further discouraging business expansion or relocation. More Valley's
    businesses will be 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 chronic unemployment rates of nearly 20 percent.
    Encouraging business expansion in or relocation to the San Joaquin
    Valley to combat unemployment will be extremely difficult in the face
    of such regulatory burdens.
        The San Joaquin Valley is home to the most productive agricultural
    land in the world. Over 350 crops are produced commercially on 28,000
    farms encompassing 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 does contribute to the problem. However, it is a $14
    billion industry that forms the backbone of the Valley's economy, and
    its vitality is crucial.
        Industry alone is not the source of the Valley's poor air quality.
    Population growth rates exceeding those in the rest of the State and
    most 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, and Federal free trade
    policies. Other factors such as fireplace burning in the winter, open
    field agricultural burning because of lack of sufficient 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 (an area the size
    of the State of Connecticut) 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 eight-county San Joaquin
    Valley Air Pollution Control District. 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 unfounded Federal mandate.
        For fiscal year 2005, our Coalition is seeking funding of
    $11,000,000 from the Department of Energy's (DOE) Energy Supply Program
    for the installation and operation of alternative fuels infrastructure
    throughout the San Joaquin Valley Air Basin. Infrastructure for both
    mobile and stationary engines is included and will allow for the
    accelerated introduction of alternatively fueled vehicles in municipal
    fleets, public school fleets, and private fleets as well as for
    stationary, agricultural irrigation pump engines in the rural areas.
    The widespread use of lower-emitting engines will provide significant
    improvement to air quality in the San Joaquin Valley while furthering
    the goals of the President's National Energy Policy, which recommends
    enhancement of the supply of reliable energy while protecting our
    environment. OCA believes, like DOE, that there is direct applicability
    of alternative fuel (e.g. natural gas) engine expertise to the
    development and deployment of hydrogen power systems. OCA wants to see
    the San Joaquin Valley as the first area in the Nation for hydrogen
    infrastructure development and hydrogen vehicle deployment. This is in
    direct alignment with the Secretary's long-term vision of a zero
    mission future, free of reliance on imported energy. Development of
    alternative fuel infrastructure will augment the low-emission vehicle
    program by providing much needed compressed natural gas (CNG) and
    liquefied natural gas (LNG) fueling facilities.
        Thank you very much your consideration of our requests.
                                     ______

               Prepared Statement of the University of Rochester

                                    PROGRAM

        DOE Inertial Confinement Fusion Program--DOE [National Nuclear
    Security Agency (NNSA)] Defense Programs for fiscal year 2005.

                                   BACKGROUND

        The inertial confinement fusion (ICF) program is a key element in
    the Department of Energy's (DOE) Stockpile Stewardship Program (SSP)
    authorized by Public Law 103-160 to ``establish a stewardship program
    to ensure the preservation of the core intellectual and technical
    competencies of the United States in nuclear weapons.'' The OMEGA laser
    at the University of Rochester's Laboratory for Laser Energetics (LLE)
    is the principal laser research facility for the University and three
    national laboratories (Los Alamos, Sandia, and Livermore) for ICF and
    SSP experiments. LLE is the only facility that also trains significant
    numbers of graduate students in inertial fusion. The OMEGA laser, the
    highest-power ultraviolet fusion laser in the world, is the principal
    laser facility for SSP activities for DOE in fiscal year 2005 and for a
    number of years to come. The Secretary of Energy Advisory Board (SEAB)
    National Ignition Facility Laser System Task Force Report noted the
    importance of continuing scientific contact with ``. . . the laser-
    based research at the University of Rochester.''
        LLE (since 1970) is the only ICF program that has been jointly
    supported by the Federal Government, State government, industry,
    utilities, and a university. LLE makes fundamental scientific
    contributions to the national program. The Laboratory transfers
    technology to the public and private sectors through the training of
    graduate students and interactions with industry and other Federal
    laboratories. The Laboratory also serves as a National Laser Users'
    Facility benefiting scientists throughout the country.
        The present primary mission of LLE's research is to validate the
    direct-drive option for ICF intended for use on the National Ignition
    Facility (NIF) in order to demonstrate ignition and energy gain. DOE
    proclaimed that OMEGA is also needed to meet mission-critical
    requirements for ignition on NIF, and to conduct experiments to support
    the SSP mission, including some that are classified, in collaboration
    with the national laboratories.
        The OMEGA laser at LLE is the only operating experimental facility
    that can demonstrate the scientific potential of direct drive to
    provide a modest- to high-gain energy option for the Nation. For fiscal
    year 2005 funds are also requested to continue construction of the
    extended performance capability (EP) to the OMEGA facility and funds to
    continue to develop petawatt technologies for the national program. DOE
    has approved the mission need and purchase of long-lead procurements
    during fiscal year 2003, and approval of the final design is expected
    during fiscal year 2004. The Congress provided $20,000,000 to continue
    the OMEGA EP project in the fiscal year 2004 Energy and Water
    Development Appropriation Act, which will significantly expand the
    research capabilities of the existing OMEGA facility. OMEGA EP provides
    the Nation with an enhanced capability to perform SSP experiments, to
    test high-gain ICF concepts, and to provide a premier high-intensity-
    laser interaction facility for the United States. The University of
    Rochester is providing a new building ($20 million) for the OMEGA EP
    project at no cost to the government. Because the new cost-shared
    facility will keep the research at the LLE technologically current, LLE
    will be able to continue to be a national and world leader in its
    field, and serve as an important, cost-effective support facility to
    assure the success of the NIF. This represents an unusually successful
    partnership among the private sector, academia, and the State and
    Federal governments. The OMEGA facility will be the only large laser
    implosion facility for NNSA in the United States until at least 2008
    when NIF construction is completed.

                                REQUESTED ACTION

        To provide the support for program deliverables and the operation
    and extension of OMEGA (for both ICF experiments and SSP experiments),
    and to maintain the related training programs at Rochester, a total of
    $69,469,000 for the University of Rochester for fiscal year 2005 is
    required. This amount includes $41,469,000 for operating funds and
    $4,000,000 for the OMEGA EP facility included in the administration's
    request, and an additional $21,000,000 for the OMEGA extended
    performance capability, and $3,000,000 for petawatt technology
    development required to maintain the cost and schedule of the project.

                                   DISCUSSION

        Thermonuclear fusion is the process by which nuclei of low atomic
    weight such as hydrogen combine to form higher atomic weight nuclei
    such as helium. In this process some of the mass of the original nuclei
    is lost and transformed to energy in the form of high-energy particles.
    Energy from fusion reactions is the most basic form of energy in the
    universe; our sun and all other stars produce energy by thermonuclear
    fusion reactions occurring in their interior. Fusion is also the
    process that provides the vast destructive power of thermonuclear
    weapons. The most significant long-term potential commercial
    application of fusion is the generation of electric power.
        To initiate fusion reactions, the fuel must be heated to tens of
    millions of degrees. In stellar bodies, containment is possible because
    of the large gravitational force. On earth, two approaches are being
    investigated to demonstrate controlled fusion: magnetic confinement
    fusion and inertial confinement fusion (ICF). ICF involves the heating
    and compression of fusion fuel by the action of intense laser or
    particle beam drivers. There are two approaches to ICF, direct and
    indirect drive: indirect drive involves the conversion of beam energy
    to X-rays to compress a fuel capsule in an enclosure called a hohlraum;
    direct drive involves the direct irradiation of spherical fuel capsules
    by energy from a laser and may be more energetically efficient than
    indirect drive. For either approach, if very extreme density and
    temperature conditions are produced, it is possible to produce many
    times more energy in these fusion reactions than the energy provided by
    the drivers.

            OMEGA EXTENDED PERFORMANCE (OMEGA EP) FACILITY AT UR/LLE

        The University of Rochester's Laboratory for Laser Energetics (UR/
    LLE) is the lead laboratory for direct-drive inertial confinement
    fusion (ICF) and is the location of the OMEGA laser facility. Only
    three facilities, OMEGA at Rochester, Z at Sandia National Laboratory,
    and a few operating beamlines of NIF are available to conduct high-
    energy-density physics experiments in support of the Nation's Stockpile
    Stewardship Program (SSP) and ICF. (In fiscal year 2003, over half of
    the OMEGA shots, 742, were for outside users, including 578 for the
    national laboratories.) OMEGA and the National Ignition Facility (NIF)
    under construction at the Lawrence Livermore National Laboratory are
    designed to support SSP and ICF by performing planar-target and
    spherical-implosion experiments at high laser irradiation intensities.
    Using high-energy, high-power lasers, a highly compressed core of
    deuterium-tritium fuel can be assembled that, with the full energy of
    NIF, will achieve controlled thermonuclear ignition and gain. (Ignition
    refers to initiating a self-sustaining fusion reaction, and gain refers
    to achieving more energy out of the reaction than was used to initiate
    it.)
        Three years ago UR/LLE proposed to construct a super-high-
    intensity, high-energy laser facility. DOE has approved the mission
    need and purchase of long-lead procurements in fiscal year 2003, and
    approval of the final design is expected during fiscal year 2004. The
    Fiscal Year 2004 Energy and Water Development Appropriations Act
    provided $20,000,000 to continue this project. The project schedule and
    cost, based on actual funding received to date, are shown in the table
    below. The total cost ($82,000,000 in as-spent dollars) is unchanged
    from the previous request. The University of Rochester is providing a
    building, estimated to cost about $20,000,000 to house the new
    facility. The new building is under construction and is slated for
    completion by January 2005.
        OMEGA EP will significantly benefit SSP and ICF through the ability
    to produce intense photon, proton, and electron beams for radiography
    and by conducting experiments to test advanced computer codes relevant
    to nuclear weapons, basic science, and astrophysics. There are
    additional exciting basic science applications that enhance our
    national ability to attract and retain the scientific expertise
    required for the United States' nuclear weapons program in the future.
        Super high-intensity, high-energy laser sources will significantly
    advance ignition physics. Very high intensities allow the ICP and SSP
    programs to test advanced concepts that can increase the gain of an ICF
    target. During the past year, LLE scientists have examined using NIF
    for direct drive (laser light directly drives the target). Calculations
    indicated that the gain is potentially at least three times larger than
    can be achieved using indirect drive (conversion of laser light to X-
    rays that drive the target). Since a conversion of laser light to X-
    rays is not required for direct drive, the efficiency of the process is
    higher. With direct drive, the target absorbs about five times more
    energy, and it is this increased energy that is responsible for the
    higher gain.
        OMEGA EP, when completed, will support the SSP and ICF programs.
    Concomitantly, with the delay of the NIF this added capability would
    contribute substantially to the critical need to recruit and retain
    graduate students, postdoctoral associates, University faculty members,
    and national laboratory scientists in areas of national need.
        OMEGA is the only facility capable of assembling an highly
    compressed deuterium-tritium core from a cryogenic target; it is the
    only location where advanced concepts for ignition and gain can be
    tested. Other advantages include (1) operating synergies with OMEGA
    will reduce operating costs, (2) UR/LLE has an established scientific
    user base, and (3) UR/LLE has a proven track record of delivering
    similar-sized projects on time and on budget as well as operating and
    maintaining large-scale laser systems.
        The construction time line and cost for this extended capability is
    as follows:

                                                [In millions of dollars]
    ----------------------------------------------------------------------------------------------------------------
                                                                  Fiscal Year  Fiscal Year  Fiscal Year  Fiscal Year
                                                                      2004         2005         2006         2007
    ----------------------------------------------------------------------------------------------------------------
    Design & Long Lead Procurement.................           13  ...........  ...........  ...........  ...........
    Procurement and Assembly.......................  ...........           20           25  ...........  ...........
    Integration & Commissioning....................  ...........  ...........  ...........           17            7
    ----------------------------------------------------------------------------------------------------------------

        Total Project Cost.--$82,000,000 (OMEGA EP) plus $20,000,000
    (building) plus $1,500,000 from New York State (auxiliary target
    chamber) equals $103,500,000. (This is for OMEGA EP, $82 million from
    the Federal Government, $20 million from the University, and $1.5
    million from New York State. Not included is the operating and research
    cost that are included in the administration's request annually.)

