[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


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                               __________
                      COMMITTEE ON APPROPRIATIONS

                     TED STEVENS, Alaska, Chairman
THAD COCHRAN, Mississippi            ROBERT C. BYRD, West Virginia
ARLEN SPECTER, Pennsylvania          DANIEL K. INOUYE, Hawaii
PETE V. DOMENICI, New Mexico         ERNEST F. HOLLINGS, South Carolina
CHRISTOPHER S. BOND, Missouri        PATRICK J. LEAHY, Vermont
MITCH McCONNELL, Kentucky            TOM HARKIN, Iowa
CONRAD BURNS, Montana                BARBARA A. MIKULSKI, Maryland
RICHARD C. SHELBY, Alabama           HARRY REID, Nevada
JUDD GREGG, New Hampshire            HERB KOHL, Wisconsin
ROBERT F. BENNETT, Utah              PATTY MURRAY, Washington
BEN NIGHTHORSE CAMPBELL, Colorado    BYRON L. DORGAN, North Dakota
LARRY CRAIG, Idaho                   DIANNE FEINSTEIN, California
KAY BAILEY HUTCHISON, Texas          RICHARD J. DURBIN, Illinois
MIKE DeWINE, Ohio                    TIM JOHNSON, South Dakota
SAM BROWNBACK, Kansas                MARY L. LANDRIEU, Louisiana
                    James W. Morhard, Staff Director
                 Lisa Sutherland, Deputy Staff Director
              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 27K at a continuous 150kW output. The 
coils . . . achieved currents of 100A . . . , 25 percent over the 
initial goal of 80 A.'' This program has now been extended to ``develop 
a pre-commercial prototype of a 3.7MW HTS motor''. The demonstration of 
this motor will be an important milestone in the commercialization 
process, since it will provide a measure of efficiency, reliability, 
and projected costs and benefits.
    Generator efforts in the United States have recently begun with a 
team headed by General Electric. The efforts here, again, appear to be 
behind those in Japan. In Japan, funds expended on HTS design, 
development, and demonstration exceed those in the United States. This 
Japanese, heavily funded effort involves 16 member organizations with 
representation from the electric utilities, manufacturers of electric 
power equipment, research organizations, manufacturers of HTS wire and 
tape, refrigeration and cryogenic suppliers, and independent research 
institutes.
    Fault Current Limiters represent a new class of electric utility 
equipment with many attractive properties. This type of equipment may, 
in fact, be a market leader, since its properties appear to provide 
substantial potential cost savings to electric utilities as well as 
containing power outages. This type of equipment is only possible using 
superconducting technology.
    Exciting developments have taken place in the field of underground 
HTS cables for transmission and distribution. In the United States, two 
teams are pursuing two different technical concepts, but each team is 
led by a powerhouse electrical cable manufacturer; Pirelli North 
America, and Southwire Co. First design cables are now under test in 
practical applications. Worldwide, about 10 superconducting electric 
power cable demonstrations are now underway, in various stages of 
completion.

                              THE BENEFITS

    Dramatic cost and energy savings are projected when the candidate 
systems and products from superconducting technology are fully 
implemented, with incremental benefits accruing from the time of 
technology readiness and commercial introduction to the time of full 
market penetration. When fully implemented into the electric generation 
and utilization sectors of our economy, superconducting technology is 
expected to save $8 billion per year in retail value of presently lost 
electricity, lost due to transmission and distribution. An additional 
$8 billion per year can be saved with the installation of 
superconductive transformers and electric motors. Yet another $1 
billion or so can be saved by full implementation of HTS generators. 
This totals fully implemented benefits of $17 billion per year from 
full implementation of HTS technology in presently envisioned 
equipment. Oak Ridge National Laboratory (ORNL) experts and studies 
carried out by Energetics, Inc. indicate that HTS underground cable 
savings would be in the range of 125,000 kWhr per mile, per year. At 
the present average rate of 6.89 cents per kWhr, this corresponds to 
retail level monetary savings of $8,612.50 per mile per year. These 
savings will flow directly into reductions in taxpayer electric bills, 
under a competitive electricity delivery environment.

                    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

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