    [Senate Hearing 108-795]
    [From the U.S. Government Publishing Office]

                                                           S. Hrg. 108-795

                                                            Senate Hearings

                                     Before the Committee on Appropriations

    _______________________________________________________________________

    Department of the Interior

    and Related Agencies

    Appropriations

                                                                Fiscal Year
                                                                       2005

                                             108th CONGRESS, SECOND SESSION

                                                          H.R. 4568/S. 2804

    DEPARTMENT OF AGRICULTURE

    DEPARTMENT OF ENERGY

    DEPARTMENT OF HEALTH AND HUMAN SERVICES

    DEPARTMENT OF THE INTERIOR

    NONDEPARTMENTAL WITNESSES

                                                         S. Hrg. 108-795

      DEPARTMENT OF THE INTERIOR AND RELATED AGENCIES 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. 4568/S. 2804

      AN ACT MAKING APPROPRIATIONS FOR THE DEPARTMENT OF THE INTERIOR AND
    RELATED AGENCIES FOR THE FISCAL YEAR ENDING SEPTEMBER 30, 2005, AND FOR
                                 OTHER PURPOSES

                                   __________

                            Department of Agriculture
                              Department of Energy
                    Department of Health and Human Services
                           Department of the Interior
                           Nondepartmental Witnesses
                                   __________

             Printed for the use of the Committee on Appropriations

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

                                   __________

                        U.S. GOVERNMENT PRINTING OFFICE
    92-152                      WASHINGTON : 2005
    _____________________________________________________________________________
    For Sale by the Superintendent of Documents, U.S. Government Printing Office
    Internet: bookstore.gpo.gov  Phone: toll free (866) 512-1800; (202) 512�091800
    Fax: (202) 512�092250 Mail: Stop SSOP, Washington, DC 20402�090001

                          COMMITTEE ON APPROPRIATIONS

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

        Subcommittee on Department of the Interior and Related Agencies

                        CONRAD BURNS, Montana, Chairman
    TED STEVENS, Alaska                  BYRON L. DORGAN, North Dakota
    THAD COCHRAN, Mississippi            ROBERT C. BYRD, West Virginia
    PETE V. DOMENICI, New Mexico         PATRICK J. LEAHY, Vermont
    ROBERT F. BENNETT, Utah              ERNEST F. HOLLINGS, South Carolina
    JUDD GREGG, New Hampshire            HARRY REID, Nevada
    BEN NIGHTHORSE CAMPBELL, Colorado    DIANNE FEINSTEIN, California
    SAM BROWNBACK, Kansas                BARBARA A. MIKULSKI, Maryland

                               Professional Staff

                                  Bruce Evans
                                  Ginny James
                                Leif Fonnesbeck
                                  Ryan Thomas
                           Peter Kiefhaber (Minority)
                            Brooke Thomas (Minority)

                             Administrative Support

                                 Larissa Sommer

                                C O N T E N T S

                                  ----------

                            Thursday, March 4, 2004

                                                                       Page

    Department of Energy: Office of the Secretary....................     1

                            Thursday, March 11, 2004

    Department of Agriculture: Forest Service........................    75

                            Thursday, March 25, 2004

    Department of the Interior: Office of the Secretary..............   115

                            Thursday, April 1, 2004

    Department of Health and Human Services: Indian Health Service...   189
    Nondepartmental witnesses........................................   225

      DEPARTMENT OF THE INTERIOR AND RELATED AGENCIES APPROPRIATIONS FOR
                                FISCAL YEAR 2005

                                  ----------

                            THURSDAY, MARCH 4, 2004

                                           U.S. Senate,
               Subcommittee of the Committee on Appropriations,
                                                        Washington, DC.
        The subcommittee met at 9:32 a.m., in room SD-124, Dirksen
    Senate Office Building, Hon. Conrad Burns (chairman) presiding.
        Present: Senators Burns, Stevens, Bennett, Dorgan, Byrd,
    Leahy, Reid.

                              DEPARTMENT OF ENERGY

                            Office of the Secretary

    STATEMENT OF HON. SPENCER ABRAHAM, SECRETARY

                   opening statement of senator conrad burns

        Senator Burns. We will call the Appropriations Subcommittee
    on the Interior to order.
        Welcome, Mr. Secretary.
        Secretary Abraham. Good to be with you.
        Senator Burns. Appreciate that.
        Secretary Abraham. Thank you.
        Senator Burns. We are glad to have you here to discuss the
    President's fiscal year 2005 budget request from the Department
    of Energy. Due to the tortured evolution of jurisdictions in
    Congress, your Department is relegated to ``related Agency''
    status in our subcommittee. The Interior Department gets its
    name on the bill, but we rarely ever hear of the Energy aspect
    of this. We appreciate that you are here for the good or the
    bad, but nonetheless we know that what you do at the Department
    of Energy is important to the country, and in a lot of ways it
    is related for the simple reason that Interior and Energy
    should be working together. They support development of
    technologies that can slow our growing dependence on foreign
    oil. Your programs also support the development of technologies
    that promote the more efficient use of all forms of energy,
    which enables our economy to grow without sacrificing
    environmental quality.
        The Department of Energy's budget, under this subcommittee,
    is roughly $1.7 billion. Direct comparisons with current
    funding levels is a bit complicated due to the use of
    revisions, deferrals, and advance appropriations, but generally
    speaking, your budget request reflects a zero sum situation. A
    handful of administrative priorities, such as FutureGen and
    weatherization, were given large increases. These increases are
    paid for by steep reductions in a range of ongoing R&D programs
    such as oil and gas research, industrial technology,
    distributed generation, and coal fuels. As a general matter,
    Mr. Secretary, I think it is appropriate that the budget
    posture, given the current fiscal climate, the budget committee
    will be going into the mark-up session today, so it is clear
    that what you have recommended here and what has been
    recommended to us up in budget will be dealt with.
        With that in mind, it is clear in our discussions that we
    need to center around tradeoffs as opposed to where the next
    additional Federal dollar should go, I do not foresee that
    there will be any additional Federal dollars for any programs
    coming up. This is going to be a tough budget year. We have
    invited you here today to explain some of those priorities
    you've set within your budget requests. If we go along with the
    reductions that you propose in oil and gas R&D or distributed
    generation research, what do we lose? If we go along with the
    major investments you propose in FutureGen, carbon
    sequestration, and weatherization, then what do we get? We
    might not necessarily agree on all of the answers but by and
    large I am sure we will have an informative discussion before
    it is all over.

                               PREPARED STATEMENT

        So again, Mr. Secretary, thank you very much for coming
    this morning. We appreciate your time; we know that you are
    busy at this time of the year.
        [The statement follows:]

                   Prepared Statement of Senator Conrad Burns

        Welcome Mr. Secretary. We're glad to have you here to discuss the
    President's fiscal year 2005 budget request for the Department of
    Energy.
        Due to the tortured evolution of jurisdictions in Congress, your
    department is relegated to ``Related Agency'' status in our
    subcommittee nomenclature. The Interior department gets its name on the
    bill (along with most of the attention--good and bad), while your
    programs tend to get somewhat less scrutiny.
        But there is no question in my mind that the DOE programs under
    this subcommittee's jurisdiction support critical national goals.
        They support development of technologies that can slow our growing
    dependence on foreign oil--something that is essential to our national
    security. And down the road those technologies may help free us from
    our dependence on oil imports once and for all.
        Your programs also support development of technologies that promote
    the more efficient use of all forms of energy; enabling our economy to
    grow without sacrificing environmental quality.
        The President's fiscal year 2005 budget request proposes roughly
    $1.7 billion for DOE programs under our jurisdiction.
        Making direct comparisons with current funding levels is a bit
    complicated due to the use of rescissions, deferrals, and advance
    appropriations. But generally speaking, your budget request reflects a
    ``zero sum'' situation.
        A handful of Administration priorities such as FutureGen and
    Weatherization are given large increases. These increases are paid for
    by steep reductions in a range of ongoing R&D programs, such as Oil and
    Gas research, Industrial Technologies, Distributed Generation, and Coal
    Fuels.
        As a general matter, Mr. Secretary, I think that is an appropriate
    budget posture given the current fiscal climate. In just a few minutes
    the Senate Budget Committee is going to begin to mark up this year's
    budget resolution, and it is clear that it will recommend less
    discretionary spending than contemplated in the President's request,
    not more.
        So with that in mind it is clear our discussions need to center
    around tradeoffs, as opposed to where the next additional Federal
    dollar should go. I don't foresee there will be any additional Federal
    dollars for these programs.
        We have invited you here today to explain to us the priorities
    you've set within your budget request. If we go along with the
    reductions you propose in Oil and Gas R&D, or Distributed Generation
    research, what do we lose? If we go along with the major investments
    you propose in FutureGen, carbon sequestration and Weatherization, what
    do we get?
        I'm not sure we'll necessarily agree on all the answers by lunch,
    but am sure we'll have an informative discussion.
        Again, Mr. Secretary, thank you for coming today. I know you have a
    number of different Congressional committees to which you must answer,
    and we appreciate your time.

        Senator Burns. Welcome Senator Dorgan, my co-chair on this
    committee, I look forward to your statement.

                  OPENING STATEMENT OF SENATOR BYRON L. DORGAN

        Senator Dorgan. Senator Burns, thank you very much and Mr.
    Secretary thank you for being with us. You and I have talked
    prior to this hearing and you know that I feel that we have a
    fiscal policy that does not work, increases in funding for
    large areas of the budget, defense and homeland security
    coupled with tax cuts, tax cuts and more tax cuts means that we
    have very large budget deficits and they are growing, not
    receding. I know my colleague, Senator Burns, will be working
    with the budget committee this morning trying to grapple with
    all that but I just do not think this adds up. And you see the
    final result of it as you take a look at these individual
    budget requests from the administration. Senator Burns asked
    the right question, what is the consequence of cutting some of
    these funding areas such as clean coal technology. What is the
    consequence of cutting that funding, fossil energy R&D, coal
    research, oil research, natural gas research? And so, we need
    to think through all of this carefully. I really do hope, even
    as we consider the individual appropriations bills, that we
    find a way, in a bi-partisan way, to put our fiscal policy in
    some kind of thoughtful order, because it is not there today.

                ENERGY AND ENVIRONMENTAL RESEARCH CENTER (EERC)

        I am going to ask you some questions about some specifics.
    The EERC, which is located in North Dakota, has been
    recommended for a cut. I know that we have talked about that
    and I want to ask you some questions about that, I think that
    is a very important institution. The issue of purchase power
    for the Western Area Power Administration (WAPA), we need to
    fix the budget recommendation there. I would love to see us,
    and I think it is important for us to have targets and
    timetables with respect to hydrogen and fuel cell initiatives;
    I support the President very much in that area. I believe that
    we should do even more than he recommends and I believe we
    should have targets and timetables. And the energy savings
    performance contracts need to be extended; it makes no sense
    for us not to extend them. We need to work together to find a
    way to do that posthaste in my judgment. These and a few other
    areas are areas I will ask you some questions about today.
        Mr. Secretary, thank you for coming back to the Senate and
    making another return visit. I appreciate your testimony today.
        Senator Burns. Thank you, Senator Dorgan, and Mr.
    Secretary, the time is yours.

                   SUMMARY STATEMENT OF HON. SPENCER ABRAHAM

        Secretary Abraham. Mr. Chairman, Senator Dorgan.
        Senator Burns. We will give you 15 minutes to sum up
    everything that you do down there.
        Secretary Abraham. Well, Mr. Chairman, as you know we have
    submitted a fairly lengthy testimony, opening statement to the
    committee and I would like to submit that for the record, and
    just make a shorter statement here.
        Senator Burns. It shall be made a part of the record.
        Secretary Abraham. Obviously, it is always a pleasure for
    me to come back to the Senate and to have a chance to discuss
    our Department with former colleagues. Obviously this budget
    request builds on a number of programs and successes which we
    have worked on over the last 3 years. I am proud of a lot of
    things that the Department of Energy has accomplished in terms
    of working towards providing energy, economic and national
    security to the American people. But in particular I am very
    proud and I want to just make a statement on the record today
    of the fine people, the men and women who work in the
    Department and whose dedication makes our success possible. I
    want to acknowledge the fact that a testament, I think, to
    their dedication and commitment is a recent announcement by the
    Office of Management and Budget which ranked the Department of
    Energy first among Cabinet level agencies in terms of the
    implementation of the President's Management Agenda, really the
    scorecard for managerial performance. This evaluates a number
    of criteria but it recognized the Department of Energy as the
    Cabinet level agency leading the pack with regard to management
    improvement. And so, as you can imagine, we are all proud of
    that, but that happened because people in the frontlines of our
    facilities and at the Department's main offices have done a
    great job, the career people who really work very hard to
    implement these programs that we debate and discuss in the
    budget process. I just want to make that statement as an
    initial point here today.
        The submission which we make this year tries to continue
    charting the focus on the management of resources to accomplish
    our four key areas of focus, defense and national security,
    energy security, world-class scientific research and
    environmental stewardship. As you noted, the total request for
    our budget, $1.7 billion, is requested for programs funded by
    this subcommittee. Those programs are in the areas of fossil
    energy, energy conservation, and the Energy Information
    Administration. And as I said, my written statement goes into
    some detail on a number of the components of those. I would
    like to emphasize just two or three of the priority areas here
    today.

                              FOSSIL ENERGY BUDGET

        The Department's Fossil Energy program seeks new
    technologies and methodologies to help take advantage of our
    vast supplies of energy in an environmentally safe fashion. The
    centerpiece of these programs is our clean coal and carbon
    sequestration initiatives, which account for about 60 percent
    of the fossil energy request. They aim at insuring that our
    Nation's 250-year reserves of coal can be used without concern
    about environmental impact. We are very excited about those
    programs, particularly about a program we launched last year
    called FutureGen. This 10-year program, costing approximately
    $1 billion in total, is designed to create the world's first
    zero emission fossil fuel plant. I think we have made good
    progress in the first 12 months working on this program and we
    expect to have continued progress in fiscal year 2004 and 2005.
    And when it is operational, this will be the cleanest fossil
    fuel-fired power plant in the world. Virtually every element of
    the FutureGen prototype plant will employ cutting edge
    technology. Rather than using traditional coal combustion, it
    will rely on coal gasification and because of this advanced
    process; we envision that FutureGen will be able to produce
    large amounts of transportation grade hydrogen fuel as well as
    electricity.

                              CARBON SEQUESTRATION

        We are also exploring advanced carbon sequestration
    technologies, both as part of FutureGen and beyond. This may
    not be a glamorous area to some but I think it is extremely
    important and I believe that the demonstrated potential of
    carbon sequestration is convincing. It has convinced us to
    fully pursue its promise. Last June we brought together
    representatives from 13 countries to form the Carbon
    Sequestration Leadership Forum and to build on international
    interest in this sort of work. That global consortium has
    already begun investigating ways to work together to sequester
    greenhouse gas emissions from fossil fuels. And so, we are very
    excited about and will be focusing heavily on these areas. Of
    course, this fossil budget involves a variety of other areas as
    well, ranging from oil and gas research to the Strategic
    Petroleum Reserve to the Northeast Home Heating Oil Reserve and
    other projects as well.

                           ENERGY CONSERVATION BUDGET

        Our Energy Conservation budget funds several top
    presidential initiatives. First and foremost is the President's
    Hydrogen Fuel initiative, which we announced last year, to
    accelerate the transition to a hydrogen economy, to go from a
    world where our cars and trucks run on petroleum to one where
    they can run on hydrogen-powered fuel cells. President Bush
    committed an initial investment of $1.7 billion over 5 years
    launching of this program, for hydrogen fuel cell research and
    development, and the budget we submit here would fully fund the
    program for fiscal year 2005. I believe in the 1 year since the
    President unveiled this program we have made tremendous
    progress. We have engaged partners in both the automotive and
    the energy industries working together really for the first
    time, in parallel on this project, which is what is required,
    in my judgment, for its success. We have also found a
    tremendous amount of enthusiasm and involvement from State and
    local governments. We have moved forward with critical hydrogen
    fuel cell research and development. And maybe the most
    important breakthrough has been that we have been able to
    attract a wide array of international interest in and
    partnership on the project, meaning that we can spread our
    research dollars further and we can begin laying the groundwork
    for the kinds of codes and standards and other developments
    that need to take place for this broader transition to occur.
    Last November we had the inaugural meeting of a group we called
    the International Partnership for the Hydrogen Economy. We had
    14 countries join the United States; virtually all of the major
    auto producing and automotive using countries on the planet to
    start working together. And so, we are excited about what that
    groundbreaking work will accomplish. We think this partnership
    really will help us to accomplish the objectives we have set,
    at least on schedule if not sooner.

                                 WEATHERIZATION

        Another top presidential initiative in the area of Energy
    Conservation is Weatherization. One of the most significant
    things which the Department of Energy does is attempting to
    reduce the burden of high energy costs for low-income
    households that spend a disproportionate share of their total
    annual income on energy, as much as 19 percent in the case of
    the average of the lower income households as opposed to only
    about 4 percent of the income of other households in our
    country. The Weatherization Assistance Program works to improve
    the energy efficiency of the homes of these low-income
    families, effectively slashing their energy bills and freeing
    up dollars that can be put to use in better ways. By making
    these homes more energy efficient, the program lowers costs for
    those who can least afford to either cool or heat their homes
    and those who are most vulnerable to very volatile changes in
    energy markets. We think the program is an extraordinarily good
    one. We hope that this year we will be able to see a level of
    funding enacted that is consistent with the request we have
    made. In 2001, in our National Energy policy, we called for an
    increase for weatherization of $1.4 billion over 10 years in
    order to weatherize a total of 1.2 million low-income homes.
    That would be about twice as many as would have been otherwise
    affected by the program. We continue to submit budgets
    consistent with that and we hope this year, working together
    with you, we can reach our goal.

                       ENERGY INFORMATION ADMINISTRATION

        Finally, I would just mention that this budget also
    supports the Energy Information Administration. We're
    requesting nearly a 5 percent increase for EIA in 2005 than our
    2004 comparable appropriation which will provide Federal
    employee pay raise support and maintain the other ongoing data
    and analysis activities which EIA conducts as part of its
    responsibility to continue to disseminate accurate and reliable
    energy information and analysis to inform energy policymakers.

                               PREPARED STATEMENT

        Again, Mr. Chairman, we could obviously go into detail on
    the areas of interest to all of you. I look forward to doing
    that and appreciate the chance to be here today.
        [The statement follows:]

                   Prepared Statement of Hon. Spencer Abraham

                                  INTRODUCTION

        Mr. Chairman and Members of the Subcommittee, it is a pleasure to
    be here today to discuss the President's fiscal year 2005 budget for
    the Department of Energy (DOE). The fiscal year 2005 budget includes a
    total of $24.3 billion for DOE, $1.7 billion of which is requested for
    programs funded in the Interior and Related Agencies Appropriations
    under the jurisdiction of this Subcommittee. Those programs are Fossil
    Energy, $728.9 million; Energy Conservation, $875.9 million; and the
    Energy Information Administration, $85 million. I will provide
    highlights of those programs later in my statement.
        This fiscal year 2005 budget request builds on a number of
    successes we have had over the past 3 years. I'm very proud of what we
    have accomplished in terms of fulfilling the President's management
    vision for this Department and also what we have achieved for the
    energy and economic security of the American people. We are grateful
    for the support and guidance that the Members of this Subcommittee have
    provided to the Department.
        The Office of Management and Budget recently announced that DOE has
    made the most progress among cabinet-level agencies in the
    implementation of the President's Management Agenda. OMB recognized DOE
    as the cabinet-level agency ``leading the pack with regard to
    management improvement.''
        A large part of that leadership involves defining the mission of
    the Department. From our first days in office we stressed that the
    overriding mission of this Department is national security.
        Another significant part of the Department's mission is to protect
    our economic security by promoting a diverse supply and delivery of
    reliable, affordable, and environmentally sound energy. The fiscal year
    2005 budget includes $2.7 billion to meet energy-related objectives. Of
    this amount, approximately $1.6 million is for Fossil Energy and Energy
    Conservation programs. The budget request maintains Presidential
    commitments to promote energy security and reliability through coal
    research and development, hydrogen production, fuel cell powered
    vehicles, advanced nuclear energy technologies, and electric
    transmission reliability.
        Within the jurisdiction of this Subcommittee, this budget provides
    for investments in the President's Clean Coal Power Initiative ($287
    million)--including the ambitious FutureGen program--and Hydrogen Fuel
    Initiative ($93.5 million). These initiatives will serve as the
    technological spring board to solve the nation's long-term energy needs
    by focusing on energy independence and reliability with a diverse
    energy portfolio.
        Also included in this budget is funding that continues the
    Administration's 10-year commitment to the Weatherization Assistance
    program. With a proposed budget of $291 million, approximately 119,000
    homes will be weatherized in fiscal year 2005.

                      INVESTING IN AMERICA'S ENERGY FUTURE

        An important element of all our energy programs is making energy
    use more secure, more efficient, and more environmentally sound. At the
    same time, we are preparing long-term energy solutions that will
    eventually make questions of supply and environmental effects obsolete.
    The Administration's energy portfolio takes a long-term focus through
    investments in hydrogen use and production, electricity reliability,
    and advanced coal and nuclear energy power technologies. Investments in
    these pivotal areas honor a commitment to strengthen the nation's
    energy security for the near-term and for generations to come.
        In fiscal year 2005, the Department's Energy Efficiency and
    Renewable Energy program is at the forefront of implementing the
    President's Hydrogen Fuel Initiative. Hydrogen promises to help meet
    our nation's future energy challenges. The Department is requesting
    $227 million for hydrogen-related activities. That figure includes $173
    million in the Energy Efficiency and Renewable Energy program, $29
    million in the Science program, $16 million in the Fossil Energy
    program, and $9 million in the Nuclear Energy program.
        This budget invests $447 million in the President's Coal Research
    Initiative to improve the efficiency and environmental protections
    being developed for coal burning power production. Of that figure, $287
    million will go to the President's Clean Coal Power Initiative,
    including the FutureGen program which was launched in fiscal year 2004.
    This cost-shared, $1-billion project will create the world's first near
    zero-emissions fossil fuel plant. When operational, the FutureGen plant
    will be the cleanest fossil fuel-fired power plant in the world.
        Mr. Chairman, I would now like to discuss some highlights of our
    fiscal year 2005 Interior and Related Agencies Appropriations budget
    request.

                            [In thousands of dollars]
    ------------------------------------------------------------------------
                                                    Fiscal year
                                      --------------------------------------
                                           2003         2004         2005
    ------------------------------------------------------------------------
    Fossil Energy R&D................      611,149      672,771      635,799
    Naval Petroleum & Oil Shale             17,715       17,995       20,000
     Reserves........................
    Elk Hills School Lands...........       36,000       36,000       36,000
    Energy Conservation..............      880,176      877,984      875,933
    Economic Regulation..............        1,477        1,034  ...........
    Strategic Petroleum Reserve......      171,732      170,948      172,100
    Strategic Petroleum Account......        1,955  ...........  ...........
    Northeast Home Heating Oil               5,961        4,939        5,000
     Reserve.........................
    Energy Information Administration       80,087       81,100       85,000
                                      --------------------------------------
          Subtotal Interior Accounts.    1,806,252    1,862,771    1,829,832
    Clean Coal Technology............      -47,000      -98,000     -140,000
                                      ======================================
          Total Interior & Related       1,759,252    1,764,771    1,689,832
           Agencies..................
    ------------------------------------------------------------------------

                                 FOSSIL ENERGY

                            [In thousands of dollars]
    ------------------------------------------------------------------------
                                                    Fiscal year
                                      --------------------------------------
                                           2003         2004         2005
    ------------------------------------------------------------------------
    Budget Request...................      797,512      804,653      728,899
    ------------------------------------------------------------------------

        As part of the effort to lessen the level of our reliance on
    imported energy sources, the Fossil Energy program is seeking new
    energy technologies and methodologies that promote the efficient and
    environmentally sound production and use of fossil fuels, as well as
    providing strategic protection against the disruption of oil supplies.
        The United States relies on fossil fuels for about 85 percent of
    the energy it consumes, and forecasts indicate U.S. reliance on these
    fuels could exceed 87 percent in 2025. Accordingly, a key goal of DOE's
    fossil energy activities is to ensure that economic benefits from
    fossil fuels and a strong domestic industry that creates export-related
    jobs are compatible with the public's expectation for exceptional
    environmental quality and reduced energy security risks. This includes
    promoting the development of energy systems and practices that will
    provide energy to current and future generations that is clean,
    efficient, reasonably priced, and reliable.
        Fossil energy programs focus on supporting the President's top
    initiatives for energy security, clean air, climate change, and coal
    research. Fiscal year 2005 fossil energy programs:
      --Support the development of lower cost, more effective pollution
            control technologies embodied in the President's Coal Research
            Initiative or help diversify the nation's future sources of
            clean-burning natural gas to meet the President's Clear Skies
            goals;
      --Expand the nation's technological options for reducing greenhouse
            gases either by increasing power plant efficiencies or by
            capturing and isolating these gases from the atmosphere as
            called for by the President's Climate Change Initiative; or
      --Measurably add to the nation's energy security by providing a
            short-term emergency response, such as the Strategic Petroleum
            Reserve, or longer-term alternatives to imported oil, such as
            hydrogen and methane hydrates.

                      PRESIDENT'S COAL RESEARCH INITIATIVE

        President Bush has committed $2 billion over 10 years on coal
    research through his Clean Coal Research Initiative. This includes two
    major programs: the Clean Coal Power Initiative, and the Coal Research
    and Development program. The fiscal year 2005 budget continues to meet
    the President's commitment by providing $447 million for the Coal
    Research Initiative. Under President Bush's leadership, budget requests
    for coal R&D have more than doubled over historical amounts and
    appropriations.

                   CLEAN COAL POWER INITIATIVE AND FUTUREGEN

        The Clean Coal Power Initiative (CCPI) is a key component of the
    National Energy Policy to address the reliability and affordability of
    the nation's electricity supply, particularly from coal. The initiative
    fulfills the President's commitment to conduct research on clean coal
    technologies to meet this challenge.
        Included in the fiscal year 2005 budget is $287 million for the
    CCPI program. The CCPI program is a cooperative, cost-shared program
    between the government and industry to rapidly demonstrate emerging
    technologies in coal-based power generation and to accelerate their
    commercialization. The nation's power generators, equipment
    manufacturers, and coal producers help identify the most critical
    barriers to coal's use in the power sector. Technologies are selected
    with the goal of accelerating development and deployment of coal
    technologies that will economically meet environmental standards, while
    increasing the efficiency and reliability of coal power plants. The
    FutureGen program is funded within this initiative and was launched in
    fiscal year 2004.
        The President's Clean Coal Power Initiative is especially
    significant because it directly supports the President's Clear Skies
    Initiative. The first projects included an array of new cleaner and
    cheaper concepts for reducing sulfur dioxide, nitrogen oxides, and
    mercury--the three air pollutants targeted by the Clear Skies
    Initiative.
        The ``first round'' in the Clean Coal Power Initiative--the
    centerpiece of the President's clean coal commitment--attracted three
    dozen proposals for projects totaling more than $5 billion. In early
    2003, we announced the first winners of the competition--eight projects
    with a total value of more than $1.3 billion, more than $1 billion of
    which would be provided by the private sector. These projects are
    expected to help pioneer a new generation of innovative power plant
    technologies that could help meet the President's Clear Skies and
    Climate Change Initiatives.
        Competitive solicitations for the ``second round'' were made just
    last month and are open to technologies capable of producing any
    combination of heat, fuels, chemicals, or other useful by-products in
    conjunction with electricity generation.
        FutureGen.--The FutureGen component of the Clean Coal Power
    Initiative will establish the capability and feasibility of co-
    producing electricity and hydrogen from coal with essentially zero
    emissions, including carbon sequestration and gasification combined
    cycle, both integral components of the zero emissions plant of the
    future.
        It is anticipated that the cost-shared FutureGen project will
    create a public/private partnership to produce technology ultimately
    leading to zero emission plants, including carbon dioxide, that are
    fuel-flexible and capable of multi-product output and efficiencies of
    up to 60 percent with coal. The project is critical to the continued
    and expanded use of coal--our most abundant and lowest cost domestic
    energy resource.
        Carbon Management.--Several Clean Coal projects also help expand
    the menu of options for meeting the President's climate change goal of
    an 18-percent reduction in greenhouse gas intensity (carbon equivalent
    per Gross Domestic Product) by 2012, primarily by boosting the
    efficiencies of power plants (meaning that less fuel is needed to
    generate electricity with a corresponding reduction in greenhouse
    gases).
        Carbon management has become an increasingly important element of
    our coal research program. Carbon sequestration--the capture and
    permanent storage of carbon dioxide--has emerged as one of our highest
    priorities in the Fossil Energy research program--a priority reflected
    in the proposed budget of $49 million in fiscal year 2005.
        Carbon sequestration, if it can be proven practical, safe, and
    affordable, could dramatically enhance our long-term response to
    climate change concerns. It could offer the United States and other
    nations an approach for reducing greenhouse gases that would not
    necessitate changes in the way we produce, deliver, or use energy.
        A cornerstone of our carbon sequestration program will be a
    national network of regional partnerships. This initiative, which I
    announced last year, will bring together the federal government, state
    agencies, universities, and private industry to begin determining which
    options for capturing and storing greenhouse gases are most practicable
    for specific areas of the country.
        Hydrogen.--Another aspect of the President's Clean Coal Research
    Initiative is the production of clean fuels from coal. A major priority
    for the Administration is hydrogen as a clean fuel for tomorrow's
    advanced power technologies (such as fuel cells) and for future
    transportation systems. Within the Fossil Energy program, we have
    allocated $16 million for research into new methods for making hydrogen
    from coal.
        Advanced Research.--To provide fundamental scientific knowledge
    that benefits all of our coal technology efforts, our fiscal year 2005
    budget includes $30.5 million for advanced research in such areas as
    materials, coal utilization science, analytical efforts, and support
    for coal research at universities (including historically black and
    other minority institutions).
        Other Power Systems Research and Development.--We are also
    proposing $23 million for continued development of fuel cells with an
    emphasis on lower-cost technologies that can contribute to both Clear
    Skies emission reductions, particularly in distributed generation
    applications, and Climate Change goals by providing an ultra-high
    efficiency electricity-generating component for tomorrow's power
    plants. Distributed power systems, such as fuel cells, also can
    contribute to the overall reliability of electricity supplies in the
    United States and help strengthen the security of our energy
    infrastructure.
        Natural Gas Research.--The President's Clear Skies Initiative also
    provides the rationale for much of the Department's $26 million budget
    request for natural gas research. Even in the absence of new
    environmental requirements, natural gas use in the United States is
    likely to increase by 40 percent by 2025. The National Petroleum
    Council has estimated that 14 percent of our natural gas supply in 2025
    will be provided from advances in technology that have not yet been
    developed.
        Our natural gas research program, therefore, is directed primarily
    at providing new tools and technologies that producers can use to
    expand and diversify future supplies of gas. The program will focus on
    resources in high-priority regions to find and produce gas from non-
    conventional and deep gas reservoirs with minimal environmental impact.
    Emphasis will be on research that can improve access to onshore public
    lands, especially in the Rocky Mountain region where much of our
    undiscovered gas resource is located. A particularly important aspect
    of this research will be to develop innovative ways to recover this
    resource while continuing to protect the environmental quality of these
    areas.
        We will continue the National Stripper Well Consortium involving
    industry and the research community to investigate multiple
    technologies to improve stripper well production and prevent continued
    abandonment.
        Natural gas importation and storage will also assume increasing
    significance in the United States as more and more power plants require
    consistent, year-round supplies of natural gas. We will continue a
    nationwide, industry-led consortium that will examine ways to improve
    the reliability and efficiency of our nation's gas storage system, and
    we will initiate analyses to facilitate LNG importation and facility
    sitting.
        Over the long-term, the production of natural gas from hydrates
    could have major energy security implications. Hydrates--gas-bearing,
    ice-like formations in Alaska and offshore--contain more energy than
    all other fossil energy resources. Hydrate production, if it can be
    proven technically and economically feasible, has the potential to
    shift the world energy balance away from the Middle East. Understanding
    hydrates can also improve our knowledge of the science of greenhouse
    gases and possibly offer future mechanisms for sequestering carbon
    dioxide. For these reasons, we are continuing a research program to
    study gas hydrates with a proposed fiscal year 2005 funding level of $6
    million.

                           OIL TECHNOLOGY DEVELOPMENT

        The President's National Energy Policy calls attention to the
    continued need to strengthen our nation's energy security by promoting
    enhanced oil and gas recovery and improving oil and gas exploration
    technology through continued partnerships with public and private
    entities.
        At the same time, however, we recognize that if the federal oil
    technology R&D program is to produce beneficial results, it must be
    more tightly focused than in prior years. Consequently, our fiscal year
    2005 budget request of $15 million reflects a reorientation of the
    program toward those areas where there is clearly a national benefit.
        One example is the use of carbon dioxide (CO2) injection
    to enhance the recovery of oil from existing fields. CO2
    injection is a proven enhanced oil recovery practice that prolongs the
    life of some mature fields, but the private sector has not applied this
    technique to its fullest potential due to insufficient supplies of
    economical CO2. A key federal role to be carried out in our
    proposed fiscal year 2005 program will be to facilitate the greater use
    of this oil recovery process by integrating it with CO2
    captured and delivered from fossil fuel power plants. This technology
    has the dual benefit of enhancing oil recovery and sequestrating
    CO2. In fact, this technology could potentially be a key
    method of meeting the President's 18-percent carbon reduction
    commitment.
        A high priority effort in fiscal year 2005 will be to develop
    ``micro-hole'' technology. Rather than developing just another new
    drilling tool, the federal program will integrate ``smart'' drilling
    systems, advanced imaging, and enhanced recovery technologies into a
    complete exploration and production system. Micro-hole systems may
    offer one of our best opportunities for keeping marginal fields active
    because the smaller-diameter wells can significantly reduce exploration
    costs and make new drilling between existing wells (``infill''
    drilling) more affordable. In addition, micro-hole technology has the
    potential to greatly increase recovery of the almost 60 percent of oil
    that remains in reservoirs after conventional production.
        We will also work toward diversification of international sources
    of oil supplies through bilateral activities with nations that are
    expanding their oil industry, including Venezuela, Canada, Russia,
    Mexico, and certain countries in West Africa. Bilateral and multi-
    lateral work will include technology exchanges.

                            OTHER FOSSIL ENERGY R&D

        The budget also includes $124.8 million for other activities in the
    Fossil Energy program, including $106 million for headquarters and
    field office salaries, $6 million for environmental restoration, $3
    million for federal matching funds for cooperative research and
    development projects at the University of North Dakota and the Western
    Research Institute, $1.8 million for natural gas import/export
    responsibilities, and $8 million for advanced metallurgical research at
    our Albany Research Center.

                               PETROLEUM RESERVES

        The Strategic Petroleum Reserve and Northeast Home Heating Oil
    Reserve are key elements of our nation's energy security. Both serve as
    resource options for the President to use to protect U.S. citizens from
    disruptions in commercial energy supplies.
        Strategic Petroleum Reserve.--The President has directed us to fill
    the Strategic Petroleum Reserve (SPR) to its full 700 million barrel
    capacity. The mechanism for doing this--a cooperative effort with the
    Minerals Management Service to exchange royalty oil from federal leases
    in the Gulf of Mexico--is working well. We have been able to accelerate
    fill from an average of 60,000 barrels per day at the start of the
    President's initiative to a rate of 130,000 barrels per day.
        Because of the President's ``royalty in kind'' initiative, we have
    achieved the Reserve's highest inventory level ever, now at 640 million
    barrels. Our goal remains to have a full inventory of 700 million
    barrels by the end of calendar year 2005.
        The fiscal year 2005 budget for the SPR is $172.1 million, all of
    which is now in our facilities development and operations account. We
    do not require additional funds in the oil acquisition account because
    charges for transporting ``royalty in kind'' oil to the SPR are now the
    responsibility of the oil supplier.
        Northeast Home Heating Oil Reserve.--We are requesting $5 million
    for the Northeast Home Heating Oil Reserve, the same level as last
    year. The two-million-barrel reserve remains ready to respond to a
    Presidential order should there be a severe fuel oil supply disruption
    in the Northeast. A key element of this readiness is a new online
    computerized ``auction'' system that we implemented to expedite the
    bidding process. Installing and testing the electronic system
    (including tests with prospective commercial bidders) have also been
    major elements of the Fossil Energy program's role in implementing the
    ``e-government'' initiatives in the President's Management Agenda.
        Naval Petroleum and Oil Shale Reserves.--The fiscal year 2005
    budget request of $20 million reflects funds for continued operation.
    The Rocky Mountain Oilfield Testing Center (RMOTC), established at the
    Naval Petroleum Reserve No. 3 in Wyoming, will be funded at $2.1
    million. We are considering transfer of Naval Petroleum Reserve No. 2
    in California to the Department of the Interior. We expect to be able
    to reduce our funding requirements for equity redetermination studies
    for the government's portion of the Elk Hills Naval Petroleum Reserve
    No. 1, which was divested in 1998. Of the four producing zones for
    which final equity shares had to be finalized, three have been
    completed and the fourth (the Shallow Oil Zone) is expected to be
    finished in fiscal year 2007.

                              ENERGY CONSERVATION

                            [In thousands of dollars]
    ------------------------------------------------------------------------
                                                    Fiscal year
                                      --------------------------------------
                                           2003         2004         2005
    ------------------------------------------------------------------------
    Budget Request...................      880,176      877,984      875,933
    ------------------------------------------------------------------------

        Now turning to the Energy Conservation budget, the Department
    continues to allocate more funding for energy efficiency and renewable
    energy programs than it does for fossil and nuclear energy activities.
    Our overall Energy Efficiency and Renewal Energy (EERE) budget request
    for fiscal year 2005 is a robust $1.25 billion. Of the $1.25 billion,
    we are requesting $875.9 million for Energy Conservation programs
    funded in the Interior appropriation. The Interior portion of the EERE
    budget request continues to reflect priorities consistent with
    Presidential initiatives, the Administration's Research and Development
    (R&D) investment criteria and the Office of Management and Budget's
    PART recommendations.
        As you know, in 2002 we dramatically restructured the EERE program
    in response to the President's Management Agenda by streamlining
    program management and centralizing administrative functions with a
    focus on developing consistent, uniform, and efficient business
    practices. This focus is helping to assure that we not only fund the
    right mix of R&D, but that we get more work done for every R&D dollar
    spent in the lab.
        EERE's R&D and technology deployment efforts funded by the fiscal
    year 2005 budget support Presidential initiatives for increased energy
    security, greater freedom for Americans in their energy choices, and
    reduced costs and environmental impacts associated with those choices.
        Vehicle Technologies.--America currently imports 55 percent of its
    oil--a level projected to rise to 68 percent by 2025, and highway
    transportation currently accounts for more than 54 percent of our oil
    use. Alternative means of fueling highway transportation from domestic
    resources is critical if we are to reverse this trend and improve our
    energy security. The Vehicle Technologies program is focused on just
    this challenge.
        In fiscal year 2005, the Department is requesting $156.7 million
    for the Vehicle Technologies program. Activities in this program
    contribute to two cooperative government/industry initiatives: the
    FreedomCAR Partnership (where CAR stands for Cooperative Automotive
    Research) and the 21st Century Truck Partnership. In addition, the
    Hydrogen Fuel Initiative builds on the FreedomCAR Partnership. Together
    these initiatives comprise a collaborative effort among the three
    domestic automobile manufacturers, five major energy companies and DOE
    for cooperative, precompetitive research on advanced automotive and
    hydrogen infrastructure technologies having significant potential to
    reduce oil consumption.
        Under the FreedomCAR Partnership, the Vehicle Technologies program
    supports advanced, high-efficiency vehicle technologies including
    advanced combustion engines, hybrid vehicle systems, high-powered
    batteries, materials and power electronics. These critical technologies
    can lead to near-term oil savings when used with gasoline or diesel-
    fueled hybrid vehicles; they are also the foundation for the hydrogen
    fuel cell vehicles of tomorrow. The fiscal year 2005 request fully
    supports the FreedomCAR Partnership goals for Electric Propulsion
    Systems, Electric Drivetrain Energy Storage, and Material and
    Manufacturing Technologies.
        The 21st Century Truck Partnership has similar objectives but is
    focused on heavy vehicles. The partnership involves key members of the
    heavy vehicle industry, truck equipment manufacturers, hybrid
    propulsion developers, and engine manufacturers along with other
    federal agencies. The effort centers on improving and developing engine
    systems, heavy-duty hybrids, parasitic losses, truck safety, and idling
    reduction.
        Fuel Cell Technology.--In fiscal year 2005, we are requesting $77.5
    million for the Fuel Cell Technology program. Fuel Cell Technology
    plays an important role in both the FreedomCAR Partnership and the
    Hydrogen Fuel Initiative. These initiatives seek to effect an industry
    decision by 2015 to commercialize hydrogen-powered fuel cell vehicles.
    To the extent that hydrogen is produced from domestic resources in an
    environmentally-sound manner, hydrogen fuel cell vehicles will require
    no petroleum-based fuels and emit no criteria pollutants or carbon
    dioxide. Their development and commercial success would essentially
    remove personal transportation as an environmental issue and
    substantially reduce our dependence on foreign oil.
        The program works to advance both fuel cell vehicle technology and
    the hydrogen infrastructure needed to support it. This helps ensure
    that hydrogen will be available and affordably priced when fuel cell
    vehicles are ready for commercialization.
        The major focus of the Fuel Cell Technology program continues be on
    high risk research and development to overcome technical barriers,
    centered on core research of key fuel cell components, with industry
    focused on engineering development of complete systems. DOE provides
    funds to major fuel cell suppliers, universities and national
    laboratories to develop materials and component technology aimed at
    lowering cost and improving durability, which are two major barriers to
    commercialization. The fiscal year 2005 Fuel Cell Technology budget
    also continues support of our Vehicle Validation effort, a ``learning''
    demonstration program that integrates real-world operation of vehicles
    provided by major automotive companies with the required refueling
    infrastructure provided by major energy suppliers (the refueling
    portion of this effort is funded through the Energy and Water
    Development appropriation bill). Projects were selected from a major
    solicitation in 2004 and this effort will play a significant role in
    integrating fuel cell vehicle and hydrogen activities, measuring
    progress and determining remaining challenges, leading to the 2015
    commercialization decision. This past year we awarded a total of $75
    million for 15 new fuel cell projects that support the FreedomCAR
    Partnership and the Hydrogen Fuel Initiative. Through open competition,
    the program has secured the country's leading scientists and engineers
    and strong corporate involvement to implement the President's vision
    that the first car driven by a child born today will be powered by
    hydrogen.
        Weatherization and Intergovernmental Activities.--In fiscal year
    2005, we are requesting $364 million for Weatherization and
    Intergovernmental Activities. Given increases in natural gas and
    heating oil prices, it is especially important to fund programs that
    will help reduce the energy costs of low-income Americans who spend a
    disproportionately high share of their income on energy. The program
    also promotes rapid deployment of clean energy technologies and energy
    efficient products. This request supports the President's commitment to
    increase funding for the Weatherization Assistance program by $1.4
    billion over 10 years.
        The fiscal year 2005 Weatherization Assistance program request of
    $291.2 million will support the weatherization of approximately 119,000
    low-income homes. The fiscal year 2005 request for other activities
    includes State Energy Program Grants ($40.8 million), State Energy
    Activities ($2.4 million), and Gateway Deployment ($29.7 million).
        Building Technologies.--EERE's building technology R&D programs
    address technologies, techniques, and tools to make residential and
    commercial buildings, both in existing structures and new construction,
    more energy efficient, productive and affordable. Our fiscal year 2005
    request for the Building Technologies program is $58.3 million. The
    funding supports a portfolio of activities that includes solid-state
    lighting, energy efficiency improvement of other building components
    and equipment, and their effective integration using whole-building-
    system-design techniques, as well as the development of codes and
    standards.
        The Building Technologies program has expanded work supporting
    longer-term, higher-risk activities with a large potential for public
    benefits. For example, last year we supported a $5 million investment
    to expand our Solid State Lighting research activities, and we request
    an increase of that funding to $10.2 million in fiscal year 2005. Solid
    State Lighting represents one of the most exciting and promising new
    approaches to efficient lighting systems, with potential to more than
    double the efficiency of general lighting systems in the coming
    decades. Our Solid State Lighting research will create the technical
    foundation to revolutionize the energy efficiency, appearance, visual
    comfort, and quality of lighting products.
        Industrial Technologies.--The mission of the Industrial
    Technologies program is to reduce the energy intensity of the U.S.
    industrial sector through a coordinated program of research and
    development, validation, and dissemination of energy-efficiency
    technologies and operating practices. The industrial sector is the most
    energy-efficient sector of our economy, due in part to the strong
    economic incentives energy-intensive companies have to reduce their
    energy consumption and costs.
        In fiscal year 2005, we are requesting $58.1 million for the
    Industrial Technologies program. As in previous years, the request
    reflects the refocus of government R&D to higher priority activities
    that align better with the Administration's R&D investment criteria.
    Beginning in fiscal year 2005, we will shift a portion of funding to
    focus on multi-industry ``Grand Challenges'' for next generation
    manufacturing and energy systems technologies. These include efforts
    for the steel, aluminum, glass and metal casting, and chemical
    industries. These Grand Challenges will require high-risk investment
    for high-return gains to achieve much lower energy use than current
    processes.
        Biomass.--This program receives appropriations from both the Energy
    and Water Development (EWD) and the Interior and Related Agencies
    Appropriations Subcommittees. Interior-funded activities focus on
    developing advanced technologies for more energy efficient industrial
    processes and co-production of high-value industrial products. EWD-
    funded activities focus primarily on developing advanced technologies
    for producing transportation fuels and power from biomass feedstocks.
        Our fiscal year 2005 request for the Interior-funded portion of the
    biomass program is $8.7 million. The request supports continuing R&D on
    processes for the production of chemicals and materials that can be
    integrated into biorefineries. Projects with industrial partners will
    focus on novel separations technologies; bio-based plastics; novel
    products from oils; and lower cost and energy use in biomass
    harvesting, preprocessing, and storage. Additional work with industry,
    universities, and the national laboratories will focus on improvements
    to increase the efficiency of individual process steps; for example,
    catalysis and separations.
        Distributed Energy Resources.--Our Distributed Energy Resources
    program leads a national effort to develop a flexible, smart, and
    secure energy system by integrating clean and efficient distributed
    energy technologies complementing the existing grid infrastructure. By
    producing electricity where it is used, distributed energy technologies
    can increase grid asset utilization and reduce the need for upgrading
    some transmission and distribution lines. Also, because distributed
    generators are located near the point of use, they allow for the
    capture of the waste heat produced by fuel combustion through combined
    heat and power systems. In fiscal year 2005, we are requesting $53.1
    million. This funding level reflects relative priority within our
    overall energy R&D portfolio and is consistent with our fiscal year
    2004 request. The program emphasizes integrated designs for end-use
    systems, but also continues support for individual technology
    components such as microturbines, reciprocating engines, thermally
    activated devices.
        Federal Energy Management Program (FEMP).--The federal government
    is the nation's single largest energy consumer. It uses approximately
    one quadrillion Btu of energy annually, or about 1 percent of the
    nation's energy use. Simply by using existing energy efficiency and
    renewable energy technologies and techniques, the federal government
    can set an example and lead the nation toward becoming a cleaner, more
    efficient energy consumer. FEMP alternative financing programs help
    federal agencies access private sector financing to fund energy
    improvements through Energy Savings Performance Contracts and utility
    energy service contracts at no net cost to taxpayers. FEMP also
    provides technical assistance to federal energy managers so they can
    identify, design, and implement new construction and facility
    improvement projects in areas such as energy and water audits for
    buildings and industrial facilities, peak load management, and new
    technology deployment, including combined heat and power and
    distributed energy technologies.
        As FEMP's core activities have matured, program efficiencies have
    increased. In fiscal year 2005, we are requesting $17.9 million for
    FEMP to continue meeting the goals of improving federal energy
    efficiency.
        Program Management.--Program Management provides executive and
    technical direction, information, analysis, and oversight required for
    efficient and productive implementation of those programs funded by
    Energy Conservation appropriations in EERE. In addition, Program
    Management supports headquarters staff, six regional offices, the
    Golden Field Office in Colorado in planning and implementing EERE
    activities, as well as facilitating delivery of applied R&D and grant
    programs to federal, regional, state, and local customers. In fiscal
    year 2005, we are requesting $81.7 million for these activities.
    Funding increases will be directed to federalize project management and
    contracting activities that have been performed by national
    laboratories, which have much higher overhead costs then our federal
    staff. This Project Management Center initiative frees our laboratories
    to devote more time to real research as opposed to management oversight
    functions, and will help more program dollars remain focused on
    research, development, and deployment.

                       ENERGY INFORMATION ADMINISTRATION

                            [In thousands of dollars]
    ------------------------------------------------------------------------
                                                    Fiscal year
                                      --------------------------------------
                                           2003         2004         2005
    ------------------------------------------------------------------------
    Budget Request...................       80,087       81,100       85,000
    ------------------------------------------------------------------------

        For the Energy Information Administration (EIA), we are requesting
    $85.0 million, which is $3.9 million more than the fiscal year 2004
    comparable appropriation. The fiscal year 2005 funding will provide for
    the federal employee pay raise and maintain the other on-going data and
    analysis activities, allowing EIA to continue disseminating accurate
    and reliable energy information and analyses to inform energy policy-
    makers.
        EIA's base program includes the maintenance of a comprehensive
    energy database, the maintenance of modeling systems for both near and
    mid-term energy market analysis and forecasting, and the dissemination
    of energy data and analyses to a wide variety of customers in the
    public and private sectors through the National Energy Information
    Center.
        In fiscal year 2005, EIA plans to discontinue the Annual Electric
    Industry Financial Report (EIA-412) that collects financial, plant
    cost, and transmission line data from municipal, state, and federal
    utilities and generation and transmission cooperatives. Funds provided
    to EIA with this budget request and savings from the discontinuation of
    the EIA-412 Report will be used to accomplish the following activities:
      --Improve the quality and timeliness of natural gas data. As part of
            this initiative, a new natural gas production survey will be
            developed and fielded;
      --Continue the Weekly Underground Natural Gas Storage Survey;
      --Update our core electricity surveys to provide improved estimates
            of fuel-switching capabilities and other critical parameters,
            and enhance data quality;
      --Update petroleum product surveys and systems to maintain data
            quality and accommodate changes in fuel specifications;
      --Provide better regional information in the Short-Term Energy
            Outlook;
      --Conduct independent reviews of energy data and analytical work to
            improve its accuracy and timeliness; and
      --Improve the voluntary reporting surveys and databases to collect
            and disseminate information on greenhouse gas emission
            reductions in accord with updated reporting guidelines that are
            being developed as part of the President's Climate Change
            Initiative.
        EIA continues to aggressively expand the availability of electronic
    information and upgrade energy data dissemination, particularly on the
    EIA website. The increased use of electronic technology for energy data
    dissemination has led to an explosive growth in the number of its data
    customers and the breadth of their interests, as well as an increase in
    the depth of the information distributed. Since establishing a fiscal
    year 1997 goal to increase the number of users of its website by 20
    percent annually, EIA has either met or exceeded this commitment in
    each of the succeeding years. In fiscal year 2003, EIA accomplished a
    23-percent increase as compared to fiscal year 2002, delivering more
    than 2,600 gigabytes of data.
        Mr. Chairman, and Members of the Subcommittee, this completes my
    prepared statement. I would be happy to answer any questions you may
    have at this time.

        Senator Burns. Mr. Secretary, thank you very much. We have
    been joined on the committee this morning by Senator Byrd and
    Senator Bennett.
        Senator Byrd, did you have an opening statement that you
    would like to provide this committee? And thank you for coming
    this morning.

                  OPENING STATEMENT OF SENATOR ROBERT C. BYRD

        Senator Byrd. Thank you, Mr. Chairman. I count myself to be
    very privileged to have you as the chairman of this
    subcommittee as long as the Republicans have to be in control.
    And I thank the witness for being here this morning.
        Mr. Chairman, let me start by thanking you and the
    subcommittee's distinguished ranking member, Senator Dorgan,
    for convening the hearing. Many of the research activities
    conducted by the Department of Energy, particularly the coal
    research activity that is overseen by the Office of Fossil
    Energy, are vital to the Nation's energy security and energy
    independence. Having an opportunity to publicly review the
    President's budget request is therefore time well spent. I
    appreciate Secretary Abraham's being here this morning to
    answer our questions; it is always nice to see a former
    colleague, although he may not be so happy to see me after he
    hears what I have to say about this budget.
        Last month, the cover of Time Magazine contained a picture
    of President Bush, along with a caption that read, ``Believe
    him or not? Does Bush have a credibility gap?'' For several
    reasons, I think the answer to that question is a resounding
    yes. But as far as today's hearing is concerned, I offer up the
    Department's fossil energy budget as exhibit A. Despite coming
    to my State and personally promising the people of West
    Virginia that he would spend $2 billion over 10 years on the
    clean coal technology program, President Bush has, for the
    fourth time in a row, simply walked away from that pledge. In
    fact, for this budget, the President is now 40 percent behind
    on his promise. If that does not constitute a credibility gap
    then I do not know what does. Even a cursory review of the
    President's fossil energy budget shows it to be an exercise in
    arithmetic gymnastics. In an effort to hide the fact that the
    President is seeking $50 million instead of $200 million for
    the clean coal technology program, the budget request simply
    blurs these line items. In an effort to hide the fact that the
    President is proposing to cut the fossil energy budget by 32
    percent in terms of new budget authority, the request props
    itself up by counting $237 million dollars in previously
    appropriated funds. And, in an effort to hide the fact that the
    President is unable or unwilling to pay for his much-touted
    FutureGen project without completely destroying the core
    research and development program, the request refuses to tell
    us where half the cost of that $1 billion project will come
    from.
        In short, the Office of Management and Budget has produced
    a document that goes beyond the realm of credibility. Indeed,
    this budget request is something I would expect to see coming
    from the accountants at Enron, not a government agency.
    Furthermore, this administration would love to be able to tout
    the multiple billions in the now-stalled energy bill for the
    promotion of coal. Given this administration's track record on
    the No Child Left Behind, homeland security, international AIDS
    and the farm bill, it hardly seems that this funding will ever
    come close to a reality. I am very aware that this
    administration would like to get an energy bill passed, any
    energy bill. However, it seems more to fulfill a campaign
    promise than anything else and it is time to stop passing bills
    for the sake of passing bills.
        Now, Mr. Chairman, out of fairness to the Secretary, I will
    reserve further comment until he has had an opportunity to make
    his opening statement and we can begin our questioning. But I
    want him to know that I have no intention of letting this White
    House get away with these distortions and half-truths. What
    they are doing to the fossil energy program is unconscionable.
    And while I understand that the Secretary must support this
    charade, I think that in his heart he too knows that this is
    not in the best interest of our Nation.
        Thank you, Mr. Chairman.
        Senator Burns. Thank you, Senator Byrd. Senator Bennett.
        Senator Bennett. After that, I probably better be quiet. I
    will reserve my comments for the question period, Mr. Chairman.
        Senator Burns. Thanks, Senator Bennett. Senator Reid.

                    OPENING STATEMENT OF SENATOR HARRY REID

        Senator Reid. Thank you very much, Mr. Chairman. Secretary
    Abraham, you know, as a person, I really like you. But I voted
    against your confirmation because I knew you would have no
    authority to do anything other than what you were told by this
    administration and that has proven to be true. I say to you,
    Senator Byrd, you should feel good that you are getting 40
    percent of what the President promised, because in Nevada we
    are getting nothing that he promised. Zero. He showed up once
    during the last campaign, and refused to take any questions
    from the press. When he realized the election was getting close
    he sent in some of his people, and issued statements, did
    little TV things, saying that he would only allow nuclear waste
    to come with good science. Then he did not even look at the
    reports that were prepared for him. He okayed Yucca Mountain
    quicker than Willie Mays covered centerfield. So, you should
    feel fortunate that you are even 40 percent of what he said he
    would do because in Nevada we got nothing.
        Mr. Chairman, I really appreciate your holding this hearing
    to discuss funding for the Department of Energy. And Spence, I
    appreciate your being here, taking the abuse that you are going
    to take.

                                 YUCCA MOUNTAIN

        I want to speak about an extremely pressing matter,
    potentially affecting thousands of people who worked at Yucca
    Mountain. And I am sure members of this committee do not even
    realize what is going on out there.
        My concern over this project as you know involves many
    things. But what we have recently learned of the treatment
    shown to workers who are digging the main test tunnel at Yucca
    Mountain, they were exposed to silicosis and other substances
    that basically are killing them. Hundreds and hundreds of these
    people, because the Department of Energy and the contractors
    involved, put these men's lives at risk. From 1992 to 1996,
    workers were exposed to dust from drilling and mining
    operations that were composed primarily of silica, better known
    as quartz. Everyone knows that the Department of Energy should
    have known, and did know, of these dangers.
        One need only look at Tonopah, which is a short distance
    away, which was a big mining camp in the early part of the last
    century. After the camp was established the operators of those
    mines would not hire what they called Americans, only
    foreigners, because they knew they would die. Silicosis was so
    bad in the mines at Tonopah that they only hired foreigners and
    they died by the score of miner's consumption, silicosis.
    Silicosis, though, is a 100 percent preventable, 100 percent.
    But no precautions were taken at Yucca Mountain. None. Some of
    the people wanted to wear respirators but the DOE would not let
    them. It took too much time taking them on and off. They would
    not let them. The mining industries learned a hard lesson in
    Nevada over the years, Tonopah is one example. My father had
    silicosis. I thought all dads coughed at night. But all dads
    did not cough at night.
        Less than 10 years ago, the Department of Energy, it is
    hard to believe, would send these workers into Yucca Mountain
    with nothing to protect them from the poison of silicosis, this
    silica. There are many common safety protocols and equipment
    which were ignored because the Department was too concerned
    with meeting an unrealistic schedule and the contractors were
    too interested in making as much profit as they could. And
    there is plenty to be made. You know, that project, if it
    continues, will be the most expensive public works project in
    the history of the world; estimates now are about $85 billion.
    But there is no price that anyone can put on the health of just
    one of these sick miners. These men worked hard to dig and
    excavate the tunnel under the assumption that the Department of
    Energy would protect their health. The failure of the
    Department of Energy to do this is a tragedy. We are holding a
    hearing in Nevada during the March break. Dr. Chu has been
    invited to testify, she is in charge of this program; she was
    not there at the time but she has had the opportunity to look
    at these records and even she recognizes how terrible it is.
    And I think the record of protecting workers from these
    foreseeable risks is just horrible and it is time we put a stop
    to this blatant disregard for the health and safety. There are
    people that are, as I speak, dying as a result of this.
        Also, Mr. Secretary, I want to spend just a minute talking
    about your railroad that you are planning to build through
    Nevada. You have what is called a preferred rail corridor for
    possibly transporting nuclear waste in Nevada, and I think you
    should check to see what's going on in Europe and see they have
    given up on transporting nuclear waste because the widespread
    protest and delays. Then they only have to haul it a few
    hundred miles and here we are talking about hauling it as many
    as 3,000 miles. Germany even scrapped its nuclear waste
    repository program following widespread protests of waste
    shipments. Each shipment of waste is a potential terrorist
    target, especially after September 11; we have learned how
    vulnerable our Nation's transportation infrastructure is. But
    you have been part of selecting a corridor called the Caliente
    route. The Bureau of Land Management have made no evaluation of
    possible impacts. This is something, another part of the rush
    job, just like having these miners killed as a result of
    working in these mines. This tunnel, I should not say mines.
    But we in Nevada know what the rail line means. It means that
    ranches that have been in operation since the time of the Civil
    War will be put out of business. Take, for example, Gracian
    Uhalde. Mr. Uhalde operates a ranch near Garden Valley in
    northwestern Lincoln County, and the proposed line is going
    right through his ranch. He was not considered--talked to, and
    what you are proposing will ruin his ranch. This is a family
    farm we're talking about.
        So, Mr. Secretary, there are many challenges facing our
    Nation, ranging from the war on terror to creating jobs to
    cutting health care costs. It is time we stopped risking the
    health of our citizens and wasting our Nation's dwindling
    financial resources in this blind pursuit of the flawed Yucca
    Mountain project.
        Let me just say this. Everyone who serves on the
    Appropriations Committee, wait until you see what the
    administration has done with the energy and water subcommittee
    budget. A half-a-billion dollars a year was not enough. This
    year they are asking for about $900 million for Yucca Mountain.
    It is going to take away from Devil's Lake, all the many things
    we do in West Virginia, things we do in Montana, things we do
    in Utah. There is not enough money when they want $1 billion to
    dig in this hole some more. So, good luck on energy and water.
        Senator Burns. Strong letter to follow.
        Mr. Secretary, thank you very much. I did not know we were
    going to get into a little old food fight up here but we try to
    work through these things together if we possibly can, then if
    we cannot we will try other avenues of approach.

                                   FUTURE GEN

        Mr. Secretary, we talked about FutureGen, let us delve into
    that a little bit because we look at how it is structured, and
    I think we have discussed the project and our shared commitment
    to see it move forward. Unfortunately, the Department has not
    provided the report demanded by December 31, 2003 in the fiscal
    year 2004 conference report. And details remain extremely hazy
    on that project. I would ask your Department to expedite that
    report because there are a lot of us that are very interested
    in this. It is research that is done so that we can use the
    largest resource we have in this country to provide power and
    energy for the United States. And that is why a lot of us are
    very much interested in this. We have been tracking the issue,
    but I think upon inquiry we hear three things from industry;
    this is people outside the Department. First, they want to
    commend you and your staff for doing an excellent job of
    sorting through the technical and scientific implications of
    the project. I think your sorting process on where we should be
    going and stressing those points has been good. But they see it
    as a meritorious project and want to lend their financial
    support to the project if a productive path can be found. And
    they are deeply concerned that OMB and the Department are
    heading toward a financing and project management strategy that
    brings into question the long-term viability of the project.
    And I think we are getting that feeling up here on the Hill,
    too. There is one thing that government does very well,
    probably better than any other entity in the world, and that is
    to throw good money after bad. And I do not think this
    committee or this Congress should be doing that. But FutureGen
    is very, very important. It is doing research in the right
    areas.
        So, would you want to comment on that? Can you update us on
    the project and outline, give us your successes and also, do
    not be afraid to mention the failures. After all that is what
    R&D is all about we have more failures than we have successes,
    and we should know about those.
        Senator Reid. Mr. Chairman, could I have your permission to
    have written questions propounded to the Secretary and have him
    respond within a reasonable period of time?
        Senator Burns. Are they going to be anything like your
    opening statement?
        Senator Reid. No.
        Senator Burns. Okay. You may do that then.
        Senator Reid. Thank you.
        Senator Burns. Mr. Secretary, go ahead.
        Secretary Abraham. Thank you. Thank you, Mr. Chairman, and
    Senator Reid, I would be glad to respond to your questions.
    Thank you.

                                   FUTURE GEN

        First of all, let me just return to a comment on FutureGen
    that I made initially and just emphasize that it is, in our
    judgment, the highest priority project. We launched the concept
    of FutureGen because we recognized, looking into the future,
    that it was not good enough to just simply make incremental
    gains in terms of clean coal technology but to really try to
    have a transformational change that would develop the kind of
    power plant of the future that ensured that we transcended all
    of this debate about whether or not we can operate coal-fired
    generation in a fashion consistent with environmental quality.
    We believe we can, we think this project will do more than any
    other that we have in mind to accomplish that. I apologize to
    the Committee, to the Congress, that the report, which was due
    at the end of the year, has not been provided. I am happy to
    report it will be provided today and I hope that will help to
    address and clarify some of the issues that have been raised
    about the path forward. We envision a program that will be
    approximately $950 million over the next decade or so with the
    Government share being very substantial, in the range of $620
    million. We also believe that we will have some international
    participation in this project, based on the highly successful
    Carbon Sequestration Leadership Forum conference of last June
    and the subsequent meetings, which I and others from the
    Department have participated in with foreign counterparts who
    have a great deal of interest in trying to work together with
    the United States to perfect carbon sequestration and coal
    gasification technologies. We believe that, of course, there is
    an important role for the private sector to play. We would
    envision that role being in the range of $250 million for this
    project; we think that is a fair allocation of responsibilities
    and we see already, that there is a strong industry coalition
    that has been developing to participate in the project as well.
    And so, I am highly confident it will be successful. You know,
    this is going to be tough work. The research involved in
    perfecting these technologies is, as you know, going to really
    test our capabilities but we think it is well worth the
    investment. I also believe that when we combine this work with
    the other work we are doing on clean coal technology and carbon
    sequestration not included in the FutureGen project, that in
    the early part of the next decade we will find ourselves with
    results that truly, as I said, transcend the current debate
    about the use of coal and the environmental impact of the use
    of coal. And that is our goal. I mean, this administration is
    deeply committed to maintaining coal as the key component in
    our electricity generation mix; it is 50 percent today, we have
    250 years of reserves, we cannot afford to not use those
    reserves and we are committed to making sure that the coal
    industry is successful in staying as strong as it is today.
        Senator Burns. Well Mr. Secretary, I agree with everything
    that you said. But when we start making decisions up here on
    how to allocate money, and where it should go, we have got to
    have some kind of an idea of the work that has been done, the
    success and the failure of it, if that be the case, and then if
    we find a failed procedure or research that has failed to come
    up with the right answers, then I have no problem in phasing
    that out and using that money in another direction. It seems
    like we do not ever hear of the failures, we only hear of the
    successes and the failures we keep on funding. I think this
    report is very, very important----
        Secretary Abraham. Right.
        Senator Burns [continuing]. To this committee. And since we
    do not have it, it does not let us prepare in asking some
    pretty straightforward questions on where does this committee,
    working with you, take our research dollars.
        Secretary Abraham. Sorry.
        Senator Burns. And that is the point I am trying to make
    here.
        Secretary Abraham. No, and it is a well-taken point. I
    appreciate it and, as I said, I apologize that we were delayed
    in getting it here. We have been working hard to try to come to
    an agreement within the administration on it. As you know, in
    the FutureGen program, which was launched just last year, the
    initial year's work was primarily a planning phase, a phase in
    which----
        Senator Burns. That is right.
        Secretary Abraham [continuing]. We were focusing on the
    environmental impact issues. And so, there has not been a lot
    of research conducted to either succeed or fail yet, that comes
    later. But certainly, your point is well taken about the timing
    of this report's release.
        Senator Burns. We have been joined by the chairman of the
    full committee on appropriations. Senator Stevens, did you have
    a statement?
        Senator Stevens. No sir, I will just take my turn when the
    time comes. Thank you very much.
        Senator Burns. Senator Dorgan.
        Senator Dorgan. Mr. Chairman, let me defer to Senator Byrd.
    I know he has other things to do, why do not we have Senator
    Byrd proceed with his questions, if he would like to, I'll be
    here until the end of the hearing in any event. Would you like
    to proceed, Senator Byrd?
        Senator Byrd. I think, let us see, how many are ahead of me
    here?
        Senator Dorgan. There is not anybody ahead of you.
        Senator Burns. No, I would go to Senator Bennett if you
    want to.
        Senator Byrd. I would be glad to wait my turn. I think I
    have a little time in the budget committee, I will be glad to
    take my turn.
        Senator Burns. Senator Bennett.
        Senator Bennett. Thank you very much, Mr. Chairman. I would
    be happy to defer to Senator Byrd if his schedule requires it.
        Senator Byrd. Thank you very much. Thank you.
        Senator Bennett. Mr. Secretary, I cannot resist just making
    a note, having listened to Senator Reid as he talked about the
    desperate conditions in the building of Yucca Mountain. And I
    made the note, I hope I made it accurately, that he said this
    occurred during 1992 to 1996, when Hazel O'Leary was the
    Secretary of Energy, rather than you. I think if there are any
    in the audience that heard that attack on the actions of the
    Department made while you are in the chair they should note the
    historic fact that he pointed out that, in fact, neither you
    nor anyone else in this administration was in a position of
    power with respect to those issues from 1992 to 1996. And I
    think, Mr. Chairman, we simply ought to perhaps highlight that,
    which Senator Reid mentioned.

                        NATURAL GAS AS A FUEL OF CHOICE

        Mr. Secretary, the fuel of choice is not coal but natural
    gas. In the joint economic committee, we have had Chairman
    Greenspan raise the various economic issues confronting this
    country. I was a little surprised, as he went through the
    standard statements of a central banker, talking about all of
    the financial implications of interest rates and trade policy
    and so on, for him to say that one of the most significant
    economic challenges we face in the future is the shortage of
    natural gas. He pointed out that natural gas, unless it is
    liquefied, is one fossil fuel we cannot import, that the only
    way we get natural gas in its natural form into this country if
    we run low in our own supply, is through pipelines through
    Mexico and Canada. But natural gas that is available anywhere
    else in the world has to be liquefied and then brought in to
    special ports that have been prepared for that. We are now in
    the process of seeing the country build those kinds of ports at
    fairly significant expense, to bring in liquefied natural gas,
    even while, from a seismological point of view, we have a
    tremendous amount of natural gas in the United States, if we
    would just build the pipelines to move it around. The first
    one, which is on our radar screen up here, perhaps because we
    have the presence of the senior Senator from Alaska, is the
    pipeline from Alaska. That would be very important to build and
    will produce a significant economic impact for the entire
    country if we get that natural gas pipeline built.
        I know it is not your area, but it is the area of the
    Interior Department, which this subcommittee is concerned with,
    to open up natural gas supplies in Federal lands to make it
    available. And I would be interested if not here, or if in your
    other testimony, you could give us any information that you
    might have as to what could be done to make natural gas more
    available to deal with the problem Chairman Greenspan is
    concerned about, and which I am, as the cost of natural gas
    keeps going up, as the environmental community continues to
    insist that it is the fuel of choice. Do you have any comments
    on this situation?

                                  NATURAL GAS

        Secretary Abraham. Well, let me make a broad statement and
    then touch on a few specific facts. There is no question that
    in recent years, as a result of regulations that deal with the
    environment, we have moved the power generation development in
    this country in the direction of gas and that puts the stress
    on the market that you are talking about. We have regulated
    ourselves in the direction of gas on the demand side and we
    have sort of regulated ourselves in the other direction with
    regard to the supply side. That does not mean there is not new
    gas being produced but there is not as much as the demand
    levels are prompting. I have been encouraged by the recent
    developments, the interest that has been shown in the building
    of an Alaska pipeline. Last week I was on the West Coast and
    heard from the Port Authority of Alaska about their plan to
    possibly split the facility, or split the pathway forward to
    use LNG, actually, to move some of the gas from Alaska to the
    West Coast, California or lower 48, and move the rest to
    Chicago through a pipeline. The interest of companies now has,
    I think, been growing in terms of building that pipeline, so we
    are encouraged by that.
        But let me put some facts on the table for the committee
    and urge you to think about these as you deliberate on, not
    just this budget but on the broader policies the Senate
    considers. Last year, actually in March 2002, I asked the
    National Petroleum Council to do an updated study of natural
    gas prospects and forecasts, for this country. They had done
    one in the late 1990s; I felt it probably was out of date just
    given what we were seeing in the market. They released the
    results of that study in September of last year and it was
    quite staggering. Even using very optimistic calculations about
    gains and energy efficiency, and contemplating the arrival of
    the Alaska gas to the lower 48 over the next 20 years, they
    forecast the following: that where America had once been able
    to supply all of its natural gas demands domestically and where
    in recent years we have seen about a 10 percent import, mostly
    from Canada, in 20 to 25 years, their forecasts would have the
    United States importing about 25 percent of its natural gas
    from beyond North America. And that is with optimistic
    proposals.
        Senator Bennett. That is even if we build the Alaska
    pipeline----
        Secretary Abraham. Yes, it is.
        Senator Bennett [continuing]. And the two tracks you have
    described?
        Secretary Abraham. Yes.
        Senator Bennett. I see.
        Secretary Abraham. And the results of that, I would be
    happy to submit for the record to the committee and also to the
    joint economic committee, if that would be helpful, what it
    calls for is, a continued effort to make sure we have diverse
    sources of electricity generation, that we do not simply rely
    on gas. That means the coal programs we are talking about here.
    It means that nuclear energy has to continue to play a role,
    which means we do have to resolve the question of what we do
    with nuclear waste. It also means that we have to be capable of
    importing larger amounts of natural gas. And that is why one of
    the focuses in our Department since that report came out has
    been on what groundwork needs to be laid in order for liquefied
    natural gas facilities to be built, what do we have to do to
    try to partner with other gas producing countries. And one of
    the concerns, obviously, that comes from this is that we do not
    want to find ourselves moving in terms of foreign dependence on
    gas in the direction we have all been concerned about regarding
    oil. So in December we convened a summit of all the major gas
    producing countries, 20 countries came, talking about what they
    could do, what they wanted to do, what their prospects were.
    There are immense natural gas reserves around the world;
    Australia has huge supplies, they would like to sell those
    supplies to the United States. And so, I think we had an
    excellent summit. We identified some serious challenges, one of
    which, clearly, is the question of safety that comes out of
    these kinds of issues. So, our Department is working now to try
    to address some of those issues, to try to identify the safety
    challenges and hopefully the solutions to them. But we also
    need to look at the regulatory approach that will be taken to
    make sure that we address the safety issues in a timely fashion
    so that facilities can be built. But this is going to be, in
    our judgment, a major, long-term strategic challenge for the
    country. I do not think that the demand for gas is going to
    abate; I think we are going to see this continue and if we are
    not able to facilitate the import of LNG it is going to put
    tremendous stress on what is already a pretty tight
    marketplace.
        Senator Bennett. Thank you for that answer and for the
    thoughtful analysis that it demonstrates on the part of the
    Department.
        Mr. Chairman, again, in this committee, subcommittee, we
    have to deal with the BLM and the Forest Service. On BLM land
    there is a tremendous amount of natural gas that is being
    prevented from coming to the market for a series of other
    reasons unrelated to the Secretary, and I think we ought to
    address that.

                              MOAB ATLAS TAILINGS

        Mr. Secretary, I am taking advantage of the fact that you
    are here, very quickly hitting a parochial issue that frankly
    is not before the purview of this committee, it is the energy
    and water committee. But taking advantage, as I say, of the
    fact that you are in front of us, I want to raise the issue of
    the Moab Atlas Tailings, to tell you that we are very concerned
    about that. We hope that we can work with you. I will not ask
    you a bunch of detailed questions about that because it would
    intrude on Senator Byrd's time, but I will just trigger that
    issue for you and let you know we will be in touch with you and
    look forward to your cooperation in trying to help us get that
    problem solved.
        Secretary Abraham. Well, we look forward to working with
    you. As you know, we are trying to move ahead to both produce
    the draft environmental impact statement, which I believe will
    be taking place in the April-May timeframe.
        Senator Bennett. The quicker the better.
        Secretary Abraham. We are hoping to have a final
    environmental impact statement by November, with a record of
    decision in December. And so we understand the importance of
    trying to move this process ahead and we will do our best to
    accomplish those timetables.
        Senator Bennett. Thank you very much for your attention to
    that.
        Senator Stevens. Senator Byrd, my questions would follow on
    the same line. Would you mind if I asked them now?
        Senator Byrd. Not at all, Mr. Chairman. Go ahead, please.

                          ALASKA ARCTIC ENERGY OFFICE

        Senator Stevens. Well, Mr. Secretary, the Congress created
    an Arctic Energy Office, a branch of your Department's National
    Energy Technology Laboratory. It was created to work with
    Canada with the knowledge that a substantial portion, an
    overwhelming portion of the remaining natural gas to be
    produced from this continent under the American flag and the
    Canadian flag would be available to us if we could really
    conduct the research that is necessary to go ahead. I point out
    that we do have some additional supplies in the world. The
    Shtokman Deposit of Russia was presumed to be oil but it is
    primarily gas now, I understand, and there is gas off our
    shores that is going to be available to us. But the cost of
    that gas in the long run is going to be overwhelming compared
    to our own domestic gas if you compute in, which the
    Congressional Budget Office does not, the affect of spending
    money in the United States as opposed to buying our energy
    overseas as we have done in the oil industry. But your budget
    this year eliminates the funding, as we understand it, for the
    Arctic Energy Office. We had over $635 million in the Fossil
    Energy Research and Development last year. I am told that your
    budget indicates that none of it will be spent in the Arctic.
    What led to that decision?
        Secretary Abraham. Senator, we have not made requests for
    this line item either this year or last year, I do not think in
    previous years in our submission because it has been a
    Congressionally initiated project. That has been kind of the
    policy on the submissions. That does not mean we do not feel
    that the office has been doing important work. We would
    certainly agree to that. And we have talked to Senator Mikulski
    about this as well and look forward to further discussion on
    how we might be able to maintain the effectiveness of that
    office. But it is not in our submission because it has been a
    congressionally initiated project.

                            ALASKAN ENERGY RESOURCES

        Senator Stevens. Well, as we look through this budget, for
    instance, in terms of the basic research in hydrates, gas
    hydrates----
        Secretary Abraham. Right.
        Senator Stevens [continuing]. 590 trillion cubic feet
    estimated in our State. The funding for the Department in terms
    of that project has been reduced by $3.35 million. If you look
    at the Syngas Ceramic Membrane project, that has been
    eliminated in 2005. The President called for the sensitive
    development of Alaska's oil and gas reserves but we find that
    consistently through the bill, for instance, University of
    Alaska in Fairbanks was at the forefront of some of these items
    and that research, budget item two, has been eliminated. It
    almost looked like someone decided that we did not want
    Alaska's gas or other resources to be pursued at this time.
        Secretary Abraham. Well, that is obviously not the way we
    view it. We certainly see tremendous Alaska potential and look
    forward to working together to figure out how to tap it. I
    think that, with the hydrates budget, I believe we have
    budgeted about $6 million in our submission; we think that is a
    valuable area. We think that it has great promise, maybe not
    immediate, but we see it as a potentially vast source in the
    future, and given the demands that I mentioned earlier we are
    going to need to be tapping unusual or new sources for our
    future needs.

                                  GAS HYDRATES

        Senator Stevens. Well, on the gas hydrates it specifically
    takes that money out. But beyond that, we put up $6.5 million
    to conduct research for the development of the Syngas Ceramic
    Membrane technology to enhance the Fisher-Tropsch gas
    conversion concept and that project too was eliminated totally.
    I just really do not understand this budget from the point of
    view that we are looking to try to develop our own resources on
    this continent, I think we should help Canada even more than we
    are, as a matter of fact, because some of their areas are so
    remote from their really population bases they are not that
    interested in moving their gas. But our projects alone would
    create 400,000 jobs in 3 years. And yet, we are still dragging
    along. Congress has not enacted the bill we need to get it
    started, but if there is a jobs bill in the United States, it
    is to assist the development of the Alaska natural gas
    pipeline. That pipeline, by the way, is to bring to market gas,
    which has already been produced, reinjected into the ground;
    there is absolutely no question that it is there. When we get
    to the Interior Department, we are going to have some questions
    about what we are doing there. But clearly Congress has seen
    fit to withdraw almost 90 percent of Alaska's arctic that
    belongs to the Federal Government; a portion of it belongs to
    our State. I see some fine hand here. You have been a good
    friend for a lot of years but I do not understand. You go
    through this budget and look at the Alaska items, each one of
    them has been reduced and that is the one area of great promise
    as far as natural gas supplies in the United States.
        Secretary Abraham. Senator, on the hydrates, our submission
    last year was quite a bit lower than our submission this year.
    We are trying to find a level where the Congress and the
    Department are in agreement. We submitted a $3.5 million
    request last year, this year it is $6 million. I think in that
    sense, we certainly demonstrated our keen interest in the
    project. There is no question this administration is certainly
    firmly on record in support of the development of Alaskan
    resources, as you well know.
        Senator Stevens. You cannot do that without Federal money
    in Alaska when you own most of the land in the area.
        Secretary Abraham. Well, we are working within a budget in
    which I have constraints and we are doing our best to try to
    make sure we address as many priorities as we can. We are
    anxious to work with the committee and with you to make sure we
    come up with a final resolution that is as positive as it can
    be. It is certainly not an attempt to focus on any one State or
    one program. We are also, as you well know, committed to trying
    to bring Alaska gas to the lower 48. I think the recent
    developments, as I said in my answer to Senator Bennett with
    regard to the interest expressed by Mid-America Company and
    others in moving that project ahead, is a very positive one. As
    you know, we are separately working on trying to expedite
    permit processes on this. Obviously, some of that falls in
    other agencies, but we are all trying to work together to
    accomplish it.
        Senator Stevens. Well, again, I am belaboring it. Arctic
    Research, line item 296, that eliminated the Arctic Energy
    Office, gas hydrates, chlorine wells; that eliminated $3.35
    million in gas hydrates for Alaska Arctic research; $1.48
    million, that eliminated the Arctic Energy Office. The
    effective environmental protection concepts, that eliminated
    the funds that have been used, $2.71 million, eliminated the
    funds for evaluating environmental questions that have limited
    production and exploration on the former National Petroleum
    Reserve for number four. Those are all in your Department and
    all very selective reductions in the Alaskan effort at a time
    when we need more money.
        My last comment would be, not only to you but to the
    committee and Senator Bennett certainly said too many times,
    but if we look at China, they build the roads out for the
    companies that are drilling for their oil. But our way, we have
    to use our State funds to build roads out of the Arctic areas.
    If you look at the investments that have been made in Shtokman,
    the Russian Government is putting infrastructure totally in
    there. We are expected to go ahead of the game and put it in
    there before we even get the approval of the Congress for the
    gas pipeline. I think we put the cart before the horse. But the
    main thing I am disturbed about is this elimination of research
    money to find the ways to do it better, as we know we are going
    to have oil and gas development at the Arctic. I cannot
    understand eliminating the money in the very key areas that I
    have mentioned.
        Again, you are a good friend, I am not criticizing you
    personally but the concept of reducing the budget for needed
    infrastructure to assure our future energy supplies is
    misguided. Thank you very much, Mr. Chairman.
        Senator Burns. I think that is what we are talking about
    and I think when I went back to my question on successes and
    failures, as far as our R&D is concerned, is trying to set our
    priorities.
        Senator Byrd.
        Senator Byrd. Thank you, Mr. Chairman.

                         CLEAN COAL TECHNOLOGY PROGRAM

        Mr. Secretary, in October 2000, during his campaign for the
    presidency, then-Governor Bush came to West Virginia. He told
    the voters that if elected he would seek $2 billion over 10
    years for the Clean Coal Technology program. The following
    night in Boston during a nationally televised debate Governor
    Bush repeated his promise. He said, I am going to ask the
    Congress for $2 billion. Eight days later on October 11, 2000,
    in another presidential debate, the Governor said, I think we
    need to have clean coal technologies. I propose $2 billion
    worth. Those are the exact words used by Governor Bush during
    his campaign, $2 billion over 10 years, or $200 million per
    year, for clean coal technology. By any conceivable measure,
    that is a strong endorsement. There is absolutely no doubt in
    my mind that that promise was key to the winning of West
    Virginia's five electoral votes. If those five votes had gone
    to Mr. Gore, you would not be sitting there in that chair. Yet,
    despite all the promises, the President has not even come close
    to proposing $200 million per year for the Clean Coal
    Technology program. The first Bush budget contained $150
    million. The second Bush budget contained $150 million. The
    third Bush budget proposed $130 million. This budget, the
    fourth Bush budget, has been cut back to a mere $50 million.
    Instead of honoring his commitment and seeking $800 million
    over the past 4 years, the President's requests have totaled
    only $480 million. That is 40 percent less than what was
    pledged. Compounding the problem is the outright deception that
    the White House is engaging in with respect to this matter.
    According to the fossil energy budget justification, and indeed
    your own prepared statement, President Bush never promised $2
    billion dollars specifically for the Clean Coal Technology
    program. On the contrary, the new revised version of events has
    him promising $2 billion for coal research overall. Such a
    claim defies logic and, in my opinion, is simply not true. As
    the chart that I have distributed, I hope it has been
    distributed, clearly shows, when the President made his $200
    million per year pledge, the coal research budget was already
    $317 million; $95 million for the Clean Coal Technology program
    and $222 million for other coal research programs. Therefore,
    if the President wants us to believe that he was only promising
    $200 million per year for coal research in general, then we
    have to believe he went to West Virginia and campaigned on a
    promise to cut the coal program by $117 million, or 37 percent.
    That is absurd. That is absurd, at best.
        Furthermore, when you spoke, Mr. Secretary, to the
    employees of the National Energy Technology Laboratory in
    Morgantown, West Virginia, on March 1, 2001, you told them that
    you were there to: ``announce a down payment on that commitment
    with next year's budget providing $150 million, new dollars,
    for clean coal technology.'' You did not say that the budget
    was providing $150 million for all coal research, which it did
    not. You were very clear in specifying the Clean Coal
    Technology program.
        Now, my question to you, Mr. Secretary, is this. Given
    these facts, what does the administration say to those West
    Virginians who actually believed the President when he promised
    $2 billion for the Clean Coal Technology program?
        Secretary Abraham. Thank you, Senator. Let me, Mr.
    Chairman? Mr. Chairman? I'm going to just need, if I could, a
    little time here to respond in some detail on the numbers here.
        Senator Burns. Okay.
        Secretary Abraham. Let me give you a sense of how we see
    this program evolving; let me give you a sense of what those
    numbers look like. As you know, Senator, since taking office we
    have now had two solicitations under the President's Clean Coal
    Initiative. The first one was for about $313 million, that
    would be the Government's share, and it has tracked at, I might
    point out, about $1 billion of private investment and
    partnership.
        The second one, which just went out, was for $280 million;
    went out just a few weeks ago. We are doing them on a 2-year
    basis, every 2 years is our plan to put out one of these
    solicitations. We are very confident that the newest one will
    likewise attract a lot of private partnership and requests. We
    envision doing these on a 2-year basis throughout the balance
    of this 10-year period, which we have identified. And each of
    these solicitations is at the $300 million level. Why did we
    only ask for $50 million for these programs in this budget?
    Because that is all we needed to complete this second
    solicitation's $280 million total amount. But, by the end of
    the 10-year period, when we have done five $300 million
    solicitations, we envision that that will be $1.5 billion in
    clean coal technology projects.
        In addition, as you know, we have talked here already today
    at great length about our proposed FutureGen program. As I
    said, we will submit the report today, and I again apologize to
    this committee for its delay. We envision the government's
    share of this new Bush initiative to be about $620 million for
    a combined total of $2.1 billion when you add those five
    solicitations that we envision and the FutureGen program. Now,
    in addition to that, and, you know, the definition of what is a
    clean coal program obviously can be interpreted in different
    ways, but as you also know we have significantly increased the
    carbon sequestration research programs that the Department has
    undertaken in the last couple of years. We strongly feel that
    we must address the carbon sequestration issue as part of the
    clean coal pathway forward, because we believe that we need to
    address not just the issues of the emission of nox or sox or
    mercury but also of greenhouse gases and carbon is obviously
    the central focus of this initiative. Our budgets for that have
    been in the range and the submission here, I think, is in the
    $49 million range, in this $40 to $50 million a year range as
    well. And I would argue that those dollars are all part of the
    clean coal initiative that we have launched. And so, when you
    add those up, you do exceed $2 billion over 10 years.
        As for our submissions to date, all I would say is this: if
    we take all the coal programs, which is what I think is listed
    here, and our submissions versus the submissions of the 4 years
    before, we have been here 4 years, we can go back the previous
    4 years, the previous 4 year submissions for all coal programs
    was about $668 million; in our first 4 years our submissions
    are $1.5 billion. That is an average of $375 million a year for
    all coal programs. If you extrapolate that to 10 years, if you
    go out to 10 years, it is obviously a number close to $3.7
    billion. And so, I look at this program as a very substantial
    investment in clean coal and I think the case for the
    submission is a strong one and we hope the committee will
    support it.
        Senator Byrd. Mr. Chairman, well, I will ask a second
    question. First of all, I will say, when the President made
    those statements, when he was looking for votes in West
    Virginia, you were not onboard at that time, but we did not
    talk about previous administrations or previous submissions. He
    made an ironclad promise; that is the way we take words like
    that in West Virginia. And the moving finger writes; and,
    having writ moves on, nor all thy pageant nor wit shall lure it
    back to cancel half a line, nor all thy tears wash out a word
    of it. We take those promises to be bona fide and that they
    come from the heart.
        Now, Mr. Secretary, with all due respect to you, this
    Senator and the people of West Virginia are not going to forget
    those words. And we were not talking about all the other clean
    coal programs when that promise was made. Let me read it again.
    Let me just for the record read that promise again. The
    President said, in October 2000, that if elected he would seek
    $2 billion over 10 years for the Clean Coal Technology program.
    Now, you are looking at the daddy of the Clean Coal Technology
    program. I understand what those words mean. I understand what
    the President meant when he said them. He said I am going to
    ask the Congress for $2 billion. By the old math and the new
    math, it was $2 billion.
        Eight days later on October 11, 2000, in another
    presidential debate the Governor said: ``I think we need to
    have clean coal technologies. I propose $2 billion worth.''
    Now, those are the President's words. And what you are saying
    is not going to register with great accuracy in the mountains
    of West Virginia. You are trying to bring in other coal-related
    programs to get to $2 billion but it is still under-funding
    clean coal technology.
        Now, my second question. How can this administration say
    that it is working to reduce our Nation's dependence on foreign
    energy resources when it continues to undermine that objective
    by cutting, cutting, these vital fossil energy research
    programs?
        Secretary Abraham. Are we referencing oil and gas programs
    in particular?
        Senator Byrd. Well, you are cutting this program. You are
    cutting vital energy research programs and you are not keeping
    the promise that was made. I get back to that, I am going to go
    back to that every time.
        Secretary Abraham. Senator, you know I have the highest
    regard for you and on this one we just see the numbers
    differently, I guess. I just want to reemphasize to the
    committee, we have done two $300 million solicitations under
    the President's new program. We do them on an every 2-year
    basis, so there will not be another one for 2 years. We would
    envision each of the remaining three to have approximately the
    same level of financing of $300 million as the first two. If
    you add the five up it is a billion-and-a-half dollars over 10
    years. And if you add the FutureGen program, which I think is
    inextricably tied to the Clean Coal Technology Initiative of
    the President, then you are in the range of $2 billion. So I
    believe we are fulfilling that commitment.
        As to the other programs, I will acknowledge to this
    committee as I did last year that we have offered very
    substantial reductions from enacted levels on the oil and gas
    programs. It is an interesting challenge we have because
    obviously the Senator is exactly correct, as we see growing
    dependence on foreign oil. And as I acknowledged to Senator
    Bennett, we are seeing the need for increased imports of
    natural gas. The reason we have submitted these numbers at this
    level is related to the evaluations these programs have gotten
    from the Office of Management and Budget. They have been deemed
    ineffective and we are trying very hard to improve the
    performance of these programs so that we can come both to the
    Congress and the American people with programs that do not have
    such ratings. I have a hard time making the case, justifying
    the request for funds for programs where I am getting low
    scores. These are major areas, we are not cutting them out but
    we are scaling them back in the hope that we can make them more
    cost-effective.
        Senator Byrd. Mr. Chairman, I am going to desist now. I
    will just shoot one final shot across the bow. A promise made
    is a debt unpaid. That promise was made. The words are etched
    in stone. The words of now-President Bush. We expect that
    promise to be kept. It is not being kept. And, Mr. Secretary, I
    feel for you because you have to try to skim over and put a
    little new face on the promise after it was made. And you are
    doing a good job, you are doing the best you can but that
    promise was made by then-Governor Bush; the people of West
    Virginia have not forgotten it and it is impinging upon the
    credibility of the administration and it will not be forgotten.
    We expect the administration to do better in keeping its
    promises.
        Thank you, Mr. Chairman.
        Senator Burns. Thank you, Senator Byrd. And, Senator
    Dorgan.

                           FOSSIL ENERGY BUDGET CUTS

        Senator Dorgan. Mr. Secretary, I was interested in hearing
    the questions by my colleague, Senator Byrd. As you know there
    are reductions in the fossil energy spending and it comes at a
    time when you indicate that based on the studies that you had
    developed we will, in 20 years, be importing 20, 25 percent of
    our natural gas from offshore; 68 percent of our oil will come
    from imports. You know, this energy problem has not just
    occurred on your watch; it has been the previous administration
    and administrations before that. But we are smoking something
    strange if we just sit around here and think that we can allow
    this to happen. It is okay 20 years from now, 68 percent of the
    oil comes from other places, troubled places in the world;
    better ramp up now. You know, we are using natural gas, the
    chairman and I were just talking about, we are using natural
    gas the way we are using it because of policy choices. And now
    we discover, well, we are going to have a problem in getting
    enough natural gas and so we will have 25 percent coming from
    other parts of the world. And I mentioned earlier, our fiscal
    policy, that is on this administration's watch; it is
    completely out of whack. And, you know, to sit around and
    pretend that this adds up suggests none of us has gone to a
    school that is worthy of being called a school. And so, I
    understand budget cuts in the situation where you have this
    kind of fiscal policy where you increase spending for defense,
    increase it for homeland security and then cut taxes, cut taxes
    and cut taxes again and say, oh, by the way, on domestic
    discretionary let us just shrink the devil out of it. I
    understand that approach but I think that we are really not
    thinking very much as a country, fight terrorism and go to war
    and say, oh, by the way, nobody has to pay for any of that, in
    fact, you can all enjoy tax cuts. That might be politically
    interesting but it is not interesting to me as a policymaker.
    And with respect to budget cuts here, the one thing that occurs
    to me in response to what Senator Stevens was talking about, I
    believe it is the case, maybe you can confirm this for me, I
    believe it is the case that the Office of Management and
    Budget, which I believe probably ought to be abolished if that
    were possible, the Office of Management and Budget, I think, as
    a matter of policy, believes that any spending programs that
    have been initiated here are by and large unworthy and
    therefore should not be included in the budget. Would that be?
        Secretary Abraham. No. I think that is an incorrect
    statement.
        Senator Dorgan. Okay.
        Secretary Abraham. I would say this. When we submit a
    budget to Congress, it is an effort to reflect the priorities
    of the administration.
        Senator Dorgan. Right.
        Secretary Abraham. We fully appreciate that the Congress
    would and does write its own budgets, which reflect its
    priorities. And so, what you see in front of you, whether it is
    my budget or anybody else's, is what reflects the spending
    priorities that we would emphasize. That does not deem any of
    the programs that Congress thinks important meaningless or
    unimportant or ineffective but what we reflect in our budget
    are the programs in the areas that we think are the maximum
    benefit to the American people.
        Senator Dorgan. It is a different way of saying what I
    think I said. Does not OMB have a policy of saying that which
    represents earmarks by the Congress will be zeroed out in our
    submission?
        Secretary Abraham. I do not know if that is a policy on
    every single earmark but it definitely affects one-time-only
    projects.
        Senator Dorgan. Well, I am not even in the administration
    and I know this. I believe that is OMB's policy.
        Secretary Abraham. One of the frustrating things is that we
    have a budget overall for our Department and we have a number
    of congressionally-directed projects that are one-time
    projects. They are funded in enactment and then we come in with
    a budget that does not reflect them and people say, well, you
    have cut the budget for this area.
        Senator Dorgan. But that is not what Senator Stevens was
    talking about. You ought to just blame OMB; if I were you, I
    would. Just say well, I do not agree with OMB but I understand
    why you cannot do that. But the point of my questions is not to
    be critical of you, it is to say they have this goofy policy at
    OMB that says anything that somebody wrote here on a continuing
    program is marginally unworthy and it will be zeroed out
    because we do not recognize that as having worth.
        Secretary Abraham. Well, all I can say, Senator, is you and
    I.
        Senator Dorgan. Just take a shot at OMB just for a moment.
        Secretary Abraham. You know, there are some of them here.
    Look, the Congress likewise, though, certainly identifies
    programs that I bring in here that we think are terrific and I
    have noticed a similar outcome with regard to the funding of
    them and so it does kind of work both ways. It was certainly my
    perspective when I sat on that side of the room; however, that
    Congress's ideas should have been given higher emphasis than
    maybe is the case today.

                  ENERGY SAVINGS PERFORMANCE CONTRACTS (ESPC)

        Senator Dorgan. All right. ESPC, the Energy Savings
    Performance Contracts. The authority for that expired at the
    end of September.
        Secretary Abraham. Right.
        Senator Dorgan. We know that saves energy, we know it is a
    good investment. It has been widely supported by Republicans
    and Democrats and yet we do not have an ESPC program in place.
    So, how do we get there?
        Secretary Abraham. Well, we need to; obviously, we would
    like to pass an Energy bill. We would like to have the ESPC
    program reauthorized. I share your view, as you know, on its
    value. Obviously, I have spent a great deal of time over the
    last several years working with you and Senator Byrd and
    Senator Bennett and others to try to get an energy bill passed.
    We need to do this. There are many components that are included
    in this bill that do not receive all the headlines. This is one
    of them. Our key ingredients in terms of meeting our Nation's
    energy challenges that have been put on a slow track or in this
    case been stopped dead in their tracks because we cannot get
    the overall bill passed. So, I look forward to working with you
    to accomplish that.
        Senator Dorgan. But Mr. Secretary, the energy bill that has
    been reintroduced in the Senate now does not any longer include
    ESPC. So even if we pass that energy bill this afternoon----
        Secretary Abraham. Right.
        Senator Dorgan [continuing]. We would still be in the
    situation where we do not have.
        Secretary Abraham. We support ESPCs.
        Senator Dorgan. But the question is, how will you help us
    get there? Will the administration recommend this? It is not in
    the budget, it is not in the energy bill, so how do we get
    there?
        Secretary Abraham. Well, I guess we will have to confer and
    consider what the right approach is. I do not have a strategic
    proposal today. Senator, I would be glad to continue the
    discussion with you to see if there is a way to address this
    issue.

                    ENERGY AND ENVIRONMENTAL RESEARCH CENTER

        Senator Dorgan. All right. The Energy and Environmental
    Research Center, obviously I have a parochial concern there,
    but I think it is one of the crown jewels in energy research in
    this country and, as you know, the funding for that has been
    cut roughly 60, 65 percent. Give me your assessment of the
    value of that center and is that cut, is that a kind of an OMB
    push?
        Secretary Abraham. Well, first of all, as you know we have
    talked about this project for several years. There will be some
    who might consider it an earmarked investment but I made the
    decision some years ago that we would not treat it in that
    fashion. I think it had established its credibility to justify
    that broad program support as well as the work done both in
    Wyoming and North Dakota. It has played a great role in terms
    of development of advanced transport gassifer. Working with us
    now in a U.S.-Australian climate partnership project that
    involves lignites and other, which I think are useful things.
    We have had a year in which we have had to be tough about
    funding levels in our submission. And we also believe, frankly,
    that these folks do very good work and will be able to attract
    and be successful in being grant recipients to significantly
    augment the direct support that we propose here. But obviously,
    I am sure this is one we will work together on in the weeks
    ahead.
        Senator Dorgan. Well, I hope Mr. Garman and others have
    visited EERC. I think by all accounts it leverages a great deal
    of private investment and by all accounts, it is a terrific
    institution and I certainly want to work to deal with that.

                              HYDROGEN FUEL CELLS

        One final point. You and I have talked about hydrogen fuel
    cells. First of all, I commend the President. I think it is
    exactly right. Those in the environmental community who last
    year said, well, the President is talking about the by-and-by
    because they do not want to deal with the here-and-now. I will
    not comment on the here-and-now except to say that if you do
    not worry about trying to find a way not to run gasoline
    through carburetors for the next 100 years, then you are not
    really concerned about our energy future.
        Secretary Abraham. Right.

                       HYDROGEN FUEL CELL VEHICLE PROGRAM

        Senator Dorgan. And I think hydrogen fuel cells can be and
    will be our future and so I support this program. I said last
    year that I think it is probably more timid than I would like;
    I would like a more robust Apollo-type program.
        But the one point I wanted to make is with respect to
    targets and timetables. If you do not know where you are going
    you are never lost, as they say, and so I think with all of
    these things you should try to aspire to have some targets and
    timetables. And we in the Senate passed that with a pretty good
    vote, an amendment that I offered setting up targets and
    timetables, 100,000 vehicles by 2010 and 2\1/2\ million
    vehicles by 2020. And I would like you to rethink the
    opposition to that. Why on earth should the administration be
    opposed to that? These are not hard targets; they are just
    setting up goals. So, rethink that if you would. I do not
    understand where the opposition comes from.
        Secretary Abraham. Well, I will continue to talk to you
    about this. I will make one comment about our concern. First of
    all, we are trying to perfect a technology at this stage, not a
    particular vehicle, and so our focus in terms of a roadmap, in
    terms of milestones in that has been on the development of the
    fuel cell technology, the hydrogen storage capacity, the
    production of hydrogen and the sort of infrastructure support.
    And I think we have a very aggressive timetable for all of
    those. One of the concerns I would have about an early date in
    terms of the deployment of vehicles is the fear that we would
    actually move, and again, I recognize these are not mandatory
    targets, but if you are pushing hard to deploy large numbers of
    vehicles you may force the development of the wrong technology.
    You may end up with not the ideal operating system but the one
    that is the easiest to get to in that timeframe. We have tried
    to resist that because we fear that it might be pushing us in
    the wrong direction. There was a problem with diesels. I think
    it was back in the 80s where there was a premature introduction
    of technology that just did not fly. And now, as we look at
    clean diesel, I see this previous experience as having had some
    relevance.
        So, those are some of the considerations that have gone
    into our views. Let me just say this. We appreciate your
    support and that of many other Members who have joined you and
    other co-sponsors in pushing this program. When we talk about
    these long-term issues of oil dependence, this program is, in
    my judgment, and I think most who have looked at it outside of
    the United States, it is increasingly the view of people that
    hydrogen-operating vehicles are the way to transcend this issue
    of dependence and at the same time address these environmental
    concerns that make internal combustion engine usage problematic
    in terms of meeting environmental standards. So, we certainly
    appreciate the support the committee has given this and hope we
    can work together to get further support in the future.

                                   FUTURE GEN

        Senator Dorgan. Mr. Secretary, the chairman has to go to
    the budget committee and I have to go elsewhere as well. Let me
    mention two points in just a second.
        You spoke about FutureGen; you suggested $80 million would
    come from foreign countries. I would like, if you could, to
    submit to the committee where you think that is coming from,
    number one. And number two; I would hope you agree that the
    additional Federal funds will not come from core research and
    development programs in the Department of Energy. We will talk
    more about that at some point.
        [The information follows:]

                        Foreign Investment in FutureGen

        We have found great interest in FutureGen participation from
    several countries including those who are members of the United States-
    led Carbon Sequestration Leadership Forum (CSLF), representing at least
    14 countries (Australia, Brazil, Canada, China, Colombia, Germany,
    India, Italy, Japan, Mexico, Norway, the Russian Federation, South
    Africa, and the United Kingdom) and the European Union. We have also
    provided the CSLF countries with a general prospectus for international
    participation that outlines the benefits of participation. We plan to
    continue to engage interested countries in serious discussions with
    respect to their cost-shared participation.

        Senator Dorgan. I do want to just come back to the point of
    OMB. I have not come recently to this question of asking
    whether OMB is a valuable contribution to our government. In
    the previous administration, I asked the same questions and I
    hope perhaps you and I together could start a new discussion
    about the value of this Federal agency, through which
    apparently every single piece of paper now moves and from which
    almost every policy emanates.
        Mr. Secretary, thank you very much.
        Secretary Abraham. Thank you, sir.
        Senator Burns. We could move OMB up here on the Hill so we
    would have greater access to them.
        As I have heard the questions here, and sometimes--we were
    doing some adding up here--our figures are a little bit
    different than Senator Byrd's and I think they say, you have
    got to look out for generation gaps. Working on an old pickup
    one time, I had a young son as you well know, and I needed a
    screwdriver. I said run in the garage, or the shop, and get me
    a screwdriver. And he came out with a glass of orange juice,
    and said: ``I found the orange juice, cannot find the vodka.''
    Now, that is not a generation gap, that is a communications
    gap. And on some of these things that are contentious I think
    it would help both us and the Congress to seek ways to
    communicate with you as we start down this road. If we want to
    change policies, why do we have to do it in a formal hearing,
    where you get a lot of dialogue but I think we are going to
    have to work much closer with the bureaucracy. And whenever you
    want to veer and change directions call us up and we will meet
    with you and then we will figure out a way that we can do it
    and the merits of the suggestion. I think we would only meet
    about once a year and that is not very often.

                           OFF-HIGHWAY ENGINE PROGRAM

        You have, once again, proposed to terminate the off-highway
    engine, such as heavy equipment, railroad engine, research
    offices. While off-road fuel consumption is far less than on-
    road consumption, it does seem that there is significant
    emission reduction potential, and in our part of the country
    much of these emission reductions could be obtained by off-road
    applications. It seems like you view these programs as low-
    hanging fruit whenever we start examining them. I have examined
    them and found otherwise. Can you elaborate, for the record,
    the reasons you are proposing to terminate these programs?
        Secretary Abraham. I would be glad to. Take it for the
    record, if I could?
        Senator Burns. Oh, for the record?
        Secretary Abraham. I thought, yes.
        [The information follows:]
        Reasons for Proposed Termination of Off-Highway Engine Programs
        Because the fuel savings potential from off-highway vehicles
    research is an order of magnitude lower than the potential for on-road
    vehicles, our R&D priorities emphasize on-road vehicle R&D. Since the
    top priority of EERE is to reduce our Nation's dependence on foreign
    oil, the FreedomCAR and Vehicle Technologies Program decided to focus
    its R&D efforts on those technologies that offer the opportunities to
    save the greatest amount of petroleum. This decision is supported by a
    recent peer review of transportation R&D plans. In fiscal year 2004,
    approximately one-half of the funds are going directly to makers of
    off-highway equipment (construction, agriculture, mining, road
    construction, and rail) for competitively awarded cooperative
    agreements, while the other half goes to our National Laboratories to
    conduct cooperative, cost-shared research with industry. Our R&D on
    heavy-duty on-road vehicle engines does address many of the same
    technical issues present in engines of off-road vehicles.

        Senator Burns. Okay. I have some other questions on things
    that have recently happened down there. I will tell you, Mr.
    Secretary, I am very much interested in the fuel cell and fuel
    cell technology in the areas of both carbon and hydrogen
    because I think it is the way of the future. I think we are
    closer to a hydrogen society than most people think. But people
    do not know about it, and the results of it and what works and
    what does not work. We need to phase out what does not work;
    and let us go with what does work and what is practical. We up
    here sometimes forget that there is still a market out there,
    amd it still has to be market-driven. Can people afford it? I
    do not see hydrogen stations popping up like gasoline stations.
    Is the infrastructure there to support it? There are a lot of
    things out there to think about whenever we start talking about
    uses of alternative fuels.
        Secretary Abraham. Senator, can I just?
        Senator Burns. I am sorry, yes?
        Secretary Abraham. Quick comment on the last point you
    made, it is an excellent one, about the infrastructure and
    without belaboring it I would just say one of the real
    challenges that we foresaw when we began the hydrogen program
    was that we for years in this country have been talking about
    the idea of hydrogen, and others have too. There has always
    been this challenge that on the one hand, you need the
    infrastructure and on the other hand, you need the vehicles.
    And the one, I think, most promising development of this past
    year has been our capacity to bring together in one strategic
    organizing oversight group both sets, the energy and the
    automotive industries, which I think will allow us to move down
    both of the pathways successfully. The problem we had, the
    standoff, where people said, well, we will build the fueling
    stations when they have the cars and the people who said, we
    will build the cars when they have the fueling station.
        Senator Burns. It is an interesting chicken and the egg. By
    the way, the numbers that Senator Byrd was alluding to a little
    while ago, we came up with the President's commitment this year
    around $470 million. Now, you want to multiply that times 10
    and you are going to go way over what he was talking about. The
    use of prior year funds is around $140 million, so if you
    subtract that it is still around $330 million, which is a
    little bit more than what we have been told in some figures. So
    I do not think there has been any breach of commitment here.

                      CLEAN COAL POWER TECHNOLOGY PROGRAM

        Secretary Abraham. I would just ask, I know that a chart, I
    got one, was handed out. I would like to submit some charts
    that I think would put this in perspective as well and I think
    demonstrate clearly that we are on a pathway to meeting the $2
    billion commitment for the very specific programs I have
    mentioned and that we are on a pathway over the 10-year period
    to vastly exceed the kind of levels that I think.
        Senator Burns. I would suggest that you do that to clarify
    that.
        [The information follows:]

                                      CLEAN COAL POWER TECHNOLOGY FUNDING--COAL BUDGET (FISCAL YEARS 1997-FISCAL YEAR 2011)
                                                                    [In millions of dollars]
    --------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                      Fiscal year
                                    --------------------------------------------------------------------------------------------------------------   Total
                                        1997       1998       1999       2000       2001       2002       2003       2004       2005    2006-2011
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    Historical request.............      149.2      148.2      172.3      160.1      178.1      161.6      161.6      161.6      161.6      969.6    1,616.0
    Historical enacted.............      152.7      147.6      167.3      168.3      295.3      186.2      186.2      186.2      186.2    1,117.2    1,862.0
    Old CCPI Request...............  .........  .........  .........  .........  .........      150.0      150.0      130.0       50.0  .........      480.0
    FutureGen Request..............  .........  .........  .........  .........  .........  .........  .........  .........      237.0      263.0      500.0
    All Other Request/Total Coal     .........  .........  .........  .........  .........      159.8      225.1      237.5      183.0    2,008.0    2,813.4
     Undistributed OMB Out years...
                                    ------------------------------------------------------------------------------------------------------------------------
          Total DOE Coal...........  .........  .........  .........  .........  .........      309.8      375.1      367.5      470.0    2,271.0    3,793.4
                                    ========================================================================================================================
    Old CCPI Enacted...............  .........  .........  .........  .........  .........      150.0      150.0      170.0       50.0  .........      520.0
    FutureGen Enacted..............  .........  .........  .........  .........  .........  .........  .........        9.0      237.0      254.0      500.0
    All Other Enacted/Total Coal     .........  .........  .........  .........  .........      246.5      263.0      271.5      183.0    2,017.0    2,981.0
     Undistributed OMB Out years...
                                    ------------------------------------------------------------------------------------------------------------------------
          Total DOE Coal...........  .........  .........  .........  .........  .........      396.5      413.0      450.5      470.0    2,271.0    4,001.0
                                    ========================================================================================================================
    Old CCT Remaining Balances.....  .........  .........  .........  .........  .........      400.0      385.0      237.0  .........  .........  .........
    --------------------------------------------------------------------------------------------------------------------------------------------------------

        Senator Burns. Senator Leahy.
        Senator Leahy. Thank you very much, Mr. Chairman and
    Secretary Abraham, welcome back. I do not know which is better,
    on that side of the dais or this side.
        Secretary Abraham. I know which is better, but----

                        CLEAN AIR ACT--NEW SOURCE REVIEW

        Senator Leahy. We had a certain scheduling problem. We had
    a matter of some interest in judiciary committee and I was over
    there. I wanted to come because of one issue. The past year-
    and-a-half, your Agency and the administration have argued the
    rollback of the new source review provisions of the Clean Air
    Act would lead to increased efficiency, increased electric
    reliability; something of interest to us especially in the
    Northeast after blackouts, and would not lead to increased
    emissions. Sort of the alchemist's best result; you would have
    increased reliability, not increased emissions. But then the
    Natural Resource Defense Council has some e-mails obtained
    through the Freedom of Information Act. They are between your
    senior staff and industry officials; industry officials
    apparently helping them put together what the Department of
    Energy would report, they showed just the opposite. They showed
    no real affect on reliability and, worse yet, increased
    emissions. What bothers me, certainly in my part of the
    country, you have a real problem, the administration does, on
    the Clean Air Act. People are worried their children are
    drinking water that has mercury in it; they are not enthused by
    hearing about more arsenic in water, all these kind of things.
    And then it appears that your agency has made clearly
    misleading arguments when, as these e-mails show, you knew they
    were misleading, you knew there was not going to be increased
    reliability and there would be increased emissions; apparently
    nobody benefits but some of the industry people who helped
    write them. What do you say about that?
        Secretary Abraham. Well, I would be happy to answer for the
    record in detail on the e-mails; I do not have them fresh in my
    mind at this point. I would say that the----
        Senator Leahy. We could give you a copy if you would like.
        Secretary Abraham. Well, I will be happy, as I said, Mr.
    Chairman, to answer that for the record. I think that our view
    has been, and at least the recommendation of our Department has
    been that as we consider this issue that the concern that
    prompted--well, let us start back. A review of new source
    review did not just begin on the day we took office. There has
    been, as you know, a longstanding and somewhat frustrating
    pathway of trying to resolve what the proper way to determine
    what constituted appropriate repairs and replacements and whole
    changes in facilities. We had concluded, and we have
    consistently recommended, that we clarify this so that the
    people who were withholding decisions on whether or not to
    improve their facilities, whether or not to repair their
    facilities and so on would know what the entire extent of the
    work they would have to do would be. And, at least our
    recommendations, in terms of the interagency discussions have
    been consistent with trying to clarify the rules in a fashion
    that would----
        Senator Leahy. But the rules, you know, new source review
    started back, as I recall, in 1977. I was brand new here in the
    Senate at the time and I must admit, not being all that
    familiar with it, Senator Stafford from Vermont had been one of
    the architects of this. And then subsequent administrations
    followed up and at the end of the Clinton administration there
    were some fairly tough rules on that because all of these
    plants had been grandfathered, saying, come on guys, we
    grandfathered you at first but now it is time to do what
    everybody expected you to do, that is, get less-polluting
    plants. And we understand when the special review that Vice
    President Cheney did, they said, well, why do not we just make
    this open enough that, if it did not cost less than 20 percent
    of the cost of overhauling the entire plant that would be
    considered routine maintenance. Now that lets these power
    plants off the hook pretty well; they do not really have to put
    any pollution controls and maybe find some of the areas where
    they are but most of these pollutants go up in the air and come
    back down in my part of the country. You have 13 different
    places in the proposed and the final NSR rule that you speak
    about reliability and yet your own internal documents say it is
    not a reliability issue. And these e-mails your staff has sent,
    I do not expect you to see everything that goes through there;
    lord knows you have got enough other things to do. But these e-
    mails go back to 2002 and they say that your staff and your
    Department knew that what they were saying was not true. Now, a
    lot of industry officials wanted you to say it but even they
    acknowledge were not true. And when you have people who are
    concerned about the water they drink and the air they breathe,
    as they should be, especially if they have young children or
    grandchildren, they worry a lot about this. I mean, why not set
    the record straight.
        Secretary Abraham. Well, I will be happy to answer, as I
    said, I will be happy to look at the e-mails and provide the
    committee with a response. It has been our view, as I said in
    the discussions we have had, in the intraagency discussions
    which we have had that leaving facilities unrepaired, operating
    at minimal efficiency in some cases, being unwilling to invest
    in any kind of replacements and repairs because of fear that it
    would trigger a much more expensive process and not knowing
    whether it would or would not, was actually, in a very broad
    sense, a negative impact, having a very negative impact but
    people were not taking actions that would in fact improve the
    efficiency as well as the emissions of their facilities.
        Senator Leahy. But Mr. Secretary, a quarter of a century
    ago the argument made by some of these companies was well, we
    cannot go ahead and upgrade, we cannot do that overnight, we
    need time; of course, we could make them less polluting, of
    course we could do a lot to go along with the Clean Air Act but
    we cannot do this overnight, we need time. Now, they have had
    25 years. I mean, when is time enough? I am 63 years old and I
    would love to still be alive when they finally get around to
    doing what they were told to do in 1977. You, of course, are
    much younger; it is conceivable you may live long enough to see
    it but not at the rate they are going.
        Secretary Abraham. Well, again, and I think it is not
    surprising to me that if the process of moving forward is one
    that is based on litigation enforcement proceedings versus the
    passage of or the clarification of these rules that it does
    produce this uncertainty. I mean, that is the issue we
    attempted to and are attempting to address. How this process
    plays out, obviously with the lawsuits that are going on and so
    on it remains to be seen. I would say that between the
    courthouses and the slowness of the process we probably are
    going to continue to get older before anything changes here.
        Senator Leahy. Well, you know, I realize this is a major
    policy issue and you know me well enough to know that I do not
    play ``gotcha'' at these hearings; I actually do want answers
    and I realize this is something you want to answer for the
    record. You and I have been friends for a long time and I have
    a great deal of respect for you but I do not have respect for
    this policy. And I would like you to respond for the record.
        Secretary Abraham. Glad to.
        [The information follows:]

                        Clean Air Act--New Source Review

        The e-mail in question is a response from an employee of American
    Electric Power (AEP) to a DOE employee who had posed questions to the
    AEP employee concerning computer modeling of power plant maintenance
    practices. DOE was interested in understanding the emission and energy
    impacts of such practices because of regulatory changes under
    consideration that might encourage greater efficiency, reliability, and
    safety at U.S. power plants. The DOE employee sought the views of the
    AEP official because of that official's current responsibilities for
    strategic planning at a large utility, and because of his extensive
    experience performing similar modeling in his previous capacities at
    firms that performed such analytical services for the government and
    for industry.
        The view expressed by the AEP employee, who had included the views
    of another AEP employee as well as a legal consultant to AEP, was
    technical in nature, as one would expect for a discussion of modeling
    assumptions. The AEP employees stated that they believed possible
    regulatory changes concerning the maintenance of industrial facilities
    would not result in power plants increasing their availability by 5
    percent, and that plant changes resulting in 10-15 percent increases in
    efficiency may include some measures that are not economic in current
    markets. For pollutants with an emissions cap, like SO2,
    they foresaw no change in emissions from changes in availability,
    capacity, or efficiency, but for other pollutants ``improved
    efficiencies will REDUCE emissions'' [their emphasis], and ``NSR
    revisions should not have a negative impact [i.e., an increase] on
    emissions at all.''
        It is important to note that the NSR revisions related to ``routine
    maintenance, repair, and replacement'' apply only to replacing
    ``identical or functionally equivalent'' equipment that does not change
    the basic design parameters of the affected process unit. As stated in
    the rulemaking, EPA believes that such changes ``are necessary for the
    safe, efficient and reliable operations of virtually all industrial
    operations.''
        DOE believes that there is a large body of information supporting
    the conclusion that there are current and emerging technologies that
    could substantially increase the efficiency of existing coal-fired
    power plants. In simple terms, efficiency is the ratio of useful energy
    produced by a power plant to the energy input to the power plant. When
    efficiency increases, we obtain more power for a given amount of fuel,
    and a given level of emissions. So improved power plant efficiency is a
    very desirable goal. Although we anticipate modest improvements in
    power plant availability from NSR revisions, these changes are not
    insignificant and could be crucial in a power shortage (blackout)
    situation. Moreover, the NSR revisions could prevent a loss in current
    levels of availability, which is also valuable. The Administration
    received substantial input from industry in response to EPA's June 27,
    2001, request for public comment on an EPA paper discussing NSR (the
    NSR 90-day Review Background Paper). Comments by utilities and
    consulting firms identified major losses in capacity and availability
    that could result from a NSR policy that impeded the ability of power
    plant owners to repair or replace equipment that had broken or was
    about to break. For example, Southern Company predicted a loss in
    capacity of 38 percent over 13 years; TVA estimated 32 percent over 20
    years. These comments were echoed by those of WEST Associates, and the
    National Rural Electric Cooperative Association, both of which cited
    degraded generating capabilities resulting from the current
    interpretation of NSR regulations. Public comments supporting the need
    for regulatory change to support improved efficiency and reliability
    were received by EPA from a host of organizations, including the
    Tennessee Valley Authority, the American Public Power Association, the
    Utility Air Regulatory Group, and the Electricity Reliability
    Coordination Council
        DOE has conducted its own analyses of how current and emerging
    technologies could improve the efficiency of existing coal-fired power
    plants. Improvements of up to 15 percent appear feasible. For
    perspective, an efficiency increase of only 10 percent in the coal-
    fired power plant fleet would provide as much electric power as 60
    large new power plants, without an increase in emissions. DOE has
    modeled a range of possible improvements in efficiency, availability
    and capacity and determined that the energy, economic, and
    environmental outcomes of such changes are almost universally positive.
    EPA has conducted similar analyses and reached similar conclusions.
    These energy and environmental analyses are discussed in the preamble
    of the rulemaking, and their details are fully documented in the
    publicly available regulatory docket for the NSR rule.
        It is both necessary and appropriate for DOE to seek out and
    consider the views of experts in these matters, just as it is
    appropriate for EPA to do so. Decisions on these regulatory matters
    have consequences that go beyond their direct cost and environmental
    impact, and encompass energy policy and energy security issues.
    Moreover, it would be simplistic to assume that all the information on
    a complex issue would point in a single direction. With respect to the
    e-mail from AEP, it expressed some views that differ from those
    expressed by others and with our own views. There is nothing
    extraordinary about that. It is the responsibility of government to
    examine data and to weigh different opinions in the light of the
    government's own analyses and determine the best approach to achieve
    public policy objectives consistent with applicable law. That is what
    was done in the case of this rulemaking.
        DOE is confident that the changes in NSR will allow utilities to
    make repairs and replacements that improve plant efficiencies and
    benefit consumers. The old regulations discouraged utilities from
    making these repairs and replacements. The new regulations, and the
    flexibility they will bring about, will result in lower national
    emissions, lower power costs, and greater efficiency from fossil-fueled
    power plants.
        Senator Leahy also remarked that many power plants are
    grandfathered from putting on emission controls. Most power plants are
    subject to State regulations to achieve federal ambient air quality
    standards, and all coal-fired power plants larger than 25 megawatts are
    subject to the stringent SO2 and NOX requirements
    of Title IV (acid rain) of the Clean Air Act. Those facts
    notwithstanding, the Administration has introduced legislation to
    achieve an additional 70 percent reduction in emission of those
    pollutants, as well as reductions in mercury emissions. That bill is
    still pending in Congress, so EPA is proceeding under existing Clean
    Air Act authority to obtain similar levels of emission reductions. It
    is clear to me that these power plants are not ``uncontrolled'', and
    that they will be further controlled in the near future.

        Senator Leahy. And then, Mr. Chairman, depending upon that
    answer I may have follow-up questions, if I might, based on
    what he answers.
        Senator Burns. Follow with anything you like.
        Senator Leahy. You are such a fine man. I just want the air
    to be as clean along the East Coast as it is in the beautiful
    State, the Big Sky State of Montana.
        Senator Burns. I will tell you what. The folks in New York,
    I was just saying a little while ago, if you do not like those
    plants shut them down.
        Senator Leahy. But actually if that is what the Clean Air
    Act was supposed to do is supposed to shut them down and
    replace them with something else, now, as we found out in the
    blackout a lot of this stuff has not replaced that should have
    been and we do not seem to have the money. I wish that what we
    had said was a lot of these plants were really going to supply
    energy to Iraq because we voted enormous amounts of money to
    replace their power plants, it would be kind of nice just to
    replace a couple here in the United States. But thank you very
    much.
        Senator Burns. Well, the structure is a bit different, as
    you well know. You can change that structure if you like.
        I have a couple of other questions. I have got to go to
    Budget, and I guess we are underway with a great deal of debate
    on the sixth floor and we had better get to be a part of that.
    Mr. Secretary, we have some other questions, if you could
    respond please.
        Let me emphasize, we really need that report. The
    communication between us and the Department gets rid of a lot
    of misunderstandings and figures, and we all need to use the
    same calculator in order to get on the same page, if we can.
        Secretary Abraham. I agree.
        Senator Burns. I know there are some misunderstanding and
    misinterpretation of what figures mean but the way we have it
    figured out up here, and like I said, it is a matter of phasing
    out some programs that are not working. There is no use
    throwing good money after bad. And then redesigning and
    retooling ourselves to pursue those things that are working,
    never limiting our ability to change and to be flexible enough
    to take advantage of the situations that we have in front of us
    to better serve the energy needs of this country.
        So, thank you very much for coming this morning.
        Secretary Abraham. Could I, Mr. Chairman?
        Senator Burns. Yes?

                        YUCCA MOUNTAIN--SILICOSIS ISSUE

        Secretary Abraham. Just make one comment, please. Earlier
    today, Senator Reid made some comments with respect to the
    Yucca Mountain project that really did not take the form of a
    question and then he had to depart. I do not want to leave open
    any question in the minds of the committee as to the actions
    which our Department has been taking. The issues that, as
    Senator Bennett pointed out, that took place in the period of
    the mid-1990s came to our attention, to our inspector general's
    attention, in 2003. This is the silicosis issue, and we are
    trying to move very aggressively to provide a program for
    workers, for screening to determine the nature of any illnesses
    that may have emanated from that exposure. We have brought the
    University of Cincinnati in to be a partner in this effort to
    do the screening programs for us and we take this very
    seriously, as we do all safety issues that are involved in any
    of our programs, whether it is in Nevada or elsewhere.

                         YUCCA MOUNTAIN--RAIL CORRIDOR

        It was also commented on that the transportation, the rail
    corridor in Nevada would go through the properties of
    individuals. That is sort of inevitable. There is no route;
    there is no rail line in Nevada to this very remote site for
    obvious reasons. We had, of course, options of moving it
    through densely populated areas and the preferred route which
    we have designated is the one, which in our judgment has the
    least potential impact on the populace of the State. And I
    would just point out again to this committee, as I have to
    others where I have testified on Yucca Mountain, that we have
    an enormously successful track record, both in America and
    throughout the world, on the transportation of radiological
    materials. It's totally safe. There has been more nuclear
    material of this sort transported in the United States and
    Europe than all the transport that will ultimately take place
    to Yucca Mountain without a harmful exposure. We intend to
    maintain that safety record.

                            YUCCA MOUNTAIN--FUNDING

        Last, I just want to say, the issue of financing. Yes, we
    are asking for more money. This is a project that is many, many
    years delayed. The Department itself is now the recipient of
    numerous lawsuits from utility companies who have been told
    that we would take responsibility for the waste that we have
    not. And yes, we are ramping up the cost because Congress made
    the decision to move forward with the project and now the costs
    of doing that will begin to grow. But the good news is this: we
    have been collecting money from utilities from the very
    inception of this project for exactly these purposes. The
    amounts of money we are seeking are consistent with the revenue
    to the Federal Government that is being secured as a result of
    the polluter pays kind of approach in which the utility
    collects the money, sends the money to us and it is our job now
    to use it. So, the amount is substantial but we are asking for
    an amount consistent with the revenue that comes to the
    government from the utilities for precisely this work.
        So, I look forward to answering his questions but I did
    want to make sure on the record that we did respond to some of
    the issues raised.
        Senator Burns. You can raise a lot of questions where
    Congress, through legislation, promised to do something and
    have not carried through. So, thank you very much Mr.
    Secretary.
        Secretary Abraham. Thank you.

                         ADDITIONAL COMMITTEE QUESTIONS

        Senator Burns. There will be some additional questions
    which will be submitted for your response in the record.
        [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 Conrad Burns

                   RECENT R&D ACCOMPLISHMENTS--FOSSIL ENERGY

        Question. Obviously this Committee is generally familiar with the
    Fossil Energy R&D work your programs support. Can you elaborate on a
    few specific examples of successes that were achieved in the last
    fiscal year? If you can, choose some examples in different Fossil
    Energy program areas, and tell us what breakthroughs were achieved and
    what the Federal role was in achieving those breakthroughs.
        Answer. Fossil Energy has been actively supporting the development
    of advanced technologies for the separation of hydrogen and carbon
    dioxide from a gasification-based synthesis gas stream for carbon
    sequestration and the hydrogen economy. Two such projects have had
    major successes within the past year, one in the CO2 hydrate
    and one in the advanced membrane area.

    CO2 Hydrates
        The CO2 hydrate project, jointly sponsored by FE's
    gasification and sequestration programs, has been under development for
    the past few years by a team consisting of Nexant, Simteche, and Los
    Alamos National Laboratory (LANL). Over the past few years, fundamental
    studies were performed by LANL in a batch and semi-continuous
    laboratory-scale flow reactor system to confirm the concept and to
    identify specific technological hurdles to scale-up. Recently, Nexant
    successfully translated this information into a continuous-flow reactor
    unit that will permit longer duration runs, demonstrate taking the
    hydrate-forming reactions to completion through novel heat removal
    design, and provide for better data collection. The unit was
    successfully commissioned in the 2nd quarter of fiscal year 2004 and
    has demonstrated sustained production of CO2 hydrates for
    several hours. The data to be generated with this unit over the next
    year will provide the basis for scale-up to a 2.5 MWe equivalent unit
    for testing at a commercial gasification site. Negotiations are in
    progress with Tampa Electric for testing this unit at its Polk Power
    Station. This novel technology has potential for reducing carbon
    capture cost to $8-9/ton of CO2 compared to today's cost of
    about $40/ton.

    Advanced Membranes
        The advanced membrane project, sponsored by FE's gasification
    program, is focused on the development of membranes that separate
    hydrogen from a shifted synthesis gas stream. This past year, Eltron
    Research, together with Noram Engineering, CoorsTek, and Sud Chemie,
    have been successful at developing a membrane composition that has
    achieved more than 100-fold increase in hydrogen flux over where they
    were one year ago at process temperatures as low as 400 C compared to
    900 C previously. These new results have tremendous implications on
    the cost of coal-based hydrogen and have sparked considerable interest
    within the team to further develop and scale-up the technology over the
    next five years. These ``leap-frog'' improvements in membrane
    performance have caused Praxair, an industrial gas company and hydrogen
    supplier, to join the development team. Also, because of its interest
    in hydrogen for chemicals production, Eastman Chemicals has committed
    to participation in the latter phases of the project and has offered
    its Kingsport, TN chemical complex as a site for field demonstration of
    a unit producing almost 9,000 lb/day of hydrogen from a coal feedstock.
    Incorporating this technology in a gasification plant will reduce the
    cost of coal-derived hydrogen to an amount comparable to hydrogen
    produced from natural gas when natural gas is priced at approximately
    $4.00/MMBtu.

    Oil & Natural Gas
        A new lightweight, flexible drill pipe engineered from space-age
    composites rather than steel was developed and commercialized. The
    composite drill pipe is much lighter than steel pipe, it is more
    flexible and can remain bent for extended periods of time, and can be
    used in multiple drilling operations. These advantages significantly
    reduce drilling costs. The improved economics and technological
    advances could bring new life to thousands of idle wells. This drill
    pipe was developed by ACPT a small firm in California that previously
    built lightweight composite parts for race cars. The first commercial
    order for this pipe came from a small independent oil and gas company
    that is going into old wells, drilling horizontally, and giving new
    life to their existing fields.
        IntelliPipeTM, a revolutionary new drill pipe with
    built-in high speed two-way data transfer, has changed the state-of-
    the-art in downhole communication speed. IntelliPipeTM is
    the key to establishing high-speed communication links throughout the
    drill string to provide drillers with the industry's highest resolution
    data feedback and control of downhole tools real-time. This advanced
    telemetry transmission revolutionizes the way drilling is done now and
    into the future. With IntelliPipeTM, drillers gain access to
    real-time critical information when they need it at volumes impossible
    by today's standards. Drilling engineers receive an unprecedented one
    million bits per second (similar to a Local Area Network) of real-time
    streaming information that improves monitoring and measurement of all
    vital aspects during downhole operations. It also allows data to be
    sent the other direction, giving oil and gas drillers the capability to
    direct the drill bit more precisely toward oil and gas bearing sweet
    spots and away from less productive areas almost instantaneously. This
    invention will greatly improve the speed of drilling operations, reduce
    environmental impact of drilling, and significantly improve safety.
    This will enhance the efficiency of oil and gas wells and reduce the
    number of wells needed to produce a reservoir.
        Tinkering with a device to jumpstart compression in a gas well, a
    pair of West Texas dropouts-turned-wildcatters invented a four chamber
    pump they say can be used as a replacement heart just as easily as an
    oil well pump. Their invention caught the attention of doctors at the
    Texas Heart Institute in Houston, who asked for a prototype for
    preliminary tests as a blood pump. The pump is designed to operate much
    like a heart. It is simple to operate, lightweight, can be made of
    virtually any material, and does a nearly complete intake and sweep of
    fluids in one 360-degree motion. The pump eliminates valves, cuts
    overheating by reducing revolutions per minute, simplifies power
    requirements, overcomes clotting problems, does not destroy as many red
    blood cells, and eases lung pressure complications. Another advantage
    to the versatile pump is that it will allow for a revolutionary
    reduction in the size of devices that would use their invention--
    enabling, for example, air conditioning systems now available only in
    huge airplanes to be comfortably fitted in a small car. In developing
    countries without ready sources of electricity, this simple pump could
    result in major improvements to the quality of life.
        In partnership with the Department of Energy, Venoco Inc. and the
    University of Southern California developed a suite of new technologies
    enabling them to find and tap into 80 million barrels of previously
    overlooked oil deposits in the Santa Barbara Channel, simultaneously
    improving the environmental impact of production operations. The new
    non-invasive technologies improved the sub-surface understanding of the
    Monterey formation and allowed Venoco Inc., an independent operator, to
    overcome a two-decade old ban on new seismic surveys in California's
    offshore region. Applying state of the art technology, production in
    five old wells has increased by an additional 600 barrels of oil per
    day. ``Seep tents'' positioned on the ocean floor capture naturally
    occurring oil and gas seeps. This additional effort has eliminated the
    oil sheen on the ocean, reduced pollution of the seawater, made the
    Santa Barbara Channel healthier for marine mammals, and eliminated new
    tar on the beaches. Both Venoco and the University of Southern
    California have very aggressive technology transfer and outreach
    efforts to other U.S. producers and researchers.
        Bluff Exploration developed user-friendly software for neural
    network solving of complex seismic and reservoir characterization
    problems. Intelligent Computing System (ICS) uses clustering,
    artificial neural networks and classical regression methods to combine
    seismic, geologic and engineering data for predicting reservoir
    potential. The integrated software modules are designed to be used by
    small teams consisting of an engineer, geologist and geophysicist. They
    are flexible and robust, working in many environments. The tools are
    used to transform seismic attribute data to reservoir characteristics
    such as storage, permeability, probable oil/water contacts, structural
    depth, and structural growth history. When these reservoir
    characteristics are combined with neural network solvers, they can
    provide a more complete description of the reservoir. This leads to
    better estimates of hydrocarbons in place, a real limits, potential for
    infill or step-out drilling, and ultimate producible reserves. The ICS
    software was used extensively in the Red River formation of the
    Williston Basin in North Dakota. Proved oil reserves were increase by
    3.25 million barrels and daily production increased by over 2,600
    barrels. Horizontal wells in this formation are expected to produce
    over 1 million barrels of incremental oil by 2005. The ICS software is
    not specific to any particular region or depositional types. Users can
    apply their down databases to populate the programs and generate
    predictions. Luff Exploration has presented the results of this effort
    at many national conferences and regional technology transfer
    workshops. Their software and instructional manual is free to the
    public.
        The Spraberry Field has earned the dubious title of being ``the
    largest uneconomic field in the world,'' because it holds more than 8
    billion barrels of oil under six Texas counties, but has produced 750
    million barrels of oil, or less than 10 percent of the original oil in
    place. Department of Energy funding allowed the risk-taking needed to
    challenge ``conventional wisdom.'' Pioneer Natural Resources Co. and
    Texas A&M teamed up to identify the most effective recovery technique
    for Spraberry. New imaging and horizontal coring techniques were
    applied to the formation, revealing three major fracture networks, the
    spacing of the fractures and the direction in which they ran. The
    information was surprising and important. They redesigned an effective
    water flood approach that has increased the reservoir pressure,
    increasing oil production from 15 barrels of oil per day to 80 barrels
    of oil per day. Cumulative incremental production after 2.5 years is
    estimated to be over 150,000 barrels of oil. Effective technology
    transfer efforts resulted in other operators in this field applying the
    same process. Estimates indicate recovery of an additional 15 percent
    of Original Oil In Place over the next 20 years, or 1.5 billion barrels
    of incremental oil. Following the water-flooding period, Spraberry will
    still hold the potential for successful CO2 flooding as
    demonstrated by the pilot study.
        Question. Since R&D is as much about failure as it is about
    success, can you offer any examples from the last year of Fossil Energy
    research that has failed to produce the desired result?
        Answer. Examples of research that did not produce desired results
    are:

    Coal & Power Systems
        One example deals with the development of effective means for
    storing enough hydrogen on board fuel cell powered cars to provide an
    acceptable range without taking up an excessive amount of room. This is
    a critical goal of FE research. Carbon nanotubes were proposed as a
    likely answer to this problem and initial results from different
    laboratories were highly encouraging. More recently, closer examination
    by both experimental and computational science provides a more sobering
    assessment--at their present state of development carbon nanotubes fall
    considerably short of DOE goals. Reaching the desired result along this
    line of attack still requires a major breakthrough that has so far
    eluded the talent of the best in nanotube research.

    Oil & Natural Gas
        The ``Hot Ice No. 1'' well recently drilled in Alaska did not
    encounter methane hydrate as expected, but it did produce information
    that should help to overcome the substantial technical obstacles to the
    eventual commercial production of this abundant energy resource. The
    well also provided an opportunity to showcase several unique and
    previously untested Arctic drilling technologies that can be expected
    to play a role in future Alaskan drilling operations. The absence of
    hydrate at the site is in itself a significant scientific finding.
    Based on detailed evaluation of log data from adjacent offset wells,
    the Hot Ice No. 1 well was expected to encounter a significant
    thickness of reservoir quality sands in the Upper West Sak unit. The
    sands were there just as expected but we found free gas and water
    rather than hydrate in the hydrate stability zone. Figuring out why
    will require a thorough post-mortem analysis of the core, log, and
    seismic data from the well. Although disappointed by the missed
    opportunity to evaluate a hydrate-filled formation, the researchers
    believe that a tremendous amount of knowledge will be gained for future
    hydrate exploration through analysis of the unique suite of collected
    data. Clearly, the model for distribution of methane hydrate on the
    North Slope may be more complex than previously thought. Although the
    hydrates expected were not found, a suite of technologies were advanced
    that could ultimately make exploration for and production of the Arctic
    methane hydrate resource economically feasible. These new technologies
    can be taken to future hydrate research sites where they will
    ultimately aid in building a better characterization of this
    potentially important frontier resource. In addition, the geologic
    knowledge gained from an ongoing comprehensive analysis of the core,
    log, and seismic data from the well will improve models for the genesis
    and distribution of hydrate accumulations on the North Slope
        Another example is in the area of seismic wave stimulation
    technology. This has the potential for being a relatively low-cost
    procedure for enhancing oil recovery in depleted fields, or returning
    some shut-in wells to production. A project to develop a novel downhole
    sonic stimulation tool to increase production resulted in a design
    error indicated by 2 bench-scale test failures, and finally failure in
    a field test where the tool became stuck in the well bore. This project
    focused on a very underdeveloped technology that has a high potential
    to improve oil recovery.
        Question. What did we learn from these failures?
        Answer. Based on the knowledge and experience gained in nanotube
    research, we learned that a better route to achieving DOE goals might
    be seen by exploiting a new class of materials, the so-called metal
    organic frameworks. Higher storage capacities have already been found
    with one example of this material than the best yet achieved with
    nanotubes. Following this lead is a more productive use of available
    resources. In addition, we have found that we can apply the expertise
    and experience that we obtained in our investigations of nanotubes for
    hydrogen storage to more rapidly assess and evaluate the potential of
    metal organic frameworks. The ability to apply the expertise and
    experience from previous efforts will result in much more cost-
    effective research in the development of hydrogen storage materials
    capable of achieving the DOE goals.

                 RECENT R&D ACCOMPLISHMENTS-ENERGY CONSERVATION

        Question. Obviously this Committee is generally familiar with the
    Energy Conservation R&D work your programs support. Can you elaborate
    on a few specific examples of successes that were achieved in the last
    fiscal year? If you can, choose some examples in different Energy
    Conservation program areas, and tell us what breakthroughs were
    achieved and what the Federal role was in achieving those
    breakthroughs.
        Answer. Several success examples are provided below:

    Buildings Success
      --With support from EERE, Cree Lighting, an American company based in
            Research Triangle, North Carolina developed a 74 lumen per watt
            white-light LED--that's higher than a compact fluorescent lamp
            (CFL) and five times better than incandescent;
      --In this project, two critical R&D advances were made--
        --it is the first high-power LED built on a silicon-carbide
                substrate and
        --it incorporates an innovative packaging design to manage heat.
      --This laboratory prototype was tested in 2003. It is estimated that
            products incorporating this technology could be in the consumer
            market by 2006 or 2007.

    Distributed Energy Success
      --The Solar Turbines Mercury 50 turbine was developed under the
            Advanced Turbine Systems Program (ATS).
      --One goal of the ATS Program was developing turbines with less than
            9 parts per million (ppm) NOX.
      --The commercially available Mercury 50 is available with a guarantee
            of 5 ppm NOX.
      --The Mercury 50 has over 40,000 hours of operating experience at 6
            field sites.
      --It is noteworthy that this success does not represent a single
            technological advance achieved with fiscal year 2003 funds. (In
            fact, no funds were provided in fiscal year 2003.) Instead, it
            represents the culmination of more than a decade of Federal
            investment, totaling more than $200 million, which came to
            commercial fruition on fiscal year 2003.

    FreedomCAR and Vehicle Technologies Success
      --The program's research reduced the cost estimate for a high-power
            25kW battery system from the 1999 estimate of $3,000/system to
            $1,180/system.
      --This work forms the basis for one of the nine FreedomCAR
            Partnership 2010 goals, to reduce to $500 the production cost
            of a high power 25kW battery for use in light vehicles,
            enabling cost competitive market entry of hybrid vehicles.

    Fuel Cell Success
      --DOE sponsored fuel cell research achieved a modeled cost of $225/kW
            for a hydrogen-fueled, 50 kW fuel cell power system, down from
            $275/kW in 2002.
      --$225/kW includes the fuel cell stack, hydrogen storage, and all
            ancillary components for air, thermal, and water management.
            (Does not include vehicle drive components such as the electric
            motor)
      --The cost estimate is derived from analysis of best current
            technology across the industry and assumes high volume
            manufacturing (500,000 units/year). The estimate does not
            correlate to any one manufacturer.
      --Cost improvement has primarily occurred through research that led
            to reductions in platinum loading, and the introduction of
            composite bipolar plates

    Industry Success
      --Working with industry through activities like Best Practices, EERE
            helps the country's most energy-intensive industries improve
            their energy efficiency, environmental performance, and
            productivity.
      --Many BestPractices technological advances and practices have helped
            companies reduce their natural gas consumption, per unit of
            output.
      --For example, EERE's Industrial Technologies Program provided
            technical assistance to Progressive Powder Coating, a company
            based in Mentor, Ohio, to install an infrared (IR) oven in
            between the powder coating booth and the convection oven on its
            production line. The IR oven allowed the plant to increase its
            conveyor line speed and increase production by 50 percent. In
            addition, the plant was able to reduce its natural gas
            consumption by 10,500 MMBtu, yielding annual energy cost
            savings to the company of approximately $54,000.
        Question. Since R&D is as much about failure as it is about
    success, can you offer any examples from the last year of Energy
    Conservation research that has failed to produce the desired result?
        Answer. Research and development in EERE is a process of testing
    and developing ways to overcome barriers to technology performance and
    market adoption. Each program within the EERE portfolio has developed a
    multi-year program technology plan that presents multiple pathways and
    performance gateways essential for selecting the most cost-effective
    and technologically-feasible solution and reducing planned performance
    risk. In every program, failure accompanies success as a necessary
    component of conducting high-risk research.
        Examples of EERE research that failed to produce the desired result
    and were closed out include:
      --In the FreedomCAR and Vehicle Technologies Program, two separate
            projects aimed at producing very small holes (50 microns) for
            diesel fuel injector orifices were developed in recent years.
            These projects were conducted: (1) at Argonne National
            Laboratory (ANL) using a deposition approach and (2) at Oak
            Ridge National Laboratory (ORNL) using a sintering approach.
            Both projects were conducted for three years. At the end of
            fiscal year 2003, because of the superior performance results,
            favorable feedback from industry stakeholders, and the
            Department's engineering judgment, the project at ANL received
            continued funding while the ORNL project was discontinued.
      --Another example of an R&D project not meeting its goals is the work
            on matrix materials cost-reduction of the wheel substrate
            material for enthalpy wheels in our Buildings Technology
            Program. This project was terminated after the Department
            determined that the biggest impact of reducing the cost of an
            enthalpy wheel lies in the cassette design, rather than the
            matrix materials that had been the focus of this project.
      --In 2001 and 2002, research on Advanced Materials for Industrial Gas
            Turbines was being performed. The research involved the use of
            Titanium Silicon Carbide in rotors, inlet nozzles, and inlet
            scrolls. In late 2002 it was jointly decided by both the
            contractor and the Department that sufficient technical
            progress had not been made to continue the research and no
            further funding was provided in fiscal year 2003.
      --A project was terminated in the mining area of the Industrial
            Technologies Program that involved microwaves. It was
            determined that the research could not prove that this
            technology could be economic in the mining industry, so the
            project was terminated and other avenues will be explored.
        Question. What did we learn from these failures?
        Answer. Albert Einstein once said, ``If we knew what it was we were
    doing, it would not be called research, would it?'' All of EERE's
    research programs gain valuable information from both successes and
    failures, and many research failures by their very nature redirect
    technology pathways towards success and increase the likelihood of
    achieving program goals and objectives.
        In nearly all instances, EERE's past ``research failures'' provided
    important information that significantly impacted the projects' multi-
    year technical plans. In some cases, such as the vehicle technologies
    example, the differing results of two research projects helped the
    project manager decide which technology pathway to pursue in the years
    ahead. In other cases, such as the mining project in the industrial
    program, the research findings convinced the project managers that the
    costs of continued research were not warranted given the limited
    economic potential for the technology and the project was terminated.
        EERE conducted a rigorous Strategic Program Review in 2002 that
    analyzed the entire EERE portfolio and pointed out that redirections
    and project terminations are a necessary part of any research plan.
    Some failures resulted in lessons that could be applied across the
    entire office, rather than just one project or program.
        EERE has learned a number of lessons from its experiences over the
    years, including:
      --Open, competitive solicitations can often, depending on the
            technology and its stage of deployment, be an effective way to
            identify promising research avenues. EERE has increased its
            emphasis on competitive solicitations in recent years.
      --Multiple research pathways are important to pursue to increase the
            likelihood of success and to broaden the range of learning.
      --Realistic, clear, quantifiable goals, metrics, and milestones are
            necessary components of successful RD&D pathways.
      --Carefully developed go/no-go decision points focus efforts and
            provide for the opportunity for termination or graduation of
            research projects.
      --Public-private partnerships are critical for effective technology
            transfer.