                            PREVIOUS FEDERAL FUNDING
    ------------------------------------------------------------------------
                                                                  Amount
    ------------------------------------------------------------------------
    Fiscal Year 2004 Appropriation..........................     $63,132,000
    Fiscal Year 2003 Appropriation..........................      47,878,800
    Fiscal Year 2002 Appropriation..........................      34,693,000
    Fiscal Year 2001 Appropriation..........................      33,150,000
    ------------------------------------------------------------------------

                                REQUESTED ACTION

        To provide the support for program deliverables and the operation
    and extension of OMEGA (for both ICF experiments and SSP experiments),
    and to maintain the related training programs at Rochester, a total of
    $69,469,000 for the University of Rochester for fiscal year 2005 is
    required. This amount includes $41,469,000 for operating funds and
    $4,000,000 for the OMEGA EP facility included in the administration's
    request, an additional $21,000,000 for the OMEGA extended performance
    capability, and $3,000,000 for petawatt technology development required
    to maintain the cost and schedule of the project.
                                     ______

              Prepared Statement of the Energy Sciences Coalition

        Chairman Domenici, the Energy Sciences Coalition expresses its
    great appreciation for the leadership you have shown as chairman of the
    Energy and Water Development Appropriations Subcommittee. We applaud
    your vision of how the programs of the Department of Energy's Office of
    Science will lead to research discoveries and technological
    developments benefiting this and future generations. We are requesting
    $3.8 billion for the Office in fiscal year 2005.
        The Energy Sciences Coalition is a broadly based organization
    representing scientists, engineers and mathematicians in universities,
    industry, professional societies, and national laboratories. We share
    your belief that the research supported by the Office of Science has
    and will make significant contributions to our Nation's security and
    standard of living.
        The coalition supports the findings of several reviews of the
    programs of the Office of Science, and the pressing need to augment its
    funding. Last fall, Secretary Spencer Abraham's Advisory Board released
    a report on the department's science programs. This task force panel
    was chaired by MIT President Charles Vest, including the former
    president of the NASDAQ Stock Market; industry, university, and
    association CEOs; and senior policy analysts. Among their findings and
    conclusions are:

        ``America can be free, secure and economically strong in the 21st
    century only if we continue to excel in science and advanced
    technology.'' ``America can meet its energy needs if and only if we
    make a strong and sustained investment in research in physical science,
    engineering, and applicable areas of life science, and if we translate
    advancing scientific knowledge into practice.'' ``DOE science budgets
    have not received the priority merited by their importance to our
    Nation's future energy, security, and economy.'' ``The federal
    investment in physical science and engineering has been stagnant for
    over thirty years. During this same period, the Department's national
    laboratories have suffered from decay and deferred maintenance, and
    U.S. industry has largely phased out its basic research programs and
    organizations. As a result, the U.S. is no longer the clear leader in
    some important areas of science.''

        Groundbreaking research supported by the Office of Science is
    conducted in universities and other institutions across the United
    States.
        Our Nation benefits not only from the discoveries that will be made
    with this support, but also from the training of America's next
    generation of researchers. Such training will be instrumental in
    maintaining our Nation's technological superiority in the international
    marketplace. The Office of Science also plays an extremely important
    and unique role in the design, construction, and operation of large-
    scale user facilities used by researchers supported by the Department
    of Energy, National Institutes of Health, and the National Science
    Foundation.
        Enclosed please find a copy of the Energy Sciences Coalition's
    fiscal year 2005 funding statement. After carefully considering the
    President's science goals in areas such as hydrogen energy, fusion, the
    human genome, climate change, and a review of the 20-year facilities
    and strategic plans, the Coalition recommends an increase in the budget
    for the Office of Science of not less than $350 million to a level over
    $3.8 billion.
        In closing, I again express the coalition's gratitude for the
    leadership that you and your colleagues have demonstrated in supporting
    the important work of the Office of Science. Please do not hesitate to
    contact me if the Coalition can be of any assistance.
        The Energy Sciences Coalition (ESC) supports the Department of
    Energy (DOE) Office of Science funding levels approved by both the
    House and Senate in their respective versions of the Energy Policy Act.
    These funding levels are easily justifiable given the tremendous
    scientific opportunities that currently exist, as well as the broad
    range of other science-related issues that the Office of Science is
    uniquely positioned to address. These opportunities, and the facilities
    and projects needed to achieve them, are well documented and outlined
    in both the Department's 20-year scientific facilities plan released in
    November 2003 and the Secretary of Energy Advisory Board's (SEAB)
    December 2003 report on DOE science.
        However, the Energy Sciences Coalition is also aware of the
    significant fiscal constraints facing the administration and Congress
    this year. Weighing the economic and national security value of
    investments in these science programs against current fiscal
    constraints, the Energy Sciences Coalition urges an fiscal year 2005
    increase of not less than $350 million for the DOE Office of Science,
    bringing the total DOE Office of Science budget to a level over $3.8
    billion. While significantly less than the fiscal year 2005 levels
    contained in the House and Senate passed energy policy bills cited
    above, this figure is similar to the funding levels these bills
    contained for fiscal year 2004.
        We believe that growth for the DOE Office of Science at a rate
    lower than 10 percent in fiscal year 2005 and in the next few years--a
    growth rate which is less than what is called for in the House and
    Senate authorization bills--will make it virtually impossible for the
    Department to move forward with the initiatives and recommendations
    outlined in the 20-year plan and by SEAB without severely damaging
    already existing and very successful DOE science programs.

                FISCAL YEAR 2005 ESC FUNDING STATEMENT ENDORSEES

        American Chemical Society; American Institute of Physics; American
    Mathematical Society; American Physical Society; American Society of
    Agronomy; American Society of Plant Biologists; Association of American
    Universities; Battelle; Crop Science Society of America; Fusion Power
    Associates; General Atomics; Krell Institute; Massachusetts Institute
    of Technology; Michigan State University; National Association of State
    Universities and Land-Grant Colleges; North Carolina State University;
    Ohio State University; Optical Society of America; Princeton
    University; Purdue University; Society for Industrial and Applied
    Mathematics; Soil Science Society of America; Southeastern Universities
    Research Association; Stanford University; Stony Brook University;
    Universities Research Association, Inc.; University of California;
    University of Chicago; University of Cincinnati; University of Houston;
    University of Pittsburgh; University of Southern California; University
    of Tennessee; University of Washington; University of Wisconsin-
    Madison.
                                     ______

       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 68-university member consortium that manages and operates
    the National Center for Atmospheric Research (NCAR) and additional
    programs that support and extend the country's scientific research and
    education capabilities. In addition to its member research
    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's principal support
    is from the National Science Foundation (NSF) with additional support
    from other Federal agencies including the Department of Energy (DOE).

                             DOE OFFICE OF SCIENCE

        We were extremely pleased to see the recommendations of the task
    force of the Secretary of Energy Advisory Board contained in the Final
    Report of the Task Force on the Future of Science Programs at the
    Department of Energy. The scientific community is aware that the report
    recommendation to strengthen the Federal investment in the physical
    sciences and advanced engineering research is supported by many members
    of Congress; it is a recommendation on which I am sure many
    subcommittee members would like to act.
        DOE is the largest Federal sponsor of basic research in the
    physical sciences, but the level of funding for DOE's core science
    programs has remained stagnant for years, while the number of
    ``congressionally directed projects'' has increased. While many of
    these add-ons seem worthy, they are diverting DOE's base funding from
    peer-reviewed research programs that are planned well in advance to
    accomplish DOE's mission in service to the country and are competed
    among the country's top researchers.
        In the House Science Committee's recently released ``Views and
    Estimates'' for fiscal year 2005, the committee acknowledges the very
    difficult budget decisions Congress will have to make this year.
    However, as it has in past years, it criticizes the administration's
    budget request for DOE's Office of Science, calling it ``inadequate''
    and ``dwarfed'' by support for the life sciences in recent years. Two
    bills, H.R. 34 and S. 915, authorize increased funding for the Office
    of Science, essentially doubling its budget. The conference report to
    H.R. 5, The Energy Policy Act of 2003, recommends that the Office of
    Science budget be funded at $4.2 billion, a 23 percent increase over
    the fiscal year 2004 amount.
        As you are well aware, a healthy science budget ensures a vital
    workforce, strong economy, and contributes directly to national
    security. The administration's fiscal year 2005 request cuts DOE's
    Office of Science by 2 percent. I urge the subcommittee to fund the DOE
    Office of Science at the level of the fiscal year 2004 Original
    Appropriation plus Adjustments, or $3.5 billion, at the very least, and
    to enable the agency to apply the entire appropriated amount toward
    planned agency research priorities. This level of research funding will
    critically augment and reinvigorate the work of researchers throughout
    the Nation.

                     BIOLOGICAL AND ENVIRONMENTAL RESEARCH

        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, yet the
    request of $496.6 million for BER research is down over 29 percent from
    the fiscal year 2004 enacted level of $641.5 million. This reduction
    eliminates over $80.0 million worth of ``extra projects'' funded last
    year.
        Peer-reviewed university research programs play a critical role in
    the BER program involving the best researchers the Nation's
    institutions of higher learning have to offer, and developing the next
    generation of researchers. Approximately half of BER basic research
    funding supports university-based activities directly and indirectly.
    All BER research projects, other than those in the ``extra projects''
    category, undergo regular peer review and evaluation. In step with the
    recommendation made above for the Office of Science, I urge the
    subcommittee to fund Biological and Environmental Research at the level
    of the fiscal year 2004 Original Appropriation plus Adjustments, or
    $641.5 million, and to enable BER to apply the entire appropriated
    amount toward planned agency research priorities that are peer-reviewed
    and involve the best researchers to be found within the Nation's
    university research community as well as the DOE labs.

                            CLIMATE CHANGE RESEARCH

        Within BER, the Climate Change Research long-term goal is to
    deliver improved climate data and models for policy makers to determine
    safe levels of greenhouse gases for the Earth system. This work is
    critical to the health of the planet. The extremely important target
    capability for fiscal year 2005 is to enable studies of the
    interactions between the carbon cycle and climate and between secondary
    sulfur aerosols and climate. The Climate Change Research Request of
    $142.9 million is flat with the fiscal year 2004 Original Appropriation
    level. I urge the subcommittee to fund Climate Change Research at a
    level that is consistent with the request for BER stated above.
        Climate Change Research is composed of several programs of great
    importance to the atmospheric sciences community and the Nation.
    Climate and Hydrology contains Climate Modeling which develops the best
    coupled atmospheric-ocean general circulation models, and Atmospheric
    Radiation Measurement (ARM) Research which contributes to our
    understanding of the processes that control solar and thermal infrared
    radiative transfer through clouds and at the earth's surface. ARM
    supports a number of scientific ``Fellows,'' making an important
    contribution to the development of the next generation of climate
    scientists. Both Climate Modeling and ARM are programs that are of
    critical importance to the Nation's overall climate change research
    efforts. Climate and Hydrology receives a 0.6 percent increase in the
    fiscal year 2005 request. I urge the subcommittee to fund Climate and
    Hydrology at a level that is consistent with the request for BER and
    Climate Change Research stated above.
        Also within Climate Change Research, Atmospheric Chemistry and
    Carbon Cycle is a program that includes Atmospheric Science, the work
    of which is essential for assessing the effects of energy production on
    air quality and climate through the quantification of the impacts of
    energy-related aerosols on climate. This work will be closely linked
    with the ARM program described above. I urge the subcommittee to fund
    Atmospheric Chemistry and Carbon Cycle at a level that is consistent
    with the request for BER and Climate Change Research stated above.

                     GLOBAL CHANGE EDUCATION PROGRAM (GCEP)

        Within the Climate Change Research program, the Global Change
    Education Program funds the DOE's Summer Undergraduate Experience and
    Graduate Research Environmental Fellowships, as well as positions in
    the Significant Opportunities in Atmospheric Research and Science
    (SOARS) program, which is managed by UCAR. The DOE education programs
    are not slated to receive an increase, which has been the case for many
    years. DOE participation in the multi-agency funded SOARS program has
    been eliminated completely by BER program managers because of funding
    issues.
        The lack of ethnic diversity among advanced-degree atmospheric
    science graduates is well documented. SOARS is a model mentoring
    program, which received the prestigious Presidential Award for
    Excellence in Science, Mathematics, and Engineering Mentoring in 2001.
    Now in its eighth year, SOARS provides a unique, 4-year experience for
    underrepresented students interested in graduate work in the
    atmospheric and related sciences. If funding for the Climate Change
    Research Program does not increase over the fiscal year 2005 requested
    level, underrepresented students will be turned away from this
    invaluable SOARS experience.

                 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. The Intergovernmental Panel on Climate Change (IPCC) has
    begun work on its Fourth Assessment Report to be completed in 2007, and
    ASCR's contribution to this international document will be critical. In
    order to maintain our international leadership in advanced computing, I
    urge the subcommittee to provide ASCR with the requested level of
    $204.3 million.

                                   CONCLUSION

        On behalf of UCAR and the atmospheric sciences research community,
    I want to thank the subcommittee 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 2005 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 Southern States Energy Board

        Mr. Chairman, the Southern States Energy Board (SSEB) is pleased to
    provide this statement for the record to the U.S. Senate Appropriations
    Subcommittee on Energy and Water Development as it considers fiscal
    year 2005 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 2005 budget request. SSEB governors
    recommend that the Congress appropriate $5,000,000 to the State/
    Regional Biomass Partnership and direct the Department to work with
    regional governors' organizations, specifically the Southern States
    Energy Board, the Coalition of Northeast Governors Policy Institute,
    the Council of Great Lakes Governors and the Western Governors'
    Association, to make the Partnership even more successful.
        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.
        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 and $2,000,000 in the Fiscal Year 2004 Energy and Water
    Development Appropriations bill. In addition, the Board wishes to
    commend the administration for reinstating the State/regional biomass
    partnership in the fiscal year 2005 budget request. SSEB and other
    regional governors organizations received new cooperative agreements
    for the fiscal year 2003 funding on March 2, 2004.
        Energy independence is a critical element in the administration's
    Energy Policy and can be significantly enhanced by developing viable
    domestic alternative energy sources. Funding for the State/regional
    biomass partnership greatly enhances the States' ability to participate
    in the development of biomass energy markets.
        As the precursor to the State/Regional Biomass Partnership, 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 partnerships, 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, the Council of Great Lakes
    Governors and the Western Governors' Association) are recognized
    nationally for their combined experience related to biomass
    technologies and policies. SSEB and other regional governors'
    organizations hosting State/regional biomass energy partnerships are
    critical to 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.
        In the past, 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 and a Federal representative named by the
    President under Public Law 87-563 and Public Law 92-440. 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 State/regional
    biomass activities, provided more formal interaction between the States
    and improved policy development and coordination in particular.
        We urge Congress to include this modest but vital appropriation in
    the fiscal year 2005 Energy and Water Development Appropriations bill
    to protect the Federal Government's 20-year investment in State/
    regional biomass activities, and to continue the promotion of the
    strong Federal interest in viable and growing biobased products and
    bioenergy.
                                     ______

          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 43,000 members,
    appreciates the opportunity to provide written testimony on the fiscal
    year 2005 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.

                             DOE OFFICE OF SCIENCE

        The scientific enterprise and the overall economy continue to
    benefit enormously from investments in the basic sciences made by the
    DOE Office of Science. The DOE Office of Science, the Nation's primary
    supporter of the physical sciences, is also an essential partner in the
    areas of biological and environmental science research as well as in
    mathematics, computing, and engineering. Furthermore, the Office of
    Science supports a unique system of programs based on large-scale,
    specialized user facilities that bring together working teams of
    scientists focused on such challenges as global warming, genomic
    sequencing, and energy research. The Office of Science is also an
    invaluable partner in certain scientific programs of the National
    Institutes of Health (NIH) and the National Science Foundation (NSF)
    and supports peer-reviewed, basic research in DOE-relevant areas of
    science in universities and colleges across the United States. 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 goal of producing and
    conserving energy in environmentally responsible ways. Programs include
    basic research projects in microbiology, as well as, extensive
    development of biotechnology-based systems to produce alternative fuels
    and chemicals, to recover and improve the process for refining fossil
    fuels, to remediate environmental problems, and to reduce wastes and
    pollution.
        The administration's proposed budget for fiscal year 2005 includes
    $3.4 billion for the Office of Science, representing a decrease of $68
    million compared to fiscal year 2004. The 2 percent cut proposed for
    fiscal year 2005 for the Office of Science is a significant departure
    from the congressionally authorized level of $4 billion. The proposed
    budget for Biological and Environmental Research (BER) in fiscal year
    2005 is $502 million or $140 million below fiscal year 2004. The
    proposed budget for Basic Energy Sciences (BES) in fiscal year 2005
    would provide $1.06 billion, representing an increase of $53 million,
    or 5.2 percent, over the prior year.

                 BIOLOGICAL AND ENVIRONMENTAL RESEARCH PROGRAMS

        DOE is the lead Federal agency supporting genomic sequencing of
    non-pathogenic microbes through its Genomics: GTL Program. This
    sequence information provides clues into how we can design
    biotechnological processes that will function in extreme conditions and
    potentially solve pressing national priorities, such as energy and
    environmental security, global warming, and energy production. The
    administration has requested $67.5 million for fiscal year 2005,
    compared to funding of $63.5 million for fiscal year 2004. These
    requests include a $4 million increase for research on function and
    control of molecular-scale machines for energy and environmental
    applications, as well as $5 million for Project Engineering and Design
    of the first Genomics: GTL project, the Facility for Production and
    Characterization of Proteins and Molecular Tags.
        In view of the valuable insights and tremendous practical potential
    from microbial genomic sequencing, the ASM recommends that Congress
    provide an additional $25 million for the GTL Program in fiscal year
    2005. ASM believes that these additional funds will be vital if DOE's
    role in this science frontier is to expand.

                           BER GENOMICS: GTL PROGRAM

        Since microbes power the planet's carbon and nitrogen cycles, clean
    up our wastes, and make important transformations of energy, they are
    an important source of biotechnology products, making DOE research
    programs extremely valuable for advancing our knowledge of the non-
    medical microbial world. 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, use, or reengineer that microbe to address an assortment of
    national issues. The DOE Genomics: GTL genomic sequencing program has
    an important impact on nearly every other activity within BER. In
    addition to this program itself, a substantial portion of the DOE Joint
    Genome Institute's (JGI) sequencing capacity continues to be devoted to
    the sequencing of microbial genomes as well as DNA in mixed genomes
    obtained from microbial communities dwelling within specialized
    ecological niches. As part of these efforts, DOE continues to complete
    DNA sequences of genomes in microbes with potential uses in energy,
    waste cleanup, and carbon sequestration.
        About 40 percent of the JTI capacity is dedicated to serving direct
    DOE needs, primarily through the Genomics: GTL program, while the
    remaining 60 percent of this capacity serves as a state-of-the-art DNA
    sequencing facility for whose use scientists submit proposals that are
    subject to merit review. These sequencing projects will be conducted at
    no additional cost for the extramural scientific community. These
    efforts are expected to have a substantial impact on the BER
    Environmental Remediation Sciences program, reflecting the fact that
    much of this program is focusing on the use and role of microbes in
    environmental remediation. In addition, the Genomics: GTL program will
    continue to have a major impact on the BER Climate Change Research
    program because of the role microbes play in the global carbon cycle
    and the potential for developing biology-based solutions for
    sequestering carbon.
        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 preponderance of microorganisms
    that cannot yet be grown in culture. 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 and higher
    levels, and thus urges Congress to fully support this exciting program.