                MOUNTAIN STATES ENERGY (MSE) CONTRACT EXTENSION

        Question. As a follow-up to Monday's [March 1, 2004] conversation,
    it will be helpful to get the Department on record regarding MSE's
    contract. Mr. Secretary, we have previously discussed extending the DOE
    contract for the Western Environmental Technology Office (WETO) housed
    at the Mike Mansfield Advanced Technology Center. I want to thank you
    for your attention to this matter and ask that you have your staff work
    with mine to ensure the great work performed by WETO continues. Can you
    please provide an update?
        Answer. MSE has submitted a contract extension to the Department of
    Energy. The Office of Environmental Management has conducted a
    preliminary review of the request for extension and determined further
    evaluation needs to be made.

                           FOSSIL ENERGY--FUTURE GEN

        Question. FutureGen continues its march toward possible demise.
    Last year you (and you alone, I might add) worked to add $9m to get the
    FutureGen program started. This year the budget allocates $237 million
    to the project, however, this amount cannot be spent in fiscal year
    2005. Industry is concerned that the Government must make a substantial
    investment to get the program moving along. Unfortunately, the
    Department used $140 million of prior year Clean Coal Technology (CCT)
    funding, and an approximately $120 million of reduction in other clean
    coal research to fund FutureGen. This rob-Peter-to-pay-Paul solution
    has not been met with industry support. Considering industry is
    expected to bring hundreds of millions in investment to the table, they
    are noticeably concerned that the federal government is not stepping up
    to the table with ``new'' money to fund FutureGen.
        Mr. Secretary, on numerous occasions we have discussed the
    FutureGen project and our shared commitment to see it move forward.
    Unfortunately, the Department has yet to provide the report demanded by
    December 31, 2003 in the fiscal year 2004 Conference Report, and
    details remain extremely hazy on the project. The Committee is anxious
    to see your plan.
        We have been tracking this issue closely, and upon inquiry, we hear
    three things from industry: (1) they commend you and your staff for
    doing an excellent job sorting through the technical and scientific
    implications of the project; (2) they see it as a meritorious project
    and want to lend their financial support to the project if a productive
    path forward can be found; and (3) they are deeply concerned that OMB
    and the Department are heading toward a financing and project
    management strategy that brings into question the long-term viability
    of the venture. Can you update us on the progress of the plan and
    outline what you have done to date to move FutureGen forward?
        Answer. The FutureGen Report to Congress was submitted by the
    Department of Energy on March 4, 2004. The Department is currently
    completing internal management review requirements that should be
    finished in about a month. Once the internal management review is
    complete, and once the fiscal year 2004 funding for FutureGen is
    released by Congress, the Department can begin negotiations with an
    industry partner. We forecast awarding the cooperative agreement in the
    late calendar year 2004 time frame. After release of funds in fiscal
    year 2004, the Department will begin its NEPA process for FutureGen.
    Once the negotiations are complete, the first priority is to develop a
    set of technical siting criteria that will be used in an open, fair,
    and transparent competitive process. After release of funds in fiscal
    year 2004, the Department will begin its NEPA process for FutureGen.
        Question. The Conferees of the Interior Appropriations Bill, as
    well as the Industry Stakeholder Group, have been very clear that
    FutureGen cannot come at the expense of critical fossil R&D research.
    However, the coal R&D budget is $470M in your budget with $140M of this
    funding coming from previously appropriated funding that is earmarked
    for FutureGen. In reality, this means that your request is $330M of new
    funds for other coal R&D programs including the Clean Coal Power
    Initiative.
        This $330M compares very unfavorably to the $450M that was spent on
    the very same programs last year. It is a significant cut in programs
    like fuel cell research, coal gasification, advanced materials
    research, and other important programs. FutureGen is not a substitute
    for these base R&D programs. How does the Department justify such a cut
    in the base fossil energy R&D programs?
        Answer. The Department considers FutureGen as the highest priority
    coal research effort. The fiscal year 2005 budget request reflects a
    research focus, of which FutureGen is a key part, towards achieving the
    goal of affordable zero emissions energy from coal. In the fiscal year
    2005 budget request, a rescission of $237 million (including prior year
    deferrals) is proposed as a total offset to fund FutureGen from prior
    year available funds from projects that were terminated in the original
    Clean Coal Technology Demonstration program, thus providing for a total
    request of $470 million. The budget request reflects a combination of
    several actions to rebalance our research portfolio to accelerate the
    zero emission goal for coal. Funding requests in several areas such as
    fuel cells are reduced because the work on near term fuel cells has
    reached a point of maturity where it is appropriate for the industry to
    take it to commercialization. In Solid Energy Conversion Alliance
    (SECA) fuel cells the work can be stretched out by one year and still
    accommodate the FutureGen schedule where SECA fuel cells can be used in
    the power module. Coal gasification research is also stretched out by
    one year without a schedule impact on the delivery of potential
    technology for FutureGen. In addition, the gas separation membrane
    research funded in fiscal year 2004 under gasification is being
    proposed in fiscal year 2005 as part of the increased request ($16
    million) for the hydrogen fuels research to maximize the synergy
    between these areas. Advanced research was streamlined to emphasize
    novel concepts that could have potential for zero emission
    applications. The fiscal year 2005 budget request therefore reflects
    the priority of achieving a zero emission option for coal given budget
    realities.

     FOSSIL ENERGY--DISTRIBUTED GENERATION--FUEL CELLS--SOLID STATE ENERGY
                           CONVERSION ALLIANCE (SECA)

        Question. The majority of interest in DOE--Fossil's fuel cell
    programs is centered on the SECA program. This program is based upon a
    number of vertical teams working on competing fuel cell technologies.
    Also funded are horizontal, or crosscutting, teams that are focused on
    addressing technological hurdles the vertical teams are facing. This
    year, DOE has reduced funding for the core fuel cell program from $71
    million to $23 million. This cut comes after DOE has added two new
    vertical teams to the SECA program (increasing from 4 to 6 teams) at
    the reduced funding level.
        Mr. Secretary, I am extremely interested in the fossil fuel cell
    programs. I know that DOE now has six industry teams working on the
    SECA program, yet has proposed a reduction from $71 million to $23
    million Distributed Generation with $25 million coming from SECA
    related activities. I am concerned that reducing the funding for
    stationary fuel cells will cause the program to slow, when it is poised
    to make great strides.
        Additionally, it is my understanding some teams may be
    underperforming, and some of the competing technologies may show little
    promise for future development. Can you update the Subcommittee on the
    progress of the SECA program and explain how you propose allocating
    resources in fiscal year 2005 to ensure we are providing sufficient
    resources to the teams showing the most promise?
        Answer. In fiscal year 2005, our highest priority is adequate
    funding for FutureGen. Within the Fuel Cells Program, our highest
    priority is SECA, which is expected to contribute to distributed
    generation applications, and larger-scale FutureGen applications.
        Funding for SECA is at the same level as the fiscal year 2004
    Request. Proposed funding for SECA is about two-thirds of the fiscal
    year 2004 appropriation ($35,063,000). Our fiscal year 2005 funding
    request of $23 million will fund the continuation of work by the SECA
    teams, given current fiscal constraints. At the proposed funding level
    we expect identical impacts on each of the participating teams, namely,
    stretching out the SECA development schedule by one year.
        Currently, six Industrial Teams are aggressively pursuing different
    promising approaches to meet the SECA goal of $400/kW. Each team's
    progress will be assessed against our rigorous contract requirements in
    2005, 2008, and 2010.
        Over 40 research and development projects that support the SECA
    industry teams are in place. The SECA Core Technology Program, SBIR,
    University Coal Research and the FE Distributed Generation Advanced
    Research budget lines fund these projects. Each Industrial Team has
    successfully demonstrated full size cells that promise to meet the SECA
    2005 criteria in full prototypes. Half of the Industrial Teams have
    already operated full prototypes, including balance-of-plant, that
    demonstrate the basic system operation. One Industrial Team, in
    partnership with a major electric utility (Southern Company), has
    demonstrated SECA technology in a coal power plant using coal gas as
    the fuel. Significant progress has been made in solving the two most
    challenging SECA technology issues, interconnects and seals: New
    materials for SECA metallic interconnects and seals are under
    development at two national laboratories and several small businesses
    and universities. Long-lived metallic interconnects with significantly
    reduced degradation and seals that exhibit significantly reduced leak
    rate have been demonstrated in the SECA Core Technology Program.

                 FOSSIL ENERGY--DOMESTIC OIL PRODUCTION/IMPORTS

        Question. Current Domestic Production continues to decrease in the
    face of rising demand. Last year you expressed concern that oil prices
    remained around $28 a barrel following the initial stabilization of
    Iraq. Currently, the price remains at approximately the same level and,
    just like last year, domestic crude storage is fairly low heading into
    the summer months. There continues to be a lag in exports. Most price
    forecasts continue to highlight that the volatility of fuel costs will
    be determined on our ability to access crude stocks, but almost all
    forecasters highlight our ongoing dependence as the reason for
    continued price swings in the oil markets. Can you comment on this?
        Answer. As with any commodity, inventories provide an immediate
    source of supply should demand surge or shortfalls in other supply
    sources occur. Should OPEC reduce its production, and consequently its
    exports, at the same time demand for crude oil is increasing as
    refiners come out of their maintenance programs to increase refinery
    throughput to maximize gasoline production, crude oil inventories can
    be the bridge to fill this possible gap in supply. However, with crude
    oil inventories well below the average range, pressure will likely
    build on prices should these low inventories be required to be drawn
    down further. Simply put, without more crude oil available to world
    markets, it will be difficult for refiners to maximize gasoline
    production without drawing crude oil inventories to even lower levels.
    It appears that more crude oil is needed to supply refiners and help to
    rebuild crude oil stocks to more normal levels.

                          OIL RESEARCH BUDGET FIGURES

        Question. Obviously, I do not agree with the Department's budget
    request reducing Oil Technology R&D from $35 million to $15 million.
    However, your budget request proposes collapsing the traditional
    functions under the Oil Technology Program. For example, under
    Exploration and Production, the enacted program includes 8 program
    areas with specific funding levels. This year you simply propose 3
    program areas, with one focused on Global Oil Supply. Given we are
    overly reliant on imported oil as is, why are you proposing to cease
    the oil programs that help domestic production and shift those funds to
    increasing our dependence on foreign oil production?
        Answer. The Oil Technology Program includes policy, science and
    technology development to help resolve oil supply, environmental, and
    reliability constraints. In addition to activities focused on
    increasing domestic production, bilateral technology exchange and joint
    research, in areas including enhanced oil recovery, between the United
    States and non-OPEC countries will also increase secure supplies of
    oil. In fiscal year 2005, the program includes a modest effort to
    diversify oil supplies through bilateral activities with nations that
    are expanding their oil industry, including Venezuela, Canada, Russia,
    Mexico, and certain countries in West Africa. Bilateral and multi-
    lateral work will include technology exchanges and joint research,
    development, and demonstration under the Administration's North
    American Initiative and other international agreements.

                          UPDATE ON WORLD OIL MARKETS

        Question. During the early stages of the operations in Iraq, crude
    prices rose to over $38 a barrel and stabilized back in the mid to high
    $20s. However, crude prices are rising again and stocks are low. Can
    you update us on the current state of the highly fluctuating oil
    markets?
        Answer. Crude oil prices have increased by about $7 per barrel
    since early December. Converted into cents per gallon, this would
    explain about 17 cents of the 26-cent increase seen in retail gasoline
    prices since December. OPEC has kept production, and consequently
    global exports, at levels that have prevented crude oil inventories
    worldwide, and especially here in the United States, from returning to
    more normal levels. This OPEC restraint has been followed by a call to
    decrease production further beginning in April. Additionally, global
    oil demand continues to increase, particularly in China and the United
    States. While supply and demand factors explain most of the increase in
    crude oil prices, other factors, including the large net long position
    by non-commercial participants in the near-month NYMEX contract and
    even a demand pull from higher gasoline prices, have also put pressure
    on oil prices. Nevertheless, crude oil prices have increased in recent
    months primarily due to a tightening global crude oil market. With
    crude oil prices at these levels, it is uneconomical for stockholders
    to hold excess inventories, thus crude oil inventories remain
    relatively low, and will likely not increase without more global supply
    being made available.

                          CURRENT CRUDE IMPORT LEVELS

        Question. Can give us a sense of how current crude imports compare
    to prior years as a percentage of domestic consumption?
        Answer. Net crude oil imports were 63 percent of U.S. crude oil
    inputs to refineries for the month of December 2003, up from December
    2002, when net crude imports comprised 61.2 percent of U.S. crude oil
    inputs to refineries. The current figure is also up compared to the
    five-year average, as crude oil net imports were responsible for an
    average of 58.2 percent of U.S. crude oil inputs to refineries during
    the month of December in each of the years 1998 through 2002. While
    crude oil imports do seem to be increasing, it is clearly not enough to
    keep crude oil inventories from reaching very low levels this past
    winter.

                                IRAQI PRODUCTION

        Question. There is still obvious concern regarding the timeline to
    return Iraq's oil production to the world market, and we have recently
    heard rumblings that the Saudi fields may have a shorter lifespan than
    previously thought. Can you update the Subcommittee on the actions the
    Department has been taking to help the Iraqi peoples' attempts to bring
    production online?
        Answer. The Coalition Provisional Authority (CPA) is responsible
    for Iraqi reconstruction, including restoration of their oil industry.
    The CPA has recruited support for their activities from several Federal
    agencies, including the Department of Energy. Some of our employees
    volunteered to serve and have completed rotations; some are still in
    Iraq. They were chosen based on their backgrounds in oil production,
    oil logistics, and electrical engineering. While each employee has made
    meaningful contributions to reconstruction, the Department of Energy is
    not responsible for planning or executing plans for reconstruction in
    Iraq and is not best positioned to respond to this question.

                            CENTRAL ASIAN PRODUCTION

        Question. Secretary, you and I have recently discussed the need to
    work with nations in Central Asia to support both natural gas and oil
    production. Could you give us your outlook on the region and the
    potential to work with ex-Soviet states to help stabilize global energy
    markets?
        Answer. The Caspian Sea region is important to world energy markets
    because of its potential to become a major oil and natural gas exporter
    over the next decade. Progress has been made in improving export
    capacity as the Baku-Tblisi-Ceyhan oil pipeline is now under
    construction and plans for the Shah Deniz gas pipeline are proceeding.
    Estimates of the Caspian Sea Region's proved crude oil reserves vary
    widely by source. The Energy Information Administration (EIA) has
    estimated proven oil reserves as a range between 17 and 33 billion
    barrels, which is comparable to OPEC member Qatar on the low end, and
    larger than the United States on the high end. The Caspian Sea region's
    natural gas potential is, by some measures, more significant than its
    oil potential. Regional proven natural gas reserves are estimated by
    EIA at 232 trillion cubic feet (Tcf), comparable to those in Saudi
    Arabia. The Shah Deniz offshore natural gas and condensate field in
    Azerbaijan, which is thought to be one of the world's largest natural
    gas field discoveries of the last 20 years, contains ``potential
    recoverable resources'' of roughly 14 to 35 Tcf.

                       IMPORT/EXPORT AUTHORIZATION FUNDS

        Question. I notice you have decreased the Import/Export
    Authorization line item, which raised a few eyebrows. However, I am
    told this decrease is the result of shifting functions out of the
    Fossil Account to align them with a more appropriate area within the
    Department. Can you elaborate on this change?
        Answer. The budget request for fiscal year 2005 reflects the
    reorganization plan to move the cross border electricity regulation
    function out of Fossil Energy to the Office of Electric Transmission &
    Distribution, which was established August 10, 2003, and funded in the
    Energy and Water Development Appropriations, and combines DOE's
    electricity transmission and distribution (T&D) programs and research
    in a single, focused office. The requested funds for Fossil Energy in
    fiscal year 2005 are appropriate for the remaining Fossil Energy
    natural gas regulatory functions.

                                GASOLINE STOCKS

        Question. Last year we discussed the alarming dependency on foreign
    refined product. My hope was that the dependency on foreign gasoline
    was an anomaly rather than a trend, however, with recent disruptions
    due to an accident on the Mississippi and regional price spikes, I am
    hearing more concern from my constituents. Can you update us on imports
    of refined product and give us an outlook for gasoline prices this
    summer?
        Answer. The average retail price for regular gasoline in the United
    States has been about $1.72-1.73 per gallon over the last couple of
    weeks, just a couple of pennies shy of the all-time high of $1.747
    (unadjusted for inflation) set on August 25, 2003. While the average
    retail price declined slightly from March 1 to March 8, EIA expects
    this to be temporary, and continues to forecast prices averaging $1.83
    per gallon later this spring.
        Gasoline prices have risen because of two primary factors: (1) a
    rise in global crude oil prices, and (2) tight gasoline markets
    nationwide.
      --Crude oil prices have increased by about $7 per barrel since early
            December. Converted into cents per gallon, this would explain
            about 17 cents of the 26-cent increase seen in retail gasoline
            prices since December. OPEC has kept production, and
            consequently global exports, at levels that have prevented
            crude oil inventories worldwide, and especially here in the
            United States, from returning to more normal levels. This OPEC
            restraint has been followed by a call to decrease production
            further beginning in April. Additionally, global oil demand
            continues to increase, particularly in China and the United
            States. While supply and demand factors explain most of the
            increase in crude oil prices, other factors, including the
            large net long position by non-commercial participants in the
            near-month NYMEX contract and even a demand pull from higher
            gasoline prices, have also put pressure on oil prices.
            Nevertheless, crude oil prices have increased in recent months
            primarily due to a tightening global crude oil market.
      --Gasoline supply and demand factors have also played an important
            role in explaining higher gasoline prices. Despite relatively
            high nominal prices, U.S. gasoline demand has been very strong,
            averaging 4.5 percent above year-ago levels over the last four
            weeks, and supply has simply not increased enough to keep up.
            On the supply side, with the refining system globally showing
            much less excess capacity than last year, the lack of ability
            to further increase gasoline production substantially,
            including here in the United States, may make it difficult for
            refiners to supply enough gasoline this spring. Gasoline
            imports have averaged significantly below year-ago levels,
            particularly in January and February, despite the fact that
            product imports in January and February 2003 were adversely
            affected by the disruption in Venezuela that had resulted from
            the oil workers strike in December 2002. Gasoline imports have
            been lower so far this year for a number of factors: relatively
            high freight rates, low supplies available for export from
            Europe, and, possibly, from lower-than-normal exports from
            Venezuela.
        With supply unable to keep up with demand growth this year, U.S.
    inventories have been drawn down much more than normal this year.
    January, which would typically be expected to see an increase of more
    than 12 million barrels, actually saw total gasoline inventories fall
    by nearly 1 million barrels, and there wasn't any significant
    improvement in February, relative to normal changes. As a result, there
    is little, if any, flexibility in the gasoline market to respond to any
    imbalances, should they occur in specific regions of the country, or
    across the country.
        Question. Does the Department have any short-term solutions to
    combat the trend?
        Answer. We all understand that the current oil market conditions
    have evolved over many years and will require patience and resolve to
    be addressed adequately. The Administration continues to work towards
    assuring that American consumers have adequate supplies of petroleum
    products at reasonable prices. I urge the Congress to do its part to
    complete comprehensive energy legislation and send it to the President.
        The trend in imported petroleum products is simple economics: the
    foreign refiners have excess capacity to produce gasoline; we have
    strong demand for gasoline, primarily on the East Coast. As long as the
    U.S. price is attractive to foreign refiners, they will provide our
    markets with needed petroleum products.
        With the FreedomCAR and Hydrogen Fuels initiatives, we are working
    aggressively to fundamentally change the way we look at transportation,
    oil use and the environment over the long term, by developing an
    integrated system using hydrogen from domestic sources that produces no
    emissions of greenhouse gases or criteria pollutants.

                              SOLID STATE LIGHTING

        Question. The fiscal year 2005 request includes $10.2 million for
    Solid State Lighting, up from $7.7 million in fiscal year 2004.
    Industry is pleased by this show of support, but is concerned by the
    split between core research projects (national labs, universities) and
    industry-led research. They feel the industry portion provides a bridge
    to product development, which will allow the U.S. industry to keep pace
    with foreign competitors. DOE would say that product development should
    be largely the responsibility of industry. I was pleased to see the
    Department's formal launch in November 2003 of a dedicated Solid State
    Lighting research and development program. The energy savings and
    environmental benefits of this technology could be enormous.
        You've asked for just over $10 million for solid state lighting in
    your fiscal year 2005 budget. I am interested in how the Department is
    allocating funds in this program between core research and research
    more geared toward product development and commercialization. From
    reports that I've heard--including a recent visit to the Far East by
    our colleague Sen. Bingaman--Korea, China, and Japan are very active,
    with government support, in developing solid state lighting
    technologies. Is enough being done to support product development
    research?
        Answer. The Department is funding core research, or ``Core
    Technologies'' as well as ``Product Development'' activities. The
    November 2003 Solid State Lighting (SSL) Workshop provided a formal
    launch of the program and a discussion of the research and development
    (R&D) plan for SSL. Much emphasis and priority was placed on the Core
    Technologies tasks, as many fundamental activities still need to be
    completed and capitalized into products before the performance and
    price of SSL will be market competitive. Product Development tasks were
    also prioritized, but for light emitting diodes (LEDs) only. The top
    priorities for both Core Technology and Product Development will be
    addressed with competitive solicitations in fiscal year 2004.
        Given that Core Technology projects will (a) achieve the technology
    breakthroughs for large jumps in efficiency (among other attributes),
    and (b) are longer term with results further out, EERE will emphasize
    the Core Technology agenda during the early years of its SSL
    activities. However, it should be noted that less risky projects
    (generally those in Product Development) require more industry cost
    sharing than riskier projects (generally those in Core Technology), as
    required by the Energy Policy Act of 1992 and in alignment with
    guidelines developed as part of the Administration's R&D investment
    criteria. Thus, total project funding--including participant cost
    sharing--is approximately equal between the two categories.
        Question. Are you confident we are applying adequate resources to
    secure the intellectual property, manufacturing capability and
    infrastructure to lead the world in solid state lighting?
        Answer. Yes. The Department is carefully applying the resources
    available within solid state lighting (SSL) to high-priority tasks
    selected by the November 2003 Solid State Lighting Workshop and is
    seeking a balance between long-term Core Technology and near-term
    Product Development activities. The Department recognizes that foreign-
    government-funded SSL consortiums are targeting the same white-light
    markets and applications. However, the U.S. industry base presently
    holds an edge in technology knowledge and expertise. Given the
    potential for large profits in the lighting industry, we are confident
    that the U.S. industry investment, combined with the Department's
    funding, will allow the United States to continue to lead.
        Question. How specifically are fiscal year 2004 funds for this
    program being allocated?
        Answer. For fiscal year 2004, EERE's Building Technologies Program
    is focusing on placing available funding on competitive solicitations
    or competitive National Laboratory research and development
    solicitations. Of the $7.75 million appropriation for solid state
    lighting (SSL) in fiscal year 2004, $1.5 million is being used to pay
    mortgages for projects from past solicitations, $6.0 million is being
    used for competitive solicitations and the balance of $250,000 is being
    used for analyses and other activities. The competitive solicitation
    will be split between Core Technology ($4.0 million) and Product
    Development ($2.0 million) in an approximate two-to-one ratio. Research
    and development activities ($7.5 million) have been given a higher
    priority than workshop ($100,000), analysis ($100,000), and
    communication ($50,000) activities.
        Question. How will fiscal year 2005 funds be allocated if funded at
    the President's request?
        Answer. In fiscal year 2005, SSL funding will be allocated using
    the funding logic emanating from the November 2003 Solid State Lighting
    (SSL) Workshop, which provided a formal launch of the program and a
    discussion of the research and development (R&D) plan for SSL. The
    Department is funding both core research, or ``Core Technologies,'' as
    well as ``Product Development'' activities. From this SSL Workshop,
    many tasks were identified as priority tasks, but only a subset will be
    placed in the fiscal year 2004 solicitations for either Core Technology
    or Product Development. The funding split in fiscal year 2005 between
    Core Technology and Product Development solicitations will be
    approximately two-to-one.

                   HYDROGEN--NATIONAL RESEARCH COUNCIL REPORT

        Question. The National Research Council recently released a study
    that identified some pretty tall hurdles that need to be cleared before
    hydrogen can make a significant impact this country. Big improvements
    are needed in the cost and reliability of fuel cell systems; advances
    are needed in transportation infrastructure for hydrogen; and we must
    determine whether it is feasible to sequester carbon that would be
    produced if we were to produce hydrogen from coal. Some have
    interpreted this report as saying that hydrogen is a pipe dream, and
    that funding anything but the most basic research at this time would be
    folly. What is your take on the NRC report?
        Answer. Conclusions that only the ``most basic research' should be
    funded are gross mischaracterizations of the NRC report. The NRC
    recommended that the program shift away from ``some'' development areas
    and toward more ``exploratory'' work--as has been done in the area of
    hydrogen storage. ``Exploratory'' research is not synonymous with
    ``basic'' research.
        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, for example, which includes the
    establishment of three ``Centers of Excellence'' led by National
    Laboratories along with multiple university and industry partners. This
    is the model that the NRC is recommending that the Department use in
    addressing fuel cell cost, durability, and other areas. The NRC is not
    recommending a shift away from development in general; the NRC is
    specifically limiting the areas that it recommends we shift away from
    to: compressed gas/liquid storage, centralized natural gas production,
    stationary polymer fuel cells, and biomass gasification.
        We agree that significant hurdles exist to realization of the
    hydrogen economy. These barriers had been previously identified by the
    Department (see the National Hydrogen Energy Roadmap, released by
    Secretary Abraham on November 12, 2002); barriers specifically
    mentioned in your question are each addressed as part of the
    President's Hydrogen Fuel Initiative:
      --Fuel cell cost and reliability.--Over the last several years, the
            program has increasingly shifted emphasis away from systems
            development activities because industry is taking on this work
            with private funding. Instead, the Department is focusing on
            research at the component level addressing cost and durability
            issues. This trend is expected to continue, is supported by the
            fiscal year 2005 budget request, and is in agreement with NRC
            recommendations.
      --Transportation infrastructure for hydrogen.--NRC recommendation ES-
            5 indicates that distributed hydrogen production systems
            deserve increased research and development (R&D). The
            Department agrees with this recommendation, and believes an
            increased focus on relevant technologies (distributed reforming
            and electrolysis) will help eliminate large infrastructure
            investments in the transition. Figure 6-1 of the report shows
            the transition beginning in 2015. The NRC gave a clear strategy
            that the transition can occur by focusing on distributed
            production of hydrogen that eliminates the need for full
            hydrogen production and delivery infrastructure in the near
            term. The Department will place much more emphasis on
            exploratory research on electrolysis in fiscal year 2005 and
            beyond. Decreasing electrolyzer cost and increasing efficiency
            are critical to producing hydrogen from renewable electricity.
            We will also continue our work in hydrogen production through
            distributed natural gas reforming, another key technology in
            the transition to a full hydrogen economy.
      --The feasibility of carbon sequestration.--Coal is a potential
            abundant and domestic source for hydrogen. It is considered a
            long-term hydrogen source because the technical, economic and
            environmental feasibility of carbon capture and sequestration
            technology must be evaluated. Over the next 10 years,
            FutureGen, a project to employ carbon capture and sequestration
            technologies will demonstrate emissions-free electricity and
            hydrogen from coal. Although funding for this demonstration is
            not part of the President's Hydrogen Fuel Initiative, the
            FutureGen project is critical to addressing greenhouse gas
            reductions and evaluating the long-term potential for coal-
            based hydrogen and electricity.
        Finally, basic research is critical to understanding the underlying
    science that will lead to hydrogen and fuel cell technology
    improvements in the near-term and potentially ``breakthroughs'' in the
    long-term. The Department has now included the Office of Science as a
    direct participant in the President's Hydrogen Fuel Initiative and has
    requested $29.2 million in the fiscal year 2005 budget for basic
    science. However, if we shift too many resources away from applied
    research and technology development, we will not meet the technology
    milestones needed to enable the industry commercialization decision in
    2015. As pointed out by Dr. Michael Ramage, Chairman of the NRC
    committee on hydrogen, when he testified before the House Science
    Committee, a continuum of basic science, applied research, development,
    and learning demonstrations is necessary for the hydrogen initiative to
    be successful. The Department believes that fiscal year 2005 funding
    represents a balanced program in terms of the mix of research and
    development.
        Question. Does anything in that report cause you to rethink the
    allocation of funds in your budget for hydrogen research?
        Answer. The Department initiated the request to have the National
    Research Council (NRC) evaluate its hydrogen program planning in
    December 2002. In April 2003, we received the interim NRC report with
    recommendations that we incorporated into the President's fiscal year
    2005 budget request. The fiscal year 2005 request reflects funding
    increases in fundamental research ($29.2 million for the Office of
    Science), safety ($18 million represents a 3-fold increase over fiscal
    year 2004), and systems analysis (to help prioritize research
    activities).
        The Department fully concurs with 35 of the 43 recommendations in
    the final report. The remaining eight will be implemented to some
    degree after careful consideration and consultation with our
    stakeholders, including the Congress. One of the major reasons the
    Department asked the NRC to examine the program was to obtain
    independent advice on our priorities and resource allocation. The
    recommendations are now being considered and funding allocations in
    future years will be made consistent with our understanding of the
    proper role of the Federal government and emphasize technology areas
    that can most greatly impact U.S. oil consumption and carbon emissions.
    We will continuously re-evaluate technology status, and reallocate
    funds appropriately.

                    HYDROGEN--TECHNOLOGY VALIDATION PROGRAM

        Question. Last year this subcommittee funded a new activity within
    the fuel cell program that was designed to support full scale
    demonstrations of hydrogen vehicles, fueling systems and storage.
    You're seeking a further increase in funding in fiscal year 2005. Can
    you update us on how the fiscal year 2004 funds are being spent?
        Answer. A solicitation was issued in fiscal year 2004 for a fuel
    cell vehicle and hydrogen infrastructure ``learning'' demonstration.
    The ``learning'' demonstration is an extension of the research program
    and is not a commercialization demonstration intended to accelerate
    market introduction. The planned project is a 50/50 cost-shared effort
    between government and industry and will provide important performance,
    durability, and safety data, under real-world operating conditions,
    necessary to continuously refocus the research program.
        Funding from the Interior and Related Agencies appropriations will
    be used to manufacture and test hydrogen fuel cell vehicles in fiscal
    year 2004 and fiscal year 2005. Funding from the Energy and Water
    Development appropriations will be used to develop and test hydrogen
    infrastructure components. It is expected that award selections will be
    announced in the near future.
        This activity will provide a critical assessment of hydrogen fuel
    cell technology and the information necessary to validate whether we
    are on track to meet our interim milestones for a 2015
    commercialization decision by industry. It will involve automotive
    manufacturers and energy companies, with multiple suppliers and
    university partners, and is critical to understanding the systems
    integration and interface issues involved with a major transformation
    in our transportation energy system.
        Question. How many demonstrations will be funded, where will they
    be and what kind of projects will they be?
        Answer. The Department anticipates selecting approximately three to
    five demonstration applications for negotiation for award. Although the
    applicants were asked to propose specific geographic locations, they
    cannot be disclosed at this time because selections have not been
    publicly announced. The solicitation required that vehicles operate in
    cold and hot climates, dry environments, and in humid conditions. This
    will provide valuable fuel cell performance data related to water
    management and heat management that feed back into the applied research
    program to fully address these issues.
        As stated earlier, the vehicle/infrastructure learning
    demonstration will involve the automotive and energy industries to seek
    national system solutions, and possible synergies between hydrogen fuel
    electricity generation and transportation applications.
        The demonstration data will include very controlled testing on
    chassis dynamometers so that fuel cell technology readiness can be
    reported to Congress with extremely high confidence. We will also be
    able to focus on safety and work with industry to develop uniform codes
    and standards necessary for eventual commercialization and safe use of
    hydrogen as an automotive fuel. The project will specifically validate
    fuel cell durability, vehicle range, and hydrogen production costs
    under real-world operating conditions by 2008. The data produced will
    help focus our R&D to accelerate technological advances. The goal is a
    2015 commercialization decision by industry.
        Question. In light of the NRC report, are you at all concerned that
    we're getting ahead of ourselves in committing substantial resources to
    a demonstration program like this, rather than investing those funds in
    additional basic research?
        Answer. As pointed out by Dr. Michael Ramage, Chairman of the NRC
    committee on hydrogen, when he testified before the House Science
    Committee, a continuum of basic science, applied research, development,
    and learning demonstrations is necessary for the hydrogen initiative to
    be successful. Furthermore, the NRC report does not recommend that
    funding be shifted from this ``learning'' demonstration to ``basic''
    research. The Department's mix of funding according to OMB circular A-
    11 for the fiscal year 2005 Hydrogen Fuel Initiative budget request is
    as follows:

    ------------------------------------------------------------------------
                                                                    Percent
    ------------------------------------------------------------------------
    Basic Research...............................................       12.9
    Applied Research.............................................       42.5
    Development..................................................       29.2
    Demonstration................................................   \1\ 13.4
    Deployment (Education).......................................    \1\ 2.0
    ------------------------------------------------------------------------
    \1\ OMB Circular A-11 does not provide a definition for this category.

        The Department believes that fiscal year 2005 funding represents a
    balanced program in terms of the mix of research and development. As
    you can see, 85 percent of the program is research and development.
        Basic research is critical to understanding the underlying science
    that will lead to hydrogen and fuel cell technology improvements in the
    near-term and potentially ``breakthroughs'' in the long-term. However,
    if we shift too many resources away from applied research and
    technology development, we will not meet the technology milestones
    needed to enable the industry commercialization decision in 2015.
        These learning demonstrations are critical to assessing how well
    the research is progressing in meeting customer targets and in
    establishing the business case. A major transition to a hydrogen-based
    transportation energy system could not occur without the involvement of
    the automotive and energy industries in this type of project.

                 FOSSIL ENERGY--DOMESTIC GAS PRODUCTION/IMPORTS

        Question. While oil reliance is especially concerning right now,
    natural gas prices and availability are at the heart of an ongoing
    domestic energy crisis. Spikes in natural gas prices on the spot market
    rival the cost spikes for electricity that lead to public outrage in
    recent years. Mr. Secretary, we have recently discussed our mutual
    concern over natural gas prices and increasing dependence on foreign
    natural gas. Could you share some of the statistics you shared with me
    on Monday, March 1, regarding our need for imported natural gas?
        Answer. Total natural gas consumption is projected to increase from
    2002 to 2025 in all Energy Information Administration (EIA) AEO2004
    cases. The 2005 projections for domestic natural gas consumption are in
    the range from 29.1 trillion cubic feet per year in the low economic
    growth case to 34.2 trillion cubic feet in the rapid technology case,
    as compared with 22.6 trillion cubic feet in 2002.
        The North American resource base has matured, making it much more
    difficult to increase supply levels faster than the rate of production
    decline. Net imports of natural gas make up the difference between U.S.
    production and consumption. Imports are expected to be priced
    competitively with domestic sources. Imports of foreign LNG account for
    most of the projected increase in net imports. When planned expansions
    at the four existing LNG terminals are completed and projected new LNG
    terminals start coming into operation in 2007, net LNG imports are
    expected to increase from 0.2 trillion cubic feet in 2002, to 2.2 and
    4.8 trillion cubic feet in 2010 and 2025, respectively.
        Net annual imports of natural gas from Canada are projected to peak
    at 3.7 trillion cubic feet in 2010, then decline gradually to 2.6
    trillion cubic feet in 2025. The depletion of conventional resources in
    the Western Sedimentary Basin is expected to reduce Canada's future
    production and export potential, and prospects for significant
    production increases in eastern offshore Canada have diminished over
    the past few years.
        Question. I notice the Department is focusing on Liquefied Natural
    Gas (LNG) to help meet these import needs. Have you worked with the
    Department of Homeland Security to assess the risk and viability of a
    large LNG infrastructure?
        Answer. DOE's Office of Fossil Energy, working with the Office of
    Intelligence, is leading interagency cooperation on assessing the risk
    of LNG infrastructure. The lead agencies for LNG infrastructure
    permitting are the Federal Energy Regulatory Commission and the U.S.
    Coast Guard, the latter of which is now part of the Department of
    Homeland Security (DHS). In addition, discussions have been held in an
    interagency context with the DHS Office of Science and Technology to
    coordinate efforts.
        Question. I know the Natural Gas Technologies accounts under Fossil
    Energy focuses on exploration and production techniques as well as
    developing advances in infrastructure to prevent failures and enhance
    delivery capabilities. Unfortunately your budget request suggests
    reducing these activities from $43 million to $26 million, down from
    nearly $46 million just a few years ago. Can you explain the disconnect
    between the information collected by your Department and the direction
    the Research and Development Accounts appear to be headed?
        Answer. The Administration's fiscal year 2005 budget request for
    oil and gas research is at the same level as the fiscal year 2004
    request. The Department believes that this is the appropriate level
    based on the priority placed on addressing the growing demand for clean
    energy with a portfolio of research in clean coal, LNG, renewables,
    conservation and more.
        The oil and natural gas program budgets reflect the PART scores
    (``ineffective'' for the past two years, although the scores improved
    from fiscal year 2004 to fiscal year 2005), which were lower than other
    Department of Energy research programs, and budget allocation is based
    in part, on this evaluation process. However, the Department is
    committed to improving performance and is taking active steps to
    improve project planning and the agency's ability to measure its
    effectiveness. We are in the process of an oil and gas strategic
    planning initiative and are working with external groups to improve our
    benefits measures.

                       GRID RELIABILITY AND FEDERAL LANDS

        Question. As you well know, maintaining and improving the
    reliability of the electric grid is dependent on our ability to
    maintain transmission lines across Federal lands--particularly in the
    West. From time to time we hear complaints that maintaining this
    infrastructure on Federal lands is a cumbersome and expensive process,
    whether it's vegetation management, line maintenance, or other
    necessary tasks.
        I know DOE has worked closely with the White House to coordinate
    the designation of corridors across federal lands in 11 Western states
    for transmission and other utility rights-of-way. My understanding is
    that the next step in this process is the completion of a region-wide
    Environmental Impact Statement, and that the Argonne National
    Laboratory has been designated to prepare the programmatic EIS, funded
    by the Department of Energy.
        I believe it is very important that these corridors be designated
    if we are going to have adequate transmission capacity in the West to
    deliver power from renewable and other energy sources. My understanding
    is that the DOE funding commitment for fiscal year 2004 has not yet
    been fulfilled.
        Can you advise this Committee as to the status of the fiscal year
    2004 funding commitment for the region-wide EIS, and whether you are
    requesting the requisite funds to complete the EIS in fiscal year 2005?
        Answer. It must be recognized that the Bureau of Land Management
    (BLM) and the Forest Service (FS) have made progress in the past 2
    years to streamline the management of existing right-of-way grants
    (ROW) for BLM administered lands or special use permits (SUP) for FS
    administered lands, and to reduce the burden and expense of
    infrastructure maintenance, whether vegetation management, line
    maintenance, or other necessary tasks. It is anticipated that
    additional administrative practices will be implemented by the BLM and
    the FS in the next couple of years that continue to streamline many
    aspects of ROW and SUP management while maintaining safety, public
    health, and environmental protections. Improvements in transmission
    policy, such as better practices for siting of transmission lines, is
    one of the activities supported by the Office of Electric Transmission
    and Distribution's Electricity Restructuring program. However,
    completion of the EIS in fiscal year 2005 depends on the availability
    of funds.
        Question. From what program would such funding most logically be
    derived?
        Answer. The electric transmission system would benefit from
    designated corridors across Federal lands; the expedited review process
    itself would save both time and money during siting evaluation. Thus,
    the Office of Electric Transmission and Distribution sees value in this
    effort. However, other programs outside the electric transmission and
    distribution area would also benefit. For instance, these corridors
    would enable better access to renewables and other energy sources,
    including natural gas and hydrogen.
        Question. Are there other steps you're taking administratively on
    an inter-agency level to address these issues?
        Answer. DOE is working closely with the Task Force on Energy
    Projects established under Executive Order 13212 in addressing these
    issues. The Bureau of Land Management (BLM) and the Forest Service (FS)
    are pursuing an effort to modernize their land use plans throughout the
    West. Both agencies have directed their field offices to identify
    management issues associated with right-of-way (ROW) grants and special
    use permits. The agencies will identify ROW corridors, analyze the
    corridors for their present and future ROW uses, and where appropriate,
    officially designate the lands as ROW corridors. In accordance with BLM
    and FS management practices, a designated ROW corridor is a preferred
    location for the placement of future ROW facilities. Proposals to place
    future ROW facilities across BLM and FS administered designated as ROW
    corridors may be able to benefit from an expedited National
    Environmental Policy Act (NEPA) review process. The DOE is coordinating
    with the BLM and the FS to ensure that concerns of DOE are addressed in
    the BLM and FS land use planning efforts/NEPA reviews. DOE will support
    the designation of appropriate ROW and work with the agencies to help
    ensure that unwarranted restrictions to the placement of ROW on other
    public lands do not occur.
        Question. Are you getting an appropriate level of response and
    cooperation from Interior and the Forest Service?
        Answer. The Bureau of Land Management and the Forest Service have
    provided outstanding support to DOE with respect to identification,
    analysis and resolving of rights-of-way issues on lands the agencies
    administer. DOE has every expectation that this outstanding level of
    cooperation will continue.

                              FOSSIL ENERGY--FUELS

        Question. The request reduces the Fuels account under Fossil Energy
    Research and Development from $31 million to $16 million. This research
    has focused on producing cleaner fuels using a number of technologies
    including using carbon feed stocks (coal, petroleum, gas) and
    separating it into various components, notably isolating the carbon
    from other elements. The budget proposes stopping all ultra clean fuels
    research and syngas research that creates clean fuels and hydrogen from
    coal.
        Mr. Secretary, I am interested in your decision to essentially stop
    all advanced fuels research in the Fossil program. For fiscal year
    2004, Congress provided $31 million to continue research aimed at
    developing cleaner fuels from domestic fossil sources including coal,
    gas, and petroleum. The strides made in producing new fuel products
    such as ultra clean diesel have given hope we can produce and utilize
    much cleaner burning fossil fuels in the near term. Can you explain why
    you believe we should abandon research that is arguable on the verge of
    creating marketable solutions to near-term environmental concerns?
        Answer. The Coal to Hydrogen program is an important part of the
    President's Hydrogen Initiative and supports the FutureGen project by
    providing advanced, less costly technology for producing more hydrogen
    and hydrogen separation technology for evaluation. In fiscal year 2005,
    $16,000,000 has been requested for the program. This funding is a
    significant increase over the fiscal year 2004 appropriated funding of
    $5,000,000 for hydrogen from coal research and is consistent with the
    programmatic need as defined in the Hydrogen Posture Plan and FE
    Hydrogen Program Plan.
        No fiscal year 2005 funding is requested for ultraclean
    transportation fuels and syngas membrane technology because these
    activities are related to the production of compliant liquid fuels
    required to meet EPA Tier-2 Standards which industry itself can support
    without DOE R&D assistance.
        The Administration's request does include funding for an alternate
    route for producing hydrogen via clean, zero sulfur liquid fuel
    hydrogen carriers that would utilize the existing infrastructure and
    can be converted to hydrogen near the end-use site.
        Question. Your budget proposes numerous projects to produce
    hydrogen from fossil energy sources. I believe we both realize our
    natural gas infrastructure is spread too thinly. Can you give us an
    indication of the potential success of production of hydrogen from coal
    and other resources?
        Answer. In a recent comprehensive study, the National Academies
    concluded that ``a transition to hydrogen as a major fuel in the next
    50 years could fundamentally transform the U.S. energy system, creating
    opportunities to increase energy security through a variety of domestic
    energy resources for hydrogen production, while reducing environmental
    impacts, including atmospheric CO2 emissions and criteria
    pollutants.'' The Committee did point out that ``breakthroughs'' in
    production, storage, delivery and fuel cells are required.
        The mission of the hydrogen from coal program is to develop through
    public/private RD&D advanced and novel technologies that will enable
    the use of the Nation's abundant coal reserves to produce, store,
    deliver and utilize affordable hydrogen in an environmentally
    responsive manner. The potential for the economic production of
    hydrogen from coal is considered to be very high. However, in addition
    to developing new innovative processing technology, studies must be
    conducted to show the integration of these technologies in producing
    hydrogen, while successfully sequestering the carbon dioxide. These
    advanced technologies being developed by the Hydrogen from Coal Program
    offer the potential of reducing overall cost of hydrogen production by
    25 percent, making the cost of the hydrogen fuel very competitive with
    alternatives.
        The integration of processes and the advanced technology studies
    would be significantly advanced by the design and construction of the
    FutureGen facility.
        In fiscal year 2005, $16,000,000 has been requested for the
    Hydrogen from Coal Program. This funding is a significant increase over
    the fiscal year 2004 appropriated funding of $5,000,000 for hydrogen
    from coal research and is consistent with the programmatic need as
    defined in the Hydrogen Posture Plan and the FE Hydrogen Program Plan.

     NAVAL PETROLEUM AND OIL SHALE RESERVES--ROCKY MOUNTAIN OIL TECHNOLOGY
                                 CENTER (RMOTC)

        Question. The Naval Petroleum request and proposed DOE
    Reorganization propose moving the Rocky Mountain Oil Technology Center
    (RMOTC) (pronounced Re-mot-C) under the auspices of the Natural Gas R&D
    portfolio. This facility allows industry to partner with DOE and place
    facilities on NPR-3 (Teapot Dome) to explore advanced oil recovery
    techniques. The budget and DOE reorganization proposes moving the Rocky
    Mountain Oil Technology Center into the Natural Gas R&D portfolio. It
    is my understanding industry partnerships to promote advanced oil
    recovery utilize this center with great success. Can you assure the
    Subcommittee that joint efforts at the center will continue at or above
    the current level in the upcoming fiscal year?
        Answer. The RMOTC program is not being placed under the auspices of
    the Natural Gas R&D portfolio as you have noted; rather it will be
    managed as part of the overall oil and gas R&D program within the
    Office of Natural Gas and Petroleum Technologies. RMOTC offers a place
    to perform hands-on testing and demonstration of upstream petroleum and
    environmental products that is tailored to the small, independent
    domestic oil producers. Government participation accelerates technology
    transfer by helping speed new technology to the market place. RMOTC
    also supports the Administration's goal to develop new/alternative
    energy sources and energy efficiency technologies for use in the
    petroleum industry. However, we cannot make assurances that funding
    will remain level or increase.
        The type of work done at the RMOTC--field demonstrations of oil
    exploration and production technology--is something that the petroleum
    industry primarily should lead. The RMOTC appropriation for fiscal year
    2004 was for $2.96 million and the fiscal year 2005 request is $2.17
    million, which will primarily be utilized to continue the work
    commenced in fiscal year 2004. RMOTC will concentrate these resources
    on primary and applied research and development that does not overlap
    with industry. It will use the fiscal year 2005 appropriation to
    complete work on already signed cooperative agreements and judiciously
    select new projects to fund.

                             OFF-HIGHWAY ENGINE R&D

        Question. You have once again proposed to terminate research on
    off-highway engines such as heavy equipment, railroad engines, etc. I
    gather this is because the potential energy savings are not nearly as
    high as for on-road vehicles research. While off-road fuel consumption
    is far less than on-road consumption, it does seem that very
    significant emission reductions could be attained in the off-road area
    by picking some of the ``low hanging fruit''. Can you give us an idea
    about how you weigh such things in your budget development process?
        Answer. Our budget development process weighs multiple factors such
    as program performance, relative priority, alignment with the
    Administration's R&D investment criteria, and other factors. The R&D
    investment criteria include considerations such as the Federal role,
    the quality of the research planning, and the potential for public
    benefits. While we continue to refine our methods for quantifying and
    comparing potential benefits of our activities, it is clear that
    advances in on-road vehicles offer greater benefits than in off-road
    vehicles. In fact, we estimate that the fuel savings potential from
    off-highway vehicles research is an order of magnitude lower than the
    potential for on-road vehicles. Accordingly, our R&D priorities
    emphasize on-road vehicle R&D, consistent with our fiscal year 2004
    request. Also, in a recent peer review of our multi-year R&D plans the
    review committee recommended that the Department follow this course of
    action. Our R&D on heavy-duty on-road vehicle engines, however, does
    address many of the same technical issues present in engines of off-
    road vehicles.
        With regard to emissions from off-highway vehicles, although the
    Department is deeply concerned about emissions, the Environmental
    Protection Agency has primary jurisdiction over this area. Recent EPA
    regulations mandate that the manufacturers of off-highway vehicles
    reduce future emissions and industry is working to meet these
    regulations on their own. Our cooperative R&D efforts emphasize
    research areas that industry would not choose to undertake on its own,
    especially in the absence of regulation.
        Question. Are fuel savings and energy efficiency your only true
    goals in these programs, with things such as emissions reductions being
    secondary benefits?
        Answer. The Environmental Protection Agency has primary
    jurisdiction over emission issues. Recent EPA regulations mandate that
    the manufacturers of off-highway vehicles reduce future emissions, and
    industry is working to meet these regulations on its own. Our
    cooperative R&D efforts emphasize research areas that industry would
    not choose to undertake on its own, especially in the absence of
    regulation.
        The Department of Energy's Office of Energy Efficiency and
    Renewable Energy certainly considers environmental factors such as
    emissions in its decision-making and evaluations, but its primary goal
    is to achieve greater energy efficiency in the United States. In the
    area of transportation, this translates to decreasing our dependence on
    foreign oil through fuel savings and fuel switching opportunities.
        Question. Can you elaborate for the record your reasons for
    proposing to terminate this program? Could you describe specifically
    how the funds appropriated in fiscal year 2004 are being spent?
        Answer. Our budget development process weighs multiple factors such
    as program performance, relative priority, alignment with the
    Administration's R&D investment criteria, and other factors. The R&D
    investment criteria include considerations such as the Federal role,
    the quality of the research planning, and the potential for public
    benefits. While we continue to refine our methods for quantifying and
    comparing potential benefits of our activities, it is clear that
    advances in on-road vehicles offer greater benefits than in off-road
    vehicles. In fact, we estimate that the fuel savings potential from
    off-highway vehicles research is an order of magnitude lower than the
    potential for on-road vehicles. Since the top priority of EERE is to
    reduce our Nation's dependence on foreign oil, the FreedomCAR and
    Vehicle Technologies Program decided to focus its R&D efforts on those
    technologies that offer the opportunities to save the greatest amount
    of petroleum. Also, in a recent peer review of our multi-year R&D plans
    the review committee recommended that the Department follow this course
    of action.
        In fiscal year 2004, approximately one-half of the funds go
    directly to makers of off-highway equipment (construction, agriculture,
    mining, road construction and rail) for competitively-awarded
    cooperative agreements, while the other half goes to our National
    Laboratories to conduct cooperative, cost-shared research with
    industry.
                                     ______

                   Questions Submitted by Senator Ted Stevens

                            ALASKAN ENERGY RESOURCES

        Question. Increasing domestic energy supplies to ensure our energy
    security is a major element of President Bush's National Energy Policy.
    Alaska's vast energy resources are a key component in meeting the
    President's goal. Alaska's North Slope provides almost 20 percent of
    U.S. oil production. Additionally, Alaska's large natural gas reserves
    are estimated at over 130 trillion cubic feet and our coal reserves are
    estimated at 5,500 billion short tons. Developing and enhancing these
    energy resources will ensure stability in domestic energy supplies.
        Despite Alaska's enormous resource potential, its energy reserves
    are largely untapped. Part of the problem has been a lack of research
    focusing on how to develop the resources given the Arctic's harsh
    climate, remoteness, and unique geology and environment. Recognizing
    that such research was important, Congress created the Arctic Energy
    Office, a branch of the Department of Energy's National Energy
    Technology Laboratory. The Arctic Energy Office was tasked with
    conducting Arctic energy research in fossil energy and remote
    electrical power generation in order to advance the economic and energy
    security of the United States.
        With the federal funding it has received, the Arctic Energy Office
    has engaged in various energy related research, including tundra
    studies, enhanced oil recovery (which has the potential to generate an
    additional 20-25 billion barrels of oil), gas hydrates, gas to liquids
    technology, and natural gas production and transportation related to
    the Alaska Natural Gas Pipeline.
        In fiscal year 2005, the Department of Energy is requesting over
    $635 million for fossil energy research and development. It appears
    from the Department's budget request, none of these funds will be used
    to support the important research of the Arctic Energy Office.
        It is my understanding that your department eliminated funding used
    to identify and study ways to make the gas pipeline more economical.
    Alaska gas will meet approximately 10 percent of our nation's natural
    gas needs, decrease our dependency on foreign sources of LNG, generate
    over $40 billion in federal revenues, and create 400,000 jobs. At a
    time when high natural gas prices are severely impacting our industries
    and consumers and hindering our economic recovery, why would the
    Department eliminate funding for this project?
        Answer. At the requested budget level for oil and gas, DOE decided
    it would not identify a specific line for Arctic research. This does
    not preclude competitively funding Arctic projects consistent with
    program priorities. However, any funding for Arctic research would be
    at a significantly lower level than the previous appropriations as a
    result of the overall decrease in funding for oil and gas. Specific gas
    pipeline funding to conduct testing of an innovative membrane
    technology for reducing the cost of gas processing prior to its
    delivery for pipeline transport was appropriated in prior years and
    remains available to conduct this project.
        Question. The mean estimate of gas hydrates on Alaska's North Slope
    is 590 trillion cubic feet. As the Department of Energy has stated,
    development of 1 percent of this resource would triple the United
    States' resource base. Despite this vast potential gas resource, why
    did the Department decrease funding for the Alaska project by $3.35
    million?
        Answer. The Department is actually emphasizing hydrate research by
    increasing its fiscal year 2005 budget request by $2.5 million over the
    fiscal year 2004 budget request. The requested increase reflects the
    natural gas program's efforts to focus on areas where there is a clear
    government role: long-term, high risk research with potentially high
    payoffs. In fiscal year 2004 and fiscal year 2005, this program will
    focus on ongoing joint projects in assessing the potential hydrate
    resource in the Gulf of Mexico and in Alaska.
        Question. In fiscal year 2004, over $6.5 million was appropriated
    to conduct research into the development of syngas ceramic membrane
    technology used to enhance Fischer-Tropsch (F-T) gas conversion to
    create environmentally friendly liquid fuels and hydrogen. Why was
    funding for this project eliminated in fiscal year 2005?
        Answer. While the development of syngas ceramic membrane technology
    would enhance the economic production of Fischer-Tropsch liquids and /
    or hydrogen from natural gas, this advance could be supported by the
    private sector and we believe it has the economic incentives to do so.
    This funding request is consistent with the Administration's budget
    request for fiscal year 2004.
        Question. The President's National Energy Policy called for
    environmentally sensitive development of Alaska's oil reserves and gas
    reserves, including those in the National Petroleum Reserve-Alaska.
    Consistent with that mandate, the Arctic Energy Office engaged in
    research into tundra travel to extend the exploration window on the
    North Slope. Why did the Department of Energy eliminate funding for
    this Arctic research?
        Answer. The Tundra Travel Model was fully funded in fiscal year
    2003 and the project has been successfully completed. To our knowledge,
    the Alaska Department of Natural Resources is not seeking additional
    funds from the Department of Energy to continue the project.
        Question. The University of Alaska-Fairbanks and the Arctic Energy
    Office have been at the forefront of climate change research. Changes
    in climate are severely impacting Alaska's coastal communities. Why was
    funding eliminated for this research in the budget for fiscal year
    2005?
        Answer. Although the Arctic Energy Office has a close working
    relationship with the University of Alaska-Fairbanks, it does not fund
    climate change research.
                                     ______

                 Questions Submitted by Senator Byron L. Dorgan

                                   FUTURE GEN

        Question. The Department's FutureGen plan, which is dated March 3,
    2004, refers to the congressional directive that the plan be
    ``closely'' coordinated with the private sector. The plan does not,
    however, provide any detail on how the Department went about
    accomplishing that task. Please tell the Committee how the FutureGen
    plan was coordinated, including the organizations consulted, the number
    of meetings convened, and when the Department expects comments back
    from the industry regarding its plan.
        Answer. DOE staff communicated on several occasions with a point of
    contact designated by the FutureGen industry alliance. The point of
    contact coordinated industry views and inputs that were discussed.
    Communications took the form of informal meetings and telephone
    conversations between Departmental staff and the industry coordinator
    as the drafting of the plan progressed. The industry alliance also
    provided input through a letter to the Department from the designated
    coordinator. The Department considered this input in the drafting of
    the plan. However, as stated in the FutureGen plan, industry has not
    had sufficient time to review or comment on the final plan that was
    submitted. Comments from the industry alliance are being requested on
    the FutureGen plan.
        Question. As the FutureGen plan rightly points out, community
    acceptance will be one of the keys to the success of the project. What
    is the Department planning with respect to community outreach, both
    before and after a specific site is selected? And does the Department
    have a plan or strategy for addressing environmental legal challenges?
        Answer. The Department is planning to include early planning
    activities for NEPA compliance in its community outreach prior to site
    selection. Early in the process, we will conduct early community
    outreach activities including an announcement of an Advance Notice of
    Intent to prepare an Environmental Impact Statement (EIS) for the
    FutureGen project. This announcement will include outreach to those
    state and tribal nation entities that initially submitted letters of
    interest in hosting the plant, including potentially interested
    communities within offering states. Every reasonable effort will be
    made to provide early information to keep the public and potential
    stakeholders apprised.
        Following an open competition to select a host site, the Department
    will issue a final Notice of Intent regarding the EIS and will announce
    that intent to all communities, states, and tribal nations responding
    to the Consortium's competition. The Department will plan and conduct
    public meetings in communities within all regions offered as reasonable
    (i.e., potentially qualified) candidate sites for the plant. An
    extensive state and community outreach program will continue after a
    site has been selected.
        As with any sizeable project, there is always the potential for
    environmental legal challenges. With respect to addressing these
    potential challenges, the Department plans to adhere to and comply with
    all relevant NEPA regulations, meticulously adhere to established
    procedures, document such procedures, and implement a full and open
    process that would engage the public and stakeholders throughout. It
    will also incorporates alternatives (site and technology alternatives)
    that are as broad as reasonably possible to ensure the reasonable range
    of alternatives were evaluated in the EIS documentation and serve to
    embody the actual conditions the project plans to move forward in at
    the time the site is selected.
        Question. Obviously, funding sources for the $950 million cost of
    the FutureGen project are an important factor that must be carefully
    considered by the Congress before committing substantial funds to this
    endeavor. The plan states that $80 million will come from state and
    foreign governments. Which governments have pledged funds, how much
    have they pledged, and what mechanism is in place to ensure that these
    funds will actually end up ``in the bank''?
        Answer. At this time, several state and foreign governments have
    expressed a keen interest in participating in the FutureGen initiative.
    However, at this early stage in the FutureGen process, pledging of
    funds from any governmental entity would be premature and thus, is not
    yet expected since such commitments would be subject to further
    discussions and negotiations. The Department is encouraging broad
    international participation and will be actively pursuing cost sharing
    partnerships in FutureGen. Several mechanisms such as existing
    protocols and agreements, modification of exiting agreements, and new
    agreements could provide the avenues for addressing cost-share
    contributions, extent of participation, rights and other quid pro quo
    issues.
        Question. The FutureGen plan also envisions $250 million coming
    from a private-sector consortium. Please provide the Committee with a
    list of consortium members and the amount of funding each member has
    agreed to contribute. In addition, specify whether or not the funds are
    legally committed to FutureGen.
        Answer. As reported by the industry consortium that refers to
    itself as the FutureGen Industrial Alliance, the members are: American
    Electric Power, Cinergy Corporation, CONSOL Energy Inc., Kennecott
    Energy Company, The North American Coal Corporation, PacifiCorp,
    Peabody Energy, RAG American Coal Holding, Inc., Southern Company, and
    TXU. It is not known by the Department what arrangements, if any, have
    been made among the membership regarding the funding contributions of
    each member. The Department has no knowledge at this time as to whether
    industry funds are or have been legally committed to FutureGen. It is
    anticipated these and other questions and issues will be addressed
    prior to or at the time of negotiations with the industry partner.
        Question. There is a real concern that the administration intends
    to pay for its $620 million share by supplanting current coal research
    programs. Even assuming Congress agrees to the administration''s
    proposal to transfer the remaining Clean Coal Technology balances to
    the FutureGen program, approximately $375 million remains unaccounted
    for. Does the administration intend to fund the FutureGen program with
    budget requests above and beyond the base coal R&D program, or will
    some of the base funds be used for FutureGen?
        Answer. On page 8 in the FutureGen plan report, a profile is
    provided of the estimated governmental expenditures. As shown in the
    report, the administration's plan calls for a total of $500 million in
    new direct funding for the project and $120 million from the
    sequestration program, with $80 million being sought from international
    partners. The Department considers FutureGen the highest priority coal
    research effort, and as such, adequate supporting base coal research
    for FutureGen will most likely continue to be needed. Certain research
    in some areas such as that in emissions controls will wind up in the
    out years. In addition, the sequestration research program calls for
    large scale field tests that would be conducted with or without
    FutureGen. Therefore, that portion of the large scale sequestration
    research which can be conducted in an integrated mode with FutureGen
    could be funded as part of the project.
        Question. The FutureGen plan states that the Department will
    provide $100 million toward the project in fiscal year 2008; $11
    million for plant design, and $89 million for procurement and
    construction. Are these funds in addition to the base coal R&D program,
    or will they be included in the basic coal research budget?
        Answer. On page 8 in the FutureGen plan report, a profile is
    provided of the estimated governmental expenditures. It is the
    administration's intent to request a total of $500 million in new
    direct funding for the project and $120 million from the sequestration
    program, with $80 million being sought from international partners. The
    Department considers FutureGen the highest priority coal research
    effort, and as such, adequate supporting base coal research for
    FutureGen will most likely continue to be needed.
        Question. Please also answer this question with respect to the $113
    million the Department proposes to spend in fiscal year 2009.
        Answer. On page 8 in the FutureGen plan report, a profile is
    provided of the estimated governmental expenditures. It is the
    administration's intent to request a total of $500 million in new
    direct funding for the project and $120 million from the sequestration
    program, with $80 million being sought from international partners. The
    Department considers FutureGen the highest priority coal research
    effort, and as such, adequate supporting base coal research for
    FutureGen will most likely continue to be needed.
        Question. The Department states that $120 million will be subsumed
    from the Sequestration research budget and put into the FutureGen
    project. According to the plan, for fiscal years 2009, 2010, and 2011,
    this amounts to $52 million. Yet, in looking at the plan's expenditures
    for those three fiscal years, no research activities are noted. On the
    contrary, design and construction account for virtually all of the
    funds proposed to be spent. How does the Department justify using much-
    needed sequestration research dollars for basic building construction,
    particularly in light of the fact that the plan makes abundantly clear
    that much more needs to be done in the sequestration area if FutureGen
    is to be a success?
        Answer. The carbon sequestration aspect of FutureGen will integrate
    carbon capture in the above-ground facility with geologic carbon
    sequestration. During fiscal year 2009, fiscal year 2010, and fiscal
    year 2011, funding from the sequestration R&D program will be used in
    conjunction with direct project funding for the design, procurement,
    and construction of carbon sequestration sub-system components for
    FutureGen, which are required for FutureGen carbon sequestration
    research and testing. Thus, funds from the sequestration R&D program
    will be used to enable sequestration research at the integrated
    FutureGen facility. Funding from the sequestration R&D program for
    fiscal year 2011 will also support shake-down and start-up testing of
    the carbon sequestration sub-system components. In addition, the
    sequestration research program calls for large scale field tests that
    would be conducted with or without FutureGen. Therefore, that portion
    of the large scale sequestration research which can be conducted in an
    integrated mode with FutureGen would be appropriately funded as part of
    the project.
                                     ______

                 Questions Submitted by Senator Robert C. Byrd

                FOSSIL ENERGY BUDGET REQUEST VS. THE ENERGY BILL

        Question. I am aware that this administration did not take into
    account the now stalled Energy bill when releasing its fiscal year 2005
    budget for DOE's Fossil Energy programs. However, one does not have to
    look far to see a clear disparity between what the administration is
    proposing this fiscal year and what is needed for many important energy
    programs. For example, the administration has cut the basic research
    and development funding for the Fossil Energy program by 32 percent for
    the fiscal year 2005 request. That is just an average cut, as specific
    oil, gas, coal, fuel cell, and other fossil energy programs have been
    cut even more severely. Based on the authorization levels in the Energy
    bill, the fossil energy program would require a 22 percent increase for
    fiscal year 2005 above and beyond the fiscal year 2004 appropriated
    funds. I am sure that similar examples exist for other important energy
    programs. We have seen this disparity in so many other bills. After the
    Congress passes a bill, the administration promotes it but then
    underfunds it.
        The Secretary recently traveled to West Virginia touting the
    administration's work for coal. This administration has suggested that
    it stands behind the multiple billions for clean coal in the Energy
    bill, including the President's campaign promise for Clean Coal
    Technology. However, given this administration's track record, it
    hardly seems likely this funding will ever fully blossom.
        Can the Department provide the Committee a copy of the Department's
    request to OMB for the Fossil Energy program for fiscal year 2005?
        Answer. According to the Office of Management and Budget (OMB), the
    advice and counsel leading up to the recommendations that form the
    basis of the President's budget are part of the internal deliberative
    process of the Executive Branch. Similar to the pre-markup activities
    of any Congressional Committee, the initial views and positions within
    the Executive Branch vary widely relative to the final outcome in the
    President's budget. In order to assure the President the full benefit
    of advice from the agencies and departments, the Administration treats
    these working papers, such as the Department's OMB budgets, as pre-
    decisional internal working documents. Therefore, the Department's OMB
    budget is not releasable outside of the Executive Branch.
        Question. If an energy bill were to somehow pass, would the
    administration actually support an increase in its funding requests to
    be in line with new authorizing levels for critical energy programs, or
    would it simply follow the same deceptive patterns that it has pursued
    after signing other authorizing bills?
        Answer. The fiscal year 2005 budget request represents the
    Administration's view of where the Department of Energy's budget should
    be given the totality of demands placed on the Federal budget. The
    Administration has indicated concern with the potential costs of both
    H.R. 6 and S. 14, including their cumulative appropriation
    authorization levels, which in many cases significantly exceed the
    President's Budget and set unrealistic targets for future programmatic
    funding decisions.

       NATIONAL ENERGY TECHNOLOGY LABORATORY (NETL)/DOE OFFICE OF ENERGY
                                   ASSURANCE

        Question. As the Department is aware, the National Energy
    Technology Laboratory (NETL) is currently providing unique expertise
    and resources to assist the Office of Energy Assurance. NETL has a
    broad knowledge of how to effectively work with energy infrastructure
    owners and operators and forge effective partnerships with government
    and the private sector. I believe that NETL is a good fit for the
    Office of Energy Assurance, and I hope that the Department will do all
    in its power to ensure that NETL has the opportunity to excel under
    this important program.
        NETL began providing assistance for the Office of Energy Assurance
    in fiscal year 2003 at a level of $16 million, with my support. In
    fiscal year 2004, I added an additional $16 million to the Energy and
    Water Appropriations bill for NETL to continue its activities under
    this program, as well as an additional $4 million for NETL to begin
    construction of a DOE facility dedicated to training first responders
    and industry on ways in which to prepare for, and respond to, a variety
    of energy-related emergency scenarios. I understand that this facility
    is a high priority for the Department.
        While I realize that the Department may not have this information
    readily available today, for the record, would the Department provide a
    detailed report on the activities for which the $16 million for NETL
    was expended in fiscal year 2003?
        Answer. In fiscal year 2003, the Office of Energy Assurance worked
    with NETL to direct and allocate the following initiatives:

                                                [In thousands of dollars]
    ----------------------------------------------------------------------------------------------------------------
                     Performer                                     Description of Work
    ----------------------------------------------------------------------------------------------------------------
    NETL.......................................  Requirement definition and support of the Energy              3,980
                                                  Infrastructure Training and Analysis Center (EITAC).
    Nat'l Labs.................................  EITAC modeling support................................        1,700
    IUOE.......................................  Training first responders.............................        1,265
    ISAC, SNL..................................  Energy Information Sharing and Analysis Center (ISAC)           689
                                                  support and technology exposition.
    NASEO......................................  State emergency planning and response enhancements....          707
    Nat'l Labs.................................  Technology development from a National Laboratory             2,200
                                                  competition.
    Nat'l Labs.................................  Visualization and analysis systems....................          601
    GTI........................................  Natural gas disruption study..........................          305
    SNL........................................  Supervisory Control and Data Acquisition system                 300
                                                  technical support.
    BCS........................................  Emergency response protocol support...................          250
    Energetics.................................  Facilitate stakeholder meetings.......................          310
    NETL.......................................  Develop metrics for energy assurance..................          761
    NETL.......................................  Program direction for Federal/contractor salaries,            2,575
                                                  travel, and materials.
                                                 Budget rescission.....................................          357
                                                                                                        ------------
          Total................................  ......................................................       16,000
    ----------------------------------------------------------------------------------------------------------------

        Question. For the record, how much of the $20 million that I have
    added for NETL in fiscal year 2004 has been released and for what
    purpose?
        Answer. NETL has received $14,070,000 of the $20,000,000 that was
    enacted by Congress in fiscal year 2004. In March 2004, the Office of
    Energy Assurance (OEA) issued Work Authorizations to NETL describing
    scope, cost, and schedule for work to be performed.
        OEA has requested the fiscal year 2004 funds to be allocated as
    shown below:

                            [In thousands of dollars]
    ------------------------------------------------------------------------
                                                                    Amount
    ------------------------------------------------------------------------
    Energy Disruptions and Preparedness........................        2,645
    Coordination with the Private Sector.......................          650
    State and Local Government Support.........................        1,075
    Criticality of Assets......................................        2,190
    Policy and Analysis........................................          875
    Technology Development.....................................        3,885
    Management Support.........................................          250
    Program Direction..........................................        2,500
                                                                ------------
          Total................................................       14,070
    ------------------------------------------------------------------------

        By site, OEA funding would be distributed as :

                            [In thousands of dollars]
    ------------------------------------------------------------------------
                                                                    Amount
    ------------------------------------------------------------------------
    ANL........................................................          550
    INEEL......................................................        1,080
    LANL.......................................................          400
    NETL.......................................................        5,495
    ORNL.......................................................          375
    PNNL.......................................................          770
    SNL........................................................        1,455
    National Lab Council.......................................          200
    National Labs (TBD)........................................          470
    Private Sectors/Universities...............................        3,275
                                                                ------------
          Total................................................       14,070
    ------------------------------------------------------------------------

        Question. Further, I would appreciate a detailed report on how the
    fiscal year 2004 funds yet to be released will be utilized by NETL to
    assist the Office of Energy Assurance.
        Answer. The Office of Energy Assurance has retained $5,930,000 of
    fiscal year 2004 funding. Of these funds, $4,000,000 is for
    construction and furnishing of facilities to support the analytical,
    training, and emergency response needs of the energy sector; $1,000,000
    for NETL Program Direction; and $930,000 for program activities yet to
    be defined by OEA.
        Question. I would also like to know how many NETL jobs are
    supported by the Office of Energy Assurance.
        Answer. In fiscal year 2004, approximately 14 Federal and
    contractor NETL employees will support the Office of Energy Assurance.
        Question. What is the Department's vision for NETL's role in the
    Office of Energy Assurance in the future? For example, will the
    Department incorporate funding to support NETL's work under this
    program into future budget requests and will the Department encourage
    NETL to work with the Department of Homeland Security in complementary
    activities?
        Answer. Funding for NETL was not identified in the fiscal year 2005
    budget request for the Office of Energy Assurance. However, the
    Department of Energy has encouraged NETL to work with the Department of
    Homeland Security (DHS) in complementary activities. For example, in
    fiscal year 2004, NETL is prepared to assist DHS in procuring up to
    $100 million in national security R&D. NETL would allocate this funding
    to projects selected by DHS that focus on security and reliability of
    energy infrastructure. Examples include development of an electric grid
    monitoring system, development and demonstration of mobile transformers
    to recover from electricity outages, and implementation of protective
    measures to monitor buffer zones near key energy infrastructures. NETL
    is coordinating this work with DOE's Offices of Electric Transmission
    and Distribution and Energy Assurance.

                CLEAN ENERGY TECHNOLOGY EXPORT (CETE) INITIATIVE

        Question. In October 2002, the administration, through the
    Department, released the Clean Energy Technology Exports (CETE)
    strategy. This action plan outlined a five-year, nine-agency initiative
    to increase U.S. clean energy technology exports to international
    markets through increased coordination among federal agency programs
    and between these programs and the private sector. As I indicated in my
    September 16, 2003, statement in the Congressional Record, this funding
    is to be specifically provided to the Office of International Energy
    Market Development (OIEMD) within the Department to more concretely
    grow this multi-agency, congressionally initiated effort. The CETE
    funding in fiscal year 2004 should be made available to the OIEMD to
    embark on the establishment of an interagency administrative center and
    to carry out related, near-term outreach efforts in support of CETE's
    long-term goals.
        Answer. Funds have not yet been made available to the Office of
    International Energy Market Development (OIEMD). The department is
    working closely with OIEMD to make these funds available from those
    offices that are funded by the Energy Supply line as specified in the
    Energy and Water Development Appropriations Conference Report 108-357.
        national energy technology laboratory (netl) reorganization plan
        Question. On Thursday, March 4, 2004, the Department submitted the
    follow-up reorganization plan for the National Energy Technology
    Laboratory (NETL). I have noted that this long overdue reorganization
    plan follows the nearly three-year, top-to-bottom review of Fossil
    Energy and the May 2003, reorganization plan that was submitted for the
    Office of Fossil Energy. As a strong proponent of NETL, I will pay
    careful attention to the continuation of its mission and strongly
    support the work of its employees who conduct that mission. As a member
    of the Interior and Related Agencies Subcommittee, I will also continue
    to review the reorganization plan and make my views known to the
    Subcommittee Chairman and Ranking Member prior to its being brought up
    for approval by the Committee. How can you assure me that the NETL will
    continue to have the appropriate and necessary flexibility to carry out
    its important mission?
        Answer. The top-to-bottom review and resultant reorganization plan
    will not adversely impact NETL's flexibility to carry out its mission.
    Rather, it will strengthen the programmatic relationship between NETL
    and Fossil Energy Headquarters by better aligning resource management
    with strategic direction. This will improve program accountability.
        Question. Do you foresee disruptions in any ongoing NETL research
    and development and other programs as a consequence of this
    reorganization plan?
        Answer. No disruptions are expected to occur in any ongoing NETL
    research and development and other programs as a result of the
    reorganization plan.
        Question. Given NETL's unique role as a government-owned,
    government-operated laboratory, how can you assure me that federal
    employees will be equitably treated--treated in a manner that is
    comparable to that afforded to the private-sector employees of the
    Department's government-owned, contractor-operated laboratories? What
    assurances can you make that contact, communications, and decision-
    making processes will continue to flow both ways--from the Department
    to the lab and from the lab to the Department?
        Answer. NETL's expertise and capabilities have and will continue to
    be valued by the Department. Their technical contributions are vital to
    decision-making, communications, and contacts with the public and
    private sectors, state and local governments, industry, and academia.
        Question. Will job losses, immediately or in the future, occur as a
    result of the laboratory reorganization plan?
        Answer. NETL will not sustain any job losses, immediately or in the
    future, as a result of the reorganization plan.
        Question. Does the Department plan further outsourcing or
    contracting efforts that would, in any way, threaten the jobs of NETL's
    employees?
        Answer. NETL supports the President's Management Agenda by
    providing documentation to conduct the fiscal year 2004 Feasibility
    Studies approved by the Competitive Sourcing Executive Steering Group
    in DOE. The Feasibility Studies may result in determinations that
    specific functions are appropriate for formal A-76 studies, therefore
    it is too early to determine any potential impact.
        Question. My review of the NETL reorganization plan indicates that
    the Department is proposing changing the reporting relationship of the
    employees in the Natural Gas Program to the National Petroleum
    Technology Office in Tulsa, Oklahoma. Is this a first step in a chain
    of actions to physically relocate those employees from Morgantown, West
    Virginia to Tulsa, Oklahoma?
        Answer. We do not anticipate, now or in the future, physically
    relocating employees in the Natural Gas Program to the National
    Petroleum Technology Office in Tulsa, Oklahoma.
        Question. What assurances can you give me that these employees will
    not be transferred in subsequent years to the National Petroleum
    Technology Office?
        Answer. We do not anticipate, now or in the future, physically
    relocating employees in the Natural Gas Program to the National
    Petroleum Technology Office in Tulsa, Oklahoma.
        Question. If no plans are anticipated, then how is it in the best
    interest of the lab's structure that these employees report to distant
    managers in such an unwieldy fashion?
        Answer. As a result of the top-to-bottom review, it was determined
    that the Department needed a clear strategic focus for the entirety of
    the natural gas and petroleum programs. The future direction of these
    programs will provide a significant economic benefit to the American
    people by aiding the efficient production of domestic resources and
    diversifying global resource supplies. The reporting relationship is
    not expected to be unwieldy since the National Petroleum Technology
    Office is an integral part of the NETL. The manager of the Tulsa office
    holds weekly face-to-face and/or telephone conference meetings with the
    NETL Director.
                                     ______

                Questions Submitted by Senator Patrick J. Leahy

                         ENERGY EFFICIENCY BUDGET CUTS

        Question. Secretary Abraham has repeatedly stressed the importance
    of energy efficiency in addressing high natural gas prices. For example
    in a June 6, 2003 letter to a number of senators, he said, ``we concur
    with the conclusion advanced in your letter that over the next 12 to 18
    months there are only limited opportunities to increase supply; and
    that, therefore, the emphasis must be on conservation, energy
    efficiency, and fuel switching.'' Given the importance of energy
    efficiency to addressing this critical problem (and other energy
    problems), why does DOE propose to cut funding for Energy Efficiency
    programs for the third year in a row?
        Answer. Our overall budget request for the Office of Energy
    Efficiency and Renewable Energy (EERE) across both our funding accounts
    is up 1.2 percent above last year's appropriation. You are correct that
    we are seeking an amount for the energy efficiency activities in the
    Interior Appropriations account that is two-tenths of one percent less
    than the amount of funding provided last year, or roughly $2 million
    out of an $876 million budget request. Through increased efficiencies,
    redirections, down-selects, project terminations, and significant
    shifts across its portfolio of programs, EERE determined that is able
    to meet its program goals at a funding level that is basically
    unchanged from fiscal year 2004. Most notable among its internal
    funding shifts, EERE is seeking a $64 million increase over fiscal year
    2004 appropriated levels in the Weatherization Assistance Program. In
    alignment with the President's commitment, the Department is increasing
    its assistance to low-income Americans who spend a disproportionately
    high share of their income on energy. This program not only reduces
    energy costs for low-income families, but also saves energy for the
    Nation. The main tradeoff for this increase is a decrease in funding
    for the Industrial Technologies Program, which generally benefits
    larger corporations with both the means and the incentive to save
    energy.

                              NATURAL GAS SAVINGS

        Question. Do you have estimates of potential natural gas savings
    from the various buildings, industry and other efficiency programs?
        Answer. Projected natural gas savings from energy efficiency
    programs are presented in the table below. We recognize that our point
    estimates rely heavily on key assumptions. For the appropriate context
    to interpret these figures, we urge you to consult the description of
    our modeling procedures and assumptions, which will be available on
    line at www.eere.energy.gov/office--eere/ba/gpra.html by May 31, 2004.

                          POTENTIAL NATURAL GAS SAVINGS
                                     [Quads]
    ------------------------------------------------------------------------
                                               2010    2015    2020    2025
    ------------------------------------------------------------------------
    Buildings Technologies..................   0.15    0.33    0.54    0.78
    FEMP....................................   0.02    0.03    0.03    0.04
    FreedomCAR and Vehicle Technologies.....  ......  ......  ......  ......
    Industrial Technologies.................   0.19    0.39    0.71    0.63
    Weatherization and Intergovernmental....   0.19    0.29    0.29    0.23
    ------------------------------------------------------------------------
    Benefits reported are annual, not cumulative, for the year given.
      Estimates reflect the benefits associated with program activities from
      fiscal year 2005 to the benefit year or to program completion
      (whichever is nearer), and are based on program goals developed in
      alignment with assumptions in the President's Budget. Mid-term program
      benefits were estimated utilizing the GPRA05-NEMS model, based on the
      Energy Information Administration's (EIA) National Energy Modeling
      System (NEMS) and utilizing the EIA's Annual Energy Outlook (AEO) 2003
      Reference Case.

                       FEDERAL ENERGY MANAGEMENT PROGRAM

        Question. The Federal Energy Management Program is unique in that
    the money saved through efficiency improvements returns directly to the
    federal government, and thus to the taxpayers. Nonetheless, you propose
    to cut the FEMP program by 9 percent. How much money does the federal
    government save due to DOE's FEMP program each year?
        Answer. The nine percent cut in Federal Energy Management Program's
    (FEMP) fiscal year 2005 budget request will not impact the program's
    alternative financing programs, the primary driver for generating
    energy cost savings for the Federal government. Instead, programmatic
    efficiency improvements within these activities will allow FEMP to help
    Federal agencies achieve the same amount of savings in fiscal year 2005
    as is expected in fiscal year 2004. Unfortunately, the authority for
    the Energy Savings Performance Contracts (ESPCs) expired October 1,
    2003, and we are awaiting legislative extension of ESPC authority
    providing temporary or permanent ESPC authority.
        FEMP estimates that its Super ESPC activity ``saved'' the Federal
    government approximately $48 million in fiscal year 2003 (assuming
    energy usage in the form of electricity). Note that, due to the nature
    of ESPCs, most of the ``savings'' realized by government agencies
    during the ESPC contract term are paid to the ESPC contractor to offset
    the original capital and installation cost of the energy efficiency
    equipment. Thus, Federal energy cost savings really don't begin to
    accrue until the contractor's investment (including interest) is fully
    paid (the average duration of the ESPC term since inception of the
    program is 17 years, which has decreased to 15 years on average over
    the past five years). However, the Federal government realizes real
    energy consumption savings as soon as the contractor implements the
    energy efficiency measures (typically, the first or second year of the
    contract). Because the Federal government is the largest single
    consumer of energy in the United States, the use of ESPCs to reduce
    Federal energy consumption can contribute to the Department's energy
    security strategic goal.
        Question. Since this program saves federal tax dollars, why are you
    proposing to cut it?
        Answer. As the Federal Energy Management Program's (FEMP) core
    activities have matured, the efficiencies in those activities have
    increased, enabling the program to reduce its funding request in fiscal
    year 2005.
        In fiscal year 2005, FEMP will continue to streamline program
    activities. For example, FEMP has determined that it is no longer
    necessary, because of activity maturation, to create any new Technology
    Specific Energy Savings Performance Contracts (ESPCs). We have found
    that we can achieve the same benefits through a fuller utilization of
    our baseline ESPCs in a way that is less complicated for our agency
    customers. Through more efficient use of its resources, FEMP will
    continue to conduct its other activities, such as partnership meetings,
    annual awards, outreach publications and technical assistance projects.

         CLIMATE CHANGE INITIATIVE AND ENERGY CONSERVATION BUDGET CUTS

        Question. The President's Climate Change Initiative sets a target
    for reduction of greenhouse gas emission intensity. Energy efficiency
    measures are typically the cheapest and quickest means of reducing
    greenhouse gas emissions. With the energy conservation budget cuts, are
    we taking advantage of the full potential of these programs to reduce
    global warming?
        Answer. The cuts to our energy efficiency budget from the fiscal
    year 2004 appropriation amount to only two-tenths of one percent, or
    roughly $2 million out of an $876 million budget request. At this
    requested funding level, our internal analyses indicate that EERE
    energy efficiency programs will reduce about 30 million metric tons
    (mmt) of carbon emissions in 2010 and 100 mmt in 2020 if they achieve
    the goals contained in the fiscal year 2005 budget request The size of
    the benefits depends not only on the success of the EERE program
    activities, but also on the evolution of future energy markets and
    policies. The EERE estimate of carbon emissions assumes a continuation
    of current policies and business-as-usual development of energy
    markets. It does not include the improvements in energy efficiency that
    would be expected in the absence of continued funding of EERE's
    programs.
        We recognize that our point estimates rely heavily on key
    assumptions. For the appropriate context to interpret these figures, we
    urge you to consult the description of our modeling procedures and
    assumptions, which will be available on line at www.eere.energy.gov/
    office_eere/ba/gpra.html by May 31, 2004.
        Question. Which DOE efficiency programs show the greatest potential
    for reducing greenhouse gas emissions over the next 10 or 20 years.
        Answer. Our modeling suggests that the Industrial Technologies
    Program (ITP) has the greatest potential to help reduce greenhouse gas
    emissions by 2020. However, because many ITP activities may contribute
    directly to the bottom line of some companies, industry has a financial
    incentive to pursue many of these activities without Federal support.
    Moreover, the modeling results reflect the fact that many ITP projects
    are near term in nature, allowing for early market penetration and
    significant reduction of emission in the year 2020. The Department has
    generally tried to shift its portfolio to more long-term activities
    where a stronger case can be made for Federal involvement. Also, like
    most models, our modeling relies heavily on a few key assumptions, and
    we have not run the model under multiple scenarios where key
    assumptions may be different.
        Finally, the category of environmental benefits, such as greenhouse
    gas emissions reductions, is only one of several categories of public
    benefits that the Department considers in managing its portfolio.
    Reduced use of oil and consumer energy expenditure savings are also
    considered, as are benefits that we do not quantify, such as the
    ability to reduce peak power demand. Given these considerations, the
    Department does not believe there is a ``silver bullet'' energy
    efficiency technology that has the greatest potential for reducing
    greenhouse gas emissions over the next 10 to 20 years. Instead, DOE has
    decided to invest in a portfolio of energy efficiency research and
    development (R&D) programs, each of which has the potential to reduce
    greenhouse gas emissions and/or provide other public benefits over the
    next 10 to 20 years.

                      WATER HEATER STANDARDS--ENERGY STAR

        Question. Water heaters are the second largest user of energy in
    the American home. Thus, DOE should be promoting ways to improve the
    efficiency of these systems and promote consumer use of the most
    efficient products available on the market. In an effort to address
    these issues, DOE recently undertook a substantial effort to establish
    ENERGY STAR criteria for water heaters, taking it to the point of
    writing draft standards and convening a stakeholder meeting in April
    2003. However, on January 6, 2004, DOE sent a letter to all water
    heater stakeholders announcing they had ``decided not to establish
    ENERGY STAR criteria for domestic water heaters at this time.'' Even
    small gains in efficiency that save energy are worthwhile. Why did DOE
    decide not to move forward with a water heater ENERGY STAR program?
        Answer. This decision rests on several market and technical
    considerations that made it impractical to consider ENERGY STAR
    labeling for water heaters at this time, along with the realization
    that labeling this product category prematurely could undermine some of
    the fundamental tenets of ENERGY STAR. The key reasons are as follows:
      --One of the ENERGY STAR program's basic tenets is that products must
            provide sufficient market differentiation and savings to
            consumers. The Department decided, based on its analyses and
            stakeholder comments, that labeling conventional technologies
            such as water heaters would not offer sufficient market
            differentiation or savings to consumers. ``Conventional''
            technologies are established, widespread, commercialized
            technologies used by homeowners in common applications; in the
            case of water heating, a ``conventional water heating system''
            consists of a storage tank in the utility room (or basement)
            with a gas or electric heat source heating the water initially
            and keeping it hot for distribution throughout the house on
            demand.
      --With stricter Federal energy conservation standards for water
            heaters already having gone into effect in January 2004, the
            incremental savings offered by the best performing conventional
            gas and electric products would not be large enough to justify
            the awarding of an ENERGY STAR designation.
      --ENERGY STAR is an appropriate differentiator of energy efficient
            products only for product groupings offering a broad range of
            energy performance levels within the given category. The
            margins between the top-performing gas and electric storage
            water heater models and the Federal standards are smaller than
            for other ENERGY STAR product categories.
      --For non-conventional products, the credibility of ENERGY STAR in
            the market place depends on the label being placed only on
            those products that save energy without sacrificing performance
            or customer enjoyment of the product. While many of the non-
            conventional products offer significant energy savings, there
            are insufficient numbers of models and manufacturers offering
            such products for sale to support a viable ENERGY STAR program
            for these products at this time.

                             TANKLESS WATER HEATERS

        Question. DOE's January 2004 letter recognizes the benefits of
    tankless water heaters, saying ``In order to achieve significant energy
    efficiency gains, manufacturers will have to pursue tankless
    technologies, and ``tankless water heaters have significant energy
    savings potential compare to conventional products,' tremendous gains
    in energy savings and associated pollution prevention could be
    achieved.'' Given that DOE recognizes the benefits of tankless water
    heaters, why did DOE categorize it as a ``non-conventional product''
    and not support using the ENERGY STAR program to promote its use?
        Answer. A key tenet of the ENERGY STAR Program is that a broad
    range of manufacturers and distribution channels exist for products
    designated as ENERGY STAR. The infrastructure to sell and service
    ``non-conventional'' products is not fully developed in most parts of
    the country, either because the product is new and not widely
    distributed (as in the case of heat pump water heaters), or because
    there is low demand for the product in much of the country due to
    economic considerations (as in the case of solar water heaters).
        Although the energy savings potential is great, the challenges
    associated with bringing these products into the mainstream are also
    great. The Department hopes that over the next several years the market
    for these products will develop, leading to a more mature delivery
    infrastructure, increased reliability, and improved performance and
    reduced prices. This would create the type of conditions in which the
    Department would consider creating an ENERGY STAR label for heat pumps
    and tankless, solar, and other newly developed water heaters.

                    SPINNING RESERVE DEMONSTRATION PROJECTS

        Question. What is the status of DOE's research by the Oak Ridge
    National Laboratory's (ORNL) Building Technology Program on spinning
    reserve demonstration projects?
        Answer. ORNL has conducted research concerning the technical
    feasibility of obtaining spinning reserve from aggregations of both
    large and small responsive loads for enhancing bulk power system
    reliability and reducing costs. Spinning reserve is the fastest
    responding and most expensive bulk power system contingency reserve.
    This concept requires both a paradigm change and a rule change. As a
    result of ORNL and other's efforts, NERC rules have been modified to no
    longer prohibit loads from providing spinning reserve. FERC has also
    stated that it will allow load to provide spinning reserve. A next step
    is to change the rules in the Regional NERC Reliability Councils. In
    addition, market rules, ISO rules, and utility rules all have to be
    addressed.
        ORNL has worked with large aggregations of residential and small
    commercial heating and cooling loads to develop the concept of spinning
    reserve from responsive load. Several technologies exist that could
    support this reliability application, and ORNL has issued two reports
    on its work with Digi-log and Carrier on the aggregation of small
    responsive loads.
        ORNL has also worked with large water pumping loads and found that
    they also offer significant potential for spinning reserve. ORNL has
    worked with the California Department of Water Resources (CDWR) to
    analyze pumping operations and the results of the analysis are quite
    encouraging. Based on the aggregated CDWR pumping load, it was found
    that the CDWR could theoretically supply more spin capacity than the
    CAISO needs for over 3,000 hours per year, and realize potential total
    annual revenues for CDWR of over $11 million are possible. Results are
    documented in the report: B. Kirby, J. Kueck, 2003, Spinning Reserve
    from Pump Load: A Technical Findings Report to the California
    Department of Water Resources, ORNL/TM 2003/99, Oak Ridge National
    Laboratory, November.
        As a result of the favorable findings of this report, ORNL is
    working with the Western Electricity Coordinating Council (WECC) to
    support a request for a WECC rule change to supply spin from load.
        Question. Has DOE considered testing the Digi-log technology in a
    cold weather climate as well?
        Answer. ORNL successfully tested the Digi-log technology for
    supplying spinning reserve for enhancing bulk power system reliability
    and reducing costs during the summer of 2003 on eighty room heating and
    air-conditioning units equipped with Digi-log controllers at a motel in
    New York. Testing confirmed that load could respond fast enough to
    perform as spinning reserve. Similar response speeds would be expected
    when using the Digi-log technology in cold weather applications. DOE
    has not tested Digi-log technology for cold-weather loads.

                              SUBCOMMITTEE RECESS

        Senator Burns. Thank you all very much. The subcommittee
    will stand in recess to reconvene at 9:30 a.m., Thursday, March
    11, in room SD-124. At that time we will hear testimony from
    the Honorable Mark Rey, Under Secretary for Natural Resources
    and Environment, Department of Agriculture and Dale Bosworth,
    Chief, Forest Service.
        [Whereupon, at 11:22 a.m., Thursday, March 4, the
    subcommittee was recessed, to reconvene at 9:30 a.m., Thursday,
    March 11.]

      DEPARTMENT OF THE INTERIOR AND RELATED AGENCIES APPROPRIATIONS FOR
                                FISCAL YEAR 2005

                                  ----------

                            THURSDAY, MARCH 11, 2004

                                           U.S. Senate,
               Subcommittee of the Committee on Appropriations,
                                                        Washington, DC.
        The subcommittee met at 9:35 a.m., in room SD-124, Dirksen
    Senate Office Building, Hon. Conrad Burns (chairman) presiding.
        Present: Senators Burns and Dorgan.

                           DEPARTMENT OF AGRICULTURE

                                 Forest Service

    STATEMENT OF HON. MARK REY, UNDER SECRETARY FOR NATURAL
                RESOURCES AND ENVIRONMENT, DEPARTMENT OF
                AGRICULTURE
    ACCOMPANIED BY:
            DALE N. BOSWORTH, CHIEF
            HANK KASHDAN, DIRECTOR, PROGRAM AND BUDGET ANALYSIS

                   OPENING STATEMENT OF SENATOR CONRAD BURNS

        Senator Burns. I will call the committee to order. I am
    very pleased to see Chief Bosworth and Mark Rey this morning
    appearing before this subcommittee. Let me start off. I want to
    congratulate you and cite you for carrying out the duties of
    your office with great skill, because we have been through some
    tenuous times here the last couple of years. It does not look
    like the drought is completely broken, but we are a little bit
    better off in moisture this year than we have been, and that is
    the good news.

                           PROPOSED BUDGET INCREASES

        The fiscal year 2005 President's budget for the Forest
    Service is $4.238 billion in discretionary appropriations. This
    represents a very modest 1.1 percent increase compared to the
    2004 level of $4.19 billion in non-emergency funds. Many of the
    Agency's operating programs are funded at levels similar to
    those of last year. There are some significant increases,
    however, including: Research, $14.2 million; the Forest Legacy
    program, which has an additional $35 million in it; the
    Hazardous Fuels program, $33 million; and Wildfire Suppression,
    $88.2 million. That is probably where we will center some of
    our discussion today.
        I believe the increase for Wildfire Suppression is
    particularly important given our experience with the fire
    seasons of the past few years. The average annual cost of fire
    suppression for the Forest Service in the last 4 years has
    exceeded $1 billion. We do not know what return the American
    taxpayer got on that, but nonetheless, it is a figure that
    worries a lot of us.
        By the way of comparison, in the 4 years prior to that, it
    was $349 million. So we can see a drastic increase in our fire
    suppression.
        These increased costs have forced the Agency to borrow
    massive amounts of money from non-fire programs. Last year
    alone, the Agency borrowed $695 million. In 2002, it borrowed
    close to $1 billion. This annual borrowing has created serious
    management problems and forced the Forest Service to cancel or
    delay many important projects.
        While I support the proposed increase of $88 million for
    fire suppression in the 2005 budget, no one should be under any
    illusion that this will solve the fire borrowing problem. In
    fact, if the fire season is anything like we have seen in the
    last few years, the Agency would still have to borrow hundreds
    of millions of dollars from non-fire programs.
        That is why I supported the language in the Senate budget
    resolution that provides up to an additional $400 million each
    year for the Forest Service firefighting from 2004 through
    2006, and I assure my colleagues that this will not be a blank
    check for the Forest Service. In my view, cost containment
    procedures must be tied to the use of the funds. I hope to
    discuss this issue with you today.

                           PROPOSED BUDGET DECREASES

        I mentioned some of the increases in the budget request.
    There are also some significant decreases, which do concern me.
    For example, funding for Capital Improvement and Maintenance
    has been decreased by $54 million, or 10 percent, compared to
    the current level. I believe this is unwise, given the $5
    billion backlog of maintenance work in our national forests.
        Funding for State Fire Assistance has also been decreased,
    by $25 million. That is almost a 30 percent cut. This program
    provides critical funds to train and equip local fire
    departments. These local fire departments are often the first
    to respond to wildland fires and they provide a vital link with
    the Forest Service and the Department of the Interior.
        I am also troubled by the $17 million cut to the Forest
    Health program in State and Private Forestry. We have millions
    of acres in our Nation's forests that are infested with insects
    and diseases like the western bark beetle, the southern pine
    beetle, and the gypsy moth. The dead trees that result from
    these pests add to our already excessive fuel loads in our
    forests. Reducing this program directly affects the Agency's
    ability to monitor and eradicate these problems.
        On the financial management side of the budget, I am
    pleased to see that the Agency obtained a clean audit opinion
    for their 2003 books. That is good because, as you know Chief,
    up until you came we had many problems in getting an audit. I
    congratulate you. I think this is the second year in a row that
    you have passed your audit and that is a good sign. They always
    had excuses before, but I think your leadership at the Forest
    Service, to not only deal with all the challenges that you had
    and then still come up with a good audit is really an
    achievement.
        I want to thank you today for joining us, you and Mark. I
    look forward to hearing your testimony, asking you both some
    questions in the hearing.
        Now we have been joined by the ranking member and good
    friend from North Dakota, Senator Dorgan.

                  OPENING STATEMENT OF SENATOR BYRON L. DORGAN

        Senator Dorgan. Senator Burns, thank you very much. I
    appreciate working with you on this subcommittee.
        Chief Bosworth, thank you for joining us, and Under
    Secretary Mark Rey and Mr. Kashdan.
        I agree with most of what my colleague has described with
    respect to priorities. The Forest Service is a big old
    bureaucracy that is charged with some very important work. When
    I say ``big bureaucracy,'' I do not mean to be pejorative, but
    the fact is, big organizations are big and bureaucratic and
    sometimes slow to act. My hope is that as we work through this
    Forest Service budget, we can find ways to restore some funding
    in some of the areas that have been cut that I think are
    critical and perhaps cut some funding in areas that are not so
    critical.
        I would like to just mention one thing that I am going to
    be doing with a number of agencies. In 1993, then-President
    Clinton required of all Federal agencies that they identify
    their ``overhead,'' quote unquote, or their G and A, general
    and administrative, expenses. I just had the GAO finish a study
    of what the compliance with that has been, and virtually no
    Agency has complied with it.
        So I am going to be asking agencies to take a look for us
    at what in fact are the true G and A or overhead expenditures
    in the Agency. The reason is fairly obvious. With the kind of
    Federal deficit we face and the critical needs for funding, as
    my colleague just described it in certain areas, we need to cut
    some funding as well. If this were a business--I know it is
    not, but if it were a business, the first thing we would take a
    look at is taking a few percent off overhead. That is the first
    place you try to cut back just a bit, tighten your belt with
    respect to overhead, travel, and so on.
        It is very hard to do that because most agencies have not
    developed an accounting process by which they establish what
    their overhead really is. So I am going to ask you to work with
    us on that if you will.
        The $4.5 billion for the Forest Service in our subcommittee
    accounts for almost 20 percent of all the funding in this
    Interior bill. So this is a very, very important matter for
    Senator Burns and myself.

                       INVASIVE SPECIES AND NOXIOUS WEEDS

        I do want to mention, I did bring a weed once again, as I
    did last year. This is a very small part of this issue. Chief
    Bosworth, you well recognize this at first glance, I know. Very
    few Americans do, but I know you do. It is called leafy spurge
    and it is no friend of the Forest Service, no friend of
    ranchers, and no friend of mine.
        I brought it last year because, as you know, I added an
    earmark in the Appropriations bill to help control leafy spurge
    on Forest Service lands because the Forest Service has a
    responsibility to be a good neighbor. If it does not control
    its weeds, then the weeds move over into the adjacent land and
    private landowners get mighty upset because they feel the
    Federal Government is not a good neighbor.
        I felt the money I had added before had been misused. I do
    not mean it was stolen or frittered away, but I mean that I
    felt the Forest Service subsumed it for its other expenses
    rather than putting it on the ground in the form of chemicals
    and controlling these weeds.
        My understanding is that things have improved in the last
    year--this is not, by the way, the same leafy spurge I brought
    a year ago, although I probably could have. It is hardy. It is
    pretty hard to kill. I probably could have kept it alive for
    the year.
        But my understanding is that you have done better and I
    want to hear from the Forest Service about that. I just think
    it is important, it is really important to private landowners
    who have land adjacent to the Forest Service. This noxious weed
    problem is a very serious problem for them.
        My father, bless his soul, he used to--Senator Burns
    probably had relatives like this. My father felt that 2-4-D
    cured everything. You know, in that movie ``My Big Fat Greek
    Wedding'' where the guy used Windex on everything; no matter
    what happened he just sprayed Windex and it cured it all. My
    dad just walked around with a can of 2-4-D, which of course is
    now illegal. But he would just spray 2-4-D on everything.
        Leafy spurge would not have worked well in our yard or in
    our pasture because he would have killed it dead. But now the
    things he would have used to kill it would not really work well
    with current law. So we have to work within the confines of our
    environmental interests in doing all of this.
        Let me say that I think the deferred maintenance account is
    a very serious problem. We have a big backlog. I believe the
    backlog is very close to $8 billion, and as I look at it, the
    budget request, appropriations request, cuts fiscal year 2004
    funding by 68 percent. Well, I do not know how we can sit there
    with a deferred maintenance backlog that is so big and then
    decide, well, not only is it not a priority just to keep level,
    but we will cut it by nearly 70 percent. I just do not think
    that works.

                                 WILDLAND FIRE

        My colleague Senator Burns talked about firefighting, and
    that is an issue he has been especially aggressive on. We in
    North Dakota are number 50 among the 50 States in native forest
    lands, so I am not the world's expert on fighting forests
    fires. But Montana has had a huge and growing problem with
    these issues, as have many other parts of the country. We have
    to get our hands around this and find a way to deal with these
    needs.
        Having said all of that, let me again say that Senator
    Burns and I are from neighboring States and from different
    political parties, but he and I work closely together. I admire
    the work he does and I enjoy working with him on this
    subcommittee. We want to work with the Forest Service to
    accomplish your goals on behalf of the American taxpayers.
        I do have to say as well, before we hear statements, that I
    have a 10 o'clock hearing that I do not have much of a choice
    to miss. It is over in the Commerce Committee and it is being
    held specifically because I demanded it. I have a hold on a
    nominee. So I am going to ask my colleague from Montana to
    continue without me after 10 o'clock.
        But, Chief, thank you for being with us. Senator Burns,
    thanks again for convening the hearing.
        Senator Burns. You bet. Do not go over there unless you
    have got your pistol cocked now; you know, you have got it all
    ready and everything.
        Thank you, Senator Dorgan; I appreciate those statements.
    It is a committee where we get along pretty good. It seems like
    our priorities along the northern part of the United States,
    the northern tier States are similar. We all have a lot of
    similar problems and we try to deal with them in our own way.
        Chief, thank you very much for coming this morning and we
    look forward to your testimony and our discussion this morning.
    Do you want to go first, Mr. Secretary? Is that what you want
    to do?

                       SUMMARY STATEMENT OF HON. MARK REY

        Mr. Rey. I will go first with a very brief statement and
    then I will defer to the Chief.
        Let me start by thanking you for the opportunity to present
    the President's fiscal year 2005 budget for the Forest Service,
    the budget for the centennial year of the Forest Service. But
    before we discuss the specifics of that budget, I would like to
    take the opportunity to express my gratitude and that of the
    President for the bipartisan support of the Congress that led
    to the passage of the Healthy Forests Restoration Act. All of
    the members of this committee understand the devastation and
    tragedy caused by catastrophic wildfire and more than half of
    the members have experienced it firsthand in their States,
    whether through forest fires or grass fires.
        The commitment to protecting communities and natural
    resources that Congress demonstrated in passing the Healthy
    Forests Restoration Act will be reflected in the priorities of
    the Forest Service and our sister agencies in the Department of
    the Interior for years to come. So again, I would like to thank
    the committee and the Senate for that effort.
        Chief Bosworth will be highlighting a number of items of
    importance to the Forest Service today. In my testimony, let me
    just touch on two of these issues as well: the implementation
    of the Healthy Forests Restoration Act and the Agency's
    achievement of its second clean audit opinion in 2 years.

                        HEALTHY FORESTS RESTORATION ACT

        Prior to fiscal year 2000, attention was beginning to focus
    on the vulnerability of natural resources to catastrophic
    wildland fires due to the buildup of hazardous fuels. The
    devastating fire season of 2000 brought the seriousness of the
    forest health problem to the homes of all Americans through
    seemingly constant reports in newspapers, on television, or in
    other media.
        Congress responded quickly with its support for treatment
    of hazardous fuels, invasive species infestations, and other
    threats to our Nation's forests, range and grasslands. The
    overwhelming support for the Healthy Forests Restoration Act in
    which Congress underscores the importance of this legislation
    across the Nation, not just in the western United States, but
    also in other parts of the country that are affected by
    drought, fires, invasive species, and similar problems.
        In reflecting the President's Healthy Forests Initiative,
    the fiscal year 2005 President's budget places increased
    emphasis on protecting communities and property from the effect
    of catastrophic wildfire. The President's budget provides
    funding for many activities that support forest health,
    including $760 million for activities in the Forest Service and
    the Department of the Interior that directly and visibly will
    result in protecting communities and restoring watersheds
    through reduction of hazardous fuels.

                              CLEAN AUDIT OPINION

        Now touching on the second issue, which is the clean audit
    opinion that the Forest Service recently received; as I
    indicated and as you mentioned, Mr. Chairman, this is the
    second unqualified opinion in the last 2 years for the Forest
    Service after many years of financial accountability problems.
    The Forest Service and the Department are working to ensure
    that timely, reliable financial information is provided in
    which the receipt of a clean opinion is the byproduct of an
    efficient and cost-effective financial management organization
    that can be sustained in the long term. The Chief will be
    telling you about some of our plans to that end as he speaks
    shortly.

                             LEGISLATIVE PROPOSALS

        Inasmuch as both of you mentioned our maintenance backlog,
    I would like to draw your attention to the legislative
    proposals in the President's fiscal year 2005 request to
    provide the Forest Service with the authority to convey at fair
    market value excess assets and to use the proceeds from the
    sale of those assets in doing maintenance across the National
    Forest System.
        It is my judgment that the size of the maintenance backlog
    is such that even if we restored the money that we reduced from
    the fiscal year 2004 enacted budget and sustained that increase
    over time, it would take us until the bicentennial of the
    Forest Service, at that rate of expenditure to deal with the
    maintenance backlog. So, obviously, we are not going to address
    the maintenance backlog in its entirety solely through
    appropriated dollars.

                               PREPARED STATEMENT

        Providing us the legislative authority to convey excess and
    unneeded assets and to use the proceeds from that to do
    maintenance work will accelerate our efforts to address the
    maintenance backlog in a way that merely appropriating more
    money will not. It will do that, first, by giving our land
    managers an incentive to divest themselves of unneeded assets
    as opposed to carrying them on our inventory of assets and
    including them in the maintenance backlog; and of course, the
    proceeds that we get from the sale of assets--in some cases
    such as southern California, extraordinarily valuable assets
    which are of no particular land management or resource
    management value--will generate revenues that will move us more
    quickly to that end than our combined efforts through trying to
    find additional appropriated dollars.
        So with that, I would refer your attention to that
    legislative proposal and defer to the Chief for his remarks.
    Thank you.
        [The statement follows:]

                      Prepared Statement of Hon. Mark Rey

        Mr. Chairman, Senator Dorgan, and members of the Subcommittee,
    thank you for the opportunity to discuss the President's fiscal year
    2005 Budget for the Forest Service. I am pleased to join Dale Bosworth,
    Chief of the Forest Service, at the hearing today on the budget for the
    centennial year of the Forest Service. Before discussing the specifics
    of the budget, I would like to take the opportunity express my
    gratitude and that of the President for the bipartisan support of this
    Subcommittee that led to passing the Healthy Forests Restoration Act
    (HFRA). All of the members of this Subcommittee understand the
    devastation and tragedy caused by catastrophic wildfire and more than
    half of the members have experienced it firsthand in their States. The
    commitment to protecting communities and natural resources you
    demonstrated in passing the HFRA will be reflected in the priorities of
    the Forest Service for years to come. Again, thank you.

                                    OVERVIEW

        Chief Bosworth will be highlighting a number of items of importance
    to the Forest Service today. In my testimony, I want to address two of
    these issues as well. I will talk more about the HFRA, and the agency's
    achievement of its second ``clean'' audit opinion in 2 years. In
    managing natural resources, we often use the term ``sustainability'' in
    context of maintaining long-term forest and rangeland health and
    ensuring the long-term delivery of services to the American people. The
    bipartisan support demonstrated by Congress in passing the HFRA will
    ensure significant and measurable returns on the investment of the
    American public. ``Sustainability'' can also be applied to obtaining a
    clean opinion in terms of maintaining the public's trust that their
    funds are being managed effectively. Implementing HRFA and effective
    financial management will require diligent and concerted efforts on the
    part of employees throughout the Forest Service to take the agency to
    sustainable levels of improvement. I am confident that the Forest
    Service under Chief Bosworth's leadership will meet these challenges
    and continue to provide the high quality of natural resources
    management that the American public expects.

                        HEALTHY FORESTS RESTORATION ACT

        Let me specifically address the Healthy Forests Restoration Act.
    Prior to fiscal year 2000, attention was beginning to focus on the
    vulnerability of natural resources to catastrophic wildland fires due
    to the buildup of hazardous fuels. In the late 1990's, the Forest
    Service developed risk maps that highlighted fuels buildups and serious
    threats to forest health throughout the Nation. I recall Senator Craig
    noting in reviewing what was referred to as ``forest risk maps,'' that
    northern Idaho was a ``big red blob'' signifying the dangerous buildup
    of hazardous fuels in that area. Because of the serious nature of the
    problem throughout the Nation, and especially in the West, Congress
    responded by authorizing focused experiments to restore health and
    productivity of our forests and rangelands by authorizing the Quincy
    Library Group activities in northern California, as well as stewardship
    end results contracting demonstration authority.
        The devastating fire season of 2000 brought the seriousness of the
    forest health problem to the homes of all Americans, through seemingly
    constant reports in newspapers, on television, and in other media. The
    catastrophic fire seasons of 2002 and 2003 further underscored the
    problem. Although the Forest Service and bureaus in the Department of
    the Interior have worked together diligently since 2000, the complexity
    and extent of the problem do not afford us quick solutions. From 2001
    to 2003, the Forest Service and Department of the Interior agencies
    have treated a total of 7 million acres to reduce the levels of
    hazardous fuels in our Nation's forests and grasslands. In fiscal year
    2004, the Forest Service will treat an additional 1.6 million acres and
    plans to treat 1.8 million acres in fiscal year 2005 with hazardous
    fuels funds. Additionally, in fiscal year 2004, the agency will
    accomplish more than 600,000 acres of hazardous fuels reduction through
    other land management activities including wildlife habitat
    improvement, vegetation management, and the sale of forest products.
    This integration of land management treatments is an important aspect
    of the President's healthy forest emphasis
        Congress has responded quickly with its support for treatment of
    hazardous fuels, invasive species infestations, and other threats to
    our Nation's forests. Funding for hazardous fuels reduction and fire
    suppression activities since fiscal year 2000 has increased
    dramatically. In response to the President's Healthy Forests Initiative
    (HFI), Congress, with strong bipartisan support in both the House and
    the Senate, passed the Healthy Forests Restoration Act in December
    2003, which contains key elements of the HFI. This Act gives the Forest
    Service and the Department of the Interior much-needed tools and
    authorities to reduce the threat of catastrophic wildfire to
    communities and to restore our Nation's forests and grasslands. Mr.
    Chairman, over the past several years, your support and that of Senator
    Bingaman and other members of the Subcommittee have provided a focus on
    natural resource management today. This is especially true for the
    support you have shown for the HFI and HFRA.
        The overwhelming support for the HFRA in Congress underscores the
    importance of this legislation across the Nation. The passage of this
    legislation shows the American people that Congress and the
    Administration are working together to combat hazardous fuels buildups,
    insect and disease infestations, and other threats to the Nation's
    forests and grasslands. Through the HFRA, Congress has also provided
    Federal land management agencies with additional tools to improve the
    condition of watersheds, as well as fish and wildlife habitat; enhance
    grazing allotments; and utilize biomass from forest lands, which may in
    turn provide local communities with new, and often needed, economic
    opportunities.

                           HEALTHY FORESTS INITIATIVE

        In reflecting the President's Healthy Forests Initiative, the
    fiscal year 2005 President's Budget places increased emphasis on
    protecting communities and property from the effects of catastrophic
    wildfire. The President's Budget provides funding for many activities
    that support forest health, including $760 million for activities in
    the Forest Service and the Department of the Interior that directly and
    visibly will result in protecting communities and restoring watersheds
    through the reduction of hazardous fuels. With this funding and by
    working together, the Forest Service and Interior bureaus will be able
    to treat more acres more quickly. Much of the coordination for these
    activities will come about through the 10-Year Cohesive Strategy and
    Implementation Plan, in which Federal, State, tribal, and local
    partnerships have formed a foundation to improve the protection of
    natural resources and communities.
        Some of the key aspects of the HFI include administrative
    initiatives that help expedite projects designed to restore forest and
    rangeland health. These efforts include new procedures, provided under
    the National Environmental Policy Act, to allow priority fuels
    reduction and forest restoration projects identified through
    collaboration with State local, and tribal governments to move forward
    more quickly. Guidance from the Council on Environmental Quality has
    helped to improve environmental assessments for priority forest health
    projects. As a result, the Departments of Agriculture and the Interior
    have developed 15 pilot fuels projects using this guidance and have
    completed the assessments on 13 of the 15 projects. Another improvement
    to the administrative process has been early and more meaningful public
    participation in the planning and implementation of forest health
    projects.
        Let me provide some examples of what can be accomplished with the
    new authorities. Due to its mountainous topography, the Gila National
    Forest in southern New Mexico has the highest fire occurrences in the
    State. Dense stands of mature trees and a continuing drought have
    combined to create a very dangerous wildland fire situation that
    threatens local communities and wildlife and fisheries habitat. In the
    summer of 2003, the Gila National Forest successfully used expedited
    administrative processes to complete planning on four categorical
    exclusions under the Healthy Forests Initiative. The four projects
    total 510 acres. All of the projects will reduce hazardous fuels by
    removing trees mechanically and using prescribed fire. Small diameter
    non-commercial trees will be chipped or piled and burned. Since some of
    the projects are located in and around communities, this effort will
    afford additional protection to the communities, which may be the
    difference that avoids disaster during a wildland fire.
        In Arizona, the benefits of stewardship contracting authority,
    which was significantly enhanced under HFRA, will be realized through a
    10-year project on the Apache-Sitgreaves National Forest. The White
    River stewardship project, which will start this spring, includes
    multiple treatments over a 150,000-acre area. The project will use the
    full stewardship contracting authority authorized in HFRA, thereby
    reducing costs of current contracting methods by one-half to two-
    thirds. The project has the full support of the Governor, county
    commissioners, and local officials.
        The administrative relief provided in the Healthy Forests
    Initiative made possible the planning and implementation of these
    projects in the same year, thereby allowing projects that are essential
    to protecting communities to proceed as quickly as possible. HFI is
    helping to decrease the wildfire threat to communities in a timely
    manner and promote a healthier forest. I firmly believe that over the
    long term, the reduction of hazardous fuels in priority areas through
    efforts supported by the HFRA will be the single most important factor
    in reducing the cost of wildfire suppression.
        With Federal wildfire suppression costs exceeding $1 billion in 3
    out of the last 4 fiscal years, this factor alone makes passage of the
    HFRA an important accomplishment. The fiscal year 2005 President's
    Budget also reflects a continued commitment to containing wildfire
    suppression costs by including cost containment performance measures
    and implementation of actions called for in the fiscal year 2004
    President's Budget, including a study of the use of aviation resources
    on large fires. An emphasis on the accountability of line officers and
    incident commanders also will be continued.

                              CLEAN AUDIT OPINION

        Now I would like to address the second issue, which is the
    ``clean'' audit opinion the Forest Service recently received. This is
    the second unqualified opinion in the last 2 years for the Forest
    Service, after many years of financial accountability problems. The
    Forest Service and the Department are working to ensure that timely,
    reliable financial information is provided in which the receipt of a
    clean opinion is a byproduct of an efficient and cost-effective
    financial management organization and system sustainable in the long
    term. Chief Bosworth can be justifiably proud of the accomplishment of
    two clean audits, although as I noted last year, it is the minimum the
    public should expect. However, as he will tell you later, achieving
    this opinion required a Herculean effort by Forest Service employees
    that cannot be sustained with the organization that is currently in
    place. This effort was highlighted in the USDA's Office of Inspector
    General's Audit Report for fiscal years 2003 and 2002, which stated
    that the Forest Service does not operate as an effective, sustainable,
    and accountable financial management organization. This illustrates
    additional work on business process design, operation, and control
    needs to be undertaken to address the reportable conditions and
    material weaknesses indicated in the fiscal year 2002 and fiscal year
    2003 audits.
        With this in mind, there are two imperative objectives the Forest
    Service will be facing this year: sustaining the clean audit opinion
    for fiscal year 2004 and, even more importantly, addressing the
    underlying financial management infrastructure challenges the Forest
    Service faces by building a highly reliable and cost-effective
    financial management organization. A massive effort to meet the fiscal
    year 2004 accelerated and congressionally-mandated audit deadline of
    November 15, 2004 is already under way. The approach being used is
    different than those used in the past, in an effort to find and address
    financial accountability problems as early as possible. In addition,
    the agency is taking steps to consolidate and centralize operations
    where feasible and practicable in order to make a more efficient and
    cost-effective organization. I know Chief Bosworth is committed to
    implementing reforms that will ensure the continued trust of the
    American taxpayer and the most efficient administrative organization
    possible.

                                   CONCLUSION

        Mr. Chairman, in closing, let me emphasize the importance of the
    fiscal year 2005 President's Budget for the Forest Service. We have
    great opportunities and challenges ahead. Due to the support of
    Congress for the Healthy Forests Restoration Act, we can pursue a
    strategy for returning our Nation's forests and grasslands to a healthy
    state. As you know, this will take time, but with the continued support
    of your Subcommittee and Congress, we will be able to see significant,
    sustained progress in that direction and will ultimately reach our
    goal.
        I look forward to working with you in implementing the agency's
    fiscal year 2005 program and would be happy to answer any questions.

        Senator Burns. Thank you very much, Mr. Secretary. And I
    plan to be at that celebration to cut the tape in the second
    100 years.
        Anyway, Hank, I am sorry I did not introduce you. I looked
    past you. Welcome this morning. We appreciate your good work. I
    know it has been some of your good work that has turned up the
    good audits. So I appreciate that very much.
        Chief, we can hear from you now.

                     SUMMARY STATEMENT OF DALE N. BOSWORTH

        Mr. Bosworth. Thank you, Mr. Chairman. Mr. Chairman, Mr.
    Dorgan; I do appreciate the opportunity to be here. What I have
    is a prepared statement, but I want to do a very brief summary
    and then I will get into answering questions.
        As Under Secretary Rey said, next year is our 100th
    anniversary in the Forest Service. That means that we have
    spent 100 years now managing the national forests and the
    grasslands. We have spent 100 years doing what I believe is
    world-class research, providing that to people all over the
    United States and the world. We have had 100 years of assisting
    States and private lands with their forestry issues and
    problems.
        Over that time, priorities have adjusted and shifted and
    funding has changed, and we expect that that will continue. But
    one thing that has remained: our guiding principle is
    conservation. Throughout those 100 years, conservation has been
    our principle and it will continue to be our principle in the
    future.
        We were founded in part because there was an awful lot of
    short-sighted destruction that was occurring on the forested
    lands of the United States. People at the time believed that an
    organization such as the Forest Service should stop some of
    that destruction and be in charge of managing these national
    forests. I believe my predecessors have done a good job of
    taking care of the national forests and grasslands over the
    past 100 years. In fact, that is probably why we have about 230
    million recreationists that want to visit the national forests
    every year, and that will be increasing.
        On occasion, when I read the newspapers I come to wonder if
    people do not think that maybe Forest Service people are the
    greatest threats to the Nation's forests and grasslands. In
    fact, I think our Forest Service people are not the threat, but
    they are the protectors of the national forests and grasslands.

                                HAZARDOUS FUELS

        But we do face four great threats and I want to mention
    those briefly. The first of those is one that we talk about a
    lot, and that is the unnatural accumulation of fuel in our
    forests and the resulting catastrophic wildfires. I will not go
    into that any more because we spend an awful lot of time
    talking to that.

                                INVASIVE SPECIES

        But the second one, the second great threat in my opinion,
    is invasive species, invasive species all across the country:
    leafy spurge as you have got there, spotted napweed, kudzu, and
    salt cedar, or tamarisk. Then there are insects and diseases,
    things like emerald ash borer that has taken out the white ash
    in Michigan, and hemlock woolly adelgid in the Northeast. These
    are a major problem for us.
        Before I move on, I would like to just respond to the leafy
    spurge there and put a picture up, just because I know you are
    going to be leaving pretty quick, and show you a place in the
    Medora Ranger District on the Dakota Prairie grasslands. On the
    left are the yellow fields of leafy spurge and on the right is
    that same area about 3 or 4 years later, that was treated with
    flea beetle that has pretty well wiped it out. I mean, it is an
    amazing contrast in my opinion.
        There is another picture that I would like to put up that
    shows some cooperators working together with the Forest
    Service. It looks like they have butterfly nets running out
    through the woods, but actually they have flea beetle nets.
    They are catching flea beetles and then they contain those, and
    take them out to other places.
        Senator Burns. Could I inject something here? Was that the
    work that was done in Sidney, Montana?
        Mr. Bosworth. Some of that has been done there.
        Senator Burns. No, but I mean the first research on that?
        Mr. Bosworth. There was research that was done there around
    Sidney.
        Senator Burns. I think these fleas attack leafy spurge.
    They have got another one that attacks spotted napweed.
        Mr. Bosworth. That is right.
        Senator Burns. By the way, for the folks that are here
    today, that is a joint effort between North Dakota and Montana,
    the Sidney Research Station in Sidney, Montana, which is over
    on the North Dakota border. We tried to move it a little more
    west, but that is between North Dakota State University and the
    cooperators there. They are doing some good work up there.
        Mr. Bosworth. Again, I think that demonstrates some hope in
    trying to deal with and take care of some of these invasives. I
    had hoped to bring a little vial of some of these flea beetles
    with me so I could have them attack your leafy spurge if you
    brought one today, but I could not get any in time to get them
    in here.
        Nevertheless, they are working well and we have high hopes
    that they will continue to work well.
        Senator Dorgan. That is the way it is in the wild, Chief.
    There is more leafy spurge than flea beetles.
        Mr. Bosworth. That is right. We are hoping to level that
    out some.

                               LOSS OF OPEN SPACE

        The third great threat in my opinion is the loss of open
    space. In particular, I am talking about some of the ranch
    lands and some of the forested lands that end up being
    subdivided and turned into ranchettes, particularly when they
    are adjacent to national forests. Even when they are not, we
    end up losing some of the biodiversity across the landscape
    that we need for deer and elk and other species. So I am
    concerned about that and the results of what that might mean.

                              UNMANAGED RECREATION

        The fourth threat in my opinion is the threat of unmanaged
    recreation. I am particularly concerned when I talk about
    unmanaged recreation about off-highway vehicles and the damage
    that can come from unmanaged off-highway vehicles. My view is
    that we need to do a better job of managing that use so that
    people in the future can have a good place to recreate on the
    national forests and so that they do not also damage some of
    the other valuable aspects of national forests.

                            COLLABORATIVE PROCESSES

        We are modernizing our processes. We are changing our
    processes. In some cases, we take some heat for that. We are
    trying to get our processes modernized so that we can engage
    people in a collaborative way at the community level up front
    as we are making these decisions, so that we can have people
    working together with Forest Service employees to come up with
    solutions that will be much more effective.
        We are spending more time on the ground; part of the
    purpose of changing these processes is to get work done on the
    ground.
        I would like to respond to one last thing in terms of the
    general administration costs that we have that Mr. Dorgan was
    concerned about. I agree with you that we have to cut our
    overhead costs. We are looking at, for example, centralizing
    our financial management processes into probably one area to
    cover all the country. My hope is that we will save $30 to $40
    million when we do that. It will be a little controversial and
    you will probably get phone calls from people when we start
    moving some folks in some of the locations. But we have to cut
    our costs. We have to cut overhead costs and we will continue
    with that.

                               PREPARED STATEMENT

        Finally, I would just like to say that I have been with the
    Forest Service now for 38 years and my father worked for the
    Forest Service about 34 years. So together we have probably
    been with the Forest Service for at least two-thirds of its
    history, and I am very proud of that.
        But I am more proud of the opportunity to be here today and
    to thank you for your assistance and your help with the Healthy
    Forests Restoration Act and the many other things that you have
    assisted us in that will help us to carry out the mission of
    the Forest Service in a better way. So thank you for that. I
    would be happy to answer any questions.
        [The statement follows:]

                     Prepared Statement of Dale N. Bosworth

        Mr. Chairman, Senator Dorgan, and members of the Subcommittee,
    thank you for the opportunity to discuss the President's fiscal year
    2005 Budget. I also want to personally thank you, Mr. Chairman and
    Senator Dorgan for the support provided to the Forest Service this past
    year in supporting the President's Healthy Forest Restoration Act and
    for the strong support in protecting America's forests and rangelands
    from the threat of catastrophic wildfire. I have seen first hand the
    interest both of you has shown in supporting the improved health and
    sustainability of forests and rangelands across multiple public and
    private ownerships.

                                    OVERVIEW

        This President's Budget is for the Forest Service's centennial
    year. It supports the agency's mission of sustainable natural resource
    management. On February 1, 1905, President Theodore Roosevelt signed
    into law The Transfer Act, transferring the forest reserves from the
    Department of the Interior to the Department of Agriculture. On March
    3, 1905, the Appropriations Act for the Department of Agriculture
    referenced the ``Forest Service.'' On the day of the transfer, then-
    Secretary of Agriculture, James Wilson, wrote a letter of instruction
    to the first forester of the Forest Service, Gifford Pinchot. He
    directed that:

    ``In the administration of the forest reserves it must be clearly borne
    in mind that all land is to be devoted to its most productive use for
    the permanent good of the whole people, and not for the temporary
    benefit of individuals or companies. Where conflicting interests must
    be reconciled, the question will always be decided from the standpoint
    of the greatest good of the greatest number in the long run.''

        Now, 100 years later, that advice encompasses the multiple use
    management principle that guides the Forest Service's program of work.
    We are here today to ensure that our nation's forests and grasslands
    are treasured resources for the benefit and enjoyment of all people now
    and in the future. The decisions made in formulating the President's
    fiscal year 2005 budget for the Forest Service are for the long-term
    good of the public and the resources that we are entrusted to manage
    for the American people.
        I am here to talk with you today about the fiscal year 2005
    President's Budget request for the Forest Service as we enter a new
    century of service to America. In 1905, the Forest Service spent just
    shy of $1 million total for the young agency. As we propose a budget to
    begin the second century for the agency, the President's request is
    $4.9 billion, $68.4 million greater than the fiscal year 2004 enacted
    budget, excluding emergency funding for repayment of fire transfers and
    funds for Southern California. The fiscal year 2005 Budget provides
    funding to reduce the risk of wildland fire to communities and the
    environment by implementing the Healthy Forest Initiative and the
    Healthy Forests Restoration Act (HFRA) which President Bush signed into
    law this past December. In addition, increased funds are provided for
    research, fire suppression, Forest Legacy, Forest Products, and
    Minerals and Geology.
        In my testimony today, I want to reflect on the challenges faced by
    the Forest Service in 2005, many of which are similar to those faced in
    1905. I want to discuss the new opportunities offered by HFRA that will
    result in improved forest and rangeland management, healthier
    landscapes, and reduced risk of catastrophic wildfires. I want to talk
    about four major challenges facing the Forest Service, which I often
    refer to as the ``four threats.'' I also want to highlight some other
    areas of performance accountability and legislative emphasis that
    comprise the President's fiscal year 2005 budget.
        As I talk with you today about the fiscal year 2005 budget, I am
    reminded of the challenges that the agency, Congress, and the American
    public have worked through and worked out over the past 100 years. A
    brief review of the land management issues of 1905 shows that issues
    were as contentious back then as they are today. The challenges that we
    faced today are still contentious and complex. I believe, however, that
    we have an opportunity to change the debate. We want the American
    people to judge us not on what is taken off the land, but how we have
    improved its condition after conducting natural resource management
    activities.
    progress towards healthy forests and grasslands--protecting communities
        Today the cleanest water in the country comes from our national
    forests. More than 60 million Americans get their drinking water from
    watersheds that originate on national forests and grasslands. A century
    ago, competition for clean water in America was not the issue it is
    today and will be in the future. Protecting wilderness values wasn't on
    the radar screen 100 years ago. Today, we protect some 35 million acres
    of wilderness, about 18 percent of the land in our National Forest
    System. At the 1905 American Forest Congress, President Roosevelt spoke
    of vast forest destruction and an inevitable timber famine if the
    destruction continued. Large parts of the East and South were cutover,
    burned over, and farmed improperly. Today, tens of millions of acres of
    federal, state, and private forests in the East and South have been
    restored and the total number of forested acres is the same as 100
    years ago. A century ago, many animal and plant species were severely
    depleted or on the brink of extinction. Today, many of these species
    have made remarkable comebacks after finding refuge on our nation's
    forests and grasslands. A century ago, the profession of forestry was
    in its infancy in the United States. Early foresters used a much
    younger set of scientific principles in managing natural resources.
    Today, after 90 years of Forest Service research, we have a much firmer
    and broader scientific foundation for sustaining forest ecosystems into
    the future.

                  REDUCING THE THREAT OF CATASTROPHIC WILDFIRE

        Today we are putting research-based knowledge to use in restoring
    the nation's watersheds to a healthy condition. The President's Budget
    provides $266 million, an increase of $33 million over the funding
    appropriated in fiscal year 2004, to reduce hazardous fuel. This will
    allow treatment of 1.8 million acres, an increase of 200,000 acres
    above the 2004 level. Over the past several decades, declining forest
    health conditions have led to an increasing incidence of
    uncharacteristically severe wildfire. Forests that are naturally
    adapted to frequent natural fires have gone many years without such
    fire, thus becoming overly dense and laden with fuels. These forests
    are at abnormally high risk to damage from wildfire as well as insects,
    diseases, or infestations of invasive plants. The President has acted
    to address this risk by establishing his Healthy Forest Initiative and
    providing a budget for hazardous fuel reduction that has more than
    tripled since fiscal year 2000. In addition, the Healthy Forests
    Restoration Act passed by Congress last year will bring new
    administrative initiatives that will compliment expanded stewardship
    contracting authority that will further reduce hazardous fuels and
    restore watersheds.
        Mr. Chairman, we need only look at how expenditures for wildland
    fire suppression have doubled in the last 10 years, to understand the
    need for this bold strategy. Just this past October we saw a graphic
    illustration of the serious forest and rangeland health problems we
    face. Although tragic in terms of loss of life and property, the severe
    wildfires in Southern California this past fall burned for the most
    part in mixed ownership chaparral areas and did not appreciably affect
    the forest health situation on forested lands in Southern California,
    particularly on the San Bernardino National Forest. In the forested
    areas, much of the remaining unburned acres are still choked with
    mostly small trees, many of which are dead and dying from drought and
    bark beetle infestations. Much of these forested lands are still at
    risk. Additional work remains on the national forests in Southern
    California as well as on other areas across the country that are
    experiencing serious forest health problems. Nor are these risks
    limited only to Federal lands. Mitigating the risks of catastrophic
    wildfires and treating forest health challenges across ownerships and
    jurisdictions requires cooperative action to be taken on the parts of
    governments, communities, private landowners and individual homeowners.
        Mr. Chairman, I want to thank you and the other members of Congress
    for working last year to pass the Healthy Forests Restoration Act and
    expanded Stewardship Contracting authority. The President's Budget and
    new authorities provided by HFRA will aid Forest Service field managers
    work with local communities to treat more areas more quickly than in
    the past. The President's Budget also recognizes the need to integrate
    the fuels reduction program with other programs that support wildlife
    habitat improvements, watershed enhancements, vegetation management,
    and forest products. Restoring and rehabilitating our fire-adapted
    ecosystems may be the most important task that our agency undertakes.
    To provide optimal wildfire risk mitigation across the landscape, we
    are prioritizing our hazardous fuels reduction work to ensure the most
    beneficial use of funds. We are moving from treating symptoms towards
    treating the underlying problems, and treating hazardous fuel in
    locations on our nation's forests and rangelands where they will be
    most likely to influence large-scale fire behavior. We expect this
    approach to restore forest health and significantly reduce the
    potential for large, damaging fires over the long term, as well as the
    costs of fires that do occur--both in terms of the taxpayer and the
    environment.
        We must also realize that it is not only the hazardous fuel
    reduction program that will improve overall forest and rangeland
    health. The integrated approach of multiple management activities in
    the agency's wildlife, grazing, vegetative management, and timber
    programs will improve the condition of the land, or in the Forest
    Service vernacular ``improve condition class.'' This emphasis
    encompasses one of the ``four threats'' I refer to in managing this
    agency. We are committed to accomplishing the aggressive treatments
    planned in the President's Budget for fiscal year 2005 using new
    authorities in the Healthy Forests Restoration Act that improve the
    condition class of the nation's watersheds and thus protect communities
    and resources for future generations--and our Research Station
    directors are committed to providing the Forest Service with the best
    science available.
        I have discussed in detail wildland fire, the first of the ``four
    threats.'' I will discuss elsewhere in my testimony the other three
    threats; invasive species, loss of open space, and unmanaged outdoor
    recreation. Before doing so, let me highlight other areas that will
    require our attention in our Centennial year.

              PERFORMANCE AND FINANCIAL MANAGEMENT ACCOUNTABILITY

        The Forest Service efforts to improve agency efficiency continue to
    focus on the implementation of the five initiatives in the President's
    Management Agenda (PMA). One key element of the PMA is improved
    financial performance. In the past few years we made an unprecedented
    effort to get our financial house in order. For a second year in a row,
    we received a clean audit opinion and made progress in reducing the
    number of material weaknesses from 6 in the fiscal year 2002 audit to 4
    in fiscal year 2003. The remaining material weaknesses are; need to
    improve financial management and accountability; accrual methodology
    needs strengthening; controls over certain feeder systems needs
    improvement; and Forest Service needs to improve its general controls
    environment. We look forward, in the not too distant future, to also
    seeing the agency removed from the General Accounting Office ``high
    risk list.'' I am proud of our financial management progress. To be
    candid, however, the effort made by Forest Service employees to keep
    the agency from falling into a type of financial receivership was so
    unprecedented that the agency cannot sustain this level of effort as we
    are currently organized. Our internal financial management and
    administrative support infrastructure is based on a 50-year-old model
    that is archaic. It does not operate within acceptable government-wide
    standards. It fails to use today's technology and business based models
    that can make our operations more efficient and our accountability the
    best it can be. With this in mind, the Forest Service will implement a
    new model for Forest Service financial management that involves
    significant centralization and consolidation of administrative support.
    We anticipate a minimum cost savings of $30-$40 million over time,
    although there may be some short-term costs incurred associated with
    setting up this model.
        We are also reengineering human resource management processes. Our
    objectives are to maximize automation, streamline processes, provide
    for consistency, and reduce overhead costs. At the same time, we will
    ensure compatibility with OPM's Government-wide initiatives.
        We will implement this overhaul without affecting the ability of
    field line officers to make decisions about natural resource
    management. We will continue to put considerable effort into improving
    the effectiveness of our financial management and administrative
    support program with the objectives of improving efficiency, reducing
    indirect costs, and dedicating funds to accomplish on-the-ground
    resource management objectives.
        An important tool that will help the agency improve its operational
    and program accountability is contained in the President's Management
    Agenda. It is the Program Assessment Rating Tool (PART). For fiscal
    year 2005, the Office of Management and Budget conducted reviews on the
    Forest Service's Forest Legacy Program, Land Acquisition Program, and
    reevaluated the Capital Improvement and Maintenance Program. This
    analysis recommended that the programs reviewed include the development
    of long-term measures that focus on outcomes, development of efficiency
    measures that assess the cost on a unit basis, and completion of
    program analysis to help focus program objectives and management.
        The PART process for fiscal year 2006 will assist the agency in
    addressing one of the ``four threats'' because the agency will utilize
    PART to evaluate invasive species activities. In addition to utilizing
    PART, the agency will use funds to address emerging threats to the
    nation's natural resources from the spread of unwanted pests and
    pathogens. The President's Budget proposes $10 million for an Emerging
    Pest and Pathogen fund to be used for quick response. We will integrate
    our National Forest System, State and Private Forestry, and Forest and
    Rangeland Research programs to ensure we are focused on this invasive
    species threat. I intend to emphasize line officer performance
    accountability for halting the spread of invasives as an important
    element of the performance appraisal process. The PART program will be
    a tool to ensure the effort is integrated, outcome-based, and properly
    focused.

                                    RESEARCH

        I noted earlier that I felt the agency's Forest and Rangeland
    Research program was a foundation of improved ecosystem health. I am
    pleased to support an fiscal year 2005 President's Budget request that
    emphasizes a renewed focus on Research as a foundation for establishing
    management practices that are applied to the national forests and
    grasslands as well as state, tribal, local, and international lands.
    The total Research and Development budget for fiscal year 2005 is up
    $14.3 million.
        The President's fiscal year 2005 Budget recognizes that the demand
    for solutions based on research is exceptionally high, and the Forest
    Service should organize to optimize the delivery of information to
    provide solutions in the timeliest, accurate manner. To enhance the
    linkage between forest researchers and on-the-ground resource managers
    in both the public and private sectors, it is critical that the most
    efficient development and delivery of mission-critical information be
    employed. Enhancing the linkage between the information user and the
    information generator helps ensure this efficiency. The President's
    Budget provides additional funding for optimizing the transfer and
    implementation of research findings.
        Within R&D, $7.2 million is focused on research that will protect
    water quality for human use and aquatic habitat, and provide improved
    tools for land managers to restore native vegetation on sites disturbed
    by fire and mechanical means. This program increase will also afford
    the agency the opportunity to continue its research focus on controls
    for newly arrived insects including the hemlock wooly adelgid, the
    Asian long-horned beetle, invasive bark beetles, and the emerald ash
    borer. In addition to this significant program increase, the State and
    Private Forestry technology applications program will be integrated
    with the Research and Development mission area. We expect an improved
    technology applications program that focuses on a thematic basis,
    including applications in hazardous fuel utilization, fire science
    applications, invasive species, watershed, and other mission critical
    areas.

                             FOREST LEGACY PROGRAM

        The third of the four threats that I have emphasized involves the
    loss of open space. The President's Budget fully funds the Land and
    Water Conservation program, including a $35.8 million increase in the
    Forest Legacy Program. The program has seen great success in addressing
    the threat of reduced open space through the use of conservation
    easements in partnership with private landowners to maintain viable and
    healthy forested lands. The PART review of the program by OMB found
    that management of the Forest Legacy Program is valuable and generally
    strong. We will work to improve performance measures that track the
    percentage of priority forest lands at risk of conversion to non-forest
    uses that are currently in a contiguous forest condition.

                                   RECREATION

        The last of the four threats to the nation's resources involves the
    challenges posed by unmanaged recreation. To use an old phrase, in many
    areas of the national forests we are ``loving our public lands to
    death.'' The fiscal year 2005 budget reflects an increase of $2.3
    million in the Recreation budget. With this in mind, I intend to have
    the agency focus on managing the program with improved efficiency and
    greater reliance on partnerships. Moreover, our work in the area of
    hazardous fuel reduction and invasive species provides a number of
    benefits that protect and enhance the quality of recreation on National
    Forest System lands.
        The Forest Service is a leading provider of outdoor recreation
    opportunities in the nation. People visited national forests and
    grasslands over 211 million times in fiscal year 2002. These millions
    of visitors expect cleared trails, accessible facilities, and safe
    experiences. They also cause significant impacts on the land and on our
    facilities, as they hike, camp, kayak, ski, hunt, or fish on our
    federal lands. Since 1997, we have relied on fees from the Recreational
    Fee Demonstration Program to provide safe, enjoyable, and memorable
    experiences for these millions of visitors. We know that without those
    fees, we would be hard pressed to keep some campgrounds open, toilets
    cleaned, and trails safely maintained. The President's fiscal year 2005
    legislative proposals include permanent authority for the Recreational
    Fee Demonstration Program. Visitor use continues to increase,
    especially near urban areas and many of the very special places we
    manage on our national forests and grasslands. As more and more people
    enjoy these places, their presence comes with the price of increased
    needs for maintaining facilities, equipment, and the land itself.
    Through the Fee Demo Program, the recreating public has told us how
    important increased safety and security is to them, an elevated service
    made possible through Fee Demo funds.
        This is the 40th anniversary of the signing of the Wilderness Act,
    a bold legislative action that secured the enduring benefits of
    wilderness for present and future generations. The Forest Service
    manages 32 percent of the National Wilderness Preservation System and
    was the first Federal agency to manage a designated wilderness area.
    The National Survey on Recreation and the Environment finds that
    Americans who know about wilderness tremendously value it.
        Our backlog in deferred maintenance for our facilities continues to
    be a challenge. This backlog includes facilities for providing
    recreation opportunities to the public, as well as our administrative
    sites where employees work and provide services to the public. The
    budget reflects improvements made by the Forest Service in implementing
    recommendations contained in a PART review of the Capital Improvement
    and Maintenance program, and includes $10 million to address deferred
    maintenance.
        In addition, there are important legislative proposals to be
    presented by the Administration that will help us leverage limited
    discretionary appropriations to accomplish key objectives of the
    recreation and other administrative programs. The Administration will
    submit legislation proposing a Facilities Acquisition and Enhancement
    Fund. This authority will provide a useful tool for reducing our
    administrative site backlog through an authorization to dispose of
    lands and improvements in excess of our needs, and use the proceeds for
    infrastructure improvements.
        The Administration will propose expanded and consolidated
    partnership authorities to make it easier and more efficient for third
    parties to get involved in the agency's recreation program as well as
    other management programs and activities. This legislation will
    streamline the ability of the Forest Service to collaborate with non-
    Federal partners in achieving natural resource management goals. Forest
    Service directives cite over 30 different laws relating to partnerships
    and 14 different types of agreement instruments document partnership
    relationships. Navigating this complex patchwork of authorities and
    agreements has hindered the agency's ability to work efficiently and
    effectively with nonprofit and community partners. We look forward to
    working with Congress in making it more efficient to work with partners
    in managing the national forests.

                           WILDLAND FIRE SUPPRESSION

        As the Forest Service focuses on a new century of service to
    Americans, its emphasis will be centered on management activities that
    address the four threats and the goals of the Healthy Forests
    Initiative. Our success over the long term will reduce the risk to
    communities and natural resources from catastrophic wildland fire. The
    Forest Service, in partnership with the Department of the Interior and
    state and local agencies, is committed to protecting communities and
    resources with the best and most efficient fire fighting infrastructure
    possible.
        The total wildland fire budget for fiscal year 2005 is $1.4 billion
    including an $88.3 million increase over the fiscal year 2004 enacted
    level for fire suppression. This increase reflects the ten-year average
    cost for fire suppression. I want to address several important wildfire
    suppression issues.
        Wildfire suppression activities are dangerous. Unfortunately, last
    year we lost five lives in fires related to the Forest Service. The
    agency continually evaluates the fire suppression program for safety,
    and makes improvements to reduce the risk to firefighters. After the
    Thirty mile fire in 2001, the Forest Service implemented a number of
    significant changes to improve safety measures for firefighters and the
    public. Changes were developed in cooperation with OSHA, the Department
    of the Interior, and other interagency partners through the National
    Wildfire Coordinating Group. We have clarified and added emphasis on
    fatigue awareness and work/rest guidelines; added driving guidelines
    for transportation safety; and improved risk assessment and mitigation
    procedures. We continue to scrutinize our firefighting program to make
    additional safety improvements, including an examination of relation of
    completed fire management plans and the deployment of incident
    personnel in locations where resource values are minimal. Areas we are
    particularly concentrating on are human factors such as experience and
    leadership. While we will never remove all the risk from firefighting,
    we will constantly work to reduce the risks. We must never compromise
    our emphasis on components of the agency's budget that might affect the
    safety of our workforce.
        This past year we have aggressively focused on reducing the costs
    of firefighting efforts. The President's budget proposes new incentives
    for reducing wildfire suppression costs including the allocation of
    suppression funds to Forest Service regions, and the authority to
    retain unexpended suppression funds for use in forest restoration
    activities consistent with the goals of the Healthy Forest Initiatives
    and HFRA. It also includes the establishment of clearer rules
    concerning the use of suppression resources and incentives for rapid
    demobilization and better use of local non-federal resources. I am
    proud of the fact that in fiscal year 2003 we kept more than 98 percent
    of all unwanted fires that started from becoming large fires in 2003.
    While large fires represent only 2 percent of the total number of
    fires, over the past few decades they have accounted for more than 87
    percent of the total costs for fire suppression. Many large fires are
    complex and more expensive to suppress today than 20 years ago, and
    they can be more dangerous. The costs of containing fires in the
    wildland urban interface will likely continue to be high as we struggle
    to keep fire from destroying people's homes and livelihoods. At the
    same time, the President's fiscal year 2005 Budget reflects the full
    implementation of fire management plans completed for all National
    Forest Systems lands that will allow for cost savings associated with a
    full range of suppression actions, including an increased use of
    wildland fire use fires, as appropriate. It also contains new
    performance measures that will provide baselines on which the total
    cost of fire suppression can be assessed.
        Over the past year, we have completed the Consolidated Large Fire
    Cost Report 2003, in which we have identified areas to contain costs.
    Clearly, reducing the number and improving the way we manage large
    fires will lead to lower costs. I have issued policy direction that
    states, ``Fires are suppressed at minimum cost, considering firefighter
    and public safety, benefits, and values to be protected, consistent
    with resource objectives.'' We will take the lessons learned from the
    past year and continue efforts to reduce the costs of large fires. We
    will also look at better ways to use fire in its natural role and will
    work together with our Federal, Tribal, State, and local partners to
    accomplish these goals.

                 CONCLUSION: ENTERING A NEW CENTURY OF SERVICE

        Our agency's 100th anniversary is a time for us as an agency to
    reflect on our history, the contributions we have made as stewards of
    our nation's natural resources, and lessons we have learned to provide
    world-class public service into the future. We see fiscal year 2005 as
    a time to broaden public understanding and appreciation of our nation's
    forests and grasslands, and a time to broaden partnerships worldwide to
    collectively sustain our natural resources. In this centennial year we
    will sponsor several events and activities that help focus this
    attention.
        Mr. Chairman, let me say again how honored I am to be here as Chief
    presenting the 101st President's Budget for the Forest Service. We have
    100 years of amazing accomplishments. We also have 100 years of
    promises to keep, 100 years of laws and regulations to uphold. For 100
    years, Americans have both applauded us and picketed our doors. The
    country has seen sweeping changes over those 100 years, and many
    innovative tools to help us keep up with those changes.
        As we enter our second century of service, the continued prosperity
    of our country is in large part dependent on sustaining the health,
    diversity, and productivity of our Nation's forests and grasslands.
    This is the Forest Service's mission today. And much as Secretary
    Wilson directed the agency in 1905, our successes are only as great as
    our ability to act under a businesslike structure, promptly,
    effectively, and with common sense. I am proud of the many
    accomplishments our talented and dedicated employees have given to this
    country and the mission they face in entering this new century of
    service.
        We still have much work to do and many challenges to undertake.
    Restoring the nation's forests and grasslands in balance with society's
    goals will take time. We have new tools to help meet those challenges
    in the Healthy Forests Restoration Act and expanded Stewardship
    Contracting authority, in continued research to support these complex
    challenges, and through the work we continue to do with local
    communities and partners--new ways of solving land management problems
    in more effective and inclusive ways.
        I enlist your continued support and look forward to working with
    you toward that end. I will be happy to answer any questions.

        Senator Burns. Chief, thank you. Let me also congratulate
    you. You started this process. I think it was you that coined
    the phrase ``paralysis by analysis.'' You are now making some
    decisions and have some information that you can use to move
    forward in restructuring and bringing the true emphasis on our
    forests, what really works and what does not work.

                                  CONSERVATION

        When you use the word ``conservation,'' I would imagine you
    and I graduated from the old school that the definition of
    ``conservation'' was the wise use of a renewable product. I
    think as long as we define it in that way, whenever we see
    conflicts of management or conflicts of ideas it usually boils
    down to definitions, how we define our words.
        So I have always been--up here you learn that pretty
    quickly, and especially with policymakers, that definitions are
    everything. But I do not think we should leave the old. I think
    the old definition of conservation was pretty well defined--the
    wise use--and we have used it in agriculture a long time. I
    know sometimes they think they should move the Forest Service
    out of the Department of Agriculture, but I do not think it
    should be. It is a wise use of a renewable resource.
        In some areas we have been wrong, but we have been wrong
    before and we know how to correct those and identify them and
    pay attention to our history. If we pay attention to our
    history we solve a lot of those problems.

                           EFFECTS OF FIRE BORROWING

        The increasing costs in firefighting has forced the Agency
    to borrow massive amounts of money from other non-fire
    programs, causing many projects to be cancelled or delayed. I
    applaud your proposed budget increase for $88 million for fire
    suppression. We know that if you have a season that is anything
    like the average of the past few years, you will still be a
    considerable amount of money short.
        Can you just outline for us, if you could, the problems you
    face whenever you have to borrow from other accounts,
    especially the huge amounts of money that we have experienced
    in the last 2 or 3 years?
        Mr. Bosworth. Well, usually when we get in a situation
    where we have to transfer dollars from other accounts it
    occurs, of course, in the fourth quarter of the fiscal year. At
    that point, we pretty well have our field work laid out. We are
    ready to go get the work done, and then of course when we
    transfer those dollars, we have to stop many of those projects.
        I can give you a very quick list of some of the effects
    from fire transfer impacts from last year. We ended up with 10
    percent less timber offered, we had 20 to 25 percent less
    wildlife habitat restoration accomplished, a significant
    shortfall in grazing allotment NEPA work, 30 percent less
    accomplishment in vegetation management, 150,000 acres less
    fuels treatment, 200 construction projects deferred, 60 land
    acquisition projects deferred, some research delayed, some
    forest inventory analysis delayed, and $8.5 million in legacy
    projects that were delayed.
        Some of those we will be able to pick up in the next year
    and so on, but they were not done on time.
        The biggest thing that bothers me perhaps as much as
    anything is the effect it has on our partners. We are trying
    more and more to work together with people in a partnership
    way. The biggest frustration is when we have partnership
    agreements, the folks that we are working with come to the
    table, and then we come to the table at the last minute and
    say: Guess what, we cannot do our part.
        It becomes very, very difficult to maintain good
    relationships and good partnerships when at the 11th hour we
    pull out. But those are some of the impacts. I can be more
    specific and give you more information for the record if you
    would care for it.
        Senator Burns. You know, that is an interesting thought,
    though, your partners. I think basically they probably
    understand the problem. Have relationships deteriorated to
    where it is difficult to do business with them again?
        Mr. Bosworth. Well, in some cases when people think that
    this is going to continue to happen, they end up looking for
    somebody else to partner with that they think might be a little
    bit more reliable. I believe when we end up with some kind of a
    long-term fix for this, I hope we will be able to get our
    partners back.
        Another effect is matching funds; sometimes when we use
    challenge cost-share agreements--we do a lot of work with
    organizations like the Rocky Mountain Elk Foundation--we will
    have some matching funds and then we when do not bring our part
    to the table, we lose those matching funds to some other place.
    Sometimes they will come back, but sometimes we do not ever get
    those matching funds back.

                           FIREFIGHTING COST ANALYSIS

        Senator Burns. I was in a couple of fire camps last year,
    as you well know, and visited with your leadership and was on
    the ground out in Montana, especially the fire in Glacier
    National Park. Chief, have you done anything to make a special
    assignment of anybody or any part of your organization to
    analyze and see how we can be more efficient in our
    firefighting? Because I think when you look around a fire camp,
    you see a lot of waste. That happens whenever you are under
    emergency conditions; I understand that. But have we done any
    analyzation of how we fight, when we fight, and what it takes
    to fight?
        Mr. Bosworth. Well, there are a couple of things. Let me
    start off by just talking about cost containment. Last year we
    instituted a number of cost containment measures, and then we
    have added a few more for the next year. Let me just run
    through those first.
        Of course, we were very concerned, as you are, about the
    rising cost of our fires. So we instituted some national-level
    review teams that report to me essentially. They go out to some
    of these major fires while the fires are burning and they
    review the decisions that are made, particularly as associated
    with costs.
        We also have some regional review teams working. We have
    some post-incident teams that go out and review a fire after it
    is over and we look at all the costs. Those teams are looking
    at that to try to find how that is going.
        The Wildland Fire Leadership Council is made up of the
    heads of all the wildland firefighting agencies, Under
    Secretary Rey, and one of the assistant secretaries at
    Interior. We have chartered a blue ribbon panel to look at cost
    containment across the board and to give us some advice. They
    are working with the Western Governors Association.
        Also, the President's budget proposes to allocate 50
    percent of the fire suppression dollars to the regions, with
    the idea that it would be an incentive. If they do not spend
    those dollars, then those dollars could be used for other kinds
    of projects like fuels treatment. And that is a very big
    incentive to our folks because our folks like to get work done
    on the ground.
        We also have directed all line officers and incident
    managers to do what we call an escape fire situation analysis
    whenever a fire escapes initial attack to look at alternative
    suppression strategies. We have directed them to develop a
    least-cost fire suppression strategy and to give that
    significant consideration.
        Another thing that was brand new last year was, with our
    enhanced or our improved financial management, we now have
    real-time cost accounting information for each individual fire.
    So every 24-hour period we can tell exactly what that fire has
    cost, what those cost centers are, how much, and where.
        In the past, it would be 2 or 3 weeks before we could do
    that. So that is another area that will help us get a handle, I
    believe, in terms of our costs.
        Senator Burns. Well, you know, I sat in on a couple of the
    meetings. They allowed me in there--and I appreciate that very
    much--on how they operate and areas of responsibility in
    Kalispell. I was impressed because your comptroller, the guy
    that was in charge of the money and the accounting, sat right
    there and he said: We cannot do that; we have got to move this;
    and these are the dollars that we have used now, this is our
    allocation.
        Sometimes under those conditions it is kind of hard to do
    business. In other words, maybe you would like to do something
    that day, but yet maybe you might not expend the money so you
    did not overrun the tape, so to speak.

                                FIRE SUPPRESSION

        Also, I hear criticism--and this is a criticism and you
    might want to respond to it--when a fire is first detected, we
    just do not get people on the ground and hit it while we can.
    In other words, there has been criticism that some fires were
    allowed to smolder for a while and then all at once blow up and
    create an even larger problem.
        Can you respond to that criticism?
        Mr. Bosworth. Yes, I would be happy to. First I would like
    to put another chart up on the wall there. We have continued to
    suppress about 98 percent of the fires in initial attack and
    keep them less than 300 acres. So in terms of that criticism,
    we suppress 98 percent. In some cases, as you know, we will end
    up with lightning strikes and we can have a couple hundred
    fires, 200 or 300 fires on a forest, start in one lightning
    storm.
        My belief is that it is going to be tough to get to 100
    percent. Maybe we can get up to 99 percent. But I believe that
    is working fairly well.
        On this chart you will see that, the purple there is the
    small fires, and then 2 percent of them get out in that darker
    color, meaning they escape initial attack. So you can see from
    the circles over on the right that 87 percent of our
    suppression costs are within that 2 percent of the fires. So
    only 13 percent of our suppression costs are on that other 98
    percent.
        In terms of acres burned, 96 percent of the acres burned
    come from that 2 percent of the fires that escaped initial
    attack. So it is extremely important from just a cost and a
    damage standpoint that we do as good as we can in nailing those
    fires in their initial attack.
        Mr. Rey. In addition to that, when we fail to succeed at
    initial attack and we end up in a large incident fire, one of
    the factors that we review when we do a cost review of that
    large incident fire are the circumstances associated with
    failure to control the fire at initial attack. What I have
    found in the incidents that I have looked at--in all honesty
    because of member interest--where we failed at initial attack
    is that there was usually a reason associated with the limits
    of the technology, the equipment we had, or safety concerns
    that precluded a more aggressive initial attack response.
        The quintessential example was the fire in San Diego this
    summer, where fire was reported right about dusk and we were
    criticized for not scrambling our tankers at that point. Well,
    our tankers are not equipped with night-flying vision. The
    worst and most hazardous time to fly those on bombing runs is
    at dawn or at dusk, because they are flying at low elevation
    with the sun often right in the pilot's eyes. You make those
    safety requirements for a reason and you do not deviate from
    them just to save a few dollars.
        That has been my personal experience in reviewing the
    specifics of some of those criticisms in individual incidents.
        Senator Burns. Well, I would recommend--of course, I was in
    a couple of them way back in the old days--that you have got to
    go experience a fire camp now and then. Now, not everybody is
    going to have the opportunity to sit in on the morning briefing
    or even the evening debrief, as you well know, but that is
    where you learn quite a lot of things.
        So we continue to worry about fire suppression and fire
    prevention, first responder and first response. We will
    continue to worry about that. I would suggest, just from a
    standpoint of up here, that we continue to look at those fire
    suppression costs and do some things.
        I know, Chief, when you were in my office we talked about
    that in the old days you fought fires at night. Now, we lost a
    couple of people and maybe we should not have, the Edith Peak
    Fire being one of them, way back when. You would take the fire
    on when it is the weakest. It is at night; that is when it is
    the lowest, that is when it is the coolest. And if you do not
    get it by then, at 10 o'clock the next morning, or whenever the
    drafts start, then you are lost. You might as well go twiddle
    your thumbs and play gin rummy or something. But you just
    cannot, especially with these fires.
        It just seems to me the intensity of these fires now are
    just beyond belief. You know, on Glacier up there, you watch
    the intensity of those things and watch them go up a
    mountainside. I tell you what, I have never seen fires moving
    like that, not in my lifetime anyway. So we continue to look at
    that.

                                    GRAZING

        Well, let us shift away from fire and the challenges that
    it has a little bit. We have other activities that go on in the
    forests. Of course grazing is one of those. By the way, he is
    not with us any more, but there was an old sheepherder out at
    Big Timber, Montana, who did his own kind of research. As you
    know, they are livestock people and people of the land do
    pretty good research. They are probably not recognized in the
    scientific community, but as far as the data being accurate, it
    is pretty accurate.
        In the forest where we had active grazing permits, we also
    did the best job in hazardous fuels removal and fire
    prevention, and lines are drawn on that. So I think grazing is
    a part of areas that become more vulnerable to that, because
    forest grazing takes care of a lot of the undergrowth.
        We have a real problem in the backlog of expiring grazing
    permits that need to be renewed. Congress put a schedule in
    place for the renewal of these permits in the 1995 Rescissions
    Act. Your budget justification says that you are only getting
    done about 50 percent of the work that you need each year. Can
    you give me a number of the backlog and how we are dealing with
    that backlog?
        Mr. Bosworth. We have had NEPA completed on about 36
    percent of the 6,900 permits at this point. We have a backlog
    of 4,590 as of right now. We are doing things to try to improve
    our approach; one of them is that we have redone or made some
    changes in our handbook that instructs the field on how to do
    the NEPA on allotment management planning to make it more
    efficient, to make it more collaborative with the permittees,
    and to allow us to get some decisions made quicker.
        We are trying to improve our efficiency. We are trying to
    cut down our overhead, but we are significantly behind. The
    troubling part of this to me is that if we had a significant
    increase in dollars, that probably would still not solve the
    problem. It would help us; it would help us get done a little
    bit sooner than what we are going to get done anyway.
        I feel like we are putting an awful lot of money into doing
    an awful lot of paperwork, that in the end does not really
    affect or change the way the grazing is being done on the
    ground; it just results in having NEPA finished. We do an
    environmental impact statement and we have a whole bunch of
    alternatives, and then we end up making some slight
    adjustments. But we put a lot of money into pushing paper
    around, and it just seems to me that maybe there is a better
    way.
        Maybe we ought to be looking at some things like what you
    do on the Healthy Forests Restoration Act or some of those
    kinds of options that might help streamline and modernize some
    of the processes we are using for our allotments right now.
        Senator Burns. This question may be out of line, but if you
    did not have to do a full-blown NEPA, a full-blown EIS, and
    operate under an EA, would that help? I do not know that much
    about what you have to do on the ground, the hoops that you
    have to jump through.
        Mark, can you address that?
        Mr. Rey. That would probably help some. The other
    alternative would be to look at formulating a categorical
    exclusion for at least some number of the grazing allotment
    renewals where not much is going to change on the ground as a
    consequence of the renewal anyway.
        In 1995 when the Rescissions Act schedule was established,
    I was sort of sitting on your side of the dais and we asked the
    then-Chief of the Forest Service, Jack Thomas, whether the
    expenditure that was going to be invested in doing EIS's for
    all these grazing lease renewals was going to result in on-the-
    ground range improvements, and his general response if I
    remember it correctly--and I will paraphrase it and we can go
    back and look at the transcripts--was that we would get a lot
    more on-the-ground improvement if we invested that money in
    range improvement work as opposed to just renewing NEPA
    documents for at least those allotments where not much has
    changed and all we are doing is renewing an allotment because
    we have hit a statutory or a regulatory deadline.
        I think an EA would help for at least some number of those,
    those 4,800 renewals that are not going to change very much. A
    categorical exclusion would probably help a lot more,
    particularly if we were able to reinvest that money in range
    improvement work.
        Senator Burns. I will tell you that, on an assessment of
    range country the other day, even though we have been through
    drought areas, range and forest grazing permits have never been
    in this good of a shape. They are basically taken care of by
    the people who are leasing the grass. So you may have a point.
        I will have to go back. I had forgotten about the Jack Ward
    Thomas statement and I am glad you recollected that. We will
    take a look at that, and we will also look at the categorical
    exclusion end of that. I think some of that does have merit
    whenever we start managing our resources.

                            STEWARDSHIP CONTRACTING

        The Congress has provided you with many new authorities
    during last year, including the expansion of the Stewardship
    Contracting program, in the passage of the Healthy Forests
    Restoration Act. The Agency has also put in place through
    regulations several new categorical exclusions to help speed up
    fuels reduction and timber salvage.
        Chief, can you tell us if these new authorities have helped
    you address the problem, and the implementation of these acts--
    give us a progress report?
        Mr. Bosworth. In terms of stewardship contracting, first I
    would like to just say again thank you for your help in getting
    us the stewardship contracting pilot authority, going back to
    1999. You have been a real champion in terms of stewardship
    contracting to help us with that. We have experimented with
    that over the years and now we have the extended authority.
        We awarded 49 contracts in fiscal year 2003. We expect to
    have 60 just in this coming year, in 2004. So we had 49 that we
    are working on and then 60 more this year.
        I think the extended authority has made a big difference
    because it has told a lot of people that this is a little more
    permanent. While it was still in the pilot stage, we had an
    awful lot of work to do with potential contractors, with people
    who might come in with proposals or bids, and not everybody was
    anxious to take the time to learn how to make those kind of
    bids.
        Now that they see that it is a tool that will be used more
    widely and for a longer period of time, there is a whole lot
    more interest. So I would expect that we will have a bunch more
    of those coming along and we will see some real successes. So I
    will be anxious to see some more on the ground, where we will
    be able to go out and maybe take a look at them. Perhaps you
    would be interested in seeing some of those.

                             CATEGORICAL EXCLUSIONS

        In terms of categorical exclusions, we have a number of
    different categorical exclusions that we have gotten authority
    to use over the last probably 9 months. We have about 560 of
    those that we have completed since then or that are ongoing
    since then. Now, not all of those are for fuels treatment. They
    are for a variety of things. I would guess probably half of
    them are for fuels treatment, and there are a number of other
    ones that we are also doing.

                               FOREST MANAGEMENT

        Senator Burns. When you look at all of these things that
    have been done--we know that we have mills in trouble in our
    part of the country. There are a number of mills in the wood
    products business that keep going the other way; that is,
    failing because of lack of wood. I was interested--this last
    weekend, the Senator from Georgia accompanied us into Montana.
    He had never been to Montana before, and we were looking at
    some regrowth areas in the Gallatin National Forest. He does
    not ski and I do not ski and this was a ski outing. I had a
    fundraiser up there. That looks good on the tape. But anyway,
    it was pretty unstructured. I used to ski. I have only been on
    them once and I wiped out a whole platoon of Marine Corps, and
    I kicked them damn things off and I have not had them on since.
        But nonetheless, we went on a little jaunt, and we started
    talking about regrowth and things that are happening in the
    forest, took a snowmobile trip into Yellowstone Park, seeing
    the regrowth that is happening there after the devastating 1988
    fires.
        It is something to see, people who have forests in their
    States, how they manage against how we manage. Of course, their
    rotation on a mature tree is much shorter than ours, as we
    know. But it was also interesting to know; they said when they
    replant a forest where they are in the South, they get growth
    and then they use what they take out when they thin the forest;
    that goes to pulp. That gives way to the trees that will
    finally end up in lumber.
        We have had a difficult time in doing that. That is usually
    on private lands, privately managed lands. We have had a
    difficult time selling the idea on public lands that that sort
    of a management situation does work. Maybe it is a longer cycle
    from a seedling to a mature tree than they have in Georgia, no
    doubt. But nonetheless, the principle is about the same.
        We still have a difficulty of selling the public on the
    idea that those management practices work. I think that is one
    of the challenges ahead of us, that just because we thin, that
    that is a lost product; in other words, it is wasted. It is
    not. The taxpayers get paid for it, actually.

                               EDUCATION EFFORTS

        So I think we need a little more outreach to the public,
    public education. Can you tell me what you have done in that
    area? It is a constant education of the public of how we manage
    their forests and why we do certain things.
        Mr. Bosworth. Well, we do have conservation education
    programs, a number of programs, particularly at the local
    levels, with folks to try to help people understand at least
    what takes place and what is going on, what the opportunities
    are.
        We also have some places where we have been experimenting
    on occasion with what we call collaborative learning, where you
    have people together from different points of view in a
    collaborative way, trying to learn on specific projects based
    upon their different values. We are also using the best science
    that we have available, so that people can learn together and
    be more informed about what the issues are and what the
    potential is.
        Of course, there is still always the difference of opinion
    about what they want their national forests to be managed for.
    There are definitely some places where we manage the national
    forests and produce timber, but then there are the places where
    people's preference is to have it, as you know, for wildlife
    purposes or for recreational purposes.
        So I think our challenge is again to try to find that
    balance through public participation, but at least to have as
    informed a public participation as we possibly can, where
    people are educated, as you say, as to what the potential is,
    what the results are, and what the consequence is.
        Senator Burns. Well, I say that because I walked into an
    elementary school and there was a big poster up there that
    says: ``When a tree is gone it is gone forever and the land
    lays barren forever.'' And that statement just stuck in my
    mind, and I said: Somebody has got to call on that school
    teacher; this is just not good information and it is not the
    way we should be teaching our young people about renewable
    resources and what this land really has.
        Mr. Bosworth. We also have programs in a number of places
    where we are working with school teachers, because that is
    perhaps the most effective way in the long run where we can get
    people informed on the facts.
        Senator Burns. Sometimes I have a hard time relating to
    those folks, so you know how that is.
        That is about all the questions. I think we kind of worked
    our way through the management part of it. I do want to
    encourage you to look at this, the waste and the way we respond
    to fires, and try to see if we cannot cut some costs there. But
    we do not want to be penny wise and dollar dumb either in those
    areas. As to your accounting, I want to congratulate you again.
    You have got a clean audit and I think your Department is for
    the most part doing a real job under very difficult conditions.
        If other members of the committee want to offer some
    questions, we will leave the record open; and if you would
    respond to the committee and to the specific Senators, we would
    appreciate that.
        Secretary Rey, good to see you again, and Hank, and all of
    you, and your leadership. I am just glad that we are in an area
    right now where I think there has been a lot of integrity
    restored back into the Forest Service. For the most part, the
    morale of the rank and file is pretty high, and I congratulate
    you for that. I talk to Forest Service people throughout my
    State, and we appreciate that. Relationships have improved,
    even though we have some areas where we could improve more. But
    nonetheless, that may boil down again to definitions.

                         ADDITIONAL COMMITTEE QUESTIONS

        There will be some additional questions which will be
    submitted for your response in the record.
        [The following questions were not asked at the hearing, but
    were submitted to the Agency for response subsequent to the
    hearing:]
                  Questions Submitted by Senator Conrad Burns
        Question. The Committee is concerned about the rising costs for
    firefighting. The average annual cost of fire suppression for the
    Forest Service over the last 4 fiscal years (fiscal year 2000-fiscal
    year 2003) has exceeded $1 billion. By way of comparison, in the 4
    years prior to that it was only $349 million. The Committee understands
    some of the factors that have raised these costs like: (1) the severe
    droughts in the West; (2) the expanding Wildland Urban Interface as
    more and more people want to live on the boundaries of our forests,
    parks and refuges; and (3) the poor health of our forests caused by
    years of inactive management.
        What, if anything, can the Forest Service do to reduce the
    skyrocketing costs of firefighting? (S&PF)
        Answer. The Forest Service has issued two reports that outline
    expectations of line officers, incident commanders, and employees in
    the area of suppression cost containment. We have standing cost
    containment oversight teams that visit large incidents and recommend
    actions that will reduce expenditures. We are developing a new fire
    planning system that will lead to better strategic analysis of large
    fires and the decisions that cause them to become expensive. We are
    developing a new situation analysis that will display a better range of
    suppression alternatives to line officers during their decision
    process. This will be accomplished by clarifying the definition of the
    least cost suppression alternatives within decision support models and
    establish this alternative as the default option for suppression
    activities for a given incident and by completing updated geospatially-
    based fire management plans linked to databases that will lead to
    increases in the annual number and acres designated as wildland fire
    use fires. We are embarking on an aggressive fuel management program to
    rid forests of accumulated fuel. In addition, we will:
      --Implement priority cost containment activities called for in the
            fiscal year 2004 President's Budget and the recommendations
            contained within the Wildland Fire Management PART, as well as
            select recommendations from the National Academy of Public
            Administration (NAPA) report entitled, Wildfire Suppression:
            Strategies for Containing Costs.
      --Reduce wildland fire suppression costs through a continued emphasis
            on the accountability of line officers and incident commanders.
      --Review the cost-effectiveness of large fire aviation resources and
            assess state cost-share agreements to ensure that the federal
            government is not paying a disproportionately high share of
            suppression costs.
      --Continue to conduct national cost containment reviews on selected
            incidents and implement recommendations contained in the
            Consolidated Large Fire Cost Report of 2003 to address
            suppression cost containment issues raised during cost reviews
            in fiscal year 2003. Provide oversight to ensure that cost
            containment measures are implemented.
      --Working through the National Wildfire Coordinating Group's Incident
            Based Automation Task Group, continue to enhance the ``real-
            time'' incident obligation reporting system.
        In addition, in fiscal year 2005 the Forest Service will initiate
    incentives to reduce suppression expenditures. The President's Budget
    proposes to allocate fifty percent of suppression funds to the field
    and allow unobligated year-end balances to be retained by the regions
    to be used for vegetative treatments to improve condition class. The
    objective is to create an incentive in the field (additional funds for
    on-the-ground work) to reduce expenditures, with the goal of
    eliminating the need to transfer funds. An added benefit will be an
    increase in funds available to improve condition class, which will
    further reduce suppression costs and the need to transfer funds. The
    President's Budget also includes cost containment actions and
    performance measures, expands the use of risk mitigation, updates fire
    management plans to increase wildland fire use, and implements
    suppression cost savings incentives. The Forest Service and Department
    of the Interior will develop a process through which rural fire
    department training, experience, and qualifications can be recognized
    as equivalent to National Wildfire Coordinating Group (NWCG)
    qualifications. Together with agency actions already under way, these
    efforts should effectively reduce the need for further borrowing,
    supplemental appropriations, or both.
        USDA and the Department of the Interior will continue to enhance
    agency policy and procedures to reduce suppression costs.
        Question. This subcommittee asked the National Academy of Public
    Administration (NAPA) to review increasing fire costs. One of their
    recommendations was that the Forest Service could save millions of
    dollars by more efficiently procuring the supplies and equipment that
    are used each year for firefighting. Do you agree with this assessment?
        Answer. On the surface NAPA's study and recommendations look good.
    However, the Agency feels that there are many variables and
    complexities that require further analysis. The Forest Service plans to
    continue to study and analyze NAPA's recommendation.
        Question. Are you planning to act on the NAPA recommendation?
        Answer. The Forest Service plans to continue to study and analyze
    NAPA's recommendation.
        Question. How long would you expect it to be before the investments
    that we are making in hazardous fuel reduction projects should lower
    the severity of our fire seasons and reduce firefighting costs?
        Answer. Fire season severity is the result of several factors
    including climate (primarily drought), weather (hot, dry, windy days),
    available fuel (fuel amount and fuel moisture), and ignition patterns
    and timing (primarily from lightning storms and human causes).
    Hazardous fuel reduction projects only influence one of these
    contributing factors. That said, fuel treatment in general can reduce
    the intensity of fire behavior under all but the most severe burning
    conditions.
        In 1999, the GAO estimated it would take the Forest Service 15
    years and $12 billion to treat 39 million acres at high risk (Western
    National Forests--A Cohesive Strategy is Needed to Address Catastrophic
    Wildfire Threats, GAO/RCED-99-65). They also believed that the Agency
    had an estimated 10 to 25-year ``window of opportunity'' for taking
    effective action before damage from uncontrollable wildfires becomes
    widespread.
        Further analysis conducted by Agency scientists (A Cohesive
    Strategy for Protecting People and Sustaining Natural Resources:
    Predicting Outcomes for Program Options, Hann et. al., 2002) indicates
    that after 15 years of an aggressive treatment program using a
    strategic landscape restoration approach (as opposed to random
    placement of treatments) that the average annual costs for suppression,
    prevention, initial attack, rehabilitation and property loss will drop
    below the current level.
        We need to remember that these are estimates based on our current
    knowledge of modeling predicted changes in condition class over an
    extended period of time due to the cumulative effects of fuel
    treatments, wildfire disturbance, and natural vegetation succession
    (growth).
        Question. Please outline the management problems that face the
    Agency when it has to borrow such large amounts of money from non-fire
    programs.
        Answer. Although transfers from other accounts have led to delays
    in some projects, the long-term negative effects on programs has been
    significantly mitigated by reprioritizing programs of work at both
    local and regional levels. In making these adjustments, the agency
    considers factors that determine whether related opportunities,
    availability of additional temporary employees, and increased use of
    contracting can be used to meet program and project objectives. The
    agency carries over large unobligated balances every year for multi-
    year projects. In heavy fire years, it makes sense to temporarily use
    these balances until we can determine how much additional funding is
    actually needed. In addition, every year some work, such as prescribed
    burning, cannot be done due to dangerous fire conditions or other
    unanticipated conditions. There are also personnel costs that are
    budgeted in one of the Forest Service's non-fire accounts but, when
    those personnel are assigned to fire duties, are ultimately spent out
    of the fire account. In these situations, it is appropriate that
    available Federal funding be redirected to fire suppression, and it is
    not necessary to repay the non-fire accounts for such salary savings.
        Question. Does the Administration have any suggestions for a long
    term solution to this persistent problem of borrowing from non-fire
    accounts for firefighting?
        Answer. The administration has been activity addressing this issue
    through cost containment efforts and is requesting the 10-year average
    for fire suppression for both the Forest Service and the Department of
    the Interior adjusted for inflation.
        In fiscal year 2003, the Forest Service initiated several new
    efforts to contain and reduce suppression costs. This included
    improving large fire cost reviews, conducting post-incident activity
    reviews, increased accountability and oversight, increased engagement
    of line officers, greater use of incident business advisors, and the
    preferred use of the least cost alternative when suppression wildfires.
    These policies and directives were published in the Chief's Incident
    Accountability Report 2003 Action Plan, February 2003, the Large Fire
    Cost Reduction Action Plan, March 2003, and the USDA Forest Service
    Fire & Aviation Operations Action Plan for 2003, April 2003.
        In September 2003, the agency released the Consolidation of 2003
    National and Regional Large Incident Strategic Assessment and Oversight
    Review Key Findings. The report summarizes the key findings of the
    national and regional Large Incident Strategic Assessment and Oversight
    Review teams and makes recommendations to improve suppression cost
    containment and other wildfire management efforts. The agency is
    developing an Action Plan based on these recommendations and will
    continue large incident reviews in 2004. During 2004 the agency will:
      --Continue aggressive initial attack on unwanted and unplanned
            ignitions.
      --Increase wildland fire use as prescribed in land and resource
            management plans and report these increases in future Budget
            Justifications.
      --Implement priority cost containment activities called for in the
            fiscal year 2004 President's Budget and the recommendations
            contained within the Wildland Fire Management PART, as well as
            select recommendations from the National Academy of Public
            Administration (NAPA) report entitled, Wildfire Suppression:
            Strategies for Containing Costs.
      --Continue to implement safety, cost containment, and program action
            items from the Large Fire Cost Reduction Plan and the Fire and
            Aviation Management 2003 Operations Action Plan.
      --Reduce wildland fire suppression costs through a continued emphasis
            on the accountability of line officers and incident commanders.
      --Review the cost-effectiveness of large fire aviation resources and
            assess state cost-share agreements to ensure that the federal
            government is not paying a disproportionately high share of
            suppression costs.
      --Continue to conduct national cost containment reviews on selected
            incidents and implement recommendations contained in the
            Consolidated Large Fire Cost Report of 2003 to address
            suppression cost containment issues raised during cost reviews
            in fiscal year 2003. Provide oversight to ensure that cost
            containment measures are implemented.
      --Working through the National Wildfire Coordinating Group's Incident
            Based Automation Task Group, continue to enhance the ``real-
            time'' incident obligation reporting system.
        In addition, in fiscal year 2005 the Forest Service will initiate
    incentives to reduce suppression expenditures. The President's Budget
    proposes to allocate fifty percent of suppression funds to the field
    and allow unobligated year-end balances to be retained by the regions
    to be used for vegetative treatments to improve condition class. The
    objective is to create an incentive in the field (additional funds for
    on-the-ground work) to reduce expenditures, with the goal of
    eliminating the need to transfer funds. An added benefit will be an
    increase in funds available to improve condition class, which will
    further reduce suppression costs and the need to transfer funds. The
    President's Budget also includes cost containment actions and
    performance measures, expands the use of risk mitigation, updates fire
    management plans to increase wildland fire use, and implements
    suppression cost savings incentives. The Forest Service and Department
    of the Interior will develop a process through which rural fire
    department training, experience, and qualifications can be recognized
    as equivalent to National Wildfire Coordinating Group (NWCG)
    qualifications. Together with agency actions already under way, these
    efforts should effectively reduce the need for further borrowing,
    supplemental appropriations, or both.
        The Forest Service will continue to enhance agency policy and
    procedures to reduce suppression costs and looks forward to working
    with Congress on other possible solutions.
        Question. The Senate version of the 2005 budget resolution has set
    aside a specific funding category for fire suppression of $400 million
    for the Forest Service for fiscal years 2004 through 2006. What is the
    Agency's position on whether these additional funds are necessary to
    lessen the program disruptions you have faced as a result of borrowing
    to fight fire?
        Answer. We appreciate the efforts made by the Senate to develop an
    alternative source of funds for fire suppression. However, the agency
    would like to continue to work with Congress on ways to reduce the
    costs of fire suppression.
        Question. Rehabilitation and restoration needs from wildfires
    remain high. Two of the FS ``threats'' are impacted by not completing
    these activities; invasive species and unmanaged outdoor recreation by
    the loss of access by roads or trails from wildfire. What suggestions
    does the Agency have if additional funding was available or given the
    fiscal concerns the Committee has, where would the Agency propose to
    reallocate funding with in your existing budget to fund this work?
        Answer. As you note, wildfire rehabilitation and restoration are
    high priorities in the Forest Service. The four threats, including
    invasive species and unmanaged recreation also remain high on our list
    of issues with disturbing trends that we are working hard to reverse.
        The Forest Service continues to improve efficiencies within our
    programs that squeeze multiple benefits out of each program dollar.
    Where it makes sense, we are developing integrated projects that
    address multiple priorities. In addition, we are taking advantage of
    streamlined processes and increased capability provided by the new
    Stewardship Contracting and Healthy Forest Restoration Act authorities.
    To address invasive species concerns, the fiscal year 2005 President's
    Budget includes $10 million for rapid response to new introductions of
    non-native or invasive pests or pathogens for which no previous Federal
    funding has been identified to address, or for a limited number of
    instances in which any pest populations increase at over 150 percent of
    levels monitored for that species in the immediately preceding fiscal
    year and failure to suppress those populations would lead to a 10-
    percent increase of annual forest or stand mortality over ambient
    mortality levels.
        Attempting to address all of the significant issues facing the
    agency within a constrained budget is no easy task. Trade-offs between
    nationally significant issues that can have long-term consequences
    requires us to strike a balance and in some cases do the best we can to
    ``hold the line.'' The fiscal year 2005 President's Budget strikes that
    balance in a fiscally sound manner within a complex set of priorities.
        Question. There is a real problem with a backlog of expiring
    grazing permits that need to be renewed. Congress put a schedule in
    place for the renewal of these permits in the 1995 Rescissions Act. The
    budget justification says that the Agency is only getting done 50
    percent of the work that needs to be done each year.
        How many grazing permits are currently in the backlog?
        Answer. Since section 325 of the Fiscal Year 2004 Interior
    Appropriations Act provides relief until the end of 2008 for renewal of
    permits without completion of NEPA analysis, all grazing permit
    renewals are current for this fiscal year.
        However, there is a backlog for completing NEPA on allotments. At
    the end of fiscal year 2003, 5,002 allotments were scheduled to be
    completed out of the original 6,886 allotments on the 1996 Rescissions
    Act schedule. Only 2,296 allotments have been completed. This results
    in a backlog of 2,706 allotments at the end of fiscal year 2003. At the
    current pace of approximately 200 allotments per year, NEPA analysis
    for the backlog will not be completed until 2018. A total of 4,590
    allotments still need NEPA on the 1996 Rescissions Act Schedule.
        To more effectively address the backlog, the fiscal year 2005
    Budget calls for the Forest Service to adopt methods for prioritization
    through the development and use of qualitative tools that assess
    rangeland health and sustainability through the use of indicators that
    are linked to existing monitoring data. The Forest Service will consult
    with the Department of the Interior to develop and utilize an
    integrated and consistent framework and process for using monitoring
    and assessment information that leads to reduced allotment monitoring
    backlogs.
        Question. Given this backlog, can the Agency explain why the budget
    proposes to cut $2.5 million for the grazing management program that
    funds the permitting process?
        Answer. In addition to the methods for prioritization through the
    development and use of qualitative tools that assess rangeland health
    and sustainability through the use of indicators that are linked to
    existing monitoring data mentioned in the answer to the previous
    question, we will be applying efficiencies generated from improved
    direction in Chapter 90 of Forest Service Handbook 2209.13 which should
    help reduce costs. Examples of efficiencies include better defined and
    limited inventory and analysis needs, focusing the analysis on the
    condition of the land, conducting inventory and analysis on multiple
    allotments, keeping the number of alternatives analyzed in detail to an
    absolute minimum, and developing well defined purpose and need
    statements and proposed actions.
        Question. At the rate the Agency is going when will this backlog be
    eliminated?
        Answer. At the current pace of approximately 200 allotments per
    year, NEPA analysis will not be completed until 2022. Accordingly, the
    fiscal year 2005 Budget provides for an integrated and consistent
    framework and process for using monitoring and assessment information
    that leads to reduced allotment monitoring backlogs.
        Question. If the Committee provided more funds for permitting could
    the Agency effectively spend it next year and get more grazing permits
    completed?
        Answer. Additional funding is not needed to complete the issuance
    of grazing permits because there is no backlog of permits; all permits
    due to expire have had a new permit issued. If the Agency was provided
    additional funding beyond the constrained budget, it could complete
    additional NEPA analysis and decisions for allotments on the schedule.
        Question. How can the Agency work more efficiently to speed up this
    process?
        Answer. Yes. In addition to the methods for prioritization through
    the development and use of qualitative tools that assess rangeland
    health and sustainability through the use of indicators that are linked
    to existing monitoring data mentioned in the answer to the previous
    question, field units are conducting training that emphasizes the
    efficiencies described in the recently released Chapter 90 of Forest
    Service Handbook 2209.13. Examples of efficiencies include better
    defined and limited inventory and analysis needs, focusing the analysis
    on the condition of the land, conducting inventory and analysis on
    multiple allotments, keeping the number of alternatives analyzed in
    detail to an absolute minimum, and developing well defined purpose and
    need statements and proposed actions. Field units are also using the
    flexibility provided in section 325 of the Fiscal Year 2004
    Appropriations Act that allows them, ``. . . to determine the priority
    and timing for completing required environmental analysis of grazing
    allotments based on the environmental significance of allotments and
    funding available . . .''
        Question. In fiscal year 2003 the FS expected to sign 451 decision
    notices for livestock grazing, but only 195 were signed. The FS expects
    to sign 432 decision notices in fiscal year 2005. What changes has the
    FS made to ensure these decision notices will be signed?
        Answer. The Agency is conducting training that emphasizes the
    efficiencies described in the recently released Chapter 90 of Forest
    Service Handbook 2209.13. Examples of efficiencies include better
    defined and limited inventory and analysis needs, focusing the analysis
    on the condition of the land, conducting inventory and analysis on
    multiple allotments, keeping the number of alternatives analyzed in
    detail to an absolute minimum, and developing well defined purpose and
    need statements and proposed actions. Although there is no absolute
    assurance, it is expected that these efficiencies will help the Agency
    succeed.
        Question. The Chief has frequently talked about ``analysis
    paralysis'' at the Forest Service. Please explain how these new
    authorities will help to address that problem and how implementation of
    these authorities is proceeding? The budget increase of $33 million to
    a total of $266 million will allow the treatment of 1.8 million acres.
    Do you anticipate any issues that will prevent the FS from treating
    these acres?
        Answer. The President's Healthy Forest Initiative (HFI) is helping
    us address our ``analysis paralysis,'' which was impeding our
    restoration of fire adapted ecosystems, including treatment of
    hazardous fuels. We are actively using categorical exclusions to
    accomplish hazardous fuel reduction. Additionally, the Agency is
    utilizing new categorical exclusions for limited timber harvest to
    address small areas needing vegetation treatment and salvage. These new
    categorical exclusions facilitate scientifically sound, efficient, and
    timely planning and decision making for the treatment of vegetation,
    including hazardous fuels.
        The counterpart regulations developed as part of HFI enhance the
    efficiency and effectiveness of the Endangered Species Act (ESA),
    Section 7 consultation process by providing an optional alternative to
    the procedures when the Forest Service determines a project is ``not
    likely to adversely affect'' any listed species or designated critical
    habitat. After analysis by qualified biologists, Forest Service line
    officers will be able to certify that projects meet the ESA regulations
    and requirements without an additional concurrence from the U.S. Fish
    and Wildlife Service.
        Another useful tool is the Stewardship Contracting authority. These
    contracts allow private companies, communities and others to retain
    forest and rangeland products in exchange for the service of thinning
    trees and brush and removing dead wood. Long-term contracts foster a
    public/private partnership to restore forest and rangeland health by
    giving those who undertake the contract the ability to invest in
    equipment and infrastructure.
        The Healthy Forests Restoration Act authorities promise to expedite
    environmental analysis and decision making for hazardous fuels
    reduction and treatment of insects and disease in certain areas.
        We do not anticipate any issues that will prevent us from treating
    these acres.
        Question. How many more stewardship contracts does the Agency plan
    to do in 2004 compared to 2003?
        Answer. Currently, 7 contracts have been awarded in fiscal year
    2004. We may award over 60 contracts and agreements in fiscal year
    2004. We awarded 49 stewardship contracts in fiscal year 2003, so the
    planned increase in fiscal year 2004 over fiscal year 2003 is 11
    contracts and agreements.
        Question. How many more acres can be treated for hazardous fuels as
    a result of all these new authorities?
        Answer. For 2005, we plan to treat 200,000 more acres than we
    anticipate accomplishing in 2004. These new authorities will add
    flexibility to our ability to increase our acre accomplishments,
    particularly with mechanical treatments.
        Question. How many salvage harvest and hazardous fuels reductions
    projects used Categorical Exclusions in 2003?
        Answer. A query of the National Fire Plan Operations and Reporting
    System (NFPORS) database shows that 157 hazardous fuels reduction
    projects were categorically excluded in calendar year 2003.
        A query of the Agency's Timber Information Manager (TIM) database
    yields a conservative estimate of 140 categorically excluded salvage
    harvests in 2003. While the database allows for identification of
    categorically excluded harvests, salvage harvests can only be
    identified where the term is used in the project name.
        Question. How many more projects does the Agency expect to use
    these on in 2004?
        Answer. A query of the National Fire Plan Operations and Reporting
    System (NFPORS) database shows that 442 hazardous fuels reduction
    projects are planned for calendar year 2004, using a categorical
    exclusion.
        Salvage harvests normally occur on an opportunity basis. As such,
    providing a planned figure would be speculative. While the level of
    salvage harvest activity will be dependant on events such as fire,
    blowdown, insects, and disease, there is a likelihood of increased
    usage of the salvage categorical exclusion to improve planning
    efficiency and make more timely decisions concerning salvage harvests.
        Question. The Forest Service has received a clean audit opinion for
    fiscal year 2003. After years of not having the books in order, the
    Agency has received a clean opinion of your financial statements for
    the last 2 years.
        Has the Agency put in place the necessary accounting systems to
    ensure that the Agency will continue to receive clean opinions in the
    future?
        Answer. The Foundation Financial Information System (FFIS)
    implemented in fiscal year 2000 has enabled the Forest Service to
    facilitate Federal accountability requirements by complying with the
    United States Standard General Ledger (SGL). FFIS is also compliant
    with current system and reporting requirements, as well as, Federal
    budget and accounting standards. FFIS also provides the capability to
    produce periodic reports that display budgetary and actual financial
    results, as well as, meet other financial and reporting requirements.
        Since implementation of the Foundation Financial Information System
    (FFIS), we have had significant improvement over financial management
    and accountability of our funds. However, in addition to implementing a
    new financial management system, we also made policy and/or procedural
    changes. For the past several years we have made improvements in our
    business processes to ensure the results of our operations are properly
    recorded for all funds. These policies also help improve our internal
    controls in the field offices, as well as, in the headquarter office.
        The Department of Agriculture is leading efforts with the
    elimination of feeder systems and in some cases replacing them with
    more technologically advanced systems.
        Question. The Chief recently sent out a memo to the field
    discussing the need to update the Agency's financial management
    systems. What needs to be done in order to update these systems?
        Answer. The memos recently issued by the Chief addressed the need
    to reengineer our financial management organization. Reengineering our
    financial management organization is part of the ongoing effort to
    stabilize financial management which includes leveraging the use of
    current technology within our Agency.
        Question. How much will these new systems cost?
        Answer. At this time, information is not available to compute the
    cost of the changes.
        Question. The Forest Service is still on the GAO's list of agencies
    at high risk of waste, fraud and abuse even though it received a clean
    audit opinion.
        What further steps must be taken in order for the Agency to get
    taken off of the GAO list?
        Answer. The Forest Service is in the process of implementing
    changes in processes, procedures, and systems to ensure that we are not
    a high risk Agency. We are developing and clarifying accounting
    policies that can be used by our financial and program management
    staffs. These policies will improve our internal and administrative
    controls. We are also in the process of resolving material weaknesses
    cited as a result of the audits. A few of the fiscal year 2002 material
    weaknesses were resolved or disclosed as reportable conditions, which
    indicates improvement. Also we went from six material weaknesses in
    fiscal year 2002 to four in 2003 which is a result of on-going
    assessments and modifications to our processes and procedures. The
    Department of Agriculture is leading efforts with the elimination of
    feeder systems and in some cases replacing them with more
    technologically advanced systems. We have begun the process of
    establishing a centralized financial management organization. In
    conjunction with the centralization efforts we will also reengineer our
    business processes. At this time information is not available to
    compute the cost of changes, such as, the centralization of our
    financial management organization, which will lower our risk. We are in
    the early stages of this process. The cost of implementing new systems
    is part of the Department's assessment.
        According to the proposed budget, the Agency has a backlog of
    deferred maintenance of over $5 billion. But the 2005 budget proposes
    to cut $54 million from the Capital Improvement and Maintenance
    account.
        Question. Why is the Agency cutting this account when the backlog
    of maintenance needs is so high?
        Answer. Given the reduction in deferred maintenance, the Agency
    will continue to focus on addressing the deferred maintenance backlog
    and addressing critical safety needs. Moreover, despite the decrease in
    Captial Improvement, facilities, roads, and trail maintenance funding
    is virtually level and the President's Budget proposes $10 million in
    funding above the 2004 request to address the deferred maintenance
    backlog.
        Question. How is the Agency planning to address this enormous
    backlog of deferred maintenance?
        Answer. Forests are completing their facility master planning which
    will identify unneeded and underutilized facilities. We are actively
    reducing unneeded or underutilized roads, trails and facilities. As one
    example, over the past 5 years we have decommissioned over 10 times the
    more roads than we have constructed under decommissioning authorities
    provided by Congress. We are focusing our capital investment funds on
    those projects where critical health and safety items exist and on
    deferred maintenance projects. We are utilizing the ``pilot'' facility
    conveyance language that the Agency has had in fiscal years 2002, 2003,
    and 2004 to sell excess administrative sites and use the proceeds to
    reduce deferred maintenance or consolidate operations into a new
    facility which will save outyear operation and maintenance funds.
        Question. In the fiscal year 2004 Interior Appropriations bill
    language was included dealing with post-fire rehabilitation and salvage
    issues on the Kootenai and the Flathead National Forests. The intent of
    this language was to speed up the environmental review process so that
    these areas could be rehabilitated before invasive weeds took over and
    we could provide some critically needed timber to local Montana mills.
        Please explain how the implementation of this critical legislation
    is proceeding?
        Answer. The Flathead National Forest is proceeding quite well due
    to the legislation, Flathead Forest Supervisor leadership, and the
    dedication of many Forest Service team employees. The Draft
    Environmental Impact Statement (EIS) for the Robert/Wedge Fires will be
    released in June 2004, with a final EIS anticipated by October 2004.
    Per the legislation, only one action alternative is being analyzed.
    Offer of salvage volume is planned in October-December 2004.
        Implementation of the legislation for the Kootenai National Forest
    is delayed because 15 planned sales for about 17 million board feet are
    currently suspended due to a court order that has not been resolved.
        Both Forests have met all the requirements of the legislation.
        Question. How much quicker will the Forest Service be able to start
    on-the-ground salvage and rehabilitation projects as a result of this
    authority?
        Answer. Projects that require an environmental impact statement can
    take from 1\1/2\ to over 2 years to complete. However, because of
    Flathead National Forest leadership, the Flathead project will only
    take about 10 months to complete. At least 2 weeks of time were saved
    by analyzing only one action alternative, and an unknown amount of time
    was saved as a result of omitting total maximum daily load process, per
    the legislation.
        The Forest Service fiscal year 2005 budget request proposes to
    eliminate the Economic Action Program which received $25.6 million this
    year. Through projects like Fuels for Schools, the Forest Service has
    helped to create markets to utilize the smaller diameter material that
    is the major component of fuels reduction projects.
        Question. Isn't funding new commercial uses for small diameter
    material crucial to reducing fuel loads on our nation's forests?
        Answer. In the Forest Service's Strategic Plan for fiscal years
    2004-2008, we are emphasizing the use of hazardous fuels reduction by-
    products. This will involve efforts to support relatively new or
    emerging product markets such as bio-based fuels in addition to
    expanding the use of wood in traditional markets. We will work in
    collaboration with Federal, State, tribal, and local government and
    with the private sector to adopt effective solutions to this issue.
    Developing these partnerships at the local level to address local
    variations in the issue is particularly important.
        We will also strive to keep timber sales economical for the
    existing infrastructure, so that it can be maintained. In addition, we
    will emphasize the use of service contracts and stewardship contracting
    to support new and existing markets and accomplish our restoration
    objectives.
        Question. Isn't the Economic Action Program, which requires a local
    match, an effective way for the Federal Government to help spur the
    development of these new uses and markets?
        Answer. Some EAP grants may be effective; however, they duplicate
    other USDA programs.
        Question. What do the Agency's fire models predict for this year's
    fire season in the West?
        Answer. Fire season 2004 has all the indicators of being very
    active, particularly in the western states. Although experiencing a
    normal amount of snow pack this year, that along with associated
    rainfall have not been significant enough to break the drought. The
    persistence of this drought, exacerbated by record rates of snow melt,
    will continue to plague much of the west and subject many areas to
    above normal fire danger. One example would be north-central Montana
    where a record setting driest October-March period was recorded.
    Currently many states are experiencing record high temperatures which
    promote fuels reaching critical levels at early dates. Longer-term
    forecasts call for no significant improvement in terms of temperature
    relief or increased precipitation.
        Dry conditions also are evident in parts of the south and will
    continue to experience high to extreme fire dangers until seasonal
    rainfall is established, hopefully by July 4th.
        Even normal, seasonal drying will produce conditions which have the
    potential to produce an active season in the west and one which could
    be equal to the one experienced in fiscal year 2003.
        Question. Nationally, does the Agency expect a fire season in 2004
    that was as bad as last year?
        Answer. While difficult to predict, the 2004 fire season could be
    equal to the one experienced in fiscal year 2003.
        The Committee is concerned about the large cut (17.5 percent) that
    is proposed in the budget for the Forest Health program in State and
    Private forestry. This program helps to monitor and treat millions of
    acres of state, Federal, and private lands for insects and diseases.
        Question. During the terrible fires we had last summer in Montana,
    a letter was sent from the Chairman of the Interior Appropriations
    Subcommittee asking for additional resources to help with
    rehabilitation and salvage work. The Chief responded by committing to
    make these resources available so that this work could get done and we
    could help the small mills in Montana.
        What additional resources did you provide to Montana?
        Answer. The Northern Region (Region 1) received $3 million to fund
    emergency timber salvage needs across the Region. The Flathead National
    Forest was allocated $850,000 to immediately begin NEPA work on the
    Wedge Canyon, Robert and Westside fires areas. An additional $800,000
    is anticipated for fiscal year 2004 preparation work. Over $1.5 million
    was also allocated to other national forests in Region 1 for work that
    will be accomplished using categorical exclusions, primarily for fire
    and bark beetle salvage.
        Region 1 also received $1,922,000 in fiscal year 2004 for
    restoration and rehabilitation work. Reforestation, road restoration
    and noxious weed treatments are the primary projects funded.
        Question. What additional timber volumes was the Agency able to
    provide to the mills by using these extra resources?
        Answer. About 100 million board feet in salvage volume is
    anticipated from the Flathead National Forest projects, to be offered
    in the first quarter of fiscal year 2005. About 12 million board feet
    is being offered in fiscal year 2004 using categorical exclusions.
        Question. The Committee is concerned about the large cut (17.5
    percent) that is proposed in the budget for the Forest Health program
    in State and Private forestry. This program helps to monitor and treat
    millions of acres of State, Federal, and private lands for insects and
    diseases.
        How many fewer acres will be treated as a result of these cuts?
        Answer. We estimate about 270,000 acres. However, many of these
    acres would be offset and long-term risk mitigated though the $10
    million proposed for the emerging pests and pathogens.
        Question. How many acres nationally need treatment for insects and
    disease?
        Answer. Nationally there are millions of acres that need
    suppression, prevention and/or restoration treatment to reduce the risk
    of an insect or disease outbreaks or restore the forest after such
    outbreaks. That number would require vastly more sums of money to treat
    than are available, so prioritization of treatment is paramount. Areas
    at special risk include several southern and western states with
    increasing incidences of southern pine beetle and western bark beetle
    attacks, urban and community forests in the Lake States threatened by
    the invasive emerald ash borer, areas of California and Oregon where
    sudden oak death has been introduced, and eastern states with hemlock
    wooly adelgid attacking eastern hemlock.
        Question. How will these cuts impact the Forest Service's response
    to the increased threat of sudden oak death syndrome to eastern oak
    forests?
        Answer. In fiscal year 2004, the Forest Service allocated $1.7
    million for survey and management activities related to sudden oak
    death (SOD). Recently, we allocated an additional $1 million to survey
    and sample forestlands threatened by spread of SOD through infected
    nursery stock, much of which has proved untraceable. The Forest Service
    has pledged to help our partners find and eradicate incipient
    infestations, and protect the eastern hardwood forests, to the degree
    funding allows.
        Question. How many acres are in the greatest need of fuels
    reduction treatments?
        Answer. The Forest Service's Cohesive Strategy published in October
    2000 identified some 73 million acres of National Forest lands that are
    in fire regime 1 and 2, condition class 2 and 3, at high risk of
    wildland fire, and in greatest need for fuel reduction treatments.
        Question. How many acres does the Agency plan to treat in 2005
    compared to 2004?
        Answer. The Agency plans to treat 1.6 million acres in fiscal year
    2004 and 1.8 million acres in fiscal year 2005.
        Question. Please outline the various programs besides fuels
    reduction that also further the goals of the Healthy Forests Act and
    reduce fuels in our forests?
        Answer. The fuels reduction program is integrated with other
    programs that support wildlife habitat improvements, watershed
    enhancements, vegetation management, timber harvest, and forest health
    management, and research. Some of the budget line items within the
    National Forest System appropriation include; Wildlife and Fisheries
    Habitat Management, Forest Products, Vegetation and Watershed
    Management, and Hazardous Fuels. Budget line items within the State and
    Private Forestry appropriation include; Forest Health Management--
    Federal Lands, and State Fire Assistance. Some of our Permanent
    Appropriations and Trust Funds include; Timber Salvage Sales, and
    Cooperative Work--Knutson-Vandenberg. A portion of our Research
    appropriation also contributes to the goals of the Healthy Forests
    Restoration Act.
        Some of the new tools now available include the new categorical
    exclusions provided through the Healthy Forest Initiative that focus on
    hazardous fuels reduction and post-fire rehabilitation, and the limited
    timber harvest categorical exclusions that include the thinning of
    overstocked stands of timber, salvage of dead or dying trees, and
    harvest of trees to control insect and disease. The stewardship
    contracting authorities are also being used to meet the intent of the
    Healthy Forests Initiative and reduce fuels. Planning and
    implementation of timber sales is being focused in areas where fuel
    reduction needs are greatest. To accomplish fuel reduction with
    stewardship contracts, the fuels treatments will be done through
    trading goods for services.
        Question. Please explain the rationale for the administration's
    proposal to move the funding for hazardous fuels reduction from the
    Fire account to the National Forest System account?
        Answer. The proposal is consistent with the President's Healthy
    Forest Initiative and the Healthy Forest Restoration Act. It enhances
    consideration of the effects of all vegetative management treatments
    upon the condition class of NFS resources. The proposal will allows
    managers to consider in a quantifiable, systematic manner the relative
    costs and benefits of proposed projects upon wildfire risk reduction
    and other land resources management objectives. The proposal also will
    allow the agency the ability to prioritize fuels reduction projects
    along with other NFS programs if it becomes necessary to transfer funds
    to Wildland Fire Suppression during severe wildfire seasons. This
    discretion is not currently available.
        Question. Why is this transfer necessary?
        Answer. The proposal enhances consideration of the effects of all
    vegetative management treatments upon the condition class of NFS
    resources. The proposal will allows managers to consider in a
    quantifiable, systematic manner the relative costs and benefits of
    proposed projects upon wildfire risk reduction and other land resources
    management objectives.
        Question. On March 23, 2004, the Department of Agriculture,
    Department of the Interior, and Department of Commerce signed an
    agreement to implement new regulations that will expedite fuels
    reduction and other forest health projects while ensuring the
    protection of threatened and endangered species. The Forest Service and
    BLM are preparing a Northern Rockies Lynx FEIS and ROD to amend the
    Forest plans of 18 Forests in Montana, Idaho, Wyoming, and Utah.
        How will the Agency measure the success of the new regulations to
    expedite forest health projects?
        Answer. The Forest Service tracks hazardous fuels reduction
    accomplishments through an inter-agency National Fire Plan Operations
    and Reporting System database (NFPORS). Through this database, the
    Agency can review planned and realized hazardous fuels reduction
    accomplishments. In addition, the Chief's office will be conducting
    fuels program reviews, which will provide an additional feedback
    mechanism for monitoring the efficacy of the Agency's new authorities
    and tools.
        Question. How will the Northern Rockies Lynx Amendment FEIS and ROD
    reduce the ``analysis paralysis'' for projects other than hazardous
    fuel treatment?
        Answer. The comment period for the Northern Rockies Lynx Amendment
    Draft Environmental Impact Statement (EIS) closed April 15, 2004. We
    are evaluating those comments to determine what, if any, changes are
    needed in the Final EIS, including the need to modify the preferred
    alternative. Therefore it is somewhat premature to answer this
    question.
        Question. Will the new lynx amendment allow the Forest Service to
    provide adequate snowmobile play areas or groomed trails to offset the
    reduction or worse, the loss of snowmobile use in Yellowstone National
    Park?
        Answer. The management direction only applies to lynx habitat on
    National Forest and Bureau of Land Management system lands, and only
    applies to routes or areas that are designated for over-the-snow
    recreation. Routes or areas designated for over-the-snow recreation are
    those areas under permit or included in winter recreation maps/
    brochures where we encourage use.
        The comment period for the Northern Rockies Lynx Amendment Draft
    Environmental Impact Statement (EIS) closed April 15, 2004. We are
    evaluating those comments to determine what, if any, changes are needed
    in the Final EIS, including the need to modify the preferred
    alternative. Therefore it is somewhat premature to answer this
    question.
        The alternatives considered in the Draft EIS have varying abilities
    to accommodate increased levels of snowmobile use. Alternative B
    essentially maintains the status quo. Alternatives C, D, and E allow
    some level of increased use. The Draft EIS did not include a detailed
    analysis regarding the amount of surplus capacity available on National
    Forest System lands that would be available under each alternative to
    absorb use from Yellowstone National Park, should they limit snowmobile
    use there.
        Question. The Forest Service recently acquired 25 surplus COBRA
    helicopters from the Army surplus yard at Ft. Drum, NY. Two of those
    COBRA's have been outfitted by the Forest Service with state of the art
    electro-optical/infrared (EO/IR) sensors which significantly enhance
    the operator's ability to see in obscure or reduced visibility
    situations, which is often present in fire fighting situation. Many
    Federal law enforcement and military services are already using this
    technology.
        The Committee understands that for the Forest Service this EO/IR
    technology may have the capability to accurately determine the position
    of hotspots and fire lines and pass the precise GPS coordinates to
    ground crew in real time; track the progress of ground crews and assess
    dangerous developing situations; and with this technology fire fighters
    can more effectively direct aerial tanker assets.
        Could you provide the Committee an update on where the two EO/IR
    systems are currently being deployed?
        Answer. The first Cobra EO/IR system has recently been completed
    with the assistance of USFS Region 5 (California) as the program's
    initial administrator. The Cobra is currently in Redding, California
    and is scheduled to become available for fire assignments on May 24,
    2004 (the historical average start of the California fire season). This
    Cobra could be mobilized earlier if other geographic areas request it.
        A second Cobra EO/IR system is currently being converted at Ft.
    Drum, NY and should be ready for delivery by mid-June 2004. It will
    then be relocated to Grass Valley, California and activated shortly
    thereafter.
        Question. Who ultimately determines when and how those two COBRA
    units will be used for aerial fire surveillance, tactical fire fighting
    missions, possibly search and research, or any other purposes?
        Answer. These assets are considered national resources and can be
    mobilized at anytime by a number of mechanisms. The host Geographic
    Area Coordination Center (GACC) or Multi-agency Coordinating Group (MAC
    Group) is responsible for assigning appropriate resources to any
    outstanding order they receive. When there is serious competition for
    resources in multiple geographic areas, the National Interagency
    Coordination Center (NICC) or the National MAC Group (NMAC) will
    determine priorities and may reassign any ``national resource.''
        The crew of the aircraft will be directed to a delivery point or
    incident and coordinate with a dispatch center, line officer or
    incident personnel as to how they will be utilized. The crew will
    advise those requesting assistance of their ability to accomplish
    specific missions in an effective and safe manner.
        Question. The Forest Service maintains an admirable record of
    controlling over 90 percent of the fires which present themselves on
    Federal lands, but those outbreaks which do develop into Type I (major)
    fires are extremely costly and disruptive to the Forest Service budget.
    Could you provide a breakdown of the cost of controlling/containing
    Type I fires compared to other smaller fires in fiscal year 2003-2004?
        Answer:

    ----------------------------------------------------------------------------------------------------------------
                                                                  Fiscal year                Fiscal year
                         Fire Class & Size                           2003        Percent      2004 \1\      Percent
    ----------------------------------------------------------------------------------------------------------------
    Small (A, B, C, & D class .25 to 299.9 acres).............    $100,600,626        7.9     $20,802,427        4.3
    Large (E, F, & G 300-5,000+ acres)........................   1,170,224,295       92.1     460,873,744       95.7
                                                               -----------------------------------------------------
          Total...............................................   1,270,824,921  .........     481,676,170  .........
    ----------------------------------------------------------------------------------------------------------------
    \1\ Fiscal year 2004 costs incurred from 10/1/2003 through 4/29/2004.

        Question. Could you provide a table delineating the major cost
    items, such as man-power, fuels, leased equipment, retardant, etc. for
    Type I fires in fiscal year 2003-2004?
        Answer. Our ability to break down major cost items is limited to
    the Budget Object Class information contained in the accounting system.
    So, for example we can break information into personnel costs, travel,
    supplies and equipment, and contracts, but we cannot separately
    identify retardant or fuels expense. We were unable to compile the
    requested detail by the due date.
        Question. If the fire situation in the west worsens this year, does
    the Forest Service have the capability to rapidly convert additional
    COBRA units with EO/IR sensing equipment from within available funds?
        Answer. There are no plans nor designated funds currently budgeted
    to expand the program beyond the two cobras that have been identified.
                                     ______

                   Questions Submitted by Senator Ted Stevens

        Question. I am pleased to see that the Forest Service proposes an
    increase of $63.8 million above fiscal year 2004 for hazardous fuel
    reduction near and around the WUI, which includes $1.29 million for
    Alaska. However, these funds will only provide treatment on 361 acres
    on the Chugach National Forest. Over 200,000 acres of untreated
    hazardous fuels within the WUI still remain on the Kenai Peninsula. The
    Kenai Peninsula has been devastated by the spruce beetle--almost 4
    million acres of forests were infested and killed by the spruce beetle.
    This negatively impacts wildlife habitat, fisheries, and watersheds,
    and contributes to the fire hazards in the area. Given these
    statistics, why is the Forest Service proposing treatment on only 361
    acres?
        Answer. The Forest Service proposes to treat 361 WUI acres in
    fiscal year 2004 on the Chugach, financed out of Wildland Fire
    Hazardous Fuels (WFHF) funds, because those acres were identified as
    the priority for the Alaska region, and are at high risk for wildland
    fire. The Forest Service also allocated WFHF funds to the Alaska
    Division of Forestry to treat 110 acres on state lands adjacent to
    Federal lands in high risk areas on the Kenai. The Forest Service has
    allocated non-WFHF funds to treat 325 WUI acres of hazardous fuels on
    the Kenai. Thus, the total number of acres to be treated on Forest
    Service and state & private lands on the Kenai Peninsula, using
    Hazardous Fuels and other Forest Service funds, is 796 acres.
    Additional funds have been allocated for treatment of hazardous fuels
    on the Kenai Peninsula via State Fire Assistance, National Fire Plan
    and congressional earmarks.
        The acres at risk in the WUI on the Kenai Peninsula are primarily
    located on State or private land. Congressional earmark funds have been
    directed to the Kenai Peninsula for several years to treat this
    hazardous fuel. In 2002, $6 million was allocated to State, Tribal, or
    local entities for treatment of hazardous fuels on State or private
    lands on the Kenai; in 2003, the Forest Service also allocated $5.4
    million for the Kenai, and in 2004, $5.9 million was set aside for this
    purpose.
        A Collaborative Forest, Wildfire and Fuels Treatment Program--
    Coordinating Committee has been established, representing major land
    owners on the Kenai Peninsula, to help plan and prioritize hazardous
    fuel treatment projects to insure that funds expended by State, Tribal,
    or municipal authorities achieve maximum benefits for community fire
    protection and are spent in accordance with Congressional intent. A 5-
    year fire prevention & protection, forest health, restoration &
    rehabilitation and community assistance action plan has been developed
    and will be implemented under the direction of the coordinating
    committee. The action plan is titled the ``Interagency All Lands/All
    Hands 5-Year Action Plan (2004-2008)''.
        Question. I am extremely concerned that the Forest Service's budget
    proposes only $4.64 million for the State & Private Forestry account in
    Alaska, a $3.39 million decrease in funding. This program provides
    grants to communities for land-use treatments on private lands to
    protect communities from wildfires, which is very important to
    communities in Alaska that are surrounded by Federal lands. Given the
    President's focus on maintaining healthy forests, why did the Forest
    Service decrease funding?
        Answer. The amount of funds going to Alaska in fiscal year 2005, as
    shown in the budget justification, is a very rough estimate. The
    allocation has not yet been determined with any degree of precision.
    Forest Health funds will depend on conditions that are not yet known.
    Cooperative fire, forest stewardship, and urban forestry funds vary
    with the amount of funding--to the degree that funding is higher or
    lower, Alaska's share will be higher or lower. Forest legacy funds are
    project-specific; the President's budget includes $1,000,000 for the
    Agulowak River project, plus a yet-to-be-determined amount for program
    administration.
        Question. Another program important to my state is the Economic
    Action Program. This program develops partnerships with the state and
    communities to improve management and protection of forest products and
    maintaining forest health to achieve long term goals for sustainable
    development. It has provided grants to 17 communities near the Chugach
    and Tongass National Forests totaling more than $2 million. Despite the
    critical importance of these grants to forest dependent communities in
    Alaska, the Forest Service eliminated funding for this program. Why was
    funding eliminated?
        Answer. The President's Budget focuses on USDA's rural development
    programs and in other Forest Service Programs that both directly and
    indirectly assist communities. Forest Service programs that benefit
    communities include forest health management, state and volunteer fire
    assistance, forest stewardship, urban and community forestry, and the
    hazardous fuels reduction program.
        For those places that already have adequate community capacity to
    compete for loans and grants, USDA's Rural Development programs can
    address the needs via the following programs:
      --Business and Industry guaranteed loans.--Provides up to 90 percent
            guarantee of a loan made by a commercial lender for
            agricultural enterprises. The business applying for the loan
            must already have strong equity and collateral.
      --Rural Business Enterprise Grants.--Provides grants to public
            institutions to assist agricultural business. Grants do not go
            directly to businesses.
      --Intermediary Re-lending Program.--Provides grants for
            intermediaries to re-lend through an adequately secured loan
            for new agricultural businesses, and expansion of those
            existing businesses unable to obtain a conventional loan.
      --Rural Business Opportunity Grants.--Promotes sustainable economic
            development in rural communities with exceptional needs such as
            natural disasters, structural changes, and persistent poverty
            or population decline. Provides grants for economic planning,
            business assistance, and training to obtain specific USDA-RD
            program funding.
      --Cooperative Development Grants.--Grants are available for
            cooperative development to establish and operate centers for
            cooperative development.
        Question. The 2002 Farm Bill authorized $100 million over 5 years
    for the Forest Land Enhancement Program to provide financial and
    technical assistance through State Foresters to landowners to implement
    land enhancement practices. These improve the productivity and health
    of non-industrial private forest land. In Alaska, over $800,000 was
    used for reforestation efforts. The Forest Service's budget proposes
    eliminating this program by reprogramming $40 million to other high
    priority programs. What will the Forest Service do with those funds?
        Answer. FLEP activities qualify for other Forest Service, Federal,
    or State conservation program support. As of 2004, USDA alone
    administered 23 programs that give agricultural land users financial
    incentives to apply conservation measures to their farms, ranches, and
    forests. These programs are included in the following table:

    ----------------------------------------------------------------------------------------------------------------
                  USDA Bureau                           Program                   Resource conservation issues
    ----------------------------------------------------------------------------------------------------------------
    FSA....................................  Emergency Conservation         Land damaged by wind erosion and other
                                              Program.                       disasters, including drought.
    FSA....................................  Soil and Water Conservation    Conserve, improve, and sustain natural
                                              Loan Program.                  resources and environment.
    FSA....................................  Conservation Reserve Program.  Wildlife habitat.
                                                                            Tree planting.
                                                                            Enhance forest and wetland resources.
    FSA....................................  Conservation Reserve           Improves water quality by establishing
                                              Enhancement Program.           vegetative buffers, including trees.
    FSA....................................  Farm Debt Cancellation--       Environmentally sensitive lands for
                                              Conservation Easements         conservation, recreation, and wildlife
                                              Program.                       purposes.
    FSA....................................  Integrated Farm Management     Conserving soil, water, and related
                                              Option.                        resources, including forests.
    FS.....................................  Forest Legacy Program........  Conservation easements for forests
                                                                             threatened with conversion to non-
                                                                             forest uses.
    NRCS...................................  Colorado River Basin Salinity  Conservation practices that reduce salt
                                              Control Program.               levels in the Colorado River.
    NRCS...................................  Rural Clean Water Program....  Rural non-point source pollution
                                                                             control.
    NRCS...................................  Small Watershed Program......  Improve water quality in small
                                                                             watersheds.
    NRCS...................................  Emergency Wetland Reserve      Restore wetlands function.
                                              Program.
    NRCS...................................  Water Bank Program...........  Conserve water and wildlife habitat.
    NRCS...................................  Wetlands Reserve Program.....  Range land, pasture, or production
                                                                             forest land where the hydrology has
                                                                             been significantly degraded and can be
                                                                             restored.
    NRCS...................................  Agricultural Management        Plant trees for windbreaks.
                                              Assistance.                   Integrated pest management.
    NRCS...................................  Conservation Innovation        Water.
                                              Grants.                       Soil.
                                                                            Air.
                                                                            Grazing Land and forest health.
                                                                            Wildlife habitat.
    NRCS...................................  Conservation Security Program  Maintain and enhance the condition of
                                                                             natural resources, including forests.
    NRCS...................................  Emergency Watershed            Watershed protection.
                                              Protection.
    NRCS...................................  Environmental Quality          Prescribed burning.
                                              Incentive Pro-  gram.         Planting.
                                                                            Fencing.
                                                                            Riparian forest buffers.
                                                                            Firebreaks.
                                                                            Forest site preparation.
                                                                            Tree/shrub enhancement.
                                                                            Forest trail and landings.
                                                                            Forest stand improvement.
    NRCS...................................  Watershed Protection and       Water needs for fish, wildlife, and
                                              Flood Prevention.              forest-based industries.
    NRCS...................................  Farm and Ranch Lands           Conservation easements.
                                              Protection Program.
    NRCS...................................  Grasslands Reserve Program...  Conservation easements.
    ----------------------------------------------------------------------------------------------------------------

        The General Accounting Office, in its report entitled Federal
    Budget: Opportunities for Oversight and Improved Use of Taxpayer Funds
    (GAO-03-922T June 18, 2003), stated:

    ``Policymakers and managers need to look at ways to improve the
    economy, efficiency and effectiveness of Federal programs and specific
    tax expenditures. Even where we agree on the goals of programs,
    numerous opportunities exist to streamline, target and consolidate to
    improve their delivery. This means looking at program consolidation, at
    overlap and at fragmentation.''

        In addition to the 23 other conservation incentive programs within
    USDA alone, the fiscal year 2005 President's Budget includes $129.5
    million for the Department of the Interior's Cooperative Conservation
    Initiative. That amount is a 25 percent increase over fiscal year 2004.
    Because FLEP is duplicative of services provided by other programs of
    USDA and DOI and countless other programs of other Federal agencies,
    States or non-government organizations, the proposal is fully
    consistent with GAO's suggestion.
        Question. The Forest Service also eliminated $5 million in
    additional funding to prepare timber sales in Alaska. These funds are
    used to prepare environmental assessments and impact statements
    necessary to ensure a stable supply of timber available for harvesting
    while maintaining the multiple use mandate of the Forest Service. Under
    the Forest Service budget, how much funding will be allocated to
    Alaska's timber program in fiscal year 2005?
        Answer. The estimated allocation to the Alaska Region is $25.5
    million. The final allocations to the Region will be based Agency's
    total final enacted budget.
        Question. Alaska currently has a backlog on road maintenance
    projects. It is estimated that an additional $5.6 million is needed to
    address this situation. What portion of the Forest Service's road
    maintenance budget will be allocated to Alaska?
        Answer. Road maintenance is not broken out from capital
    improvements by region in the Roads budget line item. The final
    allocation of the Roads, Capital Improvement and Maintenance
    appropriation will be based on the Agency's total final enacted budget.

                              SUBCOMMITTEE RECESS

        Senator Burns. Thank you all very much. The subcommittee
    will stand in recess to reconvene at 9:30 a.m., Thursday, March
    25, in room SD-124. At that time we will hear testimony from
    the Honorable Gale A. Norton, Secretary, Department of the
    Interior.
        [Whereupon, at 10:29 a.m., Thursday, March 11, the
    subcommittee was recessed, to reconvene at 9:30 a.m., Thursday,
    March 25.]

      DEPARTMENT OF THE INTERIOR AND RELATED AGENCIES APPROPRIATIONS FOR
                                FISCAL YEAR 2005

                                  ----------

                            THURSDAY, MARCH 25, 2004

                                           U.S. Senate,
               Subcommittee of the Committee on Appropriations,
                                                        Washington, DC.
        The subcommittee met at 10:16 a.m., in room SD-124, Dirksen
    Senate Office Building, Hon. Conrad Burns (chairman) presiding.
        Present: Senators Burns, Stevens, Bennett, and Dorgan.

                           DEPARTMENT OF THE INTERIOR

                            Office of the Secretary

    STATEMENT OF HON. GALE A. NORTON, SECRETARY
    ACCOMPANIED BY:
            LYNN SCARLETT, ASSISTANT SECRETARY, POLICY, MANAGEMENT, AND
                BUDGET
            JOHN TREZISE, DIRECTOR, OFFICE OF BUDGET

                   OPENING STATEMENT OF SENATOR CONRAD BURNS

        Senator Burns. We're going to call this hearing to order,
    thank you very much, Madam Secretary, for allowing us to
    maneuver a little bit this morning. We did have a lot of things
    going on, and it was my fault, because both committee hearings
    that I'm involved in this morning have quite a lot of gravity
    to them. I appreciate your flexibility to come down and start
    45 minutes late, we will try to get done the important work
    that you do and the important work that I think we do.
        I also appreciate you coming by earlier this week. We had a
    good discussion on a number of topics, of which I think we are
    moving to some fruition and we will probably cover a little
    more of that today, but nonetheless, thank you for coming.
        The Department of the Interior budget totals $11 billion
    this year, $10 billion of which is under this subcommittee's
    jurisdiction. This amounts to a 3.4 percent increase if we take
    out the emergency funds provided in fiscal year 2004 for
    wildland fire.
        In the context of the broader budget situation and our
    emphasis on defense and homeland security, that's pretty good.
    I think it's a sign that the President and the director of OMB
    have confidence in what you're doing over at the Department of
    the Interior, and I also want to congratulate you on a lot of
    things that you've done down there.
        But as we get into the details, it's obvious that we're
    going to have some issues in your budget as we go forward, and
    I'm sure they can be worked out. As has become the custom in
    recent years, every specific project or priority identified by
    Congress in fiscal year 2004 has been stripped from the budget,
    generally without any apparent consideration of its worthiness
    of those priorities. You've used those reductions to finance a
    number of increases in your own priorities, such as various
    programs that make up the ``Cooperative Conservation''
    Initiative. While many of these programs have long been
    supported by this committee, we're going to have to look
    carefully at the trade-offs inherent in these proposed
    increases.
        There are also a handful of big ticket items in your budget
    proposal that we'll want to talk about. You're proposing a $53
    million increase, or 28 percent for the abandoned mine
    reclamation in conjunction with the administration's proposal
    for SMCRA reauthorization. As I'm sure you're aware there are
    several different reauthorization proposals that have been
    introduced in Congress, and I think it's anybody's guess on the
    outcome of the legislative process and how that will impact the
    2005 appropriation.
        You've also asked for an additional $161 million for
    activities related to Indian trust reform. Let me first say
    that your dedication to addressing this problem has been
    outstanding and it cannot be denied. There is plenty for people
    to quibble about in the terms of the specifics of trust reform,
    but nobody can rightly deny that you have dedicated an immense
    amount of time and effort to the problem and that you have
    advanced the ball significantly down the field.
        That said, we still need to talk a great deal about the
    next set of investments that you're asking us to make in what
    sometimes appears to be a fiscal black hole. Sometimes we throw
    good money after bad.
        Your budget also includes an additional $58 million for the
    wildland fireaccount, including increases of $29 million for
    fire suppression and $25 million for hazardous fuels reduction.
    I don't have to tell you that these costs of wildland fire have
    been eating our lunch, just absolutely tearing our head off the
    past few years. Consistently high levels of fire borrowing has
    been disruptive to a number of programs, and have led directly
    to the cutting or cancellation of projects funded by this
    committee. We hope to avoid that this year, but as you know,
    sometimes those kinds of activities are unavoidable.
        I'm hopeful that between the additional funds included in
    your request and the firefighting reserve fund I worked to
    include in the Senate budget resolution, we can avoid
    disruptive borrowing this year. But over the long term the
    solution lies with better management of our forests, and in
    actively working to restrain firefighting costs. I look forward
    to hearing your progress on those fronts.
        Finally, I want to express my appreciation for one
    particular item in the budget request. For the first time
    during your tenure, the administration is not proposing a large
    decrease in PILT, payment in lieu of taxes. Counties that have
    large amounts of public lands rely on those funds in their
    budgets. While I certainly like to see a larger increase than
    the one you've proposed, this budget is a significant
    improvement over the previous ones. In that regard, I give you
    great credit and we appreciate that very much.

                               PREPARED STATEMENT

        Since we've got a busy committee schedule this morning,
    I'll simply stop here and say that this is a work in progress,
    as you well know and I'm sure that we can find common ground
    and fund the agency as it should be.
        [The statement follows:]

                   Prepared Statement of Senator Conrad Burns

        Welcome Madam Secretary. It's good to see you here again.
        I appreciated your taking the time to come by my office earlier
    this week. We had a good discussion about a number of topics, many of
    which I'm guessing we'll cover again this morning. But obviously
    there's a lot more to cover. When it comes to your department, there is
    never an absence of things to talk about.
        The fiscal year 2005 budget request for the Department of the
    Interior totals about $11 billion--$10 billion of which is under this
    subcommittee's jurisdiction. This amounts to about a 3.4 percent
    increase if we take out the emergency funds provided in fiscal year
    2004 for wildland fire.
        In the context of the broader budget situation and our emphasis on
    defense and homeland security, that's pretty good. I think it's a sign
    that the President and the Director of OMB have confidence in what
    you're doing over there.
        But as we get into the details, it's obvious we're going to have
    some issues with your budget as we go forward. As has become the custom
    in recent years, every specific project or priority identified by
    Congress in fiscal year 2004 has been stripped from the budget--
    generally without any apparent consideration of the worthiness of those
    priorities.
        You've used those reductions to finance a number of increases for
    your own priorities, such as the various programs that make up the
    ``Cooperative Conservation'' initiative. While many of these programs
    have long been supported by this Committee, we're going to have to look
    carefully at the tradeoffs inherent in these proposed increases.
        There are also a handful of big ticket items in your budget
    proposal that we'll want to talk about. You're proposing a $53 million
    increase, or 28 percent, for Abandoned Mine Reclamation in conjunction
    with the Administration's proposal for SMCRA [SMACK-rah]
    reauthorization. As I'm sure you're aware there are several different
    reauthorization proposals that have been introduced in Congress, and I
    think it's anybody's guess how the outcome of the legislative process
    will impact the fiscal year 2005 appropriation.
        You've also asked for an additional $161 million for activities
    related to Indian trust reform. Let me first say that I think your
    dedication to addressing this problem is admirable, and cannot be
    denied. There is plenty for people to quibble about in terms of the
    specifics of trust reform, but nobody can rightly deny that you have
    dedicated an immense amount of time and effort to the problem, and that
    you have advanced the ball significantly since you arrived. That said,
    we'll need to talk a great deal about the next set of investments
    you're asking us to make in what sometimes appears to be a fiscal black
    hole.
        Your budget also includes an additional $58 million for the
    wildland fire account, including increases of $29 million for fire
    suppression and $25 million for hazardous fuels reduction. I don't have
    to tell you that the costs of wildland fire have been eating our lunch
    for the past several years. Consistently high levels of fire borrowing
    have been disruptive to a number of programs, and have led directly to
    the cutting or cancellation of projects funded by this Committee.
        I'm hopeful that between the additional funds included in your
    request and the firefighting reserve fund I worked to include in the
    Senate budget resolution, we can avoid disruptive borrowing this year.
    But over the long term the solution lies in the better management of
    our forests, and in actively working to restrain firefighting costs. I
    look forward to hearing of your progress on those fronts.
        Finally, I want to express my appreciation for one particular item
    in the budget request. For the first time during your tenure the
    Administration is not proposing a large decrease in the PILT program.
    While I'd certainly like to see a larger increase than the one you've
    proposed, this budget is a significant improvement over previous ones
    in that regard. I give credit where credit is due.
        Since we have a busy committee schedule this morning, I'll stop
    here and simply say that I look forward to working with you as the
    process goes forward--which hopefully it will.

        Senator Burns. I welcome my good friend from across the
    little Missouri River in North Dakota, Byron Dorgan.

                  OPENING STATEMENT OF SENATOR BYRON L. DORGAN

        Senator Dorgan. Senator Burns, thank you very much. Madam
    Secretary, thank you for being with us this morning. This is a
    fairly sizable Department and budget request with a lot of very
    important functions, and I will want to visit with the
    Secretary about a range of things, some of which she will
    anticipate before she came here, the United Tribes Technical
    College, tribal college funding, and a series of issues dealing
    with the Bureau of Indian Affairs and Indian health issues and
    so on.
        As I indicated, this is a very large appropriation for an
    agency that has an impact on much of this country in many
    significant ways and I'm very pleased the Secretary is with us
    today. Senator Burns, you mentioned the payment in lieu of
    taxes. Let me add a comment about that. That is a very, very
    important piece of work that we do and we have chronically
    underfunded that over many, many years. The Federal Government
    really does have a responsibility to make up for those revenues
    that had been previously paid in taxes to support schools and
    children and local government functions, and we have not done
    nearly enough, and so we'll visit about that this morning as
    well.
        Senator Burns. Thank you, Senator Dorgan. Senator Bennett.

                 OPENING STATEMENT OF SENATOR ROBERT F. BENNETT

        Senator Bennett. Thank you very much, Mr. Chairman, and
    Secretary Norton, welcome. I must join with my colleagues in
    saying thank you for recognizing reality on PILT. Previous
    budgets have always low-balled it, knowing that the Congress
    would bring it to where it needed to be and then we'd get
    beaten up for being the spendthrifts, and we're glad to have
    you join us now in spending the PILT levels that make more
    sense.
        I notice your chart here about the national parks system.
    I'll be happy to talk to you about that. I remember our
    colleague, Malcolm Wallop, with whom I served on the Energy and
    Natural Resources Committee, who always voted against adding
    any acreage at all to the national parks system, and I'd say
    why, don't you like national parks? He said, I love national
    parks, but what we have been doing for decades is adding to the
    national parks system while not adding to the budget, and I'm
    not going to vote for an additional acre of national park until
    we get the budget where it ought to be. And I'll be happy to
    visit with you about that during the question period.
        I've raised in previous times and will again in the
    question period the question of how much of the budget of
    various agencies goes for litigation. I've talked to our people
    in Utah about that and I'll be glad to pursue that with you,
    and then Alan Greenspan's warning to us on the Joint Economic
    Committee about the coming crisis, indeed, it's not coming,
    it's here, in natural gas and our inability to produce as much
    natural gas as we need to. It is the fuel of choice because
    it's cleaner, easier to transport, et cetera, than anything
    else, so everybody wants to build a natural gas fired--
    electricity plant, and then they wonder why the price keeps
    going up when they will not allow us to exploit the natural gas
    that we have on our public lands.
        So those are the areas that I will be talking to you about.
    Welcome and thank you for your service. This is not a fun
    Department always. This is not an easy situation ever, and your
    willingness to take on this assignment and serve as diligently
    as you have is something that does not get commented upon and
    appreciated as often as it should. So welcome to the committee
    and thank you for your willingness to carry on in this
    assignment.
        Senator Burns. Thank you, Senator Bennett. The chairman of
    the full committee, Senator Stevens, have you a statement?

                    OPENING STATEMENT OF SENATOR TED STEVENS

        Senator Stevens. Thank you, Mr. Chairman. I have just a few
    comments about Alaska. I do at the time, appropriate time, have
    a couple of amendments that I'd like--a couple of questions
    that I'd like to ask. If it does not become my turn before that
    time, I'll submit it for the record.
        Senator Burns. Thank you. Madam Secretary, welcome this
    morning and we look forward to your statement.

                    SUMMARY STATEMENT OF HON. GALE A. NORTON

        Secretary Norton. Good morning, Mr. Chairman, members of
    the committee. I'm happy to be here today to present our fiscal
    year 2005 budget proposal. Interior manages one out of every
    five acres of America's lands, lands where people work, play,
    enjoy nature's beauty, and sustain this nation's cultural and
    historical legacies.
        Our mission is challenging because the world around us is
    so complex. Expectations evolve, new technologies emerge, and
    our mission encompasses so much. We seek to leave a legacy of
    healthy lands and waters, thriving communities, and dynamic
    economies. That legacy depends on how well we work together
    across landscapes and across communities.
        As the chairman has noted, our overall budget request is
    approximately $11 billion in 2005. This is an increase of $250
    million. That includes the capability to help us achieve our
    vision of healthy lands, thriving communities, and dynamic
    economies by accelerating the clean-up of abandoned mine lands,
    advancing trust reform, expanding opportunities for cooperative
    conservation, and mitigating water problems in the West.

                                 NATIONAL PARKS

        In each of these endeavors, we are harnessing the
    collective creativity of our employees and our partners. Let me
    begin by discussing the national parks. Our parks harness these
    energies by employing about 118,000 volunteers who contribute
    over $4.5 million of work annually. The parks provide a very
    positive visitor experience. Visitor satisfaction with our
    parks was surveyed at 96 percent last year.
        An environmental advocacy group recently released
    Endangered Rangers, a study of the severe staffing shortages
    crippling America's national parks. The portrayal of what this
    report calls a human resources backlog is perplexing, given
    both recent and long-term funding commitments in support of our
    national parks and the funding support that has come from this
    committee.
        The Park Service budget for park operations is at an all-
    time high and we are proposing a further increase of $80
    million in 2005. The group's report says that funding for parks
    has declined by 20 percent since 1980. The chart that is behind
    me shows the reality. Park operations funding in nominal
    dollars has increased by 3\1/2\ times since 1980. That's far
    ahead of the overall Federal budget growth or Interior's
    appropriation. The red line on the chart is the overall Park
    Service budget increases, where the other two lines are
    Interior and overall Federal spending.
        To put this number in context, in inflation-adjusted
    dollars, the Park Service increase has been 121 percent. The
    discretionary spending for the Department of the Interior has
    increased by 12 percent in inflation adjusted dollars.
        The President and Congress have demonstrated a strong
    commitment to the parks. Although visitors are satisfied, we
    recognize the need to continue to improve park management to
    ensure that dollars are spent effectively and efficiently. I am
    working with Fran Mainella to review how we manage our parks to
    ensure that priorities are set and goals are achieved.

                            PARK MAINTENANCE BACKLOG

        The President pledged to address the park maintenance
    backlog. Our 2005 budget provides tools to improve
    accountability and a total of $1.1 billion in support of the
    President's commitment to address the deferred maintenance
    backlog. That budget includes $725 million for park facility
    maintenance and construction, which is a $25 million increase
    over 2004. Also, within the highway bill, there is a proposal
    for $310 million for park roads.
        We have already undertaken 1,300 projects to ensure safe
    trails, sturdy roofs, and smooth roads for our parks. We have
    also implemented management reforms to ensure that these funds
    are spent wisely and that the maintenance backlog will not
    recur. For the first time in its history, the National Park
    Service will have by the end of this fiscal year a complete
    facility condition index, thus allowing a systematic approach
    to facility repair and maintenance.
        Our budget also includes a $10 million increase in the
    National Park Service's historic preservation account for the
    First Lady's Preserve America Initiative, a multi-agency effort
    to promote the protection and contemporary use of historic
    sites through heritage tourism.

                              ABANDONED MINE LANDS

        Another challenge that is addressed in our 2005 budget is
    abandoned mine land reclamation. The problems caused by
    abandoned mines have long presented challenges to communities
    in which they are located. Since the Surface Mining Act was
    established in 1977, our program has reclaimed over 225,000
    acres of damaged and dangerous lands. But despite all the work
    done over the past two decades, more than 3\1/2\ million
    Americans still live less than 1 mile from dangerous, abandoned
    coal mines.
        I've traveled to see these sites in several States, and
    it's easy to see why they are so dangerous. There are steep
    cliffs, there are ponds with submerged dangers in them. Since
    1999, about 100 people have died in incidents related to
    abandoned mines.
        Over the past 25 years, the allocation formula under the
    act has resulted in shifting funds away from high priority
    sites. Most abandoned mine lands now go to States based on
    current coal production, yet there's no relationship between
    the current production and the magnitude of the abandoned mine
    land problem in each State. Today only about 52 cents of every
    dollar that we give out in abandoned mind land funding goes to
    the high priority sites.
        Because of this problem, we estimate that it would take 60
    years to reclaim dangerous abandoned mine sites in Pennsylvania
    and 50 years in West Virginia. Our budget addresses this
    dangerous problem by directing abandoned mine land funding to
    where the danger is the greatest. The reauthorization proposal
    would change the funding structure and it would allow States
    like Pennsylvania and West Virginia to eliminate significant
    health and safety problems within 25 years.
        Our proposal will remove 142,000 people from risk annually,
    an increase of 67 percent over the current program. To support
    this proposal, we are requesting $244 million for the abandoned
    mine land program. This is the largest amount ever requested
    since States established their programs almost 20 years ago. By
    acting now to refocus the program, and by directing funding to
    the highest priority sites, the abandoned mine land reforms
    will save $3 billion over the life of the program.

                                  INDIAN TRUST

        Let me now move on to Indian trust. This is another of our
    long-standing challenges. We very much appreciate the funding
    support that we have received from this subcommittee over the
    years in order to tackle this challenge.

                               INTERNET SHUTDOWN

        Before I go into our trust reform priorities, I'd like to
    report on the court-ordered shutdown of Interior's Internet
    access. Interior has invested tremendous effort and resources
    over the past 2 years to dramatically improve the functioning
    and security of our computer systems. Despite these efforts and
    tangible improvements, on March 15, the U.S. District Court for
    the District of Columbia in Cobell v. Norton issued a
    preliminary injunction that ordered a shutdown of most of
    Interior's information technology systems from access to the
    Internet. This ruling crippled our ability to carry out a host
    of statutory mandates and to provide services on which the
    public depends.
        It forced most of the Department's computers to be
    disconnected from the Internet, including external e-mail. It
    shut down our web sites. Our work force is spread across
    thousands of locations. The Internet allows us to handle
    information that we need to fulfill our responsibilities to
    manage these diverse areas. The court's ruling affected Indian
    schools, wildlife refuges, financial accounting, and
    distribution of oil and gas royalty payments.
        Fortunately, late yesterday the Court of Appeals put this
    ruling on hold temporarily and will soon consider a longer-term
    and more extensive appellate review. So as of today, most of
    our system will be back up and running, but we still have for
    the Bureau of Indian Affairs, the Office of Special Trustee,
    and the Solicitor's Office a disconnection that has been in
    effect for over 2 years now. They have had no Internet access
    since December 2001. This is also on appeal.

                            INDIAN TRUST MANAGEMENT

        Now I'd like to focus on our unprecedented efforts to
    address trust management. We have a chart that shows our
    increased funding for trust management. In 2003, the Department
    began reorganizing trust functions in the Bureau of Indian
    Affairs and the Office of Special Trustee. The new organization
    resulted from a detailed analysis and a year-long consultation
    process with tribal leaders. Our reorganization reflects a
    synthesis of the views we heard during that consultation
    process.
        The reorganization will help us meet our fiduciary trust
    responsibilities and provide better customer service for our
    beneficiaries. Yet one of the greatest challenges in managing
    these trusts remains, the fractionation of individual Indian
    interests in land that the Federal Government holds in trust.
        As you can see from this chart, with each successive
    generation, individual interests in the land have become
    further and further divided among heirs, each of whom holds a
    smaller and smaller interest in the land. For example, if a
    couple in 1887 owned an undivided interest in 40 acres and that
    couple has four heirs, as you see on the chart, and each of
    them has four of their own heirs, by the time we reach the
    fifth generation, each heir owns less than half a percent of
    the original 40 acres. Without corrective action, millions of
    acres of land will be owned in such small ownership interests
    that no individual owner derives any meaningful value from that
    ownership.
        Our 2005 budget supports our trust reorganization needs. It
    also funds a major expansion in our efforts to reduce the
    fractionation of Indian trust lands. To support these trust
    reform efforts, the 2005 budget includes a $53 million increase
    to reduce the fractionation of Indian lands. Another $7 million
    increase will sustain and expand work begun in prior years to
    reform, re-engineer, and reorganize trust duties so the
    Department can better fulfill its fiduciary responsibilities.
    This work will not be easy. We will continue to work with this
    committee to find constructive solutions for land
    fractionation, probate, and related issues.

                                 WILDLAND FIRE

        We are also continuing to work with Congress on the problem
    of catastrophic fires. Our Nation's communities must not
    continue to experience the unnatural catastrophic fires that
    have devastated homes and habitats in recent years. We must
    restore forest and rangeland health.
        On December 3 of last year, President Bush signed the
    bipartisan Healthy Forests Restoration Act. That legislation
    will help us reduce threats from destructive wildfires, enable
    us to restore forest and rangeland health, and encourage public
    participation in selecting and implementing projects to reduce
    unnaturally high levels of brush build-up and overly dense tree
    stands.
        Our budget provides a $25 million increase to conduct fuels
    reduction projects and monitor the results. In total, our
    budget includes over $300 million to advance the goals of the
    new legislation. This investment, together with that of the
    Forest Service, will provide a total of $760 million to meet
    the goals of the Healthy Forest Restoration Act. Our new
    stewardship contracting authority will help us to partner with
    small businesses, non-profits, and local communities to restore
    healthy forests and reduce catastrophic fires.

                            COOPERATIVE CONSERVATION

        Our overall cooperative conservation budget of $507 million
    includes many different grant programs, many of which are very
    familiar to this committee. All of these are based on
    cooperation with States, tribes, local governments, and the
    private sector. 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.
        For example, our 2005 budget proposal of $58 million for
    invasive species will enable us to partner with other agencies,
    States, tribes, and communities to combat the brown tree snake,
    salt cedar, and many other invasive species through research,
    prevention, control, and rapid response methods. In the Klamath
    River basin, the Department is seeking a long-term resolution
    to conflicts over water and land management. Our 2005 budget
    includes $67 million for this effort, an $18 million increase.
    By improving the health of the Klamath River basin ecosystem,
    we will benefit farmers, tribes, and wildlife.
        Through our cooperative conservation challenge cost share
    program, we funded 256 projects with more than 700 partners in
    40 States and Puerto Rico. We achieved an almost two to one
    matching of non-Federal to Federal funds, with a non-Federal
    portion of $23 million complementing the $13 million Federal
    share.
        Another example of cooperative conservation is the 11-State
    High Plains region, which includes agencies, communities, and
    citizens partnering together from North and South Dakota down
    to Texas. Our budget includes a $5 million increase for the
    High Plains partnership that will help leverage funding by
    partners for conservation efforts over the next 10 years on 2
    million acres.
        Central to all of our resource protection and resource
    management activities is an emphasis on results. Monitoring
    helps us assess those results. Are we achieving healthy lands?
    How effective are our management practices? Our budget includes
    increased funding for our monitoring efforts.

                             MANAGEMENT EXCELLENCE

        Across all of these proposals is the need for excellent
    management, and we have taken a number of steps to improve our
    management to make sure that we are operating more efficiently,
    including improvements to our information technology system
    purchasing and state-of-the-art e-government initiatives, and a
    clean audit opinion for the Department and improved financial
    management.

                               PREPARED STATEMENT

        Our 2005 budget supports our journey toward management
    excellence. Above all, it is a budget focused on partnerships
    and results. We look forward to working with Congress, the
    States, and all Americans to achieve these goals. Thank you.
        [The statement follows:]

                   Prepared Statement of Hon. Gale A. Norton

        Good morning. I am pleased to be here today before the Subcommittee
    on Interior and Related Agencies 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 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.
        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 mitigate
    water problems throughout the West through Water 2025; and supports the
    goals of the National Energy Plan.

                      ADDRESSING LONG-STANDING CHALLENGES

        Park Operations.--The National Park Conservation Association
    recently released Endangered Rangers, A Study of the Severe Staffing
    Shortages Crippling America's National Parks. The Study recognizes
    recent progress made in reducing the deferred maintenance backlog, but
    alleges a critical shortage of staff in America's national parks. This
    portrayal of what the study refers to as a ``human resources backlog''
    is perplexing, given both recent and long-term funding commitments in
    support of our national parks, and the funding support of this
    Committee.
        In the near term, the Park Service's operating account will grow by
    nearly 20 percent in actual dollars and by 13 percent in constant
    dollars from 2001-2005. The 2005 President's budget proposes to
    increase operational spending by $79.8 million, including $22.0 million
    in specific park base increases.
        Our review of the operating level of the National Park Service
    indicates that the system currently has more funds per full-time
    employee, per acre, and per visitor than at any time in its history. In
    addition, the Park Service has better tools for decision-making,
    including our state-of-the-art facility management system.
        The Association's Study reports that funding for parks has declined
    by 20 percent since 1980. Based on our records, funding for operation
    of the National Park System and the U.S. Park Police has increased by
    121 percent in constant dollars, or $473 million, since 1980. To put
    this number in context, the discretionary spending for the Department
    of the Interior in total has increased by 12 percent in constant
    dollars, or $506 million during this same time period.
        Park Maintenance Backlog.--President Bush pledged to improve the
    condition of National Park Service facilities and resources and
    committed $4.9 billion over 5 years for park facility maintenance and
    construction. The 2005 budget continues to fulfill the President's
    pledge, investing $1.1 billion for maintenance, rehabilitation, and
    road repair. The National Park Service's budget includes $724.7 million
    for park facility maintenance and construction, a $25.0 million
    increase over 2004. An additional $310.0 million for park roads is
    included in the Administration's legislative proposal to reauthorize
    the Highway Bill.
        In addition to providing additional resources for park stewardship,
    the 2005 request continues to provide critical tools to improve
    accountability. Utilizing data from annual condition assessments, which
    have been completed for almost all of its regular assets, the Park
    Service has developed an estimated facility condition index, an
    industry standard for quantifying the condition of facilities. This
    baseline provides a launching point for monitoring and addressing the
    maintenance backlog. In 2005, $8.2 million of a $13.2 million increase
    in the repair and rehabilitation budget targets improving the condition
    of priority buildings to good condition. By focusing on one asset
    category, the Park Service will be able to monitor improvements to the
    facility condition index and evaluate the performance and efficacy of
    maintenance programs. The Park Service is committed to bringing all
    assets up to acceptable condition on average with funds provided
    through 2009.
        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 one 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
    coal mines. The majority of funding in the program 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. We appreciate the funding we have received from
    this Subcommittee in addressing this challenge. 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 Subcommittee 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
    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

        Healthy Forests and Rangelands.--A significant, ongoing challenge
    we face is that of wild land fire and the risks that catastrophic fires
    pose to communities. The fires in California last fall were a poignant
    and tragic reminder that we must care for our forests and rangelands.
    Our Nation's communities must not continue to experience the unnatural,
    catastrophic fires that have devastated homes and habitat in recent
    years.
        This past December, President Bush signed the Healthy Forests
    Restoration Act. This landmark bipartisan legislation will help to
    restore forest and rangeland health and reduce threats from destructive
    wild fires. It will also encourage public participation in selecting
    and implementing projects to reduce unnaturally high levels of brush
    build up and overly dense tree stands.
        As part of our $743.1 million wild land fire proposal for 2005, the
    budget includes $209.3 million, a $25.0 million increase over 2004, to
    conduct fuels reduction projects and to monitor the results. In
    combination with forest and range improvement activities funded in
    other Interior programs, the 2005 budget includes over $300 million to
    advance the goals of the Healthy Forests Restoration Act. Including
    funding for the Forest Service, the 2005 budget includes $760 million
    to meet the goals of the Act.
        The 2005 request for the wild land fire program also includes
    $221.5 million, an increase of $28.6 million, to fund suppression
    activities, based on the 10-year average, and an increase of $6.5
    million for preparedness to address increasing costs in aviation
    contracts and for the fire program analysis system.
        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
    demand, 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 two-to-one, 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 Plains 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 two to one. They give us an opportunity
    to work hand-in-hand with States, communities, and local landowners to
    build support for long-term conservation.

                              PRESERVING HERITAGE

        Historic Preservation.--March 4, 2003 President Bush and the First
    Lady announced the Preserve America initiative to enhance the Federal
    government's assistance in protecting and supporting the contemporary
    use of historic properties. Developed in cooperation with the Advisory
    Council on Historic Preservation and the Department of Commerce, this
    initiative promotes heritage tourism and wide-ranging partnerships for
    the use and preservation of historic properties. Currently, 26 States
    have some form of heritage tourism program, an economic development
    tool that enhances education, creates jobs, and increases property
    values and tax revenues.
        The 2005 budget includes $10.0 million for Preserve America grants
    to support community efforts to demonstrate sustainable uses of
    historic and cultural sites and provide economic and educational
    opportunities related to heritage tourism. Grants will be awarded
    competitively to preservation entities, such as State and tribal
    historic preservation offices and designated Preserve America
    communities. The Save America's Treasures program, which helps preserve
    nationally significant buildings and cultural artifacts, with proposed
    funding of $30.0 million, complements Preserve America.
        Included within our LWCF Federal land acquisition request is $5
    million for partnerships with States and local governments to preserve
    Civil War battlefields, many of which lie amid areas of rapid
    development in the eastern States.

                           LAND MANAGEMENT CHALLENGES

        Invasive Species.--Invasive species threaten the ecological and
    economic health of the Nation. The total national costs associated with
    invasive species may exceed $100 billion annually. An estimated 5,000
    to 6,000 invasive species have already become established in the United
    States. The most effective strategy to protect native species and their
    habitats is early detection to prevent the establishment of additional
    invasive species.
        The 2005 budget includes $58.3 million for a multi-agency effort to
    address invasive species challenges. Funding will be used to control
    invasive species such as salt cedar in the southwest and control of the
    brown tree snake population on Guam to prevent its establishment on
    other Pacific islands and the U.S. mainland. In addition, Interior
    agencies will focus on early detection and rapid response and conduct
    research to develop test methods and control strategies. The priorities
    for the use of invasive species funding are established by the National
    Invasive Species Council.
        Wild Horses and Burros.--Approximately 39,000 wild horses and
    burros occupy public rangelands. Projected levels of removal and
    adoption are not keeping pace with the growth in the populations of
    these animals. The Bureau of Land Management predicts an unsustainable
    and unmanageable rise in the population based on current management
    regimes, creating the likelihood of ecological imbalance and
    degradation of rangelands, forage resources, and wildlife habitat. The
    2005 budget proposes increased funding for a long-term strategy to
    bring the number of horses to an appropriate management level. The
    budget includes an increase in appropriated funding of $10.5 million
    for the wild horse and burro program to undertake a collaborative
    program of population and habitat management. This increase is offset
    with decreases to programs that benefit from achieving appropriate
    management levels and with reductions to lower priority activities.
        Endangered Species.--Section 4 of the Endangered Species Act has
    strict, non-discretionary deadlines for the processing of listing and
    critical habitat actions. When the Service cannot comply with a section
    4 deadline, parties frequently file lawsuits under the citizen suit
    provision of the ESA. These missed deadline suits result in court
    orders or settlement agreements requiring the Service to act, as courts
    have concluded that they have little or no discretion to give the
    Service relief from the mandatory deadlines of section 4 of the ESA.
    Since fiscal year 2000, the Service's listing program has faced a
    continuing situation where the amount needed to complete court ordered
    listing actions (primarily critical habitat designations) pursuant to
    section 4 litigation has been estimated at or exceeding the funding
    available. In fiscal year 2003, for example, the Service exhausted
    essentially all of its fiscal year 2003 budget for critical habitat
    designations by the end of July and was compelled to suspend work on a
    number of designations that were required by court orders or settlement
    agreements until additional funding became available. The program
    expects continued litigation in fiscal year 2004 and 2005. The total
    funding request for the endangered species listing program is $17.2
    million, an increase of $5.1 million. Of this amount, $13.7 million, an
    increase of $4.8 million, is for critical habitat designations for
    already listed species. This increased funding will allow the Fish and
    Wildlife Service to meet its current and anticipated court orders for
    critical habitat designations. The request also includes $3.5 million
    for other listing activities, an increase of $240,000.

                               MANAGING RESOURCES

        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 $67.2 million for this effort, including
    $32.4 million for the Bureau of Reclamation and $34.8 million for work
    to be conducted by other Interior bureaus. Other government agencies
    will provide an additional $38 million, bringing a total of $105
    million to this effort. In addition to the $6.2 million increase in the
    FWS Partners program mentioned earlier, 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.
        Energy.--Lands and waters managed by Interior produce about 30
    percent of the Nation's energy supply. Approximately one-third of the
    natural gas, coal, and oil, one-half of geothermal energy, 17 percent
    of hydropower, and 20 percent of wind power are produced in areas
    managed by Interior. We are committed to implementing the President's
    National Energy Plan, a part of which focuses on a long-term strategy
    for producing traditional and renewable sources of energy on Federal
    lands while maintaining environmental protections and involving all
    interested persons in open decision-making processes.
        The 2005 budget request will help meet the Nation's energy needs by
    focusing on timely access to oil and natural gas resources on public
    lands, consistent with publicly developed land-use plans. We propose to
    maintain Bureau of Land Management oil, gas, and coal programs at the
    2004 funding level of $104.4 million through a combination of
    appropriated funds and $4.0 million in additional user fees generated
    through a proposed rulemaking to bring fees closer to costs for certain
    services. This funding level preserves significant increases that were
    appropriated over the last few years to continue making significant
    progress in reducing permitting backlogs and expediting access to
    energy resources. The budget also includes an $800,000 increase to
    enhance permitting of renewable energy development and processing of
    rights-of-ways for both renewable and non-renewable energy resources.
        As electric power plants shift from coal to clean-burning natural
    gas, the demand for natural gas is expected to increase significantly
    in the next 10 to 15 years. Gas hydrates present promise as an
    additional domestic source of natural gas to meet this skyrocketing
    demand. The 2005 budget for the Minerals Management Service proposes an
    increase of $200,000 to begin a tract-specific hydrate assessment to
    determine fair market value once production is practical. The Minerals
    Management Service proposes $400,000 to complete phase one of a 2-year
    study to examine the potential environmental impacts of the recovery of
    this energy source.
        The 2005 MMS budget includes an increase of $4.3 million for the
    Outer Continental Shelf Connect e-government initiative. The request
    represents the third year of a 6-year project to dramatically reform
    and streamline offshore business operations by improving connectivity
    between the government and the public. The initiative will create a
    citizen-centered web presence and build an e-government infrastructure
    across agencies. Total funding for the initiative in 2005 will be $16.0
    million.
        To ensure that the government receives optimal value on lease
    permits, technology used by MMS must keep pace with the private sector,
    which has embraced and developed new technologies to meet the
    increasing challenge of competition in exploring for petroleum
    resources. The 2005 budget includes $1.9 million for a 3-D
    visualization room, additional geological interpretive tools training,
    workstation-ready well logs, and seismic data management. All of these
    technologies have been routinely used by the private sector since 1995
    for making fair market determinations on lease sales.

                  MONITORING AND SCIENCE--KEYS TO PERFORMANCE

        Monitoring for Results.--Central to Interior's resource protection
    and resource management efforts is an emphasis on results. The 2005
    budget proposes to increase monitoring programs to strengthen the
    Department's capacity to assess program results and use that
    information to improve management. The budget requests $77.6 million
    for the NPS Natural Resource Challenge, an increase of $4.4 million
    over the 2004 level, to enhance the Park Service's capability to track
    ecosystem health and water conditions. The increase will fund six
    additional vital signs monitoring networks, bringing the total networks
    to 28. The increase will also fund the remaining seven of 32 water
    quality monitoring networks.
        The 2005 budget request for the Bureau of Land Management includes
    an increase of $4.0 million to strengthen and enhance resource health
    monitoring. Information on the health of resources and trend data help
    land managers develop and revise long-term resource management plans
    and guide day-to-day operational and permitting decisions. Monitoring
    programs provide information needed to ensure that land use plans and
    management decisions are having their intended effect. Monitoring also
    identifies changes in the status of resources on public lands. The 2005
    increase, which builds on the $1.9 million provided in 2004, will allow
    BLM to increase monitoring of oil and gas activity, rangeland
    management, and overall implementation of land use plans.
        We also propose additional increases for monitoring in the Fish and
    Wildlife Service to strengthen migratory bird programs and in the wild
    land fire program as a component of the Healthy Forests Initiative.
        Science.--Scientific research provides information needed to
    understand and resolve many of the complex issues faced by the
    Department. The U.S. Geological Survey is the Department's primary
    source of scientific research, earth sciences data, and other geologic
    information and conducts research on earth and biological processes,
    including natural resources and natural hazards. The 2005 budget
    request includes $919.8 million to continue the Department's science
    programs in the U.S. Geological Survey.
        The Department is increasing the role of science in improving the
    effectiveness of Federal resource management decision-making. We are
    also avoiding duplication in our science efforts. The 2005 budget
    requests an increase of $1.2 million for ``Science on the DOI
    Landscape'' to address priority bureau science needs. The USGS budget
    also includes $1.0 million for Water 2025. This joint initiative with
    the Bureau of Reclamation will 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. Funding requested for USGS will be used 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.
        Earthquakes, volcanic eruptions, landslides, coastal storms,
    erosion, and flooding pose threats to lives and property and undermine
    local and national economic health. The Department is enhancing the
    quality and timeliness of information provided to communities so they
    can improve their warning systems, planning processes, response
    efforts, community education, and building modifications. The 2005
    budget maintains the 2004 funding of $4.4 million for the Advanced
    National Seismic System. During 2005, USGS will continue to upgrade and
    install new seismic monitoring stations. Information from these
    stations will support real time earthquake shake maps for emergency
    response in five metropolitan areas. The 2005 budget requests an
    increase of $800,000 to expand pilot high-technology radar
    investigations to develop a national monitoring capability. This
    capability will provide increased tracking of the behavior of
    volcanoes, including Yellowstone Caldera in Yellowstone National Park,
    Three Sisters volcano in Oregon, and four to six Alaskan volcanoes.

                     IMPROVING LAW ENFORCEMENT AND SECURITY

        The Department is second only to the Department of Defense in the
    number of facilities it manages and operates. Stewardship of the
    Nation's parks, refuges, public lands and facilities requires law
    enforcement and security expertise to ensure safety and security for
    employees, visitors, and facilities. Our 2005 budget request includes
    an increase of $24,7 million over the 2004 level for law enforcement
    and security for agencies funded in the Interior bill.
        To enhance security at major National Park icons, the budget
    includes operational increases of $2.1 million for the National Park
    Service and $2.0 million for the U.S. Park Police. We request an
    additional $2.0 million in construction funding to complete security
    improvements at Independence Hall in Philadelphia.
        The 2005 budget contains increases totaling $5.3 million in the
    National Park Service, Fish and Wildlife Service, Bureau of Indian
    Affairs, Bureau of Land Management, and the Departmental Office of Law
    Enforcement and Security to improve law enforcement efforts in border
    areas. The Department's land management agencies manage and protect
    public lands along the Nation's borders that comprise 39 percent of the
    southwest border, 31 percent of the southeast border (Texas to the
    Florida coastline), and 14 percent of the Canadian border. While
    primary responsibility for border security rests with the Department of
    Homeland Security, Interior agencies have an obligation to protect
    employees, visitors, natural resources, and agency facilities.
        The 2005 budget also continues to implement a Secretarial order for
    25 law enforcement reforms recommended by the Office of the Inspector
    General to improve accountability and efficiency. Key reforms include
    implementation of an off-the-shelf reporting system for law enforcement
    incidents to be used by all agencies within the Department. We request
    $5.2 million for this new system. Increases totaling $2.8 million in
    the National Park Service and Fish and Wildlife Service will support
    law enforcement management reforms in those agencies.
        The 2005 budget includes an increase of $7.8 million for the Bureau
    of Indian Affairs to operate eight new detention facilities serving
    Indian populations. These facilities, constructed through a joint
    initiative with the Department of Justice, will be completed by 2005.
    These new facilities meet current detention standards and alleviate
    conditions such as overcrowding and mixing of juvenile and adult
    detainees.

                           PAYMENTS IN LIEU OF TAXES

        Congress passed the PILT Act in 1976 to provide payments to local
    governments in counties where certain Federal lands are located within
    their boundaries. Local governments incur costs associated with Federal
    lands within their boundaries, but are unable to collect taxes on the
    lands. PILT payments are made to local governments in lieu of tax
    revenues and to supplement other Federal land receipts shared with
    local governments. Local governments use PILT payments to improve local
    school, water, and road systems, as well as for other necessary
    infrastructure. The 2005 budget proposes $226.0 million for PILT, a
    $1.3 million increase over the 2004 enacted level, and the highest
    level ever for the program.

                             MANAGEMENT EXCELLENCE

        Behind all of Interior's programs, out of the limelight, rests a
    management foundation that is vital to the accomplishment of our
    mission. The environment in which the department delivers services and
    carries out its mission is changing, driven by the same forces that are
    reshaping the Nation. The American people are demanding more from their
    public servants and calling for better business management practices,
    improved efficiency, financial transparency, and mission
    accountability. Management challenges facing the Department are
    increasingly complex, requiring more sophisticated approaches in human
    resource planning, organizational governance, facilities management,
    and technology security. Legislated requirements and government-wide
    innovations call for increased management rigor. In the past decade
    Congress has enacted extensive legislation including the Government
    Performance and Results Act, Government Management Reform Act, Chief
    Financial Officers Act, Federal Financial Improvement Act, Debt
    Collection Improvement Act, and Information Technology Management
    Reform Act.
        With a solid foundation of employees, volunteers, and partners
    working toward a common set of goals, we have made significant advances
    in our quest for management excellence.
      --Our bureaus are completing condition assessments of all facilities
            so that we can maintain and manage them better. The Bureau of
            Indian Affairs and the Bureau of Reclamation have already
            completed their assessments and the other agencies are well
            underway.
      --Our agencies are implementing 25 Secretarial directives to
            strengthen our law enforcement programs and improve our ability
            to ensure the safety of the visiting public and our employees
            and volunteers.
      --We consolidated the purchase of information technology systems to
            achieve significant savings and to provide consistency and
            interoperability within the Department.
      --We achieved an unqualified audit opinion for the Department and
            each of our eight bureaus. We completed this process within 60
            days of the close of the fiscal year, one of only eight
            agencies to do so.
        In 2005, the Department will continue to support the President's
    Management Agenda and build on this foundation for management
    excellence. The 2005 budget includes increased funding for management
    priorities including two that are highlighted here, the Financial and
    Business Management System and the Enterprise Services Network.
        Our budget proposes $18.6 million for the Financial and Business
    Management System, a $7.0 million increase over 2004. This system will
    replace a combination of systems for processing financial and related
    transactions and meet the Department's needs for business management
    information. It will revamp administrative processes throughout the
    Department by modernizing and integrating financial management,
    acquisition, property management, grants administration, and other
    subsidiary systems.
        The Enterprise Services Network will integrate and consolidate the
    Department's networks, systems, and computing environmental to provide
    secure and robust telecommunications within the Department and to
    customers. The 2005 budget includes $8.0 million for this initiative.
        The 2005 budget also requests funding for bureau-specific
    improvements, including $2.7 million to address material weaknesses in
    the U.S. Geological Survey's financial management practices. The USGS
    budget also includes $1.8 million to modernize and centrally support
    key information technology management practices to enhance service and
    eliminate critical deficiencies in the bureau's information technology
    security infrastructure.

                                   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.

        Senator Burns. Thank you, Madam Secretary. I'm going to
    start my questions. I've got quite a backlog of questions, and
    we got started 45 minutes late this morning. I'm going to start
    with the committee members, Senator Dorgan, we'll start off
    with you.

                        UNITED TRIBES TECHNICAL COLLEGE

        Senator Dorgan. Thank you, Mr. Chairman. Thank you for your
    statement. Your statement reflects again how large the agency
    is and how many varied and different functions that you
    perform. Let me go right to the question of the United Tribes
    Technical College [UTTC], because you have visited there and
    you know that not only am I concerned but I'm sure my colleague
    from New Mexico, Senator Domenici, is concerned with respect to
    Crown Point.
        Tell me if you will why there is a zeroing out of the $3
    million that we have appropriated for in the past for UTTC.
        Secretary Norton. The budget for the overall administration
    provides strong funding for tribal colleges, including the
    United Tribes Technical College. There is a program in the
    Department of Education that provides substantial funding for
    the United Tribes Technical College that is above and beyond
    anything that other tribal colleges receive through the
    Department of the Interior budget.
        We have a chart that reflects the funding that goes to the
    United Tribes Technical College compared to the other tribal
    community colleges that are funded within the Department of the
    Interior budget. And as you can see from this chart, the
    average of all of the other tribal colleges is about $9,500,
    and that is per-student funding.
        When you look at the money received by the United Tribes
    Technical College that comes from the Department of Education,
    they receive about $16,500 per student, and so as we looked at
    the overall funding, we felt that it was most equitable to have
    the funding for all of the tribal colleges be somewhat on a
    par.
        There are funds that are also available through the
    Department of Labor under a new initiative from the President
    for jobs training through community colleges. We are working
    with the Department of Labor as they put together their grants
    requirements for that program to ensure that tribal colleges
    will also be eligible for that funding.
        So if you look across the board at Federal funding, you can
    see that there is funding very strongly available for the
    United Tribes Technical College.
        Senator Dorgan. Well, Madam Secretary, first of all, the
    request for tribally-controlled community college funding is
    $5.2 million from the current enacted level, so below, so it
    has been cut $5.2 million below current enacted levels, so I
    don't think there's robust funding for tribal colleges, in fact
    it has been cut. And even at that level, even at last year's
    level, we are funding on a per-student basis dramatically below
    what other colleges would receive for per-student funding.
        Let me say with respect to this chart, that chart gives, in
    my judgement, an inaccurate representation of per-student
    funding, because you're comparing two different kinds of
    colleges, one which requires 18 credit hours per student on the
    right side and the other 12 credit hours per student, so you'd
    have to make an adjustment and create a new chart if you're
    going to compare these colleges. The better comparison would be
    the two tribal colleges, the two colleges, Indian colleges that
    you actually run in the Department, which is Haskell and SIPI.
    If you compare that on a per-student basis, that would be an
    accurate comparison, but this just is not accurate in my
    judgement.
        We, I believe, will restore the funding for United Tribes
    Technical College. I think it is an important educational
    institution. I regret that $3 million has been eliminated and I
    would hope once again as we go into another budget cycle at
    some point in the future that it will be considered on its
    merits and be funded in the administration's budget.

                     TRIBALLY-CONTROLLED COMMUNITY COLLEGES

        Let me go to tribally-controlled community colleges. You
    know, I understand this is a big old budget and there are many
    areas of priorities. There are proposed increases in funds for
    a range of areas, the Wild Horse and Burro Program, which I
    want to ask you about in just a moment, landowner incentive
    grants, New Start Preserve America program and so on. And yet,
    as I indicated, the tribal college funding would be $5.2
    million lower than last year, and I just, just speaking for
    myself, I think that is a missed priority and one that we need
    to correct if we can.
        Can you give me your impression of the value of tribal
    colleges in your judgement?
        Secretary Norton. Tribal colleges are very important and
    community colleges overall are very important. The President
    has put an emphasis on that through his proposal going through
    the Department of Labor. In looking across the board, we see
    that the funding that we propose for 2005 is nearly 40 percent
    higher than 1999 funding.
        You talked about the comparison with Haskell and with SIPI.
    Haskell is about $9,000 per student. SIPI is $5,000. Overall,
    we do want to see more support for community colleges, but our
    tribal community colleges are funded at about $2,000 more per
    student than community colleges across the country, more than
    non-tribal community colleges. So these are important programs.
    We support strengthening all of our educational activities. We
    believe that we are achieving through this budget an equitable
    allocation of the funding across community colleges.

                       LANDOWNER INCENTIVES GRANT PROGRAM

        Senator Dorgan. Madam Secretary, on the Landowner Incentive
    Grant program you're proposing an increase of $20 million. The
    Fish and Wildlife Service says that because of the newness of
    this program, there's no cost data available so they can't
    measure the success of it. So on what basis are we proposing a
    pretty substantial increase in that program at a time when
    we're proposing cuts in tribal colleges and cuts in UTTC and so
    on? What's the basis for proposing an increase without having
    the ability to measure what we've done there.
        Secretary Norton. If you look at the issues that are facing
    land users across this country, whether it's public or private,
    we see potentially tremendous impacts from endangered species.
    The landowner incentive program provides us with another
    approach that lets us work cooperatively with landowners in
    order to enhance habitat for species.
        If we look across a variety of different kinds of
    endangered species, sage grouse, for example----
        Senator Dorgan. I understand that----
        Secretary Norton [continuing]. Is one that is going to have
    a tremendous impact. This lets us get ahead of the curve, and
    instead of having tremendous economic disruption from the
    listing of an endangered species, we can recover that species
    before it gets to the point of having tremendous harm for
    farmers and ranchers and other land users.
        Senator Dorgan. I don't have a disagreement with that. My
    question was, the recommended $20 million increase before Fish
    and Wildlife and others say we've been able to measure whether
    or not this is effective and whether we're accomplishing----
        Secretary Norton. We've seen tremendous results from our
    first years of that program, and it is something that we
    believe in looking at our overall endangered species program is
    the best way to tackle the problems of endangered species.
        Senator Dorgan. Can you share with us then--as I said, the
    Fish and Wildlife says because of the relative newness of this
    program, no significant cost and performance data are currently
    available. Would you share with us whatever information exists
    that persuades you to recommend or the administration to
    recommend this $20 million increase?
        Secretary Norton. I'd be happy to provide you with
    additional information.
        [The information follows:]
      Information on Landowner Incentives Program to Support $20 Million
                                    Increase
        The Landowner Incentives Program provides matching, competitive
    grants to States, the District of Columbia, Territories, and federally
    recognized Tribes. These grants are used to establish or supplement
    existing programs that provide technical and financial assistance to
    private landowners to help them protect and manage imperiled species
    and their habitat. The program provides an opportunity for all States
    to develop the capacity to implement programs modeled after several
    innovative State programs.
        This program's short history does not allow us to provide
    quantitative performance data. However, the Service is currently
    developing performance measures for full implementation during fiscal
    year 2005, which will become the baseline year for future refinement
    and application, and plans to solicit additional input from program
    cooperators that may ultimately add to or refine these measures.
    Specifically, these performance measures will monitor the use of funds
    and document the number of land acres and stream/shoreline miles that
    are protected, restored or maintained on lands through this program.
        The Department believes that the outreach and program support
    provided by the Service, the significant level of interest from States
    and other interested parties, and the demonstrated need for a program
    like this provide a strong justification for the fiscal year 2005
    budget request. The Service has worked to ensure that States and Tribes
    are aware of this program, and that their questions and concerns were
    considered as the Service created and implemented this new program. In
    fiscal year 2003, the Service sought input on its implementation
    guidelines from States and FWS regional offices, and modified the
    program guidelines accordingly.
        The response from States clearly underscored their interest in this
    program. In fiscal year 2003 the Service had $34.7 million available to
    fund grants to States, yet received requests totaling over $60 million
    from 47 States. The $34.7 million was provided to 42 States and
    territories. For fiscal year 2003, 23 Tribal grants totaling $3.9
    million have also been approved.
        In fiscal year 2004, $25.9 million is available for the Landowner
    Incentives program for States, yet the Service has received requests
    totaling $41.8 million from 43 States and the U.S. Virgin Islands.
    Grants to 41 States and territories have already been approved by
    Director Williams.
        Examples of the types of activities supported by Landowner
    Incentive Program grants include the following:
      --In California, a $1.3 million grant to help landowners in the
            Sacramento Valley, Delta/Suisun Marsh and San Joaquin Basin
            manage 1,130 acres of riparian habitat for a 3-year period and
            1,000 acres of native grasslands for a 4-year period until
            these habitats are self-sustaining. Landowners also will manage
            950 acres of critical, permanent wetlands to meet the needs of
            at-risk wetland species and provide an additional 2,500 acres
            of post-harvest flooded cropland directly beneficial to fall
            migrant shorebirds and breeding waterbirds.
      --In Maine, a $1.3 million grant will support implementation of the
            State's ongoing, broad-scale habitat conservation planning
            effort, Beginning with Habitat. The funds will help landowners
            conserve habitats to benefit species at risk. It will also
            allow the State to provide technical and financial assistance
            to landowners for habitat protection and restoration.
      --In Nevada, a $364,500 grant will help the State establish a program
            to assist landowners in conserving imperiled species through
            sagebrush and riparian habitat management, conservation and
            restoration.

                              WILD HORSE AND BURRO

        Senator Dorgan. I appreciate that. And let's go to the Wild
    Horse and Burro Program just for a moment. Again, this is a $13
    million proposed increase. I think I understand the challenges
    that you face with respect to wild horses and burros, and yet,
    again, because I'm very concerned about tribal colleges, United
    Tribes Technical College and other areas, I see a $13 million
    increase in the Wild Horse and Burro Program, and it appears to
    me that there are roughly 39,000 wild horses and burros on the
    open range. That looks to me like it's over $1,000 per animal
    that's proposed to be spent on that program. Having raised
    horses and cattle myself, I recognize it's very hard to spend
    $1,000 per animal. I don't know what one would have to do to
    create housing for an animal in my hometown for $1,000 a year.
        But nonetheless, describe for me what we're doing on wild
    horses and burros that persuades us to increase the request by
    $13 million.
        Secretary Norton. We are at a very critical time in the
    Wild Horse and Burro Program. We've been bringing down the
    numbers of wild horses that are on the range. We are about to
    get to sustainable levels so that we can keep those horses at a
    level that is sustainable on the areas that are open to them.
        Unfortunately, it is a very expensive program to run. In
    order to bring those numbers down, because we can't use the
    same kind of management techniques we use for other wildlife,
    we have to round the horses up, transport them to adoption
    facilities which are on the East Coast or in other population
    centers, to try to get people to adopt those horses. We have to
    do medical treatments and so forth for them on the way. If we
    are not successful in adopting them, the only thing that the
    law leaves open to us is long-term pasturing of those horses.
    And so we have tremendous maintenance costs that are because of
    the long-term need to do that.
        In order for us to prevent that program from having higher
    and higher and higher costs in the long-term future, we need to
    get those population numbers under control now. That's why
    we're trying to put in a big push today so that we prevent
    higher costs in the future.

                               PARK POLICE CHIEF

        Senator Dorgan. Madam Secretary, let me ask you one
    additional--well, I won't ask a question, I'll ask you if
    you'll provide some information to us. I've not said anything
    publicly about this and will not at this point, but I do want
    to ask you a question about the issue of Theresa Chambers and
    the Park Police. You know that we've read a lot in the
    Washington Post and other journals about this person who
    apparently spoke publicly and said that they are underfunded,
    understaffed, and she subsequently lost her job.
        I know it's the subject of litigation so you likely will
    tell me you can't say much about it, but it is of interest to
    me and concern to me. As I said, I've not spoken publicly about
    it and don't know very much about it. I know last week that,
    yesterday in fact, there was a hearing over in the House about
    a fellow who in the Medicare area withheld information on
    request from the Congress about costs, and this Theresa
    Chambers apparently spoke publicly on television about the Park
    Police and the funding and she was suspended and I suspect
    probably fired.
        Would you submit for at least my information whatever
    information you can submit so I understand what's going on
    here?
        Secretary Norton. We would be happy to do that. As you well
    recognize, that is a matter of employee privacy and we are
    restricted from what we can say publicly on that.
        [The information follows:]

                        Information on Park Police Chief

        Ms. Chambers has not been dismissed from the National Park Service.
    She is on administrative leave while a proposal to remove her from the
    Service and her response to the proposal are reviewed by the Deputy
    Assistant Secretary for Fish and Wildlife and Parks. Except as may be
    governed by statute or regulation, Department of the Interior officials
    are not prohibited from expressing themselves to, or holding
    conversations with, members of Congress.

        Senator Dorgan. I respect that and again hope you respect
    I've not gone off and made any comments about this, but I am
    concerned about whether those who perhaps should be able to
    answer questions of whether funding is adequate in certain
    areas or what the cost might be, whether there are
    repercussions if they speak their mind. And I, again, the
    reason--I wasn't intending to ask you this, but the reason I do
    is because of the hearing yesterday in the Ways and Means
    Committee with Mr. Foster, who is in some amount of trouble
    because information was withheld from Congress that he had in
    his possession.
        Secretary Norton. I will note that the budget for the Park
    Police has increased by 30 percent since 2001.
        Senator Dorgan. All right. If you will just submit whatever
    information you can so that I and my colleagues can try to
    understand it a bit, and again, I don't have conclusions about
    it, I just have an interest in trying to understand what's
    behind the headlines here.
        Madam Secretary, let me finally say, this is always, always
    about choices and the process of economizing in meeting
    unlimited needs with limited resources, and that's what budgets
    are is to make the choices, and I find much in your choices
    with which I agree and some with which I disagree. Tribal
    colleges, we, in my judgment, and I hope with the cooperation
    of other members of the subcommittee, I would say the Senator
    from Montana was very, very important last year in making sure
    that tribal colleges get adequate funding. I hope we can build
    back some of that funding base for tribal colleges and
    organizations like United Tribes Technical College and Crown
    Point in New Mexico, which I think are very important to
    American Indians. Having said that, thank you for appearing
    today.
        Secretary Norton. Thank you.
        Senator Burns. Senator Bennett.

                              BLM LITIGATION COSTS

        Senator Bennett. Thank you very much, Mr. Chairman. Let me
    go back to the issues I raised in my opening comment. I asked
    you at a previous hearing if you had a percentage of budget for
    BLM, in particular asked the same question about Forest
    Service, which I realize is not under your jurisdiction but
    which is under this committee. What percentage of the budget
    has gone for litigation? I've heard that it's as high as 50
    percent. I've asked the BLM people in Utah and they indicate
    maybe not direct litigation costs, but defensive actions to
    deal with litigation costs, the whole thing comes up to
    something like 50 percent of the budget.
        Do you have any better handle on that than that, or is that
    just a ballpark number? Is it too difficult to quantify? It's
    easy to ask the question. Many times it's difficult to come up
    with a quantification. Do you have anything on that?
        Secretary Norton. We will provide you with what we can put
    together. The number is certainly a very high number. We have
    introduced a new financial accounting system that will let us
    have a better understanding of how our funds are spent in order
    to better track things like litigation costs. Certainly in your
    State of Utah, the litigation costs are extremely high.
    Virtually everything that is done in that State by the Bureau
    of Land Management is subject to litigation, and so we do know
    that a tremendous amount of resource does go for that. We'll be
    happy to provide you as much of a quantification as we can of
    that.
        There certainly are a lot of things that are hard to
    quantify because it is doing more paperwork for an
    environmental impact statement because of fear of litigation
    than might otherwise be done, and that's a hard amount to
    quantify.
        Senator Bennett. Yeah, it is difficult, but it is having
    two effects. One, of course, is the budgetary effect, and it's
    outrageous that we're spending public money at that level for
    lawsuits that have no merit whatsoever. They're filed solely
    for their nuisance purposes because the groups that file them
    don't want the agency to go ahead with its mission, and so they
    file a lawsuit, the agency has to respond. I'm told that those
    that actually go to court, the agency wins well over 90, 95
    percent of the time, but the legal fees that go into it, and
    then, as I say, the defensive activity in the anticipation that
    there will be a charge, a challenge, that causes unnecessary
    work to be done so that the record is there so that you can win
    the litigation is a budgetary burden that we ignore, but it's
    huge, and the people who bring that burden, who posture
    themselves as supporters of public lands and supporters of the
    public at large never are called to account for the impact they
    have on the taxpayers.
        The other side of it, which I get talking to BLM people in
    my State is not just the cost, but the delay. Every time they
    want to proceed on some intelligent action of land management,
    they have to figure into the equation the amount of delay that
    will be built into it by virtue of the litigation. As I say,
    they almost always win. It's not a matter of we have to examine
    this because there's a real challenge. No, there's no real
    challenge. It's just an attempt to delay things, and in
    delaying, many times it means the cost goes up eventually or
    the opportunity to solve the problem passes and the problem
    becomes far worse than it was at the time the agency decided
    we'll have to tackle the problem because it goes neglected for
    6 months, 9 months, a year or more, and then finally somebody
    rules the challenge was frivolous, pay all the legal fees, and
    you go back and the problem is 6 months, 9 months, 12 months
    worse.
        So I'm going to keep on this, because I think it is one of
    the underreported and underappreciated problems that we have in
    the political wars that go on over land use, and one side in
    the political wars has discovered that by abusing the courts,
    and I think abuse is the right word, rather than using the
    courts, abusing the courts and abusing the appeals system, they
    can achieve their goal of frustrating you in your
    responsibility to manage these lands in a proper way. And we
    need to quantify it, we need to put a spotlight on it, and we
    need to let the taxpayers know, money that could go for tribal
    colleges, money that could go for park maintenance, money that
    could go for a whole series of things that everybody wants, is
    in fact going into frivolous lawsuits and complaints and
    challenges that simply gum up the works.
        So if you could help us quantify that, I'll assure you I'll
    do what I can to put the spotlight on it if we could get some
    hard data rather than the gut feeling of the people who are
    dealing with it. I'm not challenging their gut feeling. I think
    they're exactly right, but whatever hard data we can get we
    would appreciate it.
        [The information follows:]

                    Information on Litigation Costs for BLM

        The BLM only captures costs specifically attributed to litigation.
    These include the costs of gathering of information, preparing
    documents and records, preparing and giving testimony, and working with
    solicitors and attorneys on specific legal cases. For fiscal year 2004,
    the BLM has spent approximately $14.3 million on these activities. This
    does not include any costs for activities related to the prevention of
    litigation conducted as part of the day-to-day operation of the BLM,
    such as complying with the statutes and regulations governing the
    Bureau.

                              NATURAL GAS RESERVES

        Senator Bennett. Now let's go to the issue of natural gas.
    As I said, Chairman Greenspan pointed out to us that long term
    one of our big economic problems is going to be shortage of
    natural gas. As we face the challenge of increased energy in
    this country, people say, well, we don't want nuclear plants
    and we don't want more coal plants. Out in our country they
    don't want hydro. As a matter of fact, many of these groups
    want to dismantle the dams that we've got right now that are
    producing hydro power.
        We all want natural gas, and the law of supply and demand
    is inexorable. I've said it before, I'll say it again. If I
    could control what we carve on the walls around here in marble,
    I would have us carve where we see it every day, you cannot
    repeal the law of supply and demand. We keep trying, but we
    can't. And the law of supply and demand says, the price of
    natural gas is going to go up under this increased demand if we
    don't do something about the supply, and we have a tremendous
    supply of natural gas on public lands in this country, and we
    don't seem to be able to get at it in a logical kind of way.
        I've had conversations. I will not violate the
    confidentiality of the conversations because they were one-on-
    one, but I've had conversations with some of the leading
    environmentalists in this country who have said to me
    privately, a natural gas pipeline across public lands is the
    least intrusive activity we could engage in with respect to
    those lands and has no environmental impact at all other than
    the emotional idea that somehow you're violating the land to
    put a pipeline in it. I don't think the land cares, but there
    are some people who feel emotional about that.
        Can you, probably not here, but again for the record, here
    if you could but if the record if you can, can you give us some
    idea of the reserves of natural gas that are on public lands in
    the United States?
        Secretary Norton. We certainly can do that. We have looked
    at that. We have basically a few places to look, the Gulf of
    Mexico offshore, the Rocky Mountain States, and Alaska. The
    natural gas pipeline is obviously a very significant issue and
    something that would have a tremendous benefit in the long run.
        In the short run, there are essentially two things that we
    have done to try to enhance natural gas supply. One is moving
    forward with coal bed natural gas in the Rocky Mountain area,
    and the other is in the offshore area, looking at the existing
    platforms, existing production areas, but providing some
    royalty relief for them to drill down deeper.
        We recently found that there was about a three times larger
    supply of natural gas at the deeper geologic layers under the
    shallow water areas of the Gulf of Mexico than we had
    previously believed. Through our royalty reduction there, we
    estimate that we will save consumers about $500 million over
    coming years because of that enhanced production. So there are
    things that we can do. We also recently unjammed a backlog of
    1,400 permits for coal bed natural gas in the Powder River
    Basin.
        So we're moving forward but it is a tremendous problem.
    You're quite right to highlight that. And that is something
    that the country is really going to have to focus on for the
    long term. We have enough coal bed gas at that plateau to take
    care of California's energy needs for 100 years and we can't
    get at it.
        [The information follows:]

              Information on Natural Gas Reserves on Public Lands

        In 2003, the Department published a study under the Energy Policy
    and Conservation Act (EPCA) which described the technically recoverable
    energy resources in five western basins. These five basins contain the
    bulk of the natural gas resources, and much of the oil resources, under
    public ownership in the onshore United States:
      --the Paradox-San Juan Basin (Colorado, New Mexico, and Utah)
      --the Uinta-Piceance Basin (Colorado and Utah)
      --the Greater Green River Basin (Colorado, Utah, and Wyoming)
      --the Powder River Basin (Montana and Wyoming), and
      --the Montana Thrust Belt (Montana).
        The EPCA inventory provides estimates of undiscovered, technically
    recoverable resources and known reserves of oil and gas beneath the
    five basins and an inventory of the extent and nature of limitations to
    their development. The inventory shows:
      --total area of Federal lands in the five basins, including split
            estate: 59.4 million acres;
      --total estimated reserves and undiscovered technically recoverable
            oil: 3.9 billion barrels; and
      --total estimated undiscovered technically recoverable natural gas:
            138.5 trillion cubic feet.

        Senator Bennett. Just one last comment before I have to
    leave, again for the record and for any journalists that are
    here. It's not just a question of the price of natural gas in
    terms of heating our homes or creating electricity. Natural gas
    becomes a feed stock for the chemical industry, it becomes
    important therefore for fertilizers, all kinds of industries
    depend upon the basis that's available in the--chemical basis
    that's available in natural gas. It doesn't just all go into
    electricity in homes. It ripples throughout the entire economy,
    and again, as Chairman Greenspan has pointed out, it is the one
    form of fossil fuel energy that we at the moment cannot import.
    The only way we can get natural gas from outside the country is
    by pipeline from either Canada or Mexico. We can't get it over
    the ocean by pipeline.
        So we are going to an enormous expense of changing ports
    around the country to accept liquified natural gas when we have
    tremendous amounts of natural gas right here in this country
    that could delay for a generation the necessity of bringing it
    in in liquified form, which is more expensive and from a
    terrorist point of view, far more vulnerable, because you build
    an LNG port and then you bring in a bunch of LNG and a
    terrorist would very much love to blow that thing up. And so we
    have to spend the money to build the facility and then we have
    to spend the money to protect it, and for a fraction of that,
    we could lower prices, increase security, simply by using the
    natural gas and coal-based methane gas that we have here in
    this country, and any statistical ammunition you can provide me
    in that fight, I'd be very grateful.
        Thank you, Mr. Chairman.

                                LITIGATION COSTS

        Senator Burns. Senator Bennett, on these lawsuits and
    frivolous lawsuits, when we lose it is my understanding that we
    pay their legal fees?
        Secretary Norton. That is very often the case.
        Senator Burns. And whenever we win, do they pay ours?
        Secretary Norton. Never.
        Senator Burns. We could probably cut out a lot of those
    lawsuits if they had to pay our legal fees.
        Senator Bennett. That's the British system, and for once, I
    think the British are right.

                                    LANDSAT

        Senator Burns. It's something to look at, because the
    Forest Service has the same problem. For the record, Madam
    Secretary, we got questions from Senator Feinstein, who could
    not be here this morning, and also some questions from Senator
    Stevens with regard to his Alaska situation up there, and from
    Senator Daschle on Landsat. Could you bring us up to date on
    that? Are we still working with that mapping and work that
    we're doing with the satellites?
        Secretary Norton. Yes.
        Senator Burns. Give us an update on where it is, and if
    it's working. Also I want to thank Ms. Scarlett and John
    Tresize for coming. You've got a very able staff, they answer a
    lot of our questions and take a lot of the load off both of us,
    welcome this morning along with the Secretary. I forgot to
    recognize you this morning. Could you bring us up to date on
    what's happened with Landsat?
        Secretary Norton. Yes. We are still having problems with
    the degradation of the data coming from the satellite, and so
    we're looking at ways to see if we can sell that data to
    somebody that doesn't need quite the level of sophistication on
    it. We are looking at some reprogramming to determine how we
    might be able to fill in behind that shortfall, and so we are
    looking at a variety of options in order to address that
    shortfall right now.
        Senator Burns. Have you looked at how we might outsource?
    We have imaging, a couple of organizations in Montana, that do
    that. Could we outsource to save a little money, and move some
    of that into the private sector? Because they could tailor
    programs as you want them and give you the desired information.
        Secretary Norton. There are some reasons why the data that
    comes from the Landsat satellite is at a resolution that fits a
    certain niche of needs and it's not generally available in
    other ways. We are looking at the long-term implications--at a
    future satellite--and how that might be structured and what the
    needs would be for that. That's a big, multi-agency public/
    private examination of what all of the available options are.

                                 WOLF RECOVERY

        Senator Burns. Let's talk about wolves a little bit. That's
    a pretty good shift. As you know, you revised some of your
    management practices in three States, Wyoming, Montana, and
    Idaho and we want to express our appreciation for using 10(j),
    that section of the Endangered Species Act, that would give
    more authority to States and especially handling predators. I'd
    like to see the States assume much more responsibility in
    managing that animal. Can you tell me the cost of the Wolf
    Recovery Program to the Federal taxpayer thus far? If you don't
    have those figures, I would like to have them. And can you give
    me an overall assessment of the program as it is progressing?
        Secretary Norton. We'll provide that figure for the record.
    The wolves are thriving. We have substantially more wolves.
        [The information follows:]

              Information on the Cost of the Wolf Recovery Program

        Wolves in the Northern Rocky Mountain states (Idaho, Montana and
    Wyoming) continue to increase in distribution and numbers, and recovery
    criteria have been met for removing Northern Rocky Mountain wolves from
    the Endangered Species list. Estimates of wolf numbers at the end of
    2003 were 369 wolves in the Central Idaho Recovery Area, 301 in the
    Greater Yellowstone Recovery Area, and 92 in the Northwest Montana
    Recovery Area for a total of 761 wolves. Within state boundaries, there
    were an estimated 345 wolves in Idaho, 234 in Wyoming and 182 in
    Montana.
        The Department estimates that the total funding from 1973 through
    2003 for the Rocky Mountain Wolf Recovery program is approximately
    $16,785,000. This includes FWS, NPS and USDA-Wildlife Services funding;
    as well as funding provided to the States by the FWS. This level of
    support provides for monitoring, collaborative research, public
    outreach, livestock depredation mitigation, and other recovery
    activities.
        In fiscal year 2003, FWS funding totaled $1.567 million, and the
    NPS provided an estimated $210,000 for wolf monitoring and research at
    Yellowstone National Park. In 2004, the Department estimates that the
    FWS will fund $2.251 million for wolf recovery. The NPS will maintain a
    similar level of funding to the 2003 level for Yellowstone National
    Park.
        The USDA-Forest Service may expend some additional funds related to
    wolves, however the Department is not aware of any significant wolf
    recovery activities undertaken by the Forest Service.