                           ENVIRONMENTAL REMEDIATION

        The overall goal of the DOE Environmental Management Science
    Program (EMSP), which was transferred from Environmental Management to
    the BER program, is to support basic research that improves the science
    base underpinning the clean up of DOE sites. Traditional clean up
    strategies may not work or be cost effective for many of the challenges
    that could prevent the successful closure of DOE sites. The EMSP,
    through its support of basic research, aims to develop and validate
    technical solutions to complex problems, providing innovative new
    technologies to overcome major obstacles that lead to future risk
    reduction and cost and time savings. It is the intent or the
    expectation of the EMSP that the basic research projects funded are
    directed toward specific issues and uncertainties at the DOE cleanup
    sites.
        DOE bioremediation activities are centered on the Natural and
    Accelerated Bioremediation Research (NABIR) program, a basic research
    program focused on determining how and where bioremediation may be
    applicable as a reliable, efficient, and cost-effective approach for
    cleaning up or containing metals and radionuclides in contaminated
    subsurface environments. In the NABIR program, research advances will
    be made from molecular to field scales; on genes and proteins used in
    bioremediation and in overcoming physicochemical impediments to
    bacterial activity; in non-destructive, real-time measurement
    techniques; on species interaction and response of microbial ecology to
    contamination; and in understanding microbial processes for altering
    the chemical state of metallic and radionuclide contaminants. NABIR
    activities have a substantial involvement of academic scientists.
        Additional EMSP research efforts will focus on contaminant fate and
    transport in the subsurface, nuclear waste chemistry and advanced
    treatment options, and novel characterization and sensor tools. In
    addition, studies on bioremediation of organic contaminants are
    conducted in EMSP, complementing EMSP projects will continue to be
    funded through a competitive peer review process. The most
    scientifically meritorious research proposals and applications will be
    funded based on availability of funds and programmatic relevance to
    ensure a complete and balanced research portfolio that addresses DOE
    needs. Research will be funded at universities, national laboratories,
    and at private research institutes and industries. This research will
    be conducted in collaboration with the Office of Environmental
    Management. Funding is reduced to increase research at and development
    of Field Research Centers through the NABIR program.
        The administration's proposed budget for Bioremediation research,
    including the NABIR program, is $105 million, a $2.8 million decrease
    compared to fiscal year 2004. The ASM considers these DOE environmental
    remediation programs to be of considerable importance, and recommends
    that funding for fiscal year 2005 be increased by an additional $5
    million.

                            CLIMATE CHANGE RESEARCH

        The ASM is pleased to see the administration's support of Climate
    Change Research continue in its fiscal year 2005 budget. The ASM
    endorses the President's proposed $143 million budget for fiscal year
    2005, which is about equivalent with levels in fiscal year 2004. The
    Climate Change Research subprogram seeks to apply the latest scientific
    knowledge (i.e., genomic, new computational methods) to the potential
    effects of greenhouse gas and aerosol emissions on the climate and the
    environment. This program is DOE's contribution to the interagency U.S.
    Global Change Research Program proposed by President Bush in 1989 and
    codified by Congress in the Global Change Research Act of 1990 (Public
    Law 101-106). This program is vital if science is to advance its
    understanding of the radiation balance between the surface of the Earth
    and the uppermost portions of the atmosphere and how this will affect
    the planet's climate and ecosystems.
        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 will also identify potential feedbacks from
    changes in the climate and atmospheric composition. This research is
    critical if we are to better understand the changes occurring in our
    ecosystems from increasing levels of atmospheric pollutants.
        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 shifts.

                              BASIC ENERGY SCIENCE

        The administration's requested funding for the Office of Basic
    Energy Sciences (BES) for fiscal year 2005 is $1.06 billion,
    representing an increase of $53 million over 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. Program initiatives include
    microbiological and plant sciences focused on harvesting and converting
    energy from sunlight into energy feedstock such as cellulose and other
    products of photosynthesis, as well as how those chemicals may be
    further converted into energy rich molecules such as methane, hydrogen
    and ethanol. Alternative and renewable energy sources will remain of
    strategic importance in the Nation's energy portfolio, and DOE is well
    positioned to advance basic research in this area. The advances in
    genomic technologies have given this research area a tremendous new
    resource for advancing the Agency's bioenergy goals.

                     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 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. The budget request for the DOE
    Nanoscale Science program includes an increase of $8.7 million to a
    level of $211 million for fiscal year 2005. 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. Such
    commitment will help maintain U.S. leadership in science and
    technology.

                                                                 SCHEDULE OF FEDERAL AWARDS 2004
    --------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                    Grants       Receipts or                      Grants
     Federal Grantor/Pass-through Grantor/Program Title     Cost     Federal      Program or    Receivable 1/1/    Revenue    Disbursements/  Receivable 12/
                                                           Center  CFDA Number   Award Amount        2004        Recognized    Expenditures       31/2004
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    MAJOR PROGRAMS:
        Resident Postdoctoral Research..................      783       93.283     $999,381.00      $89,902.49  ............  ..............      $89,902.49
                                                         ---------------------------------------------------------------------------------------------------
          Total Major Programs..........................  .......  ...........      999,381.00       89,902.49  ............  ..............       89,902.49
                                                         ===================================================================================================
    OTHER FEDERAL ASSISTANCE:
        HHS:
            NIGMS-MARC..................................      789       93.88       431,300.00  ..............  ............  ..............            0
            Environmental Micoorganisms.................      694       93.856       10,000.00  ..............  ............  ..............            0
            DNA Repair and Mutagenesis..................      457       93.393       25,000.00  ..............  ............  ..............            0
            Summer Institute............................      848       93.856       24,000.00          532.99  ............  ..............          532.99
            Conf Biofilms...............................      425       93.121       25,000.00       25,000.00  ............  ..............       25,000.00
            Environmental Pathogens.....................      694       93.856       10,000.00  ..............  ............  ..............            0
            Microbial Triggers of Disease...............      666       93.855        5,000.00  ..............  ............  ..............            0
            Candida and Candidiasis.....................      434       93.121       10,000.00  ..............  ............  ..............  ..............
        National Science Foundation:
            Plant Biotechnology.........................      678       47.074       15,000.00  ..............  ............  ..............            0
            Pathogens...................................      697       47.074      110,000.00       33,608.72  ............  ..............       33,608.72
            Sub Contract BioSciEd Net...................      787       47.076      100,000.00       30,838.75  ............  ..............       30,838.75
            Beyond Microbial Genomics...................      691       47.074       15,000.00  ..............  ............  ..............  ..............
        U.S. Department of Energy:
            DNA Repair and Mutagenesis..................      457       81.049       20,000.00  ..............  ............  ..............            0
            Prokaryotic Development.....................      472       81.049       10,000.00  ..............  ............  ..............            0
            Geobiology..................................      675       81.049       15,000.00  ..............  ............  ..............            0
            Microbial Ecology and Genomics..............      676       81.049       25,000.00  ..............  ............  ..............            0
            Multicellular Cooperation...................      671       81.049       15,000.00  ..............  ............  ..............            0
            Systems Microbiology........................      691  ...........       10,000.00        6,461.06  ............  ..............        6,461.06
        USDA:
            Conference Salmonella.......................      421       10.206       10,000.00       10,000.00  ............  ..............       10,000.00
            Pre-harvest Food Safety.....................      663       10.001        5,000.00        5,000.00  ............  ..............        5,000.00
            Pre-harvest Food Safety.....................      663       10.2         25,000.00       19,350.00  ............  ..............       19,350.00
            Pre-harvest Food Safety.....................      663       10.206       10,000.00        7,000.00  ............  ..............        7,000.00
            Conf Salmonella Pathogenesis................      421       10.206       10,000.00  ..............  ............  ..............            0
        EPA:
            Microbial Eolocy............................      676       66.5         20,000.00  ..............  ............  ..............            0
            Infectious Disease GI Tract.................      670       66.606       50,000.00  ..............  ............  ..............            0
            PO HHS/FDA Pre-harvest Food.................      663  ...........       10,000.00       10,000.00  ............  ..............       10,000.00
            PO US Dept of Army..........................      475  ...........       10,000.00  ..............  ............  ..............            0
                                                         ---------------------------------------------------------------------------------------------------
              Total Other Awards........................  .......  ...........    1,025,300.00      147,791.52         $0.00          $0.00       147,791.52
                                                         ===================================================================================================
              Total Federal Awards......................  .......  ...........    2,024,681.00      237,694.01          0.00           0.00       237,694.01
    --------------------------------------------------------------------------------------------------------------------------------------------------------

               Prepared Statement of the Nuclear Energy Institute

        On behalf of the nuclear energy industry, I thank you for your
    support of nuclear technology-related programs in the Energy Department
    (DOE) and your oversight of the Nuclear Regulatory Commission (NRC) for
    fiscal 2004.
        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.
        My statement for the record addresses three key points for your
    consideration this year:
        (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) Increased research and development (R&D) on advanced nuclear
    technology is essential to maintain America's leadership role in
    commercial nuclear technologies.
        (3) The NRC's budget and staffing should be reassessed in light of
    current trends.
        I also will discuss briefly several important programs that the
    nuclear energy industry supports, including research into the health
    effects of low levels of radiation.

               CONGRESS SHOULD RECLASSIFY THE NUCLEAR WASTE FUND

        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. Currently, Congress funds the used fuel programs within the
    confines of the discretionary spending allocation for the Energy and
    Water Development Appropriations bill. As a result, annual
    appropriations for Yucca Mountain and related programs have been
    reduced $723 million below DOE's budget requests in the past 11 years--
    significantly hampering DOE's progress toward accepting the Nation's
    used nuclear fuel. Funding shortfalls in past years have forced DOE to
    defer important programs, including procuring transportation containers
    for used reactor fuel; acquiring transportation and logistics services;
    creating the final grant process for providing emergency responder
    assistance; developing a transportation infrastructure in Nevada; and
    working with regional, State, tribal and local representatives on
    transportation planning.
        The industry urges Congress to reclassify the Nuclear Waste Fund
    this year, as proposed by the president's fiscal 2005 budget and
    introduced as H.R. 3981, to prevent future funding shortfalls for Yucca
    Mountain. The Nuclear Waste Fund has three unique characteristics that
    justify modifying the current budget rules governing its use in this
    way:
      --The Federal Government is obligated by law and contracts signed
            with electric companies that operate nuclear power plants to
            implement the used fuel management program.
      --The fund is intended to cover the entire cost of the Federal
            Government's commercial used fuel management program over
            several decades.
      --The disposal of used nuclear fuel from commercial reactors is
            financed entirely through a fee established by Federal law and
            paid by consumers of electricity generated at nuclear power
            plants.