        Senator Burns. Are they ever.
        Secretary Norton. Not viewed as good news by some people in
    your State, but there are substantially more wolves than were
    predicted at the time that reintroduction was proposed. So now
    we are at the position where biologically they could be taken
    off of the endangered species list, at least in that area.
        We have two things that we need in order to be able to
    delist them. One is to have the numbers in place so the
    population is healthy. We have that. The second thing is State
    programs that can allow them to assume management of the
    wolves. Both Montana and Idaho have put together programs that
    we think are able to accept responsibility for the wolves. Our
    problem has been the State of Wyoming. We do want to continue
    working with Wyoming to come up with a program that would be
    sufficient for wolf management. Unfortunately, we have not been
    successful so far in that.
        Senator Burns. Well, I know it's expensive and I will tell
    you this and go on record, we rode two drainages down in the
    Montana/Idaho area where we share a common boundary, two
    drainages where we've always had habitat for moose. There was
    not one calf last year in those two drainages, and a lot of
    evidence where the wolves have taken those calves. Now rather
    than fiddle around with some old cranky moose, well, they're
    hitting the ranchers now. We lost around 1,800 or 1,900 head
    the other day, down in Ennis, down in Madison County, and now
    we're going to start lambing one of these days and they go
    through sheep just like they're killers, and they do it because
    they like to kill, not because they're hungry. That's the
    difference.
        We've got more mountain lions than we've ever had in the
    West since I've been out there. Cats kill because they're
    hungry, they just don't kill just for the sake of killing. And
    so, there is a tolerance level on wolves. If we can keep the
    numbers in due bounds, we can have wolves and we can enjoy the
    rest of the resources that we enjoy around our farms and
    ranches. But if you get too many of them, well then you have
    four predators out there called the grizzly bear, the wolf, the
    coyote, and the cat. It gets pretty expensive as far as trying
    to run a ranching operation, or do anything else on those
    lands.
        The Wild Horse and Burro program, this is something that
    Senator Reid of Nevada and I, have been working on for the last
    couple of years, to get the numbers down. Nevada presents a big
    problem, and everyone has to understand that if you want this
    wild horse program, that some of those horses are kept under
    feed lot conditions and not range conditions. This is costly,
    from a person that understands feed lots and maintenance of
    animals.
        Horses, by the way, eat 20 hours out of the 24, we've been
    pretty successful with our small herd in the Pryors, in keeping
    the numbers down where we can manage them. But if we look at
    Nevada, they are cutting into permits of people who have paid
    for permits, and when those horses go through there, and all
    the grass is gone, that should not be allowed to happen, so we
    have to figure out some way to keep those numbers in due bound.
        We can handle anything if the numbers are right.
    Yellowstone Park has over 4,000 buffalo right now. Biologically
    that park cannot carry that many buffalo, and if BLM were asked
    to supervise the ranges in Yellowstone Park, they would have
    thrown everybody off the land and they're doing damage that is
    irreparable for Yellowstone Park.

                                RANGE MONITORING

        Range monitoring has been cut back $1.2 million this year,
    and this funding is being redirected to the Wild Horse and
    Burro Program. How are we replacing that money for range
    monitoring?
        Secretary Norton. If I can defer to Lynn Scarlett on that.
    I do know we've been trying to put more funding into that, but
    the Wild Horse and Burro Program has been impacting our ability
    to do the level of monitoring we'd like to.
        Ms. Scarlett. I believe you must be referring to this year,
    2004.
        Senator Burns. I am.
        Ms. Scarlett. Yes, I understand. We recognize the strong
    need for monitoring of Bureau of Land Management lands and have
    proposed an increase in 2005. The proposed change this year was
    to meet an emergency situation relating to the wild horses and
    burros, but we have planned an increase in monitoring for this
    budget that we're now considering.

                               INTERNET SHUTDOWN

        Senator Burns. And of course right now we're talking about,
    the shut down of the Internet, in the minerals management
    service. What is the chance of getting that back up?
        Secretary Norton. Well, we certainly hope that the court of
    appeals is going to have our systems permanently back online.
    We are working to deal with the overall litigation and that is
    currently in a mediation process with the plaintiffs, but that
    has been very slow going.
        Senator Burns. Well, we've given you more money to upgrade
    that.
        Secretary Norton. You certainly have, and we have spent it.
    I don't have the numbers handy, but it is tens of millions of
    dollars to enhance our computer security system. We have
    focused very intensively on protecting the Indian trust data.
    We've had outside consultants who have come in to look at that
    and have taken a number of steps to ensure that that is better
    protected.
        But overall in the computer world, we going toward more and
    more integration of data, more and more shared databases so you
    can draw on the same information for many uses. As we do more
    of that, it becomes more difficult to separate out one piece if
    a court is going to shut it down.

                         HEALTHY FORESTS CONSULTATIONS

        Senator Burns. As you know, last year we got Healthy
    Forests through. We've been doing a lot of Healthy Forests
    activities especially in clean-up and after fire salvage, and
    everything that the Department of the Interior and the Forest
    Service do they must have some consultation from the U.S. Fish
    and Wildlife Service. Mr. Williams was in yesterday and we had
    a very good discussion about the time line of these
    consultations. It looks like from the time that the request is
    made with the Fish and Wildlife Service, and them getting their
    work done and getting back to the Forest Service in order for
    them to proceed with the sale, or with the salvage clean-up,
    certainly takes a long time.
        In the area of salvage, if you wait too long then the
    salvage loses its value all at once. Can you give us an idea on
    what you propose to cut down that time? Is it staffing? Give us
    some kind of an idea of your assessment about why we can't move
    those requests along in a timely manner.
        Secretary Norton. We're looking at some things that would
    make our system more efficient. We are trying to have early
    coordination with the agencies that are planning actions so
    that we can decide how to handle that consultation most
    efficiently. Often times grouping things together so that you
    consider several similar proposals at the same time helps make
    that much more efficient.
        We are putting together databases so that we've got more
    information that we can draw on more quickly about the various
    species. So there are a number of things like that that will
    help us in streamlining our consultation process.

                          ENDANGERED SPECIES LISTINGS

        Senator Burns. We had quite a conversation on the
    Endangered Species Act yesterday. In Montana, we do not have a
    shortage of prairie dogs, we do not have a shortage of sage
    grouse, and if some of these species are considered for listing
    as threatened or on the endangered list--that goes nationwide
    and it hurts all of us. So I hope there's a way to work around
    an area that does not have a shortage, and that does a good job
    in managing their wildlife and habitat, and can be rewarded by
    being left out of the Endangered Species Act when we start
    talking about recovery.

                            TRIBAL DETENTION CENTER

        I've got several other questions that have to do with what
    Senator Dorgan was talking about and the tribally-owned
    colleges. And because that happens to be one of my areas that I
    have a great deal of interest in, the detention center funding
    as well. We have a situation in Montana where we have a
    privately owned detention center that's located near a couple
    of reservations, which could be used to move some people closer
    to home. We'll talk to you about that at another time.

                           TRIBAL SCHOOL CONSTRUCTION

        School construction. I've still got schools on reservations
    that need to be torn down and rebuilt. I can think of three off
    the top of my head, and you've cut some funding in there. We
    want to work with you on that because we do have about a $66
    million backlog right now on construction across this country
    and we would like to talk to you about that line item as well.
        With that, it looks like I'm the only dog left at the
    hanging. So if you would be amenable to those questions and as
    we work our way through these line items we'll be in
    consultation with you and John and Lynn. We appreciate you
    coming this morning and thank you very much. We'll leave the
    record open, and you might want to respond to those questions
    from others Senators and to the committee. Thank you.

                          PREPARED STATEMENT RECEIVED

        We have received the statement of Senator Thad Cochran. The
    statement will be made part of the hearing record.
        [The statement follows:]

                   Prepared Statement of Senator Thad Cochran

        Mr. Chairman, I am pleased to welcome Secretary Norton to this
    hearing on the Department of the Interior's budget request for fiscal
    year 2005.
        I am glad to see that funding is requested in the budget for
    research which is conducted by Mississippi State University on invasive
    species. Your statement about the importance of this research is very
    encouraging.
        Another project that is very important to me is the Shiloh National
    Military Park. The National Park Service is doing an excellent job, in
    my opinion, to expand the Park to include the Corinth Battlefields in
    Mississippi as a unit of the Shiloh Park. The construction of an
    interpretive center will be completed this summer, and I am sure it
    will add to the understanding of this important part of American
    history.
        In the town of Corinth much of the original archeology of the Civil
    War era is in pristine condition because so much of the area has been
    protected and maintained by volunteers. Corinth serves as a unique
    treasure of civil war history that is enhanced by several parcels of
    land outside the current boundary of the park. These are significant
    educational resources for visitors. I urge you to consider visiting
    Corinth and working with us to incorporate the battlegrounds in this
    area into the Corinth unit of the Shiloh National Military Park.
        I am also interested in your assessment of the study which the
    National Park Service has undertaken on the organization of the Natchez
    Trace Parkway. I am submitting questions to you for the record of this
    hearing on that subject and on the Corinth Battlefields' situation.
        Thank you for your outstanding service as Secretary of the
    Interior.

                         ADDITIONAL COMMITTEE QUESTIONS

        Senator Burns. There will be some additional questions
    which will be submitted for your response in the record.
        [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 Conrad Burns

                                     WOLVES

        Question. As you know, the reintroduction of wolves to Montana,
    Idaho, and Wyoming has been an expensive venture for Montana's
    ranchers, hunters, and sportsmen. With that in mind, I would like to
    express my appreciation for the revised 10(j) rules giving ranchers and
    the states more authority and would like to see the Department continue
    this direction. I'd like to see states assume even more management
    responsibility, but am concerned that the in the current fiscal
    situation Montana would be unable to bear this burden.
        Can you tell me the cost of the wolf recovery program to the
    federal taxpayer? Can you provide detailed figures for the record?
        Answer. Section 18 of the Endangered Species Act of 1973 requires
    the Secretary of the Interior (working through the Fish and Wildlife
    Service) to annually report certain expenditures for the conservation
    of threatened and endangered species. The first year for the
    expenditures report was for 1989; the most recent report to Congress
    included expenditures reports for fiscal year 1998, fiscal year 1999,
    and fiscal year 2000. The FWS has received 2001 and 2002 data from the
    reporting agencies, but the expenditures report has not yet been
    completed.
        The Service estimates the total expenditures from 1989-2002 for
    gray wolves to be $43,037,535. Of this, the non-FWS Federal agencies'
    expenditures for the gray wolf came to $25,287,278. The data reflect
    non-FWS Federal agency expenditures in the lower 48 states (all gray
    wolf recovery efforts, including the Mexican and the Minnesota/
    Wisconsin gray wolf). FWS' expenditures over 1989-2002 for gray wolves
    came to $17,750,257 (see Table 1 entitled Federal Agency Expenditures
    for Grey Wolves, fiscal year 1989-2002).
        The expenditures report includes those expenditures ``reasonably
    identifiable'' to a specific listed species. These reports capture not
    only recovery costs, but also include costs associated with salaries,
    listing, consultation, law enforcement, monitoring and surveys
    attributable to a listed species. The total also includes land
    acquisition costs ``reasonably identifiable'' to the gray wolf.
        Information was reported to the Fish and Wildlife Service by all
    Federal agencies with endangered and threatened species expenditures;
    however, the Service cannot independently verify the information.
        Total expenditures by State from fiscal year 1996 through fiscal
    year 2002 have ranged from $213,000 in fiscal year 1996 to a
    preliminary total of $604,700 for fiscal year 2002. For States that
    would assume management of wolves in the Eastern and Western Gray Wolf
    DPSs upon delisting, State expenditure by State range from a
    preliminary estimate of $1,600 by Idaho in fiscal year 2002 to $100,000
    by Michigan in fiscal year 2000, 2001 and 2002 (see tables below).
        In fiscal year 2003, total FWS funding for wolf recovery in the
    Western Gray Wolf DPS increased dramatically to $1,567,000 due a
    significant increase in pass-through funding appropriated to the
    Service that was used to fund assistance to the States of Idaho,
    Montana and Wyoming for wolf planning; monitoring, management, control,
    and information programs; and $100,000 to USDA Wildlife Services for
    their control programs. We understand that in recent requests to
    Congress for financial assistance, States have requested $800,000-
    $900,000 per State to manage the Western Gray Wolf DPS after it is
    delisted.
        FWS funding for wolf recovery in the Eastern Gray Wolf DPS in
    fiscal year 2003 was significantly less than the Western Gray Wolf DPS.
    Approximately $117,000 has been provided from base funding for wolf
    management with another $420,000 in grant funding provided to
    Minnesota, Wisconsin and Michigan for wolf recovery. In fiscal year
    2003, the FWS provided $805,000 in base funding for Mexican wolf
    recovery. The State of Wisconsin has asked that the Service continue to
    commit funding at least 50 percent of the costs for monitoring state
    wolf populations for the first five years after delisting. We are not
    aware of any requests from the States of Minnesota or Michigan for
    financial assistance to manage the Eastern Gray Wolf DPS after
    delisting.

                                                                                     FEDERAL AGENCY EXPENDITURES FOR GRAY WOLVES, FISCAL YEARS 1999-2002 \1\
                                                                                 [Totals includes land acquisition expenditures, and reported in actual dollars]
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                  Agency                                   1989       1990       1991       1992       1993       1994       1995       1996       1997       1998       1999       2000     \1\ 2001   \1\ 2002    TOTALS
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    Fish and Wildlife Service.........................................    654,900    802,000  1,513,300  1,133,400  1,120,000  1,661,200  1,723,100  1,276,600  1,501,470  2,232,500    959,750  2,052,500    560,637    558,900  17,750,257
                                                                       =====================================================================================================================================================================
    Other Agencies:
        Animal and Plant Health Inspection Service....................    132,967     11,247    229,300    252,000    228,356    268,860    297,790    326,329    338,748    401,362    269,421    645,404    737,874    918,075   5,057,733
        Forest Service................................................    872,200    697,300    633,100    663,970  2,543,500    650,860    550,700    426,800    694,300    386,964    378,000    240,000    846,000    152,378   9,736,072
        Natural Resources Conservation Service........................  .........  .........  .........  .........  .........  .........  .........      2,800      3,300        700        300        700  .........  .........       7,800
        National Oceanic and Atmospheric Administration...............  .........  .........  .........  .........  .........  .........  .........  .........  .........  .........  .........  .........  .........  .........  ..........
        Air Force.....................................................  .........  .........  .........  .........  .........  .........  .........  .........  .........  .........  .........  .........  .........  .........  ..........
        Army..........................................................  .........  .........  .........  .........  .........  .........  .........  .........  .........     15,000     16,000     20,800     36,000      4,000      91,800
        Defense Logistics Agency......................................  .........  .........  .........  .........  .........  .........  .........  .........  .........  .........  .........  .........  .........  .........  ..........
        Marine Corps..................................................  .........  .........  .........  .........  .........  .........  .........  .........  .........  .........  .........  .........  .........  .........  ..........
        Navy..........................................................  .........  .........  .........  .........  .........  .........  .........  .........  .........      8,000  .........  .........  .........  .........       8,000
        Army Corps of Engineers.......................................  .........        500      1,700      2,600      2,700        600      3,200  .........        500  .........      2,500      2,500      7,250      8,950      33,000
        DOD...........................................................  .........      5,000  .........  .........      6,300      4,000  .........     12,800     21,000  .........  .........  .........  .........  .........      49,100
        Bonneville Power Administration...............................  .........  .........  .........  .........  .........  .........  .........  .........  .........  .........  .........  .........  .........  .........  ..........
        Federal Energy Regulatory Commission..........................  .........  .........  .........      4,961      5,838      8,169     17,350      3,683      3,450      2,010  .........  .........      1,400      5,000      51,861
        Nuclear Regulatory Commission.................................  .........  .........  .........  .........  .........  .........  .........  .........  .........  .........  .........  .........  .........  .........  ..........
        Coast Guard...................................................  .........  .........  .........  .........  .........  .........  .........  .........  .........  .........  .........  .........  .........  .........  ..........
        Customs Service...............................................  .........  .........  .........  .........  .........  .........  .........  .........  .........  .........  .........  .........  .........  .........  ..........
        Bureau of Indian Affairs......................................  .........        280  .........        500     12,000     11,500     31,000     93,000     75,000     22,600     14,000      2,000      1,011      8,011     270,902
        Bureau of Land Management.....................................      9,500      7,900  .........     27,800     24,000     29,700     16,000     28,000     32,000     15,500     25,000     13,000     23,600     19,200     271,200
        Bureau of Reclamation.........................................      3,750  .........  .........  .........  .........  .........  .........  .........  .........  .........  .........  .........  .........  .........       3,750
        National Park Service.........................................    496,300    651,400  .........  .........    229,900    418,000    353,400    324,600    280,500    799,195    749,296    792,785    772,400    743,875   6,611,651
        Office of Surface Mining......................................  .........  .........  .........  .........  .........  .........  .........  .........  .........  .........  .........  .........  .........  .........  ..........
        U.S. Geological Survey........................................  .........  .........  .........  .........  .........  .........  .........    206,000    190,800    219,000    292,500    328,400    371,000    374,500   1,982,200
        Federal Aviation Administration...............................  .........  .........  .........  .........  .........  .........  .........  .........  .........  .........  .........  .........  .........  .........  ..........
        Federal Highway Administration................................  .........  .........  .........     41,009     83,400      4,000    109,400     60,000     21,000     14,900     23,000  .........     26,000     25,000     407,709
        Environmental Protection Agency...............................  .........  .........  .........  .........  .........  .........  .........  .........  .........  .........  .........      1,500  .........  .........       1,500
        Smithsonian Institution.......................................  .........  .........  .........  .........  .........  .........  .........  .........  .........  .........  .........  .........     18,000     25,000      43,000
        Tennessee Valley Authority....................................  .........  .........     25,000  .........  .........  .........  .........  .........  .........  .........  .........  .........  .........  .........      25,000
        NBS...........................................................  .........  .........  .........  .........    390,000    245,000  .........  .........  .........  .........  .........  .........  .........  .........     635,000
                                                                       ---------------------------------------------------------------------------------------------------------------------------------------------------------------------
          Subtotal, Other Agencies....................................  1,514,717  1,373,627    889,100    992,840  3,525,994  1,640,689  1,378,840  1,484,012  1,660,598  1,885,231  1,770,017  2,047,089  2,840,535  2,283,989  25,287,278
                                                                       =====================================================================================================================================================================
          TOTAL, All Federal Agencies.................................  2,169,617  2,175,627  2,402,400  2,126,240  4,645,994  3,301,889  3,101,940  2,760,612  3,162,068  4,117,731  2,729,767  4,099,589  3,401,172  2,842,889  43,037,535
    ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    \1\ Preliminary data; report is currently under development.

       TOTAL STATE EXPENDITURES FOR GRAY WOLVES \1\ FISCAL YEAR 1996-2002
                                [Actual dollars]
    ------------------------------------------------------------------------
                                       General        Land          Total
              Fiscal year           expenditures  expenditures  expenditures
    ------------------------------------------------------------------------
    1996..........................       179,500        34,000       213,500
    1997..........................       437,781  ............       437,781
    1998..........................       336,519  ............       336,519
    1999..........................       364,680  ............       364,680
    2000..........................       253,470       380,800       634,270
    2001 \2\......................       299,500       394,400       693,900
    2002 \2\......................       341,800       262,900       604,700
    ------------------------------------------------------------------------
    \1\ As report through the International Association of Fish and Wildlife
      Agencies (IAFWA) for the annual report to Congress: Federal and State
      Endangered and Threatened Species Expenditures.
    \2\ Preliminary data; report is currently under development.

                    SELECTED STATE GENERAL EXPENDITURES FOR GRAY WOLVES \1\ FISCAL YEAR 1999-2002 \2\
                                                    [Actual dollars]
    ----------------------------------------------------------------------------------------------------------------
                                                                                      Fiscal year
                                State                            ---------------------------------------------------
                                                                      1999         2000         2001         2002
    ----------------------------------------------------------------------------------------------------------------
    Wyoming.....................................................       22,259        8,340        5,600       27,500
    Montana.....................................................        3,500        3,834       48,300       57,700
    Idaho.......................................................        7,720        7,298        1,900        1,600
    Minnesota...................................................       49,200       18,000       18,700        2,100
    Wisconsin...................................................       40,500       43,000       43,000       54,500
    Michigan....................................................       18,000      100,000      100,000      100,000
                                                                 ---------------------------------------------------
          SUBTOTAL..............................................      141,179      180,472      217,500      243,400
    ----------------------------------------------------------------------------------------------------------------
    \1\ As report through the International Association of Fish and Wildlife Agencies (IAFWA) for the annual report
      to Congress: Federal and State Endangered and Threatened Species Expenditures.
    \2\ Data reported for the States prior to fiscal year 1999 was reported by species only, not by state and
      species. Fiscal year 2001 & fiscal year 2002 data is preliminary; report is currently under development.

        Question. If we were to transfer management responsibility to the
    states, will that cost remain steady? And how will States finance that
    management?
        Answer. If we were to transfer management responsibilities to the
    states while the wolf is still listed, the Service anticipates
    providing the States with funding as provided to the Service for wolf
    recovery. States may also consider applying for Service grant funding
    (i.e., State Wildlife Grants) to support their wolf management
    programs. Upon delisting, the States may continue to be eligible for
    funding through Service grant programs as well as possibly other
    appropriate Federal programs. We are currently working with the States
    to explore these options.

                       BLM--WILD HORSE AND BURRO PROGRAM

        Question. Madam Secretary, I am deeply disturbed with the Wild
    Horse and Burro Program. Congress has offered to help restructure the
    program to bring costs back in line, but there seems to be a lack of
    desire within the Department to institute any meaningful reform. As a
    result, we have refused to add additional resources over the $30
    million the program receives annually. But rather than offer any
    meaningful reform, the BLM budget proposes a massive $10.5 million
    increase for Wild Horses and Burros, and pays for it by cutting other
    functions like oil and gas, recreation and range.
        Why are the BLM's successful functions being taxed and scaled back
    due to the Department's failure to rein in the abysmal performance of
    the Wild Horse and Burro program?
        Answer. The additional costs for the Wild Horse and Burro Program
    were spread across many programs in the Management of Lands and
    Resources account as these programs will realize the benefits of
    improved rangeland health conditions by the achievement and maintenance
    of appropriate management levels of wild horses and burros.
        Question. What substantial changes have been made to the program to
    get it back on track? Can you offer us any other options?
        Answer. Two fundamentals have guided BLM's management since the
    passage of the Wild Free-Roaming Horses and Burros Act: (1) determining
    appropriate management levels of wild horses and burros on public lands
    and (2) removing excess animals to achieve that appropriate management
    level.
        The task of setting appropriate management levels has involved a
    high degree of controversy, including numerous protests, appeals and
    litigation. At this point BLM has established the appropriate
    management levels in 164 out of 206 herd management areas and has plans
    in place to complete the task in fiscal year 2005.
        As a result of funding received through congressional
    appropriations and reprogrammings from fiscal year 2000 to fiscal year
    2003, the BLM has made significant progress in achieving appropriate
    levels. The BLM has removed a total of 44,018 excess animals through
    adoption of 27,743 animals and placement of 16,270 animals in
    contracted holding facilities since fiscal year 2000. The number of
    animals in long-term holding facilities has risen from 1,700 in 2001 to
    14,000 in 2004.
        The results of this effort have left a population of 36,000 wild
    horses and burros currently on public lands. Populations have not been
    this low since the 1970's, however the current target appropriate
    management level is 26,433. The BLM is now in a position where the
    increased funding proposed in its 2004 WH&B reprogramming and 2005
    budget request would enable the bureau to achieve appropriate
    management levels on the public land by 2006.
        Question. Can you testify that program managers have overturned
    every stone and looked at all options to reduce costs?
        Answer. The large scale removal and placement efforts described in
    the previous answer have been costly, and costs will continue until the
    large numbers of animals now in long-term holding facilities reach the
    end of their natural lives. Holding unadoptable horses has been the
    greatest challenge of the wild horse and burro program since its
    beginning. This problem alone has been the primary cause for the start
    and stop history of the program, whereby BLM has come close on
    occasions to reaching AML by removing animals from the range, only to
    have the corresponding increase in costs to deal with the excess
    animals force BLM to divert funds away from gathers, removals, and
    adoptions, thus leading to another spike in the WH&B population on the
    range. BLM has by law only two ways to deal with horses removed from
    the public lands: adoption, and long-term holding.
        Progress in the program to date has also been the result of
    improved management efficiencies in the following areas: the placement
    of excess animals in contracted pasture has resulted in a much lower
    cost per animal than the previous method of storage in feedlot
    situations; the removal of excess animals has been refined, resulting
    in significant cost savings; larger regional and national level
    contracting efforts have provided additional savings; and BLM has also
    implemented policies for selective removal to minimize the number of
    animals going in to long-term holding pastures.
        Question. Can you tell us that no other option exists except
    slowing key BLM functions to increase funding for a failing program?
        Answer. As explained in the April 2004 report to Congress:
    ``Reaching Appropriate Management Levels in Wild Horse and Burro
    Management,'' increasing funding for the program to allow BLM to reach
    AML levels as quickly as possible by accelerating the removal of excess
    animals from the range is the most cost-effective means for addressing
    the WH&B problem. Upon achievement of AML's, the program cost to the
    BLM will begin to decrease. Total program costs will then remain
    constant, but, in the long-term, will start to decrease again as
    natural mortality occurs in long-term holding facilities. The BLM
    considers the WH&B overpopulation to be a bureau-wide resource
    management issue, not a singular issue limited to one MLR program, or
    one or two states. The BLM believes that the benefits that will be
    attained by achieving AML in WH&B populations are very significant and
    will support a majority of resource functions managed by the bureau,
    including rangeland, wildlife, fisheries, endangered species, soil
    water and air, and recreation resources, to name a few. Given competing
    priorities, the BLM Management Team and State Directors agreed that the
    most efficient approach to addressing the WH&B situation was through a
    permanent base adjustment rather than asking for additional funds.
        Question. I believe this requires strong Departmental attention.
    Why weren't the additional costs of this program spread department
    wide, rather than merely focused on the BLM?
        Answer. The additional costs for the Wild Horse and Burro Program
    were spread across many programs within BLM, as these programs will
    realize the benefits of improved rangeland health conditions by the
    achievement and maintenance of appropriate management levels of wild
    horses and burros. These benefits more clearly relate to the management
    of the public domain (BLM) than to management of other programs under
    the Secretary's direction.

            BLM--COST RECOVERY AND REDUCTIONS IN OIL AND GAS PROGRAM

        Question. Madam Secretary, the BLM budget assumes income from a
    number of user fees. I am most concerned with the $4 million proposal
    in the oil and gas management account. As you know, energy concerns
    continue to remain at the forefront of much of the work here on Capitol
    Hill.
        When will the rule makings be in place for these cost recovery
    mechanisms and can you provide the subcommittee with additional
    information as to when the funding will be available to continue work
    in the oil and gas programs?
        Answer. BLM plans to publish an energy and minerals cost recovery
    rule in September 2004 with fee collection under the rule to begin in
    early fiscal year 2005. Funds will be available to field offices for
    use immediately after the fee is collected.
        Question. Can you assure the subcommittee that oil and gas
    permitting activity will remain at or above the fiscal year 2004 level
    if we were to adopt the Administration request?
        Answer. BLM does not expect the level of permitting activity to
    drop in areas with known potential as a result of the cost recovery
    proposal contained it its 2005 Budget. Demand for natural gas is
    growing and the fee increases are small relative to the value of the
    underlying resource. The proposed fees for document processing comprise
    a small share of the producers' total cost; therefore, we do not expect
    the fees to act as a disincentive to exploration and development.
        Question. The Administration is also proposing cost recovery for
    hard-rock mining applications. Shouldn't the Department first focus on
    better management practices and creating a timely permitting system
    before charging for what is currently a broken process?
        Answer. The fees collected under this rule are small, relative to
    the value of the mineral resource, but have the potential to provide
    BLM with funding in a timely manner, especially in times of rapidly
    changing demand. The BLM is undertaking initiatives that assure that
    its energy and minerals permitting is more timely. Please refer to the
    Federal Register of March 8, 2004 (69 FR 10866). This publication
    revises the Departmental Manual for actions subject to the National
    Environmental Policy Act of 1969 (NEPA). The revision streamlines the
    NEPA process within the Department of the Interior, prevents
    duplication of studies and efforts, and requires parallel (as opposed
    to sequential) studies of various issues related to an Environmental
    Assessment (EA) or Environmental Impact Statement (EIS). These changes
    will reduce considerably the time necessary to revise and respond to a
    plan of operations.
        The BLM and the DOI do not consider our permitting process to be
    ``broken.'' However, we recognize that the NEPA process is the single
    most time consuming event in the permitting process. The completion of
    base line analysis and findings of the NEPA document, however, provide
    the guidelines used by management in its permitting process. By
    reorganizing and streamlining the Department's NEPA process and
    requirements as referenced above, the industry will begin to experience
    a considerable reduction in the time it takes for the BLM to reach a
    decision point on a proposed plan of operations.
        However, it is important to keep in mind that hardrock mining
    operations are very different from other resource extraction activities
    (such as oil and gas) and, if conducted improperly, can have serious
    environmental consequences. Plans of operation often require a
    substantial amount of upfront review to ensure that risks are properly
    evaluated and the environment and taxpayers are protected from
    unforeseen costs. Therefore, it is unreasonable to expect that
    permitting of large-scale operations will ever be a speedy process.
        Question. Does the Department have a computerized tracking system
    for various permit types and can you provide the Committee with
    information illustrating the amount of time that currently elapses
    between submissions of plans of operations or notices and when the
    permit is finally approved?
        Answer. BLM has two database tracking systems (MIS and LR2000) that
    are used in relation to its 3809 activities. MIS tracks the number of
    Plans and Notices that are targeted for a given year and at the end of
    it, compares the planned number with the number of Plans and Notices
    that were actually completed. LR2000 is designed to track all aspects
    of a case (Plan or Notice application) from beginning to end or closure
    of the case. Data regularly entered into these systems allows BLM to
    track key dates associated with a case. Key dates would include, but
    are not limited to, the date of receipt of the application, the date of
    approval of the application, and the date of an inspection. BLM can
    access the database and specifically request all pending cases as well
    as dates associated with the initial application.
        Under the 3809 regulations, as revised in 2001, Notices are
    required to provide a financial guarantee for reclamation prior to
    commencing operations. Based on a review of LR2000 serial register
    pages for Notices and Plans of Operation, after the required financial
    guarantee has been accepted, the amount of elapsed time before BLM
    issues a notice to proceed ranges from 15 days to 6 months. The revised
    3809 regulations also require BLM to respond within 30-days of receipt
    regarding the completeness of the proposed operations. The required
    information submitted must be complete in order for BLM to determine
    that the operation will prevent unnecessary or undue degradation of
    public lands. Due to the varied complexity of the proposed operations
    and the level of NEPA analysis required, new plans and/or amendments
    can range from 3 to 18 months before BLM approves the operation. In
    some cases it may be in excess of two or more years.

                             BLM--RANGE MONITORING

        Question. We have heard from many of BLM's managers on the ground,
    as well as industry, that the Bureau must do a better job of range
    monitoring. Last year we provided additional resources in both BLM and
    Forest Service to accomplish this goal. Unfortunately, BLM range has
    been reduced by $1.2 million in the request, with most of this funding
    being redirected to the wild horse and burro program.
        Why would the Administration reduce range monitoring that will
    allow us to target range improvements and shift the funding to other
    programs offering less potential for improvement on the ground?
        Answer. In fiscal year 2004, Congress added about $1.2 million to
    the BLM range program, directed specifically for on-the-ground
    monitoring. BLM allocated this funding to on-the-ground data collection
    that would supplement existing monitoring and assessment work
    associated with issuing grazing permits. The additional fiscal year
    2004 monitoring funds were considered a one-time add-on and were not
    requested in fiscal year 2005. BLM continues to make monitoring,
    assessment and evaluation of data a priority where it will fulfill our
    goal to have all grazing permits fully processed in the year they
    expire. To accomplish this, BLM has redirected efforts to conduct fewer
    lower priority tasks such as use supervision visits and compliance
    checks. Monitoring will be deferred on lower priority areas where
    permits have already been fully processed or standards of rangeland
    health are being met. Data collection will be conducted in high
    priority areas. The Department also believes that providing additional
    funds to the Wild Horse and Burro program will ultimately help improve
    range health by removing excess animals from the range.
        Question. In the absence of sound range management, how do you
    propose we target improvements and defend potential challenges to BLM's
    work as a steward of the land?
        Answer. BLM is committed to resolving the wild horse and burro
    issue because maintaining populations at Appropriate Management Levels
    will reduce impacts on rangeland resources. Rangeland monitoring is
    used to detect change and status of rangeland conditions to ensure
    achievement of healthy rangelands. Rangeland monitoring studies verify
    the need to achieve appropriate management levels (AML) of wild horses
    and burros on public lands. BLM has made substantial progress towards
    the achievement of AML and is presented with the opportunity to finally
    achieve those levels by continuing to aggressively pursue the removal
    of excess wild horses and burros. For that reason, BLM has proposed to
    redirect funds from other subactivities such as the range program to
    reach the goal of appropriate management levels as quickly as possible.
    This will result in the improvement of healthy rangeland conditions.

                 BLM--HAZARDOUS FUELS WORK AND COST CONTAINMENT

        Question. I notice the administration request increases wildland
    fire suppression funding by $28.6 million over the fiscal year 2004
    level. We have had numerous discussions regarding cost containment and
    have had the National Academy of Public Administration review cost
    containment options.
        Can you outline steps you have implemented or plan to implement to
    contain the escalating costs of fire suppression operation?
        Answer. The Department is very interested in containing the costs
    of emergency responses to wildfires. The Department shares the concerns
    of this Committee regarding the cost of suppression operations, not
    only because of our awareness of the limited resources available, but
    also because of the impact that borrowing for fire suppression has on
    other DOI programs.
        This Department and the U.S. Forest Service have been working
    together closely for the past year on suppression cost containment. The
    Wildland Fire Leadership Council, the executive policy-making body for
    the National Fire Plan, directed that the agencies conduct fire
    incident management and cost reviews at large fires in 2003. These
    reviews focused on operational and overhead actions taken on five of
    the largest fires and reported that there were common areas of concern.
    Among their findings was that cost containment guidance was understood
    and followed by fire managers; extensive use of contract crews and
    engines may be significant cost driver; incident management team
    transitions contributed to high costs; resource ordering and
    availability problems contributed to high costs; and, there was
    inadequate contracting support and oversight at large fires.
        In response to these findings, the fire management agencies have
    taken several actions. The Federal Fire and Aviation Operations Plan
    for 2004 requires that incident commanders must suppress wildfires at
    minimum cost, considering firefighter and public safety, benefits, and
    values to be protected, consistent with resource objectives. This year,
    additional incident business advisors will be assigned to large fires,
    oversight of contract resources will be increased, problems in the
    resource ordering system are being corrected, and the costs of
    transitioning from one incident management team to another will be
    reduced.
        The section of the Operations Plan that directly addresses cost
    containment issues is attached.

                                COST CONTAINMENT

        Policy: ``Fires are suppressed at minimum cost, considering
    firefighter and public safety, benefits, and values to be protected,
    consistent with resource objectives.''
        Principle: Agency Administrator oversight and involvement during
    the decision-making process is critical for containing suppression
    costs.
        Intent: The primary criterion for choosing suppression strategies
    is to minimize costs without compromising safety. Planned and actual
    suppression costs must also be commensurate with the values to be
    protected. They must be included and displayed in the Wildland Fire
    Situation Analysis (WFSA).
        It is inappropriate to expend suppression dollars with the explicit
    objective of achieving resource benefits even though resource benefits
    may result in some areas of the fire.
        Indirect suppression strategies are viable alternatives in many
    situations. Prior to selecting such a strategy carefully weigh the
    implications on safety, cost and escape potential. When fire danger
    trends are rising, the selection of these strategies must be carefully
    scrutinized.
        Long-duration wildfires where large numbers of firefighting
    resources are being committed need to be closely evaluated by National
    Interagency Cost Oversight Teams.
        Objective: Expend only those funds required for the safe, cost-
    effective suppression of the incident.
    Direction
      --Agency Administrators are responsible for financial oversight. This
            responsibility cannot be delegated. See Table 1 following this
            section for approval thresholds.
      --Maintain a minimum of two inter-agency National Interagency Cost
            Oversight Teams.
      --When fire danger trends are rising, the long-term consequences of
            indirect suppression strategies, including final fire cost,
            will be considered in the initial action decision.
      --Produce WFSA alternatives that display a full range of appropriate
            management response options. All alternatives must be developed
            with strong emphasis on cost accountability based on the values
            to be protected, with due consideration given to a minimum cost
            alternative.
      --A suppression cost objective will be included in the Delegation of
            Authority to the Incident Commander. Revision or amendment of
            the WFSA is required if incident cost objectives are exceeded.
      --Incident suppression cost objectives will be included as a
            performance measure in Incident Management Team evaluations.
      --An Incident Business Advisor (IBA) must be assigned to any fire
            with projected suppression costs of more than $5 million. An
            IBA is advised for fires with suppression costs of $1-5
            million. If a certified IBA is not available, the approving
            official will appoint a financial advisor to monitor
            expenditures. The IBA reports directly to the responsible
            Agency Administrator.
        In October 2003, the Wildland Fire Leadership Council convened a
    senior level interagency strategic issues panel comprised of State,
    local, Tribal and Federal representatives, and incident team members.
    These individuals, who represent a mix of on-the-ground and policy
    expertise, are examining cost containment issues in a broader, land
    management-based scope that integrates suppression and vegetation
    management. The panel's findings will be announced this summer.
        The Council has also approved several other changes to the wildland
    fire management program that will help in controlling costs in the
    future. First, common fire incident cost codes will be used in all
    agency financial systems for all fires beginning this year. Being able
    to accurately report on the accumulated costs of specific fire
    incidents will improve accountability and give agencies a new tool for
    identifying major cost drivers. Second, the Council ratified the
    interagency decision to adopt common budget structures and definitions
    for budget line items. For the first time, beginning in 2005, costs
    charged to Suppression, Preparedness, and Burned Area Rehabilitation
    will mean the same thing for both agencies, resulting in transparent
    cost accounting.
        Later this year, fire management plans for all lands managed by DOI
    bureaus will be completed. The plans will identify areas and the
    conditions under which naturally-occurring wildfires will be managed as
    a least-cost suppression action or a wildland fire use action.
    Monitoring actions on wildland fires should cost less than active
    suppression action and may benefit the areas being burned.
        The root cause for the catastrophic wildfires we have been
    experiencing in recent years is the buildup of hazardous fuels that
    ignite easily and spread with a much higher intensity than in past
    decades. The accumulation of hazardous fuels resulting from one hundred
    years of aggressive fire suppression, coupled with 10 years of drought
    conditions in much of the West, present an ongoing danger to lands and
    communities and will likely continue to result in a high level of fire
    activity. This Department has a very active and increasingly successful
    fuels reduction program. Nevertheless, it will take many years to
    reduce fuel loads sufficiently to gain some measure of control over the
    risk of catastrophic wildfires.
        Question. Additionally, the request increases hazardous fuel
    funding by $25 million.
        Can you outline what the Department of the Interior has done
    following the implementation of the Healthy Forests Act to make these
    dollars go as far as possible?
        Answer. The Department is taking several steps to make fuels
    dollars go farther. For example, the Department has implemented CEQ
    guidelines streamlining fuels treatment environmental assessments (EA).
    This will save time and money. The Bureau of Land Management, in
    particular, is making extensive use of the new categorical exclusion
    (CX) for certain fuels treatments. Moreover, use of the CX is allowing
    fuels treatments that otherwise would not have taken place, because of
    the increased cost and time of conducting the EA compared to that
    needed to support a CX, to go forward quickly.
        In addition, the Wildland Fire Leadership Council has approved
    moving forward with LANDFIRE, a sophisticated GIS vegetative mapping
    system that will provide data layers on fuel and condition class. This
    information will improve the efficiency of selecting and strategically
    placing fuels treatments to obtain a greater degree of risk reduction.
        Further, the Department has increased contracting in the hazardous
    fuels reduction program, drawing upon the expertise of the private
    sector and the cooperation of local resources to improve program
    performance. More than 50 percent of fuels treatment dollars go to
    contractors. This also stretches the ability of agencies to treat
    priority acres and expedites the pace at which fuels projects can be
    conducted compared to if bureaus only utilize in-house staff.
        Question. Are you increasing the number of forest stewardship
    projects or the use of categorical exclusions to increase the
    percentage of these dollars that actually goes for on-the-ground work
    as opposed to paper work?
        Answer. The Bureau of Land Management is making extensive use of
    the new categorical exclusion (CX) for certain fuels treatments. The
    use of CXs is expected to increase in fiscal year 2005 as field staffs
    better understand the authority and processes involved.
        The use of stewardship projects is also expected to increase in
    fiscal year 2005. The Bureau of Land Management expects to award 34
    stewardship contracts in fiscal year 2004. In fiscal year 2004 many of
    the stewardship projects were conversions of existing fuels treatments.
    In fiscal year 2005 we will be able to design fuels treatment projects
    as stewardship projects. As field staffs gain experience with the
    authority and the processes involved they are better able to identify
    and design fuels treatment projects that will make good stewardship
    projects. In fiscal year 2006 the Bureau of Land Management expects to
    award 50 to 60 stewardship contracts.

                       BIA--TRIBALLY CONTROLLED COLLEGES

        Question. Madam Secretary, you know the Tribally Controlled
    Community Colleges are a program I believe have been a resounding
    success in helping our native communities, yet your request reduces
    their funding by $5 million.
        Considering Tribal Colleges receive much less federal funding per
    student than other federally funded institutions, how can you justify
    this decrease?
        Answer. Education is one of the highest priorities of the
    Administration. The President and I remain committed to the President's
    promise to improve education and ``leave no child behind.'' The 2005
    request continues the President's commitment so that Indian children
    have safe and nurturing places to learn. Funding for elementary and
    secondary school operations is continued at the 2004 level, nearly 22
    percent above the levels provided just eight years ago (1996).
        Since 1996, funding for tribally controlled colleges and
    universities has increased by 58 percent. Just since 2001, we've
    increased funding for these schools by 14 percent. The 2005 budget
    maintains funding for tribal colleges at the 2003 enacted level. It
    includes an increase of $506,000 for two existing TCUs that recently
    met the statutory requirements for BIA support. Together with expected
    funding from the U.S. Department of Education, our budget will provide
    about $9,500 per student count.
        Question. Last year you argued the Tribally Controlled Community
    Colleges were reduced to support other educational programs in Indian
    country.
        Can you show me where this $5 million was shifted in the request
    before us?
        Answer. The needs in Indian country are widespread and disparate.
    Increases for fiscal year 2005 have been requested in the areas of
    higher priority to Tribes on a nationwide basis. These include law
    enforcement and public safety, economic development, forestry, and
    self-determination efforts.

                         BIA--DETENTION CENTER FUNDING

        Question. I applaud the efforts of the Departments of Justice and
    Interior to fund a round of 20 new tribal detention facilities.
    However, it is my understanding that BIA funds have been slow in coming
    to staff and equip the detention facilities once construction is
    completed.
        Your budget request includes an increase of $7.8 million to open 8
    of the 20 facilities built in cooperation with DOJ. Will this funding
    level fully meet the need, or will the opening date of some facilities
    be slowed due to a lack of funds for staffing?
        Answer. Including prior year funding and the 2005 President's
    Budget, all of the 15 detention centers that have already been
    completed or scheduled to be completed by February 2005 will be fully
    funded for operations, based on estimates of total identified operating
    need.
        Three detention centers are currently scheduled to be completed at
    the very end of fiscal year 2005 (September 2005). The President's
    Budget provides funding for start-up purposes for these three
    facilities.

                BIA--CLAIM SETTLEMENTS AND OVERALL FUNDING LEVEL

        Question. I notice that about half of the reduction to the BIA
    accounts comes from the Claim Settlement account. It is my
    understanding that the amount requested fulfills the government's
    responsibility in fiscal year 2005.
        Can you confirm the budget request level fully funds government's
    responsibility for claims in fiscal year 2005?
        Answer. Yes, the budget request level fully funds the government's
    responsibility to pay Indian land and water rights claims in fiscal
    year 2005. A number of settlements have ended in recent years, and only
    a few new ones have been added. The Department does not request funding
    for a settlement until it is finalized either through legislative or
    judicial action.

                            BIA--SCHOOL CONSTRUCTION

        Question. The administration proposes cutting the BIA school
    construction budget by $66 million following an unprecedented effort to
    reduce the backlog.
        Can you explain the Department's decision to reduce the school
    construction account and the impact on this decision now that BIA has
    released an updated list of schools slated for construction?
        Answer. By the time we have completed the work proposed in our 2005
    budget, 60 percent of BIA schools will be in good or fair condition. At
    the beginning of fiscal year 2002, 65 percent of BIA schools were in
    poor condition.
        We do have a $66 million reduction in the 2005 program. To put this
    in perspective, however, this is a reduction of about one-fifth. We are
    still proposing a robust program of $229 million. As recently as 1999,
    spending on BIA school backlog needs was only $60 million a year.
        The reason that we are comfortable with the fiscal year 2005
    program level is that we currently have 21 replacement schools in the
    planning and design process or under construction. The 2005 budget will
    build the remaining five schools on the current replacement priority
    list. The budget also provides $10 million for the tribal school
    construction demonstration program, which is likely to fund an
    additional two schools on a cost share basis with Tribes. Funding
    additional replacement schools in 2005 would get us too far ahead of
    our ability to prudently manage the construction program.
        Question. Can you give us an idea of the carryover balances in the
    school construction account for the past few fiscal years?
        Answer. The carryover in fiscal year 2002 was $101 million, and in
    fiscal year 2003 $201 million. The reason for the high carryover
    amounts is because construction funds are not obligated until planning
    and design is completed.

                 OFFICE OF THE SPECIAL TRUSTEE--OVERALL FUNDING

        Question. The ongoing trust management issue and reorganization
    efforts remain a hot-button issue for many of my constituents. Most
    tribal organizations are extremely unhappy with the direction of the
    reorganization. I have numerous questions regarding the implementation
    of these proposals.
        I have been approached with concerns that funding the regional
    trust officers is a waste of money that is not supported by tribal
    entities. I have been told there is a serious lack of appraisers and
    other key support positions for trust management activities on the
    ground, and a more wise use of funds would be to increase the oversight
    work directly on trust land.
        How do you respond to these criticisms, and will you work with us
    to ensure that these concerns are addressed?
        Answer. The addition of Fiduciary Trust Officers at the local
    (agency) level and support staff is to provide services to
    beneficiaries of the trust. OST believes strongly that this is not a
    waste of money to provide direct service to beneficiaries. No trust
    management functions currently managed by the BIA are being diminished
    or eliminated. These beneficiary services (individual and tribal) and
    improvements made in the delivery of current services will allow
    Interior to meet the fiduciary responsibilities required by statute and
    regulation.
        The 1994 Trust Reform Act governs the primary duties of the Special
    Trustee. Other duties have been added to the office of the Special
    Trustees that primarily revolve around managing the financial
    activities associated with the trust. The fiscal year 2005 increase in
    the OST budget is primarily associated with other trust reform
    activities, such as historical accounting, Indian land consolidation,
    and litigation support.
        Tribal requests for more staff locally for trust management
    activities is also partly addressed by the addition of Fiduciary Trust
    Officers who, in addition to the services they provide, will free up
    the time of current personnel to focus on their current jobs rather
    than being regularly interrupted to respond to beneficiary inquiries.
    It is difficult to ascertain the extent of the need for additional
    personnel such as appraisers until the currently planned additional
    staff are in place and workforce plans are completed that take into
    account more streamlined reengineered trust business processes. Another
    consideration is that the addition of more permanent full-time staff is
    not always the most effective response when there are options such as
    contracting for services and using the services of temporary staff when
    possible, to address temporarily increased or backlogged workload.
        In addition, implementation of more streamlined reengineered trust
    business processes of the ``To Be'' model will likely mean less
    workload at the agency level.
        Question. Moving to land consolidation efforts, we both agree that
    reducing fractionation of trust lands must be part of effective trust
    reform. I note the $53 million increase for land consolidation, but am
    concerned how this vast increase will be administered.
        Related to the question regarding appraisers and other support
    positions, how will you ensure these funds are wisely spent?
        Answer. The BIA through the Indian Land Consolidation Office (ILCO)
    has developed a strategic plan for the expansion of the Indian Land
    Consolidation Program (ILCP) on a national level. There are
    approximately 156 ``allotted'' reservations through out the country.
    The plan identifies methodology's to be used and strategies to expand
    the program based on targeting the most highly fractionated
    reservations first. One goal is to obtain fair market values through
    reservation-wide appraisals that will enable the ILCP to acquire all
    available land interests from willing sellers on all reservations in
    which those interests are located. Additional funds will allow
    contractors to be hired to provide the necessary valuations. A case
    management system will automate processes, recording and increase the
    number of interests acquired. ``Youpee'' heirs will be identified and
    title issues resolved. ILCO will continue to provide program guidance
    and technical assistance as the program expands to eventually include
    all allotted reservations. Additional contractors will be hired to
    assist ILCO with ``outreach'' marketing, sales, and recording efforts.
        Question. Can you update us on the legal status of the Cobell case?
        Answer. There are currently four appeals by the government pending
    in the Cobell v. Norton litigation. The first appeal is from the
    structural injunction issued by the District Court in September 2003.
    The structural injunction describes in detail what the District Court
    believes is required by the American Indian Trust Fund Management
    Reform Act of 1994, both by way of historical accounting and by way of
    trust reform generally. The Court of Appeals has stayed the injunction
    pending appeal.
        The second and third appeals are from preliminary injunctions
    issued by the District Court with respect to Interior's use of the
    Internet. The fourth appeal seeks a writ of mandamus disqualifying
    Special Master Balaran from further participation in the case because
    of bias. Mr. Balaran resigned as Special Master on April 5, 2004,
    rather than face potential disqualification and it remains to be seen
    whether the appeal will go forward in modified form. In the meantime,
    plaintiffs continue to seek discovery in the case.
        Question. What are the prospects of a meaningful mediation process?
        Answer. The Department is pleased that the parties to the
    litigation have agreed on a mediation team after months of preliminary
    discussions that have involved the litigating parties and a bipartisan
    groups of authorizing committee staffs. The next step in the mediation
    effort is to work out a retention agreement with the selected team. We
    continue to support the effort to mediate a resolution to the many
    issues in Cobell.

                 OFFICE OF THE SPECIAL TRUSTEE--SELF GOVERNANCE

        Question. Last year, we authored Section 139 that allows Self
    Governance tribes the ability to perform a number of trust duties.
        Can you update us on the implementation of Section 139 as a model
    for tribal participation in trust management?
        Answer. In accordance with the Section 139, the Special Trustee
    must conduct reviews to determine the status of the Tribal Trust
    Program in order to provide for the certification from the Secretary
    that the tribe is operating trust programs in accordance with and
    meeting the same fiduciary requirements that the Secretary is required
    to meet in accordance with the law and the court decisions.
        OST review teams have provided preliminary results of those reviews
    to the four tribes that were part of the demonstration group. Several
    of the tribes are not currently meeting the requirements and are
    expected to develop corrective action plans to help them reach the
    level of performance necessary to be certified as in compliance. OST
    will continue to work with the tribes to implement this provision.

                      ABANDONED MINE LAND REAUTHORIZATION

        Question. The authority to collect the tax on coal under the
    Surface Mining Control and Reclamation Act (SMCRA) expires at the end
    of this fiscal year. The Administration is proposing to reauthorize
    this legislation with some significant changes.
        Can you outline for the subcommittee the basic changes in existing
    law proposed by the administration? What is the rationale for these
    changes?
        Answer. The 1977 Surface Mining Control and Reclamation Act
    established the Office of Surface Mining and authorized the office to
    collect fees to finance reclamation of abandoned mine lands. Section
    402(a) of SMCRA establishes a per tonnage fee for mined coal. These
    fees are placed in the Abandoned Mine Reclamation Fund, and are used to
    finance reclamation of abandoned mine lands in the United States.
    Interest accrues on the unused portion of the collected fees and
    becomes part of the Fund to be used for reclamation. A portion of the
    interest is transferred to the United Mine Workers of America Combined
    Benefit Fund in order to help finance health benefits.
        Through the AML program, problems at many high-priority sites have
    been addressed. However, when AML coal user fee collection authority
    expires in September 2004, approximately $3 billion in significant
    health and safety problems will still remain, along with another $3.6
    billion of other high priority problems affecting the general welfare
    of individuals living in coalfield areas. These are not merely ``ugly
    landscapes'' that need to be cleaned up; these are serious health and
    safety hazards. A recent study conducted by the OSM found that 3.5
    million Americans live less than one mile from health and safety
    hazards created by abandoned coal mines.
        There is a fundamental imbalance between the goals established by
    the 1977 Act and the requirements for allocating funds under the Act.
    The statutory allocation formula limits the ability of the AML program
    to meet its primary objective of abating AML problems on a priority
    basis. The majority of grant funding, or 71 percent, is distributed to
    states on the basis of current production. Yet there is no relationship
    between current production and the magnitude of the AML problem in each
    State. As a result, some States have completed reclamation on all of
    the abandoned coal mine sites or are working on low-priority sites,
    while others are still decades away from completing reclamation of the
    most critical high-priority sites. Under the current allocation it will
    take on average 47 years to reclaim all high-priority sites, though in
    a few States it would take over 100 years.
        Interwoven with the allocation issue is the need to address States
    and Indian Tribes that have been certified as having completed the
    reclamation of coal mining related AML sites. Unappropriated balances
    in the AML fund that would be available under the 1977 Act to certified
    States and Tribes are expected to reach about $530.0 million by the end
    of September 2004.
        The administration's bill would change the current statutory
    allocation of fee collection, which is progressively directing funds
    away from the most serious coal-related problem sites. Under this
    proposal, all future AML fee collections, plus the existing
    unappropriated balance in the Rural Abandoned Mineland Program (RAMP)
    account, would be directed into a new single account. Grants to non-
    certified states or Tribes (those states that still have coal problems
    remaining) would be distributed from that single account based upon
    historic production, which is directly related to the magnitude of the
    AML problems.
        Existing state and tribal share accounts would not receive any
    additional fees collected after September 30, 2004. The current
    unappropriated balance in the state and tribal share accounts would be
    dealt with in one of two ways: (1) Certified states and Tribes would
    receive the current unappropriated balances in their accounts on an
    accelerated basis in payments spread over ten years (fiscal year 2005-
    2014), subject to appropriation. There would be no restrictions on how
    these monies are spent, apart from a requirement that they be used to
    address in a timely fashion any newly discovered abandoned coal mines;
    (2) Non-certified states and Tribes would receive their unappropriated
    balances in annual grants based upon historic production. If a non-
    certified state or tribe completes its abandoned coal mine reclamation
    before exhausting the balance in its state share account, it would
    receive the remaining balance of state share funds in equal annual
    payments through fiscal year 2014. Non-certified states and Tribes that
    exhaust their unappropriated state share balances before completing
    their abandoned coal mine reclamation would continue to receive annual
    grants in amounts determined by their historic coal production from the
    newly-created single account.
        The proposal amends SMCRA to remove the existing authorization of
    expenditures from the AML fund for RAMP under the jurisdiction of the
    Secretary of Agriculture. No funds have been appropriated for this
    program, which reclaimed lower priority abandoned mine land (AML)
    sites, since fiscal year 1995. Elimination of this authorization would
    facilitate the redirection of AML fund expenditures to high-priority
    sites. Accumulated unappropriated balances in the RAMP account would be
    made available for abandoned coal mine reclamation.
        The proposal modifies reclamation fee rates in an effort to closely
    match anticipated appropriations from the fund with anticipated
    revenues. The proposed changes would maintain the current fee structure
    while uniformly reducing the fee rates by 20 percent on average (15
    percent for the five years beginning with fiscal year 2005, 20 percent
    for the next five years, and 25 percent for the remaining years through
    September 30, 2018). Those rates are based on an analysis of coal
    production trends and the resultant impacts on reclamation fee
    receipts. The Administration's proposed uniform graduated fee
    reductions make the program revenue neutral and have the added benefit
    of resulting in lower costs to consumers who purchase coal-generated
    electricity. The new expiration date reflects the time required to
    collect revenues sufficient to reclaim all outstanding currently
    inventoried coal-related health and safety problem sites. Finally,
    existing language requiring the Secretary to establish a new fee rate
    after September 30, 2004, based on CBF transfer requirements would be
    removed.
        The Administration's legislative proposal extends the fee
    collection authority for 14 years, to 2018. This extension would
    facilitate the collection of sufficient fees to enable all states and
    Tribes with high priority mining-related health and safety issues to
    reclaim those sites in 25 years or less.
        The Administration's bill would replace and improve upon the
    existing provisions in SMCRA regarding the United Mine Workers of
    America Combined Benefit Fund (CBF) by removing the $70 million per
    year cap, and by making interest credited to the account in prior years
    available. These measures would protect the integrity of the AML fund
    while providing additional monies to meet CBF needs for unassigned
    beneficiaries.
        The bill provides that no State or tribe with high-priority problem
    sites would receive an annual allocation of less than $2 million. This
    provision would ensure that States and Tribes with relatively little
    historic production receive an amount conducive to the operation of a
    viable reclamation program.
        The Administration's bill also provides various other provisions to
    improve the efficiency and efficacy of the AML program. One such
    provision authorizes the Secretary to adopt regulations prescribing
    conditions under which the AML Fund could be used to promote remining
    and thus leverage those funds to achieve more reclamation of abandoned
    mine lands and waters. Another provision authorizes expenditures for
    collection and audit of the black lung excise tax. This revision would
    synchronize collections and allow OSM auditors to conduct audits of
    black lung excise tax payments at the same time as they audit payment
    of reclamation fees under SMCRA. This change would promote governmental
    efficiency, eliminate redundancies, and reduce the reporting and record
    keeping burden on industry.
        The bill also proposes amending the emergency reclamation program
    for abandoned mine land problems that present a danger too great to
    delay reclamation until funds are available under the standard grant
    application and award process. The proposal would revise this section
    by authorizing the Secretary to adopt regulations requiring States to
    assume responsibility for the emergency reclamation program. This
    change would promote efficiency and eliminate a redundancy in that
    potential emergencies would be investigated only by the State, not by
    both the OSM and the State, as occurs under the current program.
        Question. The fiscal year 2005 budget request proposes a $53
    million increase to be refunded from the Abandoned Mine Land fund to
    states and tribes that have been certified--meaning they have met their
    obligation to do reclamation work on abandoned coal mining sites.
        How many states and tribes would be eligible for this $53 million
    annual payment?
        Answer. Under Sec. 411 of SMCRA, the Governor of a State, or the
    head of a governing body of an Indian tribe, may certify to the
    Secretary that reclamation of all the priority coal mining sites has
    been achieved. Notice of the proposed certification is published in the
    Federal Register, and the public is provided opportunity to comment. If
    the Secretary determines that the certification is correct, he or she
    concurs with the certification. Currently, the States of Louisiana,
    Montana, Texas, and Wyoming, and the Hopi and Navajo Tribes have
    certified. The Crow Tribe has determined that it has received adequate
    funding to complete coal reclamation, and is treated as if it were
    certified. We estimate that as of September 30, 2004, these seven
    entities will have accumulated State/Tribal share balances in the AML
    Fund totaling $531.7 million. To pay off the balances in 10 years, the
    Administration proposes to pay 10 percent each year as follows.

                          AML REAUTHORIZATION PROPOSAL
                            [In millions of dollars]
    ------------------------------------------------------------------------
                                                                 Fiscal year
                       Certified State/Tribe                         2005
                                                                   funding
    ------------------------------------------------------------------------
    Louisiana..................................................          0.1
    Montana....................................................          4.7
    Texas......................................................          2.0
    Wyoming....................................................         41.9
    Crow Tribe.................................................          0.8
    Hopi Tribe.................................................          0.6
    Navajo Tribe...............................................          3.0
                                                                ------------
          Total................................................         53.1
    ------------------------------------------------------------------------

        Question. At the rate of $53 million per year, how long would it
    take to refund to these states and tribes the money they are entitled
    to under the state share?
        Are any additional states or tribes expected to become certified
    over the next few years? If so, would these additional states share in
    the $53 million pot of funds?
        Answer. OSM estimates that all the remaining States will have been
    paid their state share balance before they finish their coal
    reclamation work and become certified, therefore they will not be
    eligible for the payout to certified States and Tribes.
        Question. I hope to be Chairman for a long time but how can you
    assure states like Montana that are certified that they will get all
    their money if it is subject to appropriation every year?
        Answer. The Administration believes it is important to honor the
    commitments made to States and Tribes in the original legislation even
    though the conditions under which those commitments were made have
    changed dramatically. As OSM developed a reauthorization plan, many
    changes were examined that would allow OSM to alter the current
    statutory allocation formula which results in a progressive
    distribution of resources away from the most serious AML problems and
    refocus the program toward coal-related problems. The Administration's
    proposal also reflects the commitment to paying the certified States
    and Tribes their owed balances. Under the current system all they have
    is an IOU that is never going to be paid. Moreover, the funds they do
    receive have rules attached that restrict how they can be spent.
        The proposal ends that unfairness and gets additional funds back to
    the states where it's owed. For example, Montana would receive $4.7
    million every year over the next 10 years. Restrictions on that money
    would be removed so that the governor, the legislature, and the people
    of Wyoming--not those in Washington--would decide how to best use the
    money for the benefit of the people of Wyoming.
        The Administration believes the ten-year payout in the President's
    budget is reasonable and reflects an expedited payment schedule without
    creating adverse affects on our overall budget.
        Question. What has been the reaction of the States to your
    proposal?
        Answer. The problems posed by mine sites that were either abandoned
    or inadequately reclaimed prior to the enactment of SMCRA do not lend
    themselves to easy, overnight solutions. To the contrary, these long-
    standing health and safety problems require legislation that strikes a
    balance by providing States and Tribes with the funds needed to
    complete reclamation, while fulfilling the funding commitments made to
    states and tribes under SMCRA. This is the inherent tension that
    currently exists in SMCRA. The Administration believes that its
    proposal addresses these problems in a manner that is fair to all
    States and supports the Administration's budget and program priorities.
    The proposal has received support from many States.

                  ROYALTY-IN-KIND/STRATEGIC PETROLEUM RESERVE

        Question. Currently, over 80 percent of the royalties from oil
    production in the Gulf of Mexico is taken ``in kind'' of which
    approximately 60 percent goes to fill the Strategic Petroleum Reserve
    (SPR).
        What is the current estimated time frame to fill the SPR?
        Answer. Assuming continuation of current rates to fill, MMS
    estimates that the SPR will be filled in July or August 2005.
        Question. Once the SPR is filled, is it intended to continue to
    take the bulk of Gulf of Mexico royalty ``in kind'' rather than ``in
    value''?
        Answer. Decisions on whether producing properties now committed to
    the SPR initiative will revert to a cash royalty status after the SPR
    is filled will be made in the future considering prevailing market
    conditions and the comparative potential to optimize minerals revenue
    management under each approach. The MMS continues to believe that
    selective use of the RIK approach, when economic conditions warrant,
    can provide substantial benefits to the American taxpayer through
    potential revenue enhancement and reduction in administrative costs.
        Question. Since MMS believes taking the royalty ``in kind''
    minimizes questions over how to value oil production, what are the
    future plans for this program?
        Answer. The November 2001 Presidential directive on SPR fill only
    addresses fill to the 700 million barrel capacity. No further decisions
    have been made regarding the SPR capacity or use. Decisions on whether
    producing properties now committed to the SPR fill will revert to a
    cash royalty status after the SPR is filled will be made in the future
    considering prevailing market conditions and the comparative potential
    to optimize minerals revenue management under each approach.

                    NATURAL GAS PRODUCTION IN GULF OF MEXICO

        Question. I am concerned about the lack of domestic production of
    both oil and natural gas. I see in your budget that while oil
    production from the Outer Continental Shelf in the Gulf of Mexico has
    almost doubled since 1990, the production of natural gas has remained
    flat. As you know, the demand for natural gas continues to grow as more
    power plants come on line using this form of energy.
        Are you looking at options in the Gulf of Mexico to stimulate
    natural gas production? If so, what are some of these options? Does
    increased production require that we put in more money on the federal
    side to expand leasing, or do we need changes in law, or both?
        Answer. The MMS offers multi-tiered royalty relief in the form of
    royalty suspensions on specified volumes of production to encourage
    exploration for oil and gas production from the shallow water, deep
    shelf and the deepwater of the Gulf of Mexico. The shallow water, deep
    shelf offers the best opportunities to quickly move new natural gas
    production to markets due to its close proximity to existing production
    facilities and pipelines on the shelf. Discoveries of natural gas on
    the shelf can be placed on production and reach peak capacity in less
    than two years, whereas deepwater discoveries have longer lead times
    for development and may not reach peak production for five to ten years
    after discovery.
        The MMS royalty suspension volumes discontinue royalty relief if
    oil and/or gas prices rise above the price threshold. For example, the
    new deep gas rule for active leases issued prior to 2001 stipulates a
    gas price threshold of $9.34 per million BTU in 2004. A variety of
    other gas and oil price thresholds apply to other components of the MMS
    royalty relief program. High oil and/or natural gas prices serve as
    market-based incentives that encourage production, which in turn makes
    the royalty-relief incentives unnecessary. The price thresholds are
    increased annually based on calculated rates of inflation. In three of
    the past four calendar years (2000, 2001, and 2003), the average price
    of natural gas exceeded the threshold price for royalty relief from
    deepwater. Since royalties are paid when the average price of oil or
    gas exceeds the threshold price in any calendar year, deepwater royalty
    suspensions have applied more to oil production than to gas production
    in recent years.
        In calendar year 2003, the average price of natural gas exceeded
    the threshold price for royalty relief from the shallow water, deep
    shelf and deepwater incentives. In order to encourage additional
    exploration for natural gas in shallow water, MMS has set the threshold
    price for royalty relief from the deep shelf to $9.34 per MMbtu as part
    of the final rule on deep gas royalty relief for existing leases
    published January 26, 2004. Operators with shallow water leases issued
    beginning in 2001 have a one-time option to convert their leases to the
    provisions in the final Deep Gas Rule.
        Approximately 70 percent of current gas production comes from the
    shelf. The estimated future gas production from the shelf at all
    drilling depths is approximately 40 to 45 percent of the estimated gas
    production from deepwater, and the shallow water, deep shelf estimated
    future gas production is only 10 to 20 percent of the estimated gas
    production from deepwater. Deepwater natural gas production is expected
    to contribute an increasing share of the total gas production from the
    Gulf of Mexico, with deepwater gas production surpassing shallow water
    gas production sometime after 2010. If natural gas prices remain above
    $5 per MMbtu for an extended period, there will be no royalty incentive
    above the prevailing market price to explore as the high price of gas
    should act as an incentive. The MMS is currently evaluating price
    thresholds for deepwater leases relative to the high average natural
    gas prices in recent years.

                     FISH AND WILDLIFE SERVICE CONSULTATION

        Question. We hear complaints from many agencies about the
    timeliness of Fish and Wildlife Service consultations required by the
    Endangered Species Act. These consultations are necessary before much
    of the on-the-ground work can get done in our forests, refuges, and
    parks.
        Why is the consultation program proposed for a decrease in fiscal
    year 2005 when it doesn't seem you can get all the work done in a
    timely manner now?
        Answer. The proposed reduction in the fiscal year 2005 consultation
    program would not affect the resources available to the Service to
    conduct section 7 consultations with other Federal agencies. Instead,
    the President's budget eliminates the approximately $2 million that, in
    fiscal year 2004 and prior years, has been passed through to local
    jurisdictions engaged in the NCCP process in southern California. This
    Federal financial support has been an important component of the
    collaborative partnership among local, state, and federal governments
    and the private sector to address the conservation of listed species in
    southern California, and can continue to be in the future; however, it
    is more appropriate for these local jurisdictions to seek funds from
    the Service's HCP Planning Grant program (under Section 6 of the ESA).
    The HCP Planning Grant program, which was not available when direct
    funding for NCCP participants was initiated, is designed to support
    potential permit applicants efforts to develop HCPs.
        In addition, the Service has been working on a number of methods to
    streamline the section 7 consultation process for Federal agencies.
    These streamlined methods include, most notably, developing
    programmatic consultations that cover multiple actions over broad
    geographic ranges such as forest related activities. Additionally, the
    Service has concluded an alternative consultation process with the
    Forest Service and the Bureau of Land Management for certain forest
    related activities that reduce fuels loading under the National Fire
    Plan, and has proposed a similar alternative consultation process for
    the EPA's pesticide registration activities. The Service believes that,
    by improving efficiencies using these and similar streamlining methods,
    available resources may be directed to those consultations that are
    more complex in order to complete them in a more timely manner.

                               INTERNET SHUTDOWN

        Question. As you know, Judge Lamberth has issued an order shutting
    down most of the Department's e-mail and internet access. While this
    shut down will have serious Department-wide impacts, we've heard some
    very troubling things about the impact on the Minerals Management
    Service. This is because MMS conducts much of its business with the oil
    and gas industry and the States over the internet. It is possible that
    the agency's ability to collect revenues and to disburse funds to the
    states will be jeopardized.
        Can you outline for us what the impacts of the shutdown on MMS will
    be? Are you looking at ways to minimize these impacts?
        Answer. The court-ordered shutdown on March 15, 2004 forced most of
    the Department's computers to be disconnected from the Internet,
    including e-mail. This shutdown affected most Interior programs. For
    MMS the lack of Internet access had the potential to cause delays in
    the distribution of funding to Indian allottees and disrupt the payment
    of royalties to States and scheduled lease sales. However, the Court of
    Appeals temporarily put on hold the Court's ruling on March 24.
        Question. We have provided the Department additional resources to
    upgrade computer security across the board.
        What have you done in the last year to improve the security of
    trust data? Why have we again run afoul of the Court in this area?
        Answer. On March 15, 2004 the District Court again ordered Interior
    to disconnect from the Internet. The stay entered by the Court of
    Appeals on March 24, 2004, permits some of Interior to use Internet-
    based tools for a host of important missions (although the Bureau of
    Indian Affairs, the Office of the Special Trustee for American Indians
    and the Solicitor's Office generally remain offline). Monthly scanning
    results have demonstrated the significant reduction in potential risk
    associated with unauthorized access from the Internet. The Internet is
    critical to Interior, for it allows us to do everything from accepting
    national park reservations to providing research tools in Indian
    schools to disbursing millions of dollars in oil and gas revenue to
    states, Indian Tribes, and individual Indians.
        Despite the claims of the court, Interior continues to make
    significant progress in improvement to computer security across the
    Department and especially in regard to trust data. A summary of some
    recent activities follows:

    Computer Security
        Interior continues to make progress in ensuring IT security and, in
    particular, measures to address the potential risks associated with
    unauthorized access, from the Internet, to individual Indian trust data
    (IITD). Some of the most recent noteworthy accomplishments and
    completions are as follows:
      --The Interior CIO attained the Certified Information System Security
            Professional (CISSP) certification, which brings the total
            number of Interior employees with a CISSP certificate to fifty-
            two.
      --As of March 31, 2004, Federal Information Security Management Act
            (FISMA) requirements for annual IT security awareness training
            for system users had been completed by approximately 21,000
            (28.9 percent) employees and contractors.
      --During the past year, Interior established a Computer Security
            Incident Response Capability (CSIRC), which is available 24
            hours a day, seven days a week. Recently, Interior's incident
            response program incorporated a CSIRC web portal to facilitate
            incident reporting as required by FISMA.
      --Interior continued testing its wide area networks (WAN) against an
            operational security profile based on the ``SysAdmin, Audit,
            Network, Security (SANS)/FBI Top 20'' vulnerability list. The
            scanning process was changed to account for false positives in
            the reports. Bureaus identify and correct false positives
            before the final monthly report is produced. In the March 2004
            report, there were no high-risk SANS/FBI Top 20 vulnerabilities
            identified in the perimeter telecommunications equipment
            exposed to the Internet.
      --BLM refined the setting on its virus scanning software to improve
            detection and trapping of malicious software. New settings in
            SpamAssassin (BLM's email spam blocking tool) blocked thousands
            of files which may have contained viruses in attachments.
      --MMS implemented Microsoft System Update Servers (SUS) and System
            Management Servers (SMS) to deploy critical security patches to
            servers and desktops.
      --OST hired a permanent IT Security Manager. The IT Security Manager
            initiated information security assessments of the OST local
            area network and wide area network (LAN/WAN).

    OMB Circular A-130--Certification and Accreditation
        To ensure continued progress in the C&A of Internet IT systems,
    Interior awarded contracts to 10 vendors to conduct C&A tasks. Most
    major applications and general support systems have received an Interim
    Approval to Operate (IATO). Approximately 20 percent of Interior's
    major applications and general support systems have completed the C&A
    process, as of March 31, 2004.
        In response to OMB guidance, Interior has been engaged in an effort
    to identify and catalogue its IT systems and applications in
    preparation for subsequent C&A activities. A subset of Interior's
    systems and applications involve IITD. More than two thirds of those
    systems involving IITD are operated by bureaus or offices that have
    been without Internet connectivity since December 5, 2001, and most of
    those systems have received an IATO.
        The bureaus and offices housing the remaining approximately one
    third of systems with IITD were evaluated by the Special Master and
    permitted to reconnect to the Internet. All of these systems have
    received IATO. Full certification and accreditation work is ongoing for
    these reconnected systems.

    IT Systems Architecture
        The DOI Enterprise Architecture Repository (DEAR) is operational
    and accessible by Interior bureaus and offices. DEAR contains
    Interior's official inventory of IT systems. DEAR is being used as a
    decision support system for Interior's enterprise architecture program
    by determining opportunities for consolidating redundant systems,
    improving data sharing between systems and analyzing the underlying
    infrastructure of Interior's systems to improve interoperability and
    overall infrastructure management. As the official inventory of
    Interior's IT systems, DEAR currently tracks the security certification
    and accreditation status of Interior's systems.
        Interior is continuing efforts to implement a newer version of the
    CGI land title records system. The C&A assessment of the system was
    completed and the system received a recommendation for certification
    from independent vendors. The Trust Enterprise Architect and data
    standardization support contractor continued efforts to develop a data
    dictionary for trust data elements. The effort includes identifying
    common data elements to facilitate data exchanges between systems. The
    contractor mapped more than 5,700 standardized data elements. The Trust
    Data Dictionary serves as the control for the effort to standardize
    data elements.

    Audit Findings Database
        The audit findings database contains a consolidated list of audit
    findings and recommendations for the key Interior bureaus and offices
    involved in individual Indian trust management. The database is being
    subdivided into two separate databases, one to reflect the key findings
    and recommendations cited or referenced in the Special Master's
    November 2001 report and one to capture similar items in other IT
    reports.
        The affected bureaus and offices report that more than 95 percent
    of the findings and recommendations in both databases have been
    addressed and resolved. An initial staff review indicates that none of
    the remaining open items pertain to the potential for unauthorized
    access from the Internet to IITD.
    Preliminary Injunction & Reconnection to the Internet
        On March 15, 2004, the U.S. District Court issued a preliminary
    injunction that ordered most Interior IT systems to be disconnected
    from the Internet. On March 24, 2004, the U.S. Court of Appeals for the
    District of Columbia Circuit granted an administrative stay of the
    preliminary injunction. On April 7, 2004, the Court of Appeals granted
    a permanent stay pending appeal of the March 15 preliminary injunction.
    The Court of Appeals stay permitted Interior to reconnect selected IT
    systems to the Internet.
        Other Interior IT systems, serving BIA, OST, OHA and SOL, have been
    disconnected from the Internet since December 5, 2001. Continued
    disconnection from the Internet adversely impacts the operations of
    each of the affected entities. At the conclusion of this reporting
    period, these bureaus and offices had not been permitted access to the
    Internet for well over two years.
        Interior has appealed the July 28, 2003, and March 15, 2004,
    preliminary injunctions. On April 1, 2004, the Court of Appeals
    consolidated the government appeals. Oral argument is currently
    scheduled for September 14, 2004.
        There are many challenges that must be addressed regarding the
    integration, performance, funding, security, and data integrity of
    Interior IT systems. Interior initiated or completed steps to address
    some of the challenges, however, delays and obstacles listed below
    still impede progress to achieving Interior's IT management goals:
      --Employee fears about becoming personally implicated in the Cobell
            litigation are undermining creativity and decision-making. This
            continues to be an impediment within Interior as contempt or
            other disciplinary actions against individuals working on this
            issue continue to be sought by plaintiffs.
      --Funding availability will continue to dictate the timing of IT-
            related initiatives. Interior's fiscal year 2004 appropriation
            will require Interior to manage a variety of IT-related
            requirements and tradeoffs. The government continually has to
            evaluate current funding requirements.
      --Interior is conducting a business process reengineering effort to
            standardize and streamline trust business processes. The ``As-
            Is'' portion of that process has been completed and the ``To-
            Be'' reengineering efforts are underway. IT systems
            specifications, design and procurement may depend upon the
            timing and results of the reengineering effort and available
            funding.
      --Several Interior bureaus and offices (BIA, OHA, OST, SOL) have not
            been permitted, by the Court, to have Internet access since
            December 5, 2001. Lack of Internet access impedes work
            processes and the ability to communicate effectively, both
            internally and externally.
      --The additional resources (time, personnel and funding) provided for
            IT security have limited funding for a wide variety of other
            IT-related responsibilities, which may adversely impact overall
            systems performance and reform. Tradeoffs for an increased
            security posture may include adverse impacts on hiring skilled
            personnel for other aspects of Interior's IT programs, funding
            for lifecycle replacement of hardware and software, or the
            ability to undertake IT-related initiatives.
        Question. What are some of the other impacts that the internet
    shutdown will have if it remains in place? When will these impacts
    start to really be felt?
        Answer. Impacts would have adverse consequences to many day-to-day
    Interior activities, personnel, payroll and retirees, and other Federal
    Agency partners, States and contrary to the Judge's opinion, tribes and
    individual Indians as well. Examples of some of the impacts include:
      --In the MMS, lack of Internet access would result in delays of
            approximately $3 million per month being timely distributed to
            individual Indian allottees. Some potential impacts may occur
            to individuals as a result of not receiving this income,
            including the inability to pay for nursing home care, food,
            clothing, heat, electricity, and medical expenses.
      --In OST, lack of Internet access would result in the inability to
            prudently invest funds due to lack of access to the financial
            information system for a portfolio of approximately $3.3
            billion in trust funds held for tribes and individual Indians.
      --In the MMS, a potential disruption in the scheduled Central Gulf of
            Mexico Lease Sale 190, expected to generate as much as $200
            million. Revenues are distributed via Internet access to the
            MRM system. There would be a disruption in making royalty
            payments to States of $88 million per month.
      --For the National Business Center, the shutdown would have delayed
            migration of e-Gov payroll clients, including the Department of
            Transportation, NASA, and the National Science Foundation,
            which will defer cost savings to the government.
      --For the Department's financial management requirements, the
            shutdown would jeopardize completion of the CFO Act Audits, in
            accordance with mandatory deadlines, including completion of
            audit by November 15.
      --The shutdown would have impeded electronic commerce business
            processes and prevent connectivity with trading partners,
            vendors and clients.
      --The shutdown would have impacted agencies that procure services
            from the Department, including the new Millennium Challenge
            Corporation and four other agencies. The Millennium Challenge
            Corporation provides grants to developing countries to promote
            democracy and combat terrorism.
      --The shutdown would prevent the Department from performing
            acquisition activities for DOI and non-DOI clients including
            the U.S. Maritime Administration, which has been certified as a
            national security critical client, the Department of Defense,
            and the Department of Homeland Security.
        Question. When do you believe that you will be allowed to
    reestablish internet access?
        Answer. Access to the Internet, except for the Bureau of Indian
    Affairs, Office of the Solicitor, and Office of Special Trustee was
    restored on March 24, 2004.

                HEALTHY FORESTS/NEW ESA CONSULTATION PROCEDURES

        Question. I was pleased to see this week that you have announced
    some new procedures designed to speed up the Endangered Species Act
    consultation process for hazardous fuels reduction projects under the
    Healthy Forests Act.
        Can you explain how these new procedures will work?
        Answer. In October 2003, the Fish and Wildlife Service and NOAA
    developed the guidance document ``Alternative Approaches for
    Streamlining Section 7 Consultation for Hazardous Fuels Treatment.''
    The guidance combines several streamlining techniques that have been
    tested over the years and encourages early coordination and cooperation
    among Federal agencies and their partners during the project planning
    stages.
        A major part of this guidance relates to the development and use of
    design criteria, or ``screens,'' to streamline the consultation process
    while minimizing the potential for adverse effects to listed species
    and their habitats at both the landscape and site-specific levels. Use
    of such design criteria helps to ensure that fire management agencies
    are aware of the needs of listed species and their habitats during the
    early phases of planning, allowing them to incorporate these needs into
    their activities. This can greatly streamline the section 7
    consultation process because much of the effects analysis is completed
    at one time, rather than repeatedly each time a new action, or batch of
    actions, is proposed.
        The FWS and NOAA published a final rule establishing counterpart
    regulations to streamline consultation on proposed projects that
    support the National Fire Plan. These counterpart regulations allow the
    Forest Service, BLM, BIA, and NPS to make ``not likely to adversely
    affect'' determinations without concurrence from the FWS or NOAA.
        Question. When do you expect to have these fully implemented?
        Answer. The final rule appeared in the Federal Register on December
    8, 2003, and took effect on January 7, 2004. As part of the
    implementation of the counterpart regulations, the Services finalized
    Alternative Consultation Agreements with the BLM and the Forest Service
    on March 3, 2004.
        We have completed the Alternative Consultation Agreements with the
    BLM and Forest Service, and developed the necessary training materials.
    Once the BLM and the Forest Service have conducted the trainings for
    their personnel, they will begin using the new authorities conveyed by
    these regulations.
        Question. How much more work do you expect to be able to do as a
    result of these new procedures?
        Answer. The counterpart regulations will allow Service biologists
    to focus efforts on those National Fire Plan activities that are likely
    to adversely affect listed species or critical habitat and thereby
    speed the approval process for these projects. The actual number of
    such projects is determined by the BLM and USFS, so we have no reliable
    way to address the question of how many additional consultations we
    will be able to process due to the establishment of the counterpart
    regulations. However, we do expect that the overall rate of approval
    for fire plan projects will improve as a result a faster review
    schedule for those projects that qualify for review only by BLM/USFS
    and by providing more focused Service review of those fire plan
    projects that may adversely affect listed species.

                          OSM--STATE REGULATORY GRANTS

        Question. As you know, the Office of Surface Mining provides grants
    to states, on a 50/50 cost share basis, to regulate mining in their
    states. This is a good deal for the Federal government, since if the
    states did not regulate surface mining the Federal government would be
    required to do it and pay 100 percent of these costs. I see that the
    budget request for this activity is $57.575 million but that the states
    asked for $62 million.
        If we don't fund the full amount asked for by the states will it
    lead to any serious problems such as legal challenges to state programs
    based on their inability to carry out their regulatory requirements?
        Answer. The President's Budget requests a total of $58 million for
    State/Tribal regulatory programs. OSM's most relevant requested
    estimates formulating the fiscal year 2005 proposed budget, provided by
    the States and Tribes totaled $62 million. The President's budget
    provides over 95 percent of the State and Tribal request. The amount
    requested in the President is a slight increase from fiscal year 2004
    and OSM believes that the requested total will be sufficient to assist
    the States/Tribes.
        Question. Do you expect that any states will turn the regulatory
    program back over to the Federal government due to lack of funding?
        Answer. In a fiscal year 2002 study, the States/Tribes were asked
    about uncontrollable costs for their regulatory programs. The States/
    Tribes said that 70 percent of their regulatory program budgets are in
    salaries and fringe benefits. Other uncontrollable costs would include
    indirect costs, fuel expenses, office rent, contractual services
    (including legal costs), vehicle replacement or lease, and equipment
    replacement. OSM believes the increase would be adequate to cover
    uncontrollable costs and allow that States to meet their 50 percent
    share.

                             ENERGY POLICY ACT--MMS

        Question. The Congress has been debating the Energy Policy Act for
    some time now. I hope that we can pass a responsible bill in the next
    few months.
        Can you tell us whether there are provisions in the energy bill
    that will help the Minerals Management Service to enhance domestic
    production of oil, gas and alternative fuel sources?
        Answer. The energy bill includes provisions that call for relief or
    reduction in royalty rates for natural gas produced from deep wells in
    the shallow waters of the Gulf of Mexico. Recently, Interior finalized
    a rule very similar to the bill's provisions. This provision will
    encourage more production of oil and gas. There is also an OCS
    alternative use provision to the bill, which would provide MMS with the
    authority to grant easements and rights-of-way for alternate energy-
    related uses on the OCS; to act as lead agency for coordinating the
    permitting process with other executive agencies; to monitor and
    regulate facilities used for alternative energy production and energy
    support services; and it will allow an oil and gas platform previously
    permitted under the OCSLA to remain in place after oil and gas
    activities have eased to allow the use of the platform for other energy
    and marine-related activities.
        Question. If an energy bill is not enacted, can any of these
    initiatives be implemented administratively? If so which ones? Is the
    Administration moving forward on this front?
        Answer. There certainly are elements of the energy bill that we can
    work on administratively. For example, Interior is now working with
    FERC on administrative reforms to the hydroelectric relicensing process
    to afford applicants better review of their environmental proposals.
        We have also worked extremely hard to diminish the backlog of
    applications for permits to drill waiting to be processed by BLM. In
    fact recently the Casper Star Tribune reported that the BLM Buffalo
    Field Office has unjammed a backlog of 1,400 permits in the Powder
    River Basin.
        The energy bill also includes provisions that call for relief or
    reduction in royalty rates for natural gas produced from deep wells in
    the shallow waters of the Gulf of Mexico. Recently, Interior finalized
    a rule very similar to the bill's provisions.
        There are however other provisions of the bill that affect Interior
    that cannot be accomplished administratively--most notable among them
    are:
      --Allowing environmentally sound development of a very small portion
            of the ANWR.
      --Allowing Indian Tribes to enter into comprehensive energy plans
            that would allow them to enter into energy development leases
            and rights-of-way agreement without seeking Secretarial
            approval on a project-by-project basis.
      --The Department's OCS alternate uses proposal which provides
            authority--
        --to grant easements and rights-of-way for alternate energy-related
                uses on the OCS.
        --to act as lead agency for coordinating the permitting process
                with other executive agencies.
        --to monitor and regulate facilities used for alternative energy
                production and energy support services.
        --to allow an oil and gas platform previously permitted under the
                OCSLA to remain in place after oil and gas activities have
                eased to allow the use of the platform for other energy and
                marine-related activities.
      --Permanent authority to use Royalty In Kind revenues to pay the
            costs for transportation, natural gas processing, and disposal
            costs for royalty in-kind oil and gas production.

                    U.S. GEOLOGICAL SURVEY--LANDSAT FAILURE

        Question. Last May, the Landsat 7 satellite operated by GS began
    sending back degraded data. Efforts to repair failed equipment were
    unsuccessful. Two reprogrammings, one approved this past summer and
    another anticipated later this year, would divert resources from other
    GS programs to provide nearly $8 million to continue current Landsat 7
    operations. This is the estimated amount lost in sales revenue since
    the failure.
        Madam Secretary, tell me why we shouldn't pull the plug on Landsat
    7, bring the satellite down and save the taxpayers some money? What is
    the purpose of collecting and archiving defective data? Is this
    information useful in its current form--particularly since the same
    data is collected and available from other countries around the world?
        Answer. Landsat 7 provides a unique set of capabilities unlike
    other Earth observation systems in orbit. The combination of moderate
    resolution (30-meter), broad-area coverage, spectral range, and global
    availability is not duplicated by other existing satellite systems.
    Although other satellites have been considered as possible substitutes,
    the costs to purchase the comparative area coverage of a Landsat 7
    scene would be much higher. Each satellite system has a different swath
    width, a different revisit rate and time, and a significantly different
    resolution. For example, to cover the area of a Landsat 7 scene would
    require 9 scenes taken from the French SPOT system and 283 scenes from
    the higher resolution satellites such as IKONOS, making the costs much
    higher to acquire than the equivalent of Landsat 7 data. Also, it would
    take several revisits taking weeks to months from any of these systems
    to acquire the equivalent of a Landsat 7 scene.
        It is important to continue to collect and archive Landsat data as
    it is still useful for many of it's originally intended purposes.
    Landsat 7 imagery assists in decision making for fire management
    practices, suppression, and remediation measures by land and resource
    management bureaus. In addition to supporting current fire management
    practices, the increased coverage provided by Landsat 7 is a critical
    factor in fire measures. The 8-day coverage cycle provided through the
    combined data sets of Landsats 5 and 7 provides essential information
    relative to awareness of land cover and the development of fire fuels,
    as well as timely information regarding burn severities and extents and
    recovery rates needed for remediation measures, that would not be
    sufficient under a 16-day coverage cycle with Landsat 5 alone. Uses of
    remotely sensed data by the National Park Service, the Bureau of Land
    Management, the Bureau of Indian Affairs, and the Forest Service
    include rehabilitation actions and hazardous fuel reduction planning,
    applicable to both wildfire and prescribed fire, and providing a means
    for record-keeping and accountability validation required under the
    National Fire Plan.
        In addition to wildland fire needs, Landsat 7 imagery provides
    information that is vital to Federal activities such as agricultural
    crop monitoring; coastal erosion detection, monitoring and assessing
    the impacts of natural disasters; aiding in the management of water,
    biological, energy, and mineral resources; analyzing the impacts of
    climatic and other global changes; and support for some national
    defense needs. Land managers have expressed a strong need to have this
    information continue to be available. Aside from Interior bureaus, the
    major users of this data include the Departments of Defense and
    Agriculture, the Environmental Protection Agency, and the National
    Oceanic and Atmospheric Administration.
        As a result of the scan line corrector malfunction, the USGS has
    been taking actions to increase the utility of the Landsat 7 data that
    includes ``fixing'' the data gaps from the malfunctioning scan line
    corrector. The USGS held a workshop with Landsat users from the Federal
    government and academia in October 2003 to identify new products for
    data acquired since the malfunction. Representatives from the former
    NASA Landsat 7 Science Team and selected other users identified
    requirements for new products to assist in filling in the data gaps for
    customers Two new products, Anniversary composites and Multi-scene
    composites will be implemented in response to this. The initial
    product, the Anniversary composite, is generated by replacing all the
    missing data in the data gaps of a scan line corrector off data set
    with information derived from a Landsat image that was acquired prior
    to the scan line corrector malfunction. This technique results in a
    composite data product without data gaps, which can be used to meet
    additional user requirements.
        Question. Secretary Norton, your Department plans to issue a report
    at the end of this month--following discussions within the
    Administration--that will outline how best to ensure Landsat continuity
    data.
        Can you give us a brief summary of the report now? Are there
    specific recommendations that can be implemented to assure the future
    development of the Landsat Data Continuity Mission? Does NASA have a
    timeline for launching the next satellite, and have the resources been
    requested to fund it? If not, what happens to the Landsat mission?
        Answer. A recent memorandum from the Director of the Office of
    Science and Technology Policy to agencies stated the following:

        ``. . . to maintain Landsat's legacy of continual, comprehensive
    coverage of the Earth's surface, the United States Government will
    transition the Landsat program from a series of independently planned
    missions to a sustained operational program and establish a long-term
    plan for the continuity of Landsat data observations. In particular,
    the Departments of Defense, the Interior, and Commerce and the National
    Aeronautics and Space Administration have agreed to take the following
    actions:
      --Transition Landsat measurements to an operational environment,
            through incorporation of Landsat-type sensors on the National
            Polar-orbiting Operational Environmental Satellite System
            (NPOESS) platform, thus ensuring long-term continuity of these
            high-priority measurements and providing for integrated
            collection and availability of data from these two critical
            remote sensing systems;
      --Plan to incorporate a Landsat imager on the first NPOESS spacecraft
            (known as C-1), currently scheduled for launch in late 2009.
            The specific implementation plan shall be jointly reviewed and
            approved by the NPOESS Executive Committee and Landsat Program
            Management; and
      --Further assess options to mitigate the risks to data continuity
            prior to the first NPOESS-Landsat mission, including a bridge'
            mission.''

        The USGS will work with other DOI bureaus and other agencies to
    consider options for implementation of the strategies above within
    available funding.

                    U.S. GEOLOGICAL SURVEY--PROGRAM MISSION

        Question. Among its responsibilities, USGS is widely regarded as
    the nation's lead federal civilian mapping agency. However, an OMB
    review of the National Map Implementation Plan states that the
    transition away from the traditional USGS role as the nation's civilian
    mapping agency is occurring too slowly. (page 151, GS budget)
        Can you please elaborate on this comment? When and how was this
    core mission of the Survey redefined? Will you explain what transition
    the GS mapping program is expected to make?
        Answer. Land managers, policy- and decision-makers, researchers,
    and the public depend on a common set of current, accurate, and
    consistent basic information that describes the Earth's land surface
    and its dynamics. Since the establishment of the USGS, the bureau has
    had the mission responsibility to meet this need. This core mission of
    the USGS has not been redefined.
        What is changing is the way the USGS accomplishes this mission
    responsibility. In the 20th Century, the USGS fulfilled this mission
    responsibility through the creation and distribution of 55,000
    topographic maps, which provide the only topographic synthesis that was
    comprehensive, accurate, and consistent across jurisdictions.
        In the 21st Century, several factors provide an opportunity for the
    USGS to accomplish this mission in a new way. These factors include
    increased demand for more current and more accurate geospatial data;
    new technologies and lower costs to collect, maintain, and disseminate
    data; and partnership opportunities with Federal, State, and local
    agencies and the private sector, which in most cases already collect
    the geospatial data needed to put together a national map. The USGS is
    taking advantage of this opportunity by organizing sustainable
    partnerships to develop, integrate, access, and archive this map
    information. The USGS will continue to collect basic topographic data
    and will provide additional data where no other data source exists.
        This new approach is based on an increased reliance on partners.
    Through The National Map, the USGS will integrate data on a national
    scale and make it publicly available to continue to provide current,
    seamless, and nationally consistent base geospatial data for the
    Nation.

                   U.S. GEOLOGICAL SURVEY--STATUS OF REPORTS

        Question. In fiscal year 2003, the Survey was directed in report
    language to provide the House and Senate committees with two reports.
    The first was a priority system for expansion of the State cooperative
    research units funded through the Biological Resources Division. The
    second was a strategic plan and prioritized vision for expansion of the
    National Biological Information Infrastructure network. Both of these
    programs have strong support in Congress and the reports were intended
    to guide us in setting future funding priorities.
        We are now into the fiscal year 2005 budget cycle and have yet to
    receive either report. Why? Could you please look into this matter and
    let us know when the committees can expect the information they
    requested?
        Answer. The USGS has been working closely with constituent groups,
    partners, and customers to ensure that the strategic plans for these
    programs appropriately reflect the needs of all parties involved in
    these activities, as well as the sound science for which the bureau is
    known. The process of engaging these parties has required more time
    than was anticipated at the beginning of the plan development. The USGS
    and the Department are working together to ensure that the reports meet
    the needs of Congress and will forward the reports soon.

                     NATIONAL PARK FUNDING--PROJECT FUNDING

        Question. This Committee has devoted a great deal of time and
    resources to address the backlog of maintenance in our land management
    agencies, particularly within the National Park System. The President
    also made a commitment to address the park backlog, and I think has
    done an admirable job given the budgetary constraints under which we're
    operating.
        Can you update us on where we are in terms of understanding what
    the backlog is, and what progress we're making in reducing the overall
    size of the backlog?
        Answer. The NPS has completed preliminary condition assessments at
    all but four of the most asset intensive parks. The assessments for
    these four parks are scheduled for completion by the end of fiscal year
    2004. These preliminary assessments identified apparent deficiencies
    within the eight standard asset categories, which the NPS has used to
    develop a preliminary baseline facility condition index (FI) to assist
    in evaluating the relative condition of NPS assets.
        Instead of compiling a list of ``backlog'' projects, the NPS is now
    deploying an asset management strategy that seeks to prioritize the
    most important facility projects on which to spend limited resources.
    By using the asset priority and facility condition information, as well
    as considering visitor and employee health and safety requirements,
    resource protection needs, and visitor service needs, the NPS will be
    able to manage the asset inventory much more systematically than it
    ever has in the past. The objective of the NPS asset management program
    is to measure performance accomplishments and assure that the overall
    condition of the inventory improves because of funds dedicated to
    improving assets.
        The backlog cannot be stated as a single number since it is not
    static and is always changing. While the NPS is scheduled to complete
    the comprehensive condition assessments at all parks by the end of
    fiscal year 2006, the preliminary estimates associated with the
    deficiencies identified to date total about $5.7 billion. Instead of
    using a backlog to quantify maintenance needs, the condition
    assessments will define the amount of resources needed to move the
    overall condition of the NPS asset inventory from its current condition
    to acceptable condition. This estimate cannot be determined until the
    comprehensive condition assessments are completed; even then, the
    backlog will be constantly modified to respond to changes in on-the-
    ground circumstances.

                       NATIONAL PARK FUNDING--OPERATIONS

        Question. Once we make the investments to put park resources in
    good condition, obviously it makes sense to spend the money to keep
    them that way. Part of this means providing funds for periodic
    maintenance work, but we also need to make sure the parks have the
    operational capacity--the people--to either do the work or oversee it.
    We know that parks are feeling pinched on that front.
        On the one hand, I have seen data that shows park operational
    funding is up substantially over the last 10 years in constant
    dollars--up per acre, up per park unit, and up per park visit. At the
    same time, I know parks are considering reduced operating hours for
    some facilities, reductions in interpretive staff, and other cuts.
        How do you reconcile these facts?
        Answer. It is true that park operational funding has increased over
    the last ten years. Counting supplemental appropriations and transfers,
    the amount enacted for the Operation of the National Park System (ONPS)
    appropriation has increased from $1.095 billion in fiscal year 1994 to
    $1.610 billion in fiscal year 2004, a net increase of $515 million. Of
    this amount, nearly $439 million was directly provided to parks for
    operations.
        Of the funds directed to park operations, $135 million was provided
    for pay and benefit adjustments for park employees. Another $26 million
    was provided for the ``Ranger Futures'', ``Temporary Employee
    Conversation'' and other ``special pay initiatives.'' A total of $269
    million in increases was provided for specific park base operations.
    Additionally, $9 million was provided for ``park-related'' activities,
    such as Lewis & Clark Bicentennial and National Capitol Performing
    Arts.
        In addition to park base increases, additional increases were
    provided for the support of improved park operations. These activities
    provide significant benefits to the parks. The $198 million in funding
    increases included:
      --$70 million to increase the amount of annual funds provided for
            backlog maintenance projects, the implementation of a condition
            assessment process and for development of a new maintenance
            management system;
      --$74 million to improve the basis of scientific and resource
            information through the Natural Resource Challenge;
      --$16 million was used to enhance partnership efforts such as the
            Challenge Cost Share Program;
      --$10 million was dedicated to implementation of the Comprehensive
            Everglades Restoration Plan;
      --$7 million was directed towards cultural resource projects in
            parks, including collections and curation;
      --$32 million was provided to cover centralized administrative
            billings that allowed parks to avoid the costs of such items as
            GSA space rental, unemployment compensation and tort claim
            payments;
      --$11 million was used for other assorted program changes to assist
            parks such as structural fire, risk management, natural sounds,
            the Vanishing Treasures program, training, social science
            surveys, the Underground Railroad, and the Lewis and Clark
            Corps of Discovery II;
      --$7 million for central office operations;
      --$21 million in pay and benefit raises for non-park staff; and,
      --$5 million to implement the President's Management Agenda of
            management and operational improvements.
        The NPS believes it has credibly managed the funding provided. We
    are also engaged at present in a variety of self-examinations and
    comprehensive evaluations using new management tools including the
    Program Assessment Rating Tool (PART), Maintenance Management and
    Condition Assessments, and Performance Measurement and Strategic
    Planning to help us make more informed decisions. The amount requested
    for operations at individual parks is determined through a layered
    deliberative process over at least a 12-month period, involving the
    NPS, the Department of the Interior, and the Office of Management and
    Budget. The budget process always requires tough decisions and choices
    concerning the prioritization of competing needs to fit available
    budget allowances.
        Question. To what degree has pay parity impacted the National Park
    Service, and the Interior bureaus generally?
        Answer. The Congressional action of providing civilian pay parity
    added $15 million to the planned absorption in the park base.

                          FINANCIAL MANAGEMENT SYSTEM

        Question. Your budget proposes that we invest $18 million in a new
    financial management system for the Department. It seems as if it
    hasn't been that long since we paid a substantial amount for the
    current financial systems.
        Given the sometimes spotty track record the Federal government has
    in major systems acquisitions, how confident are you that this system
    will ultimately work?
        Answer. Very confident. The FBMS solution is comprised of
    commercial off the shelf software that is currently in use elsewhere in
    the Federal government. The vital core financial component is software
    that has been tested and met the standards established for federal
    financial systems by the Joint Financial Management Improvement Program
    (JFMIP).
        Question. What procedures have you put in place to ensure that it
    will?
        Answer. During the acquisition process, we required the competitors
    to have passed the 2003 JFMIP test before contract award. We required
    the competitors to have established software implementation practices
    in place for themselves and their subcontractors that met at least the
    requirements of the Software Engineering Institute's Capability
    Maturity Model (CMM) Level 2 certification.
        We have established a number of review procedures to ensure that
    the project is managed well and meets its cost, schedule and
    performance objectives. These include at least quarterly earned value
    reviews and quality audits. We also plan to contract for Independent
    Verification and Validation (IV&V) services. We have established a
    governance process that includes bureau leaders in the project
    implementation, and a change control process to manage the project's
    scope. We have placed considerable emphasis on the change management
    aspects of the project, since our market research and lessons shared by
    other agencies with recent system implementation experiences indicate
    that helping people transition from the old way to the new way of doing
    their work is critical to the project's success. We will use the
    Department's capital planning and investment control (CPIC) process for
    project reporting and monitoring.
        Question. What would be the practical effects of continuing to use
    the current systems for a few more years?
        Answer. Because we are using a phased approach to the FBMS
    implementation, we plan to use the current systems in some bureaus for
    several more years, until the transition is complete. However, we have
    many immediate and longer term concerns about the current systems.
    Interior's FFS software version is no longer JFMIP compliant and, along
    with the Department's acquisition system software, will not be
    supported by the vendor after September 30, 2004. The current systems
    are expensive and difficult to operate and secure. They do not share
    data among systems, requiring extensive data reconciliation and
    frequent data calls to the bureaus. We cannot resolve the material
    weakness in property management or completely address concerns raised
    by the Office of Inspector General related to fleet management and
    grants management with the current systems. The systems require
    Herculean efforts to close and balance in order to issue financial
    statements. As the federal requirements increase from annual to
    quarterly financial statements, those Herculean efforts must be
    multiplied. Worse, we are unable to provide consistent, timely,
    accurate information to managers and oversight organizations. These
    crises require us to act now to build the foundation for better
    financial and business management in the future.

                                  PARTNERSHIPS

        Question. Madam Secretary, you have placed a great deal of emphasis
    on cooperative conservation and on partnerships. While I think this is
    generally the right philosophy, we have to be careful not to cede too
    much control over partnership projects--especially those that the
    Department will ultimately have to operate or manage.
        What procedures have you put in place to ensure that the Department
    maintains control over these ventures?
        Answer. In regard to the National Park Service, efforts are being
    taken to improve existing review and approval procedures for
    partnership construction projects. Already, the Bureau's Director's
    Order 21 established NPS policy for fundraising and donations, and
    required that fundraising campaigns with a goal greater than $1 million
    must be approved by the Director. Partnership construction projects are
    reviewed by the Bureau's Development Advisory Board at the conceptual
    level, in conjunction with requests for fundraising approval, as well
    as at the thirty percent design stage (similar to NPS line-item
    construction projects). However, a review of existing NPS partnership
    projects is demonstrating that weaknesses still exist in the process by
    which such projects are developed, approved and administered.
    Therefore, NPS has embarked upon the development of new procedures that
    will provide the following:
      --A clearer delineation of how senior level approval and oversight of
            projects is administered at varying stages in the project's
            development.
      --Clearer definitions of roles and responsibilities of all partners
            to an agreement.
      --Notification to Congress of projects over $5 million.
      --Objective assessment of partner capability to carry out their fund-
            raising roles.
      --Direction concerning the need for Federal design control and
            approval processes including appropriate sizing and scoping of
            facilities.
      --Validation of assumptions about funding sources and revenue streams
            (especially any Federal funding commitments).
      --Assessment of operational implications of new development and how
            they are to be addressed.
      --Development of a communication plan for determining when a project
            is publicly announced.
      --Clear strategies for the partnership to scale back or terminate if
            the fundraising effort is not successful.
        By these new procedures, NPS would assure that partners are not
    driving NPS priorities in the development of construction projects and
    that such projects are not developed outside of the budget process
    whether or not Federal funding is assumed to be a part of the project.
    The NPS has also initiated a training program on partnership ventures
    and is providing additional tools to park personnel such as web site,
    model contracts, a mentor program, and further policy guidance to
    assist in developing and administering partnerships.

                                PRESERVE AMERICA

        Question. The budget request includes $10 million for a new
    ``Preserve America'' program to promote heritage tourism. At the same
    time you propose to virtually eliminate funding for heritage areas
    authorized by Congress, even as proposals for many new heritage areas
    are pending in Congress.
        Is it your view that the Congressionally authorized heritage areas
    are not effective in promoting heritage tourism and the ``sustainable
    uses of . . . historic and cultural sites . . .''? Why did you not
    simply propose a $10 million increase in the existing Historic
    Preservation Fund grants-to-states program, and allow the states and
    tribes to decide where their preservation priorities lie? Why establish
    yet another program infrastructure?
        Answer. Preserve America and the National Heritage Areas Program
    share similar public policy goals as they both support and encourage
    the recognition, preservation and reuse of historic assets to enhance
    economic development and community identity. Their principal difference
    lies in geographic and ``political'' scale. National Heritage Areas are
    created by Congress and are, in most cases, quite large in geographic
    scale--encompassing multiple communities, counties, parishes, political
    jurisdictions, watersheds or ethological systems. Preserve America
    Communities are local and self-selecting, and generally a single
    government unit (towns, small cities, or neighborhoods of larger
    cities).
        Heritage tourism is an important strategic tactic for federally-
    designated heritage areas. To date, the most effective heritage areas
    have more than amply shown their capabilities in recognizing the
    educational and economic potential of heritage tourism. We expect
    similar success from Preserve America Communities--only on a smaller
    scale. We do not see their efforts as competition--but rather as
    complementary.
        The reduction in funding for the National Heritage Area Program is
    not proposed as an offset in support of Preserve America but rather
    reflects the Administration's concerns for the need for broad national
    heritage area program legislation and national performance standards.
    We must ensure cost-effective accountability for the ever-increasing
    number of heritage areas and encourage established areas to become
    self-sufficient. The Department recommends that no new areas be
    proposed and the priority of the program's budget be reduced until such
    time as such legislation is enacted and performance standards
    established.

                           SNOWMOBILES IN YELLOWSTONE

        Question. Though I disagreed with some of the specifics, the
    Administration put forward a common-sense plan to regulate snowmobile
    use in Yellowstone National Park. That plan was the subject of
    conflicting court rulings all winter, creating a great deal of
    confusion about whether the Park was ``open'' at any given time--
    whether to snowmobiles or visitors in general.
        Though I know you can't predict the outcome of the current legal
    wrangling, what is the National Park Service prepared to do to get the
    message out with regard to the Park's operating regime for next winter?
        Answer. The National Park Service (NPS) recognizes that this is a
    difficult time for the gateway communities surrounding Yellowstone and
    Grand Teton National Parks due to the uncertainties associated with the
    future of winter use in the parks. The NPS and the Department of the
    Interior are working closely with Department of Justice to set a course
    for winter use in Yellowstone and Grand Teton National Parks.
        The NPS is working to insure that park visitors have the most
    current and accurate information available to plan their visits to the
    park. As we discuss this issue with the public, the media and other
    officials, the NPS has constantly emphasized two messages:
      --Yellowstone and Grand Teton National Parks will be open next
            winter, and people are encouraged to come and enjoy the park.
      --The Greater Yellowstone Area is a excelent winter recreation
            destination. Snowmobiling, cross-country skiing, downhill
            skiing, auto touring and snowcoach touring abound in the area.
        When the final decision on winter use is made, the NPS will:
      --Develop questions and answers for distribution to the public and
            employees.
      --Issue news releases.
      --Brief Congressional delegation staff; local and national media;
            community leaders and businesses; park concessioners; and NPS
            employees.
      --Update the Yellowstone and Grand Teton's websites, which are
            valuable resources for winter use information.
      --Hold informal public meetings in the surrounding communities to
            share information on winter use and answer questions.
      --Continue to work with the Tourism Divisions of Wyoming, Montana and
            Idaho on an outreach strategy.

                     NATIONAL PARK SERVICE--SECURITY COSTS

        Question. The National Park Service has previously provided
    information to the Committee indicating that the incremental costs of
    maintaining Code Orange alert status are about $60,000 per day. This
    estimate, however, predates some of the security-specific funding
    increases that have been provided by Congress.
        Based on current base funding levels, is the $60,000 per day figure
    still accurate? What is your current estimate of incremental costs if
    we go to Code Orange?
        Answer. The last Code Orange alert began on December 21, 2003 and
    ended on January 9, 2004. Based on those costs, the current NPS
    incremental cost of going from Code Yellow alert to Code Orange is
    $55,000 per day. The NPS is learning from experience about moving to
    Code Orange and is trying to reduce those incremental costs further.
                                     ______

                   Questions Submitted by Senator Ted Stevens

        Thank you Secretary Norton for appearing before the committee
    today. I understand that your department is operating under difficult
    budgetary constraints.

                           BUREAU OF LAND MANAGEMENT

        Question. In 1958, the State of Alaska was granted over 103 million
    acres of land under the Alaska Statehood Act. In 1971, Native Alaskans
    were granted 44 million acres of land under the Alaska Native Claims
    Settlement Act. 45 years later, the State is still waiting for the
    transfer of 15 million acres and title to over 60 million additional
    acres, and Native Alaskans are still waiting for the transfer of over
    10 million acres and title to millions more.
        To remedy this situation, Senator Lisa Murkowski and myself
    sponsored S. 1466, the Alaska Land Transfer Acceleration Act to
    accelerate conveyances to the State of Alaska and Native Corporations,
    finalize pending native allotments, and complete the University of
    Alaska's remaining land entitlement by 2009. While these legislative
    changes are a necessary component, the goal of completing the
    conveyances by 2009 requires increases in funding.
        Given the importance of completing the Alaska conveyance process,
    why did the Bureau of Land Management decrease funding for this program
    by over $8 million?
        Answer. The BLM fully supports the Alaska Conveyance program and
    proposes to fund the program in 2005 at the 2004 request level (plus an
    increase for uncontrollables). The $8 million increase provided by
    Congress in 2004 was not sustainable within overall budget constraints.
    The total BLM operating budget request for 2005, which balances many
    competing priorities, is only $8.3 million more than the 2004 enacted
    level.
        Question. The Alaska National Interest Lands Conservation Act
    (ANILCA) directed the Secretary to assess oil, gas, and other mineral
    potential on public lands in Alaska. As we are all aware, the U.S. is
    now reliant on foreign sources for 60 percent of our oil and 16 percent
    of our natural gas. Decreases in supply have brought current energy
    prices to an all time high which is hindering our economic recovery.
    Development of our energy and mineral resources is vitally important to
    increase our domestic energy supplies. Alaska remains the nation's best
    opportunity for developing these resources.
        Why did the Bureau of Land Management decrease funding for the
    assessment of Alaska's vast natural resources?
        Answer. The BLM fully supports the assessment of Alaska's vast
    natural resources, and is requesting the same level of funding for the
    Alaska Minerals program in fiscal year 2005, $2.2 million, as was
    requested in fiscal year 2003 and fiscal year 2004. This funding will
    provide for on-going Alaska mineral assessment studies, an economic
    cost factor analysis, expanding public availability to electronic
    minerals information, and continuing cost-sharing partnerships with
    United States Geological Survey, the Alaska Division of Geophysical and
    Geological Surveys, the University of Alaska, and the Alaska Native
    Claims Settlement Act regional corporations. The fiscal year 2004
    Congressional increase was not sustainable within the constraints of
    the overall budget.

                           FISH AND WILDLIFE SERVICE

        Question. The Endangered Species Act provides broad protections for
    fish, wildlife and plants that are threatened or endangered. Every
    year, Congress appropriates hundreds of millions of dollars for that
    program. One of the most important aspects of the program is the
    Candidate Conservation component, which focuses on preventing a species
    from declining and therefore avoids the necessity of listing a species.
    This is incredibly important to my state of Alaska, where the listing
    of species and designation of critical habitat has the potential to
    permanently halt many of our industries.
        Given the importance of preventing the decline of species, why was
    funding eliminated for Sea Otter research in the Fish and Wildlife
    Service's budget?
        Answer. The President's budget reflects the Service's considered
    approach to funding its highest priority items. Sea otter research is a
    priority of the Service, but it is not as high a priority as are other
    actions that would be funded under the Service's request.
        Question. Also, why was funding eliminated for the recovery of the
    threatened spectacled eider and Steller's eider?
        Answer. In fiscal year 2004, Congress provided $889,000 in pass-
    through funding for the Alaska Sea Life Center to continue a recovery
    research program for the threatened spectacled eider and Steller's
    eider. Specifically, these funds were used to identify and implement a
    recovery research agenda for these species. The Service is currently
    collaborating with the Sea Life Center as well as the North Slope
    governments and the State of Alaska. Past funding and effective
    partnerships make this pass-through unnecessary in fiscal year 2005.
    These types of activities are generally more appropriately funded
    through Service (and other) grant programs, which ensure that limited
    resources are directed to the highest priority activities.
        Question. I am pleased to see that the Fish and Wildlife Service
    has increased its budget request in fiscal year 2005 for land
    exchanges. This is incredibly important in my state. As you know, we
    have a unique situation where the state, natives and private landowners
    have inholdings within wildlife refuges. I understand that the agency
    is currently negotiating with several of these parties to resolve this
    situation.
        What is the current status of these negotiations and when do you
    expect these exchanges to be completed?
        Answer. The U.S. Fish and Wildlife Service (Service) and numerous
    entities in Alaska continue to conduct an active land exchange program.
    The Service is currently working with Native corporations, private
    individuals, and the State of Alaska to identify land exchanges, of
    mutual benefit to all parties, that protect high-quality fish and
    wildlife habitat within the boundaries of existing National Wildlife
    Refuges in Alaska. Several of these refuges expect completion of
    pending exchanges in fiscal years 2004 and 2005. Many proposed
    exchanges are pending, dependent on the completion of negotiations on
    other exchanges. The status of specific land exchanges is listed below.
    Current status of specific land exchanges
        Alaska Maritime NWR/Homer Administrative Site.--This exchange
    within the Homer city limits was completed in April 2004. It conveyed
    ownership of the warehouse being leased by the Refuge as well as
    adjoining vacant lands to the United States in exchange for prime
    commercial land along the Sterling Highway that will be used for
    expansion of the local grocery store.
        Alaska Maritime NWR/Koniag Women's Bay.--An exchange agreement has
    been signed by both parties and appraisals are complete. We are
    awaiting Koniag's identification of lands necessary to equalized values
    in the exchange. We anticipate this exchange will be completed in
    fiscal year 2004.
        Alaska Maritime NWR/Newby.--Appraisals are in the contracting
    process for this exchange. The Service anticipates completion of this
    exchange in fiscal year 2005. This exchange will benefit the new Ocean
    and Islands Visitors Center by acquiring lands adjacent to the Visitors
    Center property and within the viewshed of the Visitors Center.
        Alaska Maritime NWR/Shumagin Corp.--No action taken. The Shumagin
    Corporation has agreed to relinquish a sizable amount of their
    overselections. When final ANCSA entitlement has been determined,
    Shumagin has expressed interest in an exchange to consolidate their
    holdings.
        Alaska Maritime NWR/Sitkinak.--Final details have been worked out
    in a Memorandum of Understanding with the State of Alaska. The Service
    awaits signature on the MOU by the State to proceed with the exchange.
    This exchange will transfer about 1,653 acres to the United States and
    result in the State of Alaska owning all of Sitkinak Island, where
    cattle are currently being raised.
        Alaska Peninsula NWR/Koniag.--Awaiting completion of the Koniag
    Women's Bay exchange prior to initiating exchange involving subsurface
    acreage for other Koniag lands.
        Kenai NWR/CIRI.--Preliminary identification of exchange lands has
    been completed by the Service and CIRI for this exchange. Further site
    work will be accomplished this summer. Fiscal year 2005 funding will be
    required to initiate appraisals and secure title evidence/insurance and
    closing. Wilderness area could potentially be expanded by 3,000 acres
    if exchange is completed. The exchange would also provide an
    alternative route for relocation of the Sterling Highway near the
    confluence of the Kenai and Russian Rivers.
        Kodiak NWR/Koniag.--On hold pending completion of Koniag Women's
    Bay exchange.
        Yukon Delta NWR/NIMA Corp.--Solicitation for bids for contract
    appraisals has been initiated. A Memorandum of Understanding to
    complete the exchange has already been signed by NIMA. Fiscal year 2005
    funding will be required to complete exchange. The equal value exchange
    will result in the acquisition of about 37,000 acres by the United
    States. This exchange will facilitate consolidation of NIMA Corporation
    lands on Nunivak Island and Refuge lands on the Yukon Delta
        Yukon Flats NWR/Beaver.--On hold pending the completion of
    negotiations with Doyon.
        Yukon Flats/Doyon.--Negotiations are proceeding with this proposed
    exchange. Doyon Limited wants to acquire about 127,000 acres of refuge
    land that may be valuable for oil and gas development. In return, the
    United States would receive high value wildlife habitat lands. Only a
    few outstanding issues remain, and the parties continue talks to
    identify mutually beneficial terms leading to an exchange agreement.
    Legislation will be necessary to provide authority to implement the
    terms identified in the proposed exchange agreement, when it is
    completed.
        Yukon Flats NWR/Stevens Village.--On hold pending the completion of
    negotiations with Doyon.
        Question. An ongoing issue in my state relates to access to
    inholdings in conservation units. ANILCA provides that such access be
    allowed subject to reasonable regulations. However, in several
    instances throughout the state, access is being denied or severely
    restricted.
        What is currently being done to ensure that individuals are able to
    access their homes and villages?
        Answer. Reasonable access is available by traditional methods
    (airplanes, water boats, and snowmobiles, when snow cover is adequate)
    for travel to and from the homes and villages of the vast majority of
    inholdings within the boundaries of the National Wildlife Refuges in
    Alaska. When access is unavailable, the inholder must file a right-of-
    way application, which is reviewed and processed according to
    procedures outlined in Title XI of ANILCA. The Service's Alaska Region
    works directly with inholders throughout the application process to
    ensure resulting right-of-way permits that meet their access needs and
    protects the natural values of the National Wildlife Refuge.
                                     ______

                  Questions Submitted by Senator Thad Cochran

        Question. The Department has recently studied the employees and
    their duties at the Natchez Trace Parkway. I understand that a decision
    will soon be reached determining the most efficient way in which the
    Department believes the Trace should be organized. Either these jobs
    will be outsourced to a private company or cost-saving measures will
    result in jeopardizing the jobs of existing employees.
        What was the cost to conduct this A-76 study?
        Answer. Required under the fiscal year 2004 Appropriations
    language, the mandatory Report to Congress, defined ``incremental cost
    of conducting a study'' as ``over-time or back-filling behind employees
    who were working on the study''. To date, there have been no such costs
    to the Natchez Trace or Southeast Regional offices.
        Question. What was the cost of consultants fees to assist in the
    study?
        Answer. The cost of consultant fees to assist in the study is
    $268,000.
        Question. Do the total savings reflected in the study exceed the
    cost of conducting the study?
        Answer. By computing the cost of the as-is organization prior to
    the study and computing the cost of the Most Efficient Organization
    (MEO) one can make a projection. However, actual savings remain unknown
    until after the organization has run through at least one budget year
    and the costs captured at the end. There will be audits done to
    ascertain this but these analyses are at least a year away.
        Question. If the most efficient organization wins the bid, will
    there be sufficient funds to implement the organizational structure
    based on the study's guidelines?
        Answer. Even with the implementation of the Most Efficient
    Organization's reduction-in-force and additional increases for cost-of-
    living allowances and inflation, the park is able to maintain its total
    operations without an increase in base funding.
        Question. Do these guidelines require additional positions to
    implement the study and if so, has the Department accounted for those
    positions in their funding request for the Trace?
        Answer. No. They don't require additional positions to implement
    the study.
        Question. If the Trace wins the bid and there is a requirement to
    reduce the number of people employed by the Trace, how much will it
    cost the park service to implement these measures?
        Answer. If the NATR received the requested buy-out authority, each
    buy-out would cost up to $25,000. It is impossible to calculate the
    cost of any involuntary separation because we can only speculate on how
    many employees would chose to take the buy-out since the specific buy-
    out, early-out authority has not been approved for NATR.
        Question. The Shiloh National Military Park has a unit in Corinth,
    Mississippi. This battlefield is in a rural part of the state and much
    of the original archeology of the Civil War era is untouched. Because
    of its pristine condition and the amount of preserved land which has
    been maintained by volunteers, it is important that these areas be
    preserved by the Department of the Interior.
        Is the Park Service working toward incorporating the outlying
    battlegrounds into the existing park boundary?
        Answer. Currently there is a Special Resource Study/Boundary
    Adjustment Study taking place. As part of the planning process an
    Environmental Assessment (EA) has been completed and the public review
    process is currently taking place. The Study identified 18 non-
    contiguous sites to comprise the Corinth Unit. The Siege and Battle of
    Corinth Commission (SBCC) is willing to donate the portions of these
    tracts which they own to the park. The preferred alternative is to
    accept the land owned by SBCC as a donation for the Corinth Unit. The
    NPS would also work to acquire approximately 190 acres at the Battery
    Robinett and Contraband Campsites in the future as funding becomes
    available or the lands are offered for donation. The rest of the land
    would be identified as part of the project, but partners would be
    enlisted to acquire and manage the land.
        Question. What are the plans of the Park Service to acquire these
    lands and maintain them?
        Answer. The preferred alternative reflects acquiring the Battery
    Robinett and Contraband Campsite areas as well as those areas to be
    donated by SBCC. Legislation is needed to authorize the boundaries of
    the Corinth Unit. The Corinth Unit would continue to be maintained and
    interpreted by the National Park Service under this alternative.

                                     ______

             Questions Submitted by Senator Ben Nighthorse Campbell

                                   BIA BUDGET

        Question. It's been reported in the press that the BIA is slated
    for a 2.4 percent reduction in the fiscal year 2006 budget, on top of
    the 2.3 percent reduction in this year's budget request.
        Can you comment on the accuracy of that report?
        Answer. The formulation process for the President's fiscal year
    2006 budget is just starting, and no decisions have been made on
    proposed funding levels.

                           HAZARDOUS FUELS REDUCTION

        Question. As we all know, Colorado is in a terrible drought. Even
    the recent rains and snows are not enough to bring the moisture levels
    up to normal. Last year, over 80 percent of Colorado was classified
    under the U.S. Drought Monitor as ``Extreme'' drought or
    ``Exceptional'' drought, which is obviously worse.
        This drought is going to create a lot of hazardous fuels for future
    fires. The Forest Service told me in the past that they were delayed in
    fuels reduction due to ``analysis paralysis.'' I am curious as to your
    level of progress in fuels reduction and if you have encountered the
    types of setbacks and delays experienced by the Forest Service.
        Answer. We share the concerns for both the potential of wildland
    fire and our ability to aggressively treat the thousands of acres that
    need to be treated in Colorado. As you are aware, the drought has also
    caused a serious outbreak of the IPS Beetle. In Colorado, Department of
    the Interior bureaus treated 23,791 acres in fiscal year 2003, and have
    treated 17,066 acres as of June 18, in fiscal year 2004. The majority
    of these acres have been in the Wildland Urban Interface (WUI) area.
    The pace of treatment in Colorado has been a function of weather
    conditions. During these types of drought conditions, the use of
    prescribed fire, our most efficient tool for acre accomplishments, is
    very limited, and the emphasis shifts to more expensive, labor
    intensive mechanical treatments. Efforts are being coordinated with the
    State, private land owners and the U.S. Forest Service to be as
    efficient as possible in the execution of these projects.

                            FIRE FIGHTING BUDGETING

        Question. I've previously spoken with Forest Service Chief Bosworth
    about the difficulty of planning a budget for wildfires considering the
    unpredictability of mother nature and unplanned significant deviation
    from the 10-year fire average.
        Do you expect to have similar budgeting issues for fire fighting
    efforts?
        Answer. Budgeting for wildfire suppression is inherently difficult
    because future levels of fire activity cannot be predicted with
    precision. However, use of the 10-year suppression cost average has
    proved to be a reasonable and durable basis for suppression budgeting.
    Although suppression costs have exceeded the 10 year average in the
    past several fire seasons, looking back historically there have been
    many years in which suppression costs were below the average. For
    example, during the four fire seasons from 1995 to 1998 costs were
    below the average in three seasons and less than $2 million above the
    average in the fourth.

                              PARK SERVICE BACKLOG

        Question. As you know, addressing the Park Service's maintenance
    backlog was identified as one of the President's priorities. I couldn't
    help but notice that the fiscal year 2005 budget for construction and
    maintenance to address this backlog has remained more or less constant
    over the past 2 years. One would expect this area to receive more
    attention. What are some of the reasons your budget has remained at or
    below past years' levels for addressing this backlog?
        Answer. The 2005 request does continue to support the President's
    commitment to address NPS deferred maintenance. The fiscal year 2005
    request addresses NPS deferred maintenance with funding from facility
    maintenance, construction, the Federal Lands Highway program and a
    portion of fee demonstration revenues. The fiscal year 2004 funding
    estimate for these programs is $1.035 billion, and the fiscal year 2005
    request for these programs is an estimated $1.112 billion. Both
    estimates are dependent on enactment of the President's proposed
    funding for the NPS Park Roads and Parkways Program under the Federal
    Lands Highway Program, currently pending before Congress. By
    comparison, in fiscal year 2001, the last budget enacted under the
    previous Administration, the funding levels in the same programs
    totaled an estimated $814.6 million.

                           ENDANGERED SPECIES PROGRAM

        Question. As you know, only six animal species in the United States
    have ever been recovered by the Endangered Species Program in its 30
    year existence and none have been de-listed in the last 2 decades.
    Unfortunately, more species have been de-listed due to extinction
    (seven) than recovery (six).
        In light of these facts, can you explain why in the fiscal year
    2005 budget for Endangered Species listing has increased by more than
    $5 million while the budget for recovery has gone down by almost $10
    million? What good does it do to keep listing species if we aren't
    making good strides to recover species already on the list?
        Answer. The Service agrees that recovery of listed species is the
    fundamental goal of the Act. However, while the Endangered Species
    program has the lead for that responsibility, all programs in the
    Service (as well as programs in many other agencies, programs supported
    by States, local governments, organizations, and individuals) directly
    or indirectly benefit recovery of listed species. As a result, and
    unlike the situation for adding species to the Endangered Species list,
    resources appropriated to the recovery program itself are a relatively
    small portion of the total resources available to help recover species.
    We coordinate with other Service programs such as Refuges, Fisheries,
    Partners for Fish and Wildlife, and Environmental Quality to implement
    recovery actions for those species found on both private and public
    land. We also work closely with other Federal agencies, the States,
    non-governmental organizations, private landowners, and other
    stakeholders to leverage our Federal funds to the maximum amount
    possible to complete specific priority tasks and projects that will
    help achieve recovery objectives (to downlist or delist the species)
    outlined in the species' recovery plans. Tools such as Safe Harbor
    Agreements with non-Federal property owners are a good example of our
    partnership activities that help recover listed species. We are always
    looking for opportunities to foster new partnerships and expand ongoing
    ones.
        A significant portion of the proposed decrease in the recovery
    budget would eliminate line-item funding for specific, projects,
    including the Upper Colorado River Fish Recovery Program. This proposal
    does not reflect any lack of commitment by the Service to the recovery
    of the endangered fishes of the upper Colorado River basin; however, we
    believe that other sources of funding, including funding provided by
    our project partners, may be available to continue this work, that
    increases in grants available from various sources may be available to
    support specific, high-priority actions implemented through this
    program, and that other high-priority actions will continue to be
    supported through our Recovery funding. In times of declining overall
    budgets, specific line item funding reduces our flexibility to dedicate
    resources to the highest priority, most essential, and most successful
    conservation efforts. Taken as a whole, the President's budget reflects
    a continued commitment to the protection and conservation of endangered
    species through the use of partnerships and collaboration.
        In the last two decades (since 1985), a total of 7 animal species
    in the United States have been delisted because they have been
    recovered. These species are the Atlantic Coast population (FL, AL) of
    brown pelicans (1985), the American alligator (1987), the gray whale
    (1994), the Arctic peregrine falcon (1994), the American peregrine
    falcon (1999), the Aleutian Canada goose (2001), and the Douglas County
    population of the Columbia white-tailed deer (2003). In addition, 2
    plants in the United States (Robbins cinquefoil and Rydberg milk-vetch)
    have been recovered.
        It's important to note that there are other conservation benefits
    associated with adding a species to the endangered species list. While
    it may take years to recover a species, listing can provide immediate
    protections, increased focus on a species' needs, and often generate
    resources from other entities such as other Federal agencies, States
    and local jurisdictions, and the private sector, including non-
    governmental organizations and private landowners.

                             MIDNIGHT RIDER REMOVED

        Question. In last year's Interior Appropriations Conference Report,
    language was inserted that modified the Court-imposed requirement for a
    historical accounting to commence: this rider suspended the requirement
    until either (a) Congress amends the 1994 Act, or (b) Dec. 31, 2004.
        This year's OST budget request proposes to strike that language
    from the next bill.
        Why does the Department want this language removed?
        Answer. The fiscal year 2004 Interior Appropriations language was
    inserted in the conference report of the fiscal year 2004 bill in
    response to the September 2003 ruling in the Cobell case. It places a
    moratorium on any accounting until Congress addresses the issue of what
    kind of accounting it expects under the 1994 Act or until December 31,
    2004, whichever comes first. The Department is of course hopeful that
    Congress will address this issue before December 31, 2004. The fiscal
    year 2005 budget request does not assume this. However, we have not
    advocated either removing or extending the existing language. It
    addresses the fiscal year 2004 language by assuming the accounting
    moratorium will be lifted as of December 31, 2004, and therefore
    proposes $80.0 million to fund the Individual Indian Money accounting.
    That amount is based on the Department's costs to begin, after December
    31, 2004, implementation of the Department's proposed historical
    accounting plan. This amount may be revised depending on how the Court
    of Appeals for the District of Columbia circuit rules with regard to
    the structural injunction in the Cobell case or on whether
    Congressional action is taken to delineate the specific historical
    accounting obligations of the Department as suggested in the 2004
    Appropriations Act.

                               BIA REORGANIZATION

        Question. Last year the BIA instituted a sweeping reorganization,
    primarily to address trust management issues.
        Can you give the Committee an estimate of the total cost of this
    reorganization effort?
        Answer. Other than the initial costs of consultation with the
    Tribes, the cost of the reorganization effort is comprised mostly of
    the cost of hiring additional staff to improve the delivery of trust
    resources at the field locations. Between fiscal year 2004 and fiscal
    year 2007, the Bureau plans to hire 124 additional staff, 108 of which
    will be Deputy Superintendent positions at the local level to oversee
    daily trust transactions and operations. Once filled, the total cost of
    these positions, including travel, training and equipment is estimated
    to be approximately $16 million per year. The President's fiscal year
    2005 budget request includes the first increment of funding for these
    positions--$5.5 million to support 25 Deputy Superintendent positions
    at the local level to oversee daily trust transactions and operations.
        Question. Is there any fiscal year 2005 funding slated to go toward
    further reorganization?
        Answer. The President's fiscal year 2005 budget request includes
    $5.5 million to support 25 Deputy Superintendent positions at the local
    level to oversee daily trust transactions and operations.

                         OFFICE OF TRIBAL CONSULTATION

        Question. One of the new proposals in this budget request is $1.1
    million to establish a permanent Office of Tribal Consultation within
    the BIA.
        How permanent is this new office, and do you anticipate a similar
    level of funding every year?
        Answer. The Office of Tribal Consultation will coordinate all
    consultation efforts for Indian Affairs. This office will ensure that
    consultation is occurring where appropriate, and be the contact point
    for all Indian Affairs efforts on consulting with tribal governments.
        Question. Executive Order 13175 directs that tribal consultation
    occur at every level of every Federal agency. Where is the proposed
    location for this new office in the Departmental organization? Will it
    be within the BIA, or in the Secretary's office?
        Answer. The Office of Tribal Consultation will be located in the
    Office of the Secretary within the Office of the Assistant Secretary--
    Indian Affairs.

                           INDIAN LAND CONSOLIDATION

        Question. The Indian Land Consolidation program is to receive a
    substantial increase in this budget, up to $75 million.
        Is this level of funding substantial enough to begin addressing the
    problem of fractionated interests?
        Answer. The Department feels the Indian Land Consolidation Program
    (ILCP) has been very successful to date, with the level of resources
    available to the program. The program has purchased 74,626 interests to
    date (as of March 1, 2004) with an estimated value of $29.2 million and
    is the equivalent of 49,155 acres.
        Currently approximately 2.3 million individual Indian owner
    interests are fractionating at a rate of approximately 6 percent per
    year. At this rate of increase, approximately 140,000 to 160,000 owner
    interests will need to be purchased yearly to prevent fractionated
    interests from expanding.
        Question. How much more would be required?
        Answer. The fiscal year 2005 budget proposes an unprecedented
    amount of $70 million for ILCP, an increase of $48.3 million. Because
    of the magnitude of the problem and the necessary legislative reforms
    that are still required--such as probate reform, partition of land, and
    the disposition of unclaimed property--it is difficult to predict any
    estimate of the total amount of funds that will be necessary to
    complete the consolidation of fractional interest. However, this
    unprecedented level of funding, when coupled with other meaningful
    reforms should begin to significantly address this longstanding and
    growing problem.
        Question. What is the carryover in this account from previous
    appropriations?
        Answer. The unobligated balance carryover in the Indian Land
    consolidation account as of September 30, 2003 was $10,578,768.

                             TRIBAL SELF GOVERNANCE

        Question. I am glad to hear that 40 percent of the BIA operating
    budget is now going directly to Tribes as Tribal Priority Allocations.
    But I hope to see that number go even higher.
        How many ``first-time and expanded'' contracting tribes due you
    anticipate will enter the 638 program this year?
        Answer. For fiscal year 2005, the Department anticipates that there
    will be five additional tribes/consortia entering into Self-Governance
    compacts: however, these tribes have had previous contracting
    experience with the BIA, and will not increase the amount of programs,
    services, functions or activities assumed from the BIA.

                           TRIBAL SCHOOL CONSTRUCTION

        Question. Tribal School construction: In 1997 a GAO study estimated
    a backlog of school construction in the amount of approximately $700
    Million. Your testimony indicates that funding for tribal school
    construction has been decreased by approximately $61 million for fiscal
    year 2005, but does not provide any justification for the decrease.
        Does this decrease suggest the backlog has been eliminated, if not,
    then what is the justification for the decrease?
        Answer. We have made substantial progress in improving the
    condition of BIA schools. By the time we have completed the work
    proposed in our 2005 budget, 60 percent of BIA schools will be in good
    or fair condition. Three years ago, 65 percent of BIA schools were in
    poor condition.
        We do have a $66 million reduction in the 2005 program. To put this
    in perspective, however, this is a reduction of about one-fifth. We are
    still proposing a robust program of $226 million. As recently as 1999,
    spending on BIA school backlog needs was only $60 million a year.
        The reason that we are comfortable with this year's program level
    is that we currently have 21 replacement schools in the planning and
    design process or under construction. The 2005 budget will build the
    remaining five schools on the current replacement priority list. The
    budget also provides $10 million for the tribal school construction
    demonstration program, which is likely to fund an additional two
    schools on a cost share basis with Tribes. Funding additional
    replacement schools in 2005 would get us too far ahead of our ability
    to prudently manage the construction program.

                        UNITED TRIBES TECHNICAL COLLEGE

        Question. In this proposed budget, the funding for the United
    Tribes Technical College (UTTC) has been eliminated, even though it has
    been part of the Interior appropriations since the 1980s.
        UTTC and Crownpoint Institute of Technology are under the Perkins
    Act and not the Tribally-Controlled Community Colleges Act. What is the
    justification for forcing these schools to seek funding add-ons each
    year instead of seeking a permanent solution?
        Answer. UTTC and Crownpoint receive funding from the Department of
    Education under section 117 of the Carl Perkins Act. Under the proposed
    2005 Department of Education budget, section 117 is funded at $7.2
    million. No other tribal colleges are eligible to receive funding under
    this section. Depending on student enrollment, section 117 funding will
    provide UTTC and Crownpoint with about $6,600 or $6,700 per student
    count. TCUs receive an average of $4,230 per Indian Student Count in
    fiscal year 2004.
        Question. What alternatives have the Department pursued to find
    permanent funding for these two schools?
        Answer. The Department has not pursued ``permanent'' funding for
    these schools. However during formulation of the fiscal year 2005
    budget the Department conducted an analyses comparing per student
    funding at CIT and UTTC with that of the TCUs.
                                     ______

                 Questions Submitted by Senator Byron L. Dorgan

                       ENEMY SWIM DAY SCHOOL REPLACEMENT

        Question. It is my understanding that there is some disagreement
    between the Bureau of Indian Affairs and the Office of Facilities
    Management and Construction about the appropriate replacement size for
    the Enemy Swim Day School, which Congress appropriated funding for in
    fiscal year 2004. I'm told that the Enemy Swim Day School successfully
    appealed the size of the school, and received a written commitment from
    BIA Deputy Assistant Secretary Aurene Martin on January 6, 2004,
    agreeing that the size of the replacement school would be 67,889 square
    feet. However, OFMC is apparently refusing to honor the outcome of this
    appeal and is instead insisting that the size of the school be 45,000
    square feet.
        What is the current status of this replacement project? Does the
    appeals process mean anything if OFMC is allowed to ignore the outcome?
    What steps do you intend to take to favorably resolve this dispute
    between various Interior offices?
        Answer. The Bureau of Indian Affairs (BIA) Office of the Assistant
    Secretary (AS-IA), Office of Indian Education Programs (OIEP) and the
    Office of Facilities Management and Construction (OFMC) have been
    working diligently with tribes and school boards to improve the process
    for replacement school construction. A new interim policy has been
    approved by the AS-IA that clearly defines how student enrollment is
    calculated and used in projecting the size of new schools. This was in
    response to findings from the OIG about student enrollment projections,
    which may have resulted in some over-built schools.
        In the case of the Enemy Swim appeal of the interim policy for
    enrollment projection, approval for 139 students was granted, as
    requested by the school. In a meeting held with Enemy Swim, OFMC, OIEP
    and Enemy Swim, the school was given the authority to construct the
    school to the amount of square footage they could reach within
    available funding. The resulting space projection for this project is
    in the range of 45,000 square feet, which is well within the acceptable
    square footage for the approved student enrollment of 139. OFMC also
    was agreeable to the school's request to retain two modular buildings
    on the existing school campus for Adult FACE and school administration.
    The buildings will be set up on the new school campus and will be
    eligible for O&M funding.
        OFMC will continue to work with the Enemy Swim School
    Administration and school board to complete this project, which will
    alleviate health and safety conditions for the students and staff.

                  STATUS OF OTHER SCHOOL CONSTRUCTION PROJECTS

        Question. I am very concerned to note that, of the 20 school
    replacement projects currently pending, only 1 of these schools has
    been completed--and that project is done only because the Tribe started
    the construction with its own funds under the Cost Share Demonstration
    program. For some of these projects, design has been underway since
    2001 or before and yet construction is still not started, much less
    completed. I am particularly concerned about the status of the two
    projects in my state, the Ojibwa Indian School and the Turtle Mountain
    High School. The BIA and OFMC have put obstacle after obstacle in place
    that have delayed construction. Meanwhile, Native American children are
    being forced to continue to attend classes in over-crowded, often
    unsafe and unsanitary conditions.
        What actions do you intend to take to ensure that replacement
    school construction projects are completed in a more timely manner?
        Answer. The Bureau and OFMC are very committed to the timely
    completion of replacement school construction projects. Many of the
    projects identified in fiscal year 2003 and fiscal year 2004
    construction appropriations were adversely affected because the BIA has
    been resolving findings from the OIG about student enrollment
    projections, non-ISEP student counts and the size of schools. Based on
    these findings, the BIA developed interim policy for enrollment
    projections, which directly affects the size of the schools that can be
    constructed. This directly impacted the two projects at Ojibwa and
    Turtle Mountain.
        Currently, the design phase for Ojibwa Indian School project is 70
    percent complete. This project is handled through a Public Law 100-297
    grant. The Ojibwa School Board has requested the ability to award site
    preparation for this project before completion of the 100 percent
    design approval. The Bureau is working with Ojibwa to accomplish this
    because of the short window for the construction season in North
    Dakota.
        The design phase for the Turtle Mountain High School project is 99
    percent complete. The Bureau is in the final stage of review.
        The Bureau has established goals and objectives that clearly
    outline Planning, Design and Construction timeframes. The goal is to
    have the replacement schools completed in four years from Planning and
    Design through construction.
                                     ______

                   Questions Submitted by Senator Harry Reid

                           BUREAU OF LAND MANAGEMENT

    Wild Horses and Burros
        Question. Overpopulation of wild horses and burros poses a grave
    threat to the nation's rangelands, which have are already degraded by
    the extreme drought and fires of the past several years. The problem is
    especially severe in Nevada, where the 2003 wild horse population was
    conservatively estimated to be 17,930. This number does not account for
    the large number of foals born in 2003 and 2004, or for the 1,400
    horses in Nevada holding facilities, at an average daily cost of $3.47
    per horse. Now, twenty-eight years after Congress authorized removal of
    wild horses and burros from public lands, Nevada is nowhere near its
    Appropriate Management Level of 14,000 animals.
        Why does Nevada, with 48 percent of the Nation's wild horses and
    burros, receive only 14 percent of Wild Horse and Burro Program
    funding?
        Answer. During the last three years (fiscal year 2001 to fiscal
    year 2003) an average of 46 percent of the BLM's total Wild Horse and
    Burro (WH&B) program expenditures were directly attributable to Nevada
    wild horses and burros. According to the fiscal year 2003 population
    data, Nevada managed 48 percent of the nation's free roaming wild
    horses and burros.
        Question. How does the Department plan to overcome past failures of
    the Wild Horse and Burro Program, particularly regarding the severe
    overpopulation of wild horses on fragile, drought-stressed rangeland in
    Nevada?
        Answer. We agree that the overpopulation of wild horses and burros
    poses a threat to the nation's rangelands, and that the drought and
    wildfire situation aggravates it that much more. The best approach to
    resolving these issues is to get to appropriate management levels (AML)
    and maintain them.
        The current population of wild horses and burros on public lands is
    36,000 animals. Populations have not been this low since the 1970's.
    The target appropriate management level is 26,433 and BLM is now in a
    position to achieve appropriate management levels within two years.
        The progress to this point has also been the result of improved
    management efficiencies. The following are examples of those:
      --The BLM has reduced removal costs by making improvements in
            contracting.
      --The BLM has realized a cost savings by shifting from removals being
            done through BLM crews to removals done by contractors.
      --The BLM achieved cost savings on long-term holding of excess
            animals by establishing a policy on the age of animals being
            removed that has reduced the number of younger age animals that
            go into long-term holding.
      --The BLM has provided direction that all AML be established by
            fiscal year 2005 to facilitate the goal of having populations
            at those levels.
      --The BLM has established a four-year gather cycle policy to minimize
            gather costs and reduce stress on animals.
      --The BLM is reducing costs by determining the minimum feasible level
            of facilities to handle excess animals.
      --The BLM has achieved significant cost savings in vaccines and
            medicines by converting from state-by-state purchase contracts
            to national purchase contracts.
      --The BLM is reducing costs by moving from holding animals in
            contracted corral facilities to contracted pastures.
      --The BLM has established a relationship with the National Wild Horse
            and Burro Foundation to aid in improving the marketing
            practices of the Adoption Program.
      --The BLM has conducted three internal/external reviews/audits of the
            Wild Horse and Burro Management Program; results of these
            reports involve potential improvements or cost savings.
      --The BLM has established programs in cooperation with prisons to
            hold, train and adopt horses. The result is lower holding costs
            with the added benefit of gentling of wild horses and
            increasing adoptions.
      --The BLM has established a system of checks and balances and
            accountability using the Wild Horse and Burro Steering
            Committee, the BLM Executive Leadership Team and the Wild Horse
            and Burro Staff.
      --The BLM utilizes the National Wild Horse and Burro Advisory Board
            to pursue efficiencies and recommended changes to program
            procedures.
        The bureau's strategy to improve management of wild horses and
    burros on public lands is to redirect funds from other MLR programs to
    the WH&B program for the next several years to achieve AML west-wide by
    2006. Most of the programs from which funds will be redirected will
    benefit from the eventual achievement of AML. Once AML is achieved, the
    Bureau projects that the wild horse and burro budget will begin to
    decline as the need for removal will drop from over 10,000 per year to
    about 5,000 per year with corresponding savings in holding, feeding,
    veterinary care, preparing for adoption, and adoption. The large number
    of horses now held in long-term holding will also begin to decline
    through natural mortality. BLM plans to direct the majority of this
    effort to Nevada with plans to remove at least 5,500 animals per year
    for the next two years.
        For a more detailed review of these items and others please refer
    to the recently submitted report to Congress: ``Reaching Appropriate
    Management Levels in Wild Horse and Burro Management.''

                       EASTERN NEVADA LANDSCAPE COALITION

        Question. I appreciate efforts to restore health to our precious
    forests and rangelands. I believe that success hinges on involving
    local partners in this momentous effort. I am especially proud of the
    Eastern Nevada Landscape Coalition, a non-profit organization dedicated
    to restoring the dynamic and diverse landscapes of the Great Basin
    through collaboration with the Bureau of Land Management.
    Unfortunately, despite a 5-year, $1 million per year assistance
    agreement, the Department has only allocated $300,384 to this important
    coalition for fiscal year 2004, and has forewarned the group not to
    expect any funding in fiscal year 2005. In fact, funds for these types
    of partnerships have seen an overall decrease in your fiscal year 2005
    budget. Recognizing that the cost of fire prevention is a great deal
    less than that of fighting fires and subsequently restoring rangeland,
    would you support investing Bureau of Land Management wildfire money in
    this coalition?
        Answer. The Eastern Nevada Landscape Coalition (ENLC) is a valued
    partner to BLM. Through this partnership, much work has been
    accomplished to benefit the rangelands in eastern Nevada. BLM fully
    supports the mission of ENLC, and we collaborate with them whenever
    possible. The assistance agreement signed with ENLC authorized $1
    million per year, but that level of funding for such work has not been
    available. BLM must abide by Federal procurement laws regarding
    competitive bidding for projects that could be accomplished by ENLC
    through the assistance agreement.
        In response to your specific question about wildland fire
    management funding, the Department of the Interior has in recent years
    conducted numerous hazardous fuels reduction projects on federal lands
    within the geographic area of the ENLC, and will likely continue to do
    so. As indicated in the table below, 16 fuels projects totaling
    $711,000 were funded by the Department of the Interior in fiscal year
    2003 and fiscal year 2004 combined. The Department is increasingly
    using contracts, grants, and cooperative agreements to perform fuels
    treatments. To the extent the ENLC is qualified to conduct such
    treatments, there are certainly opportunities for ENLC to participate
    in the DOI hazardous fuels reduction program through contracts, grants,
    or cooperative agreements.