      INDUSTRY SUPPORTS BUDGET REQUEST OF $880 MILLION FOR YUCCA MOUNTAIN

        The industry greatly appreciates the House for its report language
    emphasizing the need for early action on infrastructure development for
    the used nuclear fuel disposal program. The committee's direction
    resulted in an announcement by DOE on preferences for rail transport in
    Nevada and should lead to a record of decision on route selection this
    year.
        Last year, the H.R. 6 conference report endorsed the highest level
    of funding for Yucca Mountain to date. At $580 million, DOE could
    address many technical challenges necessary for submitting an
    application to the NRC by December for a license to construct the
    repository.
        NEI recognizes the challenge that the committee faces in fiscal
    2005, based on assumptions included in the budget request on this issue
    and urges the committee to make allocations under section 302(b) of the
    Budget Act consistent with fully funding the administration request of
    $880 million for Yucca Mountain. Absent sufficient funding in fiscal
    2005, the industry does not believe the program will meet key
    milestones for accepting used fuel in 2010, and these potential delays
    will result in higher costs for the program and increased liabilities
    to the government.
        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
    reactor fuel treatment and management. Such farsighted programs will
    allow our Nation to remain the world leader in nuclear technologies.
    However, technologies like transmutation--the conversion of used
    nuclear fuel into a smaller volume of less toxic materials--still
    require a Federal repository for disposal of the radioactive by-
    products generated from the process.
        research and development of new nuclear energy systems necessary
        The industry supports increased funding for fiscal 2005 for DOE's
    R&D programs for the development of new nuclear energy systems. The
    nuclear energy industry urges the committee to approve at least $60
    million for the Nuclear Energy Technology (NET) program. Within the NET
    program, $10 million should be earmarked for the early site permit
    process as requested by DOE. This is an important component of the
    revised NRC licensing process for new nuclear power plants passed by
    Congress in 1992, and testing is already under way. An additional $50
    million should be used to begin a 6-year, cost-shared program to test
    the combined operating and construction license process for new nuclear
    plants, based on the industry's response to a DOE solicitation that
    will be awarded this year. DOE should support deployment of proven
    generation III-plus technology for this program.
        The industry believes that the government has an early role in
    bringing advanced reactor concepts, known as Generation IV reactors, to
    the marketplace. NEI urges your support for a next-generation nuclear
    plant at the new Idaho National Laboratory, funded through the
    Generation IV Nuclear Energy Systems Initiative program. The industry
    also supports the Nuclear Hydrogen Initiative at $9 million.
        Although DOE continues to fund the International Nuclear Energy
    Research Initiative (I-NERI), the domestic version of this program,
    NERI, has been terminated and a new initiative has been proposed. We
    believe the current program fills a vital need identified in a 1997
    report by the President's Council of Advisers on Science and Technology
    (PCAST) and endorsed by the energy secretary's Nuclear Energy Research
    Advisory Committee. We do not support the change for NERI. Rather, the
    industry believes this collaborative program between national
    laboratories, industry and universities should be continued at $7
    million for fiscal 2005.
        PCAST also recommended another R&D initiative--the Nuclear Energy
    Plant Optimization (NEPO) program--to produce additional amounts of
    affordable energy from America's 103 commercial reactors. Through NEPO,
    DOE has been working with the nuclear industry and DOE's national
    laboratories to apply new technology to nuclear and non-nuclear
    equipment. The industry encourages the committee to allocate $10
    million for the NEPO program to help fund important research on
    materials management issues at nuclear power plants, including improved
    availability and maintenance at nuclear plants; technology to predict
    and measure the extent of materials degradation from plant aging;
    introducing new materials in a cost-effective manner to mitigate
    materials effects; and as an underpinning to both the applied materials
    and technology development and deployment activities, advanced research
    tools and the evolving knowledge of materials properties. DOE has
    proposed no funding for the program in fiscal 2005 despite the obvious
    benefits that the national laboratories can bring to bear on these
    issues.
        The industry also requests $27.5 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 license renewal continuing at a brisk pace and the
    industry considering plans for new nuclear 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, Science and Technology to support universities that
    have undergraduate and graduate programs in health physics. The
    industry's most recent human resources survey reveals an increasing
    demand for health physics professionals. This need will become acute in
    the next few years when many will retire.

                  NRC BUDGET AND STAFFING SHOULD BE REASSESSED

        Our Nation's focus on security has led to significant security
    enhancements at nuclear power plants. Nuclear power plant security was
    among the most robust in the industrial sector before the Sept. 11,
    2001, terrorist attacks, and our facilities are even more secure today.
    By year's end, our industry will have invested an additional $1 billion
    over the past 2 years in security-related improvements, such as
    fortified perimeter security, improved background checks and tighter
    access control and detection ability at our plants. The nuclear energy
    industry has added 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.
        The NRC's proposed fiscal 2005 budget totals $670.3 million, an
    increase of $44.2 from the fiscal 2004 budget, and the highest ever for
    this agency. Fiscal 2005 is an appropriate time for the NRC to review
    its budget and resource allocations in light of current demands and
    other resources available. The industry's 103 commercial reactors are
    operating at world-class levels of safety and reliability. 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 regulatory process should be
    undertaken to focus on the more probable, safety-significant events
    rather than highly unlikely events.

                   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.
        Nuclear Research Facilities.--The industry is concerned with the
    declining number of nuclear research facilities. We urge the committee
    to fully fund the request for a DOE lead lab in Idaho for nuclear
    energy research and development.
        Uranium Facility Decontamination and Decommissioning.--The industry
    fully supports cleanup of the gaseous diffusion plants at Paducah, KY;
    Portsmouth, OH; and Oak Ridge, TN. Commercial nuclear power plants
    contribute more than $150 million to the Decontamination and
    Decommissioning Fund for government-managed uranium enrichment plants
    each year. 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 DOE and NRC's international
    nuclear safety programs. 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 Society of Nuclear Medicine

        The Society of Nuclear Medicine (SNM) appreciates the opportunity
    to submit written comments for the record regarding funding for a
    National Isotope Program in fiscal year 2005. SNM is an international
    scientific and professional organization founded in 1954 to promote the
    science, technology and practical application of nuclear medicine. Its
    14,000+ members are physicians, technologists and scientists
    specializing in the research and practice of nuclear medicine.
        To that end, SNM advocates the creation of a National Isotope
    Program to ensure consistent radioisotope research and production
    programs as isotope availability is crucial to nuclear medicine
    procedures and innovation in this field. The Society stands ready to
    work with policymakers at the local, State, and Federal levels to
    advance policies and programs that will that our Nation have a steady
    supply of isotopes for the advancement of nuclear medicine research.

                           WHAT IS NUCLEAR MEDICINE?

        Nuclear medicine is a medical specialty that involves the use of
    small amounts of radioactive pharmaceuticals, called ``Radiotracers''
    or ``Tracers,'' to help diagnose and treat a variety of diseases. These
    tracers are detected by special types of cameras that work with
    computers to provide nuclear medicine physicians and the patient's
    doctor precise pictures of the area of the body being imaged. It is a
    way to gather medical information that may otherwise be unavailable,
    require exploratory surgery, or necessitate more expensive diagnostic
    tests.
        Nuclear medicine procedures, such as PET (positron emission
    tomography) and SPECT (single-photon emission tomography), often
    identify abnormalities very early in the progression of a disease--long
    before some medical problems are apparent with other diagnostic tests.
    This early detection allows a disease to be treated early in its course
    when there may be a more successful prognosis.
        An estimated 16 million nuclear medicine imaging and therapeutic
    procedures are performed each year in the United States. Nuclear
    medicine procedures are among the safest diagnostic imaging tests
    available. The amount of radiation from a nuclear medicine procedure is
    comparable to that received during a diagnostic X-ray.
        Some of the more frequently performed nuclear medicine procedures
    include:
      --Bone scans to examine orthopedic injuries, fractures, tumors or
            unexplained bone pain.
      --Cardiac scans to identify normal or abnormal blood flow to the
            heart muscle, measure heart function or determine the existence
            or extent of damage to the heart muscle after a heart attack.
      --Breast scans which are used in conjunction with mammograms to more
            accurately detect and locate cancerous tissue in the breasts.
      --Liver and gallbladder scans to evaluate liver and gallbladder
            function.
      --Cancer imaging to detect tumors and determine the severity
            (staging) of various types of cancer.
      --Treatment of thyroid diseases and certain types of cancer.
      --Brain imaging to investigate problems within the brain itself or in
            blood circulation to the brain.
      --Renal imaging in children to examine kidney function.
        funding cuts and program restructuring threaten nuclear medicine
        The Nation needs a consistent, reliable supply of isotopes for
    medical, security, space power, and research uses. Today, new isotopes
    for diagnostic and therapeutic uses are not being developed, critical
    isotopes for national security are in short supply, and demand for
    isotopes critical to homeland security exceeds supply. Additionally,
    the national isotope infrastructure is chronically under funded at the
    DOE.
        New science, such as molecular nuclear medicine, is emerging that
    will require reliable supplies of isotopes. By abandoning isotope
    research at the DOE, innovative medical research progress into
    radiopharmaceuticals will be lost, and the medical community will not
    benefit from valuable discoveries for the diagnosis and treatment of
    millions of Americans.
        Isotopes for research & development (R&D) at reasonable prices are
    not available due to declining resources and policy change in the DOE
    Isotope Program. The DOE program and its resources have been declining
    for two decades, and recent policy changes by DOE have significantly
    worsened the situation and are impeding the development of new isotope
    applications. Recently DOE eliminated all R&D funding for DOE
    applications and production. Lost opportunities to develop new advanced
    technologies through isotope research will have major impacts on
    pressing needs of the United States in health care and national
    security.
        The Advanced Nuclear Medicine Initiative (ANMI) at the DOE fostered
    peer-reviewed nuclear medicine research studies that advanced medical
    and clinical research and practice in this important area of medicine.
    The program was funded at $2.5 million in fiscal year 2000, 2001 and
    2002. By abandoning this program in fiscal year 2003, innovative
    medical research progress into radiopharmaceuticals was lost.
        Also, the fiscal year 2003 budget instituted an upfront payment
    policy for development and production of radionuclides for treatment or
    research. This restructuring severely hampered researcher's ability to
    obtain essential radioisotopes by imposing a much higher cost on
    researchers, and created a difficult payment situation, since
    researchers often cannot commit outlays until grants are issued and
    funds are received, with the end result being an adverse effect on
    public health. A resulting crisis in the availability of isotopes
    constrained existing nuclear medicine procedures and had a chilling
    effect on research into new procedures to diagnose and treat serious
    and life-threatening diseases, such as cancer.
        Additionally, relying on foreign sources for radioisotopes severely
    hampers researcher's ability to obtain essential radioisotopes. Because
    no commercial isotope-producing reactors exist in the United States,
    there is a strong dependence on foreign sources for reactor-produced
    radioisotopes. The U.S. facilities for reactor-produced isotopes are
    limited to DOE and university reactors, primarily at the University of
    Missouri Research Reactor Center (MURR). The resulting crisis in the
    availability of isotopes will constrain existing nuclear medicine
    procedures and will have a chilling effect on research into new
    procedures to diagnose and treat serious and life-threatening diseases,
    such as cancer.
        Decline in nuclear and radiochemistry education is not being
    addressed to avoid impacts on radioisotope production and applications
    R&D. A recent survey with 19 universities found a continuation of a
    long-term decline in the number of graduate programs, graduate
    students, and faculty in the United States in nuclear and radiochemical
    fields. Currently, there are 5-10 U.S. Ph.D. graduates in these
    research fields each year while the projected demand in the near future
    at the DOE and within the nuclear medicine community will be several
    hundred Ph.D.'s. In the past, foreign graduates have solved the
    shortage of nuclear scientists. However, because of a worldwide decline
    in the number of young scientists in the field, foreign graduates are
    not available to address the shortage.