                          EASTERN NEVADA LANDSCAPE RESTORATION--FUELS TREATMENT FUNDED PROJECTS
    ----------------------------------------------------------------------------------------------------------------
                                               Mechanical              Prescribed                Other
             Fiscal year            Projects   treatment    Funding     burning     Funding    treatments   Funding
                                                (acres)                 (acres)                 (acres)
    ----------------------------------------------------------------------------------------------------------------
    2003.........................         10        2,458   $412,000          530    $21,000  ...........  .........
    2004.........................          6          451   $204,000  ...........  .........        1,085    $74,000
                                  ----------------------------------------------------------------------------------
          Total..................         16        2,909   $616,000          530    $21,000        1,085    $74,000
    ----------------------------------------------------------------------------------------------------------------

        BLM will continue to fund projects on-the-ground in the ENLC area
    of emphasis to the degree possible. Fuels treatment projects are funded
    on a priority basis across all BLM administered lands, and BLM will do
    everything possible to ensure the vast majority of dollars received
    make it to the ground where it will do the most good.
        In addition to fuels reduction funding, BLM seeks opportunities to
    engage ENLC in land health restoration work through other programs,
    including the Cooperative Conservation Initiative (CCI) program, which
    support the Great Basin Restoration Initiative and the Eastern Nevada
    Landscape Restoration Project. The Gleason Creek Co-op Sagebrush
    restoration project is under consideration for $50,000 in CCI funding
    in fiscal year 2005.

                             U.S. GEOLOGICAL SURVEY

        Question. The United States Geological Survey plays a critical role
    in providing decision makers and the public with important information
    about floods, earthquakes, water quality and availability, mineral
    resources, wildlife, and the spread of invasive species, which inform
    economic development and land use planning. Yet, funding for important
    programs such as the Mineral Resources Program and the Water Resources
    Research Institute Program are slated for significant reductions or
    elimination in fiscal year 2005.
        How do you reconcile the need for science in support of decision
    making at the Department of Interior in light of the cuts for the USGS
    in this budget?
        Answer. The USGS and the Department are working very hard to better
    integrate USGS scientific work with the science needs of the other DOI
    bureaus to ensure that on-the-ground decisions are based on the best
    possible science. Much of the ``reduction'' in the USGS comes from the
    fact that the budget does not continue Congressional earmarks from the
    fiscal year 2004 budget. In the fiscal year 2004 USGS budget, there
    were $17.1 million in earmarks. Although the work funded by these
    earmarks has merit in many instances, it doesn't necessarily address
    the highest priority science needs of the USGS or the Department. The
    Department's effort to make the highest and best use of its resources
    is not limited to looking at earmarks. Within the USGS budget, there
    are several reductions in lower priority base programs that allow the
    Department to fund higher priority needs, such as $2.8 million for
    increased research in the Klamath Basin.
        Question. The 108-year-old Cooperative Water Program is a 50:50
    costshare between USGS and State and local governments, which funds
    water-resource activities requested by local governments. In recent
    years, non-federal contributions have increased, despite static Federal
    funding levels, demonstrating strong support and need for this program.
    If the $60.4 million shortfall in the Federal match were funded, then
    28 percent more locally driven water-resource data collection and
    scientific investigation could be accomplished at no additional cost to
    local governments. Does the USGS have sufficient funds to match all the
    monies provided by the States for this program?
        Answer. In fiscal year 2003, the USGS provided $64.4 million for
    Cooperative Program activities, and the 1,400 State and local partners
    provided $135.6 million, or roughly 68 percent of total program
    funding. States are aware of what USGS is able to provide in matching
    grants for the cooperative program when they provide additional funding
    above what can be matched. The current funding level is sufficient to
    maintain a robust cooperative water program.
        Question. The U.S. Geological Survey Fire Science program would be
    reduced significantly in the fiscal year 2005 budget, despite the
    Department's stated support for understanding and preparing for
    wildland fires. The budget documents state that alternative sources of
    funding have been provided in both the Forest Service and Bureau of
    Land Management budgets. Specifically what are these alternative
    funding sources, where is it located in the other agencies' budgets,
    and what mechanism will transfer the funds to the USGS Fire Science
    Program?
        Answer. The funds are proposed to come from the Bureau of Land
    Management (BLM) Wildland Fire Management appropriation. The funds
    would be made available through a cooperative agreement.

                             NATIONAL PARK SERVICE

        Question. The Interior Department's budget does not account for
    funds that it will spend this year on privatization studies. How much
    money does the Department expect to spend on privatization studies this
    year?
        Answer. The Department conducts competitive sourcing studies, which
    are designed to improve the quality, efficiency, and effectiveness of
    services that we deliver. As part of the competitive review process,
    the Department has completed studies covering more than 2,617 FTE to
    date and of the positions studies to date, 1,102 have been maintained
    in house and 1,515 have been contracted out. Throughout this process,
    no permanent Interior employee has lost a job. In instances where
    activities were contracted out, vacancies were eliminated, personnel
    retired, or permanent employees were placed elsewhere in the
    organization. In 2004, the Department anticipates that it will expend a
    total of $1.8 million in fiscal year 2004 appropriations for
    competitive sourcing studies as compared to the $2.5 million amount
    that is specified in 2004 Appropriations Act. The 2005 budget request
    includes $4.2 million for competitive sourcing studies for Interior
    agencies.
        Question. I am worried that recent Park Service memos directing
    staff to avoid publicizing budget limitations discourage the parks in
    Nevada from communicating with me. They should not feel that the Park
    Service leadership will retaliate against them for giving me honest
    assessments of their parks. What was the intent of the Park Service in
    sending these memos? Would you agree that there should be open
    communication between the parks and Congress?
        Answer. While there was an internal National Park Service (NPS)
    memorandum that mentioned ``service level adjustments'' for the
    upcoming season, the intention was to head off any potential service
    reductions by discussing problems internally in order to make the
    management decisions that might be required, and to determine if the
    redirection of available funds was necessary. The Department strongly
    agrees with you that there should be continued open communication with
    Congress.
                                     ______

                   Questions Submitted by Senator Mike DeWine

        Question. What additional funds are needed to provide full science
    support for research conducted on behalf of the Great Lakes Fishery
    Commission at the Hammond Bay Biological Station and the Upper
    Mississippi Environmental Science Center?
        Answer. The USGS currently receives appropriated and reimbursable
    funds for the Hammond Bay Biological Station and the Upper Mississippi
    Environmental Sciences Center (UMESC) for Great Lakes research. The
    UMESC field stations operate through reimbursable agreements with the
    States to conduct Great Lakes research. The funding provided is
    sufficient to carry this research forward at this time.
        The Upper Mississippi Environmental Sciences Center conducts
    research which provides natural resource managers with scientific
    information needed to address issues such as the effects of
    contaminants, declining and endangered species, fishery drug research
    and development, river inventory and monitoring, the effects of
    nutrient loading, and long term resource (water, vegetation, wildlife)
    monitoring. Research at the Hammond Bay Biological Station focuses on
    development of alternative methods of controlling sea lamprey
    populations, refinement of existing methods for lamprey control, and on
    the effects of sea lampreys on Great Lakes fishes. Alternative control
    methods research currently includes barriers to sea lamprey migration,
    release of sterilized male sea lampreys to reduce reproduction, and the
    identification and use of migratory and sex pheromones. Other research
    focuses on application of lampricides, sea lamprey life history
    studies, population assessment, and interactions between host species
    and parasitic sea lampreys. The station has fish-holding facilities and
    houses the facility operated seasonally by the U.S. Fish and Wildlife
    Service to sterilize male sea lampreys. The funding provided is
    sufficient to carry this research forward at this time.
        Question. What additional funds are needed for the Fish and
    Wildlife Service to provide its support to Great Lakes Fishery
    Commission efforts?
        Answer. The Fish and Wildlife Service, as an agent for the bi-
    national Great Lakes Fishery Commission (Commission) since 1955,
    manages sea lamprey control activities in U.S. waters of the Great
    Lakes. This bi-national program is vital to the restoration of native
    fish in the Great Lakes and the $4.5 billion sportfishing industry.
    Congress appropriated $894,000 in fiscal year 2003 and $889,000 in
    fiscal year 2004 to the Service to help fund its support of the sea
    lamprey control program. The President's Budget for fiscal year 2005
    includes a request for $889,000.
        Question. The USGS's Great Lakes Science Center (GLSC) provides
    research support for a variety of state and tribal partners that allows
    them to better manage the unique resources of the Great Lakes. Over the
    last 10 years, however, the USGS has not provided sufficient funding
    for an adequate level of professional and administrative staffing to
    maintain the federal/state/tribal partnership on the Great Lakes.
    Please provide for the subcommittee an analysis of the levels of
    staffing and funding support received by the GLSC since its transfer to
    the USGS.
        Answer. The GLSC transferred to the USGS from the FWS in fiscal
    year 1996. Total allocated staffing in fiscal year 2004 at 102 FTEs is
    7 FTE above the allocated fiscal year 2003 staffing. Funding at the
    GLSC is projected to be $11.1 million in fiscal year 2004. A table
    summarizing funding since 1995 follows:

                                                                     [Dollars in thousands]
    --------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                          Fiscal year
                     Great Lakes Science Center                  -------------------------------------------------------------------------------------------
                                                                    1995     1996     1997     1998     1999     2000     2001     2002     2003      2004
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    Funding.....................................................   $8,012   $5,943   $7,153   $7,275   $7,415   $8,580   $8,230   $9,809   $10,105   $11,136
    FTE.........................................................      107      105      104       97       98       98       98       98        95       102
    --------------------------------------------------------------------------------------------------------------------------------------------------------

        Question. We understand that the President's budget includes a
    slight increase for the Great lakes Science Center to address Great
    Lakes deep-water fishery research issues. How much has the president
    proposed for the large-vessel program? How much more does USGS need to
    develop the scientific capability to completely address these deep-
    water fishery assessment issues for its state and tribal partners
    without starving other GLSC programs?
        Answer. The President has proposed a $500,000 increase in the
    fiscal year 2005 budget for the Deepwater Science Program at the Great
    Lakes Science Center (GLSC). Therefore, with the proposed increase,
    there would be $4.4 million for the Deepwater Science Program in the
    fiscal year 2005 budget. This funding level is sufficient to carry this
    program forward at this time.
        Question. Congress has gone to great lengths to provide research
    vessels for the Great Lakes Science Center that facilitate research on
    the Great lakes. Some of these vessels have been inadequately
    maintained to the point their capability and safety have been called
    into question. What resources are needed to ensure their continued safe
    operations and to accomplish their scientific mission?
        Answer. The USGS has worked to improve the vessel fleet on the
    Great Lakes. All vessels have undergone an extensive condition
    assessment with contracted naval architects. Any serious safety issues
    were immediately addressed. All eligible deferred maintenance/capital
    improvement (DMCI) projects for the vessels resulting from the
    condition assessments are included in the bureau's DMCI Program for
    consideration of funding in fiscal year 2006 and out years. For long-
    term vessel stability, the USGS is developing a vessel maintenance plan
    with the naval architect consultants. Once this plan is in place, a
    vessel capital replacement plan will be formulated to address replacing
    ageing vessels. The annual operations and maintenance costs for Great
    Lakes vessels are approximately $1.1 million, which is budgeted.
    Vessels are now scheduled for haul-out maintenance on a 3-4 year cycle.
        Question. What is the USGS doing to address the concerns raised by
    the Council of Lake Committees' Blue Ribbon Panel report and what
    measures will be used to improve communications and accountability for
    program delivery of the deep-water assessment program?
        Answer. To address the concerns raised by the Council of Lake
    Committees' (CLC) Blue Ribbon Panel report, the USGS and the CLC
    developed and entered into a Memorandum of Agreement (MOA) and a
    Memorandum of Understanding (MOU). These documents were designed to
    facilitate cooperation and establish new mechanisms for the USGS and
    the CLC to work in partnership. The MOA establishes specific dates for
    the USGS to provide the CLC with both budgetary and scientific
    information relative to the deepwater science program. The USGS has
    already provided the first two reports as outlined in the MOA to the
    CLC. In fiscal year 2004, an additional $1.0 million was appropriated
    for the Deepwater Science Program. To help re-build the Deepwater
    Science Program, seven additional FTEs were re-directed to the GLSC.
    The President's fiscal year 2005 budget maintains the 2004 $1.0 million
    increase and requests an additional $0.5 million for the Deepwater
    Science Program.

                              SUBCOMMITTEE RECESS

        Senator Burns. Thank you all very much. The subcommittee
    will stand in recess to reconvene at 9:30 a.m., Thursday, April
    1, in room SD-124. At that time we will hear testimony from the
    Honorable Charles W. Grim, Director, Indian Health Service.
        [Whereupon, at 11:27 a.m., Thursday, March 25, the
    subcommittee was recessed, to reconvene at 9:30 a.m., Thursday,
    April 1.]

      DEPARTMENT OF THE INTERIOR AND RELATED AGENCIES APPROPRIATIONS FOR
                                FISCAL YEAR 2005

                                  ----------

                            THURSDAY, APRIL 1, 2004

                                           U.S. Senate,
               Subcommittee of the Committee on Appropriations,
                                                        Washington, DC.
        The subcommittee met at 9:36 a.m., in room SD-124, Dirksen
    Senate Office Building, Hon. Conrad Burns (chairman) presiding.
        Present: Senators Burns, Stevens, Domenici, and Dorgan.

                    DEPARTMENT OF HEALTH AND HUMAN SERVICES

                             Indian Health Service

    STATEMENT OF CHARLES W. GRIM, D.D.S., M.H.S.A.,
                ASSISTANT SURGEON GENERAL, DIRECTOR
    ACCOMPANIED BY:
            EUGENIA TYNER-DAWSON, ACTING DEPUTY DIRECTOR
            GARY J. HARTZ, ASSISTANT SURGEON GENERAL, ACTING DIRECTOR,
                OFFICE OF PUBLIC HEALTH
            ROBERT G. MC SWAIN, M.P.A., DIRECTOR, OFFICE OF MANAGEMENT
                SUPPORT
            WILLIAM C. VANDERWAGEN, M.D., ACTING CHIEF MEDICAL OFFICER

                   OPENING STATEMENT OF SENATOR CONRAD BURNS

        Senator Burns. It's a long drive from Regent; probably had
    traffic in Fargo on the way in this morning. We'll call this
    subcommittee hearing to order. Thank you very much for coming
    and good morning.
        We have Dr. Chuck Grim, Director of the Indian Health
    Service, and some of his colleagues here this morning to review
    the Indian Health Service budget for fiscal year 2005.
        Indian health services are delivered to more than 1.6
    million American Indians and Alaskan Natives through a system
    that employs over 15,000 people and operates close to 600
    health facilities, including 49 hospitals, 236 health centers,
    and more than 300 health stations. Proposed funding for the
    Agency in fiscal year 2005 is $2.97 billion, an overall
    increase of $46 million above the current year enacted level.
        I'd just like to go over a few highlights of the budget
    request: an additional $18 million for Contract Health
    Services, and we'll be talking more about that this morning
    because every time I go home this is what I hear; $23 million
    to meet staffing requirements at newly-constructed facilities;
    an additional $10 million for sanitation facilities
    construction; and $2 million for a disease prevention
    initiative. There are also a few gaps in this proposal, chief
    among them the proposed $53 million reduction to the health
    facilities construction account. That recommendation probably
    will not be very popular with most of our subcommittee members
    who, for the most part, have supported doing more and not less
    to replace some of the facilities that we have that are getting
    into the senior age status.
        In the next few days, Congress is expected to conference
    and pass a budget resolution. Shortly after that the
    subcommittee will receive its allocation and the real work will
    begin. It is doubtful that we will have much in the way of
    additional resources to distribute to the agencies funded
    through this bill given the realities of defense and homeland
    security spending. Let me assure you, however, we will work
    closely with you, Dr. Grim, and your staff in an effort to
    address the highest priorities of your Agency and, of course,
    the health care needs of our Native Americans.

                               PREPARED STATEMENT

        Dr. Grim, thank you for being with us today. We look
    forward to your testimony. This is the first time you've been
    up before this committee and we appreciate the service that
    you've chosen in your line of work. I know that sometimes it
    has great challenges but nonetheless you appear to be a man
    that's up to those challenges.
        [The statement follows:]

                   Prepared Statement of Senator Conrad Burns

        Good morning. Today we have Dr. Chuck Grim, Director of the Indian
    Health Service, and some of his colleagues here with us to review the
    Indian Health Service budget for fiscal year 2005.
        Indian health services are delivered to more than 1.6 million
    American Indians and Alaska Natives through a system that employs over
    15,000 people at close to 600 health facilities, including 49
    hospitals, 236 health centers, and more than 300 health stations.
    Proposed funding for the agency in fiscal year 2005 totals $2.97
    billion, an overall increase of $46 million above the current year
    enacted level.
        Program highlights include:
      --an additional $18 million for Contract Health Services;
      --$23 million to meet staffing requirements at newly constructed
            facilities;
      --an additional $10 million for sanitation facilities construction;
            and
      --$2 million for a Disease Prevention initiative.
        There are also a few gaps in this budget proposal, chief among them
    a proposed $53 million reduction to the facilities construction
    account. That probably won't be too popular with our subcommittee
    members, who for the most part are supportive of doing more not less to
    replace health facilities that can be as much as 100 years old.
        In the next few days, Congress is expected to conference and pass a
    budget resolution. Shortly after that, this subcommittee will receive
    its allocation and the real work will begin. It is doubtful that we
    will have much in the way of additional resources to distribute to the
    agencies funded through this bill, given the realities of defense and
    homeland security spending. Let me assure you, however, we will work
    closely with you in an effort to address the highest priorities for
    your agency and Native Americans.
        Dr. Grim, thank you for being with us today. We look forward to
    your testimony and appreciate the opportunity to discuss the budget
    proposal with you.

        Senator Burns. I'm pleased this morning to be joined by my
    friend from North Dakota, Senator Dorgan, the ranking minority
    member of this subcommittee.

                  OPENING STATEMENT OF SENATOR BYRON L. DORGAN

        Senator Dorgan. Mr. Chairman, thank you for that. You have
    a warped sense of direction, however, if you think that you
    drive through Fargo coming from Regent. But, Montanans have
    never had an acute sense of direction. You have good judgement
    in other areas so we will overlook that this morning.
        Senator Burns. You don't go east to get to here? You don't
    go through Fargo?
        Senator Dorgan. No, you go through Aberdeen.
        Senator Burns. That's worse yet because you probably go
    through Shelby.
        Senator Dorgan. Mr. Chairman and Dr. Grim, first of all let
    me say something about the Indian Health Service staff out
    around the country. I don't know much about you three, though
    Mr. Hartz was well educated, I know, at the University of North
    Dakota. But I must say the Indian Health Service staff that I
    have met around the country are extraordinary men and women.
    They're not paid a lot, they don't do this because they're
    maximizing income, they do that because they want to provide
    health care and assistance to people who desperately need it.
    And I walk away every time I visit one of those clinics and
    those areas where I see Indian Health Service employees and I
    think what a remarkable thing and how blessed we are that
    they've decided to commit their lives to this thing. So I just
    want you to know that, number one.
        Number two, the Indian Health Service is dramatically
    underfunded and we are pretending, every year as we deal with
    these issues, we pretend that we're providing good health care
    and we're not. And it has nothing to do with you or your staff;
    you don't have the money. We're spending about 50 percent less
    on health care for American Indians than we are--per person--
    than we are for Federal prisoners and we're responsible for
    both. When we incarcerate someone we're responsible for their
    health and we commit money to provide for their health. And we
    are also responsible, under our trust responsibility, for
    Indian health. And yet we underfund that by about 50 percent
    relative to that which we spend for Federal prisoners. And one
    has a good reason, it seems to me, to ask why. And I won't go
    through the list.
        I'm going to ask a series of questions today, and they are
    not questions meant to, in any way, describe malfeasance on the
    part of your Agency but they are meant to describe the sense of
    warped priorities we have. You know, I remember just recently--
    and colleagues are tired and probably my colleague from Montana
    is tired of hearing me say this--but just recently, with
    precious little debate, we shipped off nearly $20 billion to
    reconstruct Iraq, build children's hospitals, buy garbage
    trucks, and God knows what else we're doing with $20 billion.
    To try to soak just a little bit of extra money out of the
    Federal budget to build the Indian Health Service budget to
    where it ought to be is almost impossible because we just want
    to pretend that we're doing the right thing. And we're not,
    we're just not. It is not the priority it should be.
        You're a dentist, Dr. Grim, I believe.
        Dr. Grim. Yes sir.
        Senator Dorgan. And you know, I visited the dental
    facilities at Standing Rock and you see a dentist in a trailer
    house serving 5,000 people and that's not--and incidentally,
    when you see so many American Indians with teeth missing it's
    for a good reason, because they can't get a tooth replaced when
    it's pulled, as you know, so that has health consequences. So
    there's so much going on.
        I just got off the phone a few minutes ago with some family
    members of a 14-year-old girl who hung herself on Tuesday on
    the Spirit Lake Nation Reservation and the Indian Health
    Service people and others there told me that that's not
    unusual. I mean, this little 14-year-old girl's sister hung
    herself as well, 2 years ago, committed suicide. We have a
    full-scale crisis in health care and the fact is the budget
    that you are here to represent, and you must represent it
    because you're part of the administration, will actually cause
    us to lose ground because you don't have a budget request that
    meets the population increase; you don't have a budget request
    that meets just the continuing needs. And so I'm going to ask a
    series of questions about that today. And again, I started
    deliberately because I wanted to thank the people who work in
    the IHS but we should stop pretending; we are not doing right
    by American Indians with respect to the health care budget that
    we have proposed. Not just this year but every year. Not just
    under this administration but under previous administrations as
    well. And we ought to decide, finally, it's our responsibility
    to begin doing the right thing.
        So Mr. Chairman, thank you very much.
        Senator Burns. Thank you, Senator Dorgan. Dr. Grim, we look
    forward to your statement.

                    SUMMARY STATEMENT OF DR. CHARLES W. GRIM

        Dr. Grim. Thank you sir. I want to thank both of you, too,
    for your opening comments and for your understanding and for
    the support that you've given the Indian Health Service and our
    programs over the years. Your committee has a great
    understanding of our program.
        My name is Dr. Charles W. Grim, the Indian Health Service
    Director, and I'm here accompanied by two people at the table,
    Dr. Craig Vanderwagen, our Acting Chief Medical Officer and Mr.
    Gary Hartz, our Acting Director for the Office of Public
    Health. I also have a number of staff with me here in the
    audience so that we can try to get answers to your questions
    should you pose some that we're not able to answer. I'll be the
    only one making an opening statement and then we'll take any
    questions you'd be pleased to ask.
        I'm very pleased today to have this opportunity to testify
    on the President's fiscal year 2005 budget request for IHS.
    I'll make just some brief remarks and ask that my written
    statement be entered into the record.
        Senator Burns. Without objection, it will be.
        Dr. Grim. I'm here to provide information on behalf of the
    President, the Secretary, and the IHS for the programs that are
    critical to achieving our shared goals of health promotion,
    disease prevention and the elimination of health disparities
    among all Americans. The budget request contains an $82 million
    increase for our health services programs. That will allow us
    to add up to four new epidemiology centers and increase support
    for the existing seven centers that we already have. It would
    allow us to add 30 new community health aides or practitioners
    to provide service in Alaska native communities, raising the
    number of aides and practitioners to 516. It also has funds to
    cover some of the mandatory Federal pay costs and provide
    tribally run health programs with funds for comparable pay
    raises for their staffs. We've also asked for an additional $18
    million for Contract Health Services, which was mentioned in
    your opening comments, and an additional $2 million is
    requested to expand our existing health promotion and disease
    prevention initiatives at the local community level.

                                   FACILITIES

        Our request on the facilities side includes an additional
    $23 million to add staffing for five out-patient facilities
    that are scheduled to open during fiscal year 2005. Those are
    the Pinon and West Side Health Centers in Arizona, the Dulce
    Health Center in New Mexico, the Idabel facility in Oklahoma
    and the Annette Island Health Center in Alaska. When fully
    operational, these facilities will double the number of primary
    care provider visits and bring new services to these sites.

                            SANITATION CONSTRUCTION

        We've also requested $103 million for sanitation
    construction--that's an increase of $10 million or 11 percent
    over our fiscal year 2004 level--to be able to provide safe
    water and waste disposal systems to Indian communities.
    Specifically, the President's budget request supports the
    provision of safe water and waste disposal to an estimated
    22,000 additional homes.

                      HEALTH CARE FACILITIES CONSTRUCTION

        There's also a $42 million request to fund the completion
    of out-patient facilities construction at Red Mesa, Arizona,
    and Sisseton, South Dakota, and to provide necessary staff
    housing for the health facilities at Zuni, New Mexico, and
    Wagner, South Dakota. When completed, these out-patient
    facilities will provide an additional 36,000 primary care
    provider visits, replace the 68-year-old Sisseton Hospital, and
    bring 24-hour emergency care services to the Red Mesa area for
    the first time ever. The IHS is also going to be able to add 13
    units of staff quarters and replace 16 house trailers that were
    built over 40 to 50 years ago. Having this new decent local
    housing will make it easier for us to recruit and retain health
    care professionals at these sites.
        In addition to the increased request for sanitation
    facilities, there's also an increased request for facilities
    and environmental health support. In addition to providing
    funds for the provision of health care services to Indian
    people on or near reservations, our 2005 budget request also
    includes $32 million to help support 34 urban Indian health
    organizations that provide services in cities with large
    numbers of Indian people.

                     NATIONAL BUDGET PRIORITIES/CONSTRAINTS

        The budget request for the IHS continues to reflect the
    commitment of the President and the Secretary to meeting the
    health needs of Indian people within the scope of national
    priorities. The President's overall request provides
    substantial increases to improve our Nation's security and win
    the war on terror. It also increases funding for key priorities
    such as economic growth and job creation, education, and
    affordable health care, which are all key factors in
    influencing the health status of our people. To fund these
    priorities, the President's national budget request restrains
    overall increases in spending in other areas of the government
    and in discretionary programs to less than 1 percent. In
    support of the President's key priorities, his proposal for the
    Department of Health and Human Services discretionary budget
    authority is a 1.2 percent increase over fiscal year 2004 and
    the IHS request for 2005 exceeds the 1 percent national
    discretionary average and the 1.2 percent average for HHS. The
    IHS budget request is an increase of 1.6 percent, or $46
    million over the fiscal year 2004 enacted level. The total
    proposed budget authority for us in 2005 then is at $3 billion
    and, if you add in funds from health insurance collections
    estimated at $593 million, the designated diabetes
    appropriations of $150 million and $6 million for staff
    quarters rental collections, it increases our proposed budget
    from $3 billion to $3.7 billion in program-level spending. This
    increase will allow the continuation of quality health care
    services to Indian people and this increase above the national
    and HHS discretionary averages reflects the Department's tribal
    budget consultations and a continuing Federal Government
    commitment to provide for the health of members of federally-
    recognized tribes.

                          OVERALL DEPARTMENTAL BUDGET

        The President's budget request for IHS must also be
    considered in the context of the proposed increases for the
    Department overall. Fortunately, we no longer exist in an era
    where the IHS is viewed by the Department as the sole source
    and agent for improving the health of Indian people. That
    responsibility has expanded to include all programs of the
    Department. An example of an increase elsewhere that will
    benefit Indian people and also the IHS is the Medicare
    Prescription Drug Improvement and Modernization Act of 2003.
    Items in this Act that are particularly important to the IHS,
    tribal, and urban Indian health programs include: a provision
    to increase the reimbursement rates for rural ambulance
    services, which will benefit numerous isolated tribal ambulance
    programs throughout Indian country; a provision that authorizes
    reimbursement to IHS and tribal health facilities for emergency
    services provided to undocumented aliens, which is particularly
    important for IHS and tribal facilities in remote border
    locations of the United States; and a provision that requires
    Medicare participating hospitals to accept Medicare rates as
    payment in full when providing in-patient hospital services to
    IHS beneficiaries who are referred for care, which is going to
    allow us to save more money in our Contract Health Services
    budget. There's also a 5-year authorization of reimbursement
    for increased Medicare B services, which will allow us to
    increase our billings in that arena. And there are changes in
    critical access hospital reimbursements that are going to
    benefit many of our rural IHS and tribal hospitals. They've
    also increased the disproportionate share of low-income and
    uninsured patient rate from 5.25 to 12 percent and nearly all
    of our hospitals will benefit from that.
        There are also provisions in that bill to support health
    promotion and disease efforts and, beginning this year, all
    newly enrolled Medicare beneficiaries will be covered for an
    initial physical exam, electrocardiogram and cardiovascular
    screening, blood tests, and those at risk will be covered for a
    diabetes screening test. Before this legislation was enacted,
    the IHS and tribes were providing these services but now we
    will be able to seek reimbursement for them, which will extend
    our health dollars even further.
        Overall, the combination of budget increases and additional
    purchasing power provided by that Medicare Modernization Act
    will allow for the purchase of an estimated 35,000 additional
    out-patient visits or 3,000 additional in-patient days of care.

                               PREPARED STATEMENT

        I want to thank you for the opportunity to discuss the
    fiscal year 2005 President's budget request for the IHS and
    again I'd like to thank this subcommittee for their support
    over the years to ensure that the IHS can continue to help
    American Indian and Alaska Native people across the Nation. I
    would be pleased, Mr. Chairman, to answer any questions that
    you have today.
        [The statement follows:]

                   Prepared Statement of Dr. Charles W. Grim

        Mr. Chairman and Members of the Subcommittee: Good morning. I am
    Dr. Charles W. Grim, Director of the Indian Health Service. Today I am
    accompanied by Ms. Eugenia Tyner-Dawson, Acting Deputy Director, Dr.
    William Craig Vanderwagen, Acting Chief Medical Officer, Mr. Gary J.
    Hartz, Acting Director, Office of Public Health, and Mr. Robert G.
    McSwain, Director, Office of Management Support. We are pleased to have
    this opportunity to testify on the President's fiscal year 2005 budget
    request for the Indian Health Service.
        The IHS has the responsibility for the delivery of health services
    to more than 1.6 million members of Federally-recognized American
    Indian (AI) tribes and Alaska Native (AN) organizations. The locations
    of these programs range from the most remote and inaccessible regions
    in the United States to the heavily populated and sometimes inner city
    areas of the country's largest urban areas. For all of the AI/ANs
    served by these programs, the IHS is committed to its mission to raise
    their physical, mental, social, and spiritual health to the highest
    level, in partnership with them.
        Secretary Thompson, too, is personally committed to improving the
    health of AI/ANs. To better understand the conditions in Indian
    country, the Secretary or Deputy Secretary has visited Tribal leaders
    and Indian reservations in all twelve IHS areas, accompanied by senior
    HHS staff. The Administration takes seriously its commitment to honor
    its obligations to AI/ANs under statutes and treaties to provide
    effective health care services.
        Through the government's longstanding support of Indian health
    care, the IHS, Tribal, and Urban (I/T/U) Indian health programs have
    demonstrated the ability to effectively utilize available resources to
    improve the health status of AI/ANs. For example, there have been
    dramatic improvements in reducing mortality rates for certain causes
    from the three year periods of 1972-1974 to 1999-2001, such as maternal
    deaths decreased 58 percent, infant mortality decreased 64 percent, and
    unintentional injuries mortality decreased 56 percent. More recently,
    the funding for the Special Diabetes Program for Indians has
    significantly enhanced diabetes care and education in AI/AN
    communities, as well as building the necessary infrastructure for
    diabetes programs. Intermediate outcomes that have been achieved since
    implementation of the Special Diabetes Program for Indians include
    improvements in the control of blood glucose, blood pressure, total
    cholesterol, LDL cholesterol, and triglycerides. In addition, treatment
    of risk factors for cardiovascular disease has improved as well as
    screening for diabetic kidney disease and diabetic eye disease.
        Although we are very pleased with the advancements that have been
    made in the health status of AI/ANs, we recognize there is still
    progress to be made. As the Centers for Disease Control and Prevention
    recently reported, the AI/AN rates for chronic diseases, infant
    mortality, sexually transmitted diseases, and injuries continue to
    surpass those of the white population as well as those of other
    minority groups. The 2002 data show that the prevalence of diabetes is
    more than twice that for all adults in the US, and the mortality rate
    from chronic liver disease is more than twice as high. The sudden
    infant death syndrome (SIDS) rate is the highest of any population
    group and more than double that of the white population in 1999. The
    AI/AN death rates for unintentional injuries and motor vehicle crashes
    are 1.7 to 2.0 times higher than the rates for all racial/ethnic
    populations, while suicide rates for AI/AN youth are 3 times greater
    than rates for white youth of similar age. Maternal deaths among AI/ANs
    are nearly twice as high as those among white women.
        The type of health problems confronting AI/AN communities today are
    of a more chronic nature. The IHS public health functions that were
    effective in eliminating certain infectious diseases, improving
    maternal and child health, and increasing access to clean water and
    sanitation, are not as effective in addressing health problems that are
    behavioral in nature, which are the primary factors in the mortality
    rates noted previously. Other factors affecting further progress in
    improving AI/AN health status are the increases in population and the
    rising costs of providing health care. The IHS service population is
    increasing by nearly 2 percent annually and has increased 24 percent
    since 1994.
        This budget request for the IHS will assure the provision of
    essential primary care and public health services for AI/ANs. For the
    seventh year now, development of the health and budget priorities
    supporting the IHS budget request originated at the health services
    delivery level. As partners with the IHS in delivering needed health
    care to AI/ANs, Tribal and Urban Indian health programs participate in
    formulating the budget request and annual performance plan. The I/T/U
    Indian health program health providers, administrators, technicians,
    and elected Tribal officials, as well as the public health
    professionals at the IHS Area and Headquarters offices, combine their
    expertise and work collaboratively to identify the most critical health
    care funding needs for AI/AN people.
        The President's budget request for the IHS will assist I/T/U Indian
    health programs to maintain access to health care by providing $36
    million to fund pay raises for Federal employees as well as funds for
    Tribal and Urban programs to provide comparable pay increases to their
    staff. Staffing for five newly constructed health care facilities is
    also included in the amount of $23 million. When fully operational,
    these facilities will double the number of primary provider care visits
    that can be provided at these sites and also provide new services. The
    budget also helps maintain access to health care through increases of
    $18 million for contract health care and $2 million for the Community
    Health Aide/Practitioner program in Alaska. The increase for CHS,
    combined with the additional purchasing power provided in Section 506
    of the recently enacted Medicare Prescription Drug, Improvement, and
    Modernization Act, will allow the purchase of an estimated 35,000
    additional outpatient visits or 3,000 additional days of inpatient
    care.
        As mentioned previously, the health disparities for AI/ANs cannot
    be addressed solely through the provision of health care services.
    Changing behavior and lifestyle and promoting good health and
    environment is critical in preventing disease and improving the health
    of AI/ANs. This budget supports these activities through requested
    increases of $15 million for community-based health promotion and
    disease prevention projects, expanding the capacity of Tribal
    epidemiology centers, and providing an estimated 22,000 homes with safe
    water and sewage disposal. An additional $4.5 million is requested for
    the Unified Financial Management System. This system will consolidate
    the Department's financial management systems into one, providing the
    Department and individual operating division management staff with more
    timely and coordinated financial management information. The requested
    increase will fully cover the IHS' share of costs for the system in
    fiscal year 2005 without reducing other information technology
    activities.
        The budget request also supports the replacement of outdated health
    clinics and the construction of staff quarters for health facilities,
    which are essential components of supporting access to services and
    improving health status. In the long run, this assures there are
    functional facilities, medical equipment, and staff for the effective
    and efficient provision of health services. The average age of IHS
    facilities is 32 years. The fiscal year 2005 budget includes $42
    million to complete construction of the health centers at Red Mesa,
    Arizona and Sisseton, South Dakota; and complete the design and
    construction of staff quarters at Zuni, New Mexico and Wagner, South
    Dakota. When completed, the health centers will provide an additional
    36,000 primary care provider visits, replace the Sisseton hospital,
    which was built in 1936, and bring 24 hour emergency care to the Red
    Mesa area for the first time.
        The IHS continues its commitment to the President's Management
    Agenda through efforts to improve the effectiveness of its programs.
    The agency has completed a Headquarters restructuring plan to address
    Strategic Management of Human Capital. To Improve Financial Performance
    and Expand E-Government, the IHS participates in Departmental-wide
    activities to implement a Unified Financial Management System and
    implement e-Gov initiatives, such as e-grants, and Human Resources
    automated systems. This budget request reflects Budget and Performance
    Integration at funding levels and proposed increases based on
    recommendations of the Program Assessment Rating Tool (PART)
    evaluations. The IHS scores have been some of the highest in the
    Federal Government.
        The budget request that I have just described provides a continued
    investment in the maintenance and support of the I/T/U Indian public
    health system to provide access to high quality medical and preventive
    services as a means of improving health status. In addition, this
    request reflects the continued Federal commitment to support the I/T/U
    Indian health system that serves AI/ANs.
        Thank you for this opportunity to discuss the fiscal year 2005
    President's budget request for the IHS. We are pleased to answer any
    questions that you may have.

                   Biographical Sketch of Dr. Charles W. Grim

        Charles W. Grim, D.D.S., is a native of Oklahoma and a member of
    the Cherokee Nation of Oklahoma. As the Director of the Indian Health
    Service (IHS), he is an Assistant Surgeon General and holds the rank of
    Rear Admiral in the Commissioned Corps of the Public Health Service. He
    was appointed by President George W. Bush as the Interim Director in
    August 2002, received unanimous Senate confirmation on July 16, 2003,
    and was sworn in by Tommy G. Thompson, Secretary of Health and Human
    Services, on August 6, 2003 in Anchorage, Alaska.
        As the IHS Director, he administers a nationwide multi-billion
    dollar health care delivery program composed of 12 administrative Area
    (regional) Offices, which oversee local hospitals and clinics. The IHS
    is responsible for providing preventive, curative, and community health
    care to approximately 1.6 million of the Nation's 2.6 million American
    Indians and Alaska Natives. The IHS is the principal federal health
    care provider and health advocate for Indian people.
        Dr. Grim graduated from the University of Oklahoma College of
    Dentistry in 1983 and began his career in the IHS with a 2-year
    clinical assignment in Okmulgee, OK, at the Claremore Service Unit. Dr.
    Grim was then selected to serve as Assistant Area Dental Officer in the
    Oklahoma City Area Office. As a result of his successful leadership and
    management of the complex public health dental program, he was
    appointed as the Area Dental Officer in 1989 on an acting basis.
        In 1992, Dr. Grim was assigned as Director of the Division of Oral
    Health for the Albuquerque Area of the IHS. He later served as Acting
    Service Unit Director for the Albuquerque Service Unit, where he was
    responsible for the administration of a 30-bed hospital with extensive
    ambulatory care programs and seven outpatient health care facilities.
    Dr. Grim was later appointed as the permanent Director for the Division
    of Clinical Services and Behavioral Health for the Albuquerque Area and
    had the responsibility for working with all health related programs at
    the Area level. Dr. Grim was then appointed Acting Executive Officer
    for the Albuquerque Area, one of three top management officials for the
    two-state region, and was responsible for the fiscal and administrative
    leadership of the Area.
        In April 1998, Dr. Grim transferred to the Phoenix Area IHS as the
    Associate Director for the Office of Health Programs. In that role, he
    focused on strengthening the Phoenix Area's capacity to deal with
    managed care issues in the areas of Medicaid and the Children's Health
    Insurance Program of Arizona. He also led an initiative within the Area
    to consult with Tribes about their views on the content to be included
    in the reauthorization of the Indian Health Care Improvement Act,
    Public Law 94-437.
        In 1999, Dr. Grim was appointed as the Acting Director of the
    Oklahoma City Area Office, and in March 2000 he was selected as the
    Area Director. As Area Director, Dr. Grim managed a comprehensive
    program that provides health services to the largest IHS user
    population, more than 280,000 American Indians comprising 37 Tribes.
    The geographic area of responsibility covers the states of Oklahoma,
    Kansas, and portions of Texas. Health care is provided through direct
    care, contract care, or tribally operated facilities. He was also a
    member of the Indian Health Leadership Council, composed of IHS,
    tribal, and urban Indian health program representatives. The Council is
    a decision making body of the agency that examines health care policy
    issues.
        In addition to his dentistry degree, Dr. Grim also has a master's
    degree in health services administration from the University of
    Michigan. Among Dr. Grim's honors and awards are the U.S. Public Health
    Service Commendation Medal (awarded twice), Achievement Medal (awarded
    twice), Citation, Unit Citation (awarded twice), and Outstanding Unit
    Citation. He has also been awarded Outstanding Management and Superior
    Service awards by the Directors of three different IHS Areas. He also
    received the Jack D. Robertson Award, which is given to a senior dental
    officer in the United States Public Health Service (USPHS) who
    demonstrates outstanding leadership and commitment to the organization.
        Dr. Grim is a member of the Commissioned Officers Association, the
    American Board of Dental Public Health, the American Dental
    Association, the American Association of Public Health Dentistry, and
    the Society of American Indian Dentists. Dr. Grim was appointed to the
    commissioned corps of the U.S. Public Health Service in July 1983.

        Senator Burns. Dr. Grim, thank you very much. I'm going to
    have about three questions and then I think we'll get a pretty
    good dialogue off of these three. I want to thank you for
    mentioning all of your wellness programs because we don't talk
    much about efforts to promote wellness on our reservations--one
    example is the screening programs that they'll be reimbursed
    for now to find out where our problems are and solve them early
    on. I'm also glad you mentioned the sanitation construction
    program. It seems like so many reservations we go to have real
    sanitation problems. I have two major water projects in
    Montana, ongoing now, that are high priority in my office; we
    want to complete those because I happen to believe that unclean
    water is probably the cause of a lot of our health problems.
    You can't believe what water, pure water, does for our
    wellness.
        Also in the area of diabetes, as you know it is more
    prevalent on our reservations than in the rest of the country.
    I'll want to know how you're doing there because we funnel more
    money into the diabetes fund and I want to know if we're making
    any headway, are we seeing any visible results, what is the
    impact of that money.

                            CONTRACT HEALTH SERVICES

        Contract Health Service dollars are critical because in
    Montana, and I think in other areas, too, where we're a long
    way from major IHS medical facilities, those services are met
    by hospitals and health care providers off the reservation.
    This becomes very expensive but it is also a very vital part of
    how we provide health services for our Native Americans. The
    IHS budget proposes to increase this program by about $18
    million for 2005.
        Give me your assessment of that proposal. Even though I
    know that it sounds like $18 million is a lot of money, if a
    shortfall exists in contract health care overall, can you give
    me an estimate of where we should be to provide adequate acute
    care through contract services? How many of the highest
    priority medical cases must be rejected annually because tribes
    just run out of money, and how far will this $18 million
    increase go to alleviate some of these problems? That's a
    pretty broad field.
        Dr. Grim. Yes sir, that's a lot of questions.
        Senator Burns. It's a lot of questions all in one, isn't
    it?
        Dr. Grim. I'll see if we can start addressing those and if
    we don't capture all of the ones that you asked please feel
    free to ask again.

                              $18 MILLION REQUEST

        As you can see in our budget, that $18 million request for
    increases other than our pay act inflationary increases is the
    largest increase that we asked for. That's one of the highest
    priority items in Indian country, that's the monies that we use
    to pay for care in the private sector that we cannot provide in
    our facilities. That $18 million in large part goes to help
    offset the inflation that will incur in that particular budget
    this year. Earlier I mentioned the Medicare Modernization Act.
    We've not been able to fully estimate the impact of that Act
    because its regulations have yet to be written, but we're
    working very closely with the Centers for Medicare/Medicaid
    Services. We've estimated that just the one that allows us to
    have Medicare-like rates in hospitals where we've not been able
    to get those before and had to pay full bill charges is going
    to allow us to extend our CHS budget another $8 to $9 million
    in specific locations across the IHS Areas.
        We're also working very, very hard to enhance our business
    practices all across the Indian Health Service. Prior to
    becoming Director of the Indian Health Service, I was the
    chairman of a business plan committee for the Agency that
    worked with all of our stakeholders to develop a business plan.
    One of the things that we're trying to do, as you know, our
    Contract Health Services budget is the payer of last resort and
    so we're doing everything we can in all of our facilities to
    exhaust other third-party resources that patients might have,
    like Medicare, Medicaid or private insurance. So we're trying
    to cover the front in all those arenas. We've asked for one of
    the largest increases in CHS; we're also looking at how
    Medicare modernization is going to affect our budget and then
    we're trying to enhance our business practices as well.
        It's very hard to answer your question about some of the
    highest priority claims, how many will be denied. We don't
    capture them by priority level but we do know that there are
    priority one claims, which are considered an immediate threat
    to life or limb that are denied throughout the course of the
    year. That particular budget is discretionary, not an
    entitlement-type program like Medicare and Medicaid, and so we
    are required to stay within our appropriation for that budget.
    I can give you, for the record, some overall numbers about
    denials and deferred services and things like that but we don't
    collect by priority one, two and three the way we medically
    categorize care, we don't capture it in that fashion to be able
    to tell you how many of the most urgent care needs are denied
    on an annual basis.
        Senator Burns. Well, I think maybe those are some numbers
    that this subcommittee should have and Congress should know
    about. And what I would do after this year's budget, I think I
    would probably have somebody go over that and see how much more
    money we would need to take care of what we should, even using
    good business practices and even going and trying to save money
    where we can.
        Tell me about the CHEF Program. That's along the same
    lines, I think.

                                  CHEF PROGRAM

        Dr. Grim. Yes sir.
        Senator Burns. It's meant to cover catastrophic illness.
    Tell me about that program; we're hearing a little bit of
    feedback from our reservations on that.
        Dr. Grim. Yes sir. That's a--you took the words right out
    of my mouth. That was the next statement I was going to make to
    you. The CHEF Program right now is funded at $18 million. Our
    overall CHS budget is approaching $500 million--I believe it's
    going to be about, if we get our request this year, in the $480
    plus range--and of that amount $18 million is taken off and set
    aside to handle catastrophic health emergency cases.
    Regulations set out the threshold that would have to be met by
    local contract health programs, and I believe for fiscal year
    2004 that amount is around $23,800. Whenever a facility spends
    more than that on a particular case, they apply to that fund
    and then they are reimbursed so that the catastrophic cases do
    not cause them to run out of funds early in the year. Congress
    raised CHEF from $15 million a few years ago up to $18 million,
    we have that authority, but that particular budget has been
    running out in about the third quarter of each year. And so in
    the fourth quarter of the fiscal year if any programs have
    catastrophic cases then they end up having to fund those
    themselves. We have estimates in our congressional
    justification that would indicate that probably $30 million
    would be needed in that fund to capture known cases but it's
    very hard to predict from year to year because of the expense
    of medical care and the unknown types of cases we might
    encounter.
        Senator Burns. I've got a couple of other questions
    before----
        Senator Dorgan. Why don't you finish up and I'll just----
        Senator Burns. Well I'm afraid you're going to wear your
    thumb out.
        Senator Dorgan. No.
        Senator Burns. Okay. In your epidemiology--auctioneers
    handle that pretty well, don't they?--your epicenters. Tell me
    about those. I understand that you have established some and I
    think you're short of what you want nationally but you're
    getting there.

                                  EPI CENTERS

        Dr. Grim. Yes sir. We currently have seven epidemiology
    centers and they're funded at approximately $300,000 each. And
    those seven centers really only cover about 50 percent of the
    American Indian and Alaska Native population. We have several
    large Areas of Indian population--Albuquerque, Navajo,
    Oklahoma, Billings, and California--that are not currently
    covered by epidemiology centers. So the money that we're
    requesting in this year's budget will allow us to add,
    hopefully, four new centers and to upgrade the existing centers
    by $100,000 each. As I said, we're funding them currently at
    $300,000; we estimate for them to be fully functional that they
    would need around $750,000. But those epidemiology centers take
    the money that we put in and they go after other grants,
    through States or through other programs, and are able to
    essentially use a lot of our money as seed money. Those centers
    have been very effective at working with tribes in those Areas
    to help them analyze the large amounts of health data that are
    gathered through our system. And we also work with CDC, NIH,
    and State health departments to try and bring in additional
    funding for those epicenters. So the funding that we're asking
    for this year would allow us to go out with another request for
    funding proposals and hopefully capture four more centers.
        Senator Burns. Senator Dorgan.

                              FUNDING DISPARITIES

        Senator Dorgan. Mr. Chairman, thank you very much. Dr.
    Grim, I mentioned in the opening statement the contrast between
    our responsibility as a Federal Government to provide for the
    health of Federal prisoners and the health of the American
    Indians. Could you and your staff at some point provide for me
    an estimate of what we would spend on the Indian Health Service
    if we provided funding for the health of American Indians at
    the same level that we provide for the health for Federal
    prisoners?
        Dr. Grim. Yes sir, we can provide that for you. I don't
    have those numbers before me.
        Senator Dorgan. I understand. But my cursory glance is that
    we spend, on a per capita basis about 50 percent more for
    Federal prisoners' health care than we do for American Indians.
        You know, you have a responsibility to come here on behalf
    of this budget and support the budget. I understand that, I'm
    not critical of that because that's your role. But you know and
    I know that you've described to us kind of like someone selling
    a car. You've said this is a great tail light and we've got a
    good door handle over here and I want you to see the shiny hood
    and we all directed our attention to what you wanted us to look
    at. But you know we're far short. Let me ask a couple
    questions.

                            CONTRACT HEALTH SERVICES

        Indian people have had their credit ruined, as you know,
    because they were able to access Contract Health Services that
    were approved and then the payments weren't made. These are
    health services they couldn't get on the reservation so they go
    to a hospital some place, get the health care and then the
    payment isn't made and they come back to the Indian for payment
    and he doesn't have the payment so their credit is ruined. So
    we're far short of what's needed for Contract Health Services,
    and my understanding is that if you need a hip replacement,
    just continue working; you can't get a hip replacement because
    of the rationing of care at the present time. Is that correct?
        Dr. Grim. Yes sir. Many places are unable to provide that
    level of service.
        Senator Dorgan. How about arthritis treatment?
        Dr. Grim. Again, it depends on the location. We have
    disparities of funding within the Service itself; some places
    are able to provide care for arthritis patients and others are
    not.
        Senator Dorgan. My understanding is that allergy testing,
    stress tests for diabetics who do not have signs of heart
    disease, these are things, for example, that would not be
    covered under Contract Health Services. And I simply describe
    that to point out that we're just so far short of where we need
    to be. Because you're a dentist, Dr. Grim, you know that
    dentists, I think, throughout the IHS, do not perform crown or
    bridge work. So if you go to a dentist on the reservation to
    have your tooth pulled you're going to walk around with an
    empty space because there's no crown or bridge work available.
    Is that correct?
        Dr. Grim. There are some places that are able to provide
    crown and bridge work but you are correct that as a whole we
    have very, very limited services that are provided in that
    realm.
        Senator Dorgan. And, with Federal prisoners, do we do crown
    or bridge work, I wonder?
        Dr. Grim. I'm not sure.
        Senator Dorgan. You wouldn't know that but I'm sure we do.
        Senator Burns. He's never been in prison.
        Senator Dorgan. Yeah. Let me ask a question. I mentioned to
    you about the young girl that committed suicide on Tuesday on
    the reservation and I think her name was Avis Littlewind; her
    aunt told us of this and then I called to find out what had
    happened there. You know, this is a reservation like virtually
    all of them; one social worker, one psychologist. They tell me
    that man, they just struggle to keep up. I had a hearing on
    this subject some long while ago and the young woman who was
    supposed to be in charge of the office dealing with these kids,
    and this was dealing with mental trauma and sexual abuse, child
    abuse, in the middle of the hearing she was testifying about
    what she's trying to do, she's been there about 6 months, in
    the middle of the hearing she just broke down and began sobbing
    and couldn't continue. She said you know, I just have to beg to
    get a car to take a kid to a clinic; I don't even have wheels
    to take a kid to a clinic. And then she just quit; 30 days
    later she quit. And you know, this is on the same reservation,
    incidentally. So I called these folks this morning. They're
    just woefully, dramatically understaffed relative to the load
    they have. Is there anything in this budget that's going to
    give them hope? As I read this budget, it looks like we're
    underfunding the Indian Health Service once again. We're not
    going to even meet inflation needs. Would you not agree?

                        MENTAL HEALTH/SUICIDE PREVENTION

        Dr. Grim. We have provided some funding increases for the
    mental health program in this budget along with the criteria
    that we were to lay out. And one of the things that we've done
    on top of that, since I've been in as the Director and
    realizing the huge tragedy that suicide causes in Indian
    country, I've started an initiative. When I initially became
    Director we had just the year before that received a $30
    million increase to our budget, one of the largest increases
    we'd received in a number of years. And so we worked with
    Indian country to determine how we would distribute those funds
    and one of the things that we've done recently is we've started
    a suicide initiative; we have increased the data collection
    methods that we use, we're able to now spot areas where there
    might be potential suicide clusters beginning. We've tested
    that software and we think averted a crisis in one particular
    Area because of the way the data's gathered at a national level
    now. I've also begun a suicide task force that's made up from
    representatives from all of our regions. They're scheduled to
    have their first meeting this summer in June and we're going to
    be working with them on various programs across the country.
    Any time that we have had suicide clusters and emergencies,
    we've dug into emergency funds to try to help those particular
    areas, to bring in experts.

                                PATIENT CONTACTS

        Senator Dorgan. But Dr. Grim, whether it's dental health,
    alcohol and substance abuse or mental health, in every case we
    have fewer patient contacts. More money but fewer patient
    contacts. Is that not the case?
        Dr. Grim. I would have to check the patient contact----
        Senator Dorgan. Well, let me give it to you from your
    evidence; 7,700 fewer patient contacts in the mental health
    despite the fact there's a $2.5 million increase; in dental
    health, 12,000 fewer patients; alcohol substance abuse 29,000
    fewer in-patient treatments, 13,000 fewer in-patient
    treatments. My point is, add a little money but actually don't
    keep pace with inflation and have less money actually for
    patient visits in all of these cases. Is that not the case?

                                  RECRUITMENT

        Dr. Grim. That is part of the problem, sir. Another part of
    the problem is recruitment efforts. We have, especially in
    dental, we have some very high vacancy rates right now, also in
    pharmacy and physicians and nursing we have some very high
    vacancy rates and we're doing as much as we can around
    recruitment and retention efforts. I have a huge new initiative
    that we've instituted within the Agency. The Secretary and the
    President have also agreed to strengthen the Commission Corps
    by 1,000 new officers; they've dedicated 275 of that new 1,000
    to the Indian Health Service in some of our most difficult-to-
    fill sites. So a portion of what you're saying about the
    inflationary issue is accurate and the other part of the story
    is the recruitment issue and the vacancies that we have.
        Senator Dorgan. Well, my time has expired. Our colleagues
    are here. I'm going to submit a list of questions to you. Let
    me again say that we're spending 50 percent less per person on
    Indian health than we are on health for the Federal prisoners
    in Federal prisons. And I think we're pretending. We have a
    health care crisis and we're pretending that we're sort of
    meeting it but we're really not and we need somehow to do much,
    much better. So I'll submit a series of questions.
        Let me again say thanks to the men and women of the Indian
    Health Service who are out there doing remarkable work in a
    dramatically underfunded area.
        Dr. Grim. I really appreciate that and I will make sure
    everywhere I go that I let them know this subcommittee had
    thanks for them.
        Senator Burns. Along the same lines of mental health, Art
    McDonald down on the Cheyenne, headed a program many years ago;
    we earmarked some money, $250,000, for the psychology program
    in Montana and there are just a few other schools that
    participate--University of North Dakota is one of those that
    gets an earmark for such programs. We've long been an advocate
    for this program and we just kind of struggled along but it's a
    model that I think that Art has made work down on the Cheyenne.
    So, he's a valuable resource and I'm pretty sure he'd make
    himself available if you would call on him.
        We've been joined by Senator Domenici of New Mexico and the
    chairman of the full committee. I don't know how full he is but
    he has joined us. Senator Domenici.

                     STATEMENT OF SENATOR PETE V. DOMENICI

        Senator Domenici. Thank you so much. I wanted to say to the
    Senator, it's good for me to find Senators that are willing to
    work on these issues. You know, I've been here for a long time
    and there weren't a lot of them. You take some of the issues,
    he takes some, I take some, and I think we're doing a much
    better job. There's no question, we must do better. But I thank
    you for what you do and I think you know there's been an
    enormous success, not relevant to this, but I just had an
    inventory done of how many new schools were built because we
    started 3 years ago with a notion of how it should be done.
    Compared to 10 years ago it's incredible what's being built for
    the kids in terms of new schools.

                                    DIABETES

        Dr. Grim, let me say there's many, many things we could
    talk about but I think when you see something that's just stark
    in your face you can't ignore it. Diabetes is it. I mean, we
    have some Indian tribes, as you know, that may have 50 percent
    diabetes. We also have showing up babies, kids, I don't mean
    babies but kids and most of them are Indian, with diabetes. So
    from my standpoint I'm deeply interested in your programs. You
    get some extra money.
        Dr. Grim. Yes sir.
        Senator Domenici. Because we, fortunately, put $150 million
    for America and $150 million for Indians. So that was a pretty
    big amount. In my State we have a number of centers. How many
    Indian tribes are working with those programs, do you know?
        Dr. Grim. Almost all tribes across the Nation are
    benefiting from that money. And I want to thank you, each and
    every one of you, that had a part in that $150 million; it's
    been put to great use by tribes across the Nation. We have over
    300 grantees that are being funded by that now and we have some
    great results that are starting to show up. As you know, in
    fiscal year 2004 we received the additional $50 million; prior
    to that the first 6 years had gotten up to $100 million. We
    also have a report that I think Congress would be very
    delighted to see that's going to be available very, very soon
    that's going to have a lot of information and a lot of
    statistics about the good things that money has helped us
    accomplish. Just to give you an example of some of the things
    that we've done, in 2002, 71 percent of our diabetes grant
    programs reported availability of community-based physical
    activity programs for children, youth and families. Prior to us
    having those funds available, only 10 percent of our programs
    had such activities. In 2002, 53 percent of our grant programs
    reported availability of school-based physical activity
    programs; prior to that only 22 percent of our school programs
    had things like that. Around nutrition education, prior to
    those funds being available only 20 percent of the programs out
    there had established nutrition activities for parents and
    families of school-age children; now we have 60 percent of our
    programs that have those sort of activities. This report that
    we'll be providing the Congress is just full of----
        Senator Domenici. When will that be ready?
        Mr. Hartz. Senator, that was the report that was requested
    prior to the reauthorization so we have that at the printers
    right now. So it'll be forthcoming.
        Senator Domenici. One of my questions was going to be,
    could you give us such a report?
        Mr. Hartz. Yes.
        Senator Domenici. You had previously said you would but we
    didn't seen it. So it'd be important that we look at it because
    diabetes is costing a lot of money and we understand dialysis
    requirements in Indian country are just skyrocketing and that's
    not very cheap in terms of the program but you've got to do
    them.
        Dr. Grim. Besides those programmatic sorts of indicators
    that we'll be able to show you, Senator, we'll also have
    clinical indicators, like Hemiglobin A1c that are markers, and
    we can show where we're seeing a strong downward trend in that,
    better control in our diabetics and I think you'll be very,
    very pleased to see how the money has been put to use and the
    type of impact it's had on the health of our Indian people.
        Senator Domenici. Well, I want to say, the chairman of the
    full committee truly helped us with that. The chairman of the
    subcommittee worked--and that actually happened sort of as a
    fluke when we did the balanced budget. Newt Gingrich and I
    right at the end said oh, we've done everything and we've got
    $60 million sitting here. Nobody understands how we could have
    it but we did. We decided to spend it since he was worried
    about diabetes and I had you all, I said well, why don't we
    split it? And he said between whom? I said Indians get half and
    diabetics get half; now we've gone on keeping that ratio.
        Dr. Grim. We certainly appreciate it. And I think you will
    see in this report that it's been money well spent.
        Senator Domenici. Okay. I want to switch for a minute. It's
    my understanding that the BIA's considering moving or
    establishing a children's hospital near Gallup, New Mexico.
    Would you please comment on the progress of that project.
        Dr. Grim. I'm not aware of that, Senator. We'll have to
    submit that for the record for you.
        Senator Domenici. Will you please?
        Dr. Grim. Yes sir.
        [The information follows:]

        The IHS is not aware of nor have we been involved in this project
    with the BIA.

                          GALLUP INDIAN MEDICAL CENTER

        Senator Domenici. Now we also understand that the regional
    hospital in Gallup, New Mexico, which I assume you've seen.
        Dr. Grim. Yes sir.
        Senator Domenici. Is very, very old and I understand that
    it is in need of replacement. What's happening on that front?
        Dr. Grim. In the 2000 Appropriations Committee report, the
    Indian Health Service was asked to take a look at all the
    facilities needs across Indian country. We're in the process
    right now of going through tribal consultation; we've had a
    committee that's put together recommendations; we've asked all
    of our regions to begin doing a health services master planning
    effort, and we'll be going out some time this summer with
    requests for consultation across the country on a new priority
    methodology to look at health care needs. We're hoping that
    will be a much broader and much more comprehensive look at the
    facilities health care needs than in our current system because
    over time Congress has given us some additional avenues other
    than our normal facilities appropriations like joint ventures
    and small ambulatory programs. Right now we still have four
    hospitals that are on our current priority list and five out-
    patient health facilities. Once those are completed that new
    list, the one that we're looking at now will be going into
    effect. Gallup's currently not on it but what Gallup has been
    doing with a lot of the monies that they raise through third
    party revenues and also with the maintenance and improvement
    funds that come through the Indian Health Service is to
    maintain and upgrade the facility as needed until we're going
    to be able to replace it.
        Senator Domenici. Well, I just want to say, anybody that
    would go there, especially since it's regional and right in the
    middle of the main effort with reference to diabetes, anybody
    that would look at that would, in my opinion, have to conclude
    that we can't continue to use it very much longer. It is truly
    a decrepit hospital compared to what we have in this country.
    And I'm not trying to usurp any committee or commission but I
    think we can't go so slow, we've got to get on with it. So I
    urge that that occur.
        Dr. Grim. Actually sir, they are in the process, I was just
    told, of completing a program justification document which is a
    necessity prior to getting on the list and we're in the process
    right now of a $10 to 12 million maintenance and improvement
    project with them to upgrade the facility until such time as it
    can be replaced.
        Senator Domenici. To upgrade the----
        Dr. Grim. Existing facility, yes.
        Senator Domenici. Yes. So what would I be able to tell
    these people that keep asking me? Can you put that in the human
    language instead of technical language? What about the
    hospital, Doctor? I'm telling the people in Gallup, so could
    you answer that?
        Mr. Hartz. Yes sir. I was out there within the last year or
    thereabouts and there's actually construction going on to the
    back of the hospital, between the hospital and the quarters to
    the south so that we can, as Dr. Grim was pointing out, address
    some of those facility needs because of the tremendous workload
    that comes into GIMC. And that's that $10 to $12 million that
    actually is underway.
        Senator Domenici. All right. Senator, I have some questions
    to submit. I'll just submit them, and I thank you very much,
    Mr. Chairman. They have to do with sanitation facilities, a
    terribly difficult problem; I'd like your views and in
    particular would like to know how we might put more emphasis on
    it.
        Dr. Grim. Yes sir.
        Senator Domenici. And professional staff shortages, I had
    some questions about it but if you've been asked, fine. I'm
    going to submit mine in the event there are not overlaps and
    ask you to answer.
        Dr. Grim. Be glad to respond to those, Senator.
        Senator Domenici. Thank you.
        Senator Burns. Thank you, Senator. Senator Stevens.

                        STATEMENT OF SENATOR TED STEVENS

        Senator Stevens. Well, thank you very much Mr. Chairman.
    I've just come by really to say hello to Dr. Grim and his
    colleagues and to thank Dr. Grim for coming to Alaska. Some of
    you may not know that Dr. Grim was sworn in in Anchorage, the
    first of the Indian Health Service directors that has been
    sworn in in Alaska; we consider that a great honor. And it's
    important to us because I think we have the highest percentage
    of Native people of any State in the union. It's approaching
    one-fifth of our population now, double the percentage of any
    other State. Of course, we have a small population base so that
    makes them even more important. I think that it's the only
    place where the Indian Health Service, working with the Native
    people, allows them the greatest role in management, which has
    led to our people having even higher regard for the system
    because they're directly involved in it.
        I think that when you look at it we've got to work to
    improve the situation with regard to funding. I agree with
    that. The budget caps are very tight right now but we believe
    we get more for the dollar up there because of our telehealth
    program that you have helped pioneer and people from all over
    are now coming to study it, I understand. So I hope we can work
    together with the chairman and this subcommittee to make sure
    we get the resources for a lasting Community Health Aide
    Program.
        I was visited, Doctor, by the American Dental Association;
    they're seeking to partner with you and our regional
    corporations through their non-profit subsidiaries that deal
    with health problems to see if we can't use the facilities of
    the Community Health Aides for dental services which they will
    see if they can't actually raise the money to pay for traveling
    dental assistants to come right to the villages and we may have
    to put some facilities in those community health--well, there
    are community health facilities there but we have to put dental
    facilities in them if we're going to work with the dental
    people. So I would encourage you to do that.
        We have inadequate Native hospitals in Nome and Barrow that
    we're going to have to replace; I don't know where they are on
    the list yet but----
        Dr. Grim. They're close.
        Senator Stevens. They're close? I understand that we've
    waited our turn before. But clearly the one concept we don't
    have adequate control over is substance abuse, particularly
    among the village children. So, Mr. Chairman, we have lots to
    do. Maybe when you come up you might take a trip out to a few
    Native villages this year.
        Senator Burns. Yes. I tell you what I'd like to see up
    there because we're trying to design the same kind of
    telemedicine program on our reservations up in Montana. In
    fact, we've made great strides in that respect as you have made
    up there. You know they say necessity is the mother of
    invention and imagination is necessary when you've got
    distances to cover like both of our States. Ours is not the
    magnitude of yours but nonetheless we still have a tremendous
    distance to cover whenever we start providing health care
    services.
        We looked, in the State of Montana, when you get in the
    rural areas where you have an aging population. I mean, we're
    going to have to deliver health care services in a different
    way. And of course, I don't think there's been anybody that's
    been as much on the cutting edge as Senator Stevens has and
    both of us have worked on wireless technologies in rural areas,
    where we can use that tremendous technology and do broadband
    and move lots of information and take care of lots of things.
    And I appreciate your interest in that because it's been an
    interest of mine ever since we started talking about
    telecommunications and revamping that whole area over the last
    10 to 12 years now, and the 1996 Act.
        I also have some more questions but----
        Senator Stevens. Senator, if I could point out to you, I've
    just come back from Iraq and Afghanistan. Those two nations
    would fit into my State and leave room for your State.
        Senator Burns. We might move it up there. We're getting a
    little----
        Senator Stevens. Well, we're spending a lot of money in
    those two nations and I'm not opposed to it but I do think when
    we get through this current phase of trying to help some people
    overseas that we ought to start bringing back some of that
    money and putting it to work in States like yours and mine.
        Senator Burns. Yes.
        Senator Stevens. But the distances in ours are just mind
    boggling when it comes to delivering health care and that's all
    there is to it. And I pointed that out to the dental people
    when they came in and I hope that they visit with you and you
    bring some reality to their minds about how to deliver dental
    care along with the health care that you have pioneered so much
    in our State.
        Senator Burns. We look forward to coming up.
        Senator Stevens. I think you should visit a couple
    villages.
        Senator Burns. Well, you know, I sent my number one agent
    up there and she spent 30 days with your health service.
        Senator Stevens. He's talking about his daughter.
        Dr. Grim. I was trying to recruit her this morning, too.
        Senator Burns. Oh, were you up there when she did that 30-
    days?
        Dr. Grim. I wasn't there.
        Senator Burns. Well she came back and she said if you think
    we've got problems in Montana, you want to come up here, Pop.
        Senator Stevens. I think she went to where there's more men
    available; women outnumber us in Alaska now, did you know that?
        Senator Burns. Women outnumber you guys?
        Senator Stevens. Yes.
        Senator Burns. That's the way it was at the University of
    Missouri. When I was at school there we had Stevens and
    Christian Colleges; wasn't a bad place to go to school, you
    know.
        Senator Stevens. Thank you very much, Doctor.
        Dr. Grim. Thank you, thank you Senator Stevens.
        Senator Stevens. We're drifting aside here.
        Senator Burns. We've got some other things that we'll talk
    about in the weeks ahead and we really can't say yay or nay to
    anything this morning, Dr. Grim, as you well know. The budget
    resolution, we hope, gets done this week, and our allocations
    come out. And then we'll start the real work of trying to cover
    those bases that we understand. But we've got mutual problems
    and I understand the problems you have and we all have in this
    area. But a lot of people don't realize that we also have other
    means of providing services to our reservations other than the
    Indian Health Service so when you look at that money when it
    comes in it's not as bad as it sounds but it could be better.
    And we're going to continue to try to increase those facilities
    and everything else in the way we deliver our services.
        Thank you for your service, all three of you, and all the
    men and women of the Indian Health Service. We appreciate that
    and we see its evidence every day in my State of Montana.

                         ADDITIONAL COMMITTEE QUESTIONS

        We're going to hold the record open for a couple of weeks.
    If there are any questions coming from other subcommittee or
    full committee members we ask that you respond to them and to
    this committee and thank you for your appearance this morning.
        Dr. Grim. Thank you, Mr. Chairman.
        [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 Conrad Burns

                           ASSESSMENTS/REIMBURSEMENTS

        Question. It is estimated that IHS will reimburse the Department of
    Health and Human Services for over $40 million worth of services in
    fiscal year 2005. In addition, assessments to the IHS operating budget
    for participation in Department-wide initiatives and government-wide
    administrative functions is estimated to be another $440,000.
        What types of reimbursable services does the Department provide to
    IHS?
        Answer. The Department provides the following types of services:
      --Human Resource Services: automated personnel and payroll systems
            and payroll processing.
      --Commissioned Personnel Services: active duty payroll, personnel
            management systems and support, and recruitment for active-duty
            Public Health Service Commissioned Officers.
      --Financial Management Services: accounting systems and services;
            payment management systems; preparation of financial
            statements; and audit liaison services.
      --Inclusion in new HHS-wide information systems: Unified Financial
            Management System; Enterprise Infrastructure (overall systems
            integration and security).
      --Participation in safety, health and environmental management for
            the quality of worklife of the HHS employees.
      --Participation in Government-wide activities: principally the Chief
            Financial Officers Council; Chief Information Officers Council;
            President's Council on Bioethics; and GSA First-Gov.
        Question. What benefits does the IHS-tribal partnership derive from
    its participation in government-wide and department-wide initiatives?
    Please describe what sorts of initiatives IHS will be required to help
    fund.
        Answer. The government-wide and department-wide initiatives provide
    greater access for the IHS-tribal partnership, i.e., personnel systems
    that support the 15,500 IHS personnel including approximately 2,000
    Federal personnel working for Tribes (IPAs and MOAs), and payment
    management systems that make timely payments for Tribal contracts,
    grants, and funding agreements. The department-wide initiatives also
    provide for economies of scale and common administrative systems,
    thereby resulting in more resources available for mission services.
        Initiatives to which IHS will contribute in fiscal year 2005
    include:
      --Human Resources Services
      --EEO Complaints Processing
      --Commissioned Personnel Services
      --Financial Management Services
      --Federal Occupational Health Services (Employee Assistance Programs)
      --UFMS
      --HHS Enterprise Infrastructure
      --Employees Quality of Worklife
      --IT Access for the Disabled
      --Media Outreach
      --National Rural Development Partnership
      --Government-wide Councils (CFO, CIO, Bioethics)

                              EPIDEMIOLOGY CENTERS

        Question. IHS is working with organizations such as tribal health
    boards to create regional Epi Centers. To date, 7 have been
    established. The budget includes an increase of $2.5 million, part of
    which will be used to establish 3 or 4 more.
        Billings is one of 5 IHS Areas that does not have an Epi Center.
    Has the tribal health board there expressed an interest in
    participating in this program? What criteria would an Area like
    Billings have to meet in order to be selected? Is this a competitive
    program?
        Answer. The Montana/Wyoming Tribal Chairman's Health Board has
    expressed an interest in developing an epidemiology center. However,
    they did not submit an application in fiscal year 1996 and thus we have
    had no method of funding an Epi Center in the Billings Area. We are in
    the process of finalizing a Request For Proposals (RFP) at this time to
    allow not only the Billings Area tribes the opportunity to apply but
    also other American Indian Health Boards representing other IHS Areas
    that do not have Epi Centers.
        We have cooperative agreements with the 7 currently funded tribal
    Epi Centers that had to meet the following criteria:
      --Must represent or serve a population of at least 60,000 American
            Indians or Alaska Natives.
      --Provide letters of support from all tribes in the catchment area.
      --Provide tribal resolutions supportive of the Epi Center from the
            Indian tribe(s) served by the project.
      --Must be a non-profit American Indian or Alaska Native organization.
      --Submit an application in accordance with Office of Grants
            Management and Policy (OGMP) guidelines responding to the RFP
            that will be out by mid-summer for awards in September 2004.
        It is a competitive program. The RFP will be for cooperative
    agreements with successful applicants.
        Question. Please provide examples of the benefits that Epi Centers
    offer to their tribes. What are the annual operating costs of an Epi
    Center? To what extent are these funds used to leverage dollars from
    other sources?
        Answer. Operating from within tribal organizations such as regional
    health boards, the Epi Centers are uniquely positioned to be effective
    in disease surveillance and control programs, and also in assessing the
    effectiveness of public health programs. In addition, they can fill
    gaps in data needed for the Government Performance and Results Act
    (GPRA) and Healthy People 2010. Some of the existing Epi Centers have
    already developed innovative strategies to monitor the health status of
    tribes, including development of tribal health registries, and use of
    sophisticated record linkage computer software to correct existing
    state data sets for racial misclassification. These data may then be
    collected by the National Coordinating Center at the IHS Epidemiology
    Program to provide a more accurate national picture of Indian health.
        There are currently seven Epi centers funded at $300,000 each.
    These funds are used to support basic operations; all of the centers
    write other grants and attract funds from a variety of sources to
    accomplish their mission. The Epi Centers utilize the award from IHS to
    attract funds from States, non-profit organizations, and other Federal
    funding sources. If the additional $2.5 million requested in 2005 is
    provided, we plan to fund 4 additional centers at $400,000 each, and
    increase the budget of each existing center by $100,000. Remaining
    funds would be used by the National Epidemiology Program to hire
    project officers for the expanded program and to serve Areas that do
    not have a center.

                                  TELEMEDICINE

        Question. The IHS budget justification does not seem to focus on
    telemedicine as a means to deliver more and better health care to
    tribes, particularly those in remote areas. Wouldn't an investment in
    this technology offer significant benefits to tribes in large, land-
    based states like Montana.
        Has IHS looked at ways to better integrate telemedicine into its
    services? How much of the IHS annual budget is dedicated to expanding
    or operating this kind of network? How much more would the agency have
    to invest to provide significantly greater access to this technology
    than currently exists? Have tribes expressed interest in developing
    this kind of infrastructure? Does the Service have a plan for
    developing a national network?
        Answer. The IHS is now evaluating several areas for adoption of
    telemedicine including diabetic retinopathy screening, teleradiology,
    telepyschology, and telepediatric care (in child abuse cases). As
    studies confirm the improvement in clinical outcomes and cost
    effectiveness of these newer solutions to reaching rural tribes,
    replication of the successful programs is occurring. Currently, several
    projects have been initiated, particularly in the Southwest, and
    partnerships have been established, notably with the Arizona
    Telemedicine Program, to serve as a demonstration of this care
    modality.
        The IHS spends $500,000 to $1,000,000 annually for telemedicine
    activities. We estimate that $10 million annually would support entry-
    level telemedicine capability at all sites. Resources needed to provide
    an entry-level system include national coordination and clinical
    education, increased telecommunications infrastructure to handle the
    large volumes of files and live video feeds, resources for replacement
    of existing incompatible equipment to digitally based medical
    equipment, resources to incorporate the digital imagery into our
    electronic health record software, and resources to address long term
    archival storage on a regional basis.
        Tribes are interested in developing this kind of infrastructure.
    Telemedicine is emerging as one of the central themes in the
    formulation of Area strategic plans. Tribes are seeing this as a way to
    provide high quality medical care close to home at a greatly reduced
    cost. We believe that this modality will also reduce stress on the
    patient's family, as many procedures and follow-ups may be done locally
    as opposed to traveling great distances.
        Planning has begun on a regional basis, notably with the Southwest
    Telehealth Consortium, leveraging existing programs with private and
    university-based partners to produce a regional t-health program to
    have capacity to evolve as needed to serve larger agency needs.
    Additional opportunities are being explored with the VA and other
    federal health partners. Our desire is to expand this to a nationally
    coordinated effort and take advantage of economies of scale and best
    practices.
        This Subcommittee also appropriated funds for a mobile women's
    health unit in fiscal year 2004 that will be dedicated later this year.
    We will be able to do ``realtime'' reads of digital mammography imagery
    and eliminate call backs of our patients, in addition to offering a
    full range of services in this women's health unit. Many Areas/tribes
    are interested in how successful this demonstration will be in the
    Aberdeen Area. Operational and staffing aspects of this demonstration
    are proving to be quite challenging.

                           CHANGE IN HEALTH PROBLEMS

        Question. The budget justification points out that the kinds of
    diseases affecting Native Americans today are changing. Obesity,
    injuries from domestic violence, and alcohol and drug abuse, for
    example, are beginning to replace the acute illnesses IHS has
    traditionally treated. As a result, chronic illnesses like heart
    disease, diabetes, liver disease, cancer and injuries that require
    costly long term treatment are on the rise.
        How is IHS changing its delivery of health care to meet these new
    challenges? What adjustments will be necessary to address this growing
    set of health problems? What programs will need to be expanded? What
    costs are we looking at down the road?
        Answer. The IHS system has been a public health and prevention-
    oriented program since its inception. The major effort in these areas
    has been (and still must be maintained) in maternal and child health
    where a variety of public health and disease prevention efforts have
    had great impact. Expanded emphasis on prevention and public health
    primary care activities must be focused on children of school age,
    adolescents, and young adults to promote primary prevention of these
    chronic diseases. This will require expanded efforts at the community
    and ambulatory level. There is also a need for greater emphasis on
    clinical prevention such as better management of diabetes to prevent or
    delay the secondary effects of this (and other) disease. Because of
    enhanced clinic and community care programs, the number of patients
    hospitalized has declined significantly, allowing the agency to reduce
    its construction and use of hospital beds.
        Tribal leadership in addressing these issues has been so very
    helpful. Greater tribal emphasis and control of community prevention
    programs is critical to changing the behavior and expectations of
    community members. In addition, tribal leaders can bring together all
    the non-health entities that can influence health outcomes in ways that
    are more effective than the federal government. This would include the
    justice, education, labor, and economic development entities that are
    needed to improve the quality of life in Indian communities. We can and
    must be active partners in supporting such community-wide efforts to
    expand opportunities at the Indian community level. Without this
    coherent approach, the many factors that influence health outcomes will
    not be changed.
        Community-based and ambulatory programs will need expansion. The
    emerging successes of the diabetes programs in Indian country are
    showing the ways and means to achieve healthier communities. Utilizing
    the approaches now showing effect in diabetes to address cardio
    vascular disease, cancers and behavioral disorders is the roadmap for
    the future.

                                   ALCOHOLISM

        Question. The incidence of alcoholism is reported to be more than
    600 percent greater among Indians than the general population. Drug and
    alcohol abuse accounts for 25 percent of deaths among Indian women.
    These are devastating statistics.
        What will it take to turn these statistics around? What additional
    resources do tribes need to reduce these numbers? This disease takes a
    particular toll on families. Fetal alcohol syndrome, child neglect and
    domestic violence are just a few of the problems that can result. Are
    there treatment programs targeted at women and children that have
    demonstrated some effectiveness in reducing these problems?
        Answer. Alcohol and substance abuse has and continues to be one
    among the most pervasive health and public health concerns in Indian
    Country. Their effects are widespread, pervasive, debilitating, and
    highly resistant to intervention. They are not only personal and public
    health issues, but social issues of far reaching effect. Every family
    is touched in one form or another by their widespread and devastating
    effects. Like problems discussed in other behavioral health areas,
    these problems are complex, highly resistant to change, and require
    coordinated efforts from family to federal leadership. They are also
    among the most intransigent and difficult to treat. Unlike many other
    diseases with direct and, by behavioral health standards, fairly
    uncomplicated causes and treatments, alcohol and substance abuse
    problems represent extraordinary arrays of interconnections between
    biology; psychology; history; the individual; families; communities;
    economics; politics; spirituality; and the interplay between hope and
    possibility versus hopelessness and commensurate helplessness. Simple
    and quick answers will not be found here. But answers are there and
    effective interventions from individual to community levels can be
    found. They are not necessarily simple, easy, nor quick, but they are
    there. The key, as usual, is having the appropriate approaches and
    resources to implement and sustain them.
        A significant change in the past 10-15 years has been the increase
    in tribes taking over their own services and interventions for alcohol
    and substance abuse. Now, a full 97 percent of the alcohol and
    substance abuse budget goes directly to tribally operated programs.
    Tribes are now responsible for formulating and delivering their own
    services to their people. Subsequently, IHS is shifting its focus from
    direct service provision in alcohol and substance abuse, to one of
    supporting tribal programs in their service delivery.
        There are many programs and service delivery models which represent
    tribal and urban approaches to alcohol and substance abuse. The more
    effective Native American programs have five major components that are
    in place to support not only a person's recovery process, but also the
    family's recovery as well.
        a. Firm support for and use of Tribal Traditions in the healing
    process. It is not a separate process, but integral to the healing
    process.
        b. Holistic approach to recovery including full array of behavioral
    health specialties and services; job/vocational support; education
    about and support for household financial planning and decision making;
    parenting skills training/support; educational evaluation and support
    for school-aged children.
        c. Family involvement and, for mothers, care for dependent
    children, preferably on site.
        d. Accredited programs utilizing defined outcomes measures and
    database programmatic decision-making in creating and managing
    treatment programs.
        e. Continued support and treatment for recovery after residential
    treatment is completed because program completion is not the end of
    treatment, but rather the beginning of long-term recovery.
        Representative programs with these components for mothers include
    Native American Rehabilitation Association of the Northwest, Inc., in
    Portland, OR; Friendship House of American Indians, in San Francisco,
    CA; Rainbow Center on the White Mountain Apache Reservation (known
    federally as the Fort Apache Indian Reservation) in Whiteriver, AZ; and
    Native American Connections, Inc., in Phoenix, AZ.
        There are 11Youth Regional Treatment Centers across the country
    that fully embrace these major components and continue to serve tribal
    youth with the most fully integrated treatment services in Indian
    Country.

                                 DIABETES FUND

        Question. The Balanced Budget Act of 1997 established the Special
    Diabetes Program for Indians initiative. Through this program, more
    than $600 million has been funneled to the tribes for diabetes
    prevention and treatment work. These funds are in addition to the
    appropriated dollars provided by this Subcommittee for diabetes.
        Please give examples of the kinds of work that is supported with
    this funding. Are there trends IHS can point to that offer some
    encouragement that this initiative is having a positive impact in
    Native American communities?
        Answer. The SDPI grant programs are providing a variety of diabetes
    prevention and treatment services in their respective communities,
    based on local community needs and priorities. Listed below are some
    examples and outcomes on how the SDPI funds are being used in tribal
    communities.
      --86 percent of the programs reported that general screening for
            diabetes and pre-diabetes screening was available compared to
            14 percent.
      --83 percent reported screening children and youth for obesity and
            overweight to provide an opportunity for early intervention and
            60 percent reported the development of weight management
            programs for children and youth.
      --91 percent reported screening adults (ages 26-54) for overweight
            and obesity and 91 percent of the programs reported that they
            developed programs to promote healthy lifestyles.
      --IHS has been able to demonstrate significant improvements in blood
            glucose control over time, greater than 1 percent point drop
            for each age group, as measured by A1c.
      --As a result of the SDPI grant funds, programs have both enhanced
            existing diabetes activities and developed new activities.
            Specific program activities are proven to improve diabetes care
            outcomes. SDPI grant programs integrated these program
            activities into their programs as follows:
        --83 percent of programs now track their diabetic patients through
                diabetes registries;
        --81 percent have diabetes teams in place to provide better care;
        --66 percent of programs report that basic diabetes care is now
                available for people with diabetes in their communities;
        --87 percent of programs now have diabetes education services
                available;
        --86 percent of the SDPI programs report that screening for pre-
                diabetes and diabetes is available; and
        --73 percent of the programs conducted community needs assessments.
        Question. Is IHS collaborating with other agencies through this
    program, and if so, please describe the types of activities that are
    being supported.
        Answer. The IHS National Diabetes Program developed and built upon
    collaborations and partnerships with federal and private organizations
    as a result of the Special Diabetes Program for Indians. These include:
      --Department of Health and Human Services Agencies (Centers for
            Medicare and Medicaid Services, National Institutes of Health,
            Centers for Disease Control and Prevention Division of Diabetes
            Translation, Head Start Bureau).
      --AI/AN Organizations (American Indian Higher Education Consortium,
            National Indian Council on Aging, Association of American
            Indian Physicians, National Indian Health Board, American
            Indian Epidemiology Centers, Urban Indian Nurses Association).
      --Diabetes Expert Organizations (American Diabetes Association,
            Joslin Diabetes Center, American Association of Diabetes
            Educators, National Diabetes Education Program, American
            Academy of Pediatrics, Juvenile Diabetes Research Foundation,
            Diabetes Research and Training Centers, International Diabetes
            Center, MacColl Institute of Group Health Cooperative of Puget
            Sound).
      --Academic Institutions (University of New Mexico, University of
            Arizona, University of Southern California, University of
            Colorado, University of Montana).
      --Other Organizations and Agencies (U.S. Department of Agriculture,
            Boys and Girls Clubs of America).
        --Six pilot Boys and Girls Clubs of America have implemented a
                diabetes prevention initiative for 9-12 year olds. The
                initiative is in partnership with the National Congress of
                American Indians and Nike Corporation.

                         CONTRACT HEALTH SERVICES (CHS)

        Question. Contract Health Service dollars are a critical component
    of the IHS program. It is key for some of the tribes in my state of
    Montana, who depend on these funds to purchase health care from the
    private sector. The IHS budget proposes to increase this program by $18
    million in fiscal year 2005.
        How much of a shortfall currently exists in contract health care
    funding overall? How many of the highest priority medical cases must be
    rejected annually because tribes run out of money? What impact would
    the proposed increase for fiscal year 2005 have in alleviating this
    problem?
        Answer. The Indian Health Service (IHS) Contract Health Services
    (CHS) programs operate within budget and must not obligate the Agency
    beyond their appropriations and cannot operate programs at deficits.
    The IHS medical priority system was established to ensure that the most
    needed medical services are provided within available funding levels.
        The fiscal year 2005 President's Budget includes an increase of $18
    million for Contract Health Services, (+4 percent) over the fiscal year
    2004 enacted level. This funding increase, combined with the additional
    purchasing power provided by the recently enacted Medicare
    Modernization Act, will allow IHS to purchase an estimated +35,000
    additional outpatient visits or +3,000 additional days of inpatient
    care. Section 506 of the Act will increase IHS' buying power by
    allowing IHS to purchase inpatient care at rates determined by the
    Secretary. The IHS CHS program does not track payment or denials by
    priority levels.
        Question. The Subcommittee has heard complaints from tribes that
    the CHEF set-aside, which is meant to cover the medical costs of
    catastrophic illness, does not meet the full need in Indian country.
    Tribes are forced to use their CHS dollars for these most expensive
    cases, eroding the amounts that are available for more routine care and
    illness. How much would be required to shore up the CHEF fund? About
    how many cases are eligible annually for CHEF payments but aren't being
    taken care of because the fund has run out of money?
        Answer. Once the Catastrophic Health Emergency Fund (CHEF) fund is
    depleted by the 3rd quarter, Areas, Service Units, and Tribal programs
    cease reporting high cost cases that could be designated as CHEF cases.
    In the past year an additional 800 cases amounting to over $12 million
    for a total of $30 million would have been needed to fund all cases
    submitted or CHEF funding. It is possible that there is underreporting
    of some high cost cases.

                    INDIANS INTO PSYCHOLOGY PROGRAM--MONTANA

        Question. I've been a longtime supporter of the Indians into
    Psychology program at the University of Montana. Has this program been
    successful in its goal of bringing greater numbers of Native Americans
    into mental health professions?
        Answer. The Indians into Psychology program at the University of
    Montana was initially funded in fiscal year 1999. According to the
    American Psychological Association, statistics indicate students take
    an average of 7\1/2\ years to complete a doctoral program. The students
    at the University of Montana will be completing their studies in 6\1/2\
    years which speaks highly of the quality of the program as well as the
    quality of the students.
        Currently, there are 8 American Indian students in the clinical
    psychology program and 2 will graduate in fiscal year 2006 which is
    well within the time frame for their program.
        All students are given the opportunity to work within their
    practicums at locations that serve American Indians.
        Question. Are there other programs--my colleague's support for the
    nursing recruitment program at the University of North Dakota comes to
    mind--where relatively small amounts of money are having a significant
    impact in training young Native Americans for careers in the health
    care profession?
        Answer. Yes, the following are examples of these types of programs:
      --Indians into Psychology program at the University of North Dakota;
      --Indians into Psychology program at Oklahoma State University;
      --RAIN (Recruitment of American Indians into Nursing) program at the
            University of North Dakota;
      --Indians into Medicine (INMED) programs at the universities of North
            Dakota and Arizona;
      --Nursing Residency Program--IHS employees who are LPN's, LVN's,
            Associate Degree Nurses, or Diploma Graduate Nurses, can return
            to school on a work-study program to obtain their RN degrees,
            either Associate or Bachelor's;
      --Indian Health Service Scholarship Program--supports Native American
            students in their efforts to become health professionals.
        --Preparatory scholarships assist students in studies such as
                prenursing, prephysical therapy, and prepsychology for up
                to 2 years.
        --Pre-professional scholarships assist students in premedical and
                predental studies for up to 4 years.
          --No service obligation is associated with either of these
                scholarships.
        --Professional scholarships assist students in professional
                schools, such as medical school, nursing school, pharmacy
                school, etc., for up to 4 years in return for their
                agreement to serve at an Indian health facility for from 2
                to 4 years, depending on the length of their support.
      --Indian Health Service Extern Program: Supports IHS professional
            scholarship recipients to gain experience in their field of
            study during non-academic periods.
        Question. Does IHS collaborate with tribal colleges to provide
    additional opportunities in health care education for Indian students?
        Answer. Many IHS scholarship recipients attend tribal colleges for
    their preparatory classes. Many also attend the Salish-Kootenai College
    in Montana and the Oglala Lakota College in South Dakota for their
    nursing training. We worked closely with the United Tribes Technical
    College as they developed their Associate Degree in Injury Prevention
    Program. They are now seeking to expand it to a four-year program. They
    also have the program on an Internet-based curriculum.

                           INJURY PREVENTION PROGRAM

        Question. The injury prevention program is one of the best examples
    of IHS and tribes working to make a real difference in Indian
    communities. Within a relatively small annual operating budget, it has
    achieved a 53 percent reduction in injury-related deaths between 1972
    and 1996.
        Is there data to indicate that this downward trend in continuing?
    What activities funded through this program have proven most effective
    in preventing deaths and eliminating injuries?
        Answer. The IHS injury trends indicate the downward trend is
    continuing. The most recent data shows between 1996 and 2001 there was
    4.2 percent decrease in unintentional injuries. The IHS Injury
    Prevention Program advocates the development of a public health
    oriented, community based strategy that relies on determining the
    trends and patterns of injury in specific Indian communities; forming
    community coalitions to address local injury problems; providing injury
    prevention training to community-based practitioners; and developing
    community-based strategies to identify and implement best practices to
    address local problems. This is a summary of some of the categories of
    successful initiatives and projects.
        Road hazard identification and reduction.--Numerous epidemiologic
    studies of motor vehicle crashes and pedestrian fatalities in Indian
    communities have resulted in roadway improvement projects that have
    provided roadway lighting, pedestrian walkways, traffic channeling
    through communities; speed zone and signage; and guard rails and
    barriers along roadways.
        Occupant Protection.--Multiple efforts have taken place to increase
    seat belt usage through the passage and enforcement of seat belt codes
    across reservations. A variety of child passenger protection
    initiatives are underway, including child passenger safety training and
    certification, seat distribution, development of the (Safe Native
    American Passengers (SNAP) training program; RideSafe, a Head Start
    Center based occupant protection program.
        Fire/Burn.--Through a partnership with the U.S. Fire
    Administration, IHS has developed SleepSafe: a competitively awarded,
    Head Start Center based program to increase the utilization of smoke
    alarms in Indian homes. Community-based smoke alarm distribution
    programs are also in place in many Indian communities.
        Drowning.--Drowning is a large public health problem facing Alaska
    Natives where the rivers are the roadways. Alaska Area has made
    significant commitment and impact on the drowning problem through the
    implementation of community-based float coat sales programs and ``Kids-
    Don't Float'' programs. Float coats are winter jackets with Coast Guard
    approved liner material that is a flotation device. ``Kids-Don't
    Float'' is a PFD loaner box located at marinas and boat launches.
    Families that don't have PFD's can borrow one for their kids for their
    boat trip and return it when they return. These programs are widely
    available and supported by rural Alaska communities.
        Fire Arm Safes.--A promising new strategy piloted in Alaska, the
    provision of gun safes in homes in rural Alaska villages. Eighty-six
    percent of households that were provided a safe had their firearms
    properly locked in the safe a year after distribution. Rural Alaska
    experiences suicide rates up to 13 times the national rate. Firearm
    related suicides in homes are a leading method of suicide. Firearm
    safes are a strategy to address this problem; community members are
    demonstrating their acceptance of this strategy for injury
    intervention.
        Question. What is the current funding level for this program? Are
    there preventive measures that IHS is unable to implement within
    current funding levels? What would be the optimal annual budget for
    this program?
        Answer. IHS currently has $1.779 million dedicated to Injury
    Prevention. These funds support the HQE administered Tribal Injury
    Prevention Cooperative Agreement Program and national program
    initiatives. The Cooperative Agreement program provides approximately
    $1.5 million annually to competitively award tribal injury prevention
    infrastructure development projects and direct intervention projects.
    Additional IHS funds support 25 full and part-time Injury Prevention
    Specialists throughout the 12 IHS Area's; and an Injury Prevention
    Practitioners and Fellowship training program.
        IHS is able to provide a basic level of support to injury
    prevention initiatives with the funding available. Additional funds are
    received from 5 Federal agency partners to support specific injury
    prevention initiatives; the agency partners are National Highway and
    Traffic Administration, U.S. Fire Administration, Consumer Product
    Safety Commission, Centers for Disease Control and Prevention, and
    Health Resource Services Administration.

                     FACILITIES CONSTRUCTION PRIORITY LIST

        Question. The Subcommittee understands that IHS is in the process
    of developing a new priority list for the construction of replacement
    hospitals and clinics.
        When does IHS expect the new list to be in place? What input has
    the agency received from the tribes regarding possible improvements to
    the current system?
        Answer. Congress directed the IHS to review and revise the
    facilities priority system in fiscal year 2000 conference report
    language. A Tribal workgroup developed recommendations for a process to
    identify need and suggested revisions to the existing priority system.
    This revised system and an implementation strategy will be presented to
    all Tribes for consultation before finalization. The revised system is
    expected to be in place no later than the fiscal year 2008 budget
    cycle.
        Question. The budget indicates that the Department of Health and
    Human Services has instituted a Capital Investment Review Board to
    review all IHS health care facilities construction projects. Can you
    give us additional information on this Board, why it was created and
    how it will function?
        Answer. The Board was instituted to help ensure that a coordinated
    and consistent approach to facilities construction exists within the
    Department. The Board consists of the Assistant Secretaries for
    Administration and Management; Budget, Technology, and Finance; and
    other members including land-holding Operating Divisions. The purpose
    is to implement a non-IT capital facilities investment review process,
    with projects that cost more than $10 million reviewed and approved by
    this Board.
        Question. Given that tribes are already frustrated by the lengthy
    process of project approval, why won't they see this Board as an
    additional bureaucratic hurdle?
        Answer. The IHS is working closely with the Department to minimize
    the time that may be involved under the Board's review and approval
    process.

                       JOINT VENTURE CONSTRUCTION PROGRAM

        Question. Dr. Grim, a few years ago this Subcommittee provided the
    first funding for a new program called Joint Venture. Under this
    competitive program, the costs of facilities construction are met by
    the tribes and IHS provides the funds to equip, supply, operate and
    maintain the health centers.
        No funds are requested to continue the program this year. Why
    doesn't there seem to be support here? Doesn't this program help the
    tribes and IHS get quality care out to Indians at a fast pace than
    would be possible through the traditional construction program alone?
    Are tribes not interested in participating in the program?
        Answer. Funding for the Joint Venture Program was provided to
    initiate four projects in fiscal year 2001 and fiscal year 2002. The
    fiscal year 2001 funding was utilized to enter into two Joint Venture
    agreements from proposed projects on the IHS Health Care Facilities
    Outpatient Priority List. These agreements were with the Tohono O'odam
    Nation and the Jicarilla Apache Nation. The fiscal year 2002 funding
    was utilized to fund two Joint Venture Agreements that were not from
    priority lists but were competitively awarded from 15 applications
    submitted for this program; they were with the Choctaw Nation, and the
    Muscogee Creek Nation. In fiscal year 2003 and fiscal year 2004 funds
    to support additional Joint Ventures were neither requested by the
    Administration nor provided by Congress. The fiscal year 2005 budget
    request completes the four highest priority projects on the
    construction priority lists but does not initiate any new projects. The
    fiscal year 2005 budget request does support the Joint Venture Program
    by requesting an increase of $17 million for the staffing and
    operational costs for 3 of the 4 projects which are anticipated to be
    open in fiscal year 2005.

                         HOMELAND SECURITY/BIOTERRORISM

        Question. The budget request briefly mentions a Department of
    Health and Human Services initiative related to homeland security, and
    more specifically, bioterrorism.
        Please provide more about this initiative, its impact on IHS, the
    cost of implementation and how these costs will be met.
        Answer. The funding available to the Department of Health and Human
    Services, approximately $1.4 billion, is appropriated by Congress to be
    used by States, and a few large metropolitan areas, to improve State,
    Local and Hospital preparedness for bioterrorism and other public
    health emergencies. Tribal nations are not eligible as direct awardees,
    however HHS explicitly requires all jurisdictions to include Indian
    tribes in the development, implementation and evaluation of their
    bioterrorism work plans. Awardees are also asked to provide
    documentation of Indian tribal governments' participation in state and
    local emergency preparedness planning. The funds flow through the
    Health Resources and Services Administration and the Centers for
    Disease Control and Prevention as grants for hospital preparedness and
    public health infrastructure development (respectively). Our experience
    has been that some States have been very inclusive in providing Tribes
    the opportunity to participate in policy development, training, and
    funds distribution (Arizona, Alaska, Maine, New Mexico, to name a few).
        The Indian Health Service participates in disaster planning and
    exercises as part of its ongoing medical emergency response and quality
    assurance programs with excellent support coming from some States. No
    additional resources have been devoted to this effort.

                               MEDICAL EQUIPMENT

        Question. The budget for the purchase of medical equipment is
    currently funded at $17 million. Increases over the past several years
    have been minimal and no increase is proposed in fiscal year 2005.
        As more sophisticated and expensive technologies become available
    for the diagnosis and treatment of disease, how has the Service's
    purchasing power been reduced? What amount would be needed to provide
    more and better medical equipment to IHS and tribally operated
    facilities?
        Answer. The average life expectancy for today's medical devices is
    approximately 6 years, depending on the intensity of use, maintenance,
    and technical advances. Given a medical equipment inventory of $320
    million, an annual replacement amount of $53 million would allow
    replacement of one-sixth of the inventory each year. The current
    funding level for replacement medical equipment is $11 million. The
    Medical Equipment request also includes $5 million for equipment for
    newly constructed tribal facilities and $1 million for equipment
    purchased through TRANSAM (DOD excess equipment) and ambulances.

                    HEALTH FACILITIES CONSTRUCTION DECREASE

        Question. In fiscal year 2005, the budget request for construction
    of replacement health care facilities is $42 million, a proposed
    reduction of more than $50 million from the fiscal year 2004 funding
    level.
        Given that the average age of IHS facilities is 32 years, and some
    as old as 100, what is the rationale for cutting this program in half?
        Answer. The fiscal year 2005 request allows IHS to complete
    construction of the 4 highest ranked health facilities and staff
    quarters construction projects--Red Mesa, AZ outpatient facility,
    Sisseton, SD facility, Zuni, NM staff quarters and Wagner, SD staff
    quarters. No new facility construction projects would be initiated.
        Question. What amount do you estimate would be required annually in
    base funding to operate this program most effectively?
        Answer. Funding for health facilities construction is determined on
    a project-by-project basis. In developing plans for new facilities
    construction, IHS must take into account not only construction costs
    but also the cost of operations for new and existing facilities. The
    fiscal year 2005 request allows IHS to focus on its priorities while
    taking both construction and operations costs into consideration.
                                     ______

                Questions Submitted by Senator Pete V. Domenici

                       SANITATION FACILITIES CONSTRUCTION

        Question. Sanitation construction and refurbishment is direly
    needed in many areas of Indian Country. Wastewater facility
    construction is among the most discussed issues by the tribes in New
    Mexico. A number of New Mexico tribes have systems over thirty years
    old. The IHS states its mission is to ``raise the health status of the
    American Indian and Alaska Native people to the highest possible level
    by providing comprehensive health care and preventive health
    services.'' The foundation for any health system must certainly be
    partially based upon adequate sanitation facilities.
        The modernization of these facilities is also of concern for a
    state in the midst of a devastating drought. Increasing the efficiency
    of wastewater facilities and improving the recoverability of wastewater
    is an essential step in addressing life in drought. This is especially
    true when competition for water is on the rise due to numerous factors
    including drought and protecting endangered species.
        Question. Comment on the resources that IHS can bring to address
    this problem.
        Answer. The current total need for waste water disposal facilities
    for American Indians and Alaska Natives (AI/AN) is $508 million and of
    that total need, $255 million is considered to be economically and
    technically feasible. Through the IHS regular funding for existing
    homes and Environmental Protection Agency (EPA) Clean Water Act Indian
    Set-Aside (CWAISA) funding plus other contributors funding, this
    feasible need has been reduced by $21 million since 2002. The waste
    water disposal needs have been decreasing over the last several years,
    in part due to the recent increase in the EPA CWAISA. While we have
    made significant headway in addressing the waste water needs, the water
    supply requirements have been very slight and generally the trend in
    water supply deficiency have been increasing due to inflation,
    population growth and new environmental laws including changes to the
    Safe Drinking Water Act. In addition to the EPA funding, IHS continues
    to work with Tribes, other federal agencies, and States to find
    additional funding for sanitation facilities. In fiscal year 2003, the
    IHS received $42 million in outside contributions through the IHS
    finance system.
        Question. Would it make sense to placing areas suffering from
    drought on a higher priority for water and sewer assistance so as to
    get more and cleaner water to those with the most immediate need?
        Answer. The Sanitation Deficiency system used by IHS to inventory
    the sanitation needs for AI/AN, is a priority system and not a waiting
    list and since this inventory is updated annually, emerging needs such
    as drought, can be addressed as they arise. Health impacts and tribal
    priorities can raise the score of a project and the funding priority.

                                DIABETES PROGRAM

        Question. Almost 105,000 Native Americans and Alaska Natives, or
    15.1 percent of the population, receiving care from Indian Health
    Services (IHS) have diabetes. As you know, the consequences of diabetes
    are debilitating, including heart disease and stroke, which strike
    people with diabetes more than twice as often as they do others. Other
    complications include blindness, kidney disease, and amputations.
        Diabetes is the fifth-deadliest disease in the United States.
    According to the American Diabetes Association, the total annual
    economic cost of diabetes in 2002 was approximately $132 billion, or 1
    out of every 10 health care dollars spent in the United States.
        Given that diabetes affects such a large percentage of Native
    Americans, I am deeply interested in IHS progress and programs.
        New Mexico is home to a number of diabetes centers and programs.
    How many tribes in New Mexico and the Nation have programs working
    directly with them?
        Answer. All 27 tribes in New Mexico have a Special Diabetes Program
    for Indians (SDPI) grant program. There are a total of 34 SDPI grant
    programs in New Mexico. The majority of the NM SDPI programs, 85-90
    percent, provide primary prevention activities.
        Nationally, the IHS awarded Special Diabetes Program for Indians
    grants to 318 programs under 286 administrative organizations within
    the 12 IHS Areas in 35 states. The SDPI grant programs work with their
    local service unit programs, Area Diabetes Programs, 19 Model Diabetes
    Programs and the National Diabetes Program. The NM SDPI grantee
    programs work directly with the Albuquerque Area Diabetes Program,
    their local service unit diabetes programs, and the two NM Model
    Diabetes Programs located at Zuni Pueblo and Albuquerque Service Unit.
        Question. Diabetes programs now receive $150 million annually as
    reflected in the President's fiscal year 2005 budget request. Could you
    please discuss how this money is being spent on diabetes prevention and
    treatment and help the committee understand any inroads into the
    diabetes epidemic this funding has made possible? Could you also
    comment on the Gallup Indian Medical Center and its contributions?
        Answer. The SDPI grant programs have made tremendous inroads in
    addressing diabetes prevention and treatment. The IHS has shown through
    its public health evaluation activities that the SDPI programs have
    been very successful in improving diabetes care and outcomes, as well
    as the start of primary prevention efforts, on reservations and in
    urban clinics. The CDC's Framework for Public Health Evaluation, using
    a mixed methods approach (both qualitative and quantitative methods),
    has been implemented and an analysis completed. A number of positive
    short term and intermediate term outcomes have been identified. In
    addition, the IHS NDP has improved the accuracy of baseline long-term
    measures (prevalence and mortality) and established a Diabetes Data
    Warehouse and ``Data Mart'' using RPMS data to measure accurately the
    long-term complications of diabetes.
        Prior to the SDPI, AI/AN communities had few resources to devote to
    primary prevention of diabetes. In 2002, an overwhelming number of
    diabetes grant programs (96 percent) reported that they now use funds
    to support diabetes primary prevention activities in their communities.
    The implementation of secondary prevention efforts--the prevention of
    complications such as kidney failure, amputations, heart disease and
    blindness--and tertiary prevention efforts to reduce morbidity and
    disability in those who already have complications from diabetes has
    also been a focus of SDPI activities. Improvement in the treatment for
    risk factors of cardiovascular disease, the prevention of and delay of
    progression of diabetic kidney disease, and the detection and treatment
    of diabetic eye disease have also been achieved since the
    implementation of SDPI.
        The Gallup Indian Medical Center serves the Navajo Nation and
    focuses on providing lifestyle education for their patients.
    Accomplishments include providing a comprehensive school health program
    for youth, physical exercise programs, Standards of Care for Diabetes
    and clinical interventions.
        Question. What is the typical program doing in the prevention and
    treatment areas and at what levels of funding?
        Answer. The SDPI grant programs are providing a variety of diabetes
    prevention and treatment services in their respective communities,
    based on local community need. For example:
      --83 percent reported screening children and youth for obesity and
            overweight to provide an opportunity for early intervention and
            60 percent reported the development of weight management
            programs for children and youth.
      --91 percent reported screening adults (ages 26-54) for overweight
            and obesity and 91 percent of the programs reported that they
            developed programs to promote healthy lifestyles.
      --IHS has been able to demonstrate significant improvements in blood
            glucose control over time, greater than 1 percent point drop
            for each age group, as measured by A1c (a long term measure of
            glycemic control).
        Question. Can we expect a report detailing the programs and their
    successes and needs?
        Answer. Yes. Although Congress moved the actual due date for a
    final report on the SDPI to 2007, IHS is in the process of finalizing
    in fiscal year 2004 an interim progress report on the SDPI.

                          PROFESSIONAL STAFF SHORTAGES

        Question. About 20 percent of the U.S. population resides in
    primary medical care Health Professional Shortage Areas as designated
    by Bureau of Health Professionals. This problem is magnified in Indian
    Country where health facilities are often few and far between. Staffing
    at many Indian health facilities are at critically low levels--not only
    are facilities to attract and keep health care workers lacking in many
    New Mexico Indian health centers, I have heard of instances where
    salaries were delayed or nearly went unpaid.
        Please describe what steps IHS is taking to address these staffing
    and facility shortfalls.
        Answer. IHS efforts to address staffing shortfalls include, but are
    not limited to, the following:
      --Establishing and maintaining a World Wide Web site that contains
            information regarding health professional needs at IHS, tribal,
            and urban Indian health facilities;
      --Utilizing special pay and bonus authorities as much as possible;
      --Visiting health profession training programs to discuss
            opportunities in Indian health;
      --Attending national, state, and local health profession association
            meetings to inform attendees about opportunities in Indian
            health;
      --Accepting health professions students and residents in training
            positions at IHS facilities;
      --Establishing internship arrangements between IHS facilities and
            health profession training programs;
      --Advertising in professional journals and in the Military Transition
            Times, a publication that is distributed to all United States
            and foreign military facilities bases and installations in an
            effort to attract health professionals who are leaving the
            military;
      --Attending health fairs at colleges;
      --Attending high school career days;
      --Adding funds to the IHS Loan Repayment Program;
      --Establishing special salary rates under the Title 38 authority;
      --Sending direct mailings to practicing and student health
            professionals;
      --Establishing 7 Dental Clinical and Support Centers, whose
            activities include addressing the issues of recruitment and
            retention;
      --Establishing workgroups of professionals to address the issues of
            recruitment and retention;
      --Surveying current employees to see what attracted them to Indian
            health and what has made them stay on or may incline them
            toward leaving;
      --Working with the National Health Service Corps to make Indian
            health facilities eligible to employ NHSC scholarship
            recipients;
      --Encouraging high school and college students to enter the health
            professions;
      --IHS Scholarship Programs;
      --Tribal Matching Grants;
      --Health Professions Recruitment and Retention Grants;
      --Nursing Scholarship Program;
      --Nursing Residency Program;
      --Advanced General Practice Residency Program for dentists;
      --Extensive use of the Junior and Senior Commissioned Officer Student
            Training and Externship Program (COSTEP) of the U.S. Public
            Health Service commissioned corps to help develop health
            professionals who are interested in working in the IHS; and
      --Use of the commissioned corps Commissioned Corps Readiness Force,
            Ready Reserve, and Inactive Reserve to help fill needs for
            health professionals on a temporary basis.
        In addition to the above, the Division of Nursing has launched an
    on-line continuing education (CE) program available to all Indian
    Health Service, Tribal and Urban Nurses at no cost. The program offers
    over 126 continuing education units, including mandatory updates
    regarding Joint Commission on Accreditation of Healthcare Organizations
    requirements.
        Facility shortfalls are being addressed as follows: The IHS fiscal
    year 2005 request includes funds for 244 staff at 5 newly completed
    health care facilities and construction funds to complete 2 additional
    outpatient facilities in Red Mesa, AZ and Wagner, SD and 2 staff
    quarters projects in Wagner, SD and Zuni, NM.
        Question. What resources does IHS have at its disposal in this
    regard?
        Answer. For addressing staffing shortfalls, IHS resources include:
      --Specifically identified recruiters in several professions;
      --Staff professionals who work in conjunction with the recruiters to
            speak at professional schools, colleges, high schools, and
            elementary schools to talk about opportunities in Indian health
            programs and the requirements to become a health professional;
      --A scholarship program that helps to train Indian students in the
            health professions;
      --Programs that help to identify students with the potential to
            become health professionals, assist them to obtain the academic
            prerequisites for entry into health professional training, and
            provide cultural and academic assistance during the training;
      --A loan repayment program that helps professionals work in Indian
            health programs and pay off the loans they had to incur in
            order to attend health professional schools; and
      --Staff members who are very concerned about both the quality and
            quantity of health services provided to Indian people and are
            willing to commit time and resources to address them.
        Question. What tools would enhance the ability of IHS to better
    meet its obligations for adequate staffing?
        Answer. The following tools would enhance IHS' ability to improve
    recruitment and retention:
      --The Junior Commissioned Officer Student Training and Extern Program
            (JsCOSTEP) to allow summer experience at IHS and Tribal
            facilities for a minimum of 30 days and maximum of 120 days for
            students, who have not completed their degree program.
      --The Senior Commissioned Officer Student Training and Extern Program
            (SrCOSTEP) to assist students financially during their final
            academic year in health profession programs in return for
            agreements to work for IHS after graduation for twice the time
            sponsored (i.e., 18-month employment commitment for 9 months of
            financial support).
      --The utilization of medical students through the Uniformed Services
            University of the Health Sciences (USUHS) in return for a 10-
            year service obligation time upon graduation from USUHS and
            completion of their residency programs.
      --Under Public Law 94-437, Indian Health Care Improvement Act, the
            IHS is authorized to maintain scholarship and loan repayment
            programs. The scholarship program is a valuable tool to prepare
            students and train students for critical health professions.
            This program also provides opportunities for students to gain
            practical clinical experience in their chosen health
            disciplines during non-academic timeframes prior to graduation.
            The loan repayment program provides the authority to repay
            loans in return for service in critical service locations. Both
            of these programs are very effective and the continued and
            expanded utilization will improve our recruitment and retention
            efforts.
                                     ______

                 Questions Submitted by Senator Byron L. Dorgan

                                  BASE FUNDING

        Question. The fiscal year 2005 budget justification notes a
    decrease in services in several service areas, including dental health
    and mental health. How much additional funding beyond the budget
    request is needed in pay, increased population growth, and inflation to
    maintain a ``current'' level of services?
        Answer. The budget addresses salary costs by including an increase
    of $36.2 million for Federal and Tribal pay costs. Within this amount,
    IHS will also have to manage within grade increases for Federal
    employees. The budget request also includes an increase of nearly $18
    million for contract health care, which will offset inflation
    experienced in purchasing health care from the private sector. Using
    estimates of medical inflation costs of 3.3 percent ($49 million) and
    population growth of 1.8 percent ($39 million), the estimated cost of
    fully addressing these items is $88 million.

                            CONTRACT HEALTH SERVICES

        Question. If your need for service was the same in fiscal year 2005
    as in fiscal year 2004 for contract health services, how much would you
    need to cover all current services, given inflation?
        Answer. In order to provide services at the current level the
    Contract Health Services Program is requesting $18 million to address
    issues of inequity and disparities of healthcare and off set medical
    inflation. This funding increase, combined with the additional
    purchasing power provided by the recently enacted Medicare
    Modernization Act, will allow IHS to purchase an estimated +35,000
    additional outpatient visits or +3,000 additional days of inpatient
    care. Section 506 of the Act will increase IHS' buying power by
    allowing IHS to purchase inpatient care at rates determined by the
    Secretary.
        Question. How much additional funding is needed to cover medical
    care beyond priority I? Please provide this information by priority
    level.
        Answer. The IHS does not have a fixed CHS funding standard and is
    not able to determine the level of funding needed beyond priority I. In
    addition, the IHS CHS program does not have an accurate account of all
    CHS denials or deferred services and does not track and collect data by
    priority levels.
        Question. Will the fiscal year 2005 budget request be sufficient to
    cover all priority I medical costs in each region?
        Answer. The fiscal year 2005 President's Budget includes an
    increase of +$18 million for Contract Health Services, (+4 percent)
    over the fiscal year 2004 enacted level. As mentioned above, this
    funding increase, combined with the additional purchasing power
    provided by the Medicare Modernization Act, will allow IHS to purchase
    an estimated +35,000 additional outpatient visits or +3,000 additional
    days of inpatient care. IHS does not track or collect data by priority
    level.

                          SUDDEN INFANT DEATH SYNDROME

        Question. Please provide an update on IHS efforts to combat SIDS in
    Indian country. Specifically, what types of SIDS risk reduction
    training is provided to Indian Country through IHS?
        Answer. Direct care programs provide standard of care per the
    American Academy of Pediatrics (AAP), American Academy of Family
    Practice (AAFP), American College of Obstetricians and Gynecologists
    (ACOG) guidelines--including messages on evidence-based practices of
    ``Back to Sleep''; tobacco and alcohol perinatal exposure; early and
    timely prenatal care and follow-up; and well child visits. Other
    efforts to prevent SIDS include:
      --Prenatal Home visits through Public Health Nurses (PHN) are a
            priority 1 task.
      --Tobacco.--Perinatal tobacco exposure and tobacco control measure in
            the form of abstinence and cessation include--patches, the
            American College of Obstetricians and Gynecologists 5 A's
            ``Ask, Advise, Assess, Assist, Arrange--6th Assure,'' provider
            survey to assess training needs is underway with National
            Partnership to Help Pregnant Smokers Quit, a Robert Wood
            Johnson (RWJ) funded program.
      --Breastfeeding and lactation consultant promotion.
      --Biennial Pediatric Conference and Update.
      --Biennial OB-GYN Conference and Update.
      --Maternal and Child Health (MCH) IHS National conference calls on
            emerging issues and SIDS update.
      --Working with numerous foundations and HHS agencies:
        --CJ SIDS Foundation.--SIDS Reduction Resource Kit Dissemination
        --American Academy of Pediatrics (AAP).--Committee on Native
                American Child Health--advocacy, site visits, child health
                and newborn outcomes, teen health and teen pregnancy are
                addressed.
        --First Candle and SIDS Alliance.--Child Care Provider Training.
        --SIDS Impact.--Active list serve on leading edge forensic and case
                investigation, diagnostic shift since 1998, differential
                diagnosis and need for standardized training and
                investigation.
        --HRSA funded Healthy Start programs in the Aberdeen Area.
        --CDC.--Coroners and Death Scene Investigation.
        --National Partnership to Help Pregnant Smokers Quit.--Poster and
                provider questionnaire on perinatal tobacco control,
                patient interaction.
        --Phoenix Area.--National Diabetes Program reprint of ``Easy Guide
                to Breastfeeding that includes section on back to sleep and
                safe sleep environment with CPSC endorsement.
        --Consumer Product Safety Commission--IAA.--Back to sleep
                information and bedding information included in ``Easy
                Guide to Breastfeeding'' booklet to be reprinted 50,000
                copies.
        --National Native American Emergency Medical Services.--
                Dissemination of SIDS Resource Kit.
        --Child Fatality and Child Death Review.--State and national leads.
                MCH coordinator to present at August 2004 National on IHS
                linkages to states.
        --CDC--Division of Reproductive Health.--MCH Research Agenda
                setting Planning meeting May 10. Perinatal issues are
                preeminent.
        --NICHD.--Serial meetings planned for teen parent focus group study
                to address media and health literacy needs for infant
                wellbeing and SIDS reduction in northern tier Tribes and
                Alaska.
        Question. What is current IHS spending dedicated to SIDS risk
    reduction? What is needed?
        Answer. Funds are appropriated in very broad line-item accounts and
    provided from other sources within the Department and private
    foundations. Our cost accounting system is not currently set up to
    accumulate this level of specificity. Most care in this area would be
    covered in the following line item budgets--all of which provide direct
    services to the prenatal and early infancy population:
        1. Hospital and Clinics.--Direct Health Care Provision
        2. Public Health Nursing
        3. Community Health Representative
        4. Health Education/Health Promotion and Disease Prevention
        Question. Are you partnering with any organizations on the SIDS
    issue?
        Answer. The Indian Health Service, Tribal, and Urban programs
    partner with the following organizations:
      --CJ SIDS Foundation.--SIDS Reduction Resource Kit Dissemination
      --American Academy of Pediatrics (AAP).--Committee on Native American
            Child Health--advocacy, site visits, child health and newborn
            outcomes, teen health and teen pregnancy are addressed.
      --First Candle and SIDS Alliance.--Child Care Provider Training
      --SIDS Impact.--Active list serve on leading edge forensic and case
            investigation, diagnostic shift since 1998, differential
            diagnosis and need for standardized training and investigation.
      --HRSA funded Healthy Start programs in the Aberdeen Area
      --CDC.--Coroners and Death Scene Investigation
      --National Partnership to Help Pregnant Smokers Quit.--Poster and
            provider questionnaire on perinatal tobacco control, patient
            interaction.
      --Phoenix Area.--National Diabetes Program reprint of ``Easy Guide to
            Breastfeeding'' that includes section on back to sleep and safe
            sleep environment with CPSC endorsement.
      --Consumer Product Safety Commission--IAA.--Back to sleep information
            and bedding information included in ``Easy Guide to
            Breastfeeding'' booklet to be reprinted 50,000 copies.
      --National Native American Emergency Medical Services.--Dissemination
            of SIDS Resource Kit.
      --Child Fatality and Child Death Review.--State and national leads.
            MCH coordinator to present at August 2004 National on IHS
            linkages to states.
      --CDC--Division of Reproductive Health--MCH Research Agenda setting
            Planning meeting May 10. Perinatal issues are preeminent.
      --NICHD.--Serial meetings planned for teen parent focus group study
            to address media and health literacy needs for infant wellbeing
            and SIDS reduction in northern tier Tribes and Alaska.
                  indian health care improvement fund (ihcif)
        Question. Did tribes recommend funding for the IHCIF during your
    consultation process on the fiscal year 2005 budget? If so, how much?
        Answer. The Tribes recommended a minimum increase of $24.3 million
    for the Indian Health Care Improvement fund in fiscal year 2005.

                             CONCLUSION OF HEARINGS

        Senator Burns. Thank you all very much. The subcommittee
    will stand in recess subject to the call of the Chair.
        [Whereupon at 10:30 a.m., Thursday, April 1, the hearings
    were concluded, and the subcommittee was recessed, to reconvene
    subject to the call of the Chair.]

      DEPARTMENT OF THE INTERIOR AND RELATED AGENCIES APPROPRIATIONS FOR
                                FISCAL YEAR 2005

                                  ----------

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

                           NONDEPARTMENTAL WITNESSES

        [Clerk's note.--The subcommittee was unable to hold
    hearings on nondepartmental witnesses, the statements and
    letters of those submitting written testimony are as follows:]

                           DEPARTMENT OF THE INTERIOR

              Prepared Statement of the American Fisheries Society
        The American Fisheries Society (AFS) would like to provide input
    that may assist you in the task of determining the level of fiscal year
    2005 appropriations for the Department of the Interior's, Biological
    Research Discipline (BRD) of the U.S. Geological Survey (USGS), the
    Fisheries Program of the U.S. Fish and Wildlife Service (USFWS), the
    National Park Service, the Bureau of Reclamation (BOR), and the Bureau
    of Land Management (BLM). As the Nation's largest association of
    fisheries and aquatic science professionals with 9,000 members
    representing all states, commonwealths, and trust territories, we
    believe it is essential that interests of our members and our
    profession be considered in the appropriations process for agencies
    supporting fisheries and aquatic science and conservation. We ask this
    letter be included in the official record of the agency's appropriation
    hearings.
        The Nation's fisheries annually provide billions of dollars in
    recreational and commercial benefits. Millions of Americans and
    visitors spend hundreds of millions of hours fishing the country's
    rivers, streams, lakes, and marine coastal waters.
        Over the past few years the Congress has taken critically important
    actions to conserve these resources to ensure that their benefits will
    continue to be enjoyed by future generations. However, despite
    Congress' actions, our fisheries resources are at risk and in too many
    cases threatened. Additional funds are needed to better implement the
    management and research programs that are essential to reverse the
    current decline in many of our fisheries.
        Although we understand that this is a period of strongly competing
    government priorities, we also wish to note that robust research and
    technology development programs are the only means by which more
    effective and efficient fisheries management tools and actions can be
    developed and tested. Management and conservation decisions are only as
    good as the information upon which they are based and there is
    substantial evidence to suggest that better information is critically
    needed here. To address these needs the Society offers the following
    recommendations for your consideration.

                             U.S. GEOLOGICAL SURVEY

    Biological Resources Discipline
        The Biological Resources Discipline (BRD) provides critical
    scientific research and information needed for the effective management
    and restoration of the Nation's inland, anadromous, and estuarine
    fisheries and aquatic resources. With no regulatory role, BRD provides
    high-quality unbiased science for our nation's natural resources
    decision makers.
        In light of past under funding of the BRD, AFS is disappointed over
    the fiscal year 2005 request of $167.6 million for the Biology
    component. This is almost a $7 million decrease from the fiscal year
    2004 budget. AFS also notes that although recent BRD budgets show
    progress by tracking in the same direction as inflation, they still are
    not keeping up with inflation and have not yet made up for the 20
    percent decrease experienced in 1996.
        AFS is pleased to see BRD budget request fiscal year 2005 increases
    for Klamath research of lake conditions and the Lost River and
    shortnose suckers ($2.0 million) and invasive species (+ $1.0 million).
    AFS also supports a fiscal year 2005 budget request increase of $1.3
    million for the new BRD initiative of Science on the DOI Landscape,
    especially its emphasis on fisheries (aquatic and endangered
    resources). AFS also supports new fiscal year 2005 funding of $1
    million for additional NBII (National Biological Information and
    Infrastructure) Nodes in California and the Chesapeake Bay where issues
    of water quality/quantity and species recovery/maintenance are
    critically important to fisheries, aquatic resources, and our national
    environmental heritage.
        The Society is also concerned by programs that show a decrease in
    fiscal year 2005. Of particular importance to fishery research,
    restoration, and management are the Co-operative Research Units (CRU)
    and the Biological Research and Monitoring (BRM) programs. CRU and BRM
    both appear as line item decreases in the fiscal year 2005 budget
    request. We encourage Congress to make similar earmarks to these line
    items.

                        U. S. FISH AND WILDLIFE SERVICE

    Fisheries Program
        The U.S. Fish & Wildlife Service works with others to conserve,
    protect, and enhance the nation's fishery resources and aquatic
    ecosystems for the benefit of the American people. The Fisheries
    Program safeguards these resources while helping to provide
    recreational opportunities for the nation's 50 million licensed
    anglers, as well as evaluates fish populations and their habitats and
    coordinates the restoration and recovery of aquatic populations,
    habitats, and ecosystems.
        The Society would like to see more money go into programs to combat
    aquatic nuisance species. The fiscal year 2005 budget shows a decrease
    of $180,000 in funds for aquatic nuisance species. AFS is disappointed
    to see funds for the Fish Passage and Cooperative Projects eliminated
    from the fiscal year 2005 budget request.. By reconnecting aquatic
    species to historic habitats, many native species benefit, including
    salmon, trout, striped bass, walleye, paddlefish, and sturgeon.
        AFS also commends the fiscal year 2005 budget request for beginning
    to address the operations and management challenges faced by our aging
    National Fish Hatchery System, a system critical to fishery
    conservation, restoration, and recreation efforts, but that needs to be
    updated to function at its full capacity and achieve its management
    objectives. Therefore, the Society strongly supports increasing the
    fiscal year 2005 request from $57 million--a $1 million decrease below
    the fiscal year 2004 enatced--to restore and improve the National Fish
    Hatchery System. Of this, we are very pleased with the $840,000
    increase for hatchery operations and the $999,000 increase for hatchery
    maintenance, particularly to address the critical water management
    needs of old and outdated hatcheries. We would like to see continued
    increases to the National Fish Hatchery System's budget of $15 million
    per year for the next three years.
        Related to fisheries conservation and aquatic ecosystem management
    is the important role that the USFWS plays in implementing the
    Endangered Species Act. AFS supports the fiscal year 2005 request of
    $129.4 million for the Endangered Species Line Item.

                           BUREAU OF LAND MANAGEMENT

    Wildlife and Fisheries
        The BLM manages public lands for a range of uses, including
    recreation, conservation, livestock grazing, hunting and fishing,
    forest management and wildland fire management, cultural resource
    protection, and energy and mineral production. Many of the BLM lands
    are managed for fisheries as well as other uses. Fisheries program
    priorities for 2005 include: inland-fisheries conservation; subsistence
    fisheries management; Pacific Northwest fisheries, including culverted
    fish passage issues; multi-species conservation; aquatic indicators of
    land condition; and partnerships.
        Despite the breadth of BLM's fishery management responsibilities
    and its role in conserving our Nation's aquatic resources, the
    President and Congress have not funded BLM fisheries programs
    accordingly. In fiscal year 2002 and fiscal year 2003, there was a
    decline of more than $0.7 million and $0.5 million, respectively, in
    funds allocated to fisheries programs. The fiscal year 2005 budget
    request of $12.456 million is much closer to the 2001 enacted BLM
    fisheries budget. AFS recommends an increase of the Fisheries Line Item
    to the level of fiscal year 2001, that is to $12.8 million.

                             NATIONAL PARK SERVICE

    Park Management
        For fiscal year 2005, AFS recommends supporting the Resource
    Stewardship Line Item at the level requested ($343.4 million). AFS also
    supports the fiscal year 2005 budget requests for the funding of the
    following programs that also have benefit to aquatic resources:
    Cooperative Conservation Initiative ($21 million. AFS also encourages
    the Administration and Congress to continue authorization of the
    Recreational Fee Program which will expire without further
    authorization in fiscal year 2005.
    Bureau of Reclamation
        The AFS supports the President's request for fiscal year 2005 for
    BOR. With the growing challenge of water quality and quantity,
    allocation and preservation, AFS wants to underscore the critical
    responsiblity the Bureau of Reclamation and other Federal agencies have
    in managing our water resources and their associated ecosystems and
    species for the public good, including compliance with the Endangered
    Species Act.
        The Society appreciates your consideration of our view. We welcome
    the opportunity to provide additional information and advice regarding
    fisheries efforts of the Department of Commerce.
                                     ______

               Prepared Statement of the American Hiking Society

        Mr. Chairman and members of the Subcommittee, American Hiking
    Society represents 5,000 members and the 500,000 members of our 160
    affiliated organizations. As the national voice for America's hikers,
    American Hiking Society promotes and protects foot trails and the
    hiking experience--and is a long time partner with the National Park
    Service (NPS), USDA Forest Service, and Bureau of Land Management
    (BLM). In order for Americans to enjoy the outdoors and find healthy
    places to recreate, we need protected open spaces and well-maintained
    trails and other recreation facilities. We urge you to support funding
    increases that will protect trails and recreation resources for the
    benefit of the nation and future generations of hikers. American Hiking
    makes the following trail and recreation funding recommendations for
    fiscal year 2005:
        National Park Service:
      --Rivers, Trails and Conservation Assistance program: $13 million
      --National Trails System: $10 million, plus $1.25 million for GIS
            Network
        USDA Forest Service:
      --Recreation Management, Heritage and Wilderness: $300 million
      --Capital Improvement and Maintenance--Trails: $85 million
        Bureau of Land Management:
      --Recreation Management: $70 million
      --National Landscape Conservation System: $58 million Conservation
            Trust Fund: $2.24 billion
      --Stateside Land and Water Conservation Fund (LWCF): $300 million
      --Federal Land and Water Conservation Fund: $450 million
      --Federal LWCF, Appalachian National Scenic Trail, Forest Service: $5
            million
      --Federal LWCF, Ice Age National Scenic Trail, National Park Service:
            $4 million
      --Federal LWCF, Florida National Scenic Trail, Forest Service: $10
            million
      --Federal LWCF, Pacific Crest National Scenic Trail, Forest Service:
            $10 million
      --Urban Park and Recreation Recovery Program (UPARR): $50 million
        Trails represent one of our nation's most valuable assets, bringing
    individuals and families outside for recreation, inspiration, and
    education, and providing healthy physical activities, alternatives for
    transportation, and economic development for local communities. Hiking
    is one of the nation's most popular outdoor activities--73 million
    Americans hike regularly or occasionally (Outdoor Industry Association
    Participation Study 2002). However, years of inadequate funding
    jeopardize the protection of natural and cultural resources and the
    experiences of millions of recreationists every year.
        Federal policy encouraging partnerships, healthy lifestyles, and
    promoting volunteerism to protect and maintain our public lands
    warrants increased funding for trail and recreation programs across the
    land management agencies. Targeted funding increases coupled with
    increased on-the-ground recreation staff, including trail and volunteer
    coordinators, is essential to providing and preserving hiking and other
    outdoor recreation opportunities nationwide.
    NPS, Rivers, Trails, and Conservation Assistance Program (RTCA): $13
            million
        RTCA yields enormous conservation and recreation benefits to
    communities by fostering partnerships between federal, state, and local
    interests to restore rivers and wildlife habitat, develop trail and
    greenway networks, preserve open space, and revitalize communities--all
    contributing to improved quality of life and close-to-home recreation.
        RTCA is an extremely cost-efficient program. Through RTCA
    partnerships, NPS helps conserve more than 750 miles of river corridor,
    develops nearly 1,500 miles of trails, and protects more than 65,000
    acres of park, habitat, and open space annually, at no long-term cost
    to NPS. These projects often incorporate related benefits such as
    transportation alternatives, brownfield redevelopment, and floodplain
    planning. RTCA plays a critical role in creating a nationwide network
    of parks and open spaces, supporting conservation partnerships,
    promoting volunteerism, and encouraging physical activity. The
    Administration's HealthierUS Initiative explicitly highlights RTCA for
    its efforts in promoting physical activity.
        RTCA is a highly effective and popular program but continues to
    lack adequate funding. Despite RTCA's successes in coordinating upwards
    of 300 projects annually, RTCA funding has remained relatively stagnant
    during the last decade, virtually flat--approximately $8.2 million--for
    the last four years, and lagged well behind the rate of inflation. The
    program's declining real budget and funding shortages result in limited
    staff positions in several regions, office closures, and reduced staff
    participation within communities and on-the-ground projects,
    diminishing essential services of this field-based technical assistance
    program. Flat funding results in an annual loss of approximately 4
    positions, as personnel costs continue to rise through inflation and
    cost-of-living increases, while project costs must be cut back. The
    program faces the loss of another 4-5 staff in fiscal year 2005 if RTCA
    receives flat funding.
        RTCA receives less than \1/2\ of 1 percent of the total funding for
    the National Park Service, yet by building local partnerships it
    succeeds in attracting and leveraging substantial local funding. It
    makes sense to strengthen programs such as RTCA that support
    communities through partnerships and capacity-building, enabling local
    stakeholders to better manage and conserve their recreational and
    natural resources. We strongly urge you to fund RTCA at $13 million to
    remedy the program's continued erosion, compensate for losses due to
    inflation, and enable the program to respond to growing needs and
    opportunities in communities throughout the country.

    NPS, National Trails System: $10 million, plus $1.25 million for GIS
            network
        The NPS administers eighteen of the twenty-three national scenic
    and historic trails, but only one--the Appalachian National Scenic
    Trail--is fully open for public use from end-to-end. For most of these
    trails, barely half of their congressionally authorized length and
    resources are protected and available for public use. A minimum of $10
    million in fiscal year 2005 is crucial for resource protection, trail
    maintenance, interpretation, and volunteer coordination and support for
    these long-distance trails. In addition, NPS requires $1.25 million to
    continue work on a Geographic Information System network for the
    National Trails System to better administer, manage, and protect trail
    resources and landscapes. American Hiking thanks the Subcommittee for
    its support of the National Trails System and urges you to increase
    funding to help complete and protect these national treasures. American
    Hiking Society endorses the specific funding requests submitted by the
    Partnership for the National Trails System (PNTS).

    USDA Forest Service, Recreation Management, Heritage and Wilderness:
            $300 million
        The current investment in Forest Service recreation falls far below
    national needs. The Forest Service estimates that recreation creates
    nearly 80 percent of the Gross Domestic Product generated from Forest
    Service land, yet only about 10 percent of the agency budget is
    dedicated to recreation. Additionally, our national forests include the
    vast majority of our nation's designated wilderness areas, where
    opportunities for primitive recreation are abundant. The Forest Service
    requires increased funding to protect critical resources; upgrade
    recreation facilities; reduce the $188 million recreation deferred
    maintenance backlog; augment on-the-ground recreation staff; improve
    recreation resource analyses and planning; and more effectively utilize
    volunteers. Recreation budgets in many forests are barely sufficient to
    meet daily operational needs.

    Forest Service, Capital Improvement and Maintenance/Trails: $85 million
        The Forest Service manages 133,000 miles of trails and requires
    increased funding to restore and maintain these thousands of trail
    miles; reduce the $120 million trails maintenance backlog; improve
    trail infrastructure; prevent and mitigate resource impacts; and
    provide safe, high-quality recreational experiences for millions of
    hikers and other trail enthusiasts. We request $7.2 million for
    national scenic and historic trail administration, management, and
    construction, as specified by the PNTS.
        Increased funding for recreation and trails is especially crucial
    to the Recreation Agenda goal of placing trail and volunteer
    coordinators and/or recreation planners at each national forest and for
    each nationally designated area or trail. Despite the Forest Service's
    increased emphasis on recreation, we are very concerned that this
    conversation at the top is not translating to the ground. Very few
    national forests have even one full-time trails coordinator.
    Understaffing often results in volunteers performing essential
    functions instead of agency personnel or willing volunteers being
    turned away. And despite the number of hiking and other recreation
    organizations that offer to volunteer to build and maintain trails in
    national forests, very few forests have a volunteer coordinator. These
    efforts warrant an expanded commitment to trails and recreation
    funding, notably funding for recreation staff on the ground.
        In the Northwest, current agency budgets cannot accommodate the
    additional burden of storm damage repair. Record rainfall in Washington
    last fall caused severe flooding along the western slope of the
    Cascades. Dozens of road and trail bridges were washed out, and some of
    the most popular trails and campgrounds in the North Cascades were
    severely damaged. Existing Forest Service budgets cannot absorb the
    costs associated with repairing these facilities. The Mt. Baker-
    Snoqualmie National Forest requires an additional $4.4 million in
    emergency appropriations to preserve access to more than two dozen
    campgrounds and trails enjoyed by a combined total of more than 100,000
    visitors per year. The cost of bridge replacement and tread repair
    along the Pacific Crest National Scenic Trail ($1.2 million) alone is
    almost the entire size of the Mount Baker Snoqualmie National Forest's
    annual recreation budget.

    BLM, Recreation Management: $70 million
        The BLM supports a broad range of recreational opportunities within
    its 261 million acres yet continues to receive very limited funding.
    BLM is focusing on a comprehensive travel management approach to
    managing roads and trails and providing adequate and appropriate public
    access and has generated many collaborative partnerships for trails.
    BLM is working to leverage its minimal resources through the
    development and implementation of outreach strategies and management
    action plans for both motorized and non-motorized trail activities.
    However, the BLM faces daunting challenges with a growing deferred
    maintenance backlog for upkeep of more than 15,500 miles of trails. BLM
    is also facing critical inventory, planning and management challenges
    as it manages a staggering network of an estimated 600,000 mile of
    roads, trails, routes and ways available for public use--with 80,000
    miles maintained and signed.

    BLM, National Landscape Conservation System (NLCS): $58 million
        The NLCS protects and conserves the crown jewels (such as
    wilderness areas and national scenic and historic trails) of our public
    lands while providing a variety of benefits to the public, including
    diverse recreational opportunities. Additional funding is needed to
    support a range of activities in NLCS units including: environmental
    education, site interpretation, and developing more compatible land use
    ethics among public lands visitors; completing Resource Management
    Plans and initiating implementation actions for national monuments and
    conservation areas; monitoring of recreation use; management of
    portions of twelve national scenic and historic trails exceeding 5,200
    miles; and developing and strengthening partnerships for visitor
    services, recreation, interpretation, stewardship education, and
    volunteers. We request $3.3 million for national trail administration
    and management as outlined by the PNTS.

    Land and Water Conservation Fund (LWCF): $300 million Stateside; $450
            million Federal
        Federal and state land managers use the LWCF to create parks,
    protect trails and open spaces, and preserve wilderness and wildlife
    habitat. Over the past decade, the majority of LWCF funds have been
    diverted to programs unrelated to the traditional LWCF uses such as
    land protection and recreation. While LWCF funds have been cut
    severely, the need for open space and recreation has soared. LWCF is
    one of the most important conservation tools ever designed and is
    critical to the future protection of national trails. We strongly
    support federal LWCF appropriations for the Appalachian, Ice Age,
    Florida, and Pacific Crest National Scenic Trails.
        Volunteer contributions are essential to trails and recreation
    programs, and American Hiking and its members and member clubs do their
    part every year to help maintain our nation's outstanding network of
    trails. However, an increase in volunteers on public lands should not
    be perceived as an opportunity to cut agency budgets. In fact, the
    opposite is necessary. Creating a viable volunteer environment,
    leveraging willing human resources for burgeoning land managers' needs,
    requires additional investment in the infrastructure to support these
    volunteers. In return, volunteers can help reduce the enormous
    maintenance and construction backlogs in public agencies and be an
    educated, passionate voice for preserving and protecting our public
    lands.
        On June 5, 2004, American Hiking will coordinate the twelfth
    National Trails Day (NTD) to raise public awareness and appreciation
    for trails. Participants will gather at more than 2,000 NTD events
    nationwide. American Hiking Society members and outdoorspeople
    nationwide appreciate the Subcommittee's support for trail and
    recreation in the past and look forward to continued strong support.
    Thank you for considering our request.
                                     ______

      Prepared Statement of the American Institute of Biological Sciences

        The American Institute of Biological Sciences (AIBS) requests that
    Congress appropriate at least $1 billion in fiscal year 2005 funding
    for the United States Geological Survey (USGS). This funding level
    would restore cuts to important science programs proposed by the
    administration, provide a modest but much needed inflation adjustment,
    and allow implementation of important new science and information
    dissemination initiatives.
        The USGS provides independent, high-quality data, information,
    research support and assessments needed by federal, state, local and
    tribal policymakers, resource and emergency managers, engineers and
    planners, researchers and educators and the public. Because of the
    agency's combination of biological, geographical, geological, and
    hydrological research programs, USGS scientists utilize cutting-edge
    interdisciplinary research techniques to answer significant questions
    about earth processes that impact human quality of life.
        United States Geological Survey scientists do not work in
    isolation. Through the agency's nearly 400 offices located in every
    state and partnerships with over 2,000 federal, state, local, tribal,
    and private organizations, the USGS has built the capacity to draw on
    additional research expertise. For example, through the cooperative
    research units program USGS scientists are stationed on university
    campuses. This proximity to academic researchers helps bring additional
    intellectual and technical resources to bear on the natural resource
    problems USGS seeks to understand. The value of cooperative research
    units extends beyond their immediate research productivity, however.
    Cooperative research units are an essential component of our national
    education and training infrastructure. These research units enable
    future natural resource managers to gain the skills and experience
    government agencies need. Furthermore, cooperative research units are
    one of USGS' mechanisms for providing data and technical assistance to
    decision-makers.
        Natural resource managers require reliable, relevant, and timely
    information. The USGS Biological Informatics Program through
    initiatives such as the National Biological Information Infrastructure
    is another example of how the agency is meeting the needs of the
    resource management community. The Biological Informatics Program
    develops and applies innovative technologies and practices to the
    management of biological data, information, and knowledge resulting
    from research, thereby increasing the value of that research to
    scientists, planners, decision-makers, educators, students, and the
    public. Increased funding for the USGS would enable the Biological
    Informatics Program to continue on-going activities and begin to
    implement new initiatives that the resource management and research
    communities have identified as important for addressing national
    priorities.
        Other USGS biological research programs gather important data and
    information that academic, private sector, or other government
    scientists do not collect. For instance, a clear national priority is
    the prevention and mitigation of future losses resulting from non-
    native species invading new environments. USGS research is helping
    guide our understanding of how invasive species, such as the zebra
    mussel, brown tree snake, or tamarisk, colonize new environments.
    Decision-makers, whether working for the National Park Service or a
    hydroelectric utility, utilize USGS science to develop action plans for
    combating invasive species.
        Infrastructure is vital to science. Increasingly, coordinated
    networks of databases and data gathering instruments are required to
    answer the questions that public policymakers and scientists are
    asking. For example, environmental toxicologists or ecosystem
    scientists may use real-time data from the USGS network of streamgages
    to learn how quickly a pollutant travels through a watershed, impacts
    downstream fisheries, or enters a community's drinking water supply. An
    emerging need is for increased federal investment in natural history
    collections such as museums and herbaria. These institutions contain
    irreplaceable collections of the genetic diversity of our nation;
    information that helps to answer questions about invasive species, or
    how species have responded to changing environmental conditions.
    Unfortunately, much of this information is not accessible. With an
    increased investment in USGS science programs, agency personnel and
    their partners could begin to develop new technology that enables
    scientists to better utilize this valuable information.
        In the fiscal year 2005 appropriation, Congress can also support
    USGS science by ensuring that adequate funds are provided to cover
    ``uncontrollable costs,'' items such as salary and benefit increases.
    The Department of the Interior fiscal year 2005 budget request does not
    adequately address these expenses. The Department of the Interior's
    budget indicates that $17.2 million is needed to cover these expenses.
    Unfortunately, only $9.1 million has been requested. If the $17.2
    million needed is not appropriated, program managers may be forced to
    curtail important work in order to meet these commitments.
        Thank you for your thoughtful consideration of this request. If you
    require additional information, please contact Dr. Robert Gropp at 202-
    628-1500 or rgropp@aibs.org.

                                   ABOUT AIBS

        The American Institute of Biological Sciences is an umbrella
    organization whose individual and organizational membership spans the
    breadth of applied and basic biological sciences. AIBS is dedicated to
    advancing biological research and education for the welfare of society.
    AIBS seeks to facilitate communication and interactions among
    biologists, professional biological societies, biological and other
    scientific disciplines, as well as to serve and advance the interests
    of biology in the broader scientific community and in other components
    of society.
                                     ______

              Prepared Statement of the Appalachian Mountain Club

        As a founding member of the Northern Forest Alliance (NFA), the
    Appalachian Mountain Club (AMC) echoes the testimony of George Gay,
    Executive Director of the NFA, in strong support of a significant
    increase in funding for the Forest Legacy program to at least $150
    million, and full funding for the Land and Water Conservation Fund
    (LWCF). In addition, we call for full funding of the Conservation Trust
    Fund (Title VIII), which should be funded in fiscal year 2005 at $2.24
    billion, as originally authorized. It is critical for conservation
    efforts in the Northern Forest region and across the country that the
    array of programs included in this title be fully funded.
        As a regional conservation, education, and recreation organization
    of 92,000 members from Maine to Washington, DC, AMC urges the Committee
    fund these critical programs and the many specific projects that have
    been identified for Forest Legacy or LWCF funding. In addition, the AMC
    specifically urges the Committee's favorable consideration of the
    request from Senators Collins and Snowe for $1.5 million in federal
    side LWCF funds for the expansion of the Appalachian National Scenic
    Trail in Maine, which would help implement our exciting Maine Woods
    Initiative (see below). This request incorporates a pass-through of the
    funds and the land ownership to the State of Maine, rather than the
    federal government, similar to the approach taken by the Subcommittee
    previously in other areas such as Ice Age Trail and New Jersey
    Pinelands, to address concerns about the expansion of federal land
    ownership in Maine.
        On December 9, 2003, the AMC purchased from International Paper
    37,000 acres in Maine of outstanding recreation land, wildlife habitat,
    and forest that includes 17 miles of the Appalachian Trail. This
    purchase is a first step in AMC's Maine Woods Initiative, which will
    integrate habitat protection, recreation, education, and sustainable
    forestry in the heart of the 100-Mile Wilderness region of Maine. The
    parcel purchased in December, also known as the Katahdin Iron Works
    property, lies 10 miles east of Greenville. Among the outstanding
    features of this tract are a 9-mile stretch of the Appalachian National
    Scenic Trail that traverses the property along the Barren-Chairback
    Mountain Range, and an 8-mile stretch of the Trail along its eastern
    boundary. While these sections of the Trail enjoy federal protection
    through NPS ownership of the immediate trail corridor, there are
    significant natural and scenic features along the Barren-Chairback
    Range that are not permanently protected and that fall outside the
    trail's current configuration.
        The area proposed for acquisition includes several notable
    ecological features, including a 300-year-old spruce stand on the
    southern slopes of Columbus Mountain and two occurrences of a fir-birch
    subalpine forest, considered relatively rare in Maine and notable on
    the Katahdin Iron Works property for occurring at a significantly lower
    elevation than is usual for this forest type. The proposed corridor
    expansion also includes the upper portion of West Chairback Pond
    Stream, rated Class C by the Maine Rivers Study, which puts it in the
    top 13 percent of the state's total river mileage for composite natural
    resource value. In addition, much of the proposed acquisition area lies
    within a roadless area of over 9,000 acres mapped as part of a regional
    roadless area study. Acquisition of this parcel would allow for its
    protection along this incredibly scenic and popular stretch of the
    Appalachian Trail, and provide adequate buffers of undisturbed land
    that will make the hike through the 100-Mile Wilderness a truly
    wilderness experience for the Trail's many visitors.
        AMC's Maine Woods Initiative creates the opportunity for an
    innovative public private partnership that will greatly expand the
    recreational opportunities available to local, regional, and state
    residents as well as visitors from afar, at no ongoing cost to American
    taxpayers. The 100-Mile Wilderness region, and the property purchased
    by the AMC, abounds in four season recreational opportunities, the
    experience of which will be enhanced by expanding protection of this
    section of the Appalachian Trail. In these times of scarce resources
    for our public parks and forests, this partnering of the Federal
    government, the State of Maine, and the AMC through our Maine Woods
    Initiative represents a unique opportunity to further the goals of land
    protection, outdoor recreation, and economic opportunity in the Maine
    Woods Region. The AMC is proud of the strong local support our project
    has received to date, from local government leaders and economic
    development officials to business owners, community organizations, and
    local residents for whom these lands are their own back yard.
        The AMC is excited and challenged by our Maine Woods Initiative.
    Permanent protection of an expanded trail corridor for this section of
    the Appalachian Trail will be a critical and popular first step in our
    recreation, forest management and conservation plans for the Katahdin
    Ironworks Tract. Thank you for your consideration.
                                     ______

     Prepared Statement of the California Industry and Government Coalition

        Mr. Chairman and Members of the Subcommittee: On behalf of the
    California Industry and Government Coalition for the Kern County Valley
    Floor Habitat Conservation Plan (KCVFHCP), we are pleased to submit
    this statement for the record in support of our funding request for the
    Interior Appropriations Bill for fiscal year 2005.
        First, the Coalition supports the Department of Interiors budget
    request for the Cooperative Endangered Species Conservation Fund--
    especially funding for HCP land acquisition.
        Second, the Coalition urges the Subcommittee to appropriate
    additional funding for land acquisition above the funding requested by
    the President.
        Third, the Coalition requests that the Appropriations Subcommittee
    earmark $1 million to the Kern County program to be used for purposes
    of acquiring and maintaining habitat preserves.
        The Coalition's request is supported by the timely need to
    implement the KCVFHCP. In 1997, the U.S. Fish and Wildlife Service
    allocated $500,000 of federal Endangered Species Act Section 6 funds to
    assist in program implementation. The California State Government has
    authorized $1 million to augment the federal funds. In order to secure
    the $3 million total necessary to assist in the implementation of the
    plan, we will require $1 million for fiscal year 2005 and $500,000 for
    fiscal year 2006.
        The Coalition requests that the Subcommittee appropriate the
    maximum possible amount for this program, so that the funding pool can
    accommodate our request and need. We are confident that the plan's
    merits and urgency support this request.
        Kern County's program is unique from other regions in the nation in
    that it contains some of the highest concentrations of plant and animal
    species protected by the Endangered Species Act (ESA) within the
    continental United States. The region is occupied by 11 wildlife
    species and 14 plant species covered as threatened or endangered under
    the program. The potential for conflict with the federal ESA is great
    in Kern County because of the extensive oil and gas production
    activities, water conveyance efforts and the urbanization that is
    occurring. Since Kern County is the top oil producing county in the
    nation and experiencing rapid urban growth, potential conflicts with
    the ESA and their resolution through a proactive conservation program
    has significant national importance.
        In recognition of the conflicts posed to economic growth by federal
    and state endangered species laws, a joint agency Memorandum of
    Understanding was entered into by the U.S. Fish and Wildlife Service,
    Bureau of Land Management, California Energy Commission, California
    Division of Oil and Gas and Geothermal Resources, California Department
    of Fish and Game and Kern County. The participating agencies agreed to
    develop a unified conservation strategy with the goal of providing a
    streamlined and consistent process of complying with State and federal
    endangered species laws, yet at the same time allow important industry
    activities such as oil and gas, water conveyance and other industry
    activities to continue.
        Preparation of the KCVFHCP began in 1989 and involved a number of
    federal, State and local government agencies, as well as the oil and
    gas industry, agricultural interests, utilities and environmental
    groups.
        Kern County's Valley Floor Habitat Conservation Plan is one of the
    largest and most diverse endangered species conservation programs under
    development in the nation encompassing over 3,110 square miles. The
    program represents a departure from traditional endangered species
    conservation programs which utilize prohibitory controls to assure
    conservation of species habitat. Instead, it is based on an incentive-
    based system of selling or trading habitat credits in an open market.
    This innovative approach, for the first time, provides landowners with
    real incentives and more importantly, the ability to choose how best to
    manage their own private property. The KCVFHCP is in the final stages
    of preparation. The HCP document is completed. An environmental impact
    statement is being prepared for public review in Fall, 2004. Final
    approval will occur in 2005.
        Numerous agencies, in concert with the State of California and
    local government entities, as well as the private oil and gas industry
    have contributed funding, time and other resources toward developing
    the KCVFHCP. The KCVFHCP program will be completed in 2005, provided
    there is the necessary federal funding for the acquisition of habitat
    to mitigate for oil and gas operations and development. Additional
    funding is critical to completing the HCP. This is one of the final
    steps necessary to implement the conservation strategy. Because of the
    extensive private, local and state government financial support that
    went into the development of this program, federal participation in
    program implementation will demonstrate that the burden of ESA
    compliance is not being placed exclusively on private property owners.
    Program funding will also contribute to eventual species recovery.

                             PROGRAM FUNDING NEEDS

        In order for the KCVFHCP to be implemented, the program requires
    funding in the amount of $1.5 million (augments the $1.5 million in
    state and federal funding received in 1997) that could be funded in
    increments over the first two years of the program. The purpose of this
    funding is described as follows:

    Oil Development Issue
        A mitigation strategy has been devised that is intended to
    acknowledge existing oil field activities within Kern County. The
    strategy proposes to acquire 3,000 acres of endangered species habitat
    to mitigate for species loss resulting from oil field development
    outside of established oil field production areas, but within proximity
    of those areas. This is to allow for reasonable expansion of oil field
    activities over the life of the HCP program. The program strategy
    allocates $3.0 million for acquisition and perpetual maintenance of
    species reserve areas. With this type of strategy, oil field expansion
    activities would be provided for in the program. This strategy would be
    of great benefit to the small independent oil and gas companies within
    the program area.

    Urban Development/County Infrastructure Issue
        The conservation program includes an Urban Development/County
    Infrastructure mitigation strategy that mitigates for species habitat
    loss through the use of an incentive-based system of selling or trading
    habitat credits in an open market. This innovative program will add
    market value to land that is needed by project proponents to comply
    with endangered species laws which will encourage the owners of such
    properties to offer lands for the benefit of species conservation.
    Protected species of plants and animals will benefit from a program
    that promotes private property owners to conserve permanent habitat
    preserves consistent with the objectives of the ESA.

    Federal Funding Support will Augment Local Government and Private
            Industry Efforts to Comply with the Endangered Species Act
        The $1.5 million required for the oil field strategy would help
    contribute to satisfying the program's endangered species conservation
    goals, while also providing for continued economic growth of Kern
    County's oil and urban development activities. Protected species would
    benefit from a comprehensive long-term program that promotes the
    creation of permanent habitat preserves.
        Numerous private businesses, in concert with the State of
    California and local government entities, are attempting to do their
    part, and we come to the appropriations process to request assistance
    in obtaining a fair federal share of financial support for this
    important effort. This unique cooperative partnership involving state
    and local government, as well as private industry, has contributed
    substantial funds to date, to assist in the development of this
    program.
        The California Industry and Government Coalition appreciates the
    Subcommittee's consideration of this request for a fiscal year 2005
    appropriation to support implementation of this significant program.
                                     ______

          Prepared Statement of the Colorado River Board of California

        Support for fiscal year 2005 Federal Funding of $5.2 Million for
    the Department of the Interior-Bureau of Land Management to assist in
    the Colorado River Basin Salinity Control Program, with $800,000 to be
    designated specifically to salinity control efforts.
        Your support and leadership are needed in securing adequate fiscal
    year 2005 funding for the Department of the Interior-Bureau of Land
    Management with respect to the federal/state Colorado River Basin
    Salinity Control Program. This program is carried out as a part of
    ecosystem and watershed management pursuant to the Colorado River Basin
    Salinity Control Act and the Clean Water Act.
        As you are aware, the Bureau of Land Management (BLM) is the
    largest landowner in the Colorado River Basin. Due to geological
    conditions, much of the lands that are controlled and managed by the
    BLM are heavily laden with salt. Past management practices have led to
    man-induced and accelerated erosional processes from which soil and
    rocks, heavily laden with salt have been deposited in various stream
    beds or flood plains. As a result of this disposition, salt is
    dissolved into the River System causing water quality problems
    downstream.
        Congress has charged federal agencies, including the BLM, to
    proceed with programs to control the salinity of the Colorado River.
    BLM's rangeland improvement programs can lead to some of the most cost-
    effective salinity measures available. These salinity control measures
    may be more cost-effective than some now being considered for
    implementation by the Bureau of Reclamation through its Basinwide
    Program and by the Department of Agriculture through its EQIP program.
    In keeping with the Congressional mandate to maximize the cost-
    effectiveness of the salinity control program, the Colorado River Board
    is requesting that Congress appropriate and the administration allocate
    adequate funds to support BLM's portion of the Colorado River Basin
    Salinity Control Program.
        The Colorado River Board of California (Colorado River Board), the
    state agency charged with protecting California's interests and rights
    in the water and power resources of the Colorado River System, requests
    that Congress appropriate $5,200,000 of these funds in fiscal year
    2005, to accomplish activities that BLM either has underway or should
    initiate in order to further control the concentrations of salinity of
    the Colorado River. It is particularly important that the BLM's line
    item for Management of Lands and Renewal Resources be adequately
    funded. The Colorado River Board urges the Subcommittee to specifically
    mark, $800,000 from this line-item for the Colorado River Basin
    Salinity Control Program as has been the direction to BLM from the
    Subcommittee in past years.
        The Colorado River Basin Salinity Control Forum (Forum) on behalf
    of the seven Colorado River Basin states has submitted testimony to
    your Subcommittee. The Colorado River Board concurs in the fiscal year
    2005 funding request and justification statements for BLM as set forth
    in the Forum's testimony.
        California's Colorado River water users are presently suffering
    economic damages, estimated at $300 million per year, due to the
    River's salinity, as stated in a recent report prepared by the Bureau
    of Reclamation and the Metropolitan Water District of Southern
    California. In addition, 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 the Congress provide
    adequate funds to the Bureau of Land Management for its activities
    related to salinity control in the Colorado River Basin.
        The Colorado River is, and will continue to be, a significant and
    vital water resource to the 17 million residents of southern California
    as well as throughout the Lower Colorado River Basin. As stated
    earlier, preservation of the River's water quality through an effective
    salinity control program will avoid the additional economic damages to
    users of Colorado River water in Arizona, California, and Nevada.
        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 important program.
                                     ______

               Prepared Statement of the Doris Day Animal League

        The Doris Day Animal League is a non-profit, member supported
    animal advocacy organization located in Washington, D.C. On behalf of
    our more than 350,000 members and supporters, we respectfully present
    to the subcommittee our concerns about the Bureau of Land Management's
    (BLM) Wild Horse and Burro Program (Program).
        In 1971, Congress charged the BLM with preserving America's wild
    horses and burros via passage of the Wild Free-Roaming Horse and Burro
    Act. The Act declares that ``wild free-roaming horses and burros are
    living symbols of the historic and pioneer spirit of the West . . .
    [who] shall be protected from capture, branding, harassment or death.''
    Further, they are to be considered as ``an integral part of the natural
    system of the public lands.'' We are gravely concerned that the BLM is
    failing to fulfill this mandate.
        In fiscal year 2001, the BLM received a $9 million budget increase
    to halve the number of wild horses on the range within four years.
    Despite the agency's failure to meet this goal, large numbers of horses
    were removed from the range and this new level of funding was
    maintained through fiscal year 2004.
        Now the agency is requesting another monumental increase of $10.5
    million (plus another $2.3 million from Southern Nevada Public Land
    Management Act funds) so that it can once again begin mass roundups to
    drastically reduce the number of wild horses and burros on the range
    from an estimated 39,000 to 25,000 in just two to three years. Yet the
    agency has failed to conduct the most basic research to justify its
    proposed action. Despite a statutory requirement to base roundups on
    current data, the agency now spends just 3 percent of its budget on
    range work, including monitoring and censusing of wild horse
    populations, even though such work is critical to the successful
    management of wild horse and burro populations and the range itself. In
    fact, most herd management areas haven't been censused for at least
    four years.
        The need for such basic field research cannot be over stressed.
    Multiple roundups in the last year brought in significantly fewer
    horses than had been anticipated. One explanation is the BLM's reliance
    on old data. Further, the agency operates on the premise that wild
    horses and burros have an annual population growth rate of 20-25
    percent when the rate may be closer to 18 percent. The very real
    possibility exists that the agency, if granted its requested increase,
    may actually take the wild horse and burro population well below the
    arbitrary target Appropriate Management Level of 25,000 animals, simply
    because it doesn't actually know how many horses and burros roam the
    range today.
        The removal of such huge numbers of horses also creates a
    management crisis. Although the BLM has recognized the shortage of good
    adoptive homes and has subsequently opened several long-term holding
    facilities where horses are pastured in large groups, it is unclear how
    the agency can sustain this plan of action; as more horses are rounded
    up, additional facilities are needed. Already the agency spends some 40
    percent of its annual budget on caring for some 21,000 horses removed
    from the range, with nearly another 40 percent of the budget going to a
    marketing and adoption program that can never be expected to
    successfully place the thousands of wild horses and burros rounded up
    annually.
        Ironically, while the government is spending millions to remove
    wild horses and burros from the range, it spends millions more to
    subsidize livestock grazing on public lands, a practice that has been
    cited by the General Accounting Office as being the primary cause of
    range degradation: ``. . . the primary cause of degradation in
    rangeland resources is poorly managed domestic livestock (primarily
    cattle and sheep) grazing . . . wild horses are vastly outnumbered on
    federal rangelands by domestic livestock . . .'' (Rangeland Management:
    Improvements Needed in Federal Wild Horse Program, GAO, 1990). Despite
    some grazing reductions in recent years, domestic livestock still so
    dramatically outnumber wild horses on BLM land (the ratio is estimated
    to be 50:1) that the removal of tens of thousands of horses has not had
    a significant impact on the health of the range.
        While we do not oppose the agency receiving additional funds, we do
    not agree that mass roundups should go forward without the agency first
    conducting the necessary research to establish the need to remove such
    large numbers of wild animals from their natural habitat. Not only is
    the strategy financially unsustainable, but history shows that the
    health of the range is not noticeably improved simply through the
    removal of large numbers of wild horses and burros. There is, of
    course, the loss of the animals' freedom to consider, too.
        We therefore respectfully urge this subcommittee to carefully
    scrutinize the Program's request for additional funding in fiscal year
    2005, and request the following report language be included in the
    bill:

        ``The Committee is concerned by the Bureau of Land Management's
    Wild Horse and Burro Program's failure to maintain current data on
    numbers of wild horses and burros on the range. As such, one-quarter of
    all new funds requested by and appropriated to the Bureau of Land
    Management in fiscal year 2005 for its Wild Horse and Burro Program
    shall be apportioned for on-the-range research to scientifically
    establish current population levels of wild horses and burros in at
    least one-quarter of all Herd Management Areas and to verify that the
    target Appropriate Management Level of 25,000 is indeed correct. In
    addition, the agency shall report back to Congress by March 1, 2005 on
    the Wild Horse and Burro Program's research and roundup activities,
    including the numbers or animals brought in versus the numbers
    scheduled to be gathered.''

        Finally, in light of the huge number of wild horses and burros
    being rounded up through emergency and scheduled gathers, it is
    imperative that the ``no-kill'' provision that has been attached to the
    Interior Appropriations bill for several years now remain intact. That
    provision reads:

        ``The appropriations made herein shall not be available for the
    destruction of healthy, unadopted, wild horses and burros in the care
    of the Bureau of Land Management or its contractors.''

        Thank you for your consideration.
                                     ______

            Prepared Statement of the Ecological Society of America

        The Ecological Society of America (ESA), the nation's premier
    scientific society of ecologists with over 8,000 members, is pleased to
    provide written testimony on the U.S. Geological Survey (USGS) for
    fiscal year 2005. ESA is grateful to Congress for report language
    included in both fiscal years 2003 and 2004 which underscored the
    importance of USGS programs and cooperative initiatives. We ask that
    Congress strongly consider funding USGS at $1 billion for fiscal year
    2005. This 6.5 percent boost above the fiscal year 2004 enacted level
    would restore proposed cuts to key agency programs, fully fund
    uncontrollable costs, and begin to reverse the nearly decade-long
    funding shortfall of this agency.
        As the Department of Interior's sole science agency, the USGS
    conducts research critical to Interior's responsibilities in managing
    land, water and in protecting wildlife and environmental resources. In
    addition, USGS' long-term monitoring programs, nationwide network and
    multidisciplinary scope makes USGS a unique and important research body
    in such areas as combating invasive species, maintaining water quality
    and quantity, and tracking wildlife diseases. These problems impact the
    health, well being and economic security of many U.S. residents, in
    addition to being key areas of ecological research.
        The proposed budget for fiscal year 2005 includes new funds,
    including $1 million for invasive species research and $1 million for
    Water 2025, which we believe deserve congressional support. USGS is at
    the forefront of innovative research on invasive species--a nation-wide
    environmental problem costing the United States an estimated $135
    billion a year. USGS' stream monitoring network is an unparalleled
    resource, tracking water quantity and quality all over the nation and
    providing a valuable dataset to researchers from many institutions.
        However, the Society is concerned about the Administration's
    proposed cuts--including a proposed $2.8 million cut to the fire
    ecology and biological fire science activities--which would curb the
    agency's ability to provide scientific information in those areas. In
    addition, there is a real risk that research finds will be redirected
    in order to meet uncontrollable cost increases.
        The USGS is an exceptional and unique research institution. Many of
    the ecological problems that the USGS is charged with addressing
    require an interdisciplinary and integrative approach. USGS is
    positioned to utilize its expertise in geology, hydrology, geography
    and biology to address these complex problems so crucial to maintaining
    human and environmental health.
        We hope that on this, the agency's 125th anniversary, Congress will
    do its best to support USGS at or as close to the $1 billion level as
    possible. Thank you for your thoughtful consideration of our request.
                                     ______

                   Prepared Statement of The Fund for Animals

        My name is Andrea Lococo and I serve as the Rocky Mountain
    Coordinator of The Fund for Animals, a national animal protection
    organization headquartered in New York City with 200,000 members and
    supporters nationwide and regional offices throughout the country.
    Please accept the following testimony regarding the Bureau of Land
    Management's (BLM) budget request for its wild horse and burro program
    for fiscal year 2005.
        As background information, The Fund for Animals has been intimately
    involved in wild horse and burro advocacy for many years from working
    to pass protective legislation to litigation to direct rescue
    operations. We have rescued thousands of wild burros from being shot
    over the years from Grand Canyon National Park, Death Valley National
    Monument and China Lake Naval Weapons Center. In fact, we are currently
    rescuing wild burros from Mojave National Preserve. We have also taken
    many so-called ``unadoptable'' wild horses at the request of the BLM,
    all of whom have found refuge at our sanctuary, Black Beauty Ranch, in
    Texas. We are well acquainted with the national wild horse and burro
    program and have on numerous occasions expressed our concern about the
    adverse impacts of BLM management policy and actions on these ``living
    symbols of the historic and pioneer spirit of the West.''
        With the passage of the 1971 Wild Free-Roaming Horses and Burros
    Act (WFHBA), the BLM became the primary federal agency charged with the
    protection and management of our nation's wild horses and burros. The
    agency is required to protect and to manage wild horses and burros as
    self-sustaining populations of healthy animals in balance with other
    uses and the productive capacity of their habitat. In addition, wild
    horses and burros are to be considered comparably with other resource
    values in the formulation of land use plans. (Emphases added) However,
    based upon review of the national wild horse and burro program over
    several years, it has become painfully obvious to The Fund for Animals
    that the BLM has lost sight of its legal mandate to protect wild free-
    roaming horses and burros, and instead focuses almost entirely on
    managing these animals. Disturbingly, management has been reduced to
    nothing more than removals, regardless of whether such actions
    negatively impact the health and viability of these animals.
        The WFHBA requires the BLM to submit to Congress a biannual report
    about the status of the wild horse and burro program. Astonishingly,
    1997 was the last year the BLM presented a then delinquent report to
    Congress, covering the years from 1992-1995. Since that time, for all
    intents and purposes, the agency has not been held accountable for its
    actions. Many of its current management decisions are seriously
    jeopardizing the long-term health and genetic viability of numerous
    herds.
        In fiscal year 2001, the BLM requested a $9 million increase to its
    national wild horse and burro budget in order to implement a new
    strategy to remove 50 percent of wild horses and burros from public
    lands by 2005--a strategy that made significant changes to the
    management of the program and yet was never subjected to environmental
    review. Since that time, the agency has churned out a spate of empty
    Environmental Assessments (EAs), using woefully inadequate monitoring
    data, in order to establish population targets for wild horses and
    burros that are based solely on resource availability after existing
    livestock and wildlife use is considered. Based upon review of most BLM
    land use plans, it is obvious that the agency routinely ignores its
    regulatory mandate that wild horses and burros shall be considered
    comparably with other resource values in the formulation of land use
    plans (CFR 4700.06(b)). The BLM first considers the current level of
    livestock use, after which the wild horse and burro population target,
    referred to as the Appropriate Management Level (AML), is calculated.
    Shockingly and unfairly, on the average, 90 percent of forage is
    allocated to livestock and the remainder to wild horses and burros and
    other wildlife species. Wild horses and burros are inexcusably an
    afterthought in the process.
        Now the BLM is asking for another increase of more than $10 million
    to further reduce the numbers of wild horses and burros on public
    lands--never having demonstrated the need to drastically reduce the
    populations in the first place. According to Nevada BLM documents dated
    12/17/03, received through a Freedom of Information Act (FOIA) request,
    in Nevada, the state which manages more than half of the nation's wild-
    freeroaming horses and burros, many of the Nevada's Herd Management
    Areas (HMAs) are currently below AML (the population target the agency
    itself sets) due to the removal of excess wild horses and burros since
    fiscal year 2000 and to continuing drought conditions in the West
    causing lower reproduction rates.
        The BLM routinely claims in its EAs that wild horses are increasing
    at a rate of 20-25 percent annually. Yet, when round-ups are conducted,
    the estimates often prove to be completely off the mark with
    considerably fewer animals found than estimated. This is cause for
    grave concern, particularly in herds that are geographically isolated
    and for which no chance of natural genetic exchange with contiguous
    herds exists. Nothing could be a better example than the travesty of
    the BLM's recent decision to set an AML of a paltry 7-10 wild horses in
    the isolated 11,000 acre Lahontan HMA in Nevada--a number that is
    clearly not genetically viable.
        Despite the aforementioned facts, the BLM insists that an
    overabundance of wild horses and burros is one of the primary threats
    to watersheds and to environmental health. However, the absurdity of
    such a claim is evident when one understands that literally millions of
    private domestic cows and sheep use the same lands. The BLM has
    dismissed the findings of a 1990 General Accounting Office Report (GAO/
    RCED-90-110) that stated that the primary cause of the degradation in
    rangeland resources and damaged riparian areas is poorly managed
    domestic livestock grazing, that wild horse and burro removals have not
    demonstrably improved range conditions, that wild horse behavior
    patterns make them less damaging than cattle to vulnerable range areas
    and that wild horse and burro removals are occurring in some locations
    not being damaged by widespread overgrazing. This latter point
    highlights another violation of the 1971 Free-Roaming Horses and Burros
    Act which stipulates that ``excess'' animals only be removed for the
    purpose of restoring a thriving natural ecological balance and to
    protect the range from the deterioration associated with
    overpopulation. The BLM simply never demonstrates that wild horses and
    burros are indeed the animals responsible for damage.
        The agency also ignores the findings in the Department of the
    Interior's Rangeland Reform 1994 F EIS that identified livestock
    grazing as the chief cause of deteriorated riparian areas. Studies have
    indicated that the reason riparian areas continue to degrade while many
    upland areas improve is attributable to the fact that cattle spend
    anywhere from 5 to 30 times longer in riparian areas than upland
    habitats. Furthermore, management directives from outdated land use
    plans are unlikely to address this degradation. Instead, the BLM
    appears fixated on reducing wild horse and burro numbers to AMLs that
    have been established in outdated land use plans whose obvious purpose
    was to accommodate existing livestock use in the first place.
        In addition to the problems within the program associated with on-
    the-range management, over the years, thousands of wild horses, who
    have been removed from public lands, have been sold to slaughter by
    unscrupulous and uncaring persons because the BLM failed to adequately
    screen potential adopters. The Fund for Animals has recently learned
    that hundreds of wild horses continue to be sold to slaughter each year
    in the United States alone. The BLM is doing virtually nothing to
    investigate and to prosecute people who, in order to obtain title, are
    required to sign affidavits under penalty of perjury indicating that
    they have no intention of selling the animals to slaughter and whose
    horses are subsequently slaughtered within days or weeks of receiving
    title. Even more shocking is that the BLM insists that these people are
    eligible to adopt again.
        BLM officials would have the public believe that all is well in its
    wild horse and burro adoption program, but time and time again we
    discover that is not the case, and we have been forced to turn to the
    courts several times in an effort to remedy the serious problems within
    the program. The BLM has failed to ensure that wild horses and burros,
    once adopted, receive humane care for the remainder of their lives, as
    was clearly the intent of Congress when it enacted the Wild Free-
    Roaming Horses and Burros Act in 1971.
        Twice in the recent past, nearly 60 animal protection and
    environmental organizations have submitted a request to the BLM asking
    that the agency for the first time ever prepare a Programmatic
    Environmental Impact Study (PEIS) on its national wild horse and burro
    program. Twice, the BLM has refused. Based on the difficulty our
    organization has experienced in obtaining accurate, timely information
    from the BLM, one must conclude that the agency apparently does not
    welcome public scrutiny of the program. Not only is the general public
    denied an opportunity to scrutinize the basis for the BLM's decision-
    making, but as previously mentioned, Congress has been equally denied.
        Despite the fact that the BLM has been unaccountable for its
    management actions, the agency is shamelessly requesting another
    significant increase in its budget for fiscal year 2005. To do what?
    The agency has yet to indicate and justify how it spent the last
    increase.
        For these and other reasons, The Fund for Animals respectfully
    requests that Congress instruct the BLM that until such time as the
    agency updates land use plans and prepares a Programmatic Environmental
    Impact Study (PEIS) allowing the public the opportunity to both
    scrutinize and offer input into how its wild horses and burros will be
    managed on its lands that no monies be used to conduct round-ups of
    wild horses and burros. Monies allocated for round-ups should be used
    to prepare such an analysis. At a minimum, the agency should be
    required to reallocate its budget to ensure that if removals occur,
    then the justification for such removal be based upon current and
    quality monitoring data and a current census of horses and burros. Wild
    horses and burros are to be removed from public lands for the purpose
    of maintaining a thriving natural ecological balance. Without this
    information, the agency manages recklessly and in violation of the law.
        Also, due to the massive removals within a relatively short period
    of time, there are approximately 21,000 wild horses and burros in
    holding facilities. The safety and welfare of these animals must be
    ensured. It is critical that Congress guarantee that these animals be
    humanely cared for over either the short or long term by stipulating
    that no funds be used for the destruction of healthy, unadopted wild
    horses and burros by BLM or its contractors.
        Thank you very much for your consideration.
                                     ______

                 Prepared Statement of the Highlands Coalition

        On behalf of the Highlands Coalition, I would like to offer
    testimony in support of several important projects proposed for the
    fiscal year 2005 Interior and Related Agencies Appropriations Bill that
    would significantly advance conservation of the Highlands region. The
    Highlands region has now been the subject of two federal studies that
    have highlighted its importance for conservation of public drinking
    water supplies, wildlife habitat, and recreational opportunities. The
    projects described below would help assure that this region can
    continue to meet the needs of the more than 25 million Americans who
    live within an hour's drive of the Highlands.
        The Highlands Coalition includes 117 national, regional, state and
    local organizations working to protect the more than 2 million-acre
    Highlands region that stretches from southeastern Pennsylvania through
    northwest New Jersey, the Hudson Valley of New York and into the
    Litchfield Hills of Connecticut. The Highlands Coalition was galvanized
    by the landmark regional study of the New York-New Jersey Highlands,
    published in 1992, that found the Highlands region to be of national
    significance due to the diversity and quality of its natural resources
    and landscape, all located so close to the nation's most densely
    populated area.
        In 2002, the U.S. Forest Service published a detailed study update
    that reinforced the findings of the 1992 Highlands Study and recognized
    accelerating land use pressures on the region. The study update noted
    that the Highlands are the backyard and lifeblood of a metropolitan
    complex extending from Philadelphia through Newark and New York City
    and up to Hartford, supplying clean drinking water to over 15 million
    people, hosting 14 million recreational visits annually and providing
    habitat for 247 threatened and endangered species.
        The study update further revealed that over 5,000 acres of land in
    the New York-New Jersey Highlands are lost each year to suburban sprawl
    and that the rate of loss of forests and wetlands in particular has
    quadrupled, threatening the quantity and quality of public drinking
    water supplies. Statistics indicate that if the status quo continues,
    the population of the region will increase by nearly 50 percent,
    impacting water quality in over 70 percent of Highlands watersheds and
    causing water demand to exceed supply in many areas. Wildlife habitat
    and recreational outlets in the Highlands will be similarly impacted if
    the current rate and pattern of development continues.
        The Highlands Coalition supports several projects proposed for the
    fiscal year 2005 Interior and Related Agencies Appropriations Bill that
    would help improve our understanding of the Highlands region and
    provide immediate protection for some of its most high value resource
    areas:

                  U.S. FOREST SERVICE HIGHLANDS STUDY FUNDING

        The Highlands Coalition supports the request from Senators Arlen
    Specter, Rick Santorum, Joseph Lieberman, and Christopher Dodd for
    $500,000 to extend the U.S. Forest Service's New York-New Jersey
    Highlands Study into the Pennsylvania and Connecticut portions of the
    Highlands region. The original funding for the 1992 Highlands Study and
    subsequent update clearly contemplated inclusion of associated pieces
    of the Highlands region beyond the identified study areas in New York
    and New Jersey, and a variety of public and private partners in
    Pennsylvania and Connecticut are eager to begin this long-awaited work.
    Completion of a Highlands Study extension would support more effective
    conservation of the entire Highlands greenbelt.

                             FOREST LEGACY PROGRAM

        The Highlands Coalition supports three important Forest Legacy
    projects in the Highlands that have been put forward by the States of
    Pennsylvania, New Jersey, and New York.
        The Birdsboro Waters project in the Pennsylvania Highlands seeks
    $2.2 million to conserve 1,800 acres of interior forestland that lie at
    the heart of the largest contiguous forest block in southeastern
    Pennsylvania. This project provides critical water supply protection
    for the millions of users who rely on the Schuylkill River, as well as
    wildlife habitat, trout streams, and myriad public outdoor recreation
    opportunities. The project was ranked first on Pennsylvania's list and
    twelfth in the President's Budget.
        The Dickerson Tract in the Raritan Watershed of the New Jersey
    Highlands seeks $4.5 million to conserve one of the major water supply
    areas for central New Jersey. The Raritan System includes the Spruce
    Run and Round Valley Reservoirs, two of New Jersey's most important. In
    addition to critically important water supply protection, this 220-acre
    project would also protect critical wildlife habitat as part of one of
    the largest remaining interior forest areas in the New Jersey
    Highlands. The project was ranked first on New Jersey's list and fourth
    in the President's Budget.
        The Surprise Lake project in the New York Highlands seeks $1
    million to conserve 648 acres most notable for wonderful recreation
    values and watershed protection. The project lies in the middle of a
    network of protected lands that is being assembled across the Hudson
    Highlands, a scenic area accessible from New York City by public
    transit or automobile in less than an hour. The Surprise Lake project
    area features scenic vistas from high ridgelines, long distance hiking
    opportunities, and represents one of the highest quality mountain
    recreation opportunities within close range of the New York
    metropolitan area. The project area also protects the Breakneck Brook,
    a key tributary of the Hudson River, and provides valuable wildlife
    habitat. The project rightfully ranked behind the top-ranked and
    valuable Tahawus project in the Adirondacks on New York State's project
    list, and was not included in the President's Budget. However, we feel
    that this project opportunity is so valuable as to merit a second
    project beyond Tahawus for populous and rapidly urbanizing New York
    State in fiscal year 2005.

                        LAND AND WATER CONSERVATION FUND

        The Highlands Coalition supports $1.6 million from the federal side
    of the Land and Water Conservation Fund (U.S. Fish and Wildlife Service
    account) for additions to the Wallkill National Wildlife Refuge, which
    lies within a key natural resource area that crosses the border between
    the New Jersey and New York Highlands. The Wallkill NWR provides
    valuable protection for the Wallkill River and key wetland, riparian,
    and interior forest habitat, while also providing recreation
    opportunities that include wildlife viewing, paddling, and hiking on
    the nearby Appalachian Trail and other trails.
        The federal government has already made a significant investment in
    not only the Wallkill NWR but also in the immediately surrounding
    region, including the Appalachian NST corridor, the Pochuck Mountain
    Forest Legacy project in New York, and Sterling Forest State Park. As
    development pressures increase in this formerly remote corner of the
    Highlands, it will become more difficult to complete the Wallkill NWR
    by acquiring needed inholdings. In light of the absence of appropriated
    funding for the refuge last year, the Highlands Coalition respectfully
    requests that funding be allocated for this important project in fiscal
    year 2005.
        In conclusion, the Highlands Coalition is grateful for the
    considerable federal investment that has been made over the last decade
    to support conservation of the Highlands region. We would be grateful
    for the subcommittee's support for the important projects outlined
    above to continue the fine partnership with states and local
    communities that is steadily securing valuable natural resources across
    the region.
                                     ______

         Prepared Statement of the Humane Society of the United States

        Thank you for the opportunity to offer testimony to the Interior
    and Related Agencies Subcommittee on several funding items of
    importance to The Humane Society of the United States (HSUS) and its
    8.1 million supporters nationwide. As the largest animal protection
    organization in the country, The HSUS urges the Committee to address
    these priority issues in the fiscal year 2005 budget.

           LAW ENFORCEMENT DIVISION OF THE FISH AND WILDLIFE SERVICE

        After illegal drugs and arms, trade in wildlife parts is the third
    most lucrative smuggling enterprise in this country. New technology and
    a full complement of Special Agents are essential if law enforcement is
    to have any hope of effectively enforcing the nation's endangered
    species trade laws. The HSUS strongly supports an increase of $2.351
    million over the Administration's request for U.S. Fish and Wildlife
    Service Law Enforcement Operations and Maintenance to meet last years'
    funding level.
        In addition, the Captive Wildlife Safety Act, which was recently
    signed into law, will require a small amount of additional funding for
    proper enforcement. The law, Public Law 108-191, was passed unanimously
    in both the House and Senate and takes aim at the epidemic of private
    ownership of dangerous exotic animals as pets. According to some
    estimates, there are up to 15,000 big cats kept as pets in the United
    States. A small increase of $1.3 million over last years' funding level
    should be appropriated to hire and train one new Special Agent for each
    of the Fish and Wildlife Service's seven regions. This additional
    funding will allow for adequate enforcement of this bipartisan
    legislation.
        Investigating sophisticated wildlife smuggling operations requires
    the latest in law enforcement technology. The Clark R. Bavin Wildlife
    Forensics Laboratory is capable of providing assistance in the
    prosecution of wildlife crimes by analyzing claws, teeth, feathers,
    tissue, blood, and other wildlife samples. The Clark R. Bavin Wildlife
    Forensics Laboratory is indispensable in the vigorous enforcement of
    the nation's wildlife trade laws. The HSUS urges the Committee to
    appropriate $7 million to enable completion of the renovation of the
    dermestid colony, and morphology, and firearms facilities, as well as
    new additions for pathology, an atrium that would include a 60-seat
    training and conference room for agent and inspector training and
    scientific conferences.

                    MULTINATIONAL SPECIES CONSERVATION FUND

        The HSUS joins a broad based coalition of organizations in
    requesting an increase over the Administration's request for the
    Multinational Species Conservation Fund (MNSCF). The MNSCF is a fund
    established by Congress to benefit African and Asian elephants, rhinos
    and tigers, great apes, and neotropical migratory birds. Last year,
    Congress demonstrated its commitment to the Fund by appropriating $7.8
    million for the five programs. Unfortunately, the Administration
    requested only $7 million for the five funds in fiscal year 2005. We
    ask that you continue to support these highly threatened mammals and
    birds in fiscal year 2005 by appropriating $2 million each for the
    African Elephant Conservation Fund, the Asian Elephant Conservation
    Fund, $3 million each for the Great Ape Conservation Fund and for the
    combined Rhinoceros and Tiger Conservation Fund, and $5 million for the
    Neotropical Migratory Birds Conservation Fund, for a total of $15
    million.
        While there are threats to the long-term survival of elephants,
    rhinos, tigers, great apes, and neotropical migratory birds, there have
    been improvements attributable to funds made available through the
    MNSCF. Grants made from the MNSCF provide a stable funding source that
    has leveraged over four times as much in additional contributions from
    range states, non-governmental organizations, and others.
        While The HSUS wholeheartedly supports increased funding for the
    MNSCF, we are concerned about past incidents and future opportunities
    for funds from these conservation programs to be allocated to promote
    trophy hunting, trade in animal parts, and other consumptive uses-
    including live capture for trade, captive breeding, and entertainment
    for public display industry-under the guise of conservation for these
    animals. We would like to see grants made to projects that are
    consistent with the spirit of the law.

                                  BEAR FEEDING

        The HSUS strongly recommends that all federal lands agencies
    develop consistent policies with respect to prohibiting the feeding of
    bears on publicly owned land, including deliberate baiting practices.
    Bill or report language should direct the Bureau of Land Management and
    the U.S. Forest Service to promulgate regulations banning the practice
    of feeding bears, just as the National Park Service and U.S. Fish and
    Wildlife Service have done.
        Baiting involves the intentional placement of human food as a means
    of attracting bears for the purpose of shooting the animals. While
    forty states have resident bear populations, only ten states permit
    baiting. Baiting occurs on BLM and U.S. Forest Service lands in nine
    states despite agency materials emphatically stating that feeding bears
    is harmful to the animals and hazardous to humans.
        Bears are naturally wary of humans. But once they acquire a taste
    for human food, they lose their cautionary nature and become emboldened
    in approaching people and property. Human fed bears cause millions of
    dollars in damage to property every year and can pose a serious safety
    threat to humans. A consistent policy should apply to all federal lands
    and for all forest users. Such a policy would have no impact on how
    states set bag limits, season lengths, and weapons rules for bear
    hunting.

                     TRAPPING ON NATIONAL WILDLIFE REFUGES

        National Wildlife Refuges should not permit commercial and
    recreational trapping with inhumane traps. The National Wildlife Refuge
    System (NWRS) was established to provide inviolate sanctuaries for
    wildlife. Today, trapping is allowed in many refuges, interfering with
    the important roles predators and other animals play in ecosystems, and
    causing unnecessary pain and distress for both target and non-target
    wildlife.
        According to a June 1997 report to the Congress, ``Mammal Trapping
    within the National Wildlife Refuge System: 1992-1996,'' the U.S. Fish
    and Wildlife Service administered 487 trapping programs on 281 refuges;
    thus, more than half of the nation's 520 refuges permitted some
    trapping by 1997. According to the report, ``[e]ighty-five percent of
    the mammal trapping programs on refuges were conducted primarily for
    wildlife and facilities management reasons. The remaining 15 percent
    occurred primarily to provide recreational, commercial, or subsistence
    opportunities to the public.''
        In 2002, recreational trappers visited 82 units of the NWRS a total
    of 73,090 times; the number of animals killed or injured by these
    trappers nationwide on refuges is not known. ``Consumptive'' uses as a
    whole (including recreational trapping and hunting) are allowed on the
    majority of NWRS units according to data from the U.S. Fish and
    Wildlife Service for fiscal year 2002. However, most people who enjoy
    the refuges are ``non-consumptive'' users, whose activities in the
    refuges include hiking, photography, and nature observation. In
    particular, in fiscal year 2002, the U.S. Fish and Wildlife Service
    recorded over 42 million visits by non-consumptive users to refuge
    units open to the public. Clearly, an elimination of recreational
    trapping on the NWRS would have negligible effect on the millions of
    Americans who use and enjoy the refuges every year. In fact, according
    to the U.S. Fish and Wildlife Service's most recent national survey,
    people who appreciate wildlife in a non-consumptive manner, spent $40
    billion in the year 2001 to travel and purchase equipment related to
    activities such as wildlife observation and photography.
        The American Veterinary Medical Association, the American Animal
    Hospital Association, and the World Veterinary Organization have all
    declared leghold traps to be ``inhumane.'' These traps are designed to
    slam closed and grip tightly an animal's leg or other body part.
    Lacerations, broken bones, joint dislocations, and frozen digits or
    limbs can result. Additional injuries result as the animal struggles to
    free itself, sometimes chewing off a leg or breaking teeth from biting
    the metal trap. Animals caught in leghold traps sometimes die from
    dehydration, starvation, exposure to sub-freezing temperatures, or
    predators. An animal may suffer for several days before a trapper
    returns to check a trap.
        Neck snares are similarly inhumane. Coyotes, foxes, and other
    animals trapped in neck snares often die slowly over hours or days by
    strangulation, as evidenced by necropsy data. Necropsies performed on
    neck snared coyotes show physiological evidence of a slow, painful
    death--as evidenced by inflammatory exudates and hemorrhaging--for many
    snared coyotes. Even when animals are anesthetized prior to snaring in
    laboratory tests of the snares' humaneness--a procedure that decreases
    the time to loss of consciousness--foxes often take several minutes (up
    to 45 minutes in one study) to lose consciousness.
        These traps are as indiscriminate as they are inhumane. Any animal
    unlucky enough to stumble across a trap will be victimized by it. In
    addition to catching ``target'' animals, traps catch non-target, or
    ``trash,'' animals, such as family pets, eagles, and other protected
    species. Professional wildlife managers have indicated that between 66
    and 78 percent of trapped animals caught in leghold traps are non-
    target animals. This is an unacceptable level of by-catch.
        In 1999, the House approved an amendment, offered by your
    Appropriations Committee colleague, Representative Sam Farr, to bar the
    use of tax dollars to administer or promote the use of steel-jawed
    leghold traps or neck snares for commerce or recreation on units of the
    National Wildlife Refuge System. The amendment allowed use of these
    traps for purposes of research, subsistence, conservation, or
    facilities protection. The House approved this measure by a bipartisan
    vote of 259-166, with a majority of the members of the Subcommittee on
    Interior Appropriations favoring the amendment.
        We urge the Committee to incorporate the language of the Farr
    amendment in the fiscal year 2005 Interior Appropriations Act. It is a
    sensible, humane, and narrowly crafted provision. The amendment would
    not bar trapping on refuges. Other traps, including foot snares,
    Conibears, and box and cage traps, could be used for any purpose
    consistent with law and regulation on the refuges. The Farr amendment
    would not forbid the use of leghold traps or neck snares. It would ban
    those two devices only for commercial and recreational purposes.

                            PROTECTION FOR WALRUSES

        We urge this subcommittee to appropriate $500,000 in fiscal year
    2005 to fund much-needed research on the Pacific walrus. New promising
    methodologies for surveying walrus populations are being developed and
    require funding support. Walruses are targeted by Native hunters for
    subsistence, despite a paucity of data regarding their current
    population status or population structure. Hundreds of walruses are
    killed annually; in some years this number has climbed to as many as
    7,000. Moreover, in some hunting villages, females and their calves are
    preferentially killed, against the recommendation of the U.S. Fish and
    Wildlife Service and standard management practice. A portion of these
    funds could also be used to assist and improve the Walrus Harvest
    Monitor Project, which collects basic management data.

                          WILD HORSE AND BURRO PROGRAM

        Wild horses and burros are a public trust greatly beloved by the
    American people. Consequently, we strongly believe that the Bureau of
    Land Management (BLM) should be given the direction and resources it
    needs to ensure the health of wild horse and burro herds and the public
    lands they inhabit, as well as the welfare of the horses and burros
    that are removed from the range.
        During fiscal year 2002 and fiscal year 2003, the Bureau of Land
    Management's Wild Horse and Burro Program received a substantial
    increase to their annual operating budget. This increase was to be used
    to implement BLM's four-year plan to achieve appropriate management
    levels (AML's) in all herd management areas, principally through an
    increase in the number of horses and burros removed from the public
    lands. The HSUS supports in principle the BLM's attempt to establish a
    national, strategic approach to wild horse management. We strongly
    believe, however, that many of the AML's set by the BLM exaggerate the
    impact of wild horses on the public lands, and do not provide wild
    horses and burros with the fair share of public land resources to which
    they are entitled under the law. We also fear that the planned removals
    will threaten the viability of these populations. To adequately address
    these concerns, the BLM should carry out a programmatic environmental
    impact analysis of the impacts of wild horses, burros, and livestock on
    the conditions in herd management areas, and of the proposed population
    reductions on the viability of wild horse and burro populations on
    public lands.
        Currently, however, the BLM's plan to achieve AML has been stalled
    by the rapid filling of the holding facilities available for horses
    removed from the range. As has happened repeatedly, the budget and
    attention of the Wild Horse and Burro Program are being diverted from
    management of wild populations on the public lands to maintenance of
    wild horses and burros in captivity. There is a long-term solution,
    which only awaits agency implementation that can help restore the
    agency's focus on wild horses and the land. With the strong support of
    The HSUS and this committee, BLM-sponsored research has produced a one-
    shot, one-to-two-year contraceptive vaccine for wild horses. Wide
    application of this vaccine, known as PZP, would be a humane, publicly
    acceptable, cost-efficient means for reducing the number of horses that
    must be removed from the public lands. Accordingly, we ask the
    committee to insert the following language into the fiscal year 2005
    Interior Appropriations bill: ``The BLM is strongly encouraged to
    implement immunocontraception to help control populations of wild
    horses on the public lands.''
        In addition to the more traditional threats faced by wild horses
    and burros, which include habitat destruction, wildfires, and cattle
    ranching encroachment, wild horses are coming under pressure from the
    increasing demand for horsemeat as a result of the ``mad cow'' disease
    threat in Europe. The BLM documented that in 1999 hundreds of wild
    horses that had been adopted through the BLM's adoption program were
    sold into slaughter, despite the congressionally mandated prohibition
    on such action.
        Because of pressure on wild horses and burros from decreasing
    habitat, the policy of aggressive removals, and mad cow disease, we
    urge the committee to once again include the following standard
    language in the fiscal year 2005 Interior Appropriations bill: ``The
    appropriations made herein shall not be available for the destruction
    of healthy, unadopted, wild horses and burros in the care of the Bureau
    of Land Management or its contractors.'' We also request $100,000 in
    additional funding to be allocated to the preparation of a
    comprehensive NEPA review. Finally, we urge this committee to allocate
    $500,000 in additional funding to the BLM for pre-titling compliance
    monitoring of adoptions, adopter mentoring programs, and other means of
    ensuring that adopted wild horses and burros are treated consistently
    with the intent of the Wild Horse and Burro Protection Act and are not
    sent to slaughter.
                                     ______

        Prepared Statement of the National Association of Conservation
                                   Districts

        The U.S. Department of the Interior manages roughly 20 percent of
    nation's land. Through its various agencies and bureaus, it provides
    opportunities for wilderness and wildlife protection, recreation and
    resource development and is a major supplier of water for much of the
    Western United States. The following are recommendations for USDI
    programs in which conservation districts play active roles.

                           FISH AND WILDLIFE SERVICE

        Fish and wildlife resource concerns are significant throughout the
    United States. The nation's growing population creates enormous
    pressure on the land and water habitats of many species, underscoring
    the need for active resource management programs to protect these
    valuable resources.
        The Partners for Fish and Wildlife Program offers technical and
    financial assistance to private landowners to voluntarily restore
    wetlands and other fish and wildlife habitats on their land. The
    program emphasizes the re-establishment of native vegetation and
    ecological communities for the benefit of fish and wildlife while
    meeting the needs and desires of private landowners. Conservation
    districts are major partners in the program--raising matching funds and
    sponsoring numerous restoration projects. Through 2002, the Partners
    program has restored some 640,000 acres of wetlands, more than a
    million acres of prairie and other uplands, and nearly 5,000 miles of
    streamside and in-stream habitat.
        The department-level Cooperative Conservation Initiative (CCI)
    brought about the development of two new Service initiatives: the
    Private Stewardship Grant (PSG) Program and the Landowner Incentive
    Program (LIP). Through slightly different channels these two programs
    provide grants and other assistance to individuals and groups engaged
    in local, private, and voluntary conservation efforts that benefit
    federally listed, proposed, or candidate species, or other at-risk
    species. Both programs are flexible and are open to all private
    landowners who have a desire to voluntarily manage for rare species on
    their land.
        The Ecological Services Program (Endangered Species and Habitat
    Conservation) works in partnership with public agencies, private
    organizations and landowners and operators with the goal of reducing
    threats to declining species. Its consultation and recovery elements
    include a wide range of management options designed to protect species
    while still allowing private economic development to proceed.
        The Coastal Program focuses the Service's efforts in bays,
    estuaries and watersheds along the U.S. coastline. Its purpose is to
    conserve fish and wildlife and their habitats to support healthy
    coastal ecosystems. The Service provides funding through the program to
    16 high priority coastal ecosystems.
        The North American Wetlands Conservation Fund and associated
    program provide assistance to conserve wetland ecosystems, migratory
    waterfowl and other birds and other migratory fish and wildlife that
    depend upon wetlands. Through voluntary partnerships, federal funding
    leverages nonfederal funds for projects that focus on restoring
    wetlands and acquiring wetlands from willing sellers to be managed for
    wildlife conservation by private organizations or state and federal
    agencies.
        Below are conservation district recommendations for selected Fish
    and Wildlife Service programs for fiscal year 2005.

                                                [In millions of dollars]
    ----------------------------------------------------------------------------------------------------------------
                                                                                       Fiscal year
                                                                    ------------------------------------------------
                                                                        2003       2004         2005
                                                                      enacted     final    administration  2005 NACD
    ----------------------------------------------------------------------------------------------------------------
    U.S. Department of the Interior--Fish and Wildlife Service:
        Partners for Fish and Wildlife.............................     37.826     52.000        57.000       57.000
        Landowner Incentive Program................................     39.740     30.000        50.400       50.400
        Private Stewardship Grants.................................      9.935      7.500        10.100       10.100
        Ecological Services--Endangered Species....................    131.757    134.000       146.000      146.000
        Ecological Services--Habitat Conservation..................     37.826     82.614        90.000       90.000
        Coastal Program............................................     11.210     10.200        13.100       13.100
        North American Wetlands Conservation Fund..................     38.835     38.000        54.500       54.500
    ----------------------------------------------------------------------------------------------------------------

                             BUREAU OF RECLAMATION

        Water needs are an increasing resource concern, especially in the
    Western United States. The Bureau of Reclamation (Reclamation) is the
    lead federal agency for supplying water to agricultural producers and
    others in the seventeen Western states. Reclamation initiated its Water
    Conservation Field Services Program (WCFSP) in 1997 to encourage the
    efficient use of water on federal projects, assist water districts
    develop and implement effective water conservation plans, and
    complement and support other federal, state, and local conservation
    program efforts. WCFSP is designed to provide technical and financial
    assistance in conservation planning, education, demonstration of
    innovative conservation technologies and implementation of effective
    conservation measures.
        The President's budget request includes $21 million for the new
    Water 2025 Challenge Grants initiative to help develop solutions to the
    increasing demands for limited water resources--especially in the West.
    The initiative is directed toward enhancing Reclamation's efficiency
    and performance in carrying out its core mission of delivering water
    and power in an environmentally sound and cost efficient manner. The
    initiative has four key elements intended, among other things, to
    enhance water management to prevent crisis-level water conflicts in the
    West.
        Conservation districts recommend the following for Reclamation
    programs in fiscal year 2005.

                                                [In millions of dollars]
    ----------------------------------------------------------------------------------------------------------------
                                                                                       Fiscal year
                                                                    ------------------------------------------------
                                                                        2003       2004         2005
                                                                      enacted     final    administration  2005 NACD
    ----------------------------------------------------------------------------------------------------------------
    U.S. Department of the Interior--Bureau of Reclamation:
        Water Conservation Field Services \1\......................     16.339      4.400         7.378       20.000
        Water 2025 Challenge Grants................................  .........      4.000        21.000       21.000
    ----------------------------------------------------------------------------------------------------------------
    \1\ Water Conservation Field Services is not a line item in the budget. It is funded through Reclamation's
      Efficiency Incentives Program, $1.798 million, and Water Management and Conservation Program, $5.580 million.

                           BUREAU OF LAND MANAGEMENT

        The Bureau of Land Management (BLM) administers 264 million of
    America's public lands, located primarily in 12 Western States. BLM's
    mission, sustaining the health, diversity and productivity of public
    lands, becomes more challenging each year as populations and pressures
    on the resource base grow rapidly in these states.
        The Interior Department makes annual Payments in Lieu of Taxes to
    local governments to offset local revenues not collected for tax-exempt
    federal lands administered by BLM, the National Park Service, the Fish
    and Wildlife Service, the U.S. Forest Service and for federal water
    projects and some military installations. Until last year, BLM
    administered all payments. They are now administered at the department
    level.
        BLM's Challenge Cost Share programs have been successful in
    leveraging millions of federal dollars with private and state funding
    for conservation efforts that benefit resources on BLM-administered
    public lands. The program works through partnerships to protect
    fisheries, wildlife, threatened and endangered species, cultural
    resources, and recreation areas. Partners include state fish and game
    agencies, transportation departments, historic preservation offices and
    private organizations.
        The agency's Soil, Water and Air; Range Management; and Wildlife
    and Fisheries Habitat accounts are each aimed at improving the health
    of landscapes and watersheds and to manage, protect and restore
    important fish, wildlife and grazing habitats.
        Forestry programs within BLM target conducting commercial timber
    thinning sales and management activities to improve the condition and
    productivity of public forests the agency manages. OR&CA Grant Lands
    funds target enhanced management activities on environmentally
    sensitive public lands in Oregon and California.

                                                [In millions of dollars]
    ----------------------------------------------------------------------------------------------------------------
                                                                                       Fiscal year
                                                                    ------------------------------------------------
                                                                        2003       2004         2005
                                                                      enacted     final    administration  2005 NACD
    ----------------------------------------------------------------------------------------------------------------
    U.S. Department of the Interior--Bureau of Land Management:
        Payments in Lieu of Taxes..................................    218.570    227.500       220.000      236.500
        Soil, Water, and Air.......................................     35.824     35.000        34.200       36.500
        Range Management...........................................     72.256     73.000        68.200       76.000
        Wildlife & Fisheries Habitat...............................     33.794     34.000        37.900       35.500
        Challenge Cost Share.......................................     13.892     16.496        21.296       21.296
        Public Domain Forestry.....................................      7.188      8.000         9.000        9.000
        OR&CA Grant Lands..........................................    109.946    106.672       116.058      116.058
    ----------------------------------------------------------------------------------------------------------------

                                     ______

    Prepared Statement of the National Association of University Fisheries
                             and Wildlife Programs

        The National Association of University Fisheries and Wildlife
    Programs (NAUFWP) appreciates the opportunity to submit testimony
    concerning the fiscal year 2004 budget for the U.S. Department of the
    Interior. NAUFWP represents approximately 55 university programs and
    their 440 faculty members, scientists, and extension specialists, and
    over 9,200 undergraduates and graduate students working to enhance the
    science and management of fisheries and wildlife resources. NAUFWP is
    interested in strengthening fisheries and wildlife education, research,
    extension, and international programs to benefit fish, wildlife, and
    habitats on public land. We understand the many pressing needs of the
    nation at this time, but we stress that a nation strong in its
    international role must be strong in its support and conservation of
    its natural resources, including fish and wildlife.
        The following table summarizes NAUFWP's recommendations for the
    U.S. Fish and Wildlife Service, Bureau of Land Management, USGS
    Biological Resources Division, and U.S. Forest Service:

                            [In thousand of dollars]
    ------------------------------------------------------------------------
                                                   Fiscal year
                                   -----------------------------------------
         USDOI agency/program                        2005
                                        2004     President's    2005 NAUFWP
                                      enacted       budget    recommendation
    ------------------------------------------------------------------------
    U.S. Fish and Wildlife
     Service:
        State Wildlife Grants.....       69,137       80,000        125,000
        Science Excellence          ...........        2,000          4,000
         Initiative...............
    U.S. Geological Survey:
        Total Funding.............      938,000      920,000      1,000,000
        Biological Resources            174,529      167,604        183,529
         Division.................
        Cooperative Fish and             14,942       14,113         16,113
         Wildlife Research Units..
    Bureau of Land Management:
        Wildlife and Fisheries           34,098       37,884         41,884
         Management...............
        Threatened and Endangered        21,452       21,940         26,940
         Species Management.......
    U.S. Forest Service:
        Forest and Rangeland            269,710      281,000        281,000
         Research.................
        Wildlife, Fish, Threatened      137,375      134,522        150,000
         & Endangered Species.....
    ------------------------------------------------------------------------

        We appreciate report language in recent appropriations legislation
    emphasizing the importance of cooperative Department of Interior
    initiatives. Partnerships, particularly with the academic community,
    provide the Department of Interior with increased flexibility to combat
    an aging workforce and looming retirements, and more investment is
    needed in those areas.

                         U.S. FISH AND WILDLIFE SERVICE

        Funding assistance for state wildlife conservation is one of the
    highest priority needs for wildlife at this time, providing essential
    resources to conserve wildlife, fish, and habitat, and to prevent
    further declines in at-risk wildlife populations in every state. We
    appreciate the Administration's recognition of the importance of this
    program through the $80 million request, but we strongly encourage even
    greater funding to achieve all species conservation. We recommend that
    $125 million be appropriated for State Wildlife Grants in fiscal year
    2005.
        We strongly support $4 million for the Administration's new Science
    Excellence Initiative to elevate science within the Fish and Wildlife
    Service. The initiative is aimed at enhancing partnerships with
    agencies, universities, and professional societies and improving
    application of scientific information to better guide conservation
    goals and support adaptive management and research. The President's
    budget should be increased to $4 million to adequately fund this
    important initiative. Part of the money would be dedicated to
    information acquisition, and part to building ``communities of
    practice.'' These communities would be a means for FWS to call on a
    group of scientists with particular expertise to work together on
    scientific issues within the bureau. Additional funding is needed to
    strengthen the Service's ability to analyze and address conservation
    issues that are impacting its mission.

              U.S. GEOLOGICAL SURVEY BIOLOGICAL RESOURCES DIVISION

        As a member of the USGS Coalition, NAUFWP supports $1 billion for
    USGS in fiscal year 2005. This level of funding would restore the cuts
    proposed in the President's budget and provide a 6.5 percent increase
    over the fiscal year 2004 level to cover uncontrollable costs,
    inflation, and ongoing science initiatives that support public policy
    decisions.
        We recommend that Congress appropriate an additional $15.925
    million for the Biological Resources Division to allow critical
    monitoring and research projects to continue, and to eradicate the
    budget decline (in real dollars) that the program has accumulated. We
    recommend that of this amount, $1.556 million be dedicated to fully
    funding uncontrollable costs in the Division to prevent significant
    losses in operational activities. Further, we recommend that $2 million
    of the increase be allocated to the Cooperative Fish and Wildlife
    Research Units. The Units serve as a link between USGS, state agencies,
    nongovernmental organizations, and universities. Since 2001,
    insufficient funding for the Units has eroded critical staff positions,
    including at the newly established Nebraska Unit. We strongly encourage
    you to support $16.113 million for the Units in fiscal year 2005.

                           BUREAU OF LAND MANAGEMENT

        Wildlife and Fisheries Management would receive a $3.789 increase
    in fiscal year 2005, largely directed to the Bureau's Sage Grouse
    Conservation Initiative. We support this increase, provided the
    Initiative is consistent with current state sage grouse management
    efforts, but we are concerned that no additional base funds are
    provided to the Bureau. This erodes the agency's staff and resources
    that are needed to ensure sound management and protection of a
    diversity of wildlife, fish and habitats, while providing for
    recreational and commercial uses of the land. We encourage Congress to
    appropriate an additional $4 million for Wildlife and Fisheries
    Management, to provide for adequate staff and operational funds.
        The Administration has requested a $488,000 decrease for the
    Threatened and Endangered Species Program. The request is inadequate to
    meet identified needs or allow the BLM to carry out its
    responsibilities under the Endangered Species Act. Significant
    increases in funding are needed in fiscal year 2005 and the next
    several years to stabilize funding and personnel needs until species
    recovery becomes effective. In light of the inequity between resource
    needs and funding levels, we strongly encourage Congress to appropriate
    an additional $5 million to the Threatened and Endangered Species
    fiscal year 2005 budget.
        We are gravely concerned about current staffing levels at the
    Bureau. The staff shortfall is not addressed in the fiscal year 2005
    budget, and given the increased emphasis on accelerating completion of
    land use plans and expanding energy development on public lands,
    staffing shortages are resulting in fish and wildlife resources being
    inadequately addressed in agency actions. Additional resources must be
    allocated to filling vacant wildlife, fishery, and botany positions
    within the agency.

                              U.S. FOREST SERVICE

        We are concerned about the funding decrease in the Wildlife and
    Threatened & Endangered Species programs. To ensure that each National
    Forest has a base infrastructure of personnel to administer viable
    natural resource programs and provide base level funding for biologists
    to implement management, monitoring, and research projects, we
    recommend that Congress appropriate funding that is at least level with
    the $137.375 million enacted in fiscal year 2004.
        Thank you for considering the views of universities with fisheries
    and wildlife programs. We look forward to working with you and your
    staff to ensure adequate funding for wildlife conservation. Please
    include this testimony in the official record.
                                     ______

        Prepared Statement of the National Conference of State Historic
                             Preservation Officers

    Request: $15,430,000 increase from the HPF for the States
        The National Conference of State Historic Preservation Officers
    requests a $15,430,000 increase in the withdrawal from the Historic
    Preservation Fund for the States for 2005 over the Administration's
    request of $34,570,000 for a total of $50,000,000. (A summary of the
    national historic preservation need is found on page 4.)

                                  INTRODUCTION

        The Historic Preservation Fund provides the matching money to run
    the national historic preservation program (National Historic
    Preservation Act, 16 U.S.C. 470h). State Historic Preservation Offices
    (SHPOs ) implement the preservation program. Historic preservation is
    and has been an effective domestic policy tool that addresses many key
    cultural and economic priorities. In recent years, though, funding has
    been flat or declining. With full funding, SHPOs could achieve much
    greater results in four crucial areas: Providing economic stimulus;
    implementing the ``Preserve America'' initiative; fostering heritage
    tourism; and streamlining the environmental review process, thereby
    making it easier to implement federally funded projects and privately
    funded initiatives.

                            SUPPORT FOR $50,000,000

        The National Conference is joined in this request by the Senators
    Mike DeWine of Ohio and Richard Durbin of Illinois who have said, ``We
    respectfully request that you fund the state historic preservation
    program at $50 million in fiscal year 2005 for the benefit of all our
    states. The current funding levels are undermining the ability of state
    programs to carry out their mandated activities under the National
    Historic Preservation Act. . . . The evidence is clear that funding for
    state historic preservation activities returns many times the federal
    investment by leveraging state, local and private sector dollars. . . .
    Not only will this investment be multiplied many times over . . ., this
    essential increase will ensure the protection of hundreds of historic
    structures and sites throughout the nation that might otherwise be lost
    forever.''
        Mayor Mike Swoboda of Kirkwood, Missouri, added ``The value of
    historic preservation in a local community is beyond price. It's about
    preserving something that can't be replicated today. It's about
    appreciating the planning and efforts of those who came before us.
    Historic preservation upholds what was important in the past, thereby
    maintaining a community's foundation: its past, present, and future.''
    \1\
    ---------------------------------------------------------------------------
        \1\ National Park Service, The Historic Preservation Fund Annual
    Report Fiscal Year 2003, [March 2004].
    ---------------------------------------------------------------------------
        Governor Rick Perry of Texas concurs: ``Historic preservation
    creates jobs, revitalizes downtown business districts, provides
    affordable quality housing and stimulates heritage tourism.'' \2\
    ---------------------------------------------------------------------------
        \2\ Ibid.
    ---------------------------------------------------------------------------
                               ECONOMIC STIMULUS

        Historic preservation provides an opportunity to employ diverse
    sectors of the economy, revitalize neighborhoods and communities,
    entice private capital investment nationwide and foster heritage
    tourism. HPF programs such as the Rehabilitation Tax Credit have proven
    their worth--leveraging $25 billion in private investment since 1977.
    Such programs have received bipartisan support throughout their
    history.

                                PRESERVE AMERICA

        The ``Preserve America'' initiative and State Historic Preservation
    Offices can be a great partnership. Fully funded, SHPO funding to
    certified local governments (CLGs) would double and SHPOs could provide
    technical assistance and promotional resources to help implement the
    First Lady's initiative, including needed support for the new $10
    million grant program proposed for fiscal year 2005.

                                HERITAGE TOURISM

        Historic preservation is the foundation of heritage tourism, which
    is a multi-billion dollar industry ($200 billion annually by 2005).
    Heritage tourists stay longer and spend more than do other tourists
    ($623 per historic/cultural trip as compared to $457 for an average
    U.S. trip), providing local jobs and creating local, state and federal
    tax revenues. SHPOs promote heritage tourism through historic site
    survey and National Register programs, and they further American
    history education by generating interest in urban and rural landmarks
    across America.

                        STREAMLINE ENVIRONMENTAL REVIEW

        One crucial duty of SHPOs is to review federal projects (e.g.,
    highways, wetlands permits, HUD block grants) for potential impacts on
    historic places. In fact, every federal dollar spent goes through these
    reviews. State budget shortages and increased federal activity have
    escalated the workload on SHPOs leading to delays in the critical
    review process. This creates frustration with both the project sponsors
    and the SHPOs who are doing the best they can with extremely limited
    resources. Increased HPF funding will facilitate more timely review and
    also allow SHPOs to conduct site visits and provide training to
    agencies and applicants.

                 HPF ALLOCATIONS TO THE STATES-MONEY WELL SPENT

        In fiscal year 2003 the Historic Preservation Fund programs
    underwent a review under the Program Assessment Rating Tool, the
    government-wide process to inform budget decisions. The Historic
    Preservation Programs received a first review score of 83 percent
    indicating exemplary performance of mandated activities.\3\ The
    National Conference is disappointed that this success is not reflected
    in the Administration's budget request.
    ---------------------------------------------------------------------------
        \3\ State LWCF grants, in contrast, received a review score of 25
    percent.
    ---------------------------------------------------------------------------
                             HPF INTENT UNDERMINED

        Further, the National Conference of State Historic Preservation
    Officers is deeply concerned that the Historic Preservation Fund is
    being used to pay for federal staff salaries both in the administration
    of Save America's Treasures and in tribal grants especially as the
    National Park Service budget increases. The National Historic
    Preservation Act is specific (Section 101(e)). The Secretary may make
    matching grants to the States, Indian tribes, and the National Trust.
    The law allows the Secretary to use 10 percent of the annual HPF
    appropriation for direct, project grants, not for NPS salaries.

                           NATIONAL PRESERVATION NEED

        The chart on page 4 outlines the national historic preservation
    need.

                                    NATIONAL HISTORIC PRESERVATION NEED FROM THE HPF
    ----------------------------------------------------------------------------------------------------------------
                                                                                       The national
                                                                        Fiscal year     need NCSHPO   Administration
                                                                        2004 actual       request     budget request
    ----------------------------------------------------------------------------------------------------------------
    State Historic Preservation Offices:
        National preservation program operations....................     $34,568,734     $50,000,000     $34,570,000
        Expedite project review to complete the national inventory..  ..............      10,000,000  ..............
        Preserve America/local grants...............................  ..............      30,000,000  ..............
    Tribal grants...................................................       2,963,034      12,000,000       2,963,000
    National Trust historic sites...................................         493,839  ..............  ..............
    Federal Grant Programs:
        Save America's Treasures....................................      32,593,378      30,000,000      30,000,000
        Preserve America grants.....................................  ..............  ..............      10,000,000
    HBCU............................................................       2,963,034  ..............  ..............
                                                                     -----------------------------------------------
          TOTALS....................................................      73,582,099     132,000,000      77,533,000
                                                                     ===============================================
    OFF SHORE OIL LEASE DEPOSITS INTO HPF...........................     150,000,000     150,000,000     150,000,000
    ----------------------------------------------------------------------------------------------------------------

        Thank you for your consideration of our request.
                                     ______

        Prepared Statement of the National Council for Science and the
                                  Environment

                                    SUMMARY

        The National Council for Science and the Environment (NCSE) urges
    Congress to appropriate $1 billion for the U.S. Geological Survey
    (USGS) in fiscal year 2005, an increase of 6.6 percent over fiscal year
    2004. USGS science helps every citizen in the nation by providing
    critical knowledge on natural hazards, freshwater, geological and
    biological resources, and mapping. The 6.6 percent increase we propose
    for the USGS would restore damaging cuts in the budget request, provide
    full funding for ``uncontrollable'' cost increases, and allow for
    modest investments in a few high priority areas that would pay
    dividends to homeland security, economic development, natural resources
    management, natural hazards mitigation, and other critical national
    needs.
        NCSE is dedicated to improving the scientific basis for
    environmental decisionmaking. We are supported by over 500
    organizations, including universities, scientific societies, government
    associations, businesses and chambers of commerce, and environmental
    and other civic organizations. NCSE promotes science and its
    relationship with decisionmaking but does not take positions on
    environmental issues themselves.
        The National Council for Science and the Environment thanks the
    Senate Appropriations Subcommittee on Interior and Related Agencies for
    the opportunity to provide testimony in support of increased
    appropriations for the U.S. Geological Survey.

                           FEDERAL INVESTMENTS IN R&D

        Federal investments in research, development, and science education
    are essential to the future well-being and prosperity of the nation and
    deserve the highest priority of Congress. The U.S. Geological Survey is
    a critical component of the nation's R&D portfolio. On the occasion of
    the 125th anniversary of the agency, USGS Director Charles Groat said,
    ``For 125 years, the USGS has provided the Department of the Interior,
    the nation, and the world with the science needed to make important
    decisions and safeguard society. As an unbiased science organization,
    our scientists are dedicated to the timely, relevant, and impartial
    study of the landscape, our natural resources, and the natural hazards
    that threaten us.''
        The USGS supports a unique combination of biological, geological,
    hydrological and mapping programs that is of great value to
    decisionmakers. During the past eight years, total federal spending for
    non-defense research and development has risen by nearly 50 percent
    from $37 billion to almost $55 billion in constant dollars. By
    contrast, funding for the USGS has been nearly flat. Even this flat
    funding for the USGS reflects congressional restoration of proposed
    budget cuts.
        NCSE greatly appreciates the sustained support of the Senate
    Appropriations Subcommittee on Interior and Related Agencies for the
    U.S. Geological Survey. We are especially grateful for the
    Subcommittee's bipartisan leadership in restoring past cuts and
    providing for growth in the USGS budget. We encourage your continued
    support in this difficult fiscal environment.

           U.S. GEOLOGICAL SURVEY BUDGET REQUEST FOR FISCAL YEAR 2005

        The National Council for Science and the Environment urges Congress
    to increase the budget of the U.S. Geological Survey to $1 billion in
    fiscal year 2005, an increase of 6.6 percent over the fiscal year 2004
    enacted level. This increase would provide $8.1 million to fully fund
    uncontrollable cost increases, $26.2 million to restore proposed cuts
    to existing programs, $16.1 million to fund new programs in the
    President's budget, and $11.6 million for modest investments in a few
    high priority areas. The additional investment would pay dividends to
    homeland security, economic development, natural resources management,
    natural hazards mitigation, and other critical national needs.
        Under the fiscal year 2005 budget request, funding for the USGS
    would fall by $18.2 million or 1.9 percent to $919.8 million in fiscal
    year 2005. After accounting for transfers of existing funds to the
    agency's new Enterprise Information account, funding for Water
    Resources would decrease 4.2 percent, funding for Geology would
    decrease 3.9 percent, funding for Biological Research would decrease
    2.3 percent, and funding for the Geography (formerly Mapping) would
    decrease 1.7 percent.
        These proposed budget cuts would impair the ability of the USGS to
    achieve its important mission. In fiscal year 2005, $6.5 million would
    be cut from the Mineral Resources program, $6.4 million from the Water
    Resources Research Institutes, $2.8 million from fire ecology and
    biological fire science activities, and $1.9 million from partnership
    funding for the National Map. A variety of other programs would suffer
    losses as well.
        In addition to explicit funding cuts, the fiscal year 2005 budget
    request would require the USGS to absorb $8.1 million in uncontrollable
    cost increases. As in past years, the failure to provide full funding
    for uncontrollable costs increases may force the USGS to curtail on-
    going science that is needed by the nation.
        The fiscal year 2005 budget request would provide $16.1 million for
    the USGS to establish or expand several promising science initiatives
    that merit the support of Congress. The request would add $2.7 million
    for Klamath Basin-related science, $1.2 million for science on
    Department of the Interior landscape initiatives, $1.0 million for
    Water 2025, and $1.0 million for invasive species research.
        The U.S. Commission on Ocean Policy cites USGS funding cuts as a
    factor in the inadequacy of the nation's water quality monitoring
    network. According to the Commission's draft report, ``National [water]
    monitoring has been greatly reduced, particularly in coastal areas, due
    to funding cuts at USGS and many partner agencies. The USGS National
    Streamflow Information Program has eliminated a number of streamgages.
    . . . Funding cuts have also affected USGS's water quality monitoring
    programs, resulting in reductions in the number of sampling sites and
    sampling frequency.''
        We encourage Congress to provide the USGS with a budget that will
    allow for the modest growth necessary to address emerging needs for
    science. After years of stagnant funding and absorbing uncontrollable
    cost increases, the USGS has a large and growing backlog of monitoring
    and science needs. The National Council for Science and the Environment
    urges Congress to appropriate $1 billion for the USGS in fiscal year
    2005. This investment will help the USGS improve monitoring networks,
    strengthen partnerships, produce high-quality data, and deliver
    impartial science that serves the needs of the nation. As a founding
    member and co-chair of the USGS Coalition, NCSE welcomes the
    opportunity to work with Congress and the Administration to achieve
    these objectives.

                             USGS SERVES THE NATION

        The USGS has a truly national mission that extends beyond the
    boundaries of the nation's public lands to encompass the homes of all
    citizens through natural hazards monitoring, water resource studies,
    biological and geological resource assessments, and other activities.
        The nation's policymakers--at the national, regional and local
    levels--are confronting increasing challenges in water management. They
    need the information provided by USGS streamgages and water quality
    studies. The USGS streamgage network also supplies the National Weather
    Service with the information it needs to issue flood warnings.
        The USGS has tremendous strength in areas that are critical to
    homeland security, such as monitoring water resources and producing
    digital maps that are needed for assessing terrorist threats and
    responding to terrorist attacks.
        The USGS helps protect people across the nation from potentially
    disastrous consequences of geologic hazards, including earthquakes,
    volcanic eruptions, landslides, erosion and floods. For example, USGS
    sensor systems provide information that can substantially reduce the
    impact of earthquakes, leading to reduced loss of human life and
    property.
        USGS biologists study wildlife health issues like chronic wasting
    disease and West Nile virus, which also affects human health. USGS
    researchers also study the spread of invasive species, which have
    significant economic (billions of dollars per year), environmental, and
    public health impacts.

                                            TABLE 1.--U.S. GEOLOGICAL SURVEY
                                                  [Dollars in millions]
    ----------------------------------------------------------------------------------------------------------------
                                                          Budget Authority      Fiscal year 2004-  Fiscal year 2004-
                                                    ---------------------------   05 changes \1\    05 changes adj.
                                                            Fiscal year                             for transfes \2\
               USGS Activity/Subactivity            ----------------------------------------------
                                                       2003     2004     2005                     ------------------
                                                      actual  enacted  request   Amount   Percent   Amount   Percent
    ----------------------------------------------------------------------------------------------------------------
    Mapping, Remote Sensing, & Geog.
     Investigations:
        Cooperative Topographic Mapping............    $81.1    $80.8    $71.0    -$9.8     -12.1    -$2.0      -2.5
        Land Remote Sensing........................     35.7     33.7     33.1     -0.5      -1.6  .......       0.1
        Geographic Analysis & Monitoring...........     16.4     15.2     14.8     -0.5      -3.1     -0.2      -1.4
                                                    ----------------------------------------------------------------
          Subtotal.................................    133.2    129.8    118.9    -10.8      -8.3     -2.2      -1.7
                                                    ================================================================
    Geologic Hazards, Resources, and Processes:
        Geologic Hazard Assessment.................     75.0     75.3     73.0     -2.3      -3.0     -0.9      -1.2
        Geologic Landsc. & Coast. Assess...........     78.7     78.4     75.2     -3.1      -4.0     -1.7      -2.1
        Geologic Resource Assessment...............     79.5     80.5     72.5     -8.0     -10.0     -6.6      -8.2
                                                    ----------------------------------------------------------------
          Subtotal.................................    233.2    234.2    220.8    -13.4      -5.7     -9.1      -3.9
                                                    ================================================================
    Water Resources Investigations:
        Hydrolog. Monit., Assess. & Rsch...........    136.8    145.3    139.7     -5.6      -3.9     -2.7      -1.9
        Cooperative Water Program..................     64.4     64.0     63.0     -1.0      -1.5      0.1       0.1
        Water Resources Research Act...............      6.0      6.4  .......     -6.4    -100.0     -6.4    -100.0
                                                    ----------------------------------------------------------------
          Subtotal.................................    207.2    215.7    202.7    -13.0      -6.0     -9.0      -4.2
                                                    ================================================================
    Biological Research:
        Biological Research & Monitoring...........    132.1    135.1    129.2     -5.9      -4.4     -3.7      -2.7
        Biological Information.....................     22.8     24.7     24.3     -0.4      -1.6  .......
        Cooperative Research Units.................     14.9     14.8     14.1     -0.6      -4.4     -0.5      -3.1
                                                    ----------------------------------------------------------------
          Subtotal.................................    169.8    174.5    167.6     -6.9      -4.0     -4.0      -2.3
                                                    ================================================================
    Enterprise Information.........................  .......  .......     45.1     45.1     100.0     45.1     100.0
    Science Support................................     85.2     90.8     68.7    -22.1     -24.3      5.1       5.6
    Facilities.....................................     90.8     93.0     95.9      3.0       3.2      3.0       3.2
                                                    ----------------------------------------------------------------
          TOTAL....................................    919.3    938.0    919.8    -18.2      -1.9    -18.2     -1.9
    ----------------------------------------------------------------------------------------------------------------
    Source: The Interior Budget in Brief: fiscal year 2005, USGS fiscal year 2005 Budget documents and NCSE
      analysis.
    \1\ Change from enacted fiscal year 2004 USGS appropriations to the President's fiscal year 2005 budget request
      for USGS.
    \2\ These columns include the change from the enacted fiscal year 2004 USGS appropriations to the President's
      fiscal year 2005 budget request for USGS, adjusted to compensate for transfers from disciplinary accounts and
      programs to the new Enterprise Information account.

                                     ______

       Prepared Statement of the National Institutes for Water Resources

        Mr. Chairman, I am James Moncur, President of the National
    Institutes for Water Resources and Director of the Hawaii Water
    Resources Research Center at the University of Hawaii. My statement
    requests the Subcommittee to provide $8,775,000 to the U.S. Geological
    Survey for the state Water Resources Research Institutes program.
        First, I want to thank you and this Subcommittee for the strong
    support you have given to the state water resources research institutes
    program in past years. You have recognized the great value in having
    federal, state and local government agencies cooperating with a network
    of universities to produce new knowledge about water resources as well
    as train a new generation of talented and educated water professionals.
        In addition, I want to acknowledge the leading role you and your
    colleagues have played to ensure that the U.S. Geological Survey
    continues to provide the science needed to manage the nation's natural
    resources.
        Public Law 106-374, passed in 2000, reauthorized the Water
    Resources Research Act through fiscal year 2005. In passing this
    reauthorization, Congress recognized the enormous success of the state
    water resources research institutes in providing sound science and well
    educated professionals to the nation's water management programs, and
    doing so in a highly efficient manner.
        The National Institutes for Water Resources respectfully request
    the addition of $8,775,000 to the U.S. Geological Survey's fiscal year
    2005 budget for the state water resources research institutes program.
    This recommendation is based on the following components:
      --$7,000,000 in grants for the 54 institutes as authorized by Section
            104(b) of the Water Resources Research Act;
      --$1,500,000 to support the national competitive grants program
            authorized by Section 104(g) of the Act, and
      --$275,000 for program administration at USGS.
        These amounts would provide each institute $125,000 under Section
    104(b), to support state-based competitions for research and graduate
    education at the institutes, located at land-grant universities in each
    state, three territories and in Washington, D.C. Currently this grant
    is $92,524. It would also provide for an increase from about $1 million
    to $1.5 million for the national grants program under Section 104(g).
    Competition for the awards is extremely vigorous: in 2003, for example,
    76 proposals were submitted to the 104(g) program; only 6 were funded.
        This year, 2004, marks the 40th anniversary of the original Water
    Resources Research Act. In that time, the state institutes created by
    Congress have established a remarkable infrastructure of physical and
    human capital for studying water resource problems. The institutes link
    scientists and scholars from a wide array of disciplines, institutions
    and agencies to focus on the diverse characteristics and effects of
    water and related resources. The network composed of these institutes
    serves an invaluable function in sharing knowledge across state lines
    and addressing problems created by the stubborn refusal of rivers,
    aquifers, floods and droughts to restrict their effects within the
    boundaries of any given state.
        In the past several decades, our nation has made great strides
    managing water resources. Our rivers no longer carry layers of
    pollution that catch on fire. Most wastewater is highly treated before
    disposal into receiving waters. Conservation efforts have allowed a
    growing population and economy to thrive despite flat water usage over
    the last two decades. We have wide controls on salinity and erosion and
    are very sensitive to potential contamination with pesticides or other
    toxic chemicals.
        Unfortunately, few of these problems are anywhere near completely
    and finally ``solved,'' and new issues continue to arise. Several areas
    of the country are rapidly approaching or have passed the sustainable
    limits of groundwater withdrawals. Control of non-point source
    pollutants is a vast undertaking, far from complete despite several
    years of earnest effort. Contention over river flows has spread from
    the dry west to some of the relatively rainy eastern states. Floods,
    forest fires, homeland security and newly discovered chemical
    contaminants all remain challenging issues. Water is widely thought to
    be the most scarce resource of the 21st century and more likely to be
    the cause of regional conflicts and war.
        Not all these problems are equally important in all states or
    regions of the country. In my own state of Hawaii, we don't, for
    example, argue over access to flows of rivers in neighboring states,
    but we do face most other issues present in other states as well as
    some that are particular to tropical or subtropical climates. Our
    fading sugar-plantation legacy and rapid population growth have
    generated immense changes in water use. These changes have forced a
    thorough re-examination of the management of aquifers from which most
    of our water is drawn and have sparked new interest in alternative
    sources of supply--wastewater reuse, desalination and conservation. In
    other areas of country, pressures on water supplies of the Rio Grand
    Basin; acid rain in New England; water storage in Nebraska sand dunes;
    assessment of water quality in South San Francisco Bay; and regional
    water planning in the New York City watershed exemplify the diversity
    of problems approached by the institutes. Any such list illustrates the
    need for a network of research centers to look after problems in their
    own backyards as well as to collaborate with one another on problems of
    regional and national scope.
        Here are some examples of the institutes' work in the past year:
      --The Montana institute developed simple and inexpensive techniques
            for remediating mine wastes, based on a sophisticated
            understanding of indigenous microbiology.
      --The West Virginia institute is studying biological and water
            quality criteria appropriate to mining-impacted watersheds.
      --The North Dakota institute studied the potential risks of importing
            unwanted aquatic organisms along with interbasin water
            transfers, placing risks into perspective.
      --The Nevada institute created a broad coalition of government,
            university and private sector groups to study water problems of
            developing countries.
      --New Mexico Water Resources Research Institute's worked with Sandia
            National Labs and the Bureau of Reclamation to evaluate
            proposals for a major desalination research facility.
      --The Maryland Water Resources Research Center developed methods to
            rejuvenate oyster habitat and populations in Chesapeake Bay,
            using genetic markers to test the effectiveness of restoration
            strategies.
      --The Alaska Water and Environmental Research Center will determine
            environmental impact of winter pumping of water to build ice
            roads, airfields and drilling pads on the tundra.
        This abbreviated list attests to the practicality and applicability
    of research performed by the institutes. To ensure the usefulness of
    supported research, each institute has a technical advisory committee,
    made up of representatives from faculty, local, state and federal
    agencies and the private sector. These panels identify the most
    pressing water problems facing their states, establish priorities and
    help with local reviews of proposals.
        The National Institutes for Water Resources, in close collaboration
    with the USGS, has developed a highly effective and efficient online
    system for collecting data, reporting results, and review of
    competitive research proposals for the institutes program. The system
    accepts early drafts of proposals and allows local administrators to
    choose which to support. It then identifies experts from across the
    country to provide peer reviews, which they report online. The same
    system accommodates the institute evaluations required every five years
    under the Water Resources Research Act. This system is now serving as a
    model for management of other sponsored research by federal agencies.
        Each year the Institute Program produces about 1,000 technical
    publications dealing with water resources. Roughly one-fourth of these
    are in refereed scientific journals. In fiscal year 2003, the
    institutes conducted more than 132 conferences, seminars and workshops
    with more than 22,500 participants. About two-thirds of the institutes
    publish newsletters detailing research projects and reporting on water
    events. The Internet has proven to be of great importance in technology
    transfer, with web sites at each institute and at USGS providing a
    ``virtual library'' of water information, to anyone who can type
    ``Google.''
        Beyond research and service, the institutes also make an important
    contribution to education and training. In fiscal year 2003, 1,409
    students (528 undergraduates, 526 master's 297 Ph.D.s and 58 post-
    doctoral) were supported by institute-generated projects. These
    projects provided invaluable hands-on application of classroom
    instruction for students from agriculture, engineering, economics,
    geology, geography and many other areas. Often, students have developed
    theses or dissertations and even found post-graduation employment as a
    direct result of their institute-supported work. Encouragement of
    education in water-related areas is increasingly important as the baby-
    boom cohort, representing a large fraction of the nation's human
    capital in water and other sciences, ages and retires in the next
    decade.
        Section 104(b) provides grants oriented mainly to state-based
    issues, with priorities set by the individual state institutes. Section
    104(g) sponsors a nation-wide competitive grants program dealing with
    issues of national or at least wide regional scope. For several years,
    priorities for this program have centered on water quality issues,
    particular non-point sources. Recently, in response to severe drought
    affecting a large area of the country, emphasis shifted to water supply
    matters.
        The federal appropriation has fostered a network of truly national
    scope from a collection of individual researchers in universities and
    water professionals in government and the private sector. The
    institutes provide the driving force for collaboration between
    disciplines. The Institutes are the only entity that brings together
    managers, regulators, users, public-interest groups and researchers to
    articulate problems and develop the research needed to solve them. The
    Institutes all have, in some way, input from and contact with the many
    public and private entities affecting water in each of our states.
    Without an institute in each state, these extensive network benefits
    would wither away.
        Federal funds invested in the institutes program have a remarkably
    high payoff. Each dollar of the 104(b) grant ($84,234 per institute in
    fiscal year 2003) requires $2 matching funds from other sources. The
    grants directly supported 235 projects nationwide, and led the way to
    an additional 917 projects funded from other sources. Altogether, the
    institutes generated an additional $19 in other funding for each dollar
    provided by the federal appropriation. Of this, $10 came from other
    federal sources and $9 from local and state governments, universities,
    private firms, foundations and other non-federal sources. It is crucial
    to realize that much of this extra $19 could not have been generated
    without the leverage provided by the Congressional appropriation. In
    the process, the grants serve as a catalyst for universities to invest
    in and maintain capacities to galvanize faculty, laboratories and
    equipment and to stimulate student interest in water resource issues.
        The 1960s appropriations provided $100,000 per year to each
    institute. By fiscal year 2004, despite a small but most welcome
    increase over the previous several years, this had declined to $92,524
    per institute. Worse yet, inflation has eroded the 2004 appropriation
    to just over $17,000 in 1965 dollars. Research needs for this money
    have not, unfortunately, diminished apace.
        The U.S. Geological Survey Water Resources Research Institutes
    program generates a high return to the people of the United States by
    applying sound scientific methods in support of sound water policy and
    management. The National Institutes for Water Resources urges this
    Subcommittee to provide $8,775,000 for fiscal year 2005.
        Finally, the National Institutes for Water Resources is a member of
    the USGS Coalition. NIWR strongly concurs in the Coalition's
    recommendation that Congress increase the budget of the U.S. Geological
    Survey to $1 billion in fiscal year 2005, an increase of 6.5 percent
    above the fiscal year 2004 enacted level. The increase, which is
    necessary for the Survey to continue providing critical information to
    decision makers at all levels of government, would enable the USGS to
    restore the science cuts proposed in the budget request, provide full
    funding for ``uncontrollable'' costs, and undertake a few exciting new
    science initiatives that would begin to reverse the cumulative effects
    of the long-term funding short fall.
        Thank you very much for the opportunity to present these views.
                                     ______

       Prepared Statement of the National Recreation and Park Association

        The Association urge your support for a fiscal year 2005
    appropriation of $200 million from the Land and Water Conservation Fund
    for assistance to state and local governments, and $50 million for the
    Urban Park and Recreation Recovery Program.
        Recent revelations in the Journal of the American Medical
    Association (March 10, 2004) on the increasing rate of mortality
    attributable to physical inactivity and poor diet increase the
    imperative to invest in public park and recreation facilities that
    encourage active lifestyles. The 400,000 deaths annually due to
    physical inactivity and poor diet is the ``largest increase among all
    causes of death,'' the report observes. Also, Kenneth H. Cooper, M.D.,
    M.P.H. recently noted, ``(Today) our kids are fatter and less fit than
    they have been in the history of this country.'' (Statement to National
    Governors' Association, Winter Meeting, Feb. 22, 2004.)
        A report by the National Center for Chronic Disease Prevention and
    Health Promotion reinforces our recommendations. The Center observed,
    ``(C)haracteristics of our communities such as the accessibility and
    location of parks, trails, sidewalks and recreation centers . . . may
    play an even greater (than social environments) role in promoting or
    discouraging an individual or family's level of physical activity.''
        Congressional support for increased public access through
    recreation development and resource conservation holds high potential
    for at least stabilizing costs over the long term. For example, the
    four diseases that may be prevented by appropriate active lifestyles,
    including active recreation--heart disease, cancer, stroke, and
    diabetes--are life-threatening and costly to treat. The Centers for
    Disease Control and Prevention has observed that if physically inactive
    people were to become sufficiently active, we could potentially reduce
    health care costs by over $75 billion a year. Active recreation also
    can promote mental health; it can reduce feelings of anxiety and
    depression.
        Youth, especially, can benefit from active recreation. About 15
    percent of all children are obese, a condition that increases the risk
    of high blood cholesterol, high blood pressure, and diabetes. By being
    physically active on a regular basis, often at public parks and
    recreation sites, youth may be able to avoid or delay health problems
    associated with obesity and related conditions.
        With appropriate funds, thousands of public park and recreation
    facilities in American communities will be created, restored, and
    expanded, thus offering greater opportunity for active lifestyles. We
    urge your support for federal-state-local fiscal partnerships that will
    further these objectives.
                                     ______

       Prepared Statement of the National Recreation and Park Association

        This statement shares with the Subcommittee the views of the
    National Recreation and Park Association on fiscal year 2005
    appropriations for selected programs within its jurisdiction.
    Referenced programs are administered principally by the National Park
    Service.
        We recommend the following:
      --$200,000,000 from the Land and Water Conservation Fund for state
            assistance to be invested by state and local governments on a
            50/50 matching basis. Funds should be allocated to the states
            as authorized by current law.
      --$50,000,000 to address the most distressed urban recreation
            resource conditions and deficiencies identified and aided
            through the Urban Park and Recreation Recovery Program. This
            program funds no land acquisition.
      --$13,000,000 for the Rivers, Trails and Conservation Assistance
            (RTCA) program to support field-based technical assistance
            program that yields enormous conservation and recreation
            benefits to communities partnerships between federal, state,
            and local interests in creating blueway and greenway trail
            systems.
      --Sufficient funds to enable the National Park Service, through
            Federal Lands to Parks and other programs to collaborate with
            state and local recreation and park agencies and others on the
            conservation and use of surplus federal real property, and
            conservation of rivers and trails and other resources.
        These recommendations, if substantially adopted, will help address
    the national imperative to improve physical and mental health, sustain
    the environment, and stimulate economic growth.

               LAND AND WATER CONSERVATION FUND STATE ASSISTANCE

        Further, we are pleased to note that our recommendations relative
    to LWCF assistance and urban park restoration are also supported by
    Advocates for Health, Public Parks, and Recreation, a broad coalition
    of health and recreation related groups. Their statement has been
    submitted separately.
        We commend the Subcommittee for its decisions to create and sustain
    fiscal partnerships with state and local recreation and park
    authorities. However, we share with many legislators and advocates the
    disappointment that the fiscal year 2003 and 2004 appropriations have
    fallen below previous years, especially the LWCF state assistance and
    the urban park programs. Our request for fiscal year 2005 equals the
    administration's LWCF state assistance request for fiscal year 2003--
    $200,000,000--absent proposed restrictions that would have been imposed
    by the Secretary of the Interior's ``Cooperative Conservation
    Initiative.''
        We also commend the President for his commitment to appropriations
    from the Land and Water Conservation Fund. However, the
    administration's budget incorporates non-LWCF programs, thus creating
    the illusion that LWCF is ``fully funded.'' If the Congress in its
    wisdom continues to fund these programs from LWCF, then jurisdictions
    and agencies presently eligible for LWCF assistance should be eligible
    for participation in programs that are drawn from the LWCF treasury
    account.
        Recent local and state requests for LWCF assistance exceed $4
    billion according to applications submitted to state officials. This
    reflects both the need for investment and program effectiveness, while
    suggesting that our request is very conservative. Our program
    priorities reflect a nationwide demand to increase the recreation
    capacity of public systems, especially those relatively close to home.
        We continue to press our concern that the administration's proposed
    budget again recommends access to the Land and Water Conservation Fund
    for a number of other non-LWCF activities. The LWCF act, while broad in
    its application and diversity of projects, is very specific in its
    policy objectives--provision of recreational opportunities to improve
    human health through conservation of lands and waters and developments
    to enable public use and access.
        Non-federal recreation and park resources are essential to quality
    recreation experiences for all people. Frankly, these systems provide
    the majority of public recreation destinations, services, and visitor
    experiences.

                   URBAN PARK AND RECREATION RECOVERY PROGRAM

        The Urban Park and Recreation Recovery Program recognizes the
    recreation values associated with conservation of the built
    environment. Its use is restricted to restoration and, thus, renewed
    and expanded public use of local recreation facilities and sites that
    have essentially been worn out by use or age. These facilities and
    sites are no less important than conservation of other recreation
    spaces and places of high ecological and aesthetic value. Demand for
    Urban Park and Recreation Recovery Program assistance remains high.
    This interest is reflected in both the number of requests for
    assistance and the quality and objectives of projects. Based on demand
    for fiscal year 2001-2003 appropriations, we estimate that our
    recommendation would support between 115-125 projects. UPARR projects
    emphasize the national importance of bringing quality recreation
    resources and services to children and youth in more economically
    distressed cities and neighborhoods.

               NATIONAL PARK SERVICE INTERGOVERNMENTAL ACTIVITIES

    Rivers and Trails Conservation Assistance Program
        We recommend $13,000,000 for the Rivers, Trails, and Conservation
    Assistance Program. The program illustrates the critical importance of
    federal contribution to public/public and public/private partnerships
    for conservation of natural and cultural resources, and public access
    for recreation. The program provides technical assistance to local
    governments, citizen and community organizations, and state agencies to
    consider recreation and conservation strategies. The results include
    planning, restoration, and development of water ways and trails, and
    conservation of open space and greenways, among other types of
    projects. In most cases, local governments continue to invest non-
    federal funds in projects stimulated by local public interests and
    technical assistance.
        RTCA has been ``flat-funded'' for several years, which has resulted
    in a reported annual loss of program staff and project funding. This
    trend must be reversed for this invaluable program that does so much to
    bring local, state, and regional funding to the partnerships it
    creates.

    Federal Lands to Parks Program
        We recommend an appropriation of at least $1 million to support the
    Federal Lands to Parks program, also part of the NPS Recreation and
    Conservation Assistance area. The FLP program is an exemplary service.
    It guides state and local governments in the conversion of federal
    surplus properties to public recreation and park uses and conservation
    of historic or wildlife values. We understand that the amount of
    surplus property potentially available for state and local parks, and
    demands for assistance has increased beyond the present capacity of
    program staff. A large part of this demand was generated by the closure
    of a large number of military bases between 1988 and 1995. In recent
    years, program staff have assisted in the transfer of about 20-25
    properties annually. There is a current backlog of some sixty pending
    transfers.
        While there is today considerable attention and debate on the
    stewardship and priorities of the National Park System and National
    Park Service, we urge the Subcommittee to not let these situations and
    issues divert attention away from other congressional authorities in
    the Interior department's domain.
        Local and state park systems are critical to the American people
    and others who work and reside among us. With sufficient funds, more
    recreation resources could become accessible. These resources address
    diverse public interests and our collective need for quality recreation
    and associated services for children of working parents. Local agencies
    in particular host programs that serve millions of nutritious
    breakfasts, lunches, snacks, and suppers to needy children. Public
    recreation and park sites and services help reduce crime and
    delinquency, especially during non-school hours, days and seasons.
    Public recreation and park mangers recognize that at any given time
    perhaps 50 million people have a physical disability: They attempt to
    accommodate their needs for recreation.
        In addition to providing public recreation experiences, state and
    local agencies contribute importantly to plant and wildlife diversity.
    Collectively, over 5,000 local park systems contain about 9 million
    acres. Hundreds of local systems contain more than 5,000 acres, with
    many systems in excess of 15,000 acres. An estimated 80 to 85 percent
    of larger systems are typically undeveloped and thus contribute to an
    array of conservation outcomes. Most systems also provide wide-spread
    public opportunities to create environmental awareness among the
    general public.
        The National Recreation and Park Association appreciates the
    opportunity to submit this statement. NRPA public policy director Barry
    Tindall (202-887-0290) is available to provide additional perspectives
    and to respond to questions.
                                     ______

                  Prepared Statement of The Nature Conservancy

        Mr. Chairman and members of the Subcommittee, I appreciate this
    opportunity to present The Nature Conservancy's recommendations for
    fiscal year 2005 appropriations. The Nature Conservancy is an
    international, non-profit organization dedicated to the conservation of
    biological diversity. Our mission is to preserve the plants, animals
    and natural communities that represent the diversity of life on Earth
    by protecting the lands and waters they need to survive. The
    Conservancy has more than 1,000,000 individual members and 1,900
    corporate associates. We have programs in all 50 states and in 28
    foreign countries. We have protected more than 15 million acres in the
    United States and Canada and more than 83 million acres with local
    partner organizations globally. 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.

                          STEWARDSHIP OF PUBLIC LANDS

        The nation's federal lands require enhanced stewardship funding.
    Many of our ecosystems are extremely degraded, particularly by invasive
    species and poor fire management, and require substantial investments
    to restore proper ecosystem function.
        National Fire Plan.--In recent years, inadequate wildfire
    suppression funding has required agencies to transfer funds from other
    key resource programs to cover suppression costs. We urge Congress to
    find a solution to the suppression funding problem. Any solution should
    include cost containment measures, including increased emphasis on fire
    management planning and wildland fire use.
        In addition to the increase in the President's budget for Hazardous
    Fuel Reduction to $476 million, we recommend $100 million for hazardous
    fuels reduction projects supported by local communities and consistent
    with long-term, ecologically-based, landscape-scale plans (within and
    beyond the WUI) with scientifically adequate monitoring protocols.
    Congress should also explore full funding of the Healthy Forest
    Restoration Act Title I ($760 million) consistent with the agencies'
    capacity.
        The most cost-efficient way to address the threat of ecologically
    destructive fires is through long-term restoration. Without adequate
    post-emergency restoration following unnaturally severe fires, forest
    and grassland habitats are impaired and invasive species can invade the
    site, increasing the risk of fire. The President's budget does not
    provide funding for long-term post-fire restoration, and limits
    rehabilitation funding to $27 million. Congress should restore total
    Rehabilitation and Restoration programs to $82.7 million, the fiscal
    year 2002 level, including $10 million ($5 million, Forest Service and
    $5 million DOI) for development and production of additional native
    plant materials through private/public partnerships. The National Fire
    Plan fire research funding for the Forest Service should be increased
    to $25 million and should focus on long-term management and ecological
    restoration so that future suppression costs will be decreased.
        Forest Health Management.--America's forests are under siege by
    numerous exotic insects and diseases, and the pace of introductions
    appears to be increasing. The Forest Service has a crucial role in
    containing or eradicating these devastating organisms and minimizing
    their impacts. which can cost hundreds of billions of dollars if they
    are not contained. We recommend that the Forest Health Management
    program (including National Fire Plan funding) be maintained at the
    fiscal year 2004 level of $123.261 million. We support the President's
    request for $10 million for an ``Emerging Pest and Pathogen Fund'' as
    long as these funds are in addition to the base and conditions for use
    of the money are sufficiently flexible. We also recommend funding as
    needed for the Accelerated Information Gathering section of the Insect
    Infestations and Related Diseases title of the Healthy Forests
    Restoration Act (Title IV).
        State and Private Forestry.--We strongly support funding for
    programs that provide incentives for forest stewardship on state and
    private lands, and critical technical and financial assistance to
    communities and landonwers to improve forestry practices for
    conservation. We support: (1) full funding ($15 million) for the
    Watershed Forestry Assistance program of the Healthy Forests
    Restoration Act (Title III); (2) funding for demonstration projects ($5
    million) under the Healthy Forest Reserve title of HFRA (Title V); (3)
    $20 million for the Forest Land Enhancement Program.
        Invasive Species.--Next to habitat loss, invasion by non-native
    species is the most pervasive threat to native biodiversity on public
    land. The Conservancy supports the interagency National Invasive
    Species Budget as a step in accelerating prevention, early detection,
    rapid response, control and management and restoration. In addition to
    the President's requested funding of $58.3 million for BLM, BOR, NPS,
    FWS and USGS and $17.4 million for Forest Service for invasive species
    management, the Conservancy recommends $7 million for a new grant
    program for integrated tamarisk control within western watersheds.
        Sage Grouse Habitat Conservation.--Declining sagebrush habitats
    have led to petitions to list sage grouse as threatened or endangered.
    We support the President's request of an increase $3.2 million for the
    BLM's Wildlife Management budget to address sage grouse conservation
    and restoration needs.

                          ACQUISITION OF FEDERAL LAND

        The Nature Conservancy applauded action by the Appropriations
    Committees to establish and fully fund the Land Conservation,
    Preservation, and Infrastructure Improvement program established in
    fiscal year 2001 and fiscal year 2002. The Conservancy was disappointed
    that the fiscal year 2004 Interior appropriations bill did not continue
    the commitment to implementing this historic 6-year conservation
    achievement. We strongly urge the Subcommittee to fully fund this
    program at its fiscal year 2005 level of $1.68 billion.
        Land and Water Conservation Fund.--We strongly support continued
    federal acquisition of high-priority biologically important land and
    urges the Congress to provide funding for the Land and Water
    Conservation Fund (LWCF) at a far more robust level than the
    President's request. The Conservancy specifically proposes funding of
    39 biologically rich land acquisition projects totaling $81.2 million.
    Priorities include completing multi-year projects to transform Great
    Sand Dunes National Monument into the 57th National Park, a multi-
    agency project in Montana's Blackfoot River valley and protection of
    major inholdings at St. Marks NWR, Cache River NWR and the St. Francis
    NF. A number of projects, including the Northern Tallgrass Prairie NWR
    and BLM's Henry's Lake ACEC projects, rely upon conservation easements
    to achieve important conservation objectives while maintaining the
    integrity of working landscapes. We urge the subcommittee to provide at
    least the President's request of $93.8 million for the state-side of
    LWCF.
        Forest Legacy.--This program is an increasing popular and
    successful model of a non-regulatory conservation approach based on
    partnerships between federal and state governments and private
    landowners. We strongly support the President's request for $100
    million for this program and urge the Committee to fully fund this
    request to support priority projects from the Walls of Jericho in
    Tennessee, to the Blackfoot River in Montana, to St. Croix in the U.S.
    Virgin Islands.

              PAYMENTS IN LIEU OF TAXES AND REFUGE REVENUE SHARING

        Programs provide payments to counties where land has been taken off
    the local property tax roles and put into federal ownership. In some
    counties, protection of significant natural resources impacts the tax
    base necessary to fund local government services, including schools and
    public safety. We urge the Committee to provide full funding for these
    programs and honor the federal government's commitment to impacted
    communities.

                             SCIENTIFIC INFORMATION

        Sound decisions on public and private land acquisition and
    management must be based on high-quality scientific information. The
    Conservancy's work on the ground has been guided by information from
    the non-profit organization NatureServe and its state natural heritage
    program members. We support the President's request for the National
    Biological Information Infrastructure (NBII, USGS) and recommend an
    increase of $6 million to establish the NBII State Grants Partnership
    program. We support an increase of $4.3 million for the NPS Natural
    Resource Challenge; an increase of $4 million in BLM's budget for long-
    term resource monitoring to measure the effects of increased energy
    development on other resources, and an increase for Forest Service
    (NFS) Inventory and Monitoring to $191,345,000.

                          ENDANGERED SPECIES PROGRAMS

        The Conservancy supports $100 million for the FWS's Cooperative
    Endangered Species Fund, an effective and flexible tool for building
    cooperative, voluntary partnerships. The requested increase reflects
    the importance and unmet public funding needs of collaborative
    conservation strategies to protect critically rare species on non-
    federal land, and state and local acquisition of habitat necessary for
    the survival of listed and candidate species.
        The Conservancy proposes significant increases for the FWS's ESA
    implementation programs. Funding increases would enhance the Service's
    ability to provide important incentive-based, non-regulatory programs
    that assist private landowners in protecting species. $12 million for
    Candidate Conservation would expand this innovative program and permit
    more effective monitoring and implementation of existing agreements.
    $17 million for Listing would enable the Service to expand its
    evaluation of imperiled species for listing, a critical action that
    guarantees certain protections under the law, including the authority
    to purchase habitat. $55 million for Consultation/Habitat Conservation
    Planning would permit the Service to respond to the dramatic increase
    in the use of HCPs. $75 million for Recovery would permit the
    development, monitoring, and implementation of recovery plans and
    actions for a rapidly increasing number of listed species. We support
    $1.75 million in planning funds to Southern California's Natural
    Community Conservation Planning program. We urge that targeted funding
    for Pacific Salmon Grants (a $1.975 million pass through) and the Upper
    Colorado River Recovery Program ($691,000) be restored, in addition to
    restoration of $1.4 million of general Recovery program funds.

                        STATE AND TRIBAL WILDLIFE GRANTS

        The Conservancy strongly supports this program and recommends
    funding of $125 million. We believe the development of state
    comprehensive wildlife conservation plans will set the foundation to
    direct future resources for state conservation objectives and encourage
    the states to make full use of the best existing scientific
    information, including natural heritage data.

       COOPERATIVE CONSERVATION INITIATIVE AND PRIVATE LANDOWNER PROGRAMS

        Private lands provide a portion of the habitat for at least two-
    thirds of all federally listed species. The Administration's
    Cooperative Conservation Initiative supports innovative ways to support
    partnerships between private landowners, local communities, states and
    the federal government.
        Challenge Cost Share.--We support the proposed funding for the BLM
    ($21 million), FWS ($12.0 million) and NPS ($21 million). These
    programs leverage appropriated dollars through 1:1 matches with State
    and private partners to implement important restoration and protection
    projects.
        Partners for Fish and Wildlife.--We support the proposed increase
    to $50 million, including $5 million to the High Plains Partnership and
    $6.2 million for the Upper Klamath River Basin Restoration Initiative.
    The Partners program provides important technical and financial
    assistance to private landowners and other partners to protect, restore
    and enhance habitat for fish and wildlife species.
        Landowner Incentive Program and Private Stewardship Grants.--We
    support the President's request of $50 million and $10 million for
    these programs, respectively.

                            PARTNERSHIP INITIATIVES

      --National Fish and Wildlife Foundation.--Federal support to NFWF
            continues to yield a return of over two non-federal dollars for
            every single taxpayer dollar. We recommend appropriations of
            FWS ($9 million), BLM ($4 million) and Forest Service ($4
            million).
      --North American Wetlands Conservation Fund and Joint Venture
            program.--The Conservancy supports funding for NAWCA at the
            President's request of $54 million or more. More than $1.6
            billion in partner contributions has been raised to match $573
            million in federal funds in order to save 20.6 million acres of
            wetlands. The Conservancy supports the Presidents's request of
            $11.45 million for Joint Ventures..
      --Neotropical Migratory Bird Conservation Fund.--We support funding
            for this important and increasingly popular program at its
            authorized level of $5 million. The Service should continue to
            administer this grant program through its Division of Bird
            Habitat Conservation.
      --Connecticut River Atlantic Salmon Commission (CRASC).--The
            Conservancy urges restoration of funding and an increase to
            $750,000 for the CRASC.
      --Great Lakes Fish and Wildlife Restoration Act (GLFWRA).--The
            Conservancy recommends $2 million in base funding and $2
            million for grants for the Service's Great Lakes Fish and
            Wildlife Restoration Programs.

                            INTERNATIONAL PROGRAMS.

        The Conservancy recommends a total of $14 million to the programs
    identified in the FWS' Multinational Species Conservation Fund. We
    propose, however, that the Committee appropriate $9 million to the
    Rhinoceros/tiger, Elephants and Great Ape funds and provide $5 million
    to the Neotropical Migratory Bird Conservation Fund. We support $10
    million for the Forest Service's International Programs. The NPS Office
    of International Affairs should be funded at $2 million so that the
    National Park Service--global leaders in conservation--can expand its
    activities to assist international partners in creating and managing
    parks and other protected areas.
        Thank you for the opportunity to present The Nature Conservancy's
    comments on the Interior budget.

     FISCAL YEAR 2005 LAND AND WATER CONSERVATION FUND PROJECTS RECOMMENDED
                            BY THE NATURE CONSERVANCY
    ------------------------------------------------------------------------
                                                              Administration
                  LWCF project                  TNC request       request
    ------------------------------------------------------------------------
    Bureau of Land Management:
        Blackfoot River Watershed, MT.......      $5,000,000  ..............
        Henry's Lake ACEC, ID...............       1,000,000      $1,000,000
        Otay Mountain/Kuchamaa HCP, CA......       2,000,000  ..............
        Santa Rosa/San Jacinto Mountains NM,       1,000,000       1,000,000
         CA.................................
        Upper Snake/South Fork Snake River,        2,000,000       2,000,000
         ID.................................
    U.S. Fish and Wildlife Service:
        Baca NWR, CO........................       3,400,000       2,600,000
        Big Muddy NWR, MO...................         750,000         750,000
        Cache River NWR, AR.................         850,000         850,000
        Cahaba River NWR, AL................       1,500,000  ..............
        Cape Romain NWR, SC.................         900,000  ..............
        Cape May NWR, NJ....................       1,000,000  ..............
        Cypress Creek, IL...................         127,000         127,000
        Dakota Tallgrass Prairie WMA, ND/SD.       1,000,000         650,000
        Eastern Shore Virginia NWR, VA......       3,000,000  ..............
        Laguna Atascosa NWR, TX.............       1,000,000       1,000,000
        Lower Hatchie NWR, TN...............       1,130,000  ..............
        Lower Rio Grande Valley NWR, TX.....         650,000         600,000
        Massasoit NWR, MA...................         575,000  ..............
        Northern Tallgrass Prairie NWR, MN/        1,000,000         500,000
         IA.................................
        Red River NWR, LA...................       2,700,000  ..............
        San Diego NWR, CA...................       3,000,000       1,000,000
        Silvio Conte NWR, CT/MA/NH/VT.......       1,000,000       1,000,000
        St. Marks NWR, FL...................       1,900,000       1,000,000
        Upper Mississippi NWFR, MN/IA/IL/WI.         500,000         500,000
    National Park Service:
        Pinelands National Reserve, NJ......       3,000,000  ..............
        Pinnacles NM, CA....................       5,300,000       5,300,000
    U.S. Forest Service:
        Chattahoochee NF (GA Mountains             3,000,000       3,000,000
         Riparian Project), GA..............
        Cherokee NF (TN Mtns.), TN..........       3,260,000       3,000,000
        Daniel Boone NF, KY.................       2,000,000         500,000
        Francis Marion NF, SC...............       5,500,000  ..............
        Helena-Lolo NFs (Blackfoot project),      10,000,000         300,000
         MT.................................
        Hoosier NF (Hoosier Unique Areas),         1,100,000         125,000
         IN.................................
        Huron-Manistee NF, MI...............       2,300,000         500,000
        Mark Twain NF (Ozarks Mtn. Streams &         500,000         500,000
         Rivers), MO........................
        National Forests in Alabama, AL.....       2,500,000  ..............
        Shawnee NF, IL......................       1,000,000         125,000
        Skagit River, WA....................         600,000  ..............
        Sumter NF, SC.......................       2,000,000  ..............
        Wenatchee NF (Tieton River), WA.....       2,200,000  ..............
                                             -------------------------------
          Total TNC Request for 39 LWCF           81,242,000  ..............
           Projects.........................
    ------------------------------------------------------------------------

                                     ______

      Prepared Statement of the Enewetak/Ujelang Local Government Council

        Mr. Chairman and distinguished members of this Subcommittee: Thank
    you for providing this opportunity to the people of Enewetak to
    describe issues that relate to our ability to live on Enewetak Atoll.
    Of immediate concern is the funding of the Enewetak Food and
    Agriculture Program. In the Compact of Free Association, as amended
    (hereinafter ``Compact''), Congress provided an annual sum of ``not
    less than $1.3 million'' for the Enewetak Food and Agriculture Program.
    That funding in the Compact is much appreciated. However, Congress has
    funded the program at a level of $1.7 million these past several years
    and that is the minimum amount necessary to provide food,
    transportation, and the continuation of the soil rehabilitation and
    agriculture work. Accordingly, this statement includes a request to
    increase the Compact funded Enewetak Food and Agriculture Program by
    $400,000 from $1.3 million to $1.7 million.
        Other issues that relate to our ability to live on Enewetak Atoll
    are: Funding of the health care program; funding of the just
    compensation award issued by the Nuclear Claims Tribunal; resettlement
    of the Enjebi people on their home island of Enjebi; monitoring of the
    our people for radiation exposure; continued monitoring of the
    environment to determine current radiation levels; and, monitoring of
    the Runit dome.
        We would first like to address the continuing challenges that life
    on Enewetak presents. These challenges are the result of the severe
    damage inflicted on our atoll by the U.S. Nuclear Testing Program. This
    committee has helped us meet some of these challenges by funding the
    Enewetak Food and Agriculture Program.
        increased funding of the enewetak food and agriculture program.
        This program is necessary because over one-half of Enewetak remains
    contaminated by radiation. The remaining fifty percent of the land was
    turned into a desert-like wasteland in the course of the nuclear
    testing program. As a result of such activities, there is insufficient
    food and other resources on Enewetak atoll to support the people.
        Congress has provided a sum of not less than $1.3 million annually
    for 20 years for the Enewetak Food and Agriculture Program in the
    Compact. The Enewetak people greatly appreciate such mandatory funding.
    However, the program has been funded at a level of $1.7 million for the
    past several years and such funding level needs to continue to maintain
    the minimum components of the program. The components of the program
    include a soil and agriculture rehabilitation program, the importation
    of food, and the operation of a vessel.
        Much progress has occurred over the past several years with regard
    to the agriculture rehabilitation effort. In addition, we have become
    more and more involved with the soil rehabilitation effort and the
    planting and maintenance of food bearing plants. Funding of the program
    at the $1.7 million level these past several years has helped the
    program keep up with inflation and has created a momentum that we would
    like to maintain.
        However, the growing population, much improved agriculture
    rehabilitation techniques, and transportation expenses have increased
    the costs of the program. These costs are the costs of the necessary
    food imports; transportation costs for food imports; transportation
    costs of equipment, material, supplies, and fuel for the agriculture
    rehabilitation program; and labor costs for the accelerated agriculture
    effort. To meet these costs, the program funding needs to be increased
    to the sum of $1.7 million in fiscal year 2005. The $1.7 million is
    broken down as follows: Food and cooking fuel costs, $550,000;
    agriculture costs (labor, equipment, material, supplies, fuel,
    operations and maintenance), $850,000; transportation costs (labor,
    fuel, operations and maintenance), $300,000. Included in the three
    foregoing categories is the cost of administration of the program. Due
    to the foregoing, we respectfully request that this committee increase
    the amount provided under the Compact for this program for fiscal year
    2005 by the amount of $400,000, for a total of $1.7 million.
        We would now like to describe the award of $386 million made to us
    by the Marshall Islands Nuclear Claims Tribunal for damages we suffered
    as a result of the U.S. Nuclear Testing Program.

      FUNDING OF THE JUST COMPENSATION AWARD ISSUED BY THE NUCLEAR CLAIMS
                                    TRIBUNAL

        The issue most important to us is the funding of the $386 million
    award for just compensation made to the Enewetak people by the Nuclear
    Claims Tribunal. Enewetak was the site for forty-three of the sixty-
    seven nuclear bombs detonated by the United States in the Marshall
    Islands. The damages of the U.S. Nuclear Testing Program affect us to
    this day. It is important to remember that in 1947, prior to the
    removal of our people from Enewetak, the United States promised us that
    we would have all constitutional rights accruing to U.S. citizens, that
    we would be taken care of during our exile to Ujelang, and that we
    would not be exposed to any greater danger than the people of the
    United States.
        The constitutional rights to which we are entitled include the
    right to be justly compensated for the damages we suffered as a result
    of the U.S. nuclear testing program. In addition to the well documented
    promises made to us, the United States in the Compact (1) accepted
    responsibility for the just compensation owing for loss or damage
    resulting from its nuclear testing program and (2) agreed that the
    Marshall Islands Nuclear Claims Tribunal (``Tribunal'') make a final
    determination of the amount that would satisfy the constitutional
    requirement of just compensation.
        The Tribunal, following well established U.S. constitutional,
    legal, and regulatory principles, determined that the just compensation
    to be provided to us was an amount of $386 million in addition to what
    we received or will be receiving under the Compact. The funding of this
    amount by the United States would satisfy its constitutional obligation
    to us. This funding could be provided through the Changed Circumstances
    Petition process that has been presented to the U.S. Congress.
    Alternatively, the Congress could direct the U.S. Court of Appeal for
    the Federal Circuit to review and certify, or to reject in whole or in
    part, the award of the Tribunal similar to an existing Congressional
    provision that deals with judgments of the Marshall Islands courts
    against the United States arising from its administration of the
    Marshall Islands under the U.N. Trusteeship.
        It is important to note that this funding would provide us with the
    resources to rid our land of radiological contamination, rehabilitate
    the soil, revegetate the land, resettle the Enjebi people on their home
    island, and provide the means by which we could establish a local
    economy in the fishing and tourism sectors. The foregoing would permit
    us to once again become self-reliant and self-sufficient. Until this
    funding materializes, we require continued and increased funding of the
    Enewetak Food and Agriculture Program.

        RESETTLEMENT OF THE ENJEBI PEOPLE ON THEIR HOME ISLAND OF ENJEBI

        We, the Enewetak people, consist of two groups: The people of the
    southern part of the atoll, the Enewetak group; and, the people of the
    northern part of the atoll, the Enjebi group. The Enjebi people have
    been exiled from their home island for a period of over 56 years. They
    have not been able to resettle their home island because it remains
    contaminated. As a result, the Enjebi people need to share the limited
    land and resources with the other Enewetak people on the islands of
    Enewetak, Medren and Japtan. As the populations grow, this is becoming
    an increasingly difficult situation. Yet Enjebi cannot be resettled in
    the near term because insufficient funding exists for the cleanup and
    resettlement.
        The situation at Enjebi is difficult since Enjebi Island was ground
    zero for a number of tests. In addition, it underwent bulldozing,
    scrapping and soil removal during the 1977-80 partial cleanup
    activities. In order to make the island habitable again, radiological
    remediation and soil and plant rehabilitation are required. As
    determined by the experts, the cost for the radiological remediation
    and soil and plant rehabilitation is approximately $118 million, which
    includes the cleanup and rehabilitation of the other northern islands
    which are part of the Enjebi people's resources for food from land and
    marine areas. These costs are part of the just compensation award made
    to the Enewetak people by the Tribunal.
        In addition, the people require the housing, infrastructure, and
    other buildings necessary to permit them to live on the island while
    the rehabilitation is ongoing. These costs are estimated at $30
    million.
        In short, the cleanup and resettlement of Enjebi is projected to
    cost $148 million. The best solution is to fund the Tribunal award
    which would provide the funding for the cleanup and rehabilitation of
    all the northern islands including Enjebi, and which would provide the
    funding for the housing and other necessary infrastructure at Enjebi.
    radiation monitoring of the people, the environment, and the runit dome
        Because of the residual radiation contamination at Enewetak Atoll,
    we and our environment need to be monitored. The U.S. Department of
    Energy (DOE) and the Enewetak/Ujelang Local Government Council have
    reached an agreement on an appropriate whole body counting and
    plutonium detection regime. The DOE responsibilities under such a
    regime need to continue until Enewetak is radiologically remediated. In
    addition, the Runit Dome (Cactus Crater Containment Site) contains over
    110,000 cubic yards of material including plutonium and other
    radioactive debris. This site needs to be monitored to assure the
    integrity of the structure and to assure that no health risks from the
    radioactive waste site are suffered by us. To effect the foregoing, a
    long-term stewardship program of the Runit Dome needs to be implemented
    by the United States.

                       FUNDING OF THE HEALTH CARE PROGRAM

        In Section 102 of Public Law 96-205, the U.S. Congress, authorized
    a program of medical care and treatment for the peoples of the atolls
    of Bikini, Enewetak, Rongelap, Utrik and other Marshallese determined
    to be affected as a result of the U.S. Nuclear Testing Program in the
    Marshall Islands. The funding for such program continued, in an amount
    of $2 million annually for 15 years, under the terms of the Compact.
    The funding for such medical care and treatment program expired as of
    October 21, 2001. The RMI has provided funding for the continuation of
    this program from the Section 177 trust fund. However, that fund is now
    so depleted that the RMI cannot fund the program as of September 30,
    2004. The Congress in Section 104 of Public Law 96-205, intended such
    medical care and treatment program to continue unless terminated by the
    express approval of the Congress. Congress has not approved
    termination. The program needs to continue and the funding needs to be
    increased to $4 million annually to provide a medical safety net for
    the people of the 4 atolls and other Marshallese determined to have
    been affected by nuclear testing. Even at the $4 million level, the
    program will only be able to expend $28 per person per month for the
    program costs. The $4 million should include an inflation factor by
    being tied to the U.S. medical CPI.

                     ENEWETAK FOOD AND AGRICULTURE PROGRAM

        The Enewetak Food and Agriculture Program enables us to live on
    Enewetak. It provides funding for imported food, continued agriculture
    rehabilitation, operation of a motor vessel that brings us the imported
    food, and an operation and maintenance component conducted out of a
    facility on Enewetak known as the field station.
        1. Efforts made to increase food production.--The most significant
    aspects of the agriculture rehabilitation program are the infusion of
    nutrients into the soil and the planting of buffer plants along the
    island's shore to protect the interior plants from salt spray. The
    infusion of nutrients into the soil is accomplished by digging trenches
    and placing organic material in the trenches along with a compost
    mixture of copra cake and chicken manure. This activity is extremely
    labor intensive and requires the importation of copra cake and chicken
    manure. Although the work is progressing, additional funding is
    required to provide greater manpower and the necessary equipment,
    materials and supplies.
        2. Importation of food.--Imported food is required because of the
    poor soil condition of the land available to us and the radiation
    contamination of other lands. Imported food is now approximately
    $550,000 of the program budget and is expected to increase because of
    the increase in food costs and because of our growing population. These
    issues further illustrate the need to increase the program to $1.7
    million.
        3. Vessel.--In 1999, we purchased, repaired, and refitted a 104-
    foot motor-vessel as a replacement vessel for our 54-foot motor-sailer,
    which sank. This replacement vessel, named the KAWEWA, has greater
    capacity for cargo and passengers than the previous vessel. The KAWEWA
    permits us to transport machinery, equipment, supplies and other
    necessary cargo. It also provides transportation to members of our
    community. Both the transport of cargo and people has become extremely
    difficult in the Marshall Islands because of the lack of transport
    vessels and aircraft. The KAWEWA provides the necessary lifeline for
    goods, materials, and transportation for our community.
        4. Field Station.--Operation and maintenance of the entire program
    is conducted out of a facility referred to as the Field Station. Field
    Station personnel provide all the required agricultural work; maintain,
    service, and operate the equipment required by the various components
    of the program; make payments and maintain books of accounts; and
    coordinate the procurement of food, material and equipment.

                                   CONCLUSION

        We thank the Congress for its past support and its consideration of
    the items described above.
                                     ______

    Prepared Statement of the Nebraska Boyer Chute National Wildlife Refuge

                          SITE DESCRIPTION & LOCATION

        Boyer Chute National Wildlife Refuge was established on August 11,
    1992, under the authority of the Fish & Wildlife Act and the Emergency
    Wetland Resource Act. It lies three miles east of the farming community
    of Fort Calhoun, Nebraska. The current refuge boundary is situated west
    and alongside the Missouri River in Washington County, ten miles north
    of Omaha, Nebraska. The authorized acquisition boundary also extends
    across the river into Pottawattamie County, Iowa.
        This 3,200-acre refuge lies in the wide, fertile floodplain of the
    Missouri River valley on former river meanders. It will connect DeSoto
    NWR and Wilson Island State Park to the north with the Neale Woods
    Center (a privately owned Nature Center) to the South. The focal point
    of the refuge is Boyer Chute, a ``first of its kind'' restored side-
    channel of the Missouri River.

                               ECOLOGICAL VALUES

        The purpose of the Refuge is to restore, preserve, and maintain
    fish and wildlife habitat, with special emphasis to threatened and
    endangered species, migratory birds, and preservation of the natural
    biodiversity of the Missouri River floodplain. It is not to be
    considered as another waterfowl refuge. However, it will serve as an
    important migration stopover for ducks and geese. As the mosaic of
    riparian forest and grasslands are restored, the refuge will attract a
    wide variety of neotropical migratory species. It also serves as an
    important habitat and nursery ground for riverine species of fish.
        The Refuge is a joint federal and local conservation partnership
    designed to restore a portion of the Missouri River habitat that flows
    through the 2\1/2\ mile long chute and parallels the main flow of the
    river. Riparian woodland, tallgrass prairie, and palustrine and
    riverine wetlands are the major wildlife habitats that are being
    restored and protected. Approximately 400 acres are temporarily managed
    as croplands awaiting restoration. Over 1,500 acres of tallgrass
    prairie and wet meadows have been restored or preserved. These habitats
    benefit Missouri River fishes, migratory birds, endangered species and
    resident wildlife. This important habitat is a potential Important Bird
    Area in the state.

                                   PUBLIC USE

        Proactive outreach introduces more and more people to the Fish and
    Wildlife Service. The refuge promotes recreational activities including
    fishing, picnicking, hiking, interpretation, wildlife viewing,
    environmental education and photography. This affords the growing
    visiting public the chance to enjoy the wildlife and associated
    habitats of the restored floodplain forest and adjacent grasslands.
    Visitors can use four nature trails and two education pavilion shelters
    located along 2 miles of graveled roads along the Chute. Parking areas,
    rest rooms, and fishing piers are handicapped accessible.

                                    THREATS

        Threats to the integrity of the refuge come from several fronts.
    Urban sprawl from the Greater Omaha Metropolis is ever increasing. Land
    prices are acutely inflated due to the desire to move out of the big
    city. The clearing of land for trophy houses along the river is
    creating significant riparian habitat loss. Cottonwood regeneration is
    at an all-time low along the Missouri River corridor causing serious
    declines in use by bald eagles and innumerable other species. Invasive
    species such as purple loosestrife become more of a threat every day
    because landowners along the river are not controlling growing
    populations. Progeny from the invasives are then transported to the
    refuge where they become established. The physical incising of the
    Missouri River channel into itself is effectively ``drying out'' the
    river valley. Floodplain side-channels and associated wetlands have
    become non-functional as a result.

                               ACQUISITION STATUS

        An LWCF appropriation of $1 million is needed to replenish the
    depleted funding for Boyer Chute NWR acquisition and acquire these
    tracts.

                                 PUBLIC SUPPORT

        Boyer Chute NWR Is a joint federal, state, and local partnership
    with Corps of Engineers, Papio-Missouri River Natural Resources
    District, the NE Game and Parks Commission, Natural Resources
    Conservation Services, Ducks Unlimited, Back to the River, Inc.,
    Friends of Boyer Chute and DeSoto NWR, Midwest Interpretive
    Association, Fontenelle Nature Association, and the Upper Mississippi
    Joint Venture of the North American Waterfowl Management Plan.

                                    HABITAT

        River, Wetlands, Taligrass Prairie, and Wet Meadows.

                                    SPECIES

        The Refuge provides a home or seasonal resting are for 83 species
    of fish, 15 species of amphibians, 29 species of reptiles, 60 species
    of macroinvertebrates, 40 species of mammals, and at last count 259
    species of birds. Habitat is also suitable to the endangered Pallid
    sturgeon, Interior Least Tern, Piping Plover and American Burying
    Beetle. Also, Wood Thrushes, Red-Headed Woodpeckers, Short eared Owls,
    Harris, Grasshopper and Henslow's Sparrows, Dickcissels, Bald Eagles,
    Lapland Longspurs, Common Snipe, Lesser and Greater Yellowlegs, Spotted
    and Upland Sandpipers, Orange Crowned, Palm, Black & White, Tennessee
    and Nashville Warblers, Yellow-bellied Sapsuckers, Northern Goshawks,
    Merlins, Green, Yellow-Crowned Night and Great Blue Herons, Hooded and
    Common Mergansers.

    Attachment.
                              Audubon Society of Omaha,
                                               Omaha, Nebraska,
                                                        March 22, 2004.
    Hon. Conrad Burns, Chairman,
    Senate Appropriations Committee, Subcommittee on Interior, Washington,
            DC.
        Dear Chairman Burns: When you mark up your fiscal year 2005
    Interior appropriations bill, I ask that you include $1 million under
    the Land and Water Conservation Fund for the Boyer Chute National
    Wildlife Refuge located a few miles north of the metropolitan city of
    Omaha, Nebraska. These funds will be used to purchase lands in the
    floodplain of the Missouri River valley on former river meanders, ``the
    first of its kind'' restored side-channel of the Missouri River. The
    addition of these lands will greatly increase the area's value as bird
    and wildlife habitat.
        The 3,200 acre proposed refuge is a joint project of federal and
    local conservation partnership designed to restore a portion of the
    Missouri River habitat that flows through the 2\1/2\ mile long chute
    and parallels the main flow of the river. Partners include the Papio-
    Missouri River Natural Resources District, the Nebraska Game and Parks
    Commission, The Corps of Engineers, and the U.S. Fish & Wildlife
    Services. Riparian woodland, tallgrass prairie, palustrine and riverine
    wetlands are the major wildlife habitats that are being restored and
    protected. Approximately 400 acres are temporarily managed as
    croplands, awaiting restoration. Over 1,500 acres of tallgrass prairie
    and wet meadows have already been restored or preserved. These habitats
    benefit Missouri River fishes, migratory birds endangered species and
    resident wildlife. This grant would greatly help the U.S. Fish &
    Wildlife Service work to bring this Refuge to fruitation.
        The Refuge affords the growing, visiting public the chance to enjoy
    the wildlife and associated habitats of the restored floodplain forest
    and adjacent grasslands. It promotes recreational activities including,
    fishing, picnicking, hiking, interpretation, wildlife viewing,
    environmental education and photography.
        On the other hand, the integrity of the refuge is being threatened
    by the increase of urban sprawl from the Greater Omaha Metropolis by
    the desire of its citizens to move ``out of the big city.'' Land prices
    are becoming acutely inflated because of this desire of the citizens.
    It is imperative to complete a conservation project of this scope and
    importance before the land no longer becomes available.
        We respectfully request that you include LWCF funding of $1 million
    for the Boyer Chute National Wildlife Refuge in the Interior
    Appropriations Bill. Thank you for your attention to this request and
    for your assistance in years past. I look forward to working with you
    this year to make this conservation project a reality.
                Sincerely,
                             Ione Werthman, Conservation Chair,
                                              Audubon Society of Omaha.
                                     ______

          Prepared Statement of the Nebraska Game and Parks Commission

        The Nebraska Game and Parks Commission is the agency responsible
    for stewardship of Nebraska's wildlife resources in the best long-term
    interest of Nebraskan's and those resources. The Commission supports
    the President's fiscal year 2005 budget for the National Biological
    Information Infrastructure (NBII, U.S. Geological Survey, Department of
    Interior) and recommends an increase of $6 million to establish the
    NBII State Grants Partnership program. This grant program will further
    the development, dissemination and use of sound scientific information
    about the nation's natural heritage and wildlife. The program will
    provide base funding to every state for natural heritage resources and
    wildlife information management and a national competitive grant pool.
        Each year millions of dollars are spent by states and the federal
    government to grapple with land and water use issues. Countless hours
    of staff time are devoted to managing conflicts over changes to the
    environment caused by society's need to develop natural resources. The
    lack of reliable information about vulnerable species and habitats
    increases the uncertainty, risks, and costs for developers, energy
    companies, and other private landowners due to project delays. Ready
    access to this kind of information will reduce uncertainty, risks, and
    costs, and enhance conservation opportunities.
        States are clearly in a position to provide leadership in the
    management, sharing and use of data essential to making sound decisions
    for the conservation and management of our nation's natural resources.
    However, resources are needed at the state level to computerize this
    information, document and publicize its uses, and make it easily
    accessible to a broad range of stakeholders.
        A NBII State Grants Partnership program to further the development
    and dissemination of sound, scientific natural resource information
    will have numerous benefits including:
      --Strengthen the state's ability to evaluate proposed land and water
            uses by improving accessibility of essential biological
            information.
      --Lower costs of state planning efforts (transportation, economic
            development, etc.) by improving the efficiency with which
            managers can access detailed information about biological
            resources in project areas.
      --Reduce conflicts associated with biological resource management
            (e.g., declining species, habitat loss) by increasing the
            amount and improving the quality of scientific information
            available to both state staff and the public.
      --Strengthen cooperation among states in the management of species
            and ecosystems throughout their ranges by increasing
            interoperability among information systems.
      --Eliminate duplication of effort by ensuring that information about
            the state's biological resources does not have to be collected
            in the field more than once because it is captured in data
            systems where it can easily be used to address future resource
            management issues.
        The NBII State Grants Partnership program would provide much needed
    support for our ability to develop and disseminate natural resource
    information and would allow the Game and Parks Commission to better
    manage the state's wildlife resources. We encourage you to support
    funding for this program.
                                     ______

                  Prepared Statement of The Ocean Conservancy

        The Ocean Conservancy (TOC) is pleased to share its views regarding
    the programs in the Department of the Interior's budget that affect
    marine resources and requests that this statement be included in the
    record for the fiscal year 2005 Interior and Related Agencies
    Appropriations bill.
        The Ocean Conservancy strives to be the world's foremost advocate
    for the oceans. With over 80 staff serving 150,000 members, we work to
    inform, inspire and empower people to speak and act for the oceans
    through science-based advocacy, research and public education.
    Headquartered in Washington, D.C., The Ocean Conservancy has additional
    offices in Alaska, California, Washington, Florida, Maine, Virginia and
    the U.S. Virgin Islands.
        The following testimony summarizes TOC's priority funding requests
    for the Departments of Interior, including the Conservation Trust Fund
    and agency-specific requests for the Fish and Wildlife Service, the
    National Park Service, the U.S. Geological Service, the Minerals
    Management Service and the Office of Insular Affairs.

                           DEPARTMENT OF THE INTERIOR

    Conservation Trust Fund
        The Conservation Trust Fund supports a wide variety of programs
    including the Land and Water Conservation Fund, State Wildlife Grants,
    the Cooperative Endangered Species Fund; it finances the maintenance of
    parks, refuges and other sites, and supports critical marine and
    coastal protection needs. TOC is deeply concerned that the
    Administration's budget request significantly cuts the Conservation
    Trust Fund and urges the Subcommittee to fully fund the Interior
    portion at $1.68 billion in fiscal year 2005.

                        FISH AND WILDLIFE SERVICE (FWS)

    Endangered Species Act (ESA) Requirements
        Listing and Critical Habitat.--The FWS continues to face a backlog
    of listing and critical habitat designations required by the ESA. TOC
    is pleased that the Administration is seeking a $5 million increase in
    fiscal year 2005 and urges that the Subcommittee to provide an
    additional increase for endangered species listing and critical habitat
    programs in fiscal year 2005.
        Section 7 Consultations.--Each year, the FWS performs interagency
    consultations on more than 62,000 federal actions under Section 7 of
    the ESA. TOC urges the Subcommittee to reject the Administration's
    proposed cut and support $67.9 million in fiscal year 2005 to ensure
    timely completion of these required biological reviews.
        Recovery Program.--TOC is extremely concerned about the
    Administration's proposed $9.7 million cut to the endangered species
    recovery program. We appreciate the Subcommittee's rejection of the
    Administration's proposed cut in fiscal year 2004 and urge
    substantially increased funding be provided in fiscal year 2005.
        Southern Sea Otter.--The southern sea otter was listed as
    threatened under the ESA in 1977. The current population has suffered
    significant declines in six out of the last eight years. Necropsy data
    indicates that nearly 40 percent of otters examined suffered an
    infection at the time of death. TOC respectfully requests that the
    Subcommittee provide $1,500,000 in fiscal year 2005 to undertake the
    health-related research proposed in the Southern Sea Otter Recovery
    Plan, which was finalized last year. With a mortality of 262 southern
    sea otters in 2003, which represents over 10 percent of the population,
    this research is both timely and necessary to recover this population.

    Manatee Recovery and Enforcement
        Heightened law enforcement is necessary to protect the endangered
    Florida manatee and curtail motorboat caused fatalities. Past funding
    has assisted in increasing compliance with manatee protection speed
    zones. In fact, watercraft-related manatee deaths in 2003 were at their
    lowest level since the 1999, suggesting that manatee protection
    strategies, including law enforcement, are having a positive impact.
    TOC thanks the Subcommittee for its support in fiscal year 2004, and
    respectfully requests continued funding at $1 million for fiscal year
    2005.

    Marine Mammals
        The FWS is badly in need of revised stock assessments for manatees,
    walrus, and polar bears, ongoing trend data for declining northern sea
    otters, and a comprehensive health assessment of southern sea otters.
    TOC urges the Subcommittee to reject the Administration's proposed $2.2
    million cut and appropriate $11.8 million in fiscal year 2005 to
    improve research and conservation efforts for these species.

    Multinational Species Conservation Fund
        TOC appreciates the Subcommittee's continued support for the
    Multinational Species Conservation Funds and requests $2 million each
    for the Asian Elephant and African Elephant Conservation Funds, $3
    million each for the Great Ape and the Rhinoceros and Tiger
    Conservation Funds, and $5 million for the Neotropical Migratory Bird
    Conservation Fund in fiscal year 2005.
        Since the early 1990s, the Multinational Species Conservation Fund
    has helped to produce some notable successes in protecting these
    species and has been especially effective in encouraging local and
    international matching contributions from private organizations and
    foreign governments. The program's $31 million in grants over the past
    thirteen years has leveraged over $107 million in additional funding.
    The result has been an important contribution to the survival of these
    species and we respectfully request that the Subcommittee continue its
    support for these funds in fiscal year 2005.

                          NATIONAL PARK SERVICE (NPS)

    Channel Islands National Park
        TOC supports the Administration's request of $326,000 to enhance
    law enforcement within the Channel Islands National Park. While the
    park includes 125,000 acres of marine waters, only seasonal local
    patrols are currently conducted around three islands. With the dramatic
    decline in the heath of the ecosystem, the new marine protected areas
    within the park, and the high levels of visitors, this funding is
    critical to provide a consistent marine patrol presence to better
    protect the resource.

    Buck Island Reef National Monument, St. Croix, U.S. Virgin Islands
        The Buck Island Monument has expanded in size from 880 acres to
    18,135 marine acres, a twenty-fold growth. As a result, TOC
    respectfully requests an additional $1.0 million in funding in fiscal
    year 2005 for the Park Service to administer this ocean park;
    scientifically assess, monitor and protect its marine resources; and
    conduct outreach and education programs for its increased number of
    visitors.

    Virgin Islands Coral Reef National Monument, St. John, U.S. Virgin
            Islands
        TOC respectfully requests an additional $500,000 in funding in
    fiscal year 2005 to administer this monument; scientifically assess,
    monitor, and protect its marine resources; and conduct outreach and
    education programs.

    Coral Reef Protection in Dry Tortugas and Biscayne National Parks
        TOC requests an additional $1.0 million to improve the management
    and protection of special coral reef areas in Florida's Dry Tortugas
    National Park and Biscayne National Park; the later is currently
    undergoing an extensive public management review process.

                         U.S. GEOLOGICAL SERVICE (USGS)

    Coral Reef Conservation
        TOC urges the Subcommittee to provide a $1.0 million increase above
    the Administration's request for USGS coral reef programs in fiscal
    year 2005. This $4.5 million would help the agency conduct basic
    research on coral reef decline, provide more valuable data to local
    partners, and better coordinate those efforts with mapping and
    monitoring findings to produce regional assessments.

                          MINERALS MANAGEMENT SERVICE

    Offshore Oil and Gas Leasing Moratoria
        Since 1981, Congress has included bill language in the Interior
    Appropriations legislation to protect sensitive coastal and marine
    regions from new offshore oil and gas leasing. Today the moratorium
    protects the east and west coasts of the United States and parts of the
    Eastern Gulf of Mexico off Florida. TOC applauds the Subcommittee's
    historic support of this language and urges its continued inclusion in
    fiscal year 2005.

                                INSULAR AFFAIRS

    Coral Reef Conservation
        TOC respectfully requests $2.0 million in fiscal year 2005 for
    grants to the Marshall Islands, Micronesia, and Palau. These grants,
    which would be awarded based on partnerships, would go directly to
    local communities and assist them with building the capacity to manage
    their natural resources, cracking down on illegal foreign fishing
    through remote monitoring and patrols, and implementing their local
    action strategies, such as increasing public education and field work,
    to improve coral reef conservation.