                     CREATION OF A NATIONAL ISOTOPE PROGRAM

        Congress should realign isotope resources to create the National
    Isotope Program to produce essential isotopes, reestablish R&D for
    production and isotope applications, establish nuclear technology
    education activity, and support isotope production infrastructure of
    new and existing facilities.
        Major components of a National Isotope Program include:
      --Establishment of a national program to meet the national need for
            isotopes. The program should be supported at the Secretary of
            Energy level with the program director reporting at a high
            level in DOE;
      --Collaboration with R&D, medical, and industrial users to assess
            isotope needs and transfer technologies to accelerate
            applications;
      --Facilitation of the transfer of commercially viable isotope
            programs to the private sector;
      --Investment in R&D to improve isotope production, processing, and
            utilization;
      --Continuously monitoring the isotope needs of researchers and
            clinicians;
      --Establishment of an education program to ensure that the next
            generation of nuclear and radiochemists are trained and
            available to support the Nation's needs; and
      --Upgrade the capability at the University of Missouri and other
            existing facilities that produce isotopes.
        A National Isotope Program will continue innovation in nuclear
    medicine to meet the health care needs of the Nation. To that end, SNM
    advocates the allocation of $25 million in fiscal year 2005 for the
    creation of the National Isotope Program.

                                   CONCLUSION

        The Society of Nuclear Medicine once again stands ready to work
    with policymakers to advance policies that will reduce and prevent
    suffering from disease for all Americans, while ensuring an adequate
    nuclear medicine workforce. Again, we thank you for the opportunity to
    present our views on funding for nuclear medicine workforce and
    research related programs and stand ready to answer any questions you
    may have.

           LIST OF WITNESSES, COMMUNICATIONS, AND PREPARED STATEMENTS

                                  ----------
                                                                       Page
    American:
        Museum of Natural History, Prepared Statement of the.........   473
        Nuclear Society, Prepared Statement of the...................   450
        Public Power Association, Prepared Statement of the..........   465
        Society:
            For Microbiology, Prepared Statement of the..............   486
            Of Plant Biologists, Prepared Statement of the...........   462
    Arizona Power Authority, Letter From the.........................   363
    Arkansas River Basin Interstate Committee, Prepared Statement of
      the............................................................   308
    Association of State Dam Safety Officials, Prepared Statement of
      the............................................................   306

    Beckner, Dr. Everet H., Deputy Administrator, Defense Programs,
      National Nuclear Security Administration, Department of Energy.    63
    Bennett, Senator Robert F., U.S. Senator from Utah:
        Questions Submitted by.......................................   188
        Statement of.................................................    69
    Bi-State Turkey Creek Association, Prepared Statement of the.....   338
    Biomass Energy Research Association, Prepared Statement of the...   468
    Blue Valley Association, Prepared Statement of the...............   336
    Board of:
        Commissioners of the Pontchartrain Levee District, Prepared
          Statements of the........................................357, 358
        Levee Commissioners For the Yazoo-Mississippi Delta, Prepared
          Statement of the...........................................   339
        Mississippi Levee Commissioners, Prepared Statement of the...   334
    Bob Lawrence & Associates, Inc., Prepared Statements of...453, 455, 456
    Bowman, Admiral Frank L., Deputy Administrator, Naval Reactors
      Program, National Nuclear Security Administration, Department
      of Energy......................................................    63
        Prepared Statement of........................................    95
        Statement of.................................................    93
    Brazos River Harbor Navigation District, Prepared Statement of
      the............................................................   394
    Broderick, James, Chairman for Colorado, Prepared Statement of...   310
    Brooks, Ambassador Linton F., Under Secretary, National Nuclear
      Security Administration, Department of Energy:
        Prepared Statement of........................................    79
        Statements of................................................63, 72
    Burns, Senator Conrad, U.S. Senator from Montana, Statement of...   218

    Calaveras County Water District, Prepared Statement of the.......   391
    California Government and Private Sector Coalition for Operation
      Clean Air's Sustainable Incentive Program, Prepared Statement
      of the.........................................................   478
    Cameron County, Texas, Prepared Statement of.....................   393
    Carey, Bob, Senior Policy Advisor, Office of the Secretary,
      Department of Energy...........................................   159
    Central Arizona Water Conservation District (CAWCD), Prepared
      Statement of the...............................................   428
    Chambers County-Cedar Bayou Navigation District, Prepared
      Statement of the...............................................   395
    Chu, Margaret, Director, Office of Civilian Radioactive Waste
      Management, Department of Energy:
        Prepared Statement of........................................   169
        Statement of.................................................   168
    City of:
        Crookston, Minnesota, Prepared Statement of the..............   294
        Flagstaff, Arizona, Prepared Statement of the................   299
        Granite Falls, Minnesota, Prepared Statement of the..........   292
        Los Angeles Board of Harbor Commissioners, Prepared Statement
          of the.....................................................   287
        Morro Bay, Prepared Statement of the.........................   380
        St. Helena, California, Prepared Statement of the............   389
        Stillwater, Prepared Statement of the........................   289
        Virginia Beach, Virginia, Prepared Statement of the..........   366
        Watsonville, California, Prepared Statement of the...........   419
    Clay and Bailey Manufacturing Company, Prepared Statement of the.   339
    Coalition of Northeastern Governors, Prepared Statement of the...   451
    Cochran, Senator Thad, U.S. Senator from Mississippi:
        Prepared Statements of.......................................6, 219
        Questions Submitted by.......................................    53
        Statement of.................................................   219
    Colorado:
        River:
            Basin Salinity Control Forum, Prepared Statement of the..   411
            Board of California, Prepared Statement of the...........   398
            Congress, Prepared Statement of the......................   448
            Energy Distributors Association, Prepared Statement of
              the....................................................   436
            Water Conservation District, Prepared Statement of the...   431
        Springs Utilities, Prepared Statement of.....................   408
    Cook, Beverly, Assistant Secretary, Office of Environment, Safety
      and Health, Department of Energy:
        Prepared Statement of........................................   163
        Statement of.................................................   159
    Coosa-Alabama River Improvement Association, Inc., Prepared
      Statement of the...............................................   331
    Craig, Senator Larry, U.S. Senator from Idaho:
        Prepared Statement of........................................    71
        Questions Submitted by......................................54, 131
        Statements of..........................................31, 143, 222
    Crescent City Harbor District, Prepared Statement of the.........   363

    DECO Companies, Inc., Prepared Statement of......................   337
    Denver Water, Prepared Statement of..............................   448
    Department of Natural Resources, State of Utah, Prepared
      Statement of the...............................................   400
    Dolores Water Conservancy District, Prepared Statement of the....   409
    Domenici, Senator Pete V., U.S. Senator from New Mexico:
        Opening Statements of...............................1, 63, 135, 207
        Prepared Statements of..............................2, 66, 137, 209
        Questions Submitted by.......................44, 117, 189, 198, 205
    Dorgan, Senator Byron L., U.S. Senator from North Dakota:
        Prepared Statements of.......................................   220
        Questions Submitted by.......................................   251
        Statements of................................................   219
    Duchesne County Water Conservancy District, Prepared Statement of
      the............................................................   408

    Empire State Development Corporation, State of New York, Prepared
      Statement of...................................................   345
    Energy Sciences Coalition, Prepared Statement of the.............   482

    Feinstein, Senator Dianne, U.S. Senator from California,
      Statement of...................................................    70
    Fifth Louisiana Levee District, Prepared Statement of the........   301
    Flowers, Lieutenant General Robert B., Chief of Engineers, Corps
      of Engineers--Civil, Department of the Army, Department of
      Defense--Civil.................................................   257
        Prepared Statement of........................................   267
        Statement Of.................................................   265
    Fort Peck Assiniboine and Sioux Tribes and Dry Prairie Rural
      Water, Prepared Statement of the...............................   431
    Four Corners Power Plant, Prepared Statement of the..............   410

    Garman, David, Assistant Secretary, Office of Energy Efficiency
      and Renewable Energy, Department of Energy.....................     1
        Prepared Statement of........................................     9
        Statement of.................................................     8
    Garrison Diversion Conservancy District, Prepared Statement of
      the............................................................   401
    Grand Valley Water Users Association, Prepared Statement of the..   411
    Green Brook Flood Control Commission, Prepared Statement of the..   341

    Hayes, Pam, Budget Office, Bureau of Reclamation, Department of
      the Interior...................................................   207
    Health Physics Society (HPS) and Health Physics Program Directors
      Organization (HPPDO), Prepared Statement of the................   449
    Hewgley, James M., Jr., Chairman for Oklahoma, Prepared Statement
      of.............................................................   313
    Holman, Gerald H., Chairman for Kansas, Prepared Statement of....   310

    Irrigation & Electrical Districts' Association of Arizona,
      Prepared Statement of the......................................   400

    Johnston, J. Ronald, Program Director, Central Utah Project
      Completion Act Office, Bureau of Reclamation, Department of the
      Interior.......................................................   207
        Prepared Statement of........................................   239
    Jordan Valley Water Conservancy District, Prepared Statement of
      the............................................................   408

    Kansas City:
        Industrial Council, Prepared Statement of the................   337
        Missouri, Prepared Statement of..............................   318
    Keys, John W., III, Commissioner, Bureau of Reclamation,
      Department of the Interior.....................................   207
        Prepared Statement of........................................   228
        Statement of.................................................   224

    Latture, Paul, II, Chairman for Arkansas, Prepared Statement of..   309
    Lewis and Clark Rural Water System, Prepared Statement of the....   420
    Livers Bronze Co., Prepared Statement of the.....................   338
    Longsworth, Paul M., Deputy Administrator, Defense Nuclear
      Nonproliferation, National Nuclear Security Administration,
      Department of Energy...........................................    63
    Louisiana:
        Department of Transportation and Development, Prepared
          Statement of the...........................................   303
        Governor's Task Force on Maritime Industry, Prepared
          Statement of the...........................................   327