                           ANTI-ENVIRONMENTAL RIDERS

        TOC urges the Subcommittee to not attach any anti-environmental
    rider to this or any other appropriations bill. In the past, riders
    have been used by Members of Congress to roll back environmental
    protections and prevent Interior from advancing conservation.
        Thank you for considering the funding needs of these programs. They
    are of the utmost importance to the stewardship of the nation's living
    marine resources. TOC appreciates the difficult budget constraints
    under which spending decisions must be made this year. We appreciate
    your past support for these programs and your consideration of our
    fiscal year 2005 requests.
                                     ______

        Prepared Statement of Partnership for the National Trails System

        Mr. Chairman and members of the subcommittee: The Partnership for
    the National Trails System appreciates your support over the past
    several years, through operations funding and earmarked Challenge Cost
    Share funds, for the national scenic and historic trails administered
    by the National Park Service. We also appreciate your increased
    allocation of funds to support the trails administered and managed by
    the Forest Service and your support for the trails in the Bureau of
    Land Management's National Landscape Conservation System. To continue
    the progress that you have fostered, the Partnership requests that you
    provide annual operations funding for each of the 23 national scenic
    and historic trails for fiscal year 2005 through these appropriations:
      --National Park Service.--$9.553 million for the administration of 18
            trails and for coordination of the long-distance trails program
            by the Washington Park Service office.
      --USDA Forest Service.--$3.2 million to administer 4 trails and
            $750,000 to manage parts of 13 trails administered by the Park
            Service or Bureau of Land Management; Construction: $1 million
            for the Continental Divide Trail, $500,000 for the Florida
            Trail and $1,765,000 for the Pacific Crest Trail.
      --Bureau of Land Management.--To administer the Iditarod National
            Historic Trail: $250,000, the Camino Real de Tierra Adentro
            National Historic Trail: $250,000, the Old Spanish National
            Historic Trail: $100,000 and $2.715 million to manage portions
            of 9 trails administered by the Park Service or the Forest
            Service; $407,000 for operating the Casper NH Trail
            interpretive center.
      --We ask that you appropriate $9 million for the National Park
            Service Challenge Cost Share Program and continue to earmark $5
            million for Lewis & Clark Bicentennial projects and one-third
            of the remaining $4 million (approximately $1,326,000) for the
            other 17 national scenic and historic trails it administers or
            create a separate $1 million National Trails System Challenge
            Cost Share Program.
      --We ask that you appropriate $1.253 million to the National Park
            Service National Center for Recreation and Conservation to
            support the second year of a five-year interagency pilot
            project to develop a consistent system-wide Geographic
            Information System (GIS) for the National Trails System.
        We ask that you appropriate from the Land and Water Conservation
    Fund:
      --to the Forest Service: $10 million to acquire land for the Pacific
            Crest Trail, $10 million to acquire land for the Florida Trail,
            $5 million to acquire land for the Appalachian Trail in
            Tennessee and Virginia, $150,000 to acquire land for the
            Overmountain Victory Trail in North Carolina;
      --to the Bureau of Land Management: $1.5 million to acquire land for
            the Oregon Trail in Oregon, $3.5 million to acquire land for
            the Lewis & Clark Trail in Montana;
      --to the Park Service: $4 million to grant to the State of Wisconsin
            to match state funds to acquire land for the Ice Age Trail; $1
            million to grant to the States of Wisconsin, Michigan and Ohio
            to match state funds to acquire land for the North Country
            Trail; $6.25 million to acquire land at Fort Clatsop, Oregon
            for the Lewis & Clark Trail.

                             NATIONAL PARK SERVICE

        We request $1.253 million to fund the second year of a 5 year
    interagency effort to develop a consistent GIS for all 23 national
    scenic and historic trails. This initiative is described in the August
    2001 report (requested by Congress in the fiscal year 2001
    appropriation) ``GIS For The National Trails System'' and is built upon
    work already underway on the Ice Age, Appalachian, Florida, Oregon,
    California, Mormon Pioneer and Pony Express Trails to develop
    consistent information and procedures that can be applied across the
    National Trails System. The requested funding will be shared with the
    Bureau of Land Management and the Forest Service.
        The $9.553 million we request for Park Service operations includes
    increases for many of the trails to continue the progress and new
    initiatives made possible by the $975,000 funding increase provided for
    nine of the trails in fiscal year 2001 and the $500,000 increase
    provided in fiscal year 2004. $74,000 of our requested increase will
    finally provide significant operational support for the Natchez Trace
    Trail, which currently receives only $26,000 in annual operations
    funding. Another $916,000 will enable the Park Service to begin
    managing the three new national historic trails--Ala Kahakai, El Camino
    Real de Tierra Adentro, and Old Spanish--the latter two administered
    with the Bureau of Land Management. These funds will provide full-time
    management, support projects for these trails and development of a
    Comprehensive Management Plan for the Old Spanish Trail.
        We request an increase of $25,000 for the Overmountain Victory
    Trail to fund a feasibility study of the best place to locate the Park
    Service headquarters and principal public contact site for the trail.
    An increase of $34,000 will fund interpretive projects and the trail
    corridor study along the Potomac Heritage Trail in Washington, D.C.
        We request an increase of $276,000 to continue and expand Park
    Service efforts to protect cultural landscapes at more than 200
    significant sites along the Santa Fe Trail and to fund public outreach
    and educational programs of the Santa Fe Trail Association. An increase
    of $185,000 for the Trail of Tears will enable the Park Service to work
    cooperatively with the Trail of Tears Association to develop a GIS to
    map the Trail's critical historical and cultural heritage sites so they
    can be protected and interpreted for visitors.
        The $100,000 increase we request for the interagency Salt Lake City
    Trails office will enable the Park Service to develop a comprehensive
    interpretation plan for the Oregon, California, Mormon Pioneer and Pony
    Express Trails with a library of images derived from the GIS map
    database of the trails.
        We request $500,000 to help fund the operation of ``Corps II,'' a
    major component of the Federal government's commemoration of the
    Bicentennial of the Lewis & Clark Expedition. This interagency mobile
    interpretive exhibit is designed to follow the route of the Lewis &
    Clark Trail, stopping in communities along the way to provide state-of-
    the art, interactive interpretation of the Lewis & Clark ``Corps of
    Discovery.''
        All of these trails are complicated undertakings, none more so than
    the 4,000 mile North Country Trail. With more than 650 miles of Trail
    across 7 national forests in 5 states there is good reason for close
    collaboration between the Park Service and Forest Service to ensure
    consistent management that provides high quality experiences for
    hikers. Limited budgets for both agencies have severely hampered their
    ability to practice this effective management procedure. The $846,000
    we request will give them that ability for the first time while also
    providing greater support for the regional and local trail building and
    management led by the North Country Trail Association, hastening the
    day when our nation's longest national scenic trail will be fully
    opened for use.
        The $935,000 we request will enable the Park Service to help WDNR
    and other partners to accelerate acquisition of land for the Ice Age
    Trail and more efficiently plan resource protection, trail construction
    and maintenance to correct unsafe conditions and better mark the Trail
    for users. The funds will also provide assistance to the Ice Age Park &
    Trail Foundation to better equip, train and support the volunteers who
    build and maintain the Ice Age Trail and manage its resources.
        The Challenge Cost Share program is one of the most effective and
    efficient ways for Federal agencies to accomplish a wide array of
    projects for public benefit while also sustaining partnerships
    involving countless private citizens in doing public service work. The
    Partnership requests that you appropriate $9 million in Challenge Cost
    Share funding to the Park Service for fiscal year 2005 as a wise
    investment of public money that will generate public benefits many
    times greater than its sum. We ask you to continue to direct $5 million
    for Lewis & Clark Bicentennial projects and one-third of the other $4
    million for the national scenic and historic trails to continue the
    steady progress toward making these trails fully available for public
    enjoyment. We suggest, as an alternative to the annual earmarking of
    funds from the Regular Challenge Cost Share program, that you establish
    a separate National Trails System Challenge Cost Share program with $1
    million funding.

                              USDA-FOREST SERVICE

        As you have done for several years, we ask that you provide
    additional operations funding to the Forest Service for administering
    three national scenic trails and one national historic trail, and
    managing parts of 13 other trails. We ask you to appropriate $3.203
    million as a separate budgetary item specifically for the Continental
    Divide, Florida and Pacific Crest National Scenic Trails and the Nez
    Perce National Historic Trail. Full-time managers have been assigned
    for each of these trails by the Forest Service. Recognizing the on-the-
    ground management responsibility the Forest Service has for 838 miles
    of the Appalachian Trail, more than 650 miles of the North Country
    Trail, and sections of the Ice Age, Anza, Lewis & Clark, California,
    Iditarod, Mormon Pioneer, Oregon, Overmountain Victory, Pony Express,
    Trail of Tears and Santa Fe Trails, we ask you to appropriate $750,000
    specifically for these trails.
        Work is underway, supported by funds you provided for the past five
    years, to close several major gaps in the Florida National Scenic
    Trail. The Florida Trail Association has built 100 miles of new Trail
    across Eglin Air Force Base, in the Ocala National Forest, Big Cypress
    National Preserve and along Lake Kissimmee and the Choctawahatchee
    River. The Partnership requests an additional $500,000 for trail
    construction in fiscal year 2005 to enable the Forest Service and FTA
    to build 90 more miles on these and other segments of the Florida
    Trail.
        The Continental Divide Trail Alliance, with Forest Service
    assistance and funding from the outdoor recreation industry, surveyed
    the entire 3200 mile route of the Continental Divide Trail documenting
    $10.3 million of construction projects needed to complete the Trail. To
    continue new trail construction, begun with fiscal year 1998 funding,
    we ask that you appropriate $572,500 to plan 382 miles of new trail and
    $1 million to build or reconstruct 267 miles of the Continental Divide
    Trail in fiscal year 2005.
        A Forest Service lands team is working with the Pacific Crest Trail
    Association (PCTA) and the Park Service National Trail Land Resources
    Program Center to map and acquire better routes for the 300 miles of
    the Pacific Crest Trail located on 227 narrow easements across private
    land or on the edge of dangerous highways. We request $200,000 to
    continue the work of the fulltime Trail Manager and the lands team and
    $100,000 for Optimal Location route planning. We also request
    $1,765,000 for new trail construction and reconstruction of fire and
    flood damaged bridges along the PCT in California and Washington by the
    Forest Service and the PCTA.

                           BUREAU OF LAND MANAGEMENT

        While the Bureau of Land Management has administrative authority
    only for the Iditarod, El Camino Real de Tierra Adentro, and the Old
    Spanish National Historic Trails, it has on-the-ground management
    responsibility for 641 miles of two scenic trails and 3,115 miles of
    seven historic trails administered by the National Park Service and
    U.S. Forest Service. The significance of these trails was recognized by
    their inclusion in the National Landscape Conservation System and, for
    the first time, in fiscal year 2002, by provision of specific funding
    for each of them. The Partnership applauds the decision of the Bureau
    of Land Management to include the national scenic and historic trails
    in the NLCS and to budget specific funding for each of them. We ask
    that you continue to support the funding for the National Landscape
    Conservation System and that you appropriate for fiscal year 2005
    $250,000 for the Iditarod National Historic Trail, $250,000 for El
    Camino Real de Tierra Adentro National Historic Trail, $100,000 for the
    Old Spanish National Historic Trail and $2,615,000, as requested by the
    Administration, for management of the portions of the nine other trails
    under the care of the Bureau of Land Management. We also request $1
    million for construction of the California Trail Interpretive Center in
    Elko, Nevada, $100,000 for maintenance of the Pacific Crest Trail, and
    $407,000 to operate the Historic Trails interpretive center in Casper,
    Wyoming.

                        LAND AND WATER CONSERVATION FUND

        The Partnership requests that you fully appropriate the $900
    million annual authorized appropriation from the Land and Water
    Conservation Fund and that you make the specific appropriations for
    national scenic and historic trails detailed at the beginning of this
    statement and in Attachment No. 2. The funding we request for the
    Florida and Pacific Crest National Scenic Trails will continue
    acquisition underway by the Forest Service and Park Service. The first
    5 tracts to help close gaps in the Florida Trail have been acquired and
    11 other acquisitions are underway with LWCF money provided in previous
    years. Optimal Location Planning and appraisal work have been completed
    and acquisition has begun in earnest along the Pacific Crest Trail. The
    requested funding for the Appalachian National Scenic Trail will help
    complete its protection in Tennessee and Virginia. The requested
    funding for the Overmountain National Historic Victory Trail will
    protect a key link and access to a 7-mile section of the trail in the
    Pisgah National Forest in North Carolina.
        The $5 million requested for the Bureau of Land Management will
    protect important historical sites along the Lewis & Clark National
    Historic Trail in Montana and the Oregon National Historic Trail in
    Oregon.
        The National Trails System Act encourages states to assist in the
    conservation of the resources and development of the national scenic
    and historic trails. Wisconsin has committed more than $10 million to
    help conserve the resources of the Ice Age National Scenic Trail. With
    fiscal year 2000-04 LWCF funding, matched 2:1 by State funds, Wisconsin
    has purchased 18 parcels and now has another 12 parcels under appraisal
    or option to purchase. The requested $4 Million Land and Water
    Conservation Fund grant to Wisconsin will continue this very successful
    Federal/State/local partnership for protecting land for the Ice Age
    Trail.
        The essential funding requests to support the trails are detailed
    in Attachment No. 2.

             PRIVATE SECTOR SUPPORT FOR THE NATIONAL TRAILS SYSTEM

        Public-spirited partnerships between private citizens and public
    agencies have been a hallmark of the National Trails System since its
    inception. These partnerships create the enduring strength of the
    Trails System and the trail communities that sustain it by combining
    the local, grass-roots energy and responsiveness of volunteers with the
    responsible continuity of public agencies. They also provide a way to
    enlist private financial support for public projects, usually resulting
    in a greater than equal match of funds.
        The private trail organizations commitment to the success of these
    trail-sustaining partnerships grows even as Congress' support for the
    trails has grown. In 2003 the trail organizations channeled 648,548
    hours of documented volunteer labor valued at $10,726,994 to help
    sustain the national scenic and historic trails. The organizations also
    applied private sector contributions of $6,997,803 to benefit the
    trails. These contributions are documented in Attachment No. 1.

       ATTACHMENT NO. 1.--CONTRIBUTIONS MADE IN 2003 TO SUPPORT THE NATIONAL TRAILS SYSTEM BY NATIONAL SCENIC AND
                                              HISTORIC TRAIL ORGANIZATIONS
    ----------------------------------------------------------------------------------------------------------------
                                                                                         Estimated
                                                                         Volunteer       value of        Financial
                              Organization                                 hours         volunteer     contributions
                                                                                           labor
    ----------------------------------------------------------------------------------------------------------------
    Appalachian Trail Conference....................................         185,018      $3,060,198      $3,700,000
    Continental Divide Trail Society................................       \1\ 1,500          24,810  ..............
    Continental Divide Trail Alliance...............................          19,600         324,184         906,000
    Florida Trail Association.......................................      \1\ 59,400         982,476         170,200
    Ice Age Park & Trail Foundation.................................          81,755       1,352,228         699,920
    Iditarod National Historic Trail, Inc...........................      \1\ 17,900         296,066      \1\ 75,000
    Heritage Trails/Amigos De Anza & others.........................           3,967          65,614  ..............
    Anza Trail Coalition of Arizona.................................           3,255          53,838  ..............
    Lewis & Clark Trail Heritage Foundation.........................      \1\ 55,000         909,700         315,000
    Mormon Trails Association.......................................             350           5,789           3,032
    Iowa Mormon Trails Association..................................         \1\ 750          12,405        \1\ 2080
    Nebraska Mormon Trails Association..............................         \1\ 125           2,067       \1\ 2,635
    Natchez Trace Trail Conference..................................  ..............  ..............  ..............
    National Pony Express Association...............................           1,526          25,240           4,108
    Pony Express Trail Association..................................           5,706          94,377          38,176
    Nez Perce Trail Foundation......................................           1,700          28,118           8,000
    North Country Trail Association.................................          39,192         648,236         180,847
    Old Spanish Trail Association...................................           7,629         126,184          27,833
    Oregon-California Trails Association............................          75,635       1,251,003         312,172
    Overmountain Victory Trail Association..........................           5,789          95,750          14,000
    Pacific Crest Trail Association.................................          31,900         527,626         395,600
    Potomac Trail Council...........................................       \1\ 1,670          27,622  ..............
    Santa Fe Trail Association......................................      \1\ 19,200         317,568          86,000
    Trail of Tears Association......................................          29,981         495,886          57,200
                                                                     -----------------------------------------------
          Totals....................................................         648,548      10,726,994       6,997,803
    ----------------------------------------------------------------------------------------------------------------
    \1\ Estimate.

     ATTACHMENT NO. 2.--PARTNERSHIP FOR THE NATIONAL TRAILS SYSTEM REQUESTED FISCAL YEAR 2005 APPROPRIATIONS FOR THE
                                                 NATIONAL TRAILS SYSTEM
    ----------------------------------------------------------------------------------------------------------------
                                                 Fiscal year
                                   ---------------------------------------  Project/Programs possible with increased
             Agency/Trail            2004 Cong.  2005 Admin.    Partners                    funding
                                      approp.      request      request
    ----------------------------------------------------------------------------------------------------------------
    PARK SERVICE:
        Ala Kahakai...............     $179,000     $179,000     $181,000  Continue preparation of Comprehensive
                                                                            Management Plan for new trail;
        Appalachian...............    1,024,000    1,024,000    1,052,000  Operations of NPS A.T. Park Office;
                                                                            $350,000 of the total supports volunteer-
                                                                            based trail and land management guided
                                                                            by ATC; Park ranger to deal with trail
                                                                            encroachments;
        Natchez Trace.............       26,000       26,000      100,000  Planning & building new trail & bridges;
                                                                            backlog maintenance with NTTC & SCA;
        El Camino Real............       70,000       70,000      100,000  Begin collaborative management of new
                                                                            trail with Bureau of Land Management.
        California................      246,000      246,000      271,000  Develop comprehensive interpretation plan
                                                                            with images library database for 4
                                                                            trails;
        Ice Age...................      530,000      530,000      935,000  Accelerate Trail corridor planning and
                                                                            land acquisition by agency partners;
                                                                            Increase Trail development, maintenance
                                                                            and resource management by IAP&TF
                                                                            volunteers;
        Juan Bautista de Anza.....      225,000      225,000      225,000  Coordination of Trail site protection,
                                                                            interpretation & development projects
                                                                            with local agencies & organizations;
                                                                            Outreach to schools and Latino
                                                                            communities;
        Lewis & Clark.............    1,681,000    1,681,000    2,181,000  Planning, coordination & support for
                                                                            local Bicentennial projects and ``Corps
                                                                            II'';
        Mormon Pioneer............      125,000      125,000      150,000  Develop comprehensive interpretation plan
                                                                            with images library database for 4
                                                                            trails;
        North Country.............      596,000      596,000      846,000  Advance Trail construction, route
                                                                            planning, protection and public
                                                                            awareness by providing regional services
                                                                            and technical assistance for volunteers
                                                                            and partners;
        Old Spanish...............       70,000       70,000      635,000  Shared administration with Bureau of Land
                                                                            Management; begin preparation of CMP;
        Oregon....................      213,000      213,000      238,000  Develop comprehensive interpretation plan
                                                                            with images library database for 4
                                                                            trails;
        Overmountain Victory......      163,000      163,000      188,000  New route signs & interpretive exhibits;
                                                                            mapping Trail sites for protection
                                                                            inventory, feasibility study for
                                                                            location of Trail headquarters and
                                                                            visitor contact site;
        Pony Express..............      177,000      177,000      202,000  Develop comprehensive interpretation plan
                                                                            with images library database for 4
                                                                            trails;
        Potomac Heritage..........      216,000      216,000      250,000  Assistance to local agencies &
                                                                            organizations for planning & educational
                                                                            projects;
        Santa Fe..................  \1\ 631,000  \1\ 631,000      907,000  Preserve SFNHT Cultural resources, design
                                                                            & distribute interpretive media with
                                                                            SFTA;
        Selma to Montgomery.......      256,000      256,000      261,000  Comprehensive management plan developed
                                                                            and trail interpretation begun in
                                                                            collaboration with citizen support
                                                                            organizations & local agencies;
        Trail of Tears............      296,000      296,000      481,000  Develop GIS, interpret critical Trail
                                                                            sites & provide new visitor facilities
                                                                            with TOTA;
        NTS-Washington Office.....      238,000      238,000      350,000  Program coordination and funding for
                                                                            special projects and training for staff
                                                                            & partners;
                                   ---------------------------------------
          National Trails System..    6,962,000    6,962,000    9,553,000  Total National Trails System operations
                                                                            funding
                                   =======================================
    Challenge Cost Share..........  \2\ 6,852,0  \3\ 8,974,0    9,000,000  $5 M for Lewis & Clark; One-third of
                                             00           00                remaining $4 M for rest of National
                                                                            Trails System.
    Interagency GIS Project.......  ...........  ...........  \4\ 1,253,0  Development of GIS for National Trails
                                                                       00   System.
    BLM:
        Iditarod Trail............      165,000      165,000      250,000  Coordination and support for
                                                                            collaborative management with other
                                                                            Federal agencies, Iditarod Trail
                                                                            organizations and State of Alaska;
                                                                            bridges and cabins;
        El Camino Real............      250,000      250,000      250,000  Collaborative administration and
                                                                            management with National Park Service;
        Old Spanish...............       87,000       87,000      100,000  Collaborative administration and
                                                                            management with National Park Service;
                                                                            Begin preparation of Comprehensive
                                                                            Management Plan;
        Continental Divide........      115,000      115,000      115,000  Marking 230 miles of CDT in Wyoming and
                                                                            work in Idaho, Montana and New Mexico;
                                                                            Interagency management collaboration;
        Pacific Crest.............       90,000       90,000      190,000  PCT maintenance in California;
                                                                            Interagency management collaboration;
        Juan Bautista de Anza.....       56,000       56,000       56,000  Interpretive exhibits for Anza Trail in
                                                                            Arizona and California;
        California................      163,000      163,000      163,000  California Trail resource inventories in
                                                                            Utah, Nevada and California;
        Lewis & Clark.............    1,754,000    1,754,000    1,754,000  Lewis & Clark Bicentennial preparations
                                                                            and activities in Idaho and Montana;
        Mormon Pioneer............      129,000      129,000      129,000
    Nez Perce.....................       43,000       43,000      $43,000  Lewis & Clark Bicentennial preparations
                                                                            in Idaho and Montana;
        Oregon....................      144,000      144,000      144,000  Interagency management collaboration;
        Pony Express..............      121,000      121,000      121,000  Marking Pony Express Trail in Utah and
                                                                            Nevada;
                                   ---------------------------------------
          National Trails System..    3,117,000    3,117,000    3,315,000  Total National Trails System operations
                                                                            funding.
    Casper NHT Center.............      407,000      407,000      407,000  Operating Oregon, California, Mormon
                                                                            Pioneer, and Pony Express National
                                                                            Historic Trails interpretive center;
    Construction of California        1,000,000  ...........    1,000,000  Continued funding for construction of
     Trail Interpretive Center--NV.                                         California National Historic Trail
                                                                            interpretive center in Elko, Nevada.
    FOREST SERVICE:
        Continental Divide........      653,000  ...........      967,500  Continued support for full administrative
                                                                            responsibility and leadership for
                                                                            consistent interagency collaboration for
                                                                            each trail; support for consistent
                                                                            management with trail organization and
                                                                            local agency partners; trail brochures,
                                                                            signs, project planning etc.; Also
                                                                            $572,500 to plan 382 new miles of CDT;
                                                                            $200,000 to support work of full-time
                                                                            Trail administrator and $100,000 for
                                                                            Optimal Location Planning for PCT and
                                                                            $100,000 to increase Trail maintenance
                                                                            by volunteers coordinated by PCTA;
                                                                            $750,000 to continue collaborative work
                                                                            with Florida Trail Association to
                                                                            inventory 430 miles of the Florida Trail
                                                                            and continue development of Trail GIS;
                                                                            $49,000 to support education and public
                                                                            outreach activities of Nez Perce Trail
                                                                            Foundation;
        Florida...................      554,000  ...........      750,000
        Pacific Crest.............      733,000  ...........      900,000
        Nez Perce Trails..........      537,000  ...........      586,000
                                   ---------------------------------------
          Total...................    2,477,000    1,000,000    3,203,500
        Appalachian, North              745,000      350,000      750,000  Improved trail maintenance, marking,
         Country, Ice Age,                                                  interpretation, archaeological studies,
         Iditarod, California,                                              historic site protection and trailhead
         Juan Bautista de Anza,                                             facilities for trail segments in
         Lewis & Clark, Oregon,                                             National Forests; $200,000 to address
         Mormon Pioneer,                                                    deferred maintenance, remove blowdown
         Overmountain Victory,                                              trees on 30 miles of trail, make
         Pony Express, Santa Fe,                                            improvements and provide liaison for
         Trail of Tears.                                                    collaborative management of the North
                                                                            Country Trail with National Park
                                                                            Service; Re-location and reconstruction
                                                                            of sections of the Appalachian Trail,
                                                                            replacement of major bridges and
                                                                            installation of toilets at shelters;
        Continental Divide Trail..      988,000  ...........    1,000,000  Trail construction projects along the
                                                                            Continental Divide Trail: reconstructing
                                                                            or building 267 miles of trail in
                                                                            Montana, Idaho, Wyoming, Colorado and
                                                                            New Mexico;
        Florida Trail.............      494,000  ...........      500,000  Trail construction projects totaling 90
                                                                            miles in Seminole State Forest, Aucilla
                                                                            Wildlife Refuge and along the
                                                                            Choctawahatchee, Kissimmee, Yellow, and
                                                                            Suwannee Rivers;
        Pacific Crest Trail.......      840,000  ...........    1,765,000  Trail construction projects along the
                                                                            Pacific Crest Trail, including
                                                                            reconstruction of fire and storm damaged
                                                                            bridges and structures in California and
                                                                            Washington; Fabrication and installation
                                                                            of roadside interpretive signs at Trail
                                                                            highway crossings;
          National Trails System..    4,719,000    1,350,000    7,218,500  Total: National Trails System funding
    Nat. Forest System Trail         37,750,000  ...........  ...........  Trail maintenance throughout the National
     Maintenance.                                                           Forest System.
    Nat. Forest System Trail         37,900,000  ...........  ...........  New trail construction and trail re-
     Construction.                                                          construction throughout the National
                                                                            Forest System.
    Nat. Forest System Capital       75,650,000   71,791,000   85,000,000  Trail maintenance and new trail
     Improvement & Maintenance--                                            construction throughout the National
     Trails                                                                 Forest System.
    LWCF FOR TRAILS:
        LWCF grant--FS Pacific      ...........  ...........   10,000,000  USDA-Forest Service acquisition of lands
         Crest.                                                             in southern California, Oregon and
                                                                            southern Washington to preserve the
                                                                            scenic integrity of the Pacific Crest
                                                                            Trail.
        LWCF grant--FS Florida....    3,000,000  ...........   10,000,000  USDA-Forest Service acquisition of lands
                                                                            to protect 62 miles of threatened
                                                                            Florida Trail corridor and connect trail
                                                                            segments across private land between the
                                                                            National Forests, St. Marks Wildlife
                                                                            Refuge, Eglin Air Base, along the
                                                                            Suwannee River and in central and south
                                                                            Florida.
        LWCF grant--FS Appalachian    3,800,000    3,000,000    5,000,000  The total supports three USDA-Forest
                                                                            Service acquisition projects in the
                                                                            Tennessee Mountains and Virginia
                                                                            Mountains. Of the total, about $2
                                                                            million would acquire 16 Appalachian
                                                                            Trail-related tracts; the balance would
                                                                            acquire other significant inholdings
                                                                            within the affected forests.
        LWCF grant Ice Age--          2,000,000  ...........    4,000,000  Assistance provided to State of Wisconsin
         Wisconsin \6\.                                                     to protect threatened Ice Age Trail
                                                                            corridor and connect trail segments
                                                                            across private land in Dane, Chippewa,
                                                                            Columbia, Marathon, Polk, Portage,
                                                                            Walworth, Washington, Waupaca and
                                                                            Waushara Counties.
        LWCF grant--NPS North       ...........  ...........    1,000,000  Assistance provided to States of
         Country--WI, MI \7\.                                               Wisconsin, Michigan and Ohio to acquire
                                                                            critical links in the North Country
                                                                            Trail;
        LWCF grant--FS              ...........  ...........      150,000  USDA-Forest Service acquisition of land
         Overmountain Victory.                                              to protect key link in the Overmountain
                                                                            Victory Trail in North Carolina.
        LWCF grant--BLM Oregon....    1,000,000    1,500,000    1,500,000  BLM acquisition of land along the Sandy
                                                                            River in Oregon.
        LWCF grant--BLM Lewis &     ...........    3,500,000    3,500,000  BLM acquisition of land along Missouri
         Clark.                                                             River at Chain-of-Lakes RMA in Montana.

        LWCF grant--NPS Lewis &       1,250,000    6,250,000    6,250,000  Park Service acquisition of land at Fort
         Clark.                                                             Clatsop National Memorial in Oregon.
                                   ---------------------------------------
          Total...................   11,050,000   14,250,000   41,400,000
    ----------------------------------------------------------------------------------------------------------------
    \1\ Includes $261,000 for operations of Santa Fe Park Service office, not related to the Santa Fe Trail.
    \2\ Includes $4.902 million earmarked for Lewis & Clark Bicentennial projects. One-third of the remaining funds
      (about $650,000 of $1.950 million) are earmarked for National Trails System projects.
    \3\ Administration request does not allocate any funds for the National Trails System. The Congressional earmark
      is needed to accomplish this.
    \4\ Funding request reflects budget detailed in Park Service GIS report delivered to Congress in January 2002.
    \5\ Appropriation includes: $2.477 million for administration of the Continental Divide, Florida, and Pacific
      Crest National Scenic Trails and the Nez Perce National Historic Trail, funding for full-time administrators
      for each trail and land acquisition teams for the Florida and Pacific Crest Trails.
    \6\ This would be a grant to the State of Wisconsin to be matched at least 1:1.
    \7\ These would be grants to the States of Wisconsin, Michigan and Ohio to be matched at least 1:1.

             Prepared Statement of the Rivers and Trails Coalition

        Mr. Chairman and members of the Subcommittee, the Rivers and Trails
    Coalition, composed of local, regional, statewide, and national
    organizations representing hundreds of thousands of Americans
    nationwide committed to conservation and recreation, respectfully asks
    that you fund the National Park Service Rivers, Trails and Conservation
    Assistance (RTCA) program at $13 million in fiscal year 2005.
        The RTCA coalition formed many years ago to support an invaluable
    field-based technical assistance program of the National Park Service
    that yields enormous conservation and recreation benefits to
    communities by fostering partnerships between federal, state, and local
    interests. The resulting cooperative efforts restore rivers and
    wildlife habitat, develop trail and greenway networks, preserve open
    space, and revitalize communities--all contributing to improved quality
    of life and close-to-home recreation. RTCA staff provide on-the-ground
    assistance solely at the request and invitation of communities in
    coordinating projects, facilitating public meetings, serving as a
    liaison and convener of government and non-profit groups, assessing and
    mapping resources, developing promotional materials and events, and
    identifying sources of funding.
        RTCA is a highly effective and popular program but continues to
    lack adequate funding. Current demand for RTCA services greatly exceeds
    the program's capacity. Despite RTCA's successes in coordinating
    upwards of 300 projects annually, RTCA funding has remained relatively
    stagnant during the last decade, virtually flat for the last four
    years, and has lagged well behind the rate of inflation, resulting in
    real cuts to the program. The program's declining real budget and
    funding shortages have resulted in limiting staff positions in several
    regions, office closures, and reduced staff participation within
    communities and on-the-ground projects, diminishing essential services
    of this field-based program. RTCA currently has 82 staff in 33 field
    offices, compared to 90 staff in 2002. Flat funding results in an
    annual loss of approximately 4 positions, as personnel costs continue
    to rise through inflation and cost-of-living increases, while project
    costs must be cut back. The program faces further reductions in service
    and the loss of another 4-5 staff in fiscal year 2005 if RTCA receives
    flat funding.
        RTCA is an extremely cost-efficient program. Through RTCA
    partnerships, NPS helps conserve more than 750 miles of river corridor,
    develops nearly 1,500 miles of trails, and protects more than 65,000
    acres of park, habitat, and open space annually, at no long-term cost
    to NPS. Projects also include regional trail systems and greenway
    development, transportation alternatives, brownfield redevelopment,
    youth conservation projects, floodplain planning, among numerous other
    conservation and recreation initiatives. RTCA receives less than one-
    half of 1 percent of the total funding for the National Park Service,
    yet by building local partnerships it succeeds in attracting
    substantial local funding. Every year, RTCA funding has helped leverage
    millions of dollars from other sources for its projects. This program
    is an excellent value for the American taxpayer and merits increased
    funding to accomplish its mission as a community-based National Park
    Service technical assistance and outreach program.
        Last year, RTCA experienced a strong showing of support from both
    the Administration and many legislators. The President's fiscal year
    2004 budget request proposed a $1.5 million increase for RTCA (to
    approximately $9.6 million), recognizing the critical role the program
    plays in creating a nationwide, seamless network of parks and open
    spaces, supporting conservation partnerships, promoting volunteerism,
    and encouraging physical activity. The Administration's HealthierUS
    Initiative explicitly highlights RTCA for its efforts in promoting
    physical activity through the development of local trails, greenways,
    and parks.
        The Senate Interior Appropriations bill included a $1.5 million
    increase for the RTCA program for fiscal year 2004, representing a
    modest increase equal to the President's proposal. In addition, twenty-
    two Senators signed a Dear Colleague letter requesting increased
    funding for RTCA in fiscal year 2004. The House Interior Appropriations
    bill, however did not include increased funding for RTCA in their mark-
    up. The final fiscal year 2004 Interior budget provided flat funding
    for RTCA in the NPS budget at approximately $8.2 million
        Our requested funding level would allow this extremely beneficial
    program to continue current projects without interruption, restore
    recent cuts, put staff closer to the people they serve, and meet the
    outstanding requests from communities around the nation. We strongly
    believe it makes sense to strengthen programs such as RTCA that support
    communities through partnerships and capacity-building, enabling local
    stakeholders to better manage and conserve their recreational and
    natural resources from the bottom-up.
        We urge you to fund the Rivers, Trails and Conservation Assistance
    program at $13 million in the fiscal year 2005 Interior Appropriations
    bill to remedy the program's continued erosion, compensate for losses
    due to inflation, and enable the program to respond to growing needs
    and opportunities in communities throughout the country. Thank you for
    your consideration.
        Respectfully submitted by the Rivers and Trails Coalition,
    comprised of the following organizations:
        The Accokeek Foundation; American Canoe Association; American
    Hiking Society; American Rivers; American Society of Landscape
    Architects; American Trails; American Whitewater; Appalachian Mountain
    Club; Association of State Floodplain Managers; Bay Circuit Alliance;
    Bikes Belong Coalition; Conservation District of Southern Nevada; East
    Coast Greenway Alliance; International Mountain Bicycling Association;
    National Association of Service & Conservation Corps; National Audubon
    Society National Parks Conservation Association; National Recreation
    and Park Association; New York-New Jersey Trail Conference; New York
    Parks and Conservation Association; North American Water Trails; Rails
    to Trails Conservancy Scenic America; Trout Unlimited; Washington Area
    Bicyclist Association; and Washington Trails Association.
                                     ______

           Prepared Statement of the San Diego County Water Authority

        Re: Support for fiscal year 2005 Federal Funding of $5.2 Million
    for the Department of the Interior--Bureau of Land Management to assist
    in the Colorado River Basin Salinity Control Program, with $800,000 to
    be designated specifically for salinity control efforts.
        The San Diego County Water Authority appreciates your support and
    leadership in securing fiscal year 2005 funding for the Department of
    the Interior--Bureau of Land Management (BLM) with respect to the
    federal/state Colorado River Basin Salinity Control Program. This
    program is carried out pursuant to the Colorado River Basin Salinity
    Control Act and the Clean Water Act.
        Locally, salinity has been one of San Diego County's biggest water
    quality issues. The Colorado River is the primary source of water for
    the San Diego region, providing in recent years about 75 percent of the
    water imported by the Water Authority. Compared with water imported
    from the State Water Project, which comprises the remaining 25 percent
    of the Authority's supply, Colorado River water is relatively high in
    dissolved salts. While this is not a concern from a public health
    perspective, impacts of excessive salinity in San Diego County include
    damages to residential and business water-using appliances, reduced
    agricultural yields, plus increased water use for leaching agricultural
    crops.
        The Authority is working with members of the Colorado River Board,
    the state agency charged with protecting California's interests and
    rights in the water and power resources of the Colorado River System,
    to support activities that further control the concentrations of
    salinity of the Colorado River.
        Because of the importance of the Colorado River to the San Diego
    region the San Diego County Water Authority is requesting that Congress
    appropriate $5,200,000 and the administration allocate these funds to
    support BLM's portion of the Colorado River Basin Salinity Control
    Program.
        Further, the San Diego County Water Authority urges the
    Subcommittee to specifically mark $800,000 from this line-item for the
    Colorado River Basin Salinity Control Program, as has been the
    direction to BLM from the Subcommittee in past years.
        The Colorado River Basin Salinity Control Forum (Forum), on behalf
    of the seven Colorado River Basin states, has submitted testimony to
    your Subcommittee. The San Diego County Water Authority concurs in the
    fiscal year 2005 funding request and justification statements for BLM
    as set forth in the Forum's testimony.
        The Colorado River is, and will continue to be, a significant and
    vital water resource to the millions of San Diego County residents. The
    Water Authority greatly appreciates your support of the federal/state
    Colorado River Basin Salinity Control Program and your assistance and
    leadership in securing adequate funding for this important program.
                                     ______

      Prepared Statement of the Society for Animal Protective Legislation

        The Society for Animal Protective Legislation (SAPL) respectfully
    requests the House Appropriations Committee's Subcommittee on Interior
    and Related Agencies appropriate an additional $7 million for the
    United States Fish and Wildlife Service Division of Law Enforcement for
    Special Agents, an additional $1.4 million to establish two new
    wildlife ports of entry, $12 million for certain funds under the
    Multinational Species Conservation Fund (including a specific $500
    thousand for the Great Ape Survival Partnership of the United Nations
    Environment Programme), $7 million for the Clark R. Bavin National Fish
    and Wildlife Forensics Laboratory, and $1 million to enforce the
    recently-enacted Captive Wildlife Safety Act.
      united states fish and wildlife service division of law enforcement
        SAPL urges significant increased funding to enable the Law
    Enforcement Division of the U.S. Fish and Wildlife Service (FWS) to
    undertake its important, expanding work. These agents are responsible
    for enforcement of over a dozen conservation laws including the Lacey
    Act, Migratory Bird Treaty Act, Endangered Species Act, Marine Mammal
    Protection Act, African Elephant Conservation Act, the Wild Bird
    Conservation Act, and implementation of the Convention on International
    Trade in Endangered Species of Wild Fauna and Flora (CITES). Special
    agents undertake a variety of wildlife trade cases involving illegal
    shipments of caviar, elephant ivory, shahtoosh, reptiles, primates,
    African finches, bear viscera, turtle eggs, coral, exotic big cats, and
    many other species. It is well-known that the trade in wildlife is
    rivaled only by the trade in drugs in terms of its magnitude in global
    commerce.

    Special Agents
        The FWS Division of Law Enforcement undertook nearly 10,000
    investigations during fiscal year 2003 for cases involving vital
    wildlife protection statutes that are important to millions of
    Americans. Special agents also conduct vital anti-poaching and wildlife
    law enforcement training for officials in numerous countries across the
    globe. This training is essential to protect threatened and endangered
    wildlife from being poached in these range states. In 2003 cases
    uncovered more than 7,700 violations resulting in some $13,000,000 in
    fines and civil penalties.
        The proposed budget for law enforcement operations and maintenance
    would not meet even the most basic needs of the Division, which is
    currently undergoing a rebuilding effort to get back to its number of
    authorized Special Agents--253. Quite frankly, SAPL feels that 253
    Special Agents is insufficient to investigate all cases of illegal
    wildlife smuggling. However, given current funding restraints, SAPL
    urges an additional $7 million appropriation to enable the Service to
    hire 38 additional law enforcement special agents to raise its number
    from 215 to 253. This money will not only enable the new hires, but it
    will also provide the $186,000 of funding per agent that is optimal for
    the agents to carry out their work (this includes salary and operations
    expenses).

    Port Inspectors
        Approximately 100,000 shipments worth more than $1 billion are
    processed by FWS inspectors at the 14 existing designated ports of
    entry each year. As wildlife smugglers become increasingly
    sophisticated, they try new ways to get their wildlife contraband into
    the United States--including via United Parcel Service (UPS) and
    Federal Express (FedEx). SAPL, therefore, requests an additional $1.4
    million to establish Memphis (a FedEx hub) and Louisville (a UPS hub)
    as Designated Ports of Entry. $700,000 for each of these entry points
    would enable three wildlife inspectors, one special agent, and clerical
    support and other basic start-up costs. Annual appropriation needs for
    each of these ports, once established, will decrease to approximately
    $450,000.

                    MULTINATIONAL SPECIES CONSERVATION FUND

        Since 1988, the United States has shown its steadfast commitment to
    global conservation efforts by legislatively creating a series of funds
    to assist in wildlife protection in all regions of the globe. The
    African Elephant Conservation Fund, the Asian Elephant Conservation
    Fund, the Rhinoceros and Tiger Conservation Fund, and recently, the
    Great Ape Conservation Fund, are vital tools to prevent these species
    from declining further and, in some cases, going extinct. SAPL
    respectfully requests that $2.5 million be appropriated for the Asian
    Elephant Conservation Fund, $2.5 million for the African Elephant
    Conservation Fund, $3 million for the Great Ape Conservation Fund and
    $4 million for the Rhinoceros and Tiger Conservation Fund.
        The African Elephant Conservation Fund and the Asian Elephant
    Conservation Fund have provided important funding for elephant
    conservation projects. For decades, poachers and smugglers exploiting
    the global ivory trade have targeted elephants. Today, elephants are at
    great risk not only for ivory, but also for their meat, which is
    consumed as ``bushmeat,'' particularly in Africa. Vital conservation
    projects that have received funding under these Funds include: anti-
    poaching assistance, acoustic monitoring of forest elephants,
    immunocontraception research as a means of non-lethal population
    control, and programs exploring the interrelationships of elephants,
    people, and the protection of their crops.
        The Rhinoceros and Tiger Conservation Fund provides essential
    financial assistance to protect the world's remaining five rhino
    species and tiger subspecies. Rhinos have been poached historically for
    their horns, which are used in traditional Asian medicines, while
    tigers have been exploited for their valuable skins, bones and other
    body parts. In the last century, it is estimated that the total number
    of all wild tigers scattered across their range has plummeted to 5,000
    animals. Recent U.S. funding has contributed to the equipping and
    operating of anti-poaching patrols, studies of population dynamics
    using DNA technology, establishing conservation education programs in
    rhino and tiger range states to increase awareness about these species,
    and rhino translocations.
        The Great Ape Conservation Fund makes funds available to address
    the growing threat of the trade in bushmeat and the habitat decimation
    perpetrated on great apes by timber companies and other extractive
    industries. Chimpanzee, bonobo, gorilla, orangutan and gibbon
    populations have declined substantially, and there is a serious threat
    to their long-term survival. Grants from this fund enable conservation
    and anti-poaching projects to be established and effectively
    implemented to the benefit of these endangered ape species.
        A specific earmark for the Great Ape Survival Partnership (GRASP)
    is needed under the Great Ape Conservation Fund. The United Nations
    Environment Programme has undertaken a significant, ambitious endeavor
    to examine all of the relevant parameters concerning great ape decline
    and survival in range states. A modest additional $500,000 from the
    United States Congress, administered through the Great Ape Conservation
    Fund, would provide support for GRASP's continuing work to undertake
    stakeholder workshops and technical missions in range states. This will
    assist dramatically in the development of long-term national planning
    projects to conserve all remaining great apes.

       THE CLARK R. BAVIN NATIONAL FISH AND WILDLIFE FORENSICS LABORATORY

        The Service's forensics lab is uniquely capable of providing
    assistance in the prosecution of wildlife crimes and is the world's
    only forensic laboratory devoted specifically to wildlife crime. The
    lab analyzes teeth, claws, hairs, feathers, tissues, blood, and other
    wildlife samples to determine species of origin and connect wildlife
    and suspects to the scene of the crime. This lab has always been on the
    cutting edge of wildlife prosecutions and must be funded adequately to
    fulfill its vital roles. Further, the lab is an internationally well-
    respected icon, and the Secretariat of CITES has, for instance, entered
    into Memorandums of Understanding with the lab to, among other things,
    assist in the analysis of ballistic evidence. At the CITES Standing
    Committee meeting in Geneva, Switzerland in March 2004, the CITES
    Secretariat specifically recommended that Parties contact the Bavin lab
    to assist in the identification of bear parts and derivatives during
    investigations.
        The laboratory has begun an important and significant
    rehabilitation and expansion project, which had included plans to
    enlarge lab capabilities with a 37,000 square foot addition, including
    a training and conference room, a new pathology lab with a bio-level 3+
    containment capability, and a new evidence control area. Sadly, funding
    constraints are apparently preventing the Bavin lab from meeting its
    planned development goals fully. We respectfully urge this Subcommittee
    to appropriate a minimum of $7 million to enable completion of the
    renovation of the demonstration colony, and morphology and firearms
    facilities, as well as new additions for pathology, an atrium that
    would include a 60-seat training and conference room for agent and
    inspector training and scientific conferences. This $7 million
    appropriation would be extremely modest given the importance of the
    Clark R. Bavin National Fish & Wildlife Forensics Laboratory and the
    actual expansion and renovation needs for the lab.

                        THE CAPTIVE WILDLIFE SAFETY ACT

        On December 19, 2003 the President signed into law the Captive
    Wildlife Safety Act to prevent the interstate and foreign commerce in
    big cats--lions, tigers, leopards, cheetah, jaguars, or cougars or any
    hybrid of such species--for personal possession as ``exotic'' pets. In
    recent years, the United States has seen a dramatic increase in the
    number of these dangerous animals being kept in private hands, with a
    concomitantly dramatic rise in the number of unfortunate attacks by
    these inherently wild animals. It is imperative that the FWS be given
    the tools it needs to enforce this important law, for the benefit of
    the animals themselves and the humans who are at risk because of the
    big cats who are being kept in captivity.
        While the legislation authorized an appropriation of up to $3
    million each year for implementation and enforcement of the Act, SAPL
    appreciates the difficult financial situation confronting Congressional
    Appropriators this year. As a result, SAPL urges an appropriation of $1
    million toward specific enforcement of the Captive Wildlife Safety Act.

                            WILD HORSE AND BURRO ACT

        Another issue the Society for Animal Protective Legislation would
    like to address is the Wild Horse and Burro Program. In 1971, Congress
    charged the Bureau of Land Management (Bureau) with preserving
    America's wild horses. The Wild Horse and Burro Act states that ``wild
    free-roaming horses and burros are living symbols of the historic and
    pioneer spirit of the West . . . [and] shall be protected from capture,
    branding, harassment or death.''
        We are concerned that the Bureau is failing to fulfill this
    mandate, and instead is engaging in scientifically, ecologically and
    economically unsound practices under the guise of range protection,
    resulting in a program which favors the interests of the livestock
    industry over those of wild horses and burros. In fact, the Bureau has
    presented a funding proposal to Congress where thousands more horses
    than can be adopted out to the public will be removed from the range,
    despite the fact that the Act specifically states that roundups are
    subject to the availability of homes to which the animals may be
    adopted.
        Domestic livestock so dramatically outnumber wild horses on the
    range (the ratio is at least 50:1) that the removal of these wild
    horses will not make a dramatic difference in range vitality. As a GAO
    report from 1990 states, ``. . . the primary cause of degradation in
    rangeland resources is poorly managed domestic livestock (primarily
    cattle and sheep) grazing . . . wild horses are vastly outnumbered on
    federal rangelands . . . Even substantial reductions in wild horse
    populations will, therefore, not substantially reduce total forage
    consumption'' (Rangeland Management: Improvements Needed in Federal
    Wild Horse Program, GAO, 1990). It should be noted that less than 3
    percent of American beef is produced on federal lands and contributes
    less than 1 percent to annual incomes in Western states.
        During this Congress, Representative John Sweeney, Co-chair of the
    Congressional Horse Caucus introduced the American Horse Slaughter
    Prevention Act to ban the slaughter of America's horses. To date this
    bill has the strong support of Congress, the horse and humane
    community, veterinarians and the American public. Each year thousands
    of federally protected wild horses, stolen horses, foals and abused
    horses are being slaughtered in a brutal industry to meet consumer
    demand abroad.
        Congress must act quickly to ensure that our wild horses do not
    quietly disappear at the hands of a few self-serving individuals.
        In closing we, support the President's language included in the
    fiscal year 2005 Department of Interior Appropriations Act:

        ``That appropriations herein made shall not be available for the
    destruction of healthy, unadopted, wild horses and burros in the care
    of the Bureau or its contractors.''

         HONOR THE U.S. OBLIGATION TO PHASE OUT STEEL JAW LEGHOLD TRAPS

        Approximately 140 of 517 national refuges currently permit use of
    steel jaw leghold traps. These traps slam with a vice-like grip on the
    limbs of their victims, breaking bones, tearing ligaments and tendons,
    severing toes and causing excruciating pain. Alternative traps, which
    reduce the suffering of trapped animals are available and can be used
    instead.
        The American Veterinary Medical Association, the American Animal
    Hospital Association, the World Veterinary Association and the National
    Animal Control Association have condemned leghold traps as
    ``inhumane''. The vast majority of Americans oppose use of these traps
    as evidenced by numerous public opinion polls. In addition, the states
    of Massachusetts, Arizona, Colorado, Washington and California have
    prohibited use of these cruel devices by public referendum. New Jersey,
    Florida and Rhode Island prohibit use of steel jaw traps too.
        In response to the widespread international concern with steel jaw
    leghold traps, the U.S. Trade Representative signed an
    ``Understanding'' with the European Union on December 11, 1997 in which
    the United States committed to phase out use of ``conventional steel
    jawed leghold restraining traps.'' The U.S. Department of Interior is
    responsible for honoring this U.S. obligation on lands under its
    jurisdiction and needs to begin implementing a phase out on use of
    these devices. So far, no action has been taken by the Department of
    Interior to comply with this official agreement. We respectfully
    request this distinguished Subcommittee urge the Secretary to take
    action this year.
                                     ______

                         Letter From the State of Utah

                                         State of Utah,
                                        Office of the Governor,
                                 Salt Lake City, UT, February 16, 2004.
    Hon. Conrad Burns, Chair,
    Hon. Robert C. Byrd, Ranking Minority Member,
    Subcommittee on Interior and Related Agencies, Committee on
            Appropriations, U.S. Senate, Washington, DC.
        Dear Chairman Burns and Senator Byrd: I am writing to request your
    support and assistance in ensuring continued funding for the Recovery
    Implementation Program for Endangered Fish Species in the Upper
    Colorado River Basin (Upper Colorado River Endangered Fish Recovery
    Program) and the San Juan River Basin Recovery Implementation Program.
    These cooperative programs involving the states of Colorado, New
    Mexico, Utah and Wyoming, Indian tribes, federal agencies and water,
    power and environmental interests are ongoing in the Upper Colorado
    River Basin and have as their objective recovering four species of
    endangered fish while water development proceeds in compliance with the
    Endangered Species Act of 1973, state law and interstate compacts. Utah
    respectfully requests support and action by the Subcommittee that will
    provide the following:
        1. The appropriation of $700,000 in ``recovery'' funds (Ecological
    Services Activity; Endangered Species Subactivity; Recovery Element;
    Colorado Fish Project) to the U.S. Fish and Wildlife Service (FWS) for
    fiscal year 2005 to allow FWS' Region 6 to meet its funding commitment
    to the Upper Colorado River Endangered Fish Recovery Program. This is
    the level of funding appropriated in fiscal years 2003 and 2004 for
    this program. Funding will be used for FWS' program and data management
    costs, estimating the abundance of fish populations, evaluating
    stocking and monitoring fish and habitat response to recovery actions.
        2. The allocation of $444,000 in appropriated base operation and
    maintenance funds (``Fisheries Activity; Hatchery O&M Subactivity'') to
    support the current operation of the FWS' Ouray National Fish Hatchery
    in Utah for fiscal year 2005.
        3. The allocation of $165,000 in ``recovery'' funds for the San
    Juan River Basin Recovery Implementation Program to the FWS for fiscal
    year 2005 to meet FWS's Region 2 expenses associated with program
    management and implementing the San Juan Program's actions.
        The enactment of Public Law 106-392, as amended by Public Law 107-
    375, authorized the Federal Government to provide up to $46 million of
    cost sharing for these two ongoing recovery programs' remaining capital
    construction projects. Additional hatchery facilities to produce
    endangered fish for stocking, restoring floodplain habitat and fish
    passage, regulating and supplying instream habitat flows, installing
    diversion canal screens to prevent fish entrapment and controlling
    nonnative fish populations are key components of the capital
    construction efforts. 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. Subsection 3(c) of Public Law 106-392 authorizes the Secretary
    of the Interior to accept up to $17 million of contributed funds from
    Colorado, Wyoming, Utah and New Mexico, and to expend such contributed
    funds as if appropriated for that purpose. These facts demonstrate the
    strong commitment and effective partnerships that are present in both
    of these successful programs.
        The above line item funding requests for the FWS are supported by
    the state of Utah and each of the participating states engaged in these
    programs. The requested federal appropriations are critically important
    and will be used in concert with other federal and non-federal cost-
    sharing funding. The support of your Subcommittee in past years is
    gratefully acknowledged and appreciated, and it has been a major factor
    in the success of these multi-state, multi-agency programs in
    progressing towards endangered fish species recovery in the Upper
    Colorado and San Juan River basins while necessary water use and
    development activities are occurring. We again request the
    Subcommittee's assistance to ensure that the FWS is provided with
    adequate funding for these vitally important programs.
                Sincerely,
                                               Olene S. Walker,
                                                              Governor.
                                     ______

                        Letter From the State of Wyoming

                                      State of Wyoming,
                                        Office of the Governor,
                                       Cheyenne, WY, February 25, 2004.
    Hon. Conrad Burns, Chairman,
    Hon, Byron Dorgan, Ranking Member,
    Subcommittee on the Interior and Related Agencies, Committee on
            Appropriations, U.S. Senate, Washington, DC.
        Dear Chairman Burns and Senator Dorgan: I am writing to request
    your support and assistance in insuring continued funding for the
    Recovery Implementation Program for Endangered Fish Species in the
    Upper Colorado River Basin (Upper Colorado River Endangered Fish
    Recovery Program) and the San Juan River Basin Recovery Implementation
    Program. These cooperative programs involving the States of Colorado,
    New Mexico, Utah and Wyoming, Indian tribes, federal agencies and
    water, power and environmental interests are ongoing in the Upper
    Colorado River Basin and have as their objective recovering four
    species of endangered fish while water development proceeds in
    compliance with the Endangered Species Act of 1973, state law, and
    interstate compacts. Wyoming respectfully requests support and action
    by the Subcommittee that will provide the following:
        1. The appropriation of $691,000 in ``recovery'' funds (Ecological
    Services Activity; Endangered Species Subactivity; Recovery Element;
    Colorado Fish Project) to the U.S. Fish and Wildlife Service (FWS) for
    fiscal year 2005 to allow FWS' Region 6 to meet its funding commitment
    to the Upper Colorado River Endangered Fish Recovery Program. This is
    the level of funding appropriated in fiscal years 2003 and 2004 for
    this program. Funding will be used for FWS' program and data management
    costs, estimating the abundance of fish populations, evaluating
    stocking and monitoring fish and habitat response to recovery actions.
        2. The allocation of $444,000 in appropriated base operation and
    maintenance funds (``Fisheries Activity; Hatchery O&M Subactivity'') to
    support the current operation of the FWS' Ouray National Fish Hatchery
    in Utah for fiscal year 2005.
        3. The allocation of $167,000 in ``recovery'' funds for the San
    Juan River Basin Recovery Implementation Program to the FWS for fiscal
    year 2005 to meet FWS' Region 2 expenses associated with program
    management and implementing the San Juan Program's actions.
        The enactment of Public Law 106-392, as amended by Public Law 107-
    375, authorized the Federal Government to provide up to $46 Million of
    cost sharing for these two ongoing recovery programs' remaining capital
    construction projects. Additional hatchery facilities, restoring
    floodplain habitat and fish passage, regulating and supplying instream
    habitat flows, installing diversion canal screens and controlling
    nonnative fish populations are key components of the capital
    construction efforts. 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. Subsection 3(c) of Public Law 106-392 authorizes the Secretary
    of the Interior to accept up to $17 Million of contributed funds from
    Colorado, Wyoming, Utah and New Mexico, and to expend such contributed
    funds as if appropriated for that purpose. These facts demonstrate the
    strong commitment and effective partnerships that are present in both
    of these successful programs.
        The above line item funding requests for the FWS are supported by
    the State of Wyoming and each of the participating States engaged in
    these Programs. The requested federal appropriations are critically
    important and will be used in concert with other federal and non-
    federal cost-sharing finding. The support of your Subcommittee in past
    years is acknowledged and appreciated and has been a major factor in
    the success of these multi-state, multi-agency programs in progressing
    towards endangered fish species recovery in the Upper Colorado and San
    Juan River Basins while necessary water use and development activities
    are occurring. We again request the Subcommittee's assistance to ensure
    that the FWS is provided with adequate funding for these vitally
    important programs.
                Best regards,
                                              Dave Freudenthal,
                                                              Governor.
                                     ______

                        Letter From the State of Wyoming

                                      State of Wyoming,
                                        Office of the Governor,
                                       Cheyenne, WY, February 25, 2004.
    Hon. Conrad Burns, Chairman,
    Hon. Byron Dorgan, Ranking member,
    Subcommittee on the Interior and Related Agencies, Committee on
            Appropriations, U.S. Senate, Washington, DC.
        Dear Chairman Burns and Senator Dorgan: I am writing to request
    your support and assistance in insuring continued funding for the U.S.
    Fish and Wildlife Service's (FWS) participation in the development of a
    Federal/State basin-wide recovery implementation program (Program) for
    endangered species in central Nebraska. Wyoming respectfully requests
    support and action by the Subcommittee to provide the appropriation of
    $982,000 in ``recovery'' funds (Ecological Services Activity;
    Endangered Species Subactivity; Recovery Element; Platte River Recovery
    Project) to the U.S. Fish and Wildlife Service (FWS) for fiscal year
    2005 to allow FWS to continue its necessary participation. This is the
    same level of funding appropriated to the FWS in fiscal year 2004 for
    this project and insures that the Platte River is not de-emphasized in
    the FWS budget at a critical time in the Program's development.
    Congress has appropriated funding in this FWS line item each year since
    1998.
        In 1997, the States of Nebraska, Wyoming and Colorado and the U.S.
    Department of the Interior signed a Cooperative Agreement for Platte
    River Research and Other Efforts Relating to Endangered Species Along
    the Central Platte River, Nebraska (Cooperative Agreement). The
    signatories agreed to pursue a basin-wide, cooperative approach to
    address habitat needs of four threatened and endangered species--the
    whooping crane, piping plover, least tern and pallid sturgeon. The
    signatories to the Cooperative Agreement realize a comprehensive,
    cooperative approach for addressing the Endangered Species Act (ESA)
    issues in the Central and Lower Platte River Basin region is the most
    equitable and effective means to resolving endangered species
    conflicts. This cooperative approach also provides greater certainty
    that the Platte River will continue as a water source for irrigators,
    wildlife, and for the many people who reside in the Basin.
        The Department of the Interior has prepared a draft environmental
    impact statement (DEIS) dated December 2003 to analyze the impacts of
    the proposed Program. The National Academies of Science (NAS) is
    currently conducting a review of the scientific aspects of the
    processes and methods used by the FWS in determining the habitat needs
    for the target species in central Nebraska. It is anticipated that the
    required EIS and ESA reviews of the proposed Program, as well as the
    NAS review of the scientific foundation of the proposed program, will
    be completed during calendar year 2005. With adequate funding secured
    to complete the required reviews, the first increment of the Program
    may be implemented in 2005. Once approved by the States and the
    Congress, program costs will be shared equally between the States and
    the Federal government. Any specific authorization that may be sought
    from the Wyoming Legislature or the Congress for Program implementation
    will be addressed prior to proceeding with implementation of the
    Program.
        The State of Wyoming and each of its partners participating in
    developing the proposed Program for the Platte River Basin support the
    $982,000 funding request for the FWS. The requested Federal
    appropriation is critically important and will be used in concert with
    other federal and non-federal cost-sharing funding. The support of your
    Subcommittee in past years is gratefully acknowledged and appreciated.
    We also appreciate the fact that the Bureau of Reclamation Budget for
    2005 is adequate to cover their participation in financing the Program.
    We again request the Subcommittee's assistance to ensure that the FWS
    is provided with adequate funding to assure progress and success in
    implementing the proposed recovery implementation program.
                Best regards,
                                              Dave Freudenthal,
                                                              Governor.
                                     ______

                Letter From the Wyoming State Engineer's Office

                       Wyoming State Engineer's Office,
                                            Herschler Building,
                                            Cheyenne, WY, May 12, 2004.
    Hon. Conrad Burns, Chairman,
    Hon. Byron L. Dorgan, Ranking Member,
    Subcommittee on the Interior, Committee on Appropriations, U.S. Senate,
            Dirksen Senate Office Building, Washington, DC.

        Re: Support for Funding of $5,200,000 in fiscal year 2005 to the
    Bureau of Land Management for Implementing the Colorado River Salinity
    Control Program; Support for the President's Request for the Land
    Resources Subactivity--Soil, Water and Air Account in the amount of
    $34,238,000; Requesting the Specific Designation of $800,000 for
    Colorado River Basin Salinity Control

        Dear Chairman Burns and Ranking Member Dorgan: This letter is sent
    in support of fiscal year 2005 funding for the Bureau of Land
    Management (BLM) for activities directly benefiting the Colorado River
    Salinity Control Program. The activities needed to control salts
    reaching the Colorado River system from lands managed by the BLM fall
    within that agency's Land Resources Subactivity--Soil Water and Air
    Account. We write to request $5,200,000 be directed to enhancing
    Colorado River water quality and accomplish salt loading reduction in
    the Basin. We support the appropriation of $34,238,000 for the Soil
    Water and Air Account, Land Resources Subactivity, as requested in the
    President's recommended fiscal year 2005 budget.
        The State of Wyoming is a member state of the seven-state Colorado
    River Basin Salinity Control Forum, established in 1973 to coordinate
    with the Federal Government on the maintenance of the basin-wide Water
    Quality Standards for Salinity. The Forum is composed of gubernatorial
    representatives and serves as a liaison between the seven States and
    the Secretaries of the Interior and Agriculture and the Administrator
    of the Environmental Protection Agency (EPA). The Forum advises the
    Federal agencies on the progress of efforts to control the salinity of
    the Colorado River and annually makes funding recommendations,
    including the amount believed necessary to be expended by the Bureau of
    Land Management for its Colorado River Basin Salinity Control Program.
    Overall, the combined efforts of the Basin States, the Bureau of
    Reclamation, the Bureau of Land Management and the Department of
    Agriculture have resulted in one of the nation's most successful non-
    point source control programs.
        The basin-wide water quality standards for salinity consists of
    numeric water quality criteria set for three Lower Colorado River
    points and a Plan of Implementation that describes the overall Program
    and the specific salinity control projects that are being implemented
    to remove sufficient salt from the River system to assure the salinity
    concentrations of the River's waters arriving at the three locations do
    not exceed the numeric criteria values. Pursuant to the Clean Water
    Act, these water quality standards for salinity are reviewed at least
    once each three years and the Plan of Implementations is jointly
    adjusted and revised by the States and involved Federal agencies,
    including representatives of the Bureau of Land Management, to ensure
    continuing compliance with the numeric criteria for salinity.
        Successful implementation of land management practices by the
    Bureau of Land Management to control soil erosion and the resultant
    salt contributions to the Colorado River system is essential to the
    success of the Colorado River Basin Salinity Control Program and
    compliance with the water quality standards adopted by each of the
    seven Colorado River Basin States and approved by the Environmental
    Protection Agency. Inadequate BLM control efforts will result in
    significant additional economic damages to downstream water users.
        At its recent October 2003 meeting, the Forum, in consultation with
    BLM officials, recommended that the U.S. Bureau of Land Management
    should expend $5,200,000 in fiscal year 2005 for salinity control. The
    Forum requests, joined herein by the State of Wyoming, that the Land
    Resources Subactivity--Soil, Water and Air Account line item be
    adequately funded. Based on analyses conducted by the Forum, our
    testimony specifically requests that BLM be directed to target the
    expenditure of $5,200,000 for activities to reduce salt loading from
    BLM-managed lands in the Colorado River Basin in fiscal year 2005.
        The State of Wyoming appreciates the Subcommittee's funding support
    of the Bureau of Land Management's statutorial responsibility to
    participate in the basin wide Colorado River Salinity Control Program
    in past years. We continue to believe this important basin-wide water
    quality improvement program merits funding and support by your
    Subcommittee.
                With best regards,
          John W. Shields, Interstate Streams Engineer, for
            Patrick T. Tyrrell, Wyoming State Engineer,
                   Member, Colorado River Basin Salinity Control Forum.
                                     ______

       Prepared Statment of the Teaming With Wildlife Steering Committee
        On behalf of the Teaming with Wildlife Steering Committee, we
    request your support for the State Wildlife Grants program in fiscal
    year 2005 Interior and Related Agencies Appropriations. Teaming with
    Wildlife is a broad coalition of more than 3,000 groups who have united
    to enhance America's wildlife resources. We are dedicated to achieving
    increased federal funding for state-level fish and wildlife
    conservation, education, and recreation, to ensure a bright future for
    all fish and wildlife and the habitat on which they depend. We strongly
    urge you to appropriate $125 million for State Wildlife Grants in
    fiscal year 2005.
        The State Wildlife Grants program is the nation's core program for
    preventing wildlife from becoming endangered in every state. The
    program leverages federal funds to assist state fish and wildlife
    agencies in conserving wildlife and habitat. The federal government and
    states have had a strong partnership for decades in the conservation of
    wildlife species that are hunted and fished--this program extends the
    same support to all wildlife.
        State Wildlife Grants provide essential resources to state agencies
    to conserve fish, wildlife, and habitat, and to prevent further
    declines in at-risk fish and wildlife populations. More than 1,000
    species are imperiled, or listed as federally threatened or endangered,
    with many more under consideration for listing. While we understand
    that Congress must make difficult programmatic decisions during this
    time of fiscal constraints, it is critical to recognize that State
    Wildlife Grants ultimately save federal taxpayer dollars. Experience
    shows that efforts to restore imperiled wildlife are difficult and
    costly. State Wildlife Grants enable states to be proactive and avert
    such conservation catastrophes, saving wildlife and taxpayer dollars,
    and improving our quality of life by conserving wildlife for the
    benefit of millions of Americans. Further, in difficult budget times,
    the State Wildlife Grants program is even more effective, as it
    leverages federal dollars with state and private funds furthering
    national goals at less federal expense.
        We are very pleased that the President has recognized the
    significance of this program and supported $80 million for State
    Wildlife Grants in fiscal year 2005, an increase above fiscal year
    2004's enacted level. However, funding has been variable over the last
    few years and we hope to see this funding restored to the Conservation
    Trust Fund's anticipated higher level. A funding level of $125 million
    will ensure that every state receives at least $1 million to maintain
    the critical on-the-ground conservation work that they are doing.
    Reliable funding is essential for these activities to succeed over the
    long term.
        Because the State Wildlife Grants program is so effective, it
    enjoys consistent, bipartisan support in Congress. Even in a tight
    budget year, Members of Congress are asking for additional funding for
    this effective program. As you know, 52 Senators from both parties and
    every part of the nation recently signed a letter supporting a funding
    level of $100 million for State Wildlife Grants. A second letter,
    supporting full funding for the Conservation Trust Fund and, therefore,
    an effective funding level of $165 million for State Wildlife Grants,
    recently attracted the support of 50 Senators. The State Wildlife
    Grants program also enjoys strong support in the House of
    Representatives, where 111 Representatives recently signed on to a
    letter of support for a funding level of $100 million.
        We understand the many pressing needs of the nation at this time,
    but we stress that a nation strong in its international role must be
    strong in its support for and conservation of its natural resources,
    including fish and wildlife. We need and sincerely appreciate your help
    with annual funding, and are hopeful that we can work together to bring
    dependability to these funds, which will be necessary to achieve long-
    term fish and wildlife conservation objectives for all citizens.
                                     ______

                    Prepared Statement of the USGS Coalition

                                    SUMMARY

        The USGS Coalition urges Congress to increase the budget of the
    U.S. Geological Survey to $1 billion in fiscal year 2005--the 125th
    anniversary of this vitally important federal agency.
        The USGS plays a central role in protecting the public from natural
    hazards such as floods and earthquakes, assessing water quality,
    providing emergency responders with geospatial data to improve homeland
    security, analyzing the strategic and economic implications of mineral
    supply and demand, and providing the science needed to manage our
    natural resources and combat invasive species that can threaten
    agriculture and public health. The USGS has nearly 400 offices, located
    in every state. To aid in its interdisciplinary investigations, the
    USGS works with over 2,000 federal, state, local, tribal and private
    organizations.
        The USGS Coalition is an alliance of 58 organizations united by a
    commitment to the continued vitality of the unique combination of
    biological, geographical, geological, and hydrological programs of the
    United States Geological Survey.

                               FUNDING SHORTFALL

        During the past eight years, total federal spending for non-defense
    research and development has risen by nearly 50 percent from $37
    billion to almost $55 billion in constant dollars. By contrast, funding
    for the USGS has been nearly flat, as shown in the accompanying chart
    (Figure 1). Even this flat funding for the USGS reflects congressional
    restoration of proposed budget cuts.
        In language accompanying last year's spending bill, the House
    Appropriations Committee strongly urged the Administration ``to
    continue to fund these critical science programs in the base budget in
    future years.'' For its part, the Senate Appropriations Committee urged
    the Administration ``to bear in mind the expressed public support
    across the United States for the Survey's programs.''
        The need for science in support of public policy decisionmaking has
    never been greater. USGS scientists and engineers produce knowledge and
    data that support water, energy and mineral resource management,
    wildlife and ecosystem management, and protection and prevention
    measures for natural disasters.
        In order to meet the tremendous needs of the future, more
    investment is needed. That investment should be used to strengthen USGS
    partnerships, improve monitoring networks, produce high-quality digital
    geospatial data and deliver the best possible science to address
    societal problems and inform decision makers.

                              USGS BUDGET REQUEST

        The USGS Coalition urges Congress to increase the budget of the
    U.S. Geological Survey to $1 billion in fiscal year 2005, an increase
    of 6.5 percent above the fiscal year 2004 enacted level, which is
    necessary for the agency to continue providing critical information to
    decisionmakers at all levels of government. The increase would enable
    the USGS to restore the science cuts proposed in the budget request,
    provide full funding for ``uncontrollable'' costs, and undertake a few
    exciting new science initiatives that would begin to reverse the
    cumulative effects of the long-term funding short fall discussed above
    (Figure 1).
        The fiscal year 2005 budget request would cut funding for the USGS
    by $18.2 million or 1.9 percent to $920.6 million. The budget request
    would cut $6.5 million from the Mineral Resources program, $6.4 million
    that funds the Water Resources Research Institutes, $2.8 million for
    USGS fire ecology and biological fire science activities, and $1.9
    million in partnership funding for the National Map, as well as cutting
    other programs. The proposed budget cuts would adversely affect the
    ability of the USGS to achieve its mission.
        The budget request also contains $17.2 million in uncontrollable
    cost increases, of which $9.1 million would be funded in the budget and
    $8.1 million would be ``absorbed'' by various programs. Without full
    funding of uncontrollable cost increases, USGS program managers may be
    forced to curtail on-going research, hindering or preventing the
    delivery of data needed by natural resource managers and others.
        The budget request would add $16.1 million for new or expanded
    programs, including $1.2 million for science on Department of the
    Interior landscape initiatives, $2.7 million for Klamath Basin-related
    science, $1.0 million for Water 2025, and $1.0 million for invasive
    species research. These initiatives deserve the support of Congress.
        We encourage Congress to consider additional increases that would
    enable the USGS to meet the tremendous need for science in support of
    public policy decisionmaking. We appreciate the fiscal year 2003 and
    fiscal year 2004 report language emphasizing the importance of USGS
    programs and recognizing the need to support cooperative initiatives.
    More investment is needed to strengthen USGS partnerships, improve
    monitoring networks, produce high-quality digital geospatial data and
    deliver the best possible science to address societally important
    problems.

                A SAMPLING OF ESSENTIAL SERVICES FOR THE NATION

        The USGS has a truly national mission that extends beyond the
    boundaries of the nation's public lands to encompass the homes of all
    citizens through natural hazards monitoring, drinking water studies,
    biological and geological resource assessments, and other activities.
      --USGS water-quality studies help to protect the nation's drinking
            water and fresh water resources by assessing how environmental
            and human factors affect the condition of our streams and
            ground water over time. The National Weather Service uses data
            from the USGS streamgage network to issue flood warnings. Other
            agencies use the data for assessing flood risk and drought
            impacts. Still other scientists use streamgage data to study
            fish populations and behavior or to create models that improve
            our understanding of how ecosystems function.
      --Not only does USGS produce the topographic maps familiar to many,
            but it also works with partners to provide a whole new
            generation of high-quality, digital geospatial data products
            that help inform decisions by resource managers, state and
            local officials, and the public.
      --Invasive species are a major economic, environmental and public
            health problem. USGS researchers track the pathways of these
            species and study their effects on other organisms and
            ecosystems.
      --Nearly 80 million people in 39 states are at risk from destructive
            earthquakes. New USGS sensor arrays can produce real-time
            groundshaking maps and other products to help vulnerable urban
            areas reduce the human and economic effects of future quakes.
            The Advanced National Seismic System (ANSS)--a nationwide
            monitoring network, when complete, will provide emergency
            response personnel with real-time information on the intensity
            and distribution of ground shaking that can be used to guide
            emergency response efforts.
      --USGS assessments of energy and mineral resources provide crucial
            information for environmentally prudent development and
            conservation, contributing to the nation's economic security.
      --USGS biologists are studying wildlife health issues like chronic
            wasting disease and West Nile virus. Because such diseases can
            also affect human populations, this research has important
            medical value as well.
      --With elevated homeland security concerns, the USGS and its federal
            partners are developing and deploying advanced sensors to
            monitor vulnerable water bodies and natural resources. As the
            nation's mapper, USGS provides geospatial data for an array of
            homeland security needs.

                  CELEBRATE THE 125TH ANNIVERSARY OF THE USGS

        Congress has repeatedly recognized the value of the USGS since it
    established the agency in 1879. In March 2004, a bipartisan group of
    Representatives demonstrated their appreciation for the USGS by co-
    sponsoring a resolution (H. Res. 556) that recognizes the agency's
    important work on the occasion of its 125th anniversary. As he
    introduced the resolution, Rep. Jim Moran said, ``For 125 years, the
    United States Geological Survey has provided the science that serves as
    the basis for our most important decisions.'' The resolution states:

        ``Resolved, that the House of Representatives congratulates the
    United States Geological Survey on its 125th anniversary and expresses
    strong support for the United States Geological Survey as it serves the
    Nation by providing timely, relevant, and objective scientific
    information which helps to describe and understand the Earth, minimize
    the loss of life and property from natural disasters, manage water,
    biological, energy, and mineral resources, and enhance and protect the
    quality of life of all Americans.''

        Recognizing that the USGS is a federal agency ``. . . with no
    regulatory or land management responsibilities and is thus a trusted
    entity to provide impartial science that serves the needs of the
    Nation'' (H. Res. 556), the USGS Coalition urges Congress to
    appropriate $1 billion to support USGS programs that underpin
    responsible natural resource stewardship, improve resilience to natural
    and human-induced hazards, and contribute to the long-term health,
    security and prosperity of the nation.
        Thank you for your thoughtful consideration of our request. If you
    would like additional information or to learn more about the USGS
    Coalition, please contact Robert Gropp of the American Institute of
    Biological Sciences (rgropp@aibs.org), Emily M. Lehr of the American
    Geological Institute (eml@agiweb.org), or Craig Schiffries of the
    National Council for Science and the Environment
    (schiffries@NCSEonline.org) or visit www.USGScoalition.org.
                                     ______

            Prepared Statement of the Wildlife Management Institute

        The Wildlife Management Institute (WMI), established in 1911, is a
    national scientific and educational organization that is committed to
    the conservation, enhancement and professional management of North
    America's wildlife and other natural resources. We are longstanding
    partners of the Bureau of Land Management (BLM), U.S. Fish and Wildlife
    Service (FWS), U.S. Geological Survey (USGS), and U.S. Forest Service
    (USFS). In general we support the natural resource management and
    biological research requests the Administration has made for these
    agencies but there are specific programs for which WMI seeks increased
    funding. Compared to the fiscal year 2004 estimate, we are asking your
    subcommittee to support the following increases: $22 million for the
    BLM, $139 million for the FWS, $2 million for the USGS, and $3.9
    million for the USFS.

                           BUREAU OF LAND MANAGEMENT

        Within the wildlife and fisheries program, the Institute greatly
    supports the proposed increase of $3,235,000 to protect sagebrush and
    sagebrush steppe communities from further degradation and
    fragmentation. As you know, the populations of sage grouse are
    alarmingly low and there is public pressure to list the species as
    federally threatened or endangered (T/E). But through the cooperative
    efforts of the BLM and its 11 western State fish and wildlife partners,
    hope remains for restoring sage grouse populations without the help of
    the Endangered Species Act (ESA).
        WMI asks additional consideration for management of T/E species on
    BLM lands. Under the fiscal year 2001 Interior Appropriations Act, the
    Bureau was directed to study how listings under the ESA affected the
    agency's mission and to identify resources for reversing those impacts.
    The BLM concluded that it must rely more on multi-species conservation
    efforts to prevent the need for listing and that it must hire
    additional biologists, the latter of which would require a $48 million
    baseline by fiscal year 2007. The T/E program has hovered around $21
    million since fiscal year 2001, and the Administration has proposed
    level spending for fiscal year 2005. WMI urges your subcommittee to
    increase the Bureau's T/E funding level by at least $10 million so that
    the agency can start implementing its 3-year old T/E strategy.
        Last year, the Office of Management and Budget used its Program
    Assessment Rating Tool to review the Bureau's restoration programs. OMB
    concluded that the BLM does not conduct enough monitoring when making
    land management decisions or when assessing the effectiveness of its
    restoration programs. In light of the above conclusion, the Institute
    believes a $12 million increase for monitoring activities is reasonable
    and justified.
        Lastly, WMI understands that the mustang and burro population on
    BLM lands is exceedingly large and must be reduced substantially.
    However, when so many other fish and wildlife programs also merit
    immediate attention, like the ones described above, and continue to be
    funded at the same level year after year, the Institute opposes any
    redirection of land and resource management dollars to adopt a more
    aggressive management strategy for the wild horse and burro program. We
    urge your subcommittee to withhold support for the Administration's
    $10.5 million increase for the wild horse and burro program until new
    dollars are available.

                         U.S. FISH AND WILDLIFE SERVICE

        The Fish and Wildlife Service's Cooperative Conservation Initiative
    contains many proposed spending increases for the next fiscal year, all
    of which WMI supports. One program in particular that we ask your
    subcommittee to endorse is the High Plains Partnership Program (HPP).
    Recognized as a subset of the Partners for Fish and Wildlife Program,
    HPP is designed to help private landowners address habitat needs for
    species of concern and to reduce the need for listing any of those
    species as federally endangered or threatened. Landowners in the
    Central Plain states have demonstrated high interest and participation
    in the program and the Institute supports the $5 million set aside for
    HPP in fiscal year 2005.
        Another program of keen interest to WMI is the State Wildlife
    Grants Program (SWG). For the first time, this Administration has
    requested $80 million to help State fish and wildlife agencies leverage
    state, local and private funds to keep common species common. Indeed,
    SWG is now widely recognized as the nation's core program for
    preventing the listing of endangered species in every state. Before
    October 2005, each State agency will have finalized its Comprehensive
    Wildlife Conservation Plan, but each State also needs financial help to
    complete those plans. Moreover, the States collectively have a fish and
    wildlife conservation need that totals at least $350 million each year.
    For these reasons, WMI requests a $56 million increase for SWG in
    fiscal year 2005.
        The Institute appreciates the Administration's $54 million request
    for the North American Wetlands Conservation Act (NAWCA), but WMI seeks
    full funding for the statute in fiscal year 2005 (a $27 million
    increase). For 14 years the wildlife conservation community has used
    NAWCA dollars to protect and restore over 16 million acres of wetlands
    and associated habitat in the United States, Canada, and Mexico. By
    funding NAWCA at its authorized amount of $65 million, the
    Administration will enhance the populations of countless birds, ranging
    from waterfowl to neotropical migrants, while achieving its goal of no
    net loss of wetlands.
        As mentioned during the BLM discussion, survey and monitoring work
    is a critical component of migratory bird management. Without quality
    survey and monitoring results, the FWS and its State partners cannot
    confidently carryout the hunting regulatory process. Moreover, without
    quality survey and monitoring data, the FWS cannot conduct strategic
    planning and conservation efforts for webless migratory birds,
    shorebirds, waterbirds and neotropical migrants. Thus, the Institute
    urges you to increase the Administration's spending request for
    migratory bird management by $16 million.
        In fiscal year 2002, the operations and maintenance backlog for the
    National Wildlife Refuge System (NWRS) was $294 million. Thanks to the
    support of the White House and Congress, the baseline for that program
    has grown to $391 million in fiscal year 2004. According to the
    Cooperative Alliance for Refuge Enhancement, however, the NWRS must
    receive an annual appropriation of $700 million so it can reduce its
    operations and maintenance backlog in ten years. And because over 39
    million recreationists visit national refuges each year, it is critical
    that the FWS reaches its $700 million baseline sooner than later. Thus,
    WMI recommends a $40 million increase for the NWRS deferred operations
    and maintenance account in fiscal year 2005.

                             U.S. GEOLOGICAL SURVEY

        As a partner in the Cooperative Fish and Wildlife Research Units
    (CRU) Program, the Institute finds it extremely troubling that the
    Administration continues to ignore the program's mounting financial
    needs. Established nearly 70 years ago, the CRU Program represents a
    true Federal-State-university-private partnership that maintains an
    unparalleled record of collaboration and cost-sharing.
        Presently there are 40 CRUs within 38 states. A university is the
    host for each unit, and as the host, the university is responsible for
    providing each CRU scientist with office space, research equipment and
    money to hire and to advise graduate student researchers. Hence, the
    USGS is only responsible for providing the salary and federal benefits
    for each CRU scientist. Meanwhile, State fish and wildlife biologists
    are working closely with CRU scientists to identify and to conduct
    timely research projects. Because of this time intensive relationship,
    the research products for each CRU are promptly translated into a land
    management action. As the program's fourth partner, the Institute
    maintains a supervisory role to insure all CRU projects uphold the
    principles of science-based management. In short, the CRU Program
    represents the quintessential model for how biological researchers and
    land managers should work together to solve America's conservation
    issues.
        Lest the integrity of the CRU Program is lost, it is imperative
    that the USGS receive an additional $2 million to keep the program
    running properly in fiscal year 2005 and beyond. Approximately 1 out of
    every 8 Unit scientist positions (i.e., 15 total) is currently vacant
    and there are 25 scientists within 16 CRUs who are eligible to retire
    in 2004. If the CRU Program is denied its modest $16.1 million funding
    need in fiscal year 2005, USGS will not be able to fill any of the
    presently vacated scientist positions while even more positions become
    vacant. WMI urges your subcommittee to not let this happen.

                              U.S. FOREST SERVICE

        The Institute supports the Administration's requests for the
    National Forest System's wildlife and fisheries habitat program and for
    the State and Private Forestry's Forest Stewardship Grants and Forest
    Legacy Program. But, as in previous years, we request a revision in the
    Forest Service's budget structure. Without detailed information of how
    the agency uses its wildlife and fisheries habitat money, it is
    difficult for WMI and our partners to track individual habitat
    conservation projects and to determine whether we think those projects
    are receiving sufficient funding.
        Under Wildland Fire Management, WMI recommends a $3,914,000
    increase for the restoration and rehabilitation program. This program
    must receive stable funding for multiple years to maintain desirable
    soil, plant, wildlife, and water conditions for forests and rangelands
    that have experienced a catastrophic burn. Stable funding is also
    needed to protect previously burned sites from future, unwanted
    wildfires. The Institute also recommends that the USFS use the
    restoration and rehabilitation dollars to minimize human-wildlife
    conflicts in the Wildland-Urban Interface. As nutritious grasses, forbs
    and saplings emerge in previously burned areas, prey animals, such as
    deer and elk, will appear in larger numbers, subsequently attracting
    cougars, coyotes and other predators. Hence, the protection of human
    safety is not restricted to fire preparedness and suppression programs.
        Thank you for this opportunity to submit comments on the fiscal
    year 2005 Interior and Related Appropriations Bill. Please contact
    Kathryn Reis at (202) 371-1808 if you have any questions.
                                     ______

                                 INDIAN AFFAIRS

     Prepared Statement of the American Indian Higher Education Consortium

        On behalf of the nation's 34 Tribal Colleges and Universities
    (TCUs), which comprise the American Indian Higher Education Consortium
    (AIHEC), thank you for this opportunity to present our fiscal year 2005
    Appropriations requests for the 27 colleges funded under the Tribally
    Controlled College or University Assistance Act (Tribal College Act),
    and for our tribally controlled postsecondary vocational institutions.
    The U.S. Department of the Interior, Bureau of Indian Affairs,
    administers these programs. While AIHEC ultimately seeks full funding
    for all programs authorized under the Tribal College Act, we recognize
    that a focused approach with incremental increases is a way to best
    meet that goal over time. In fiscal year 2005, we seek a total of $64.2
    million for Tribal College Act programs. Our first priority within this
    request is to increase funding for the day-to-day operations of
    institutions funded under Titles I & II of the Act, for this we
    specifically request $54.5 million; of which, $43,619,000 would be for
    Title I grants and $10,881,000 would be allocated for Title II. This
    request is an increase of $6.7 million over the fiscal year 2004 level,
    the same percentage increase enacted in fiscal year 2004, and $12.2
    million over the President's fiscal year 2005 budget recommendation.
    Additionally, we seek: $500,000 for technical assistance, an increase
    of $386,000 over fiscal year 2004 and the President's request. These
    funds will help address continually emerging technical assistance needs
    and to gather and analyze data necessary to comply with the
    Congressional request to provide added information on TCUs; and $2
    million for endowments under Title III of the Act. Also, we support $4
    million for United Tribes Technical College; and a minimum of $1.325
    million for Crownpoint Institute of Technology; the fiscal year 2005
    budget recommendation once again eliminates funding for these two
    tribally controlled vocational institutions.
        AIHEC's Membership also includes three other TCUs funded under
    separate authorities within the Interior Appropriations Act, namely:
    Haskell Indian Nations University; Southwestern Indian Polytechnic
    Institute; and The Institute for American Indian Arts. AIHEC supports
    the independently submitted requests for funding the institutional
    operations of these institutions.

                       BACKGROUND AND FUNDING DISPARITIES

        In 1972, six tribally controlled colleges established AIHEC to
    provide a support network for member institutions. Today, AIHEC
    represents 34 Tribal Colleges and Universities in 12 states, created
    specifically to serve the higher education needs of American Indians.
    Annually, they serve approximately 30,000 full- and part-time students
    from over 250 federally recognized tribes.
        The vast majority of TCUs is accredited by independent, regional
    accreditation agencies and like all institutions of higher education,
    must undergo stringent performance reviews on a periodic basis to
    retain their accreditation status. In addition to college level
    programming, TCUs provide much-needed high school completion (GED),
    basic remediation, job training, college preparatory courses, and adult
    education. Tribal colleges fulfill additional roles within their
    respective communities functioning as community centers, libraries,
    tribal archives, career and business centers, economic development
    centers, public meeting places, and childcare centers. An underlying
    goal of TCUs is to improve the lives of students through higher
    education and to move American Indians toward self sufficiency.
        Title I of the Tribal College Act authorizes funding for the basic
    institutional operating budget of one qualifying institution per
    federally recognized tribe based on a full-time American Indian student
    enrollment formula. The Tribal College Act was first funded in 1981.
    Today, 23 years later and notwithstanding an increase of $6 million in
    fiscal year 2004, these colleges are operating at $4,230 per full-time
    Indian student count (ISC), just 70 percent of their authorized level
    of $6,000 per ISC. This is not simply a matter of appropriations
    falling short of an authorization; it effectively impedes our
    institutions from having the necessary resources to expand so as to
    provide the educational services afforded students at mainstream
    institutions.

                                 JUSTIFICATIONS

        Tribal colleges provide critical access to vital postsecondary
    education opportunities.--TCU reservations are located in remote areas,
    and their populations are among the poorest in the nation. On average,
    median household income levels are only about half of the level for the
    U.S. population as a whole. As a result, the cost of attending a
    mainstream institution, which for many reservation communities is
    several hours away, is prohibitively high, especially when tuition,
    travel, housing, textbooks, and other expenses are considered.
        Tribal colleges are producing a new generation of highly trained
    American Indians as teachers, tribal government leaders, engineers,
    nurses, computer programmers, and other much-needed professionals.--By
    teaching the job skills most in demand on their reservations, TCUs are
    laying a solid foundation for tribal economic growth, with benefits for
    surrounding communities. In contrast to the high rates of unemployment
    of reservations, 74 percent of recent tribal college graduates are
    employed and using the skills gained through their educational
    experiences. Many of these graduates are employed in ``high need''
    occupational areas such as Head Start, and elementary and secondary
    school teachers, and nurses/health care providers. Just as important,
    the overwhelming majority of tribal college graduates remain in their
    tribal communities, applying their newly acquired skills and knowledge
    where they are most needed. Nearly one-half of the faculty and staff of
    Little Big Horn College in Crow Agency, Montana are graduates of the
    college.
        Tribal colleges meet the strict standards of mainstream
    accreditation boards and offer top quality academic programs.--Several
    TCUs have attained a ten-year accreditation term, the longest term
    granted to any higher education institution. The quality of the
    colleges' programs is reflected in the high rates of satisfaction
    reported by their graduates: 91 percent of TCU graduates surveyed
    reported being very satisfied or satisfied with courses in their major
    field of study and with overall instruction.
        Tribal colleges serve as highly effective bridges to four-year
    postsecondary institutions.--While most TCUs are two-year institutions
    offering certificates and associate degrees, their transfer function is
    significant. A survey of TCU graduates indicated that almost 50 percent
    continued their education during the year after graduation, with more
    than 80 percent of those seeking a bachelor's degree. The overwhelming
    majority of the continuing TCU graduates felt that the programs at TCUs
    had prepared them well for further education and greatly enhanced their
    success rates.

                             SOME ADDITIONAL FACTS

        Enrollment Gains & New TCUs.--Compounding existing funding
    disparities is the fact that although the numbers of TCUs and students
    enrolled have dramatically increased since 1981, appropriations have
    increased at a disproportionately low rate. Since 1981, the number of
    colleges has increased from 6 to 26 and enrollments have risen a
    remarkable 332 percent. In fiscal year 2005, the two newest TCUs,
    Saginaw Chippewa Tribal College (Michigan) and Tohono O'odham Community
    College (Arizona) will be eligible to receive funds under the Tribal
    College Act. TCUs are in many ways victims of their own successes. The
    dramatic enrollment increases, coupled with a growing number of
    tribally chartered colleges, have forced TCUs to slice an already
    inadequate pie into even smaller pieces. Our fiscal year 2005 request
    would fund operations at Title I colleges at about $4,700 per ISC,
    after 23 years, still far short of the $6,000 per ISC authorized by
    Congress.
        The Absence of State Funds for Institutional Operations.--While
    mainstream institutions have enjoyed a foundation of stable state
    support, TCUs must rely on the Federal government for their operating
    funds. Because TCUs are located on Federal trust lands, states have no
    obligation to fund them even for the non-Indian state-resident students
    who account for approximately 20 percent of TCU enrollments. Yet, if
    these same students attended any other public institution in the state,
    the state would provide basic operating funds to the institution.
        Local Tax and Revenue Bases.--TCUs cannot rely on local tax base
    revenue. Although tribes have the sovereign authority to tax, high
    reservation poverty rates, the trust status of reservation lands, and
    the lack of strong reservation economies hinder the creation of a
    reservation tax base. In Indian Country, according to the Bureau of
    Indian Affairs, 50 percent of the eligible workforce is unemployed. In
    comparison, the current national unemployment rate is 5.6 percent.
        Trust Responsibility.--The emergence of tribal colleges is a direct
    result of the special relationship between American Indian tribes and
    the Federal government. TCUs are founded and chartered by their
    respective American Indian tribes, which hold a special legal
    relationship with the Federal government, actualized by more than 400
    treaties, several Supreme Court decisions, prior Congressional action,
    and the ceding of more than one billion acres of land to the Federal
    government. Beyond the trust responsibility, the fact remains that TCUs
    are providing a public service that no other institutions of higher
    education are willing to, or can, provide, by helping the Federal
    government fulfill its responsibility to the American people,
    particularly in rural America. Despite the fact that only Indian
    students are counted when determining the level of operating funds,
    TCUs have open enrollment policies and do not discriminate based on
    race or ethnicity. They are simply and effectively removing barriers
    that have long prevented equal access to higher education for
    reservation community residents.

              THE PRESIDENT'S BUDGET REQUEST FOR FISCAL YEAR 2005

        Although the President's fiscal year 2005 budget does acknowledge
    that there are two new colleges now eligible for funding, it recommends
    a $5.5 million cut to current funding, which is already inadequate to
    operate our tribally chartered reservation based colleges, and once
    again eliminates funding for the two vocational colleges. Despite a $6
    million increase in the fiscal year 2004 Appropriation, the 24 colleges
    currently funded under Title I of the Act are receiving $4,230 per full
    time Indian student (ISC), just 70 percent of the authorized level of
    $6,000 per ISC. The $5.5 million cut proposed in the President's fiscal
    year 2005 budget, if enacted, would result in a loss of $844 per ISC
    for Title I colleges, assuming Title II funding were to revert to the
    fiscal year 2003 funding level of $6,212 per ISC. This slashing of
    basic operating funds would cause some TCUs to no longer be able to
    meet minimum requirements for stable funding needed to pay overhead and
    the salaries of faculty and staff. This would not only jeopardize their
    accreditation status but would most likely force some of the colleges
    close their doors.

              AIHEC'S APPROPRIATIONS REQUEST FOR FISCAL YEAR 2005

        We respectfully request a total appropriation of $64.2 million for
    our Tribal College Act authorized programs. Of that amount our first
    priority is to increase funding for our institutions' basic operations
    under Titles I & II of the Act, we specifically request $54.5 million
    for Titles I and II of the Tribal College Act; of which, $43,619,000
    would be for Title I grants and $10,881,000 would be allocated for
    Title II. This request is an increase of $6.7 million over the fiscal
    year 2004 appropriated level, and represents the same percentage
    increase as was enacted in fiscal year 2004 and $12.2 million over the
    President's fiscal year 2005 budget request. This increase would bring
    funding for the basic operations of our Title I colleges, including our
    two new colleges, Saginaw Chippewa Tribal College (Michigan) and Tohono
    O'odham Community College (Arizona), to $4,700 per ISC, which is still
    far short of the $6,000 per ISC authorized. Additionally, we seek
    $500,000 for technical assistance, an increase of $386,000 over fiscal
    year 2004 and the President's request. These funds will help address
    ever emerging technical assistance needs and to fund data collection
    and analysis necessary to comply with the Congressional requests for
    additional information on TCU operations, and $2 million for endowments
    under Title III of the Act.
        For our two tribally controlled vocational institutions, we support
    $4,000,000 for United Tribes Technical College; and a minimum of
    $1,325,000 for Crownpoint Institute of Technology, to restore and
    expand the funding for these programs that the fiscal year 2005 budget
    once again recommends eliminating.

                                   CONCLUSION

        Tribal colleges are bringing education to thousands of American
    Indians. The modest Federal investment in the TCUs has paid great
    dividends in terms of employment, education, and economic development,
    and continuation of this investment makes sound moral and fiscal sense.
    We very much need your help to sustain and grow our programs and
    achieve our missions.
        Thank you for your past and continued support of the nation's
    Tribal Colleges and Universities and your consideration of our fiscal
    year 2005 appropriations requests.
                                     ______

          Prepared Statement of the Chippewa Ottawa Resource Authority

        The Chippewa Ottawa Resource Authority (CORA,) on behalf of its
    five member Indian tribes, requests an increase of $523,108 in CORA
    base funding from the Department of Interior's fiscal year 2005
    Appropriations Bill. This increase is imperative as CORA continues to
    face a very real and serious funding shortfall.
        CORA is the management and regulatory body for the five Michigan
    tribes with recognized fishing rights in the 1836 treaty-ceded waters
    of the upper three Great Lakes. These rights were adjudicated and
    affirmed under U.S. v. Michigan. The five federally recognized member
    tribes that comprise CORA are; the Bay Mills Indian Community, the
    Grand Traverse Band of Ottawa and Chippewa Indians, the Little River
    Band of Ottawa Indians, the Little Traverse Bay Bands of Odawa Indians,
    and the Sault Ste. Marie Tribe of Chippewa Indians. The Bay Mills
    Indian Community, Grand Traverse Band, and Sault Ste Marie Tribe have
    operated joint management programs since 1981, while the Little River
    Band, and Little Traverse Bay Bands recently joined the inter-tribal
    management structure in 1998 and 2000 respectively. Other parties to
    U.S. v. Michigan are the State of Michigan and the United States
    government.
        The parties to U.S. v. Michigan strongly desired to settle resource
    allocation and management issues through a joint agreement, rather than
    contentious and costly litigation. A landmark agreement was achieved in
    August 2000, and entered into federal court as a Consent Decree. The
    Consent Decree will govern allocation, management, and enforcement of
    Great Lakes fisheries through the year 2020.
        In order to achieve an agreement of this scope and magnitude, the
    CORA tribes made many concessions, assumptions, sub-agreements and
    politically difficult changes in their fishery and associated
    management structures. These changes require increases in all phases of
    management activities, and form the basis for this appropriations
    request.

                 SUMMARY OF FUNDING NEEDS FOR FISCAL YEAR 2005

        In fiscal year 2005, CORA is seeking a total of $3,443,547 for the
    following purposes:
        (1) Maintain current fiscal year 2004 base funding for CORA tribes
    ($2,920,439).
        (2) Provide increased base funding to allow the CORA tribes to meet
    the increased obligations mandated by 2000 Consent Decree ($523,108).

                  JUSTIFICATION FOR INCREASED FUNDING REQUEST

        Illustration 1 shows the extent of the treaty-ceded waters of the
    Great Lakes, and the expanded water territory resulting from the 2000
    Consent Decree. Expanding the area within the treaty-ceded waters for
    tribal fishing was essential to achieving an agreement among the
    parties. However, securing this expanded area has created many burdens
    on already understaffed and under-equipped tribal enforcement and
    biological departments. In addition, the Consent Decree instituted
    numerous inter-governmental bodies and processes that require extensive
    participation by tribal biological and enforcement personnel.
        Consent Decree directly hinges on the ability for each of the
    tribal, State, and federal parties to meet their obligations, and
    provide effective resource management programs.
        Over the past decade, inflation has eroded the amount of funds
    available to the tribes for operation and management of the treaty
    fishery. In addition to the mandates of the Consent Decree, the costs
    associated with tribal management programs have increased over the past
    decade, and the tribes are now facing a serious threat to their ability
    to effectively manage and self-regulate their treaty-based fishery.

        We wish to stress that the Consent Decree imposed many new court-
    ordered mandates and responsibilities on all tribal biological and law
    enforcement programs, including those of the ``new'' tribes, that
    current (fiscal year 2004) funding levels will not support. The
    geographic area where the tribes can fish was substantially expanded,
    thereby creating an increased responsibility to biologically assess and
    monitor those fish stocks and enforce fishing regulations. The Consent
    Decree increased requirements for on-lake assessments, which often must
    be completed before tribal commercial fishing can commence. The Decree
    also created an inter-agency biological modeling group to assist in the
    development of harvest limits (quotas) and fishing effort limits for
    important commercial and sport fish species. The modeling process
    requires additional staff to conduct the actual modeling work as well
    as increased field data collection required to make the modeling task
    scientifically valid. The Decree further mandated numerous new law
    enforcement processes or tasks that require increased staff, travel,
    and equipment well beyond the current scope of activity or funding
    support.
        It is imperative, that after making such landmark and long-term
    commitments, the tribes must not be placed in a position where
    inadequate funding inhibits them from meeting their obligations,
    responsibilities and opportunities under the Decree. Failure to meet
    such obligations risks ``re-opening'' the Decree, or at a minimum,
    modifying certain terms of the Decree in a manner detrimental to the
    tribes, and the other parties.

              FUNDING HISTORY AND PREVIOUS APPROPRIATIONS REQUEST

        CORA has historically been under-funded when compared with similar
    inter-tribal fishery organizations, especially considering the scope
    and magnitude of the inter-governmental activities established by the
    2000 Consent Decree. Therefore, it is imperative that the CORA tribes
    are appropriated funding adequate to protect their management
    capability, and protect their treaty-based fishery rights.
        Prior to fiscal year 2004, base funding for CORA programs was
    $1,915,000, a level that has remained virtually constant for the
    previous 11 years. Consequently, tribal management programs were under
    financial stress even prior to the Consent Decree! In fiscal year 2004,
    CORA requested $1,515,108 of which only $992,000 was appropriated
    (balance = $523,108). This appropriation was earmarked as base funding
    for the two tribes that recently joined the CORA structure, but had
    previously received no funding for Great Lakes treaty activities.
    However, the fiscal year 2004 appropriation was not adequate to
    establish management programs for the two new tribes, nor did it
    provide the original three CORA tribes with any additional funding to
    allow their programs to meet obligations and responsibilities of the
    Consent Decree. Accordingly, for fiscal year 2005 we are requesting
    that our fiscal year 2004 request be funded in full as recurring
    operational dollars.

                PROPOSED USE OF FISCAL YEAR 2005 FUNDING REQUEST

        Our fiscal year 2005 funding request will be used for the Great
    Lakes fishery management programs consisting of the biological
    services, conservation enforcement, conservation court and CORA
    Administration--joint programs. The additional funds will be
    distributed to the member tribes as follows:

    ------------------------------------------------------------------------
                               Tribe                                Amount
    ------------------------------------------------------------------------
    Bay Mills Indian Community fiscal year 2005 DOI                  $95,333
     Appropriation Request.....................................
    Little River Band fiscal year 2005 DOI Appropriation             118,998
     Request...................................................
    Little Traverse Bay Bands fiscal year 2005 DOI                   118,110
     Appropriation Request.....................................
    Grand Traverse Band Self-Governance fiscal year 2005 DOI          95,333
     Appropriation Request.....................................
    Sault Tribe Self-Governance fiscal year 2005 DOI                  95,334
     Appropriation Request.....................................
                                                                ------------
          Total 2005 Funding Request...........................      523,108
    ------------------------------------------------------------------------

        On behalf of CORA and its five member tribes, I would like to thank
    you for your support in fiscal year 2004, and request your continued
    support in obtaining base funding for CORA in fiscal year 2005.
                                     ______

        Prepared Statement of the National American Indian Court Judges
                                  Association

        On behalf of the National American Indian Court Judges Association
    (NAICJA), I am pleased to submit this testimony on the proposed fiscal
    year 2005 budget for the Justice Department's Indian Country Law
    Enforcement Initiative and the Indian Tribal Justice Technical and
    Legal Assistance Act of 2000 (Public Law 106-559). We request $73.4
    million for Tribal Courts including $15 million for Indian Country Law
    Enforcement Initiative and $58.4 million in funding for the Indian
    Tribal Justice Technical and Legal Assistance Act of 2000 (Public Law
    106-559). In addition, we request full funding for the following areas
    or, at minimum, proportional increases in keeping with economic growth.
    Specifically, this includes:
        1. Increase by $4.74 million Administration proposed cuts in Law
    Enforcement under the COPS program in DOJ.
        2. Increase by $7.59 million Administration proposed cuts in Tribal
    Courts under DOJ.
        3. Increase by $2 million Administration proposed cuts in BIA for
    ``contract support costs'' to $135,314,000.
        4. Increase by $2.46 million Administration proposed cuts in DOJ
    for Indian Country Prison grants.
        The National American Indian Court Judges Association (NAICJA),
    www.naicja.com, was incorporated in 1969. NAICJA is the largest
    organization representing Tribal Judges and Tribal Courts in the United
    States. The mission of NAICJA is to strengthen and enhance all Tribal
    justice systems through improvement and development of Tribal Courts
    and Tribal Court Judges.

                           JUSTICE DEPARTMENT FUNDING

    Indian Country Law Enforcement Initiative and Indian Tribal Justice
            Technical and Legal Assistance Act of 2000 (Public Law 106-559)
        (1) $15 million for Indian Country Law Enforcement Initiative.--
    NAICJA strongly supports full funding for the Indian Country Law
    Enforcement Initiative. NAICJA would like to specifically emphasize our
    support for the funding of the Indian Tribal Court Fund at a level of
    at least $15 million (Please note that this fund was formally
    authorized by the 106th Congress--see Public Law 106-559, section 201).
    Through the increased funding for law enforcement under the Indian
    Country Law Enforcement Initiative, more police officers have been
    added throughout Indian Country. Without substantial additional
    funding, tribal courts will be unable to handle the increased caseloads
    generated by this increased law enforcement.
        (2) $58.4 million in funding for the Indian Tribal Justice
    Technical and Legal Assistance Act of 2000 (Public Law 106-559).--When
    the 106th Congress enacted Public Law 106-559 in December 2000, it
    recognized the vital legal and technical assistance needs of tribal
    justice systems--finding in part that ``there is both inadequate
    funding and inadequate coordinating mechanism to meet the technical and
    legal assistance needs of tribal justice systems and this lack of
    adequate technical and legal assistance funding impairs their
    operation'' and promised three grant programs to address these
    Congressional recognized needs. It is vital that Congress provide
    adequate funding for Public Law 106-559 (see the Act itself for more
    specific information). NAICJA strongly supports funding of Public Law
    106-559 at the level of at least $58.4 million. Failure to provide this
    funding level would make the Indian Tribal Justice Technical and Legal
    Assistance Act of 2000 (Public Law 106-559) a hollow recognition of
    tribal justice systems needs without providing needed resources.
        We further express our concern with the Administrations fiscal year
    2005 Budget proposals regarding Tribal Courts. Decreases in these areas
    will severely hinder effective law enforcement and Tribal Courts in
    Indian Country.
        We request full funding for the following areas or, at minimum,
    proportional increases in keeping with economic growth. Specifically,
    this includes:
        5. Cuts in Law Enforcement under the COPS program by $4.74 million
    in DOJ.
        6. Cuts in Tribal Courts under DOJ by $7.59 million.
        7. Cuts in BIA for ``contract support costs'' by $2 million down to
    $133,314,000.
        8. Cuts in DOJ for Indian Country Prison grants by $2.46 million.

                          IMPORTANCE OF TRIBAL COURTS

        Tribal justice systems are the primary and most appropriate
    institutions for maintaining order in Tribal communities.

        ``Tribal courts constitute the frontline tribal institutions that
    most often confront issues of self-determination and sovereignty, while
    at the same time they are charged with providing reliable and equitable
    adjudication in the many and increasingly diverse matters that come
    before them. In addition, they constitute a key tribal entity for
    advancing and protecting the rights of self-government. . . . Tribal
    courts are of growing significance in Indian Country.''----(Frank
    Pommersheim, Braid of Feathers: American Indian Law and Contemporary
    Tribal Law 57 (1995)).

        Tribal Courts must deal with the very same issues state and Federal
    courts confront in the criminal context, including, child sexual abuse,
    alcohol and substance abuse, gang violence and violence against women.
    Tribal Courts, however, must address these complex issues with far
    fewer financial resources than their Federal and state counterparts.
    Judicial training that addresses the existing problems in Indian
    Country, while also being culturally sensitive, is essential for Tribal
    Courts to be effective in deterring and solving crime in Indian
    communities.

                  INADEQUATE FUNDING OF TRIBAL JUSTICE SYSTEMS

        There is no question that Tribal justice systems are, and
    historically have been, under-funded. The 1991 United States Civil
    Rights Commission found that ``the failure of the United States
    Government to provide proper funding for the operation of tribal
    judicial systems . . . has continued for more than 20 years.'' The
    Indian Civil Rights Act: A Report of the United States Civil Rights
    Commission, June 1991, p. 71. The Commission also noted that
    ``[f]unding for tribal judicial systems may be further hampered in some
    instances by the pressures of competing priorities within a tribe.''
    Moreover, they opined that ``If the United States Government is to live
    up to its trust obligations, it must assist tribal governments in their
    development . . .'' More than ten years ago, the Commission ``strongly
    support[ed] the pending and proposed congressional initiatives to
    authorize funding of tribal courts in an amount equal to that of an
    equivalent State court'' and was ``hopeful that this increased funding
    [would] allow for much needed increases in salaries for judges, the
    retention of law clerks for tribal judges, the funding of public
    defenders/defense counsel, and increased access to legal authorities.''
        With the passage of the Indian Tribal Justice Act, 25 U.S.C.  3601
    et. seq. (the ``Act''), Congress found that ``[T]ribal justice systems
    are an essential part of tribal governments and serve as important
    forums for ensuring public health, safety and the political integrity
    of tribal governments.'' 25 U.S.C.  3601(5). Congress found that
    ``tribal justice systems are inadequately funded, and the lack of
    adequate funding impairs their operation.'' 25 U.S.C.  3601(8). In
    order to remedy this lack of funding, the Act authorized appropriation
    of base funding support for tribal justice systems in the amount of
    $50,000,000 for each of the fiscal years 1994 through 2000. 25 U.S.C.
    3621(b). An additional $500,000 for each of the same fiscal years was
    authorized to be appropriated for the administration of Tribal Judicial
    Conferences for the ``development, enhancement and continuing operation
    of tribal justice systems . . .'' 25 U.S.C.  3614.
        Nine years after the Act was enacted into law, and even after
    reauthorization, no funding has been appropriated. Only minimal funds,
    at best, have been requested. Yet, even these minimal requests were
    deleted prior to passage. Even more appalling is the fact that BIA
    funding for Tribal Courts has actually substantially decreased
    following the enactment of the Indian Tribal Justice Act in 1993.

               BIA-DOJ INDIAN COUNTRY LAW ENFORCEMENT INITIATIVE

        Full funding is requested for the Joint BIA-DOJ Law Enforcement
    Initiative proposal to improve law enforcement in Indian Country. The
    Final Report of the Executive Committee for Indian Country Law
    Enforcement Improvements documents the ``stark contrast between public
    safety in Indian Country and the rest of the United States.''----(Final
    Report, p. 4.) ``While law enforcement resources have been increased
    and deployed throughout the United States, BIA resources actually have
    been reduced in Indian Country during the past few years.'' It is
    axiomatic that ``as a consequence of improvements to law enforcement
    services, a corresponding increase in funds is needed for judicial
    services, especially tribal courts.''----(Final Report, p. 8).
        The Initiative includes funding to continue the Department of
    Justice Indian Tribal Court Program. We urge the Committee to support
    full funding of the Tribal Court Program to assist in the development,
    enhancement and continued operation of tribal judicial systems. While
    funding has fallen far short of the $58 million in annual funding
    promised by the Indian Tribal Justice Act, the Initiative will fail
    without it. Without well-staffed, competent Tribal judiciaries to
    handle the influx of the new criminal prosecutions flowing from the Law
    Enforcement Initiative, the goal of providing service to 1.4 million
    Native Americans who live on or near Indian lands the same ``protection
    of their basic rights, a sense of justice, and freedom from fear''
    enjoyed by Americans at large, will not be attained.----(Final Report,
    p. 4).

                                   CONCLUSION

        Tribal justice systems are the primary and most appropriate
    institutions for maintaining order in tribal communities. They are key
    to Tribal economic development and self-sufficiency. Any serious
    attempt to fulfill the federal government's trust responsibility to
    Indian nations, must include increased funding and enhancement of
    Tribal justice systems.
        We welcome the opportunity to comment on the Justice Department's
    Budget Request for the fiscal year 2004 funding of the Indian Country
    Law Enforcement Initiative and the Indian Tribal Justice Technical and
    Legal Assistance Act of 2000 (Public Law 106-559).
        Please contact me at (715) 478-7255, or NAICJA Executive Director
    Chuck Robertson, at (605) 342-4804 or naicja@rushmore.com with
    questions or comments. Thank you.
                                     ______

        Prepared Statement of the Chugach Regional Resources Commission

        We appreciate the opportunity to provide this written testimony to
    the Senate Appropriations Subcommittee on Interior and Related
    Agencies. The Chugach Regional Resources Commission (CRRC), a non-
    profit Alaska Native coalition for managing Tribal natural resources,
    with its seven member Tribes located in the Prince William Sound and
    Lower Cook Inlet, respectfully requests restoration of its base funding
    of $350,000 to the fiscal year 2005 Bureau of Indian Affairs budget,
    Fish, Wildlife and Parks Program.
        The Tribes of the Chugach Region, who make up CRRC, appreciate the
    support of the Subcommittee in reinstating our fiscal year 2004 funding
    which was zeroed out by the Bureau of Indian Affairs. Unfortunately,
    the Administration has once again zeroed out our funding of the
    President's proposed BIA fiscal year 2005 budget. Therefore, we are
    respectfully requesting the support of the House Appropriations
    Subcommittee on Interior and Related Agencies to restore the $350,000
    to the Bureau of Indian Affairs fiscal year 2005 Fish, Wildlife and
    Parks budget for for CRRC and add it to the base budget as permanent
    funding.
        Until fiscal year 2002, this funding had been included in the BIA's
    Fish, Wildlife and Parks budget for the previous 12 years. The mission
    of CRRC is to work with our seven member Tribes to promote and develop
    sound economic resource based-projects and to work collectively to
    address any natural resource and environmentally related issues that
    affect the Native people of the Chugach Region.
        This funding, over the past 14 years, has supported the development
    and operation of many programs that have assisted communities in
    providing meaningful employment opportunities as well as valuable
    services and products to the people of the State of Alaska. If this
    funding is not restored, 35 Native people in the Chugach Region will
    lose their jobs. With the scarcity of employment opportunities in rural
    Alaska, the impact of approximately six families per village losing
    this income in a village with an average population of 100, strikes a
    devastating blow to the local community economy. In addition, these 20
    families will create a much larger burden on state and federal
    financial resources as they will be forced to depend upon state and
    federal welfare programs to provide funding for necessary living
    expenses. This funding also supports the base operating expenses of
    CRRC, and without it, our work will not be able to continue. A summary
    of some of these programs supported by this funding is provided to give
    you a better understanding of the integral role this funding plays in
    Tribal community development.
        The Port Graham Salmon Hatchery has been in operation since 1990,
    and raises sockeye, pink, and coho salmon. CRRC provided Port Graham
    with the technical and administrative assistance necessary to build the
    hatchery program. The hatchery's goal is to rebuild local salmon runs
    and provide economic opportunities for village residents. CRRC has
    funded the hatchery operations for many years and employed the hatchery
    staff consisting of 5-7 full time and seasonal employees.
        The original hatchery was located in the net loft of the salmon
    cannery building. This building was completely destroyed by a fire in
    January of 1998. CRRC worked closely with the Port Graham Village
    Council to obtain funding and help to build a new hatchery. The new
    hatchery was completed in 2000 and is now in the process of bringing
    salmon production to full capacity, which is 110 million pink salmon
    eggs, 5 million sockeye salmon eggs and 2 million coho salmon eggs. The
    hatchery currently produces local stock pink and coho salmon and
    incubates sockeye salmon eggs for the nearby Native Village of
    Nanwalek. The hatchery is expecting about 300,000 adult pink salmon to
    return this year, which will be enough to fill it to capacity. Annual
    adult returns are expected to increase to about 3 million pink salmon
    beginning in 2004 and 100,000 to 200,000 sockeye salmon beginning in
    2006. Reinstatement of the fiscal year 2005 funding will allow to
    continue with its needed investment in the hatchery program and to help
    develop a value added processing component to the local processing
    plant which is owned and operated by the Port Graham Corporation.
        The Nanwalek Sockeye Enhancement Program (NSEP) was also initiated
    in 1990. CRRC provided funding and technical and administrative
    assistance to develop a sockeye smolt stocking program that would
    supplement wild production and help rebuild the depleted English Bay
    sockeye run. The Nanwalek IRA Council operates the project with
    administration and support coming from CRRC. It is the only program of
    its kind currently permitted in the State of Alaska and employs one
    full time and ten seasonal workers. The heart of the project consists
    of rearing Port Graham hatchery produced fry to smolt size in English
    Bay Lakes and releasing them in the lakes to migrate out to sea and
    return as adults. Rearing operations commenced in 1991 and have
    occurred annually since that time. Over two and a half million sockeye
    smolts have been released into the English Bay Lakes since project
    inception. This has produced over 220,000 adult sockeye salmon that
    have returned to the English Bay River and associated fisheries. Fish
    from this project allowed for the reopening of the subsistence fishery
    in 1996 and a limited commercial fishery in 1997.
        This important program is expected to reach a peak production of
    about 150,000 adult sockeye salmon returning every year beginning in
    2007. English Bay River sockeye salmon are a principal source of
    subsistence food and commercial fishing income for the Nanwalek and the
    nearby Port Graham villages. CRRC continues to provide consulting and
    technical assistance for this project that will help provide a
    sustainable economic base for the village of Nanwalek.
        The Qutekcak Shellfish Hatchery in Seward has been a major
    accomplishment for both the Qutekcak Native Tribe and CRRC. The
    operation began in a small pilot hatchery with funding provided from
    CRRC BIA funds, and is now operating out of a new state-of-the-art
    facility, spawning, hatching, and rearing littleneck clams, Pacific
    oysters and geoducks for sale to shellfish farms in Alaska and
    elsewhere. This hatchery is now operated by the Tribe under a contract
    with the City of Seward, and employs 4 full time employees. This is the
    only shellfish hatchery in the State of Alaska, and has the capacity to
    serve all shellfish farms in the state. The Tribal hatchery staff is
    currently conducting research on the culture techniques of Purple-
    hinged Rock Scallops and Cockles. CRRC has helped fund hatchery
    research and development, which would be sharply curtailed without this
    support. This would devastate not only the Tribal hatchery, but the
    shellfish farmers in Alaska as well who depend upon seed for their own
    operations. One condition of the hatchery operating contract stipulated
    that the Tribe put up $100,000 bond to cover the cost of mothballing
    the hatchery should the Tribe pull out and no one else found to take
    its place. Operating costs are approximately $340,000 per year for the
    hatchery. Without the BIA funding, hatchery operations would have to be
    cut back. This would reduce seed production that, in turn, would reduce
    income. This likely would force the Tribe to back out of its operating
    contract. This would mean that some or all of its $100,000 bond would
    be forfeited if no one else could be found to take over hatchery
    operations. Closing the hatchery would also doom the state's
    mariculture industry; reducing it to a very small number of farmers
    supplying oysters to the tourists.
        The Tatitlek IRA Council has operated the Alutiiq Pride Oyster Farm
    since 1992 and is one of those farms that depend upon seed from the
    Qutekcak Shellfish Hatchery for their operation. The oyster farm has
    produced some of the best oysters in the country and is well known
    throughout Alaska. The operation sells their product primarily in
    Anchorage at this time, marketing approximately 200-300 dozen per week.
    Funding for this project is slowly being phased out as their profit
    margin increases. Sales currently account for about $80,000 of its
    $145,000 budget. About $35,000 of the remainder comes from the CRRC's
    BIA natural resources program and the rest from village funding
    sources. This is one of the bigger mariculture operations in the state,
    providing 3 full time and several part time employment opportunities
    for Tribal members. The Tribe recently completed construction of a
    processing facility to process the oysters and prepare them for
    shipping. Losing the BIA funding would likely result in a reduction in
    employment and production, and possibly the end of the program. This in
    turn would hurt the Qutekcak shellfish hatchery since Tatitlek is one
    of the hatchery's bigger customers.
        In a related project, the Chenega IRA Council operates the Chenega
    Floating Nursery System for oysters and other shellfish in Chenega Bay.
    With this nursery system, they are able to raise shellfish to a size
    larger than what can legally be imported into Alaska. The ability to
    purchase larger seed means shorter grow-out time, and higher
    profitability for the shellfish farms. So, this program fills a niche
    in the shellfish market that did not exist anywhere in the state prior
    to its inception. This program employs one full time community member.
        In addition to these projects, this funding has also supported the
    development of Tribal Natural Resource Programs in the region in an
    effort to be more meaningfully involved in the natural resource
    management projects and decisions that affect the Tribes' traditional
    subsistence lifestyle. Active participation by the Tribes in such
    current initiatives as the Exxon Valdez Trustee Council's Gulf
    Ecosystem Monitoring Program, the federal subsistence fisheries
    management projects occurring in traditional use areas, and the
    potential co-management of the Outer Continental Shelf fisheries is
    vital to the overall success of each of these programs. We have also
    been able to start new projects with this funding, such as providing
    much needed training in natural resource management so that the
    communities are better prepared to participate in state and federal
    agency management efforts. Funding from this initial appropriation also
    supports the base operations of the organization, such as salaries,
    travel, telephone, office space, office supplies, and professional
    biological assistance, which are vital to the CRRC's very existence. We
    have been very successful at utilizing these funds to use as match for
    other grants as well, oftentimes doubling or even tripling the initial
    investment.
        As you can see, this funding has played an integral role in
    allowing CRRC to develop and implement important community-based
    programs such as those described above. The over 35 Native people
    employed under this funding, the majority of which are located in the
    villages, will lose their jobs if this funding is not restored; CRRC
    will be without operating funds, thus unable to facilitate the
    development of local community economies, and Tribes will no longer
    have a collective voice to address the environmental and resource
    issues that affect their lives.
        We are respectfully requesting the Committee's support to restore
    the original amount of $350,000 to the BIA Fish, Wildlife and Parks
    Budget for the Chugach Regional Resources Commission and make it part
    of the recurring base budget. Due to the magnitude of this program to
    the people of the Chugach, as well as its far reaching impacts and high
    cost to benefit ratio, we are also requesting that this funding be
    included in the budget as part of the permanent base. We believe that
    making our funding a part of the permanent base will alleviate the need
    for us to spend what little funding we have on getting our BIA funding
    restored rather than on meaningful projects that will benefit the
    communities.
        In a related matter, we also support the restoration of funds to
    other Tribal fish and wildlife programs that were cut from the BIA
    budget, including $98,000 to the Alaska Sea Otter and Stellar Sea Lion
    Commission, $1,087,000 to the Bison Restoration Program, and $592,000
    in Wetlands/Waterfowl Management.
        Once again, we ask the Committee to restore these funds in behalf
    of the Native people of the Chugach Region and thank you for your
    support of our programs, as well as this opportunity to provide our
    written testimony. If you have any questions, please feel free to
    contact me at 907/284-2212 or Patty Brown-Schwalenberg, Executive
    Director, at 907/562-6647.
                                     ______

             Prepared Statement of the Metlakatla Indian Community

        The Metlakatla Indian Community submits this statement with regard
    the fiscal year 2005 Interior and Related Agencies Appropriations bill.
    In summary, our requests are:
      --$3.3 million for economic development
      --$3.2 million in IHS funds for staffing and equipment for our health
            clinic (same as the Administration's request)
      --Increased funding for the Alaska Community Health Aide/Practitioner
            Program ($11.7 million increase) and the Medevac and Patient
            Travel ($2 million increase each)
      --$14.5 million to continue work on the Walden Point Road/Ferry
            Project

                              ECONOMIC DEVELOPMENT

        Metlakatla needs $3.3 million to avoid economic collapse and to
    transition to a better future. Funds will be used to provide government
    services, develop tourism and start the Bald Ridge mine. The mine will
    provide 70 jobs and revenues that may reach millions. By making its
    fishery a tourist attraction, Metlakatla can restore profits to its
    enterprise and a living wage to its fisherman.
        In 1998, Ketchikan Pulp Company terminated operations in
    Metlakatla, resulting in the immediate loss of 175 fulltime jobs. The
    shutdown resulted from the Clinton Administration's determination to
    stop timber harvest on the Tongass National Forest. The consequences
    now are being felt fully. The Tongass closure was coupled with a sharp
    decline in the fishing industry, resulting in the closure of
    Metlakatla's cannery and continuing losses for its cold storage.
        Unemployment has risen from 40 percent to a catastrophic 80 percent
    plus. The percentage does not even give a true picture because dozens
    of households moved in search of employment. Metlakatla's population
    decreased to 1,200 from 1,600. School enrollment is down over 100
    students. Over 450 jobs have been lost. This loss of jobs has had
    tragic consequences--there has been a 37 percent increase in alcohol
    and drug abuse in Metlakatla which has, in turn, increased the
    incidence of domestic violence. Emergency calls--primarily alcohol and
    drug related--have increased significantly and are putting great stress
    on our already overworked medical transportation system. We need
    additional qualified medical staff to deal with substance abuse
    problems, domestic violence, and emergency medical transportation.
        Average prices for salmon are less than half of what they were. A
    glut of pink salmon keeps prices down and forces processors to limit to
    what they buy. A few years ago the average skipper in Metlakatla
    grossed about $100,000, enough to maintain and operate a vessel and
    feed a family. The average gross now is less than $30,000, which is not
    enough to meet overhead, let alone live on.
        Metlakatla Power & Light's revenues dropped from $2.4 to $1.4
    million. For the first time, MP&L is in default on loans from the Rural
    Utility Service. Loss of the mill lease removed nearly $500,000 from
    annual municipal revenues. Collections from other municipal services
    are less than 70 percent of what they were, while receivables grow at
    over 10 percent annually. Essential maintenance on infrastructure is
    deferred. Metlakatla is unable to meet matching fund requirements for
    grants.
        Many Metlakatla citizens have been forced onto welfare. The despair
    of citizens places burdens on law enforcement and social services
    agencies. Despite a 20 percent loss in population, arrests for assaults
    nearly doubled for two years after the mill closed. Although the number
    of assaults has leveled off, the liquor related offenses now are up
    sharply. Social services cases related to family dysfunction also
    continue to increase alarmingly.
        Metlakatla must develop the Bald Ridge project as soon as possible.
    Right now, it cannot afford to undertake the necessary planning and
    preparatory work. Unless Metlakatla independently plans for this
    business, however, a big mining company may control our economic
    future.
        Tourism also offers hope. Metlakatla's exclusive right to operate
    fish traps is marketable. We want to establish high-speed marine
    transportation to bring tourists to trap operations. Metlakatla also
    hopes to help fishermen upgrade vessels so that tourists can experience
    commercial fishing. Value added salmon products would be sold. Tourists
    could observe salmon harvest, claim a fish and have it prepared to
    order.
        Metlakatla cannot realize its hopes for the future without
    financial help. Thus, knowing that its request is extraordinary, it is
    asking for emergency assistance. The funds will be used over the next
    two years as follows:

    Bald Ridge Mine ($1 Million)
        Metlakatla has no staff for the mine's technical or marketing
    development. It is using its existing, understaffed Forestry and
    Natural Resources Departments for these activities. It will take about
    $500,000 annually to do the scientific, marketing, professional and
    preparatory site work to be prepared adequately to contract with a
    mining company for exploitation of the site.

    Tourist Development ($1.3 Million)
        Metlakatla has no operational fish trap. Framing and rigging an
    authentic trap from natural materials will require a sizable crew and a
    considerable amount of time and materials. An option is an aluminum
    frame but the cost will probably be more. A high-speed vessel of
    sufficient size will be expensive. In addition, we need to establish a
    loan program for fishermen who have vessels suitable for upgrading and
    outfitting for tourist activities.

    Municipal Shortfall ($1 million)
        Metlakatla needs to survive as a municipality unit until it can
    establish its new economic ventures. It must supplement its general
    assistance program immediately and be prepared to do so again next year
    in order to keep a labor force. It needs to bolster its social services
    capability to help distraught families and to help children who are
    negatively affected by the stresses in their homes. We also need an
    overall coordinator for new economic activities.
        Staffing Package for Our Health Clinic.--We are grateful that in
    fiscal year 2004 Congress appropriated the final portion of funding for
    the construction of our health clinic and related quarters. We now need
    the staffing package funding for the new clinic and urge Congress to
    approve the $3,280,000 included in the Administration's fiscal year
    2005 IHS budget for this purpose.
        Special Health Program Needs in Alaska.--We support the request of
    the Alaska Native Health Board for an $11.7 million increase in IHS
    funding for the Community Health Aide/Practitioner Program in Alaska.
    This amount of funding would increase the number of CHA/P by 125 and
    the number of field supervisory by 23 positions. While we appreciate
    the Administration's recommendation that the CHA/P program be increased
    by $2 million in order to add 30 positions, there is an urgent need to
    expand the program more rapidly.
        We also support the ANHB recommendation of a $2 million increase
    each in IHS funding for Medevac services and patient travel in Alaska.
    Being an island community with no hospital, we are dependent on these
    air services. New Federal Aviation Administration regulations requiring
    that air transport of patients must be done with critical care air
    services has resulted in an increase in these costs. And lack of
    patient travel funds results in people not seeking needed health care
    services.
        As mentioned above in the context of the consequences of our huge
    loss of jobs at Metlakatla, we specifically need some portion of any
    increase for Medevac and patient travel. The dramatic rise in substance
    abuse and domestic violence at Metlakatla also means that we need
    additional resources for medical transportation and for medical
    evacuations off the Annette Island Reserve.
        Walden Point Road/Ferry Project.--Under a Memorandum of Agreement,
    dated November 20, 2000, the Metlakatla Indian Community has worked
    jointly with the Department of Defense (DOD), the Federal Highway
    Administration (FHWA), the Bureau of Indian Affairs, and the Alaska
    Department of Transportation and Public Facilities, on developing the
    Walden Point Road to alleviate isolation and improve public safety and
    health care (emergency medical evacuations must now all be by air). The
    project, when completed, will link Metlakatla to the city of Ketchikan.
    The project is eligible for funding under 23 USC 101(a)12 and is listed
    on the Indian Reservation Roads Inventory of the Bureau of Indian
    Affairs (Walden Point Road, Air 7, Sections 30-130 (14.7 miles). The
    Community is seeking $14.8 to continue this project during fiscal year
    2005.
        Thank you for your consideration of our needs.
                                     ______

            Prepared Statement of Crownpoint Institute of Technology

        The Crownpoint Institute of Technology (CIT) is the only post-
    secondary vocational/technical school on the Navajo Reservation. CIT is
    one of only two tribally-controlled postsecondary vocational technical
    institutions in the nation. Both of these institutions are funded under
    the authority of Public Law 84-959, ``The Adult Indian Vocational
    Training Act'', codified at 25 U.S.C. Sec. 309. CIT has submitted other
    testimony to this Subcommittee addressing the separate issue of
    requesting continued operational assistance.
        This testimony addresses the issue of contract support and is CIT's
    request for bill language to implement prior Congressional directives.
    Prior Years Committee Language
        The Conference Committee report on the fiscal year 2003
    appropriation included this language:

        ``The managers do not understand the disparate treatment of
    Crownpoint Institute of Technology and the United Sioux Tribes
    Technical College related to contract support. Unless there is an
    objection by the Navajo Nation to Crownpoint being treated as a tribal
    organization, the managers expect the Bureau to provide this funding
    under a Public Law 93-638 contract and include contract support.''----
    House Report 108-10.

        The Senate last year included this language in its report on the
    appropriation for fiscal year 2004:

        ``The Committee does not understand the disparate treatment of the
    Crownpoint Institute of Technology and the United Sioux Tribes
    Technical College related to contract support. Unless there is an
    objection by the Navajo Nation to Crownpoint being treated as a tribal
    organization, the Committee expects the Bureau to provide this funding
    under a Public Law 93-638 contract and include contract support.''----
    Senate Report 108-89.
    Situation/Need
        Since fiscal year 2000, this Subcommittee has appropriated
    critically needed operational assistance to CIT. This funding is under
    the authority of 25 U.S.C. Sec. 309. Of the two tribal postsecondary
    vocational technical institutions in the nation, both receive funding
    under this same authority. Only CIT does not receive contract support
    costs to pay for administration of the base program. For the past three
    years, CIT's base funding has totaled more than $1 million annually.
    Even though CIT is authorized to contract for its BIA monies under the
    Indian Self-Determination Act and has asked to do so, BIA has refused
    to convert CIT's annual grant to a self-determination contract. The
    reason: Contracts require BIA to pay contract support costs in addition
    to base program monies in order to keep program levels intact. Grants
    do not.
        Contract support costs are essential for the proper functioning of
    contracted programs. Without payment of contract support costs, program
    monies must be diverted to administration, reducing educational
    services. In either case, programs suffer.
        The lack of contract support has deprived the school of monies for:
    (1) human resources, (2) accounting, (3) development, (4) payroll, (5)
    comptroller, (6) administrative personnel, (7) facilities maintenance,
    (8) transportation, (9) security (CIT is a campus-based residential
    facility), (10) cafeteria, (11) student services, and (12) dormitory
    operations.\1\ To pay for its skeletal administration, CIT has been
    forced to use program funds, which has diminished direct educational
    services.
    ---------------------------------------------------------------------------
        \1\ CIT's funding includes funds from the Department of Labor and
    the Department of Education. These agencies are under legislative or
    regulatory restrictions prohibiting them from reimbursing contract
    support and disallowing use of grant funds for this purpose beyond very
    small percentages. BIA, on the other hand, is under a statutory
    directive to pay contract support for its contracted self-determination
    programs. 25 U.S.C. Sec. 450j-1(b)(2).
    ---------------------------------------------------------------------------
        CIT is in the business of educating adult Indian students for
    gainful employment and has demonstrated unqualified competency in this
    arena. However, in recent years the loss of anticipated support costs
    has, for example, contributed to the reduction in CIT's graduate job
    placement rate from over 90 percent to a current all time low of 76
    percent. CIT has been fulfilling one of the BIA's highest priorities,
    which is educating and placing Indian people in meaningful lifelong
    employment that improves the quality of life for them and their
    dependent families, and contributes to the overall economic well-being
    of the Nation.
        The school is now launching a legal fight to force conversion to
    contracts and to recover lost CSC monies from prior years. But there is
    virtually no chance the legal fight will result in reimbursement of
    prior year contract support costs. Meanwhile, the program needs
    stability and adequate funding. The legal fight may take a long time.
    In the meantime, more Navajo young adults will be deprived of
    critically needed education opportunities. CIT proposes that Congress
    place a directive in the fiscal year 2005 appropriations bill to
    correct BIA's intransigence and make the school whole.
    CIT proposes the following Language
        Provided, That the Secretary is directed to: (1) issue forthwith to
    the Crownpoint Institute of Technology, Crownpoint, New Mexico, a
    mature Indian Self-Determination Act contract to replace its Bureau
    grant, to be funded according to 25 U.S.C. Sec. 450j-1(a) and
    Sec. 450l(c) sec. 1(b)(4); and (2) pay $950,000 to the Crownpoint
    Institute of Technology in unpaid contract support costs for fiscal
    year 2003 and fiscal year 2004.
    Proposed Justification for Committee Reports
        Despite directives in the Conference Report for fiscal year 2003,
    House Report 108-10, and the Senate Report for fiscal year 2004, Senate
    Report 108-89, the Bureau has refused to convert Crownpoint Institute
    of Technology's annual grant for vocational education under 25 U.S.C.
    Sec. 309 to an Indian Self-Determination Act contract. The chief
    consequence of Bureau's refusal has been to deprive the school of
    necessary contract support costs, which the Congress had assumed would
    be paid in those years from the appropriation of contract support
    costs. This provision is intended to (1) ensure conversion of the
    school's grant to a mature Indian Self-Determination Act contract
    without further delay; (2) reimburse the school unpaid contract support
    costs at the same level that applied to all other contractors and
    compactors, for amounts the school was assured would be forthcoming for
    fiscal year 2003 and fiscal year 2004; (3) henceforth provide on-going
    program monies and contract support costs to Crownpoint on the same
    basis as to all other mature contractors and compactors; and 4) settle
    a claim filed by Crownpoint for refusal by the Bureau to convert
    Crownpoint's grant to a contract.

    The Amount Requested
        The dollar amount requested was computed by multiplying the
    Bureau's grant to CIT $1,187,000 in fiscal year 2003 and its
    anticipated grant of approximately $1,308,000 in fiscal year 2004 by
    CIT's most recent negotiated indirect cost rate, 60 percent. The
    calculation results in $712,200 for fiscal year 2003 and $784,800 for
    fiscal year 2004, to a total of $1,497,000 for the two years.
        Because tribal contractors received less than their full need for
    contract support costs, we multiply those amounts by the BIA average
    percentage of need for contract support costs over the last four fiscal
    years, 89.8 percent. The reduced funding for CIT contract support costs
    is thus $1,344,306. We then reduce this by almost 30 percent to
    $950,000. Thus, the legislative proposal is quite conservative.
        We thank this Subcommittee for its generous assistance for CIT to
    operate a highly successful, fully-accredited postsecondary vocational
    educational institution that places young Indian adults in meaningful
    employment. On behalf of the hundreds of students at CIT, we thank the
    Subcommittee for the opportunity to present this testimony. We urge the
    Subcommittee to act favorably on this request for Congressional
    intervention.
                                     ______

                   Prepared Statement of the Fort Peck Tribes

                                  INTRODUCTION

        The Fort Peck Tribes are pleased to present testimony on the fiscal
    year 2005 BIA and IHS Budget.
        Overall, the President's fiscal year 2005 budget request for Tribal
    programs is a severe disappointment. Except for the Office of Special
    Trustee, which the Administration proposed a 54 percent increase for,
    the Administration did not request any measurable increases for tribal
    programs. It is clear to the Tribes that this Administration is more
    concerned with the appearance of fulfilling its trust responsibility to
    tribes than actually doing it. This is no more apparent than in the
    programs under which the BIA and Tribes actually manage trust
    resources-range land management, fisheries management, timber
    management, oil and gas management-for which the Administration has not
    requested any significant increases in the last four years.
        The one trust resource account that the Administration has
    requested an increase in is the Land Consolidation Account, which in
    principle we strongly support. However, as the Bureau of Indian Affairs
    has implemented this program, the goal of land consolidation has not
    been achieved. In fact, since the program's inception, more land on
    these reservations has either continued to be fractionated or has gone
    out of trust, than has gone into trust for the tribes. This is contrary
    to the experience where tribes are operating their own land
    consolidation programs without the supervision of the BIA. The Fort
    Peck Tribes, in particular, have been very successful at our land
    consolidation efforts in the last fifteen years. Thus, we urge the
    Congress to fund the $53 million requested increase for this program to
    expand it to all of the Reservations. But, in doing so, we ask Congress
    to allow Tribes to operate this program, rather than solely relying on
    the BIA to operate the program.
        While we are discussing fiscal year 2005, we do want to make
    Congress aware that this Administration is proposing to cut BIA
    programs by 3.6 percent in 2006. This cut will devastate Indian country
    and Indian communities. Indian communities are growing in size and the
    need to responsibly manage our trust resources is as vital as it has
    ever been in our history and without the resources to do it, we will
    not be able to preserve them for the generations to come.

                      FUNDING FOR LAW ENFORCEMENT PROGRAMS

        Beyond the Administration's failure to request funding to
    adequately manage trust resources, the Administration has failed to
    request sufficient funds to fulfill its basic trust responsibility in
    the areas of health and safety. The Fort Peck Tribes are particularly
    concerned with the failure of the Administration to request any
    increase in law enforcement funding across Indian country. The only
    increase for this account was directed for the operation and
    maintenance of detention facilities constructed with DOJ funding and
    for one Reservation to address its particular border security issues.
    This is wholly unacceptable. All Tribes are facing a crisis in law
    enforcement services, most particularly in the area of staffing. Tribal
    and BIA law enforcement departments are unable to compete with local
    and other federal law enforcement agencies in salary and benefits
    packages. Thus, even when a Tribe has the resources to hire an officer,
    it is unable to retain him once he is fully trained and certified.
        This problem will become more acute for the Fort Peck Tribes in
    2005. In 2005, the Fort Peck Tribes will no longer be able to receive
    Department of Justice COPS hiring and retention grants. Without this
    federal funding to support the Public Safety Department, the Fort Peck
    Department will go from a department of 47 to a department of 14
    positions, of that there will only be 8 patrol officers. Eight officers
    cannot adequately patrol a 2 million acre Reservation with a population
    of over 10,000, with a high incidence of drug and violent crimes. A
    survey of current officers has shown that they will not continue to
    work for the Tribes under conditions where they will be required to
    ride alone and respond to calls without any possibility of backup and
    be asked to work longer hours year after year for the same or less
    compensation.
        To address this immediate need on the Fort Peck Reservation, the
    Fort Peck Tribes request $275,000 to be added to the Tribes' law
    enforcement base budget to ensure the continued staffing and operation
    of the Fort Peck Tribes Public Safety Department. Without these funds,
    the Fort Peck Tribal Council will be forced to consider returning the
    operation and management of the law enforcement department, which the
    Tribes have operated pursuant to a 638 Self-Determination contract
    since 1995, back to the Bureau of Indian Affairs. More significantly,
    with only eight patrol officers, the health and safety of all the
    residents on the Fort Peck Reservation will be in grave danger.

                          TRIBAL PRIORITY ALLOCATIONS

        The Tribal Priority Allocations system is intended to give tribes
    an additional measure of flexibility in determining how to use
    available funds to best meet local needs. However, the Administration
    has requested only a small increase of $4.9 million increase over the
    fiscal year 2004 level. While we support this request, it would still
    fall far short of allowing the Fort Peck Tribes to meet the needs of
    our people in key areas including, education, agriculture, road
    maintenance, and tribal courts. We urge the Congress to do all it can
    to increase TPA above the level requested by the President.

                                   EDUCATION

        Higher Education.--We urge the Committee to support the education
    needs of Indian people. The President's budget requests $27.4 million
    for scholarships for Indian students to attend accredited post-
    secondary schools-This represents a $500,000 cut in this programs
    funding from the fiscal year 2004 level. Obtaining a degree in higher
    education--particularly for those individuals from families that have
    not previously sent anyone to college--takes courage and often
    considerable personal sacrifice. We believe it is our responsibility to
    support the efforts of our people to attend college. The Tribes provide
    scholarship funds available through the BIA program. However, the
    current levels of funding are already far too inadequate. For example,
    this year the Tribes have identified 230 students who are eligible for
    scholarship benefits for higher education but who cannot be served
    because of lack of funding. The BIA itself reports that the level of
    unmet requests for scholarships nationwide has increased steadily over
    the last three years.
        Tribal Colleges.--We oppose the Administration's proposal to cut
    tribal colleges funding by $5.4 million. In addition to this cut, the
    Administration proposes bringing two additional colleges into the
    system. Thus, the true impact of this cut will be much larger. The
    current twenty-six tribal colleges are important institutions in the
    remote tribal communities that they serve. On our Reservation, we
    operate the Fort Peck Tribal College, a fully accredited institution,
    offering Associate Degrees in arts, science and applied sciences.
        The College offers our students an opportunity to obtain a higher
    education without having to leave their homes and families. This is
    critical for many of our students, especially our single parent
    students, who need family members to provide child care. These students
    do not have the resources or the network to attend school in Billings
    or Great Falls and if it weren't for our Tribal College they would have
    no opportunity to improve their lives, through higher education. We
    strongly urge the Subcommittee to increase funding for this vital
    program that is improving the lives of Indian people.