    Magwood, William D., IV, Director, Office of Nuclear Energy,
      Science and Technology, Department of Energy:
        Prepared Statement of........................................    24
        Statement of.................................................    23
    Metropolitan Water Reclamation District of Greater Chicago,
      Prepared Statement of the......................................   383
    Mid-Dakota Rural Water System, Prepared Statement of the.........   421
    Mississippi Valley Flood Control Association, Prepared Statement
      of the.........................................................   348
    Mni Wiconi Project, Prepared Statements of the.................413, 438
    Mo-Ark Association, Prepared Statement of the....................   336
    Moss Landing Harbor District, Prepared Statement of the..........   343
    Murray, Senator Patty, U.S. Senator from Washington:
        Prepared Statements of.....................................146, 276
        Questions Submitted by............................59, 133, 197, 203
        Statements of...............................................29, 145

    Napa County Flood Control and Water Conservation District,
      Prepared Statement of the......................................   386
    National Mining Association, Prepared Statement of the...........   354
    New:
        Jersey Maritime Resources, Department of Transportation,
          State of New Jersey, Prepared Statement of.................   345
        Mexico Interstate Stream Commission, Prepared Statement of
          the........................................................   425
        York City Economic Development Corporation, Prepared
          Statement of...............................................   345
    Northern Colorado Water Conservancy District, Prepared Statement
      of the.........................................................   410
    Nuclear Energy Institute, Prepared Statement of the..............   492

    Orbach, Raymond L., Director, Office of Science, Department of
      Energy:
        Prepared Statement of........................................    16
        Statement of.................................................    15

    Pajaro Valley Water Management Agency, Prepared Statement of the.   419
    Perkins County Rural Water System, Inc., Prepared Statement of
      the............................................................   409
    Port:
        Of:
            Garibaldi, Prepared Statement of the.....................   325
            Los Angeles, Prepared Statement of the...................   287
            Sacramento, California, Prepared Statement of the........   382
        San Luis Harbor District, Prepared Statement of the..........   330
    Provo River Water Users Association, Prepared Statement of the...   407
    Public Service Company of New Mexico, Prepared Statement of the..   411

    Raley, Bennett W., Assistant Secretary for Water and Science,
      Department of the Interior, Prepared Statement of..............   232
    Red River Valley Association, Prepared Statements of the.......360, 443
    Redlands Water & Power Company, Prepared Statement of the........   443
    Reid, Senator Harry, U.S. Senator from Nevada:
        Prepared Statements of..................................5, 141, 214
        Questions Submitted by......................................57, 248
        Statements of.......................................3, 67, 138, 210
    Riverside County Flood Control and Water Conservation District,
      Prepared Statement of the......................................   373
    Roberson, Jessie H., Assistant Secretary, Office of Environmental
      Management, Department of Energy:
        Prepared Statement of........................................   148
        Statements of..............................................135, 147

    Salt River Pima-Maricopa Indian Community and the City of Mesa,
      Arizona, Prepared Statement of the.............................   350
    Santa Clara Valley Water District, Prepared Statements of the..367, 444
    Seminole Tribe of Florida, Prepared Statement of the.............   351
    Society of Nuclear Medicine, Prepared Statement of the...........   494
    Solar Energy Industries Association, Prepared Statement of the...   459
    Southeastern:
        Colorado Water Conservancy District, Prepared Statement of
          the........................................................   447
        Federal Power Customers, Inc., Prepared Statements of the..298, 464
    Southern States Energy Board, Prepared Statement of the..........   485
    Southwestern Water Conservation District, Prepared Statement of
      the............................................................   446
    St. Francis Levee District of Arkansas, Prepared Statement of the   364
    Standing Rock Sioux Tribe, Prepared Statement of the.............   376
    State:
        Engineer's Office, Wyoming, Letter From the..................   426
        Of Wyoming, Prepared Statement of the........................   427
    Stevens, Senator Ted, U.S. Senator from Alaska:
        Questions Submitted by......................................55, 283
        Statement of.................................................   216

    Tennessee-Tombigbee Waterway Development Authority, Prepared
      Statement of the...............................................   316
    The:
        Nature Conservancy, Prepared Statement of....................   396
        Port Commerce Department, The Port Authority of New York &
          New Jersey, Prepared Statement of..........................   345
        Salvajor Company, Prepared Statement of......................   338

    University:
        Corporation for Atmospheric Research, Prepared Statement of
          the........................................................   483
        Of:
            Medicine and Dentistry of New Jersey, Prepared Statement
              of the.................................................   475
            Rochester, Prepared Statement of the.....................   479
    Upper:
        Gunnison River Water Conservancy District, Prepared Statement
          of the.....................................................   448
        Mississippi River Basin Association, Prepared Statement of
          the........................................................   321

    Vance Brothers Inc., Prepared Statement of.......................   337
    Ventura Port District, Prepared Statement of the.................   324
    Volusia County, Florida, Prepared Statement of...................   352

    Warehouse One, Inc., Prepared Statement of.......................   337
    Washington Suburban Sanitary Commission, Prepared Statement of
      the............................................................   382
    Wolf, Bob, Director, Budget Office, Bureau of Reclamation,
      Department of the Interior.....................................   207
    Woodley, John Paul, Jr., Assistant Secretary of the Army (Civil
      Works), Corps of Engineers--Civil, Department of the Army,
      Department of Defense--Civil:
        Prepared Statement of........................................   259
        Statement of.................................................   257

                                 SUBJECT INDEX

                                  ----------

                          DEPARTMENT OF DEFENSE--CIVIL

                             Department of the Army

                           Corps of Engineers--Civil

                                                                       Page

    Additional Committee Questions...................................   283
    Appropriation Accounts...........................................   263
    Civil Works:
        Construction Backlog.........................................   268
        Program Transformation.......................................   269
    Financing and Management Initiatives for Operating Projects......   261
    Focus on High-return New Investments.............................   260
    Homeland Security................................................   272
    Need for a More Robust Business Management System................   270
    Overview of Fiscal Year 2005 Army Civil Works Budget.............   259
    Performance-based Budgeting......................................   259
    President's Management Agenda....................................   262
    Summary of Fiscal Year 2005 Program Budget.......................   267
    Value of the Civil Works Program to the Nation's Economy and
      Defense........................................................   271

                              DEPARTMENT OF ENERGY

    Additional Committee Questions...................................   188
    Removal of MOAB Uranium Mill Tailings Pile.......................   188
    Salt Cavern Disposal Remediation Alternative.....................   189

                    National Nuclear Security Administration

    Additional Committee Questions...................................   117
    Advanced Concepts................................................    74
    Budget and Program Highlights....................................    82
    Cooperation with Office of Nuclear Energy........................   123
    Cryogenic Targets................................................   127
    Defense Nuclear Nonproliferation.................................77, 84
    Emerging Threat--Pakistan........................................   120
    Establishing Scientific Milestones...............................   128
    Facilities and Infrastructure Recapitalization...................    82
    Fallout..........................................................   111
    First Cluster-Laser Integration..................................   126
    Fiscal Year 2005 Department of Energy Budget Request.............    96
    Funding Schedule for:
        Directed Stockpile Work......................................   108
        Pit Manufacturing and Certification Campaign.................   109
    International Nuclear Fuel Markets...............................   124
    Libya............................................................   121
    Los Alamos Schools...............................................   118
    Lower Liability Standard.........................................   120
    Management Issues................................................    86
    MESA/CMR Facilities..............................................   130
    Modern Pit Facility..............................................   130
    MOX..............................................................   113
        Program......................................................   120
    National Ignition Facility (NIF)...............................100, 125
        Other Options................................................   129
        Plan.........................................................   103
    Naval Reactors...................................................    85
        Fiscal Year 2005 Department of Energy Budget Detail..........    97
    Nuclear:
        Deterrence...................................................   112
        Nonproliferation.............................................   115
        Research.....................................................   106
        Stockpile Report.............................................   116
        Testing......................................................   104
        Tests Since Baneberry........................................   105
        Weapons Incident Response....................................    83
    Office of the Administrator......................................    86
    OMEGA............................................................   127
    Pacific Northwest National Lab (PNNL)............................   133
    Performance Measurements, Goals, and Accomplishments.............    98
    Program Infrastructure and Administrative Requirements...........    98
    Removal of Additional Highly Enriched Uranium (HEU)..............   123
    Research & Development (R&D) Funding.............................   123
    Revised Nuclear Stockpile Plan...................................   117
    Robust Nuclear Earth Penetrator...........................100, 108, 117
    Russia--Uncosted Balance & Access Issues.........................   121
    Russian Highly Enriched Uranium (HEU)............................   118
    Safeguards and Security..........................................   117
        Design Basis Threat..........................................    82
    Space Reactors...................................................   131
    Staffing and Technical Challenges................................   131
    Technical Area 18 Los Alamos National Laboratory.................   131
    Today's Nuclear-Powered Fleet....................................    95
    Weapons Activities...............................................    83
    Z Machine......................................................114, 128

                Office of Civilian Radioactive Waste Management

    Additional Committee Questions...................................   188
    Budget Request...................................................   205
    Cost Reduction Initiatives.......................................   175
    Ensuring Adequate Resources to Complete the Mission..............   174
    Fiscal Year:
        2003 Accomplishments.........................................   170
        2004 Ongoing Activities......................................   171
        2005 Key Activities..........................................   172
    Questions Submitted to the Office of Civilian Radioactive Waste
      Management.....................................................   205
    The:
        Fiscal Year 2005 Budget Request..............................   170
        2010 Objective...............................................   170
    Transportation Mode and Routes for Yucca Mountain................   187
    Yucca:
        Mountain:
            Fiscal Year 2005 Budget Request..........................   186
            Metal Storage Containers.................................   205
        Transportation...............................................   206

                Office of Energy Efficiency and Renewable Energy

    Additional Committee Questions...................................    44
    Alaska Examination of Geothermal Sites...........................    55
    Assistance to Alaska Companies...................................    55
    Barter Arrangements..............................................    52
    Biomass:
        And Biorefinery Systems R&D..................................    12
        R&D and:
            National Laboratories....................................    53
            Universities.............................................    54
        Rationale for Cuts...........................................    59
    Centers for Excellence in Hydrogen...............................    46
    Ceramic Ion Transport Membranes Project..........................    53
    Departmental Energy Management Program...........................    13
    Energy Efficiency:
        And Renewable Energy.........................................  4, 7
        Program Direction............................................    41
    Evaluation of Renewable Energy Sources on Public Lands...........    55
    Facilities and Infrastructure....................................    14
    Financial Assistance to Geothermal Development in Alaska.........    59
    For Inspiration and Recognition of Science and Technology (FIRST)    57
    Funding:
        A Commercial Biomass Plant...................................    54
        For Concentrating Solar Power................................    58
    Genomics: GTL Facilities.........................................    59
    Geothermal Technology............................................    12
    High Temperature Superconductor Program..........................    59
    Hydrogen:
        In the Pacific Northwest.....................................    60
        Technology...................................................    10
    Idaho National Laboratory........................................    49
    Industry-Laboratory Cooperation..................................    60
    Intergovernmental Activities.....................................    13
    International Thermonuclear Experimental Reactor (ITER)..........44, 57
    Iowa Environmental/Education Project.............................    57
    Louisiana Energy Services--Enrichment............................    51
    National Climate Change Technology Initiative Competitive
      Solicitation Program...........................................    14
    National Renewable Energy Laboratory.............................    58
    Nuclear Energy:
        Budget.......................................................    47
        Technologies/Nuclear Power 2010..............................    48
    OMB Funding Request..............................................    46
    Offshore Wind....................................................    15
    Program Direction................................................    14
    R&D vs. Funding for Demonstration Projects.......................    46
    Radiopharmaceuticals.............................................    51
    Renewable Energy:
        Program in Alaska............................................    56
        Programs Fiscal Year 2005 Budget Request.....................    10
    Solar Energy Technology..........................................    11
    Storage Centers..................................................    46
    Tidal Energy Projects Cost in Alaska.............................    56
    Time Scale for Hydrogen in Northwest.............................    60
    Twenty Year Facility Plan........................................    44
    Ultra High-Speed Super Computers.................................    60
    University Programs..............................................    50
    User Facilities..................................................    57
    Who Controls the Hydrogen Initiative?............................    45
    Wind and Hydropower Technologies.................................    11
    Zero Energy Buildings............................................    11

                    Office of Environment, Safety and Health

    Additional Committee Questions...................................   188
    Budget Details...................................................   199
    DOE:
        And HHS Studies..............................................   201
        Site Profiles................................................   199
    Energy:
        Employees Occupational Illness Compensation Program........167, 182
        Supply.......................................................   163
    Environment, Safety and Health Fiscal Year 2005 Budget Request...   163
    Existing Samples--Marshall Islands...............................   203
    Marshall Islands:
        Annual Meeting...............................................   203
        Carryover Funds..............................................   202
        Health Testing...............................................   202
    Other Defense Programs...........................................   165
    Oversight Reorganization Reform..................................   198
    Questions Submitted to the Office of Environment, Safety and
      Health.........................................................   198
    Reporting of Injury at DOE Sites.................................   198
    Worker Safety Site Profiles......................................   184

                       Office of Environmental Management

    Additional Committee Questions...................................   188
    BNFL Contract Costs Overruns.....................................   176
    Defining High-Level Waste........................................   194
    Demonstrating Results............................................   150
    DOE Plan to Convert Depleted Uranium.............................   196
    $500 Million Settlement for BNFL.................................   192
    Hanford:
        Employees Exposure to Tank Farm Vapors.......................   180
        300-Area Closure.............................................   177
    IG Report on Safety Performance..................................   181
    Laboratory Direct Research Funding at Idaho......................   177
    LDRD Funding At Oak Ridge and Savannah River.....................   177
    Los Alamos Cleanup...............................................   190
    Managing Future Waste Costs......................................   191
    New Mexico Cleanup Agreement.....................................   183
    Office of Future Liability.......................................   190
    Plutonium Traces at Waste Isolation Pilot Plant..................   183
    Questions Submitted to the Office of Environmental Management....   189
    Risk Based End States............................................   196
        Initiative...................................................   175
    Small Business Contracts and EM Cleanup..........................   196
    The Fiscal Year 2005 Budget Request..............................   152
    Transuranic Waste................................................   188
    Waste:
        Deposits at WIPP.............................................   191
        Incidental to Reprocessing (WIR)......................178, 187, 193
    WIPP Detection of Plutonium......................................   189

                Office of Nuclear Energy, Science and Technology

    Additional Committee Questions...................................    44
    Advanced:
        Fuel Cycle Initiative........................................26, 38
        Reactor Hydrogen Code Generation Project.....................    34
    Advancement of Nuclear Energy Technology.........................    39
    Alaska Examination of Geothermal Sites...........................    55
    Assistance to Alaska Companies...................................    55
    Barter Arrangements..............................................    52
    Biomass:
        R&D and:
            National Laboratories....................................    53
            Universities.............................................    54
        Rationale for Cuts...........................................    59
    Centers for Excellence in Hydrogen...............................    46
    Ceramic Ion Transport Membranes Project..........................    53
    Climate Change...................................................    43
    Evaluation of Renewable Energy Sources on Public Lands...........    55
    Financial Assistance to Geothermal Development in Alaska.........    59
    For Inspiration and Recognition of Science and Technology (FIRST)    57
    Funding:
        A Commercial Biomass Plant...................................    54
        For Concentrating Solar Power................................    58
    Generation IV Nuclear Energy Systems.............................    25
    Genomics: GTL Facilities.........................................    59
    High Temperature Superconductor Program..........................    59
    Hydrogen in the Pacific Northwest................................    60
    Idaho National Laboratory........................................    49
    Industry-Laboratory Cooperation..................................    60
    INEEL Solicitation and Infrastructure............................    39
    INL--DOE's Command Center for Nuclear R&D........................    28
    International Thermonuclear Experimental Reactor (ITER)..........44, 57
    Iowa Environmental/Education Project.............................    57
    Louisiana Energy Services--Enrichment............................    51
    National Renewable Energy Laboratory.............................    58
    Nuclear:
        Energy.......................................................     4
            Budget...................................................    47
            Technologies/Nuclear Power 2010..........................    48
        Engineering Programs.........................................    23
        Hydrogen Initiative..........................................    26
        Power 2010...................................................    27
    OMB Funding Request..............................................    46
    R&D vs. Funding for Demonstration Projects.......................    46
    Radiological Facilities Management...............................    28
    Radiopharmaceuticals.............................................    51
    Renewable Energy Program in Alaska...............................    56
    Storage Centers..................................................    46
    Tidal Energy Projects Cost in Alaska.............................    56
    Time Scale for Hydrogen in Northwest.............................    60
    Twenty Year Facility Plan........................................    44
    Ultra High-Speed Super Computers.................................    60
    University:
        Programs.....................................................    50
        Reactor Fuel Assistance and Support..........................    27
    User Facilities..................................................    57
    Who Controls the Hydrogen Initiative?............................    45
    World Nuclear Power Plants Under Construction On Order...........    35
    Yucca Mountain...................................................    42

                               Office of Science

    Additional Committee Questions...................................    44
    Advanced Scientific Computing Research...........................    18
    Alaska Examination of Geothermal Sites...........................    55
    Assistance to Alaska Companies...................................    55
    Barter Arrangements..............................................    52
    Basic Energy Sciences............................................    19
    Biological and Environmental Research............................    19
    Biomass:
        R&D and:
            National Laboratories....................................    53
            Universities.............................................    54
        Rationale for Cuts...........................................    59
    Centers for Excellence in Hydrogen...............................    46
    Ceramic Ion Transport Membranes Project..........................    53
    Evaluation of Renewable Energy Sources on Public Lands...........    55
    Financial Assistance to Geothermal Development in Alaska.........    59
    For Inspiration and Recognition of Science and Technology (FIRST)    57
    Funding:
        A Commercial Biomass Plant...................................    54
        For Concentrating Solar Power................................    58
    Fusion Energy Sciences...........................................    19
    Genome Science...................................................    34
    Genomes to Life Program..........................................    33
    Genomics: GTL Facilities.........................................    59
    High:
        Energy Physics...............................................    20
        Temperature Superconductor Program...........................    59
    Hydrogen in the Pacific Northwest................................    60
    Idaho National Laboratory........................................    49
    Industry-Laboratory Cooperation..................................    60
    International Thermonuclear Experimental Reactor (ITER)..........44, 57
    Iowa Environmental/Education Project.............................    57
    Louisiana Energy Services--Enrichment............................    51
    National Renewable Energy Laboratory.............................    58
    Nuclear Energy:
        Budget.......................................................    47
        Physics......................................................    20
        Technologies/Nuclear Power 2010..............................    48
    Office of Science Fiscal Year 2005 Budget Request................     3
    OMB Funding Request..............................................    46
    Pacific Northwest National Laboratory Facilities.................    29
    Protein and Molecular Tags Facility..............................    33
    R&D vs. Funding for Demonstration Projects.......................    46
    Radiopharmaceuticals.............................................    51
    Renewable Energy Program in Alaska...............................    56
    Safeguards and Security..........................................    21
    Science:
        Laboratories Infrastructure..................................    21
        Plans and Priorities.........................................    17
        Priorities...................................................    32
        Program Direction............................................    22
        Programs.....................................................    18
    Storage Centers..................................................    46
    Tidal Energy Projects Cost in Alaska.............................    56
    Time Scale for Hydrogen in Northwest.............................    60
    Twenty Year Facility Plan........................................    44
    Ultra High-Speed Super Computers.................................    60
    University Programs..............................................    50
    User Facilities..................................................    57
    Who Controls the Hydrogen Initiative?............................    45
    Workforce Development for Teachers and Scientists................    22
    Z Machine Application to the Science Program.....................    32

                           DEPARTMENT OF THE INTERIOR

                             Bureau of Reclamation

    Additional Committee Questions...................................   248
    Addressing Long-standing Department Challenges...................   235
    Budget Overview..................................................   232
    Bureau of Reclamation............................................   233
    California Bay-Delta Restoration.................................   230
    Central:
        Utah Project Completion Act..................................   235
        Valley Project Restoration Fund..............................   230
    Dakota Water Resources Act.......................................   251
    Demonstrated Commitment and Accomplishments......................   231
    Desalination.....................................................   249
    Fiscal Year 2005 Planned Activities..............................   232
    Five-Year Expenditures...........................................   254
    Fort Yates Intake Structure Failure..............................   251
    Hydropower.......................................................   253
    Investing in Conservation........................................   237
    Klamath Basin....................................................   235
    Pick-Sloan Hydropower............................................   252
    Policy and Administration........................................   229
    President's Management Agenda....................................   230
    Program Assessment Rating Tool (PART)............................   230
    Red River Valley Water Supply Project............................   251
    Site Security....................................................   253
    Title XVI Water Reclamation and Reuse Program..................249, 250
    Water 2025.......................................................   248
        And Related Resources........................................   228
        Title XVI....................................................   249

                                       -