                             INDIAN HEALTH SERVICE

        The President's budget requests a total of $3.7 billion for IHS
    services and construction. While this represents an increase on paper,
    it will not translate into any program improvements or expansions. This
    increase does not even keep pace with medical inflation rates.
        The health indicators in Indian communities consistently
    demonstrate higher infant mortality, teenage suicide, accident,
    alcoholism, diabetes, and heart disease rates among Indian people when
    compared with other minorities and the general American population.
    Yet, money directed to health care, especially preventative care, such
    as routine checkups and health education, that clearly improve the
    quality of life and help avoid more expensive health care costs in the
    future is not included in the Administration's fiscal year 2005 budget
    request. This is unacceptable.
        At Fort Peck, we are in dire need of an in-patient facility where
    our people can receive care and not have to be flown to Billings or
    Williston to receive adequate medical care. However, when we discussed
    this with the officials in the Indian Health Service, we were told that
    the IHS will not consider the Fort Peck Reservation for a new in-
    patient facility and that in any event to get on the list for a new
    facility it would take years. It is clear that there is extraordinary
    need for health facilities construction in Indian Country, we urge the
    Congress to examine this and begin the process to address this need.
        In short, the Federal government has a trust responsibility to
    provide health care to Native Americans, an obligation that was paid
    with millions of acres of land and resources. This Federal
    responsibility has been reaffirmed through treaties, legislation,
    executive orders and policies by Congress and Presidential
    Administrations. The failure of the Administration to recognize this
    responsibility and request sufficient funding for tribal health
    programs and facilities needs, while disappointing, cannot be a basis
    for Congress abdicating its responsibility to appropriate the funds to
    meet these needs.
                                     ______

      Prepared Statement of the Fond du Lac Band of Lake Superior Chippewa

        Mr. Chairman, Members of the Committee, I, Robert B. Peacock,
    Chairman of the Fond du Lac Band of Lake Superior Chippewa would like
    to thank you for this opportunity to present written testimony on
    fiscal year 2004 appropriations for the Department of Interior. The
    Fond du Lac Reservation was established by Treaty with the United
    States on September 30, 1854 and encompasses 100,000 acres of land in
    northeastern Minnesota. There is a population of 6,500 Indian people
    that live within the service area of the Reservation with the Band
    providing employment or services to most of them. On behalf of the Fond
    du Lac Band, I am asking that you increase the bands funding from the
    Bureau of Indian Affairs by $15 million for fiscal year 2005 for the
    Resource Management Division to develop the infrastructure necessary to
    continue to serve and protect the resources of the band. I also request
    that $915,000 be provided for the Circle of Flight program under the
    BIA's Other Recurring Programs--Resource Management line item. Congress
    restored this important program in fiscal year 2003 and 2004, but the
    President has again proposed eliminating the Circle of Flight in fiscal
    year 2005. I request that the Dept. of Interior's Tribal Wildlife Grant
    Program be funded at $10 million as in fiscal year 2003, and that the
    Tribal-Landowner Incentive Program also be funded at $4 million as in
    fiscal year 2003.
        We ask the Committee to restore full Pay Cost funding for all
    tribes in the fiscal year 2005 Interior Appropriations budget. Funding
    for tribes' most critical core services have experienced unprecedented
    erosion in recent years. These services, including law enforcement,
    fire protection, courts, resource management, road maintenance,
    education and social services affect the lives of our people every day.
    Tribes are locked in a desperate struggle to protect the funding levels
    provided for these services, especially since the crippling, nearly
    $100 million cut in the Tribal Priority Allocations account (TPA) in
    fiscal year 1996, with only one minor, general increase in the TPA
    since that time (fiscal year 1998). In addition, tribes' core service
    funding has been subjected to permanent, across-the-board reductions
    each year, as well as permanent, targeted reductions such as the fiscal
    year 2004 reduction, which was used to fund the BIA's Information
    Technology upgrades. The only general increase tribes could count on
    each year was a cost of living pay increase, known as the 638 Pay Cost
    account, which is similar to what the Administration and Congress
    provide for federal workers employed by federal agencies each year.
    Now, even this cost of living pay increase is under attack. Due to
    federal administrative oversight and through no fault of the tribes,
    tribes received only 75 percent of their 638 Pay Cost funding in fiscal
    year 2002. Due to an Administration decision, tribes received only 15
    percent of their 638 Pay Cost funding in fiscal year 2003 and about 30
    percent in fiscal year 2004. As a result of the above, tribes' core
    service funding is far less, in real terms, than nearly a decade ago.
    Critical services continue to erode, seriously undermining our ability
    to provide some semblance of public safety, security, and well being
    for people who already suffer some of the worse living standards in
    America. It may be the case that some federal agencies can absorb this
    onslaught of cuts, but tribes cannot--there have simply been too many
    cuts for too long. The failure of the BIA, OMB and the Congress to
    ensure that Pay Cost parity between federal and tribal employees is
    protected seriously undermines the federal Indian policy that favors,
    pursuant to Public Law 93-638, as amended, the assumption by tribes of
    programs, functions, services and activities formerly carried out by
    federal employees. I strongly urge the Committee to restore full Pay
    Cost funding for all tribes in fiscal year 2005, and to consider
    restoring Pay Cost funding not received in fiscal year 2002-2004
    through a special appropriations equitable adjustment.
        We ask that the House Appropriations Committee support the Fond du
    Lac Band, in behalf of the Fond du Lac Ojibwe Schools, to restore a
    $4.8 million decrease in the proposed budget for overall school
    operation costs to at least the fiscal year 2004 enacted level of
    $569.8 million. We also request that a proposed decrease of $5.4
    million to the tribal college program be restored in the budget. The
    Congress has authorized $6,000 per tribal college student, however the
    proposed budget for fiscal year 2005 would only provide about $3,300
    per student, a significant reduction from the fiscal year 2004 level of
    $4,200 per student. Tribal colleges continue to be the lowest funded
    post secondary schools in the country. The Tribal Scholarship program
    would be cut by $0.5 million in the proposed budget, and we request
    that this program be fully funded.
        The Administration's budget for the Indian Health Service is $3.7
    billion. Although this is an increase in most areas from last years
    budget it still falls far short of the levels of need determined by the
    Congress's approved Level of Need Formula (LNF). The LNF has determined
    a need of about $8 billion for the Indian Health Service to properly
    care for their patients. The budget for the Indian Health Service
    should be significantly increased to meet this need.
        We strongly support the Administration's request of additional
    funding under the Indian Country Law Enforcement Initiative. In 1997
    the Minnesota Supreme Court held that certain traffic regulations
    including, speeding, driving without a license, and driving with no
    insurance were ``civil-regulatory'' in nature and under Public Law 280
    are unenforceable by state police officers on the Reservation. The
    ruling known as the Stone decision, left a jurisdictional void with
    regard to law enforcement on the roads within Indian Reservations in
    the State. In order to fill this void, the Band has undertaken the
    establishment of it's own Tribal police force through the Community
    Oriented Policing Services, Bureau of Indian Affairs and Tribal funds.
    In addition, the Band has worked with all local law enforcement
    agencies to establish a cross-deputization agreement that ensures
    maximum law enforcement protection for the Reservation and it's
    citizens by allowing all law enforcement agencies within the
    Reservation boundaries to enforce each other's laws. However, because
    of the short-term, limited financial resources available, there are
    significant unmet needs in this area. At Fond du Lac, we need long term
    funding to pay for staff and equipment to adequately ensure the safety
    of the Reservation population. In light of the Stone decision, we ask
    this committee to support the Administration's request for investment
    in strengthening Indian Country's Law Enforcement and Criminal Justice
    System and ask that this committee consider placing these initiatives
    into the BIA's permanent base budget. The Band currently employs seven
    police officers, six conservation officers, one records clerk, one
    prosecuting attorney, one clerk of court, one part time court recorder,
    and one part time judge. All of these staff positions are located
    within the Resource Management division. Along with this staff, are
    thirty other permanent full time staff and fifteen full time seasonal
    staff housed in a building that was designed to house twenty. With the
    increased responsibility assumed by the Band there is an ever
    increasing need to expand the staff and it's capabilities. With this in
    mind, we request a one time allocation of $12 million to the Band for
    expansion of the office space for the Resource Management Division. We
    are also requesting that $1.5 million be added to our base budget to
    continue to implement and staff the court and enforcement systems for
    the Band.
        Under Treaties with the United States made in 1837 and 1854 the
    Fond du Lac Band reserved the right to hunt, fish and gather on the
    lands ceded, a large portion of central and northeastern Minnesota, to
    the United States. The Band's rights under these treaties have been
    recognized and upheld by the federal courts--most recently the United
    States Supreme Court. On March 24, 1999 the Supreme Court issued a
    decision expressly re-affirming the Band's hunting and fishing rights
    in the 1837 Ceded Territory. Under established Band conservation law,
    the exercise of these off-reservation treaty rights require that the
    Band take the steps necessary to ensure proper use and management of
    the natural resources. This means the Band is responsible for member's
    hunting, fishing and gathering activities over approximately 8,000,000
    acres of land. The Band has adopted, along with the federal courts, a
    code and a resource management plan that protects the exercise of
    treaty reserved rights and the resources. It is very essential that the
    Band continue to manage their on-reservation resources in order to meet
    the demands of an increasing population. Established by the Treaty of
    1854 with the United States, the home of the Band is 100,000 acres in
    northeastern Minnesota. The waters, wildlife, wild rice and the forest
    resources of the reservation are vitally important to it's members as
    these resources provide the foundation for our culture, subsistence,
    employment and recreation. The Fond du Lac Reservation includes some
    3,200 acres of lakes, 1,900 acres of wild rice lakes and associated
    wetlands, 66 miles of cool water streams, and 17,500 acres of forest
    with the remaining acres being used by individual land owner for
    housing and development. The loss of wild rice acres, wildlife habitat,
    and the decline of our forest are of great concern to the Band.
    Therefore, we are seeking an additional $1.5 million be added to the
    Band's base budget for the Fond du Lac Resource Management Division,
    for it's natural resource programs, that will enable us to protect
    these resources for the future generations on Fond du Lac.
        In the $1.5 million request, we seek a $100,000 increase to the
    base budget of the Fond du Lac Natural Resources Program. The Fond du
    Lac Natural Resources program carries out the essential fisheries,
    wildlife and wild rice programs on the Fond du Lac Reservation. The
    funds for this program have not been increased since 1991 and the cost
    of conducting these resource management programs has increased
    substantially.
        Another important resource management need is to obtain funds to
    address the threat of Chronic Wasting Disease (CWD), which has recently
    infected white tailed deer in our region. CWD poses a very serious
    threat to the health of the white tailed deer herds and potentially to
    the moose population in northern Minnesota. The potential harm to the
    deer population in this region has serious implications for Native
    Americans, because for a majority of Fond du Lac Band Members, deer
    comprise 25-30 percent of their diet. Therefore, we urgently request
    $75,000 in base program funds for our Conservation Enforcement Program.
    The long term funding of this project is necessary for our Conservation
    Enforcement and Wildlife staff to collect the samples from hunters for
    analysis, in order to identify the frequency and range of infected deer
    in Northeastern Minnesota
        The Circle of Flight--Tribal Wetland & Waterfowl Enhancement
    Initiative, under the BIA's Other Recurring Programs category, was
    again eliminated by the President in his fiscal year 2005 budget
    request. The Circle of Flight has been one of Interior's top trust
    resource programs for 10 years. Since fiscal year 1991, Great Lakes
    tribes and our partners have restored or enhanced more than 66,000
    wetland, grassland and native prairie acres, installed thousands of
    waterfowl nest structures, and have undertaken many other wetland
    enhancement and education activities. Circle of Flight has enabled
    Great Lakes tribes to become key partners with federal, state, and
    local government units, as well as private organizations such as Ducks
    Unlimited and the Nature Conservancy. The Circle of Flight program has
    invested more than $6 million in habitat projects, and has leveraged
    these dollars for an additional $18 million in federal, state, private,
    and tribal funding, yielding an impressive match ratio of 3 to 1. I ask
    that you restore the Circle of Flight program to the BIA's fiscal year
    2005 budget to at least the fiscal year 2004 level of $600,000, and to
    consider providing the fiscal year 2003 requested amount of $915,000.
        I thank the Committee for providing an increase (from $5 million to
    $6 million) for the Tribal Wildlife Grant (TWG) program in the Interior
    Conservation Spending Category in fiscal year 2004. Even though this
    amount represents less than .30 percent of this Title, whereas tribes
    are directly responsible for protecting at least 2.35 percent of the
    land area of the United States, and also many of the lakes and rivers
    in the Great Lakes region, it represents a good start at helping to
    address the massive unmet need tribes have in meeting their
    conservation responsibilities. The TWG program was funded at nearly $10
    million in fiscal year 2003, and we request that this amount be funded
    for fiscal year 2005. The Tribal-Landowner Incentive Program (TLIP) was
    funded at $4 million in fiscal year 2003, which was reduced to $3
    million in fiscal year 2004. We request that TLIP be funded at the $4
    million for fiscal year 2005. Fond du Lac has received grants in these
    two programs this year, which will be used for important fisheries,
    wildlife, and wild rice management and restoration projects. I request
    that these two programs be funded at least at the level of the fiscal
    year 2004 budget.
        In conclusion, the needs at Fond du Lac and throughout Indian
    Country remain massive. Your support to preserve the current BIA
    funding request is critical to maintain current program levels. Your
    consideration for our additional funding requests will enable us to
    improve the delivery of services to Band members and help ensure that
    we enter the 21st Century with a renewed sense of hope.
        Miigwech. Thank you.
                                     ______

        Prepared Statement of the Great Lakes Indian Fish and Wildlife
                                   Commission

        BIA Treaty Rights Protection/Implementation.--$4,196,000 ($282,000
    above enacted fiscal year 2004)--Operation of Indian Programs, Other
    Recurring Programs, Resources Management, Rights Protection/
    Implementation, Great Lakes Area Resource Management.\1\ Specifically,
    GLIFWC seeks to:
    ---------------------------------------------------------------------------
        \1\ The requested amount reflects GLIFWC(s share of this line item,
    which also provides funding for the 1854 Authority.
    ---------------------------------------------------------------------------
      --Restore the full $300,000 in base funding that Congress had
            provided in fiscal year 2003 but that has not been fully
            included in the Administration's subsequent budget proposals;
      --Restore $75,000 in fiscal year 2002 and 2003 pay cost adjustment
            base funding that Congress provided to the BIA but that the BIA
            continues to wrongfully withhold from GLIFWC; and
      --Provide $150,000 to sustain enhancements in conservation law
            enforcement and emergency services capabilities.
        GLIFWC's conservation and law enforcement programs both fulfill
    important federal obligations to its 11 member Ojibwe Tribes and
    provide a wide range of associated benefits for the general public.
    Without full base funding, GLIFWC's required functions under a number
    of federal court decisions will be jeopardized, as will its ability to
    participate in a number of conservation and public safety partnerships
    in Wisconsin, Michigan and Minnesota.
        BIA Contract Support Costs.--GLIFWC also seeks full contract
    support cost funding as it has experienced a $310,000 shortfall since
    fiscal year 1995 that has cut into program funding and that makes it
    increasingly difficult to maintain its historically low indirect cost
    rate (e.g. 14.67 percent in fiscal year 2003).
        BIA ``Circle of Flight'' Program.--GLIFWC supports restoration of
    funding to the Operation of Indian Programs, Other Recurring Programs,
    Resources Management, Tribal Management Development Programs, Wetlands/
    Waterfowl Management line item. The Administration again proposes to
    eliminate this long-standing tribal contribution to the North American
    Waterfowl Management Plan. As it has done for the past two years,
    Congress should restore the necessary funding, which over the past
    decade has leveraged over $21 million--almost a 3 to 1 ratio--in
    matching federal, state, private, and other tribal funding for
    cooperative wetland enhancement projects.
        Ceded Territory Treaty Rights and GLIFWC'S Role.--GLIFWC was
    established in 1984 as a ``tribal organization'' within the meaning of
    the Indian Self-Determination Act (Public Law 93-638) to assist its
    member Tribes in:
      --securing and implementing treaty guaranteed rights to hunt, fish,
            and gather in Chippewa treaty ceded territories; and
      --cooperatively managing and protecting ceded territory natural
            resources and their habitats.
        It exercises authority delegated by its member Tribes to implement
    federal court orders and various interjurisdictional agreements related
    to their treaty rights. It serves as a cost efficient agency to
    conserve natural resources, to effectively regulate harvests of natural
    resources shared among treaty signatory Tribes, and to develop
    cooperative partnerships with other government agencies, educational
    institutions, and non-governmental organizations.
        Congress has funded GLIFWC for nearly 20 years to meet specific
    federal obligations under: (a) a number of U.S./Chippewa treaties; (b)
    the federal trust responsibility; (c) the Indian Self-Determination
    Act; and (d) various court decisions, including a 1999 U.S. Supreme
    Court case, affirming the treaty rights of GLIFWC's member Tribes.
        Under the direction of its member Tribes, GLIFWC operates a ceded
    territory hunting, fishing, and gathering rights protection/
    implementation program through its staff of biologists, technicians,
    conservation enforcement officers, and public information specialists.
        Its activities include: natural resource population assessments and
    studies; harvest monitoring and reporting; enforcement of tribal
    conservation codes into tribal courts; funding for tribal courts and
    tribal registration/permit stations; development of natural resource
    management plans and tribal regulations; negotiation and implementation
    of agreements with state, federal and local agencies; invasive species
    eradication and control projects; biological and scientific research;
    and development and dissemination of public information materials.
        Why GLIFWC's Funding Base Needs to be Maintained.--Ultimately,
    GLIFWC must be able to carry out its conservation and law enforcement
    functions as required by a number of federal court decisions and to
    remain an active partner with state, federal and local governments,
    with educational institutions, and with conservation organizations and
    other non-profit agencies.
        For the past 3 years, Congress recognized this need and provided
    funding in the range of $261,000 to $300,000 above what the
    Administration had proposed for GLIFWC each year. As a result, GLIFWC
    has been able to maintain its core programs and has been able to
    restore services that had to be cut because of chronic funding
    shortfalls.
        Continued full base funding also will ensure GLIFWC's participation
    in regional emergency services networks as an integral partner with
    surrounding emergency responders. GLIFWC's officers not only enforce
    the Tribes' off-reservation conservation codes, but also work
    cooperatively with surrounding authorities in detecting violations of
    state or federal criminal and conservation laws. And, they are
    certified medical emergency first responders and are trained in
    wilderness search and rescue.
        GLIFWC has worked hard over the years to streamline its programs
    and institute other cost-saving options. Specifically, it has: (i) cut
    staff as necessary to stay within funding allocations; (ii) teamed up
    with its partners to maximize the cost efficiency of cooperative
    projects; (iii) obtained separate contract support funding from the
    BIA; and (iv) diversified its funding from non-BIA sources to build
    upon its Self-Determination Act funding and to undertake special
    projects.
        How the requested fiscal year 2005 funds would be used.--GLIFWC
    will:
        1. Restore and Maintain Required Core Programs ($300,000).--As was
    the case with the funds that Congress provided for the past 3 years,
    GLIFWC would--(1) Restore programs that had been cut or reduced; \2\
    (2) Replace ageing vehicles and field equipment; \3\ and (3) Meet
    increased personnel and fringe costs (particularly ever-increasing
    health insurance costs).
    ---------------------------------------------------------------------------
        \2\ As it did with previously provided funding, GLIFWC would:
    restore fall juvenile walleye recruitment surveys to previous levels;
    restore tribal court and registration station funding cuts; restore
    Lake Superior lamprey control and whitefish assessment programs; and
    restore GLIFWC's share in cooperative wildlife and wild rice
    enhancement projects with state and federal agencies, as well as with
    non-profit conservation organizations and other partners.
        \3\ GLIFWC would continue to maintain a vehicle/equipment
    replacement capital fund and would replace a number of its oldest
    vehicles and equipment that have become obsolete or economically
    inefficient to operate and maintain. This fund would be replenished
    with fiscal year 2005 funds to cover some of the over $200,000 in other
    vehicle/equipment replacement needs.
    ---------------------------------------------------------------------------
        2. Restore and Maintain Pay Cost Adjustments that the BIA has not
    Included in Base Funding ($75,000).--The BIA wrongfully withheld
    $75,000 that Congress had provided in fiscal year's 2002 and 2003 for
    GLIFWC's pay cost adjustments. The BIA has agreed to provide these
    funds on a one-time basis but, unlike in previous years, has not
    included them in its proposal for GLIFWC's base funding. Unless
    corrected, this would negate the very purpose of the adjustments and
    would result in more de facto budget cuts as the adjusted salaries are
    paid in subsequent years.
        3. Enhance Law Enforcement and Emergency Services ($150,000).--In
    the past few years, GLIFWC has solidified its law enforcement and
    emergency response infrastructure utilizing a combination of US
    Department of Justice/COPS funds and BIA funds. For example, it
    recently increased its warden force by three officers and the
    additional $150,000 would partially support the salaries, provide
    training and equipment, and build the fiscal foundation to ensure
    retention of these officers over the long-term.
        Public Benefits from GLIFWC'S Funding.--With the requested funds,
    GLIFWC will:
        1. Remain a constructive, stabilizing natural resource management
    and public safety institution--GLIFWC provides continuity and stability
    in interagency relationships and among its member Tribes, and
    contributes to social stability in the ceded territory in the context
    of treaty rights issues. It is a recognized and valued partner in
    natural resource management, in emergency services networks, and in
    providing accurate information to the public.
        2. Retain an Experienced Professional Staff.--In many instances,
    GLIFWC staff experience matches or exceeds that of their counterparts
    in other agencies when it comes to treaty rights issues and to ceded
    territory natural resource management and conservation enforcement.
        3. Maintain cooperative, cost-effective partnerships.--GLIFWC has
    built partnerships with:
      --Federal, state, and local government agencies (e.g. State DNR's,
            USFWS, USDA-FS, USDA-NRCS, Great Lakes Fishery Commission, U.S.
            Coast Guard, EPA, ATSDR, and Canadian federal and provincial
            governments);
      --Schools and Universities (e.g. University of Wisconsin-Madison,
            University of Wisconsin-Superior, Northland College, University
            of Minnesota, Michigan State University, and Lac Courte
            Oreilles Ojibwe Community College); and
      --Conservation groups (e.g. Ducks Unlimited, the Sharp-Tail Grouse
            Society, the Natural Resources Foundation, the Nature
            Conservancy, and local lake associations).
        Through these partnerships, the parties have achieved public
    benefits that no one partner could have achieved alone by:
      --Identifying mutual natural resource concerns, and implementing
            joint conservation and enhancement projects (e.g. wild rice
            restoration, waterfowl habitat restoration and improvement
            projects, and exotic species control projects);
      --Providing accurate information on state and tribal harvests and on
            the status of natural resource populations (e.g. joint fishery
            assessment activities and jointly prepared reports);
      --Maximizing financial resources to avoid duplication of effort and
            costs (e.g. coordinating annual fishery assessment schedules
            and sharing personnel/equipment);
      --Contributing scientific research and data regarding natural
            resources and public health (e.g. furbearer/predator research,
            fish consumption/human health studies, and other fish
            contaminant research particularly regarding mercury and
            dioxin); and
      --Engendering cooperation rather than competition (e.g. cooperative
            law enforcement and emergency response, joint training
            sessions, mutual aid emergency services arrangements, and
            cross-credential agreements).
                                     ______

       Prepared Statement of the Institute of American Indian and Alaska
                      Native Culture and Arts Development

                               SUMMARY OF REQUEST

        IAIA is authorized under Public Law 99-498, as amended, and herein
    respectfully submits its fiscal year 2005 request, a total of $13
    million to be allocated as follows:
      --$6 million, as supported in the President's fiscal year 2005
            Request, for strengthening operations as IAIA continues to
            mature into a four-year postsecondary institution and
            implements recommendations of its accreditation assessment of
            new four-year programs;
      --$7 million for capital construction, building on last year's
            appropriation of $1 million to provide an $8 million federal
            match to a W.K. Kellogg Foundation challenge grant for the
            development of the first and only international American
            Indian, Alaska Native and Indigenous peoples lifelong learning
            center.

                            BACKGROUND AND KEY FACTS

        IAIA, originally established in 1962 by Executive Order, has
    produced the majority of North America's most illustrious contemporary
    Indian artists. Founded as a Bureau of Indian Affairs (BIA) high
    school, IAIA's path has been one of steady evolution--from a unique
    high school to a federally chartered four-year college, building its
    own campus and operating the national American Indian Arts Museum in
    the historic plaza of Santa Fe, NM.
        Charter and Mission.--IAIA moved out of the control of the BIA into
    a Congressionally chartered institution in 1988 and is authorized under
    Public Law 99-498, as amended. This law affirms and acknowledges that
    Native cultures and arts are critical to the nation as a whole and,
    consequently deems it appropriate and essential for the federal
    government to support IAIA in the advancement, preservation, and
    promotion of diverse Native cultures and arts. With IAIA's unique
    authority and charter, its mission is to serve as the national center
    of research, training, language and scholarship for Native Americans
    and Alaska Natives through the dedicated study, creative application,
    preservation and care of our Native cultures and arts. The primary goal
    of IAIA is to enhance knowledge and understanding of the cultural
    traditions of American Indians and Alaska Natives with a special focus
    on traditional and contemporary Native art. To this end, it provides a
    culturally based curriculum that combines professional skills
    development with an integrated liberal arts education. It also has a
    public education mission which is carried out through its public
    programs offered at its museum.
        Governance.--IAIA is governed by a board of trustees appointed by
    the President of the United States and confirmed by the Senate, a
    majority of which must be of American Indian and Alaska Native descent.
        Funding.--As a national postsecondary institution, IAIA operations
    are funded through direct federal support and a diversified private
    sector approach to foundations, corporations, tribes, and individual
    donors. It does not receive state support for operations or student
    aid.
        Educational Goals.--IAIA's educational goals are to: recruit,
    admit, and retain qualified American Indian and Alaska Native students
    and provide them with a Native-centered arts education--graduate
    students from the degree programs with demonstrated artistic and
    academic competency--focus on the needs of the individual student by
    providing an environment that encourages independent work, personal
    growth and professional development--strengthen cultural identity--and
    provide awareness of community and cultural diversity.
        Museum.--IAIA's enabling legislation also authorizes funding to the
    IAIA Museum and specifies its dual purpose of public education and
    presentation. Its facilities and collections provide hands-on training
    for students and faculty and serve as an outlet to showcase exemplary
    work and ongoing connections with students and alumni. It provides the
    Institute with a highly visible venue for public relations, education,
    and outreach, attracting over 50,000 visitors annually. It also houses
    the largest National Collection of Indian Contemporary Art comprised of
    more than 6500 pieces of artwork as well as valuable artifacts from BIA
    collections.
        Campus.--The Rancho Viejo Partnership, Ltd. donated 140 acres to
    IAIA for the establishment of the college's permanent campus in 1989.
    IAIA developed the land infrastructure for site development and created
    an impressive master campus plan. The first phase of the new campus,
    which is nearly complete, includes the following facilities: Academics
    and Administration, Cultural Center, Student Housing, Student Life
    Center, Facilities and Information Technology Management, Library and
    Technology Center, and a Student Mentoring Center.
        Student Body.--IAIA's diverse student body represents virtually
    every state in the country. Over the years, IAIA has enrolled and
    graduated over 4,000 members of the 562 federally recognized tribes.
    The student population is 90 percent American Indian and Alaska Native
    and relatively young in comparison to other tribal college student
    populations. On average, over 90 percent of enrolled students come from
    impoverished reservations located in rural, isolated communities. Their
    family income levels are predominately below federal poverty standards
    and financial aid is crucial for continuation of their study. The
    majority of IAIA students reside on campus and experience phenomenal
    personal and professional growth from the holistic framework and
    relevancy of the curriculum IAIA offers. Graduates become renowned
    artists and/or highly respected professionals in tribal communities and
    mainstream society.
        Tuition.--IAIA's is strongly committed to assisting its student
    body access both federal and private sources of scholarship, financial
    aid and other tuition assistance public and private programs. IAIA's
    tuition rates are similar to other community colleges in the Santa Fe
    area.
        Performance Measures.--The Institute undergoes rigorous assessment
    through regular reviews by mainstream accreditation committees and
    meets strict evaluation standards. It holds dual accreditation as a 4-
    year fine arts college by the North Central Association of Colleges and
    Schools and the National Association of Schools of Art and Design.
        Community Outreach and Support.--Through its public education and
    outreach services, IAIA serves over 50,000 students, community members
    and national and international visitors annually. Because of the
    important work IAIA is conducting in tribal communities, it has gained
    the national support of tribes and Indian education and tribal
    organizations. Please note that this budget request has the unanimous
    support of the American Indian Higher Education Consortium, the All
    Indian Pueblo Council, the National Congress of the American Indian,
    and the National Indian Education Association, as documented by
    resolution and or support letter.

                             FUNDING JUSTIFICATIONS

        Accomplishments.--IAIA just completed another very successful year
    as it continues to establish itself on its new campus. The 2003
    graduating class of 40 students was one of the largest in the school's
    history with six students receiving Bachelor of Arts or Bachelor of
    Fine Arts degrees and 34 students receiving Associate degrees. In the
    last academic year, 32 percent of the student population achieved
    placement on the President's Honor Roll (GPA of 4.0) or the Dean's
    Honor Roll (GPA of 3.5+). In addition, 14 of these students were
    inducted into the Beta Theta Delta Chapter of the Phi Theta Kapp
    International Honor Society.
        Another highlight of fiscal year 2003 was the construction and
    completion of a new library. The state of the art facility was made
    possible from gifts from the private sector, appropriations from
    Congress and the State of New Mexico, grants from the Economic
    Development Agency, the Department of Housing and Urban Development,
    and the Department of Agriculture, as well as gifts from tribes. The
    library will support the newly added baccalaureate programs of the
    IAIA.
        Many new partnerships and collaborations were created over the past
    year that will prove to be of tremendous benefit in providing new
    learning opportunities for students, some of which include:
      --MOU with the Smithsonian National Museum of the American Indian
      --MOU with the Maori University of New Zealand
      --2+2 Articulation Agreements with other tribal colleges for transfer
            into IAIA's new four year programs
      --100 new partnerships in support of the Center for Lifelong Learning
      --Consortium with the Peabody Essex Museum, Hood Museum, Bishops
            Museum and the Alaska Native Heritage Center to enhance museum
            and education programs and operations.
        Because of IAIA's accomplishments and growing reputation, the
    Eastern Band of Cherokee in Cherokee, North Carolina approached IAIA to
    seek the establishment of a branch campus on their reservation. At
    IAIA's request, the Cherokee Tribal Council has conducted a feasibility
    study, which shows strong feasibility for course offerings to both the
    Cherokee tribe and the Southern Eastern Tribes of the United States.
    Similarly, at the request of the Alaska Congressional delegation, we
    are exploring expanding IAIA's services to Anchorage, Alaska. The
    Alaska Native Heritage Center is highly interested in partnering with
    IAIA in this endeavor. Jointly, we are planning a feasibility study
    over the next year and a subsequent implementation plan appropriate to
    the conducted research.
        Remaining Challenges.--Although IAIA's track record has been
    exemplary over the past several years, significant challenges still
    remain in the institution's viability. More funding is needed to
    solidify gains and allow the Institute the opportunity to fully develop
    into its newly awarded four year designation. Actual costs of basic
    operations, critical to the four year status, were not fully addressed
    the fiscal year 2004 budget and far exceed the federal appropriation.
    Below is a summarized list of critical needs/priorities that must be
    met in the next two fiscal years.
      --Stabilize operations and maintenance of existing programs and new
            facilities
      --Meet strict accreditation mandates directly related to four year
            programs of student, including: strengthen faculty and staff
            credentials; provide new technologies for instructional
            delivery; strengthen current curriculum and implement new
            programs of study; expand library services through technology
            and campus services and community outreach
      --Strengthen student services to include developmental studies for
            the vast number of under-prepared students applying to IAIA
      --Conduct research study on retention of students and develop and
            institutionalize successful model student retention programs
      --Institutionalize data collection and provide ongoing training for
            faculty and staff
      --Increase faculty and staff salaries appropriate to competitive
            markets
      --Implement comprehensive recruitment program to strengthen student
            enrollment and admissions systems
      --Review financial management system through outside expert
            evaluation
      --Renovate historical building, housing the valuable national
            collection of contemporary Indian art.
        Lifelong Learning Center.--The emergence of adult learners as a
    major constituency in American higher education has been one of the
    most dramatic changes in the United States in the past 25 years. Since
    the 1970s, national commissions have been established to examine
    lifelong learning. Their collective recommendations and findings
    presented significant research and evidence that have now placed a high
    priority on comprehensive lifelong learning models in the education
    agenda for the nation. As a result, the Kellogg Foundation has
    established continuing education centers throughout the world,
    demonstrating their commitment to creating comprehensive lifelong
    learning models across all levels and groups of people. However, until
    now, Native populations have not been considered in this agenda, yet
    have some of the highest social, economic, and educational needs in
    this country.
        Through a highly competitive process the W.K. Kellogg Foundation
    selected IAIA as the designated site for the very first continuing
    education center to serve American Indian, Alaska Native and indigenous
    peoples worldwide and granted the Institute a $2 million planning
    award. Planning, construction and development costs are projected at
    $37 million of which, $17 million has been secured and/or committed.
    The Kellogg Foundation has committed an additional $10 million but
    requires a federal match of $8 million. Federal cooperation is
    essential to the success of this initiative. The Institute is
    diversifying support for remaining costs for construction and start-up
    by engaging private, state, and tribal partners.

                                   CONCLUSION

        An endless dedication to the sustainability of our Indian Nations
    keeps IAIA an ever-evolving force in the world of creative arts.
    Through the hard work of our staff, faculty, trustees, as well as the
    critical support of President Bush, Congress, foundations and many
    individuals, we have achieved great things. This success has positioned
    the Institute to become internationally prominent. We appeal to you to
    continue to support IAIA's hard-earned momentum. The federal resources
    specified in IAIA's budget request are essential to the future of the
    Institute of American Indian Arts. Thank you for your serious
    consideration and continued support.
                                     ______

            Prepared Statement of the InterTribal Bison Cooperative

                           INTRODUCTION & BACKGROUND

        My name is Ervin Carlson, a Tribal Council member of the Blackfeet
    Nation of Montana and President of the InterTribal Bison Cooperative
    (ITBC). Please accept my sincere appreciation for this opportunity to
    submit written testimony to honorable members of the Appropriation
    Subcommittee on Interior. ITBC is a Native American non-profit
    organization, headquartered in Rapid City, South Dakota, comprised of
    fifty-three (53) federally recognized Indian Tribes within an 18 state
    region. On behalf of these members of ITBC, I would like to address the
    following issues: (1) request an appropriation of $3,000,000 for fiscal
    year 2005, an increase from the $2.23 million of last year's
    appropriation, (2) explain to the committee ITBC's unmet funding need
    of $23 million, and (3) update the committee on ITBC's present
    initiatives.
        Buffalo thrived in abundance on the plains of the United States for
    many centuries before they were hunted to near extinction in the 1800s.
    During this period of history, buffalo were critical to survival of the
    American Indian. Buffalo provided food, shelter, clothing and essential
    tools for Indian people and insured continuance of their subsistence
    way of life. Naturally, Indian people developed a strong spiritual and
    cultural respect for buffalo that has not diminished with the passage
    of time.
        Numerous tribes that were committed to preserving the sacred
    relationship between Indian people and buffalo established the ITBC as
    an effort to restore buffalo to Indian lands. ITBC focused upon raising
    buffalo on Indian Reservation lands that did not sustain other economic
    or agricultural projects. Significant portions of Indian Reservations
    consist of poor quality lands for farming or raising livestock.
    However, these wholly unproductive Reservation lands were and still are
    suitable for buffalo. ITBC began actively restoring buffalo to Indian
    lands after receiving funding in 1992 as an initiative of the Bush
    Administration.
        Federal appropriations have allowed ITBC to successfully restore
    buffalo the tribal lands, thereby preserving the sacred relationship
    between Indian people and buffalo. The respect that Indian tribes have
    maintained for buffalo has fostered a serious commitment by ITBC member
    Tribes for successful buffalo herd development. Opportunities now exist
    for Tribes to utilize buffalo for tribal economic development efforts.
    Thus, ITBC is now focused assuring economic sustainability of bison
    herds and the promotion of buffalo as a healthy food source allowing
    Tribes to utilize a culturally relevant resource as a means to achieve
    self-sufficiency.

                                FUNDING REQUEST

        The InterTribal Bison Cooperative respectfully requests an
    appropriation for fiscal year 2005 in the amount of $3,000,000. This
    amount is $770,000 above the fiscal year 2004 appropriation for ITBC
    and is greatly needed to maintain last years funding level and to help
    build economic sustainability to the Tribal projects.

                         FUNDING SHORTFALL & UNMET NEED

        In fiscal year 2004, the ITBC and its member tribes were funded
    through appropriations at $2,230,000. The President's budget for fiscal
    year 2005 recommends a funding amount of $1,144,000, which is a
    decrease of $1,087,000 at a time when market prices for buffalo are
    only10 percent of the price three years ago.
        At the current level of funding, many ITBC member tribes will not
    receive adequate funding to begin buffalo restoration efforts. Other
    tribes that have successfully restored buffalo to Tribal lands will not
    receive adequate technical assistance and resource development funds to
    ensure the sustainability of existing herds.
        ITBC is structured as a member cooperative and 100 percent of the
    appropriated funds expended on the development and support of Tribal
    buffalo herds and buffalo product business ventures. ITBC funding is
    distributed to ITBC member Tribes via a needs proposal review process
    developed by the consensus of members. ITBC surveys member tribes,
    annually, to determine unmet project needs and currently the total
    unmet need for ITBC member projects is $23,000,000. I have attached
    Tribal Bison Project Proposal summaries that detail ITBC member tribe's
    projects and financial needs for your review.

                            ITBC GOALS & INITIATIVES

        The immediate goal of ITBC is restoration of buffalo to Indian
    lands through the development of Tribal buffalo herds and enhancement
    of buffalo product economic development projects. ITBC's ultimate goal
    is for Tribal buffalo herds to achieve self-sufficiency and evolve into
    successful Tribal economic development projects.
    Economic Development
        In 1991, seven Indian tribes had small buffalo herds, with a
    combined total of 1,500 animals. The buffalo provided little or no
    economic benefit to the tribal owners. ITBC has proven extremely
    successful at buffalo restoration during its relatively short 10-year
    history. Today, with the support and technical assistance of ITBC, over
    35 Indian Tribes are engaged in raising buffalo with approximately
    15,000 animals owned and managed by ITBC member tribes. Many of these
    tribal buffalo programs are close to achieving self-sufficiency via
    profitable operations. Of great significance for Indian reservation
    economies, buffalo production has resulted in a new industry creating
    hundreds of direct and indirect jobs relating to the buffalo management
    and production. As a result, thousands of dollars circulated through
    Indian reservation economies.
        However, Tribes must have the resources to build solid foundations
    for this new industry to become fully self-sufficient and maintain
    sustainable buffalo herds. ITBC provides critical technical assistance
    to member Tribes that have developed sustainable management and
    infrastructure development plans. Additionally ITBC provides training
    curriculum for the newly created jobs and marketing plans as Tribal
    herds reach marketing capabilities. ITBC has begun implementation of a
    marketing initiative to provide member Tribes with viable marketing
    options for utilization of buffalo as economic development efforts.
    This marketing initiative is in an infancy phase and continued funding
    is critical to achieve success.

    Tribal Buffalo Marketing Initiative
        When the tribal buffalo are ready for market, ITBC member tribes
    have faced another obstacle to economic success. Few meat processing
    plants exist that are willing to process range-fed buffalo. Shipping
    buffalo far distances to be processed increases operating costs and
    reduces the quality of the meat by introducing unnecessary and harmful
    stress to the animals. Further compounding the problem, existing
    processing plants often will not process buffalo unless the buffalo are
    finished in feedlots, which compromises the objective of ITBC to
    provide a healthy range-fed product. ITBC believes the development of
    tribally owned processing facilities that will process range fed
    buffalo will provide a solution to the processing plant obstacle.
        ITBC has negotiated with the Assiniboine and Sioux Tribes of the
    Fort Belknap Indian Community in northern Montana to assist with the
    development of a meat packing facility acquired by the Tribe in Malta,
    Montana. The Tribe requested ITBC's assistance to develop a viable
    facility for processing buffalo, to coordinate with other Tribes for
    buffalo processing, and to build a cooperative market for the Tribally
    produced range fed buffalo. ITBC has launched it's marketing initiative
    by negotiating to provide critical support to the Ft. Belknap Tribe in
    Montana and intends to assist other tribes that have acquired USDA
    approved facilities. Development of Tribally owned processing
    facilities will create the necessary infrastructure to ensure the
    sustainability of Tribal buffalo production. Additionally, ITBC will
    provide skills training in meat processing, cold storage facility
    development, processing plant enhancement, development of distribution
    systems for Buffalo meat and by-products, and develop a cooperative
    brand name with standards and labeling guarantees for Native American
    produced buffalo. The development of the Ft. Belknap plant will serve
    as a model for other Tribal processing plants in strategic, regional
    locations. Tribally owned buffalo processing plants will maintain the
    integrity of the buffalo meat as a healthy food source, and provide
    culturally appropriate processing methods.

    Preventive Health Care Initiative
        ITBC is committed to providing buffalo meat to Indian reservation
    families both as an economic development effort for Native American
    producers and, more critically, as a healthy food to reintroduce into
    the diets of Native American populations. Current research indicates
    that the diet of most Indian reservation families includes large
    amounts of high cholesterol, processed meats that contribute to
    diabetes, heart disease and other diet related illnesses.
        ITBC has implemented a preventive health care initiative to provide
    easy access to buffalo meat on Indian reservations and to educate more
    Indian families of the health benefits of range fed buffalo meat in
    their daily diets. Generally, buffalo meat is not sold in small
    quantities at the Indian reservation grocery and convenience stores
    leaving Native American families with few alternatives to the high fat,
    high cholesterol processed meats stocked in reservation stores. ITBC
    seeks to remedy this concern by providing buffalo meat in family sized
    quantities to Indian reservation markets.

                                   CONCLUSION

        ITBC has demonstrated success over the years by assisting its
    member tribes restore buffalo to their native lands for cultural
    purposes and economic development. ITBC will continue to provide
    technical assistance and funding to its member tribes to facilitate the
    development of sustainable buffalo herds.
        ITBC and its member tribes have created a successful new Indian
    reservation industry, tribal buffalo production, resulting in new money
    for reservation economies. In addition, ITBC continues to support
    methods to market buffalo meat by providing easy access on the
    reservation and education efforts to the health benefits of buffalo
    meat in the Native diet.
        ITBC and its member tribes are appreciative of past and current
    support from the Congress and the Administration. I urge the committee
    to consider an increase to ITBC fiscal year 2005 appropriation to
    continue, without interruption, the important and successful efforts of
    buffalo restoration and development of buffalo production as viable
    Reservation based economic development efforts.
        I would like to thank this Committee for the opportunity to present
    testimony and the members of ITBC invite the honorable members of the
    Committee to visit our Tribal buffalo projects and experience first
    hand their successes.
        Questions and/or comments regarding any of the issues presented
    within this testimony may be directed to Mr. Ervin Carlson, President
    or to Mr. Fred DuBray, Executive Director at (605) 394-9730.

        [NOTE.--Additional information can be found on the website:
    www.intertribalbison.com]
                                     ______

              Prepared Statement of the Intertribal Timber Council

                                    SUMMARY

        Mr. Chairman, I am Nolan Colegrove, Sr., President of the
    Intertribal Timber Council. I hereby submit the following requests for
    fiscal year 2005 BIA and U.S. Forest Service appropriations:
        (1) Increase BIA Forestry base funding by $119.6 million as per the
    Primary Recommendations of the December 2003 independent IFMAT-II
    report on Indian trust forests and forest management,
        (2) Integrate Interior fire funding for BIA lands into the BIA
    Forestry base budget in Non-Recurring Programs, Resources Management,
    as per the Primary Recommendations of the independent IFMAT-II report
    on Indian trust forests and forest management,
        (3) Within the overall BIA Forestry base funding increase in ITC
    request No. 1 above, support the BIA's requested $1 million increase to
    Non-Recurring Programs, Resources Management Forest Management
    Inventory and Planning, and add an additional $6 million, to initiate a
    10 year program to eliminate the backlog in forest management planning,
        (4) Restore Endangered Species in Non-Recurring Programs, Resources
    Management to $3,035,000, and add $3 million for unfunded ESA mandates,
        (5) Add $1 million to Environmental Management in Non-Recurring
    Trust Services for cultural resource surveys,
        (6) Add $8 million to Cadastral Surveys in Non-Recurring Programs
    Real Estate Services, and add $1.5 million to Regional Office
    Operations Land Titles and Records,
        (7) Within Wildland Fire funding, direct BIA to develop a Native
    American fire crew leadership training program, and
        (8) Add $2.5 million to U.S. Forest Service State and Private
    Forestry to fund the newly authorized Tribal Forested Watershed
    Assistance Program.

    Intertribal Timber Council background
        The Intertribal Timber Council (ITC) is a twenty-eight year old
    organization of seventy forest owning tribes and Alaska Native
    organizations that collectively possess more than 90 percent of the 7.6
    million timberland acres and a significant portion of the 9.5 million
    woodland acres that are under BIA trust management. These lands provide
    vitally important habitat, cultural and spiritual sites, recreation and
    subsistence uses, and through commercial forestry, income for the
    tribes and jobs for their members. In Alaska, the forests of Native
    corporations and thousands of individual allotments are equally
    important to their owners. To all our membership, our forests and
    woodlands are essential to our physical, cultural, and economic well-
    being, and their proper management is our foremost concern.
    (1) Increase BIA Forestry base funding by $119.6 million, as per the
            Primary Recommendations of the December 2003 independent IFMAT-
            II report on Indian trust forests and forest management
        The National Indian Forest Resources Management Act (Public Law
    101-630) in Section 312 (25 U.S.C. 3111) requires that every ten years
    the Secretary of the Interior provide for an independent assessment and
    report on the status of Indian forests and forest management. After
    enactment of Public Law 101-630, the first Indian Forest Management
    Assessment Team report was issued in November 1993 (IFMAT-I). The
    second independent assessment has now been conducted and its report,
    IFMAT-II, was issued in December 2003.
        The IFMAT-II team consisted of nationally pre-eminent forestry
    professionals led by Dr. John Gordon of Yale University. Six IFMAT-I
    team members also served on the IFMAT-II team, providing invaluable
    continuity of knowledge about the IFMAT processes and the Indian trust
    forest resource to the second assessment and report. By statute, each
    IFMAT report must address eight specific tasks, including the funding,
    staffing, management, and health of Indian trust forests. Additionally,
    each IFMAT report must be submitted to Congress.
        The IFMAT-II report, coming at this time when forest health and
    federal Indian trust management adequacy issues are both being
    intensively debated, is particularly significant. It is the only
    independent, standardized, periodic review of an Indian trust resource.
    There are no other reports of this kind for any other Indian trust
    resource, and as such, in addition to the information the report
    provides for Indian forests and forest health, it demonstrates the
    contribution independent reviews can play in trust oversight.
        IFMAT-II concludes that progress has been made in narrowing three
    of the four gaps originally identified in IFMAT-I: (1) the gap between
    Indians' visions for their forests and how their forests are actually
    managed is narrowing, (2) the funding gap between BIA Forestry and
    other comparable forests is narrowing (but principally as a result of
    increased fire funding), and (3) more tribes have or are developing
    integrated management plans. But (4), the progress has been made in the
    area of on-the-ground trust responsibility.
        In addressing its statutory mandate for ``an in-depth analysis of
    management practices on, and the level of funding for, specific Indian
    forest land compared with similar federal and private forest lands''
    (25 USC 3111(a)(2)(A)), the IFMAT-II reports finds that BIA base
    Forestry funding has actually declined in inflation-adjusted dollars
    from $3.29 an acre in 1991 (exclusive of fire funding) to $2.83 an acre
    in 2001. This funding, when expressed as a percentage of U.S. Forest
    Service per acre funding (inflation adjusted and excluding fire), has
    risen slightly from 21.6 percent of USFS per acre spending in 1991 to
    29.8 percent in 2001 (see Table 2b, IFMAT-II page 58), but this
    comparative increase is due to USFS per acre funding declining rather
    than a BIA increase. The IFMAT-II report recommends that BIA base
    Forestry funding be increased by $119.6 million to bring it into per
    acre funding parity with the Forest Service (IFMAT-II page 98).
    (2) Integrate Interior fire funding for BIA lands into the BIA Forestry
            base budget in Non-Recurring Programs, Resources Management, as
            per the Primary Recommendations of the independent IFMAT-II
            report on Indian trust forests and forest management
        The IFMAT-II report stresses the contribution that fire-related
    funding (fuels management, preparedness, emergency stabilization) has
    made to the program since 1991. For 2001, the total BIA Forestry budget
    including base program funding and fire funding is $9.38 an acre, or
    two-thirds of the $13.70 per acre combined base and fire budget for the
    Forest Service. But while the BIA's fire funding increase has helped
    make-up a significant part of its funding disparity with National
    Forests, the strict barriers on the BIA fire funds hamper more
    effective and coordinated management, and can cause duplication of
    effort and other inefficiencies. The IFMAT-II report therefore
    recommends that fire funding be made a permanent part of BIA's base
    Forestry funding in order to efficiently address forest health as part
    of overall Indian forest management (IFMAT-II page 60). The ITC agrees
    and requests the Committee to shift funding for BIA fire and fuels
    management and preparedness to Forestry in Non-Recurring Programs,
    Resources Management.
    (3) Within the overall BIA Forestry base funding increase in ITC
            request No. 1 above, support the BIA's requested $1 million
            increase to Non-Recurring Programs, Resources Management Forest
            Management Inventory and Planning, and add an additional $6
            million, to initiate a 10 year program to eliminate the backlog
            in management planning
        Within the fiscal year 2005 BIA budget request for Non-Recurring
    Programs, Resources Management, we support the requested $1 million
    increase for forest management planning, but believe that the requested
    amount falls far below the actual annual need of $7 million, as
    identified by the BIA's own Status of Forest Management Plans and
    Inventory Report. A November 13, 1998 Interior Solicitors' Opinion
    holds that ``Indian timber may not be harvested until an approved
    forest management plan has been established.'' Yet the IFMAT survey
    reports only 43 percent of the timberland tribes had current Forest
    Management Plans in 2001 (IFMAT-II page 14, and Table 4 page 22). A
    current management plan is essential for the regulation of a forest,
    and the design and execution of appropriate forest health activities
    and timber sales all depend on a current plan. The absence of a current
    plan effectively places the capacity to manage Indian forests and
    generate income from harvest of forest products at risk. Additionally,
    there are 185 tribal woodlands under BIA trust management, of which
    only 34 (18 percent) were reported as having current management plans.
    (4) Restore Endangered Species in Resources Management, Non-Recurring
            Programs, to $3,052,000 and add $3 million to begin fulfilling
            the unfunded ESA mandates
        We request that the Endangered Species item in the BIA's Non-
    Recurring Programs Natural Resources budget be provided $6,052,000.
    This amount restores the northern spotted owl/marbled murrelet (NSO/MM)
    and Cheyenne River ferret programs back to their fiscal year 2002 level
    of $3 million ($1.6 million for the owl, $1.4 million for the ferret),
    includes $52,000 for cost of living adjustments, and then adds another
    $3 million to begin addressing unfunded tribal/BIA endangered species
    mandates. Congress started the NSO/MM program in 1991 to enable the BIA
    to fulfill its obligations after the owl and murrelet were listed under
    the ESA. BIA subsequently combined the NSO/MM with the ferret program.
    In fiscal year 2003, the Administration proposed eliminating both
    activities, but Congress partially restored the funding to $2,697,000.
    For fiscal year 2004, the Administration request of $2,198,000 was
    enacted at $2,172,000 for ESA activities. It is essential that funding
    to support ESA activities be restored. They are the only funds that
    have ever been specifically provided in the BIA's budget for addressing
    the NSO/MM listings. Reduction of these funds threatens ESA compliance
    activities and could potentially restrict or shutdown the timber
    harvesting that is essential to the economies of tribal communities.
        We request that ESA funding be fully restored for the NSO/MM and
    ferret programs to inflation-adjusted levels provided for fiscal year
    2002. We also request a further $3 million increase in the ESA budget
    item for management of other ESA-listed species throughout Indian
    Country.
    (5) Add $1 million to Environmental Management in Non-Recurring Trust
            Services for cultural resources surveys
        Indian lands are rich in historic artifacts and sensitive sites,
    and various federal laws such as the Historic Preservation Act, NAGPRA,
    and NEPA impose exacting requirements on land and resource managers.
    Cultural surveys generate the data that is essential for forest and
    other resource management plans, but BIA has never requested any
    funding to help meet those federal mandates. Accordingly, like last
    year, we request that $1 million be added to Environmental Management
    in Non-Recurring Trust Resources for cultural resource surveys.
    (6) Add $8 million to Cadastral Surveys in Non-Recurring Programs Real
            Estate Services, and add $1.5 million to Regional Office
            Operations Land Titles and Records
        Reliable and accurate boundaries and clear, current title are
    essential for the management of Indian trust lands and resources.
    Without them, land use and management are clouded, its income subject
    to question, and its protection jeopardized. But Interior funding has
    not been sufficient, so we request increasing the fiscal year 2005
    funding to $16 million. We also ask that BLM, which for years has
    shirked its statutory responsibility to provide cadastral surveys for
    trust land, be directed to institute such a program as part of its
    baseline responsibilities.
        For Land Titles and Records in Regional Office Trust Services, we
    ask an increase of $1.5 million, to renew the commitment started
    several years ago to improve the BIA's ability to produce timely and
    accurate titles. Currently, BIA has 150,000 title documents that need
    to be recorded, and this caseload is growing as demand continues to
    outstrip the BIA's capacity. Accordingly, we ask that funding be
    increased by $1.5 million.
    (7) Within Wildland Fire funding in the Bureau of Land Management,
            direct BIA to develop a Native American fire crew leadership
            training program
        There is an increasing need for fire crew leadership training that,
    if not addressed, could endanger the safety and hinder the deployment
    of otherwise fully trained and able tribal fire crews. Native American
    crews constitute about 25 percent of the line fire fighter work force
    and a crew leadership training program in the BIA is essential to
    improve their safety and effectiveness. To help address this need, we
    ask that the BIA be directed to develop a Native American fire crew
    leadership training program.
    (8) In U.S. Forest Service State and Private Forestry, add $2.5 million
            to fund the newly authorized Tribal Forested Watershed
            Assistance Program
        Title III of the Healthy Forests Restoration Act (Public Law 108-
    148) establishes needed watershed forestry assistance programs for
    states (Sec. 302) and for Indian tribes (Sec. 303). The authorized
    funding for the Tribal Watershed Forestry Assistance program is $2.5
    million a year, which we request to initiate the program in fiscal year
    2005. We anticipate funding will be applied through a national
    competitive grant program that will help assure these relatively modest
    funds will be effectively applied to worthy watershed projects
    throughout Indian country, where community water supplies are often
    fairly basic and heavily rely upon watershed health for the quality of
    the community water supply.
        Thank you for the opportunity to present this testimony.
                                     ______

        Prepared Statement of the Lac du Flambeau Band of Lake Superior
                                Chippewa Indians

        As Chairman of the Lac du Flambeau Band of Lake Superior Chippewa
    Indians, located in Wisconsin, I am pleased to submit this written
    testimony which reflects the needs, concerns and issues of the Tribal
    membership arising from the President's fiscal year 2005 Budget.

                                INDIAN EDUCATION

        Indian Education continues to be a Tribal priority. In the fiscal
    year 2005 Tribal Priority Allocation (TPA) BIA formulation process the
    Lac du Flambeau Band made education its top 4 priorities. These TPA
    programs include Scholarships, Johnson O'Malley, Adult Education and
    Job Placement and Training. In the past we have supported the
    President's BIA budget on Indian Education, but this year most of the
    increases are associated with school construction ($229.1 million) and
    operation ($565 million). This does not help the Lac du Flambeau Band.
    The Band is and has been requesting increased funding through the
    Administration's Tribal Priority Allocation planning process in higher
    education and Johnson O'Malley, but has not been successful. So again,
    we are asking Congress to address this funding shortfall through the
    legislative process.
        The Band's specific concern is the funding levels associated with
    higher education programs. There has not been an increase in the BIA's
    higher education funding for 8 years. In fiscal year 2003, 230 Tribal
    members applied for scholarships and only 37 students were served. To
    fully support our eligible students, an additional $141,000.00 of
    funding for Lac du Flambeau is required.
        The Johnson O'Malley program has been under funded through the
    Tribal Priority allocation process and the Band has identified a
    funding shortfall. Our Education Program receives $55,967.00 to operate
    the JOM program. Given this limited funding, we are forced to
    concentrate the funding we receive on our high school students.
    Subsequently, we have 520 students in grade school that are not served
    by the Johnson O'Malley program. To fully fund this program at Lac du
    Flambeau, an additional $93,000.00 would be required.

                                 INDIAN HEALTH

        The Lac du Flambeau Band urges Congress to support the Indian
    Health Service request of $3.7 billion, an increase of $45 million over
    last year. One million six hundred thousand (1.6 million) people
    utilize the Indian Health Service and the number is growing. Even
    though the Band supports the increase, we do not think $45 million is
    enough to address the growing health concerns and costs in Indian
    Country. For example, Lac Du Flambeau received $3.2 million last year
    from IHS and supplemented the Peter Christensen Health Clinic by $1.9
    million for a total budget of $5.1 million.
        Along with increased health care costs, there is the associated
    increase in health insurance costs, which is having a negative effect
    on the Lac du Flambeau Band and it's enterprises. The Health Insurance
    premium for an employee with single coverage is $451.60 per employee
    per month and for family it equals $966.00. The non-Indian employee
    depending on the option can pay from $25.00 to $200.00 per month to
    help off set costs. The total annual cost of health insurance the Band
    pays is $7.3 million. It would be great to be able to use a portion of
    this money for infrastructure development, education, economic
    development, natural resource management and social services.

                         NATURAL AND CULTURAL RESOURCES

        In many past testimonies provided this Appropriations Committee,
    the Lac du Flambeau Band has always described and discussed how
    important it's natural resource are in providing fishing, hunting,
    gathering and economic opportunities to the tribal membership. These
    same resources are also enjoyed by many non-Indians who live, work and
    visit the reservation. So it is very important Congress supports our
    efforts in protecting, conserving and enhancing these resources for
    present and future generations. Specifically we would like Congress to
    address the following funding issues:
    Circle of Flight-Great Lakes Wetland/Water Fowl Management Program
        We strongly urge the Committee to restore $596,000.00 for the Great
    Lakes Wetland/Water Fowl Management Program (Circle of Flight) that the
    Administration proposes eliminating entirely again this year.
        Congress restored this important funding last year and the Lac du
    Flambeau Band would like to thank the Committee for understanding how
    important this program is in restoring and preserving our Nation's
    wetlands and waterfowl populations. This program also gives Congress,
    the Great Lakes Region Tribes, States, USFWS, USDA, Ducks Unlimited and
    other private sector groups an opportunity to work cooperatively in
    projects that provide wetland protection, flood control, clean water
    and recreation in the Great Lakes Region. Your strong support of this
    program is required again.

    Tribal Historic Preservation
        The Lac du Flambeau Band requests from the Saving America's
    Treasures Account $1.5 million for the restoration of the Lac du
    Flambeau Boys and Girls Indian School.
        This school was opened in 1895 with the purpose of assimilating
    Indian children from the region and operated as such until 1932. The
    history of the Lac du Flambeau Indian school represents a snapshot of a
    painful part of American history as to the federal government's various
    policies to address what at many periods in history was viewed as the
    ``Indian problem.''
        Specifically the boarding school era of the late 19th century had
    as its goal the eradication of Indian traditional culture and language.
    Unfortunately, this story is rarely told in present day text books.
    Restoration of the Lac du Flambeau Indian School, will allow for the
    telling of this story. It is a story of cultural survival and personal
    endurance in the face of what was at times seemingly insurmountable
    obstacles. The Tribe's goal to have inside the restored buildings a
    place to tell the story of the boarding school era, as well as the
    creation of a space where present day cultural learning and activities
    can take place.
        Of the $1.5 million requested, $1.410 million will be used for
    planning, design, and construction. The remaining $90,000 will be to
    continue the historical and archival research and creation of an
    exhibit for the public to view.

    Wildlife and Parks
        The Band has a comprehensive Natural Resource Department and
    dedicated staff with considerable expertise in natural resource and
    land management. Our activities include raising fish for stocking,
    conservation law enforcement, data collection on water and air quality,
    developing well head protection plans, conducting wildlife surveys, and
    administering timber stand improvement projects on the 86,000 acre
    reservation. We urge this Committee to increase the Wildlife and Parks
    budget and set aside $200,000 for Lac du Flambeau ($100,000 for Tribal
    Fish Hatchery Operations and $100,000 for Tribal Management and
    Development). The Wildlife and Parks budget has not increased
    significantly since 1990. An increase will ensure we can maintain our
    current staff and critical natural resource programs.

    Forestry
        Within the 86,000-acre reservation, we have 46,000 acres of
    forested land that supports hunting and gathering opportunities for
    tribal members as well as logging. Proper management of the forest is
    essential to sustain our subsistence lifestyle, but also to provide
    economic growth for the Band. The Forestry Program, consisting of two
    (2) foresters and two (2) technicians, undertakes a broad range of
    management activities including tree planting, prescribed burning,
    timber road design and maintenance and timber sale administration. The
    Forestry Program is funded through the Tribal Priority Allocation (TPA)
    within the Bureau of Indian Affairs budget, which has been historically
    under funded. Through the TPA planning process, the Band identified an
    unmet need of $107,000.00 just to support the current program.
    Currently, through TPA funding the forestry program is receiving
    $99,985.00. Total need to fully operate this program equals
    $207,000.00. In order to increase forest development, timber sale
    management and wildfire control activities we urge the Committee to
    earmark $107,000.00 for the Lac du Flambeau Forestry Department. This
    program has not received any substantial funding increases since 1991.

    Tribal Wildlife Grant and Landowner Incentive Program
        We strongly support the continuation of State and Tribal Wildlife
    Grant and program ($5 million tribal set-aside). These grant programs
    are extremely important, because of the critical shortage tribes have
    experienced in conservation funding. Generally, tribes manage Indian
    trust land with fewer staff and fewer dollars than their state and
    federal counterparts. Thus, this funding is important to ensuring that
    tribes carry out their responsibilities in a manner that is consistent
    with the standards of their peer resource agencies.

    Great Lakes Indian Fish and Wildlife Commission (GLIFWC)
        The Band supports the Great Lakes Indian Fish and Wildlife
    Commission request of $4.196 million, to meet the needs in the
    Commission's testimony submitted to the Committee. The Band is a member
    of the GLIFCWC, which assists the Band in protecting and implementing
    its treaty-guaranteed hunting, fishing and gathering rights.

             PAY COST SHORTAGES FOR BIA PUBLIC LAW 93-638 EMPLOYEES

        The Lac du Flambeau Band is requesting the Appropriations Committee
    to restore full Public Law 93-638 Pay Cost funding for Tribes in the
    fiscal year 2005 Interior Appropriations Budget and consider restoring
    pay cost funding not received in fiscal year 2002-2004 through a
    special appropriations. Funding for the Band's most critical core
    services have experienced unprecedented erosion in recent years as a
    result of the lack of appropriate pay costs increases. These services
    include law enforcement, courts, education, natural resource management
    and social services. Funding would be used to support staff managing
    the Public Law 93-638 programs (TPA and non-TPA). If these services
    were carried out by the federal government they would continue to
    receive the appropriate pay cost increases mandated by federal law.
    Since tribal governments have assumed this responsibility under the
    Indian Self-Determination Act, Congress and the Department of the
    Interior has failed to fulfill its responsibility under the Act by not
    ensuring the Band has the same amount of resources the federal
    government would have to carry out these functions. Over the course of
    several years, Tribes have received 75 percent of the pay cost
    adjustment in fiscal year 2002, 15 percent in fiscal year 2003 and
    approximately 30 percent in fiscal year 2004. For the Lac du Flambeau
    Band $50,900.00 would provide for a 5 percent cost of living adjustment
    for the programs operated pursuant to its Self-Determination Act
    contracts including programs within the Tribal Priority Allocation,
    Tribal Management and Development and Tribal Fish Hatchery Operations.
    The Lac du Flambeau Band is requesting $50,900.00.
                                     ______

                    Prepared Statement of the Navajo Nation

        The Navajo Nation appreciates the opportunity to submit these
    comments concerning the proposed fiscal year 2005 budget for the Navajo
    Indian Irrigation Project (``NIIP'').

                                 I. BACKGROUND

        From the 1920s through the 1950s, the Navajo Nation developed a
    keen interest in a large-scale irrigation project near Shiprock, New
    Mexico, to partially alleviate the hardships caused by the brutal
    livestock reduction program of-the federal government. At the same
    time, the State of New Mexico considered plans to divert San Juan River
    water across the Continental Divide through the Rio Chama to serve non-
    Navajos in Albuquerque and elsewhere in the middle Rio Grande Basin.
        In 1956, Congress passed the Colorado Storage Project (``CRSP'')
    legislation (Public Law 84-485) authorizing construction of the Navajo
    Dam, identifying both the Shiprock project and the San Juan-Chama
    Diversion Project as participating projects, but did not authorize
    construction of either project, pending agreement on their respective
    water allocations. In December of 1957, the Navajo Nation and the State
    of New Mexico reached such agreement-the Navajo Nation would consent to
    in annual average diversion of up to 110,000 acre-feet from the San
    Juan River for the first stage of the San Juan-Chama Diversion Project
    in consideration for the construction of a 110,630 acre NIIP with a
    diversion right of 508,000 acre-feet per year.
        As the Interior Department's Inspector General stated, the Navajo
    Nation Council's approval of this agreement ``culminated 10 years of
    negotiations.'' Audit Report ``Navajo Irrigation Project, Bureau of
    Indian Affairs,'' No. 88-43 (Feb. 1988) at 3, (``Audit Report''). ``It
    is generally agreed that the [Navajo] Tribe was promised a completed
    irrigation project of a certain size and, based on that promise, made
    important concessions in return for an irrigation project.'' Id.
        In 1958, Senators Anderson and Chavez introduced a bill to jointly
    construct the NIIP and the San Juan-Chama Diversion Project. The
    legislation, embodying the agreement between the Navajo Nation and New
    Mexico, was signed into law by President Kennedy in 1962. Public Law
    87-483. As the Inspector General recounted:

        ``The Navajo Irrigation Project was authorized in the same
    Congressional bill as the San Juan-Chama Diversion Project, with the
    implication that construction of the two projects would proceed
    generally at the same pace. Congress subsequently appropriated funds
    for the San Juan-Chama Diversion Project, and the Bureau of Reclamation
    completed the Project on schedule in 1971. (Without the Tribe's
    agreement, it would have been impossible for New Mexico to obtain
    rights to the water now being diverted to the City of Albuquerque and
    the middle Rio Grande Valley). Conversely, appropriations and
    construction for the Navajo Irrigation Project have lagged far behind
    schedule. . . . There have not been any significant appropriations or
    major construction on the Project since 1980. . . . Construction of the
    Navajo Irrigation project is about half complete and at least 16 years
    behind schedule.''----Audit Report at 1.

        Funding for fiscal years 1994 through 2002 was increased to
    approximately $25 million to allow for additional construction of the
    NIIP, but this was still not sufficient to complete the NIIP in a
    reasonable time period. Funding for fiscal years 2003 and 2004 was
    drastically reduced from those amounts by approximately 50 percent, and
    resulted in no substantial construction. Today, the NIIP is only about
    65 percent completed. The proposed fiscal year 2005 budget continues
    the reduced funding level, which again delays any substantial
    construction.

                   II. CONSEQUENCES OF THE DECREASED FUNDING

        A comprehensive study of the Navajo Agricultural Products Industry
    (``NAPI'') commissioned by the Bureau of Indian Affairs, ``NAPI: Navajo
    Agricultural Assessment Project'' (Mid Kansas Agri Co 2000), identified
    organizational and management deficiencies within NAPI and a variety of
    external causes of NAPI's then-lack of profitability. According to the
    study those external causes directly implicated the failure to complete
    construction of NAPI as promised. . . .

        ``2. Farm development that included excessive infrastructure
    (roads, offices, buildings, staff, etc.). If the farm had been
    developed in a timely fashion as originally planned, the infrastructure
    costs would not have been a problem;
        ``3. Amount of time taken for BIA to develop the farm. The extended
    period of time it has taken to develop the farm has resulted in
    equipment being depreciated or won out before the farm was fully
    developed. Funds that should have gone toward replacing this equipment
    have been used for other purposes; and
        ``4. Inadequate funding throughout the developmental phases of
    NIIP. The BIA has not provided adequate funding for training Navajo
    managers in business management skills and for production expenses
    incurred in the initial crop year for each field.''----Id. Exec, Sum.,
    at xii-xiii.

        That report recommended an additional commitment of $31,250,000 of
    federal funds for repairing and replacing old water delivery systems
    and for establishing cover crops, Id. at xiii. The United States,
    however, did not implement such recommendations. On the other hand,
    NAPI implemented all of the major recommendations of the report except
    one which was determined by the NAPI Board of Director not to be cost-
    effective.
        As a result of the limited funding, NAPI struggles to spread its
    overhead over an incomplete farm, to manage a farm whose equipment and
    works have become obsolete even before the farm is substantially
    completed, and, now, even to undertake federal responsibilities
    contracted under Public Law 93-638 with inadequate funding because, in
    the words of the BIA NIIP Project Manager, ``BIA may have to make some
    mandated payments out of the O&M [Operations and Maintenance] account
    to some other Tribes this year.'' Letter from NIIP Project Manager to
    NAPI (Feb. 4, 2004). In addition, NAPI and the NAVJO Nation bear the
    opportunity costs of the incomplete farm. The 45,000 acres of the NIIP
    that are not yet served by the irrigation project could have generated
    up to $15,000,000 per year, had the NIIP been completed.

                       III. CAUSES OF FUNDING VARIATIONS

        The United States first offered as justification for reduced NIIP
    funding the fact that NAPI was not profitable. After NAPI returned to
    profitability three years ago, the United States offered a new
    justification, that NAPI had not implemented the Mid Kansas
    recommendations. Now that NAPI has done that, the current ``Green
    Book'' offers another explanation: ``The BIA is negotiating with the
    Navajo Nation to establish a Memorandum of Understanding (MOU)
    identifying activities and addressing responsibilities to initiate the
    turnover of completed blocks to the Navajo Nation and identify the date
    of project completion. Construction of additional facilities is being
    deferred until the MOU is finalized and signed.'' Green Book, p. BIA-
    338.
        However, Interior officials have also stated on other occasions
    that they have been instructed not to work on the MOU. In addition, the
    BIA has said that the United States will not fulfill its agreement
    until the Navajo Nation agrees to take over ``responsibilities'' of the
    NIIP ``completed blocks,'' although the project is only 65 percent
    complete.
        These continued justifications for reduced funding result in
    additional delays for the completion of the NIIP. Ultimately, these
    delays result in additional costs to the NIIP, which makes it more
    expensive and costly to all parties involved. Furthermore, none of
    these purported justifications honors the central fact that the Untied
    States and the Navajo Nation have agreed for the construction of the
    NIIP. This agreement was not conditioned on a profitable NAPI or
    compliance with the recommendations of any third party but was in
    exchange for the Navajo Nation's consent to the diversion of 110,000
    acre-feet of water to the San Juan-Chama diversion project.

                IV. FISCAL YEAR 2005 FUNDING REQUST--$40 MILLION

        As the ``Green Book'' states, ``NAPI is a diverse, viable business
    enterprise that directly contributes over $30 million annually to the
    regional economy. NAPI-related activities employ over 200 full-time
    employees annually and over 1,000 seasonal employees during peak
    operations. NAPI's future projects include continued crop
    diversification, food processing plants, and modern crop storage and
    processing facilities to fulfill customer packaging preferences and
    market demands.'' Green Book, p. BIA-337. The BIA NIIP Project Manager
    requested that the fiscal year 2005 budget include $40 million for NIIP
    construction. The Navajo Nation and NAPI's Board of Directors think
    this is an accurate and fair request to ensure completion of the NIIP
    and as a whole support the BIA funding request of $40 million.
        NAPI's management and Board have, within the past quarter, adopted
    a five-year strategic plan. Its achievement will bring more employment
    to the Navajo Nation, more dollars to the regional economy, and more
    profits to the Navajo Nation. However, these goals will not be realized
    if the NIIP continues to be funded at the proposed fiscal year 2005
    level.
        As such, the proposed funding for the NIIP for fiscal year 2005 is
    woefully inadequate. The Navajo Nation, therefore, respectfully
    requests that Congress increase funding for the NIIP to $40 million for
    fiscal year 2005.
        We appreciate the opportunity to offer these views for the
    consideration of the Subcommittee, and look forward to any discussions,
    clarification, and testimony that the Subcommittee deems desirable.
                                     ______

                    Prepared Statement of the Navajo Nation

        The Navajo Nation thanks the subcommittee for its support over the
    past year for funding Indian Self-Determination Act (ISDA) programs.
    The Navajo Nation has seen first hand the interest the subcommittee has
    shown in supporting the Navajo Nation's efforts to bring about social,
    governmental and economic change to its communities. Federal funding is
    the single most pressing budget issue facing our Navajo communities for
    fiscal year 2004 through fiscal year 2006, so much so that, the United
    States Commission on Civil Rights Report of July 2003 ``A Quiet
    Crisis'' states,

        ``Native Americans still suffer higher rates of poverty, poor
    educational achievement; substandard housing and higher rates of
    disease and illness . . . continue to rank at or near the bottom of
    nearly every social, health, and economic indicator.''

        The conditions have not changed much. This is why the Navajo Nation
    takes issue with the President's fiscal year 2005 budget since it
    includes drastic measures that provide no real significant funding
    increases to ISDA.
        Overview.--The Navajo Nation fully impresses upon the subcommittee
    that the ISDA funds contracted from the Department of the Interior-
    Bureau of Indian Affairs budget is a vital function of the federal
    Indian self-determination policy.
        The Congress and the Administration must be reminded, that we just
    started the second quarter-century of the ISDA. Quite frankly, Tribal
    governments and their communities can certainly fare much better than
    the first quarter-century, if the Department would simply support,
    formulate and defend a budget reflective of the ISDA policy.
        Budget Impacts.--The Navajo Nation presents an analysis and
    impending impacts of the President's fiscal year 2005 Budget proposal
    on the ISDA contracted programs; as well, the Navajo Nation offers its
    perspective of our budgetary needs. Over the course of this
    Administration, the President has requested an average of only 2.35
    percent in increases for fiscal years 2002 through 2005 for the
    Operation of Indian Program (0IP) budgets, which is comprised of
    numerous budget categories, namely, tribal priority allocation (TPA),
    Other recurring program (ORP), nonrecurring program (NRP), construction
    (CON), special pooled overhead programs (SPP), Regional Office
    Operations (RO) and Central Office Operations (CO). For fiscal year
    2005, the President requested $51,929,477,000 for OIP, $36,772,000 more
    than the fiscal year 2004 enacted budget, representing a 1.9 percent
    increase. Of the fiscal year 2005 Budget increase for OIP, $54,997,000
    or.065 percent above fiscal year 2004 enacted amount was requested for
    TPA, $14,088,000 or 268.24 percent above fiscal year 2004 enacted
    amount was requested for Trust Services within the Central Office
    Operations budget category, and $10,105,000 or 5.86 percent above the
    fiscal year 2004 enacted amount was requested for SPP within the
    Regional Office Operations budget category. The President's fiscal year
    2005 budget requires the subcommittee's leadership to help the Congress
    debate the Administration for its meager funding of the ISDA and its
    failure to meet the full accordance to the federal government's Indian
    self-determination policy.
        Navajo Nation Fiscal Year 2005 Funding Request.--In April 2003 the
    Navajo Nation requested $95,540,502 for various ISDA programs
    contracted by the Navajo Nation. The requested amount includes a 5
    percent or $4,549,548 planned increase amount to fund fiscal year 2005
    Navajo Nation Priorities: Scholarship/Higher Education and Law
    Enforcement.
        The Navajo Nation's priorities represent efforts to promote
    educational opportunities and safe communities. The 'Navajo Nation
    believes that an educated workforce willing to conduct commerce with
    the rest of America is vital to raising its standard of living. Despite
    efforts to develop the Navajo Nation's budgetary need with the
    Department, the Navajo Nation now learns that the President's fiscal
    year 2005 budget makes no requests to fund priorities we have
    identified; and for that matter, makes no attempt to hearken our plea
    of developing an educated workforce.
        While we are grateful for the receipt of past funding, we must
    state, the fiscal year 2005 President's budget does little to establish
    social and economic parity comparable with the rest of the citizens of
    America. We have continuously stated that current funding levels to the
    Navajo Nation are insufficient to adequately meet the needs of the
    Navajo people. Thus, it is important to remind the Congress and the
    Administration of our unmet needs budget for fiscal year 2005 in the
    amount of $331,345,192. The Congress, through several appropriation
    provisions, has persistently stated that. ``the BIA shall develop
    alternative methods to fund tribal priority allocations base programs
    in future years.'' To date no methodology recommendations have been
    developed by the BIA.
        Response to Fiscal Year 2005 Budget Policy Issues.--The challenges
    the Navajo Nation faces in fiscal year 2004 and now with fiscal year
    2005 and further anticipated for fiscal year 2006, are shortfalls in
    funding and absent any longstanding federal-Indian policy initiatives
    to sustain operational and funding parities. In the Department of the
    Interior's own fiscal year 2003-2008 Strategic Plan, several outcome
    strategies have been adopted for the tribal ISDA contracted programs,
    with specific performance measures for each significant outcome. While
    the Department's Strategic Plan is noble in projecting performance
    measure outcome plans lawmakers like to see, the fact of the matter is,
    the fiscal year 2005 funding request does little to achieve the
    Department's stated performance outcome measure for all of Indian
    Country. The following are specific budget policies that drive the
    President's fiscal year 2005 budget request and all of which presents a
    great hindrance to the Navajo Nation, as well as all Indian tribes and
    yet the Navajo Nation makes its recommendations.
        Fiscal Year 2005 lmpact on Fiscal Year 2006.--The Navajo Nation has
    learned in early March 2004 that the Administration is directing all
    executive departments to plan for a 2.4 percent cut to its fiscal year
    2006 budget request and are instructed to submit reduced numbers
    reflecting the planned budget cuts.
        The Administration's latest action substantially cuts the already
    under funded fiscal year 2006 Tribal ISDA budgets and further
    exacerbates the historical ISDA funding problem. The instructed 2.4
    percent cut represents a $55.3 million cut in fiscal year 2006. Once
    inflation and salary increases are taken into account, the real cut
    easily reaches 3.6 percent or nearly $80 million to OIP. Overall, the
    department will take a $259 million cut in fiscal year 2006. Budgeting
    within these constrained funding levels will be even more challenging
    than in fiscal year 2005. While the Administration dramatically cuts
    every single Interior agency, the BIA will absorb 22 percent of the
    overall cut. As for the Office of Special Trustee, it would be scaled
    back by $8 million. The office's budget saw increases of 54 percent and
    44 percent in the past two years.
        Restore Full 638 Pay Cost Funding.--We ask the Congress to restore
    full 638 Pay Cost funding for tribes. Tribes count on the cost of
    living pay increase, which is similar to what the Administration and
    Congress provide for federal employees each year. Due to the
    Administration's budget decision, tribes like the Navajo Nation
    received only 30 percent of their pay cost adjustment in fiscal year
    2004, 15 percent in fiscal year 2003 and 75 percent in fiscal year
    2002. The shortfall of 638 Pay Cost funding for these years have caused
    ISDA programs to absorb the cost by reducing operations and direct
    services to ISDA clients. The Navajo Nation strongly urges the Congress
    to restore 100 percent 638 Pay Cost funding for tribes in fiscal year
    2005, and to consider restoring 638 Pay Cost funding not received for
    fiscal years 2002-2004 as a special appropriation.
        Provide Training to Tribes of Base Line Data for Budgets and
    Performance.--Since fiscal year 2002, Indian tribes have been left out
    of the discussions regarding the implementation of the Administration's
    Management Agenda. Our ISDA programs have been left to defend for
    themselves when the Program Assessment Rating Tool (PART) assessment
    were being administered in fiscal year 2003 and as more are scheduled
    in fiscal year 2004 and fiscal year 2005. And all the while, the Office
    of Management and Budget continues to rate Bureau and Tribal-operated
    programs with yellow on progress and red on status, linking budget
    decisions to performance measures and cost management information to
    improve budget performance integration. We request the Congress to
    direct the BIA to establish high-level coordination with Tribes on
    their reporting requirements and with their method of processing tribal
    financial and performance accomplishment reports for purposes of
    developing the annual budget. By that token, we request new funding be
    provided to the BIA and Tribe's ISDA programs for training on the
    various reporting requirements and the PART demands.
        Fiscal Year 2003 Estimated Carry-Over.--The President requests a
    one-time 55,400,000 reduction to the fiscal year 2005 OIP budget. The
    reduction stems from an anticipated carry-over from fiscal year 2003
    and fiscal year 2004. The Congress must note that when the fiscal year
    2003 Interior bill was signed into law, disbursement to tribes and the
    BIA was not made fully available until late March 2003, causing all BIA
    operations to expend their appropriated funds with approximately 75
    percent of the fiscal year remaining. The Navajo Nation requests the
    Congress to add the fiscal year 2005 anticipated carry-over reduction
    and all future carry-over reductions to the ISDA funding base for ISDA
    programs identified as national priority ISDA programs by Indian
    Tribes.
        Contract Support Costs (CSC).--The fiscal year 2005 President's
    budget requests $133,314,000 for CSC, a 5,334,000 or .25 percent
    decrease from fiscal year 2004 enacted level. The Congress has
    consistently not funded CSC at 100 percent. Rather, this Congressional
    sanctioned impasse has produced nothing more than capping CSC at 89
    percent since fiscal year 2003. The Navajo Nation strongly urges the
    Congress to restore 100 percent CSC funding for tribes in fiscal year
    2005, and to consider restoring CSC funding not received for fiscal
    years 1999-2004 as a special appropriation.
        Trust Asset Management Reform.--The Administration has approached
    this issue by piecemeal and at the expense of the ISDA programs.
    General provision language in the fiscal year 2003 and fiscal year 2004
    Interior Appropriation have consecutively directed the BIA to transfer
    any un-obligated funds from prior appropriation acts to be made
    available for trust management reform activities.
        We recommend that no provisions be made a part of the fiscal year
    2005 Interior Appropriation bill and that the Congress direct the
    Department and the Office of the Special Trustee to: (1) report and
    communicate their trust reform processes, (2) report their performance
    results and have them assure that they are measured against their trust
    reform plan. Further we recommend Congress to monitor the conditions of
    critical ISDA program resources in the Department's plans; and assure
    that ISDA funding resources are not impacted as a result of the
    Department implementing their trust asset management reform plan.
        Education Construction.--Despite a terrible backlog of new school
    construction, Education Construction will lose $65,871,000 or a 28.75
    percent decrease in the President's fiscal year 2005 budget, primarily
    due to the rationale that funding will be used for construction for the
    remaining five schools. Disturbing to the Navajo Nation, the fiscal
    year 2005 budget proposes that the remaining balance upon funding the
    five schools will be used to replace the next schools on the priority
    list. The Navajo Nation requests that Congress restore the fiscal year
    2005 decrease and to establish assurance from the Department, which the
    next schools scheduled for replacement are funded with new funding.

                                   CONCLUSION

        Investing in tribal communities should not be weighed against how
    much the federal government can spend to minimally live up to its
    federal trust obligations. Instead, the federal government should
    invest in tribal communities so tribal communities can create for
    themselves, a strong economic base. America's first people ceded
    insurmountable amounts of real estate property containing vast riches
    of renewable and non-renewable natural resources with the hopes that
    such patriotic acts would provide to the birth of the new country-,
    that treaty negotiations would bring perpetual returns. Since then, the
    United States has become a world leader in promoting democracy,
    developing a strong military defense and building a sustainable
    economy. Yet, its government fails to institute long-standing
    governmental and diplomatic prominence to the first Americans.
        The Navajo Nation believes that it must be provided an opportunity
    to debate. We want the Congress and the Administration to judge us not
    by the subsistence funding it has provided, but how our performance has
    improved upon achieving a level of funding parity in ISDA. Thank you
    for the opportunity to convey our budget request and concerns and we
    respectfully request an opportunity to present oral testimony to the
    Committee.
                                     ______

                    Prepared Statement of the Navajo Nation

        Mr. Chairman and members of the Senate Committee on Appropriations,
    thank you for the opportunity to provide the Navajo Nation's statement
    regarding the President's fiscal year 2005 Budget. This statement is
    authorized by the Intergovernmental Relations Committee of Navajo
    Nation Council pursuant to resolution IGR-72-04, as sponsored by the
    Chairperson of the Public Safety Committee of the Navajo Nation
    Council, the Honorable Mrs. Hope MacDonald-LoneTree.
        The Navajo Nation personally thanks the Senate Committee for its
    support of Indian Law Enforcement and for funding adult and youth
    detention centers in Indian country. The Navajo Nation and People
    directly benefit from the support the Committee has given to Indian Law
    Enforcement.

                                    OVERVIEW

        In the 1997 Final Report of the Executive Committee for Indian
    Country Law Enforcement Improvements, the Attorney General and the
    Secretary of the Interior stated that Indian reservations were
    suffering from a ``public safety crisis.'' The report went on to state
    that the Indian law enforcement problem in Indian Country was
    ``severe,'' and that ``the most glaring deficiency is a chronic lack of
    law enforcement resources.''
        In the years since that report, the law enforcement situation on
    many Indian reservations has not improved. On March 16, 2003, the U.S.
    Attorney's Office in Flagstaff Arizona stated that violent crime on the
    Navajo Reservation was six times higher than the national average.
    Attesting to the lack of resources to adequately police tribal
    communities, in an area roughly 22,000 square miles and covering three
    states, the Navajo Nation employs just over 300 Navajo police officers.
        Additionally, in a time of glaring national concern in America's
    security against acts of terrorism, many tribal reservations are
    sources of important natural resources that provide energy to large
    cities such as Los Angeles, Phoenix, and Las Vegas. The Navajo Nation,
    for example, is surrounded by power plants and large water resources.
    The reservation also has substantial oil, gas, uranium, and coal
    reserves used to provide energy for West. Furthermore, the Navajo
    reservation is also home to major transportation corridors that lead to
    major cities in Southwest.
        Despite the fact that Indian reservations are facing increasing
    rates of crime and are potentially targets of terrorist acts and
    infiltration, there is no significant increase in the funding of Indian
    law enforcement. The primary challenge that Indian Law Enforcement
    faces, and has faced for a number of years, is a federal funding
    shortfall.
        This challenge is directly related to the absence of a federal-
    tribal policy that will create operational and funding parity for
    Indian law enforcement agencies on a consistent basis. Though the
    Department of Interior's fiscal year 2003-2008 Strategic Plan provides
    several strategies intended to be adopted by tribal communities with
    law enforcement performance measures, the fact of the matter is that
    the President's fiscal year 2005 budget request will: (1) not assist
    the Department of Interior's stated performance-outcome measure for
    Indian Law Enforcement, (2) not adequately assist Tribes with
    controlling rising crime rates, and (3) not adequately train and equip
    tribal law enforcement officers. A consistent, increase, and reliable
    source of federal funding would greatly improve Indian Country's crime
    fighting capabilities, as well as make tribal communities safer.
        In order to improve Indian County's ability to fight crime, tribal
    law enforcement will need a substantial increase in federal funding.
    Indian Law Enforcement funds, specifically Navajo Nation Law
    Enforcement funds, contracted from the Bureau of Indian Affairs plays
    an important role in the safety of our communities, and arguably, the
    safety of the United States. Unfortunately, President Bush's fiscal
    year 2005 budget for Law Enforcement is a matter of serious concern and
    will require this Committee's leadership to ensure that tribal law
    enforcement is adequately funded in accordance to the principles of
    Indian self-determination and the Federal Government's trust
    responsibility.
        Though President Bush's proposed fiscal year 2005 Budget requests
    more than $180,600,000 to fund 676 full-time-equivalent (FTE)
    employees, it only provides $7.8 million to hire 70 Bureau of Indian
    Affairs employees and 79 Tribal employees with operational costs at
    eight DOI-DOJ constructed detention facilities. Furthermore, $1.4
    million is earmarked for the Tohono O'odham Nation Reservation near the
    U.S.-Mexican border. The President's fiscal year 2005 budget does not
    reflect any significant increases for Indian law enforcement throughout
    entire expanse of Indian Country.
        The Navajo Nation respectfully requests Congress for increased
    Indian Law Enforcement funding to a level of parity that other state
    and municipal law enforcement agencies enjoy. Increased funding would
    be used for training and recruiting law enforcement personnel,
    improving law enforcement infrastructure, replace dilapidated
    equipment, and enhancing information technology.

                                   CHALLENGES

        Challenge One: Law Enforcement Personnel Capacity.--Navajo Nation
    law enforcement, and Indian law enforcement in general, work in a
    demanding and dangerous environment. Indian law enforcement personnel
    must be certified, trained, adequately compensated, and equipped to do
    their jobs.
        According to the 2000 U.S. Census, the Navajo Nation is projected
    to have on reservation population more than 201,000 by 2006.
    Furthermore, crime statistics reveal that felonies have increased at an
    average of more than 4 percent over a four year period from 1999 to
    2003. Misdemeanors have increased at an average of nearly 17 percent
    over the same period while funding remains level in these years.
        In order to effectively control crime in our communities, we need
    more law enforcement officers who are certified, trained, adequately
    compensated, and equipped to do their jobs.
        Additional law enforcement personnel.--In January 2003, the Bureau
    of Justice Statistics Report cites a need for more than 1,500
    additional sworn officers throughout Indian country. No where is this
    need more apparent than within the Navajo Nation where the officer per
    capita ratio is only .03 police officers per 1,000 people. This
    startling statistic is made more evident when compared to the FBI's
    Uniform Crime Report, which reveals that there are 209 officers per
    1,000 people in non-Indian communities with population under 10,000.
        Law Enforcement Compensation and Training Needs.--As a result of
    inadequate funding, tribal law enforcement agencies have had to absorb
    85 percent of Indian Law Enforcement costs either through operation
    funds or by reducing law enforcement personnel. Subsequently, this
    funding crisis impacts the ability of tribal law enforcement agencies
    to attract and retain qualified law enforcement personnel.
    Additionally, this funding issue detracts from other law enforcement
    services intended for improving community safety.
        Furthermore, the fiscal year 2005 budget request represents a 15
    percent decrease in the training of tribal law enforcement personnel.
    Without adequate training, tribal law enforcement personnel present a
    liability to their own safety and the safety of the tribal community.
    In real world terms, ``there are lives on the line.'' Tribal police
    officers face increasing risks that are totally avoidable with adequate
    funding.
        Reliable and State-of-the-Art Equipment-Disparities.--The operating
    expenditure for an individual tribal law enforcement office is
    approximately $36,000. This includes training, protective gear,
    communications technology, and other equipment. While on the other
    hand, the operating expenditure for non-Indian law enforcement is
    $43,000. This disparity reveals that Indian law enforcement officers
    are being asked to do more with less.
        Challenge Two: Law Enforcement Facilities.--Indian law enforcement
    facilities commonly have very limited or no available professional
    space. Additionally, tribal facilities are more expensive to maintain
    and improve to meet federal standards. On the Navajo Reservation, there
    are less than 103 dilapidated seventy year old jail cells for a
    population of over 150,000 Navajo people living on the reservation.
        Constructing New Law Enforcement Facilities.--The Federal fiscal
    year 2005 budget does not request funding for new detention facilities.
    This poses a serious problem for three detention facilities on the
    Navajo Reservation that remain to be funded as new construction; these
    facilities are listed on the BIA's Detention Priority List--as approved
    by Congress. Without adequate funding, tribal facility needs--earmarked
    by Congress--will continue to be unmet and crime will continue to rise.
        Operation and Maintenance Budget Outpaces Demand of Maintaining
    Older Buildings.--The Public Safety and Justice Construction program
    elements within the fiscal year 2005 budget request is only $2,000
    above the fiscal year 2004 enacted level. The Navajo Nation unmet needs
    is $61,654,271.00. As such, this inadequate increase falls short of
    fully supporting the Department's Strategic Plan 2003-2008. The
    Strategic Plan calls for achieving parity between Indian and non-Indian
    law enforcement, it also states that law enforcement facilities will be
    maintained or improved to meet standards established by the Facilities
    Condition Index. This is not possible given the President's current
    fiscal year 2005 budget request.
        Challenge Three: Reporting Statistics and Base Line Data for
    Budgets and Performance.--Currently, there exists a need for tribal
    participation and involvement with the President's initiative on Budget
    and Performance Integration, and the formulation and planning of
    baseline performance measures and standardized reporting. More than
    often, the Bureau of Indian Affairs formulates performance measures and
    corresponding budgets without tribal consultation. The Navajo Nation
    remains steadfast in requesting the Federal Government to adhere to
    Sec. 106(j) of the Indian Self-Determination and Education Assistance
    Act, which states:

        ``. . . [T]he Secretary shall consult with, and solicit the
    participation of, Indian Tribes and tribal organizations in the
    development of the budget for the Indian Health Service and the Bureau
    of Indian Affairs (including participation of Indian Tribes and tribal
    organizations in formulating annual budget requests that the Secretary
    submits to the President for submission to Congress . . .''

        The Bureau of Indian Affairs must establish and maintain executive-
    level coordination with Tribes on matters related to the BIA's
    reporting requirements and method of processing tribal financial and
    performance accomplishment reports for the annual budget. Further, it
    would be ideally feasible that Tribes are trained and prepared to
    respond to various report requirements and requests such as information
    used in formulating budget recommendations, performance planning and
    the Performance Assessment Rating Tool (PART).

                                   CONCLUSION

        Adequate funding for Indian law enforcement is desperately needed
    to meet increasing challenges. Without any established policy
    initiative on part of the Federal Government to help meet these
    challenges, Indian Country will continue to deal with increasing crime
    such as murder, drug trafficking, rape, and robbery. Just on the Navajo
    Nation we need $61,654,271 than presently is requested.
        The Navajo Nation strongly requests your support. As it stands now,
    President Bush's fiscal year 2005 Budget does not provide adequate
    funding to address Indian law enforcement challenges in Indian Country.
    We look forward to working with this Committee. At this time, I will
    answer any questions the Committee may have. Thank you.
                                     ______

           Prepared Statement of the Ramah Navajo School Board, Inc.

                                    ABSTRACT

        The Ramah Navajo School Board, Inc. (RNSB), which serves the
    educational needs of 463 students in grades kindergarten through
    twelve, appreciates the opportunity to submit its views on fiscal year
    2005 Interior Appropriation budget for the Bureau of Indian Affairs
    Indian education programs. In order for our Pine Hill School, and other
    BIA-funded schools, to begin to meet the mandates set out in the ``No
    Child Left Behind Act,'' we respectively request that Congress
    appropriate adequate funds in the fiscal year 2005 Interior
    Appropriation budget for the Bureau of Indian Affairs Indian education
    programs as set out below:

    ------------------------------------------------------------------------
                                                                  Amount
    ------------------------------------------------------------------------
    Indian School Equalization Funds (million or $4,500/             $352.90
     w.s.u.)................................................
    Administrative Cost Grant (million--on-going programs)..           60.00
    Initial AC Grant (million--new programs)................            3.00
    Student Transportation (per mile).......................            3.18
    Facilities Operation (million)..........................           69.30
    ------------------------------------------------------------------------

                              COMMUNITY BACKGROUND

        The Ramah Navajo Community, located in west central New Mexico in
    Cibola County, is part of the Navajo Nation although it is
    geographically separated from the main reservation. Due to its remote
    and isolated location, the community was largely ignored for most of
    its history by the federal, state and tribal governments. The incentive
    for the establishment of the Ramah Navajo School Board, Inc. (RNSB) was
    the closing of the local public school in the late 1960s and the
    refusal of the State of New Mexico to build a new school to replace the
    condemned school. Ramah Navajo students then had to be bused to public
    schools in Grants and Gallup--both 55 miles away. Many Ramah Navajo
    children were also sent to BIA boarding schools, some located out-of-
    state, far from the community and their parents for months at a time.
    In order to bring their children back to their families and the
    community, the Ramah Navajo people realized they had to have their own
    school and that this school had to be controlled by the community. Led
    by grassroots leaders, and working with the Ramah Navajo Chapter, the
    Ramah Navajo School Board was established by the Chapter on February 6,
    1970, and incorporated as a nonprofit organization in the State of New
    Mexico in February 10, 1970. On April 10, 1970, RNSB received its
    501(c)(3) tax exempt status from the IRS.

               IMPLEMENTATION OF THE ``NO CHILD LEFT BEHIND ACT''

        In the enactment of the ``No Child Left Behind Act'' of 2001
    (NCLDA), the President and Congress confirmed the federal government's
    trust responsibility for the education of Indian children in BIA and
    state school systems. Nevertheless, the President continues to submit
    to Congress budgets with no request to focus on the full implementation
    of NCLBA, making it difficult for BIA-funded schools to meet the
    requirements mandated by the law. As we enter the 21st Century full of
    hope and promises, too many of our neediest Indian students are still
    being left behind.
        RNSB strongly believes that in order to combat the pressure from
    the State Education Agency (``BIA-Indian Education'') to hold the
    schools accountable for meeting these mandates and the requirements
    imposed on schools that fail to meet these accountability goals, a
    national mandate is called for to the President and Congress to fund
    the ``No Child Left Behind'' initiatives at $1 billion in fiscal year
    2005 total for all education programs.
        Non-funded activities within BIA Indian Education includes
    continued focus on raising student academic achievement, continued
    development of academic performance and cost efficiency measures that
    are comparable to public school systems, and the strengthening of
    school-community links with parental involvement. The federal
    government must also help close the achievement gap for disadvantaged
    students by fully funding the NCLBA.

                             BIA SCHOOL OPERATIONS

        RNSB requests that BIA school operations be funded as follows in
    the fiscal year 2005 budget:

    ------------------------------------------------------------------------
                                                                  Amount
    ------------------------------------------------------------------------
    Indian School Equalization Funds (million or $4,500/             $352.90
     w.s.u.)................................................
    Administrative Cost Grant (million--on-going programs)..           60.00
    Initial AC Grant (million--new programs)................            3.00
    Student Transportation (per mile).......................            3.18
    Facilities Operation (million)..........................           69.30
    ------------------------------------------------------------------------

        Although the RNSB supports the Administration's fiscal year 2005
    request for an increase in funding for BIA School Operations of $364
    million, which would be $522.4 million for the 2004-05 School Year, we
    believe there are continuing shortfalls that need to be addressed. The
    School Operations budget funds ISEF, Student Transportation,
    Administrative Cost Grants and Early Childhood. The base value for ISEF
    weighted student unit (w.s.u.) was $3,916 for fiscal year 2003 and
    $3,962 for fiscal year 2004, an increase of $46 per w.s.u. ISEF funds
    the instructional and residential programs. RNSB recommends that the
    fiscal year 2005 ISEF budget be increased to $4,500 w.s.u., to reflect
    the educational need in BIA-funded schools and to continue to meet the
    requirements of the ``No Child Left Behind Act.''
        We note that the fiscal year 2005 Administrative Cost (AC) Grant
    request of $45.3 million for current contract and grant schools
    throughout the country is still below the previous levels. The funding
    for AC Grants historically has been under-funded. RNSB believes that
    the current funding need to administer these contracts and grants is
    greater than the fiscal year 2004 funding level.
        In addition, the Initial Administrative Cost Grant for BIA-operated
    schools converting to contract and grant schools was not funded.
    Although the Administration states that there are carryover funds
    available from fiscal year 2004, the BIA-operated schools which intend
    to convert to new contract and grant schools will face greater
    obstacles in meeting the recent requirements of NCLBA. Therefore, RNSB
    requests the funding for AC Grants be $60 million for on-going contract
    and grant schools, and $3 million for Initial Grants.
        School Transportation.--For Student Transportation, the BIA rate is
    $2.13 per mile for the 2003-04 School Year, far short of the national
    average of $2.92 reported for public schools seven years ago. Yet the
    fiscal year 2005 budget includes a $58,000 decrease for transportation
    costs, costs which have constantly exceeded the budgeted rate because
    of: (1) sharp increases in fuel costs; (2) above average repair costs
    for school buses used mainly in rural areas on roads that are not paved
    and not maintained; and (3) escalating GSA rental and mileage rates.
    Our school has been forced to use $100,000 to $150,000 of its ISEP
    funds to cover the shortfalls in the transportation funding we
    received--a trade off we should not be forced to make. Therefore, we
    ask Congress to increase student transportation in fiscal year 2005 to
    a level that can at least support a $3.18 per mile rate, which we
    estimate would require an appropriation of at least $51.9 million.
        School Facilities Operations.--The formula distributions for
    Facilities Operations remain inadequate, often proving insufficient to
    cover even basic utilities, let alone basic maintenance. Adequate
    formula funding for everyday upkeep of schools is a critical element to
    assure schools will last longer and remain safe for students. With
    Facilities Operations and Maintenance funds divided into two accounts
    in fiscal year 2000 (over the objection of the BIA schools), and
    Facilities Maintenance blended into the overall line item for
    Facilities Improvement & Repair (FI&R) under the Education Construction
    budget, it is difficult to discern what funding will be available for
    Facilities Operations under the FACCOM formula. Currently we face a
    shortfall of 21.18 percent. RNSB asks that Congress work with the
    Administration to ensure that adequate funding--at least $69.3
    million--is appropriated to eliminate this shortfall. These funds are
    imperative to the operations of the Pine Hill School and RNSB' s Indian
    Self-Determination operations.
        Navajo Tribal Education Department.--RNSB supports the Navajo
    Nation in its request for funding to establish its own ``Tribal
    Education Department'' to assist 372 BIA, public, private and parochial
    schools, school districts, and other programs serving 68,000 Navajo
    students within and near the Navajo Reservation in Arizona, Utah and
    New Mexico. The Navajo Nation wants to establish its own educational
    standards, institute a certification process for educators, integrate
    Navajo language and culture into the curricula, and assist schools
    serving Navajo students to meet the requirements of the ``No Child Left
    Behind Act.''
        U.S. Department of Education.--While we realize this Committee does
    not address Department of Education funds under the Labor-HHS-Education
    appropriations act, we want to share with you how such funds directly
    impact BIA-funded schools. The proposed funding for the U.S. Department
    of Education provides direct and indirect funds to BIA Indian Education
    for distribution to BIA-funded schools. The fiscal year 2005 total
    request for Indian Education is $120.9 million, which is unchanged from
    the fiscal year 2004 level. Grants to local education agencies (LEAs)
    is funded at $95.9, million.
        The BIA Office of Indian Education Programs (OIEP) distributes a
    percentage of Title II-Part A (Improving Teacher Quality) grants to
    BIA-funded schools for the purpose of improving student achievement.
    However, depending on the student population, the most a school can
    receive is $30,000. It is imperative that BIA/OIEP and DOE/Indian
    Education collaboratively reassess these programs to request a larger
    increase for this much needed initiative.
        RBSB supports the Administration's budget request for Individuals
    with Disabilities Education Act (IDEA) for special education and
    related services to children with disabilities, which is $12.2 million
    for all programs. BIA-funded schools receive funds under Part B and
    Part C of IDEA.
        RNSB supports the Administration's requested level funding for
    English Language Acquisition of $681.2 million includes a $5 million
    set aside for BIA-funded schools which are predominately Native
    American.
        We thank you for your consideration of our requests for
    congressional funding increases in the fiscal year 2005 Interior
    Appropriations BIA education budget as set out above.
                                     ______

           Prepared Statement of the Ramah Navajo School Board, Inc.

                                    ABSTRACT

        The Ramah Navajo School Board, Inc. (RNSB) expresses its
    appreciation for the opportunity to submit its views on matters coming
    before the 108th Congress. RNSB requests that Congress appropriate $24
    million in the fiscal year 2005 Interior Appropriation budget
    specifically for the Bureau of Indian Affairs (BIA) road appropriations
    for the repair, renovations and surfacing of BIA Routes 122 and 125 on
    the Ramah Navajo Community in New Mexico.

                              COMMUNITY BACKGROUND

        The Ramah Navajo Community, located in west central New Mexico in
    Cibola County, is part of the Navajo Nation although it is
    geographically separated from the main reservation. Due to its remote
    and isolated location, the community was largely ignored for most of
    its history by the federal, state and tribal governments. The incentive
    for the establishment of the Ramah Navajo School Board, Inc. (RNSB) was
    the closing of the local public school in the late 1960s and the
    refusal of the State of New Mexico to build a new school to replace the
    condemned school. Ramah Navajo students then had to be bused to public
    schools in Grants and Gallup--both 55 miles away. Many Ramah Navajo
    children were also sent to BIA boarding schools, some located out-of-
    state, far from the community and their parents for months at a time.
    In order to bring their children back to their families and the
    community, the Ramah Navajo people realized they had to have their own
    school and that this school had to be controlled by the community. Led
    by grassroots leaders, and working with the Ramah Navajo Chapter, the
    Ramah Navajo School Board was established by the Chapter on February 6,
    1970, and incorporated as a nonprofit organization in the State of New
    Mexico in February 10, 1970. On April 10, 1970, RNSB received its
    501(c)(3) tax exempt status from the IRS.

                                 JUSTIFICATION

        Funding is needed for the repair and renovation of the two main
    roads running through the Ramah Navajo Community--BIA Routes 122 and
    125--which were built by the Bureau of Indian Affairs and remain the
    BIA's responsibility for their maintenance and repair. These roads must
    be safe and passable since services and households are scattered
    throughout the community area. BIA Route 122 is primarily a gravel road
    in critical disrepair, often impassable during inclement weather, and
    is a dangerous road for our school buses. BIA Route 125, which passes
    through the developed areas of Mountain View and Pine Hill, runs for
    approximately 25 miles through the community and is the only paved
    access from State Road 53 to the Ramah Navajo and surrounding
    communities.
        Hazardous Natural Terrain.--Even if BIA Routes 122 and 125 were all
    paved and in excellent condition, they would be dangerous roads by
    their location alone. The Ramah Navajo Community is in a rural isolated
    area, with elevations exceeding 7,000 feet. (The continental divide
    runs through a portion of the reservation.) The terrain is hilly with
    juniper, pinon and pine tress throughout the area, obscuring the road
    ahead as it winds through the community. Thus, the roads are dangerous
    under the best of conditions, even during the day and in good weather.
    However, during the evening and night, the dangers increase as it
    becomes more difficult to see ahead. And during bad weather, with rain,
    snow or icy conditions, the roads become even more hazardous.
        Existing Road Problems.--BIA Routes 122 and 125 are in immediate
    need of extensive repairs, renovations and paving due to severe rough
    and uneven areas that exist throughout the routes. Hazards include:
    extremely rough and uneven road sections; potholes and worn down road
    edges; faded center and side stripping; lack of adequate road
    reflectors and side road indicators; lack of lighting at intersections
    and crosswalks; outside lines that border the road are non-existent in
    some areas making it hard to stay at a safe distance from the edge of
    the road causing drivers to drift towards on-coming traffic--all of
    which present many safety and health hazards.
        Current Usage.--Although Route 125 is paved, most of the other
    roads in the community are either gravel or dirt. Usage of these
    routes, especially Route 125, includes the following:
      --Residents of the Ramah Navajo Community, visitors, vendors, and
            public agencies who have to drive the road--many on a daily
            basis.
      --Our Pine Hill School buses transporting students to and from their
            homes that are scattered throughout this rural community.
      --Visiting school buses coming in for athletic activities, including
            activities in the evening when the roads become even more
            treacherous for all travelers. Also, visiting athletic teams
            usually have families traveling BIA 125 to attend the events.
      --Vendors from the major distribution areas of Grants and Gallup
            utilize this Route 125 when they deliver their goods to the
            Pine Hill Market, the school and school cafeteria, and the Pine
            Hill Health Center's medical and pharmacy services. Not only
            perishable goods, but liquid products such as propone,
            gasoline, diesel, and collection of waste by Waste Management
            are transported over these roads.
      --Other users include the U.S. Postal Service, UPS and Federal
            Express, private stores delivering furniture, tables, office
            equipment, local private vendors and feed for livestock.
      --Public agencies that use the road are the U.S. Government, the
            Navajo Nation, other tribal governments, the U.S. Forest
            Service, the U.S. National Park Service, as well as State
            governmental officials.
      --Emergency vehicles such as ambulance services, law enforcement,
            fire department, and others who require swift travel are slowed
            down and in jeopardy when using the routes.
      --Patients being transported often complain about the added pain
            caused by the bumpy roads, not to mention the time lost during
            emergency transport of patients.
      --Vehicles pulling trailers with hay, wood, water and livestock are
            at risk.
      --Participants and visitors to the annual Ramah Navajo Fair must
            utilize this road.
        Federal Programs.--Multiple federally-funded health, education,
    community, social and administrative services and programs essential to
    the community are located along BIA Route 125 as follows:

    ------------------------------------------------------------------------
                                                     Funding provided by
    ------------------------------------------------------------------------
    At Pine Hill:
        Pine Hill Health Center...............  U.S. Dept. of Health & Human
                                                 Services/IHS
        Emergency Medical Services............  U.S. Dept. of Health & Human
                                                 Services/IHS
        Pine Hill Volunteer Fire Department...  U.S. Dept. of Homeland
                                                 Security/FEMA
        Pine Hill Schools (K-12)..............  U.S. Dept. of the Interior/
                                                 BIA
        Pine Hill Schools (K-12)..............  U.S. Dept. of Education
        Pine Hill Schools (K-12)/Food Program.  U.S. Dept. of Agriculture
        Pine Hill Schools (K-12)/New Dormitory  U.S. Dept. of the Interior/
                                                 BIA
        Ramah Navajo Head Start...............  U.S. Dept. of Health & Human
                                                 Services
        Family And Child Education (FACE).....  U.S. Dept. of the Interior/
                                                 BIA
        Workforce Investment Act (WIA)........  U.S. Dept. of Labor
    At Mountain View:
        BIA SW Region/Ramah Navajo Agency.....  U.S. Dept. of the Interior/
                                                 BIA
        Ramah Navajo Chapter..................  U.S. Dept. of the Interior/
                                                 BIA
        Ramah Navajo Police Department........  U.S. Dept. of the Interior/
                                                 BIA
        Ramah Navajo District Court...........  U.S. Dept. of the Interior/
                                                 BIA
        RNSB Social Services..................  U.S. Dept. of the Interior/
                                                 BIA
    ------------------------------------------------------------------------

        The importance of BIA Routes 122 and 125 is not limited to usage by
    the above entities--it is also the main road for other agencies and
    organizations such as Gallup-McKinley School District buses, Waste
    Management for collections, and the Pine Hill Market site, where a
    service station, a community bank, a Laundromat, CellularOne and other
    businesses are located.
        Federal Government/BIA Responsibility.--Although the BIA's
    Southwest Region/Ramah Navajo Agency Roads Department is responsible
    for maintaining this road and all others in the community, the BIA has
    stated that it is unable to correct the problems on BIA Routes 122 and
    125 due to limited funding. Since Routes 122 and 125 are BIA roads,
    funding is unavailable from the State of New Mexico and Cibola County.
        Therefore, the Ramah Navajo School Board, Inc. is requesting
    congressional funding in the fiscal year 2005 Interior Appropriations
    (BIA) budget for the repair and renovation of BIA Routes 122 and 125 in
    the Ramah Navajo Community in Cibola County.
                                     ______

          Prepared Statement of the Red Lake Band of Chippewa Indians

        Mr. Chairman, I thank you and the other distinguished members of
    the Committee for this opportunity to provide testimony on behalf of
    the Red Lake Band of Chippewa Indians. On behalf of the people of Red
    Lake, who reside on our reservation in northern Minnesota, we
    respectfully submit that the budget appropriation process represents
    for us the major avenue through which the United States government
    fulfills its trust responsibility and honors its obligations to Indian
    tribes. We must depend on you to uphold the trust responsibility which
    forms the basis of the government to government relationship between
    our tribe and the federal government. The Red Lake Band of Chippewa
    Indians requests $7.9 million in additional fiscal year 2005 Interior
    funding for Red Lake's programs.
        Red Lake is a relatively large tribe with 9,650 members. Our
    840,000 acre reservation is held in trust for the tribe by the United
    States. While it has been diminished in size, our reservation has never
    been broken apart or allotted to individuals. Nor has our reservation
    been subjected to the criminal or civil jurisdiction of the State of
    Minnesota. Consequently, we have a large land area over which we
    exercise full governmental authority and control, in conjunction with
    the United States.
        At the same time, due in part to our location far from centers of
    population and commerce, we have few jobs available on our reservation.
    While the unemployment rate in Minnesota is about 5 percent, ours
    remains at an outrageously high level of 74 percent. The lack of good
    roads, communications, and other necessary infrastructure continues to
    hold back economic development and job opportunities.
        The President's fiscal year 2005 budget request for Indian programs
    falls far short of what tribes need. The following testimony highlights
    the most critical needs of the Red Lake Band of Chippewa Indians in
    fiscal year 2005.

                       TRIBAL PRIORITY ALLOCATIONS (TPA)

        Tribal governments have suffered a terrible and unprecedented
    erosion in federal funding for their critical core governmental
    services in the last decade. These services, including law enforcement,
    fire protection, courts, road maintenance, resource protection, and
    education and social services, affect the every day lives of people in
    Indian communities.
        Tribes are locked in a desperate struggle to protect the funding
    levels provided for these services, especially since the crippling,
    nearly $100 million cut in the TPA in fiscal year 1996. Although the
    President's budget each year has requested an increase in the TPA, in
    fact, except for a few targeted exceptions, none of these increases
    ever go to tribes' existing TPA programs to offset inflation. Instead,
    these increases go to fund new tribes and for certain internal
    transfers and uncontrollable costs. There has been only one small
    General Increase in the TPA in fiscal year 1998.
        Further exacerbating the situation, tribes' core service funding
    has been subjected to permanent, across-the-board reductions each year,
    as well as permanent, targeted reductions such as the fiscal year 2004
    reduction in tribal funding used to finance the BIA bureaucracy's
    Information Technology upgrades. Additional TPA cuts are proposed in
    fiscal year 2005 for Scholarships, Pay Costs, and ``Anticipated savings
    related to improved fleet management''. It has become a major task each
    year just to count up the number of ways the TPA is being cut.
        As a result of the above, tribes' core service funding is far less,
    in real terms, than a decade ago. Critical services continue to erode,
    seriously undermining our ability to provide some semblance of public
    safety, security, and well-being for people who already suffer some of
    the worst living standards in America. It may be the case that some
    federal agencies can absorb this onslaught of cuts, but tribes cannot--
    we have reached the breaking point.
        Let me provide an example of how real the funding crisis for basic
    services is at Red Lake. Below is a table showing TPA funding versus
    actual expenditures for just two of our critical service programs,
    Community Fire Protection and Tribal Courts.

    ----------------------------------------------------------------------------------------------------------------
                                                                         Calendar year 2003
                                              ----------------------------------------------------------------------
                  Tribal program                Actual TPA      Actual         Actual      Unmet need
                                                BIA budget   expenditures  shortfall \1\       \2\       Total need
    ----------------------------------------------------------------------------------------------------------------
    Fire Protection..........................       $42,500      $310,192     ($267,692)    $3,557,479    $3,599,979
    Tribal Courts............................       246,900       559,136      (312,236)       325,400       884,536
                                              ----------------------------------------------------------------------
          Totals.............................       289,400       869,328      (579,928)     3,882,879     4,484,515
    ----------------------------------------------------------------------------------------------------------------
    \1\ The actual shortfall, $579,928 for just these two programs, had to be taken from other Tribal programs,
      sharply reducing services provided by those programs.
    \2\ The Unmet Need for Fire Protection is primarily to replace two fire station buildings due to age and
      deteriorating conditions. The Unmet Need for Tribal Courts is primarily for additional staff to resolve a
      tremendous backlog of existing Court cases.

        The above example illustrates the damage caused by the onslaught of
    cuts to the TPA. The only solution to this crisis is a General Increase
    in the TPA, to be distributed to all tribes. The increase should be no
    less than 5 percent ($35 million) over the fiscal year 2004 enacted
    level. This amount will not even come close to replacing funds lost to
    inflation and across-the-board reductions, but will provide a start at
    addressing the present crisis.

                          PUBLIC LAW 93-638 PAY COSTS

        The only general increase tribes could count on each year was a
    cost of living pay increase, known as the 638 Pay Cost account, and
    which is similar to what the Administration and Congress provide for
    federal workers employed by federal agencies each year. Now, even this
    cost of living pay increase in under attack. Due to federal
    administrative oversight and through no fault of the tribes, tribes
    received only 75 percent of their 638 Pay Cost funding in fiscal year
    2002. Due to an Administration decision, tribes received only 15
    percent of their 638 Pay Cost funding in fiscal year 2003 and about 30
    percent in fiscal year 2004. These cuts, when combined with the cuts to
    the TPA described above, have been nothing short of crippling.
        The House Interior Appropriations Subcommittee included the
    following language in House Rpt. 108-195--Department of Interior and
    Related Agencies Appropriations Bill, 2004, Section on Erosion of Base
    Program Budgets:

        ``The Committee is concerned about the erosion of the capability of
    the agencies funded in this bill to deliver programs and services to
    the American people. Each of the last three budgets has only partially
    funded the costs of employee pay increases, as proposed by the
    Administration and approved by the Congress. Many of the agencies are
    salary intensive, funding on-the-ground work by rangers, biologists,
    maintenance workers, educators and other dedicated and skilled
    employees at the Nation's parks, wildlife refuges, public land
    districts, National forests, scientific laboratories, and Indian
    agencies, hospitals and schools. If funding to cover pay increases is
    `absorbed', programs and service inevitably are reduced. In the case of
    the Department of the Interior alone, cumulative pay costs of at least
    $225 million will be absorbed in fiscal year 2004 . . . Also unfunded
    are uncontrollable costs, such as utilities, rent increases, and
    inflationary costs that are beyond the agencies' control and must be
    paid. Medical inflation has averaged 15 percent per year, yet there
    have been no funds provided to the Indian Health Service for non-pay
    inflation in many years.''
        ``The absorption of uncontrollable pay costs has been compounded by
    substantial unbudgeted costs that have been incurred for activities
    associated with management initiatives, including competitive sourcing,
    budget and performance integration, financial management reform,
    activity based costing, the program assessment rating tool, and e-
    government . . .''

        I want to reiterate, the profusion of cuts to the TPA, including
    Pay Costs, has created a crisis for the Red Lake Band of Chippewa
    Indians. I appeal to the Committee to restore full Pay Costs in fiscal
    year 2005, for both BIA and IHS programs, and to consider restoring Pay
    Cost funding not received in fiscal year 2002-2004 through a special
    appropriations equitable adjustment. The impact to Red Lake during this
    time frame has been a permanent reduction in base funding of at least
    $250,000, and I ask for a specific and permanent earmark to Red Lake
    for this amount in fiscal year 2005.

                             CONTRACT SUPPORT COSTS

        Contract Support Cost (CSC) funds are critical for tribes to
    successfully operate programs under self-determination policy. The
    Administration and Congress have historically underfunded tribes' CSC.
    For fiscal year 2005, the President proposed a further reduction in CSC
    over the fiscal year 2004 request. The CSC account is presently funded
    at about 90 percent of documented need. This ongoing shortfall
    continues to penalize tribes that choose to operate BIA programs under
    the self-determination policy. To fund CSC at 100 percent of need, at
    least $25 million additional is required above the President's fiscal
    year 2005 request of $133.3 million, and I ask for this amount.

                                HEALTH SERVICES

        The President's fiscal year 2004 IHS request is $45 million over
    the fiscal year 2004 enacted amount, a paltry 1.5 percent. In just the
    last five years, the IHS service population has risen by about 11.5
    percent, while medical costs have risen by about 15 percent each year.
    We're falling further and further behind, and this is reflected in
    diminished health and well-being of our people. Below are just a few
    American Indian health statistics:
      --The rate of diabetes is twice that of the rest of America
      --The mortality rate for chronic liver disease is more than twice
            that of the rest of America
      --The rate of alcoholism is more than five times than the rest of
            America
      --The rate of Tuberculosis is about four times than the rest of
            America
      --Infant mortality is nearly two times higher than Caucasian
            Americans
      --The Sudden Infant Death Syndrome rate is the highest in America
      --Unintentional/accidental death rate is twice that of the rest of
            America
      --Teen suicide rates are three times higher than Caucasian Americans
      --Average life span is six years less than the rest of America
        Health care expenditures for Indian people are far below 50 percent
    of the per capita health care expenditure for mainstream America, and
    only 50 percent of per capita expenditures for federal prisoners. As
    the Administration and Congress continue to cut health care services to
    Indian people by not providing funding levels even remotely in line
    with inflation, the rates of illness and death from disease will grow
    worse each year. The fiscal year 2005 IHS ``Needs Based Budget'' is
    $19.5 billion, and this is what I ask the Committee to provide.

                                  OTHER ISSUES

        Housing is one of the most basic needs of every American. Past
    funding for the BIA's Housing Improvement Program (HIP) has been
    terribly inadequate. For example, Red Lake recently submitted its 2003
    HIP Work Plan Report to the BIA documenting 188 families in need of
    housing upgrades or replacement, for which the BIA is responsible to
    assist with. The total need documented for just BIA's share of housing
    repair and new housing at Red Lake is $1.2 million, yet Red Lake
    receives only $50,000 in HIP funding. I ask the Committee for a
    specific earmark of $1.2 million for Red Lake in fiscal year 2005. I
    further ask that the fiscal year 2005 BIA HIP budget be increased to
    $32 million, the level of need recently identified by the National
    American Indian Housing Council.
        The President's fiscal year 2005 budget for Indian Country Law
    Enforcement continues a downward trend at a time when rising crime
    rates, homeland security concerns, and court case backlogs have sharply
    hampered tribes' abilities to ensure public safety and welfare. A
    recent study by the Department of Justice for example, showed that
    violent crime rates in Indian Country are twice the national average,
    and the same study identified that inadequate funding is ``an important
    obstacle to good policing in Indian Country''. The President's fiscal
    year 2005 budget calls for cutting $4.7 million for tribal COPS grants,
    $2.5 million for Indian Country detention facility grants, and $7.6
    million in Department of Justice funding for Tribal Courts. We strongly
    oppose these cuts and request that for fiscal year 2005, funding for
    tribal law enforcement be increased by 50 percent to provide basic
    public safety in Indian Country.
        A top priority for Red Lake is to acquire funding to complete the
    new Red Lake Criminal Justice Complex. When completed, this complex
    will be home to our law enforcement, courts, adult and juvenile
    detention, and juvenile residential components. To date we have
    received approximately $11 million in federal funds to construct the
    detention facilities portion of the project. None of these funds may be
    used for construction of the law enforcement and courts portion of the
    facility. Unless we receive additional law enforcement and courts
    funding, our new facility will be located 1.5 miles away from the law
    enforcement and court components. This will create operational problems
    from the start, and will result in significantly higher costs to staff
    and maintain two separate facilities. Because of the urgent need to
    complete this comprehensive facility, I ask the Committee to consider a
    specific earmark to Red Lake in the amount of $3 million in fiscal year
    2005 Interior funding. This will allow us to complete all components of
    the criminal justice complex and avoid the significantly higher costs
    required to adequately staff and maintain two separate facilities.
        We are very concerned about the continued lack of attention to
    community fire protection. The funds tribes receive are woefully
    inadequate. Instead of addressing this need, the budget for community
    fire protection has been slated for reductions in recent years. I cited
    above, the dramatic disparity between BIA funding and actual
    expenditures for Community Fire Protection at Red Lake. I ask the
    Committee for a specific earmark for Red Lake in fiscal year 2005 of
    $3.5 million.
        The Circle of Flight Tribal Wetland & Waterfowl Enhancement
    Initiative, under the BIA's Other Recurring Programs category, was
    again eliminated by the President in his fiscal year 2005 budget
    request. The Circle of Flight has been one of Interior's top trust
    resource programs for 10 years. Elimination of the Circle of Flight
    would cripple Great Lakes tribes' ability to continue successful
    partnerships which have benefited a diverse array of wildlife and
    associated habitats. It would also be contrary to Interior Secretary
    Gale Norton's recent statement that ``successful programs should be
    funded and allowed to thrive''. I ask that you restore the Circle of
    Flight program to the BIA's fiscal year 2005 budget to at least the
    fiscal year 2004 level of $600,000, and to consider providing the
    fiscal year 2005 requested amount of $1.1 million.
        Thank you for allowing me to present, for the record, some of the
    most immediate needs of the Red Lake Band of Chippewa Indians in fiscal
    year 2005, and for your consideration of these needs.
                                     ______

              Prepared Statement of the Seminole Tribe of Florida

        The Seminole Tribe of Florida is pleased to submit this statement
    regarding the Tribe's fiscal year 2005 request for funding from
    programs in the Department of the Interior (DOI). The Tribe requests
    that Congress:
      --Continue to provide $396,000 to the Bureau of Indian Affairs for
            water quality and quantity studies by the Seminole Tribe of
            Florida and the Miccosukkee Tribe of Indians, to be equally
            divided between the Tribes; and
      --Provide $1,000,000 to the Bureau of Indian Affairs, Water
            Management Planning and Pre-Development non-recurring account
            for the Seminole Tribe for water quality studies and other
            ecosystem restoration and management efforts, as a part of the
            Seminole Tribe's Everglades restoration and government-wide
            resource management efforts.
        In summary, this funding will support a number of critical water
    projects in the Greater Everglades ecosystem, including, but not
    limited to: water quality studies to determine numeric standards for
    water conservation plan implementation; program development for
    adaptive management of wetlands; and Tribal planning and review of
    capital projects. These studies will strengthen the Tribe's ability to
    ensure effective and efficient project planning, design, and
    implementation and to coordinate permitting programs. In addition, this
    funding will complement ongoing federal funding of Tribal programs and
    projects designed to maximize effective resource management on Tribal
    lands, including a number of Everglades ecosystem restoration programs
    and projects.
        Department of Interior funding has helped the Tribe develop
    restoration programs and projects and ultimately define its role in the
    overall South Florida Ecosystem effort. The Seminole Tribe continues to
    make significant contributions to the restoration effort and looks
    forward to a continued partnership with DOI toward achieving our common
    goals.
        The Tribe's Everglades Restoration Initiative is a comprehensive
    water conservation system designed to improve the water quality and
    natural hydropatterns in the Big Cypress Basin. The Initiative, as
    implemented on the Big Cypress Reservation, is designed to mitigate the
    degradation the ecosystem has suffered through decades of flood control
    projects and urban and agricultural use. It will also provide an
    important public benefit: a new system to convey surface water from the
    western basins to the Big Cypress National Preserve, where water is
    vitally needed for rehydration and restoration of lands within the
    Preserve. This Initiative will contribute to the overall success of the
    Comprehensive Everglades Restoration Plan (CERP) as authorized by the
    Water Resources Development Act of 2000 (WRDA 2000).
        Working with the U.S. Army Corps of Engineers (Corps) and the USDA
    Natural Resources Conservation Service (NRCS), the Tribe is
    implementing its Everglades Restoration Initiative on the Big Cypress
    Reservation. The Tribe and the Corps initiated an agreement for design
    and construction of the western portion of the Big Cypress Reservation,
    along with a canal that transverses the Reservation, as a Critical
    Project under the authority of the Water Resources Development Act of
    1996. Initial construction activities on this project are complete and
    the detailed planning activity for the balance of the project will be
    completed this summer, allowing construction to begin in fiscal year
    2005. The NRCS has identified a number of Farm Bill programs and the
    Small Watersheds Program as suitable for funding the design, planning,
    and construction of the project on the eastern portion of the
    Reservation. The Tribe is working with NRCS to begin detailed planning
    and design for this project.
        The Tribe has also developed a comprehensive water conservation
    plan to address restoration issues near Lake Okeechobee on the Brighton
    Reservation. The Brighton plan addresses water storage and water
    quality issues. The Tribe is exploring funding options with the Corps
    for the implementation of this plan.
        Funds provided by the DOI have made it possible for the Tribe to
    initiate the research necessary to allow the Corps and NRCS to complete
    final project designs. The Tribe continues to spend Tribal funds to
    advance the research and design and is prepared to provide the required
    cost share payments as required by the different federal programs. In
    addition, the results of studies the Tribe helps pay for with both the
    Critical Ecosystem Study Initiative (CESI) funds from NPS and the BIA
    funds will be applicable to other CERP projects.
        The DOI, through the Bureau of Indian Affairs (BIA), has provided
    the Seminole Tribe with $199,500 in each of the fiscal years 1994
    through 2002, half of the $399,000 line item. In fiscal year 2003 and
    fiscal year 2004, $396,000 was appropriated and split between the
    Seminole and Miccosukee Tribes. The Seminole Tribe has used this BIA
    funding to complete studies and water quality and quantity monitoring
    that has proven critical to the Tribe's leading role in Everglades
    restoration.
        Through the National Park Service's (NPS) Critical Ecosystem Study
    Initiative (CESI) program, Interior provided the Tribe with $390,000 in
    fiscal year 1997, $920,000 in fiscal year 1998, $684,125 in fiscal year
    1999, $230,000 in fiscal year 2000, and $220,000 in fiscal year 2001.
    The Tribe has not received any additional CESI funds. The Seminole
    Tribe used CESI funds to monitor and analyze the quality and quantity
    of water coming onto and leaving the Reservation and to conduct
    scientific studies to determine nutrient impacts. For example, the
    Tribe studied the assimilative capacity of the C&SF canals for
    nutrients, phosphorus in particular. The results of such monitoring and
    studies will be available to others studying ecosystem degradation and
    developing plans to arrest the harm.
        Continued funding at an increased level is necessary for the Tribe
    to complete a number of studies that will support the design,
    construction, and operation of the Big Cypress water conservation
    project. Funding through the BIA budget is also necessary because the
    source of supplemental funding in prior fiscal years (the NPS CESI
    account) has become so low as to not support the studies originally
    funded with the CESI funds; the Tribe has not received any CESI funding
    since fiscal year 2001.
        Specific studies that would be supported through the increased
    level of BIA funding include the following:
      --Forested Wetland Nutrient Uptake Research designed to address how
            to restore and maintain wetland communities of plants and
            animals weakened by the adverse impact of poor water quality
            and desiccation by re-establishing natural hydrology and water
            quality;
      --Seminole Tribe Data Collection and Monitoring designed to access
            ecosystem damage and explore methods to restore and enhance
            natural habitats; and
      --Early Detection and Management of the Invasion of the Big Cypress
            Reservation by the Exotic Old World Tree Climbing Fern designed
            to prevent this invasive species from negating the restoration
            and preservation of native wetland communities.
        Most of this research is likely to be applicable to most areas of
    the Big Cypress Basin where similar forested wetland bio-regions exist.
        In addition, this increased level of BIA funding will support water
    quality studies to determine numeric standards for water conservation
    plan implementation and program development for adaptive management of
    wetlands on both the Big Cypress and Brighton Reservations. The Tribe
    also intends to reinforce its planning and review of Tribal capital
    projects to ensure effective and efficient project planning, design,
    and implementation. As part of this effort, the Tribe intends to expand
    coordination of its wildlife, wetland, and water resource permitting
    programs. This funding will complement ongoing federal funding of
    Tribal programs and projects designed to maximize effective resource
    management on Tribal lands, including a number of Everglades ecosystem
    restoration programs and projects.
        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. Similarly, improving
    water quality and expanding storage opportunities adjacent to Lake
    Okeechobee is crucial to the success of the programs to restore the
    Lake's ecosystem. By granting this appropriation request, the Congress
    will be taking a substantive step towards improving the quality of the
    surface water that flows over the Greater Everglades ecosystem. Such
    responsive action with regard to the Tribe's reservations, federal land
    held in trust, will send a clear message that the federal government is
    committed to Everglades restoration and the Tribe's role in this
    historic ecosystem restoration effort.
        The Seminole Tribe is making substantial commitments to Everglades
    restoration, including the dedication of over 9,000 acres of land for
    water management improvements on the Big Cypress reservation and 50
    percent of the planning, design, construction, and operations and
    maintenance of the critical project authorized at over $49 million. The
    Tribe is also finalizing plans to enhance water quality and storage
    opportunities on the Brighton Reservation to impact the Lake Okeechobee
    watershed. However, as the Tribe moves forward with its contribution to
    the restoration of the South Florida ecosystem, a substantially higher
    level of federal financial assistance is needed as well.
        The Tribe has demonstrated its economic commitment to the Greater
    Everglades ecosystem restoration effort; the Tribe is asking the
    federal government to help its participation in this effort. This
    effort benefits not just the Seminole Tribe, but all Floridians
    dependent on a reliable supply of clean, fresh water flowing out of the
    Everglades, and all Americans whose lives are enriched by this unique
    national treasure.
        Thank you for the opportunity to present the request of the
    Seminole Tribe of Florida. The Tribe will provide additional
    information upon request.
                                     ______

       Prepared Statement of the Shiprock Alternative School, Greasewood
              Springs Community School, and Pinon Community School

        This statement on the Bureau of Indian Affairs budget request for
    fiscal year 2005 is submitted on behalf of Shiprock Alternative School,
    Greasewood Springs Community School, and Pinon Community School,
    located in New Mexico and Arizona, respectively. Our schools are BIA-
    funded grant schools and serve a total of 1,114 students in
    kindergarten through 12th grade.

                           SUMMARY OF RECOMMENDATIONS
    ------------------------------------------------------------------------
                                                                  Amount
    ------------------------------------------------------------------------
    Student Transportation (million or $3.00/mile)..........          $47.50
    Indian School Equalization Formula (WSU)................        5,500.00
    Administrative Cost Grants (million)....................           62.00
    Facilities Operations (million).........................           75.00
    Facilities Improvement and Repair (million).............          156.30
    ------------------------------------------------------------------------

        We are concerned that much of the Administration's decisions with
    regard to BIA Education funding appear to be focused on (1) the
    erroneous assumption there is a big decline in enrollment at BIA-funded
    schools and (2) on data for specific performance measures for which
    there are inadequate financial resources. While we agree that
    establishing performance goals and measures are necessary and helpful
    in guiding the actions of the schools, funding to achieve these goals
    and objectives should be reflected in the Bureau's budget requests. We
    note, however, that the fiscal year 2005 budget request does not
    support the Bureau GPRA goals and performance measures,\1\ much less
    address the true needs of the BIA-funded schools.
    ---------------------------------------------------------------------------
        \1\ Some of the BIA's annual GPRA goals for education in fiscal
    year 2002 were: provide for a 2 percent increase in proficiency of
    students in the areas of language arts and math; increase the student
    attendance rate at Bureau/Tribal schools to 91 percent; provide for 100
    percent accreditation at Bureau/Tribal schools--but without any
    information on the number of non-accredited schools; provide for 10
    percent reduction in incidences of violence among students; provide
    $2.30 [per mile] in Indian student transportation funding to bring
    funding up to a rate comparable to the national average.
    ---------------------------------------------------------------------------
        Regarding the ``declining enrollment,'' the enrollment numbers have
    previously been established during a specified count period in the
    fall, with no adjustment for the influx of students we gain following
    the initial grading period in public schools or the second half of the
    school year. Recognizing the need to more accurately determine the
    numbers of students served, it is anticipated that the Bureau will
    revise this process to possibly a rolling average of the numbers of
    students throughout the year. Our views on the specific funding levels
    proposed for BIA-funded schools are as follows.

                             BIA--SCHOOL OPERATIONS

        Funding received under the Interior and Related Agencies
    appropriations accounts for over 75 percent of the funds for School
    Operations programs. Yet, the Administration request would only provide
    an overall increase of $364,000 (a less than 1 percent increase) over
    the fiscal year 2004 final funding level. Within the School Operations
    total are the following issues:
        Forward Funded Programs (to be expended in SY 2005-2006).--$453.1
    million (a $241,000 net increase) for the ``Forward Funded'' programs
    (ISEF, Student Transportation, Administrative Cost Grants, Early
    Childhood).
        Student Transportation.--Student Transportation is without a doubt
    one of the most under funded programs yet a vitally important element
    to the operation of a school. For several years we have urged the
    Bureau to request a realistic funding level so that our schools do not
    have to subsidize the transportation program from the instructional
    funds. Yet, instead of even a minimal increase as in fiscal year 2004,
    the Administration proposal of $38.1 million for fiscal year 2005 would
    result in a $58,000 decrease. Surely not only will some of Indian
    children be left behind academically but also physically if we do not
    have sufficient funds to bring them to and from the school!
        The Bureau's annual goal in fiscal year 2002 was to provide $2.30/
    mile, but the actual amount provided dropped to $2.17/mile in SY 2002-
    2003 while the total miles in the BIA school system grew from 14,873 to
    15,828. In SY 2003-2004, the rate dropped yet again to $2.13/mile and
    total miles increased yet again (16,314 miles). Without a significant
    increase for transportation, the Bureau will not be able to provide
    funds at a rate comparable to the national average ($2.93/mile in SY
    1999-2000 based on School Bus Fleet data published February 2002). We
    also note that according to the Rural School and Community Trust, for
    rural schools located outside designated Metropolitan Statistical
    Areas, transportation costs are nearly tripled.
        Recommendation.--We urge that Congress increase student
    transportation funding to at least $47.5 million or the amount that
    would result in a rate of $3.00/mile.
        Indian School Equalization Formula (ISEF).--ISEF is the primary
    source of funds for the instructional and residential programs at the
    185 schools and dormitories in the BIA school system. These funds,
    which are allocated by formula on a weighted student unit basis, are
    used to (1) provide education services to students (including 15
    percent reserved to support the special education program), (2) cover
    the increasing instructional program costs, teacher recruitment, and
    curriculum development to maintain our current programs, and (3) cover
    the costs associated with the many additional requirements of the No
    Child Left Behind Act of 2001 (NCLBA). Such additional costs include
    hiring only highly qualified teachers and paraprofessionals, providing
    increased professional development and parent involvement activities,
    ensuring schools achieve adequate yearly progress-with the goal of all
    students reaching the proficient level on reading/language arts and
    mathematics tests by the 2013-14 school year--and increased costs due
    to cost of living and inflation. In addition, when the recently
    negotiated regulations developed pursuant to the NCLBA are finalized
    and implemented, schools will likely face additional costs to institute
    an appropriate assessment, curriculum, standards and myriad of other
    requirements. Further, because of shortfalls in other areas of the
    school budget, particularly student transportation, ISEF funds are
    often utilized to cover those shortfalls.
        In fiscal year 2004, the Bureau estimated schools would receive
    $4,029 per WSU but the actual rate is now revised to $3,944 per WSU.
    However, during the NCLBA negotiated rulemaking, the committee
    considered the minimum annual amount [base funding] necessary to
    sustain a BIA-funded academic or residential program and found that the
    cost per student could be $5,260 per academic student and $11,000 per
    residential student (based on SY 99-00 data). In light of the ever
    increasing demands on these limited funds which constitute the base
    funding for schools, we seriously doubt the fiscal year 2005 request of
    $352.9 million will be sufficient to even maintain the current
    instructional program much less address the additional requirements
    imposed by the NCLBA.
        Recommendation.--To enable our schools to meet the requirements
    established in the No Child Left Behind Act and ensure our students
    make adequate yearly progress, we urge that Congress provide an amount
    that would result in at least $5,500 per WSU.
        Administrative Cost Grants (AC Grants).--The Administration does
    not request any funds for the separate fund to cover the first-year AC
    Grant costs for schools that newly convert to tribal operation, which
    was established in fiscal year 2004. The Bureau states there is no need
    until tribal interest in taking over schools currently operated by the
    Bureau ``can be assured.'' Without further information, it is difficult
    to determine whether the AC Grant request of $45.3 million would assure
    that there are sufficient funds for the on-going contracts/grants as
    well as those which may convert to contract basis during fiscal year
    2004. It is doubtful since the fiscal year 2005 request is a decrease
    from the amount provided in fiscal year 2004.
        Of even greater concern is that the AC Grants funding request for
    continuing tribally-operated schools will, once again, be totally
    insufficient to meet the needs of the schools. In SY 2002-2003, the
    Bureau was only able to supply 72.1 percent of the AC Grant needs of
    these ongoing tribally-operated schools. With the proposed reduction of
    $265,000, we will not even be provided that rate and thus be unable to
    keep up with the increasing costs of annual financial audits, liability
    insurance, salaries for certified administrators, and mandatory
    training courses for newly-elected school board members.
        Recommendation.--In order to meet 100 percent of need for on-going
    tribally-operated schools, we urge Congress to provide no less than $60
    million \2\ for continuing AC Grants.
    ---------------------------------------------------------------------------
        \2\ Based on fiscal year 2002 data, 100 percent AC Grant would have
    required $59.7 million.
    ---------------------------------------------------------------------------
        Current Year Funded Programs.--$69.3 million (a $123,000 net
    increase) for ``current year funded'' (Facilities Operations,
    Institutionalized Disabled, etc.).
        Facilities Operations.--These funds are used to cover the cost of
    utilities, heating fuel, janitorial, communications, refuse collection,
    water/sewer, fire protection, pest control, and technology maintenance.
    Funding for this program is based on the total square feet of education
    space.
        The Administration's fiscal year 2005 request of $57.1 million
    would result in a $30,000 increase over fiscal year 2004. Since prior
    years' funding levels resulted in our being able to cover only 60
    percent to 70 percent of the actual school operating costs, it is
    unrealistic to believe that the minimal increase proposed would impact
    the existing shortfall. Nor will the proposed amount help us to address
    rising costs of fuel and other utility costs. As Congress is aware,
    nearly half of all BIA schools are more than 30 years old, and 15
    percent are more than 50 years old, which means it costs substantially
    more to operate and maintain these outdated facilities--facilities that
    have been found \3\ to generally be in poorer physical condition, have
    more unsatisfactory environmental factors, more often lack key
    facilities requirements for education reform, and are less able to
    support computer and communications technology.
    ---------------------------------------------------------------------------
        \3\ General Accounting Office, BIA and DOD Schools: Student
    Achievement and Other Characteristics Often Differ from Public Schools,
    GAO-01-934 (September 2001).
    ---------------------------------------------------------------------------
        Recommendation.--For the safety of our students and to assist us in
    being able to provide an adequate learning environment, additional
    Facilities Operations funds are necessary. We ask that Congress
    appropriate at least $75 million in order that our schools can be
    properly operated and maintained.
        FOCUS Program.--We agree with the Administration that additional
    assistance is necessary to help the lowest performing schools improve.
    Therefore we support the $500,000 requested for the FOCUS program.

                          BIA--EDUCATION CONSTRUCTION

        The Administration proposes $229.1 million for Education
    Construction, which is $65.9 million less than the fiscal year 2004
    amount and $64.7 million below the fiscal year 2003 enacted level.
        Replacement Schools Construction.--Construction of new schools to
    ensure children are no longer subjected to dilapidated, unsafe building
    conditions, buildings that are not in compliance with handicapped
    accessibility codes, do not meet the instructional minimums, and
    contain a variety of health/safety code violations, remains a very real
    need. We do not support the Administration's recommendation that
    replacement school construction funds be reduced by $61.1 million.
        Facilities Improvement and Repair Program (FI+R).--In the recently
    released ``Department of Interior PART Assessments,'' one of the
    findings was that in spite of the amounts appropriated since fiscal
    year 2001, the Bureau could not assure that the Administration's
    commitment to eliminate the maintenance backlog within 5 years will be
    achieved. We do not find this surprising since the FI+R funds has been
    decreasing ($163.3 million in fiscal year 2003, $146.3 million in
    fiscal year 2004), and yet the Administration proposes another decrease
    of $8.8 million for an fiscal year 2005 funding level of $137.5
    million.
        We believe the Bureau's ``justification'' for the proposed funding
    cut is lacking as it only recites how the funds will used. It is
    certain, however, that the proposed amount will not be sufficient to
    significantly reduce the maintenance backlog, which has been estimated
    by the GAO to be more than $960 million.
        Recommendation.--We ask that Congress restore the $8.8 million the
    Bureau proposes to cut from the FI+R program, and provide at least an
    additional $10 million in fiscal year 2005.
        We fully realize that Congress faces an especially difficult year
    for determining the best uses of a limited amount of funds.
    Nonetheless, we hope that Congress will correct the inadequacies of the
    fiscal year 2005 budget request for the BIA-funded schools.
                                     ______

         Prepared Statement of the Skokomish Tribe of Washington State

        My name is Gordon James, I am Chairman of the Skokomish Tribe of
    Washington State. The Skokomish Indian Reservation is a rural community
    located at the base of the Olympic Peninsula with a population of over
    1,000 people. The Skokomish Tribe requests an appropriation of $250,000
    to support the continued operation of the Skokomish Tribal Police
    Department to meet the safety needs of this growing community.
        In the last ten years, the Skokomish Tribal Police Department has
    grown from one (1) untrained officer, to a force of thirteen (13)
    Washington State/BIA certified law enforcement officers. In addition,
    the Skokomish Tribe's Public Safety Department provides the only marine
    law enforcement and rescue services in a thirty-five mile radius of the
    southern Hood Canal. The Police Department works very closely with non-
    Tribal law enforcement agencies to combat the scourge of drug
    trafficking in this isolated rural area. These Tribal officers play a
    key role in the detection and bust of methamphetamine labs on the
    Reservation. Finally, the Tribe is a partner with adjoining counties in
    the Region 3 Homeland Security efforts. However, in fiscal year 2005
    the Tribe will not be able to maintain these officers or its
    Department, because the Tribe will no longer be eligible for DOJ COPS
    hiring funding. Thus, without the requested $250,000 the Tribe will be
    faced with possible closure of its Law Enforcement Department, which
    has become an integral part of the law enforcement community in Mason
    County.
        The Tribe experienced a significant growth in the Reservation's
    population during the 80s and early 90s. Along with the increased
    population, the Skokomish Indian Tribe experienced an alarming increase
    in the extent and severity of drug abuse among the residents of the
    Reservation. According to data from the Tribe's Alcohol Service
    Program, more than 53 percent of young adults ages 18-24 are presently
    impacted by drug abuse dependency. Unfortunately, along 64453.1 with
    increased drug use, the community has had to endure a significant
    escalation in associated crimes, including drug manufacturing and
    selling, armed assaults, domestic violence, and burglary. In the last
    six months, the Tribe's officers have responded to 1,800 calls, which
    resulted in 300 arrests--many involving non-Indian people. More than
    one-third of these arrests involved substance abuse. It is clear to the
    community and the partnership of law enforcement personnel and agencies
    involved that if the Tribe is forced to close its department, this
    rural community will become a haven for drug manufacturing and selling,
    and associated crimes.
        This is unacceptable. The Tribe requests your support for $250,000
    to support the continued operation of the Department. This request is
    supported by the surrounding local governments, the Hood Canal School
    District and the local law enforcement agencies.
                                     ______

        Prepared Statement of the United South and Eastern Tribes, Inc.

        Thank you for the opportunity to submit important testimony
    regarding the Administration's fiscal year 2005 Proposed Department of
    Interior Budget, and in particular our concerns regarding the Bureau of
    Indian Affairs budget. The United South and Eastern Tribes, Inc. (USET)
    is an inter-Tribal organization comprised of 24 federally-recognized
    Indian Tribes from 12 states along the eastern seaboard, the Gulf
    Coast, and into Texas. USET Tribes rely heavily on the Bureau of Indian
    Affairs (BIA) annual appropriations in order to contract with the
    government for the operation of Indian programs. Over ninety percent
    (90 percent) of the USET Tribes are contracting/compacting Public Law
    93-638 tribes. Continual reductions to the BIA budget more than concern
    the Tribes as they have a direct impact on tribal sovereignty and
    tribal self-governance. Many of the USET Tribes already spend valuable
    Tribal funds to cover the shortfalls in administering the 93-638
    government contracts, which provide for the basic human needs of their
    Tribal members. These funds should be available for valuable economic
    development initiatives on Tribal lands that work to establish
    sustainable economies. For all Tribes taking budget hits and those less
    fortunate Tribes that do not have the additional tribal funds to
    invest, their programs suffer and never reach full capacity. Unless the
    budget cuts cease and full funding of Indian programs is restored,
    Tribes will be forced to continue making these difficult decisions
    about what is important to the preservation of their people.

               FISCAL YEAR 2005 ADMINISTRATION'S PROPOSED BUDGET

        The President's proposed fiscal year 2005 Budget is said to be
    based upon performance measurements. Those programs that can prove they
    are performing and meeting their goals will receive funding, while
    those that fall short of meeting performance goals are drastically cut
    or terminated. USET understands that these are hard economic times and
    it is the Administration's focus to limit spending of funds to the most
    effective programs. Indian Programs are effective based on the
    resources that they have to operate the programs. The performance
    reviews that the Administration and Office of Management and Budget
    (OMB) look to in completing their proposed budgets are not a full
    picture of the affected programs.
        The current performance measures provide an incomplete picture of
    the performance levels of many programs in Indian country. The BIA
    Operation of Indian Programs has been historically under-funded and
    under-staffed for many years, yet when the performance reports rate
    Indian Programs this is not taken into account. How does the
    Administration expect Indian Programs to function at the optimal
    performance level and receive good reviews when there is not adequate
    funding or resources to operate the programs? In addition to leaving
    out this important consideration, the data collected by the performance
    reviews comes strictly from government data and is usually wrong. Not
    once have the USET Tribes been contacted during a performance review of
    a program to get their valuable input. This is a true crisis because
    the use of inaccurate data and reporting is eating away at the BIA
    Operation of Indian Programs budget each year. USET requests that
    Congress recognize this deficiency in the performance review process
    and work to remedy it quickly.
        The following is a list of concerns regarding various program
    funding in the President's proposed fiscal year 2005 budget request.
    USET Tribes ask that Congress weigh the heavy impacts that continued
    reductions to the BIA budget will have on already struggling programs.
    BIA Operation of Indian Programs works to provide the basic human needs
    to Tribes across the country including, welfare assistance, Indian
    Child Welfare, Housing Improvement, Law Enforcement, and Education.
    Millions of dollars leave this country in foreign aid each year. USET
    asks that you consider these requests and just leave a portion of those
    dollars marked for foreign aid in the Bureau of Indian Affairs budget.
        1. Contract Support Costs.--USET requests 100 percent funding on
    Contract Support Cost for Tribes carrying out Public Law 93-638
    government contracts. In the fiscal year 2005 Proposed Budget, Contract
    Support Costs were cut by $334,000. Tribes are being forced to use
    tribal money, that is much needed in other areas, to help support the
    administration of 638 contracts. Any other contract that the federal
    government enters into, they are expected to pay the contractors the
    full amount that it would have cost the government to run the same
    program. This does not happen in Indian country. It is a direct assault
    on tribal self-determination. The federal government tells Tribes that
    they want them to administer their own programs, but does not provide
    the resources to do so. The real fact is that if all Tribes got tired
    of paying for federal contract shortfalls and turned programs back over
    to the government to administer, the government would not be able to
    fulfill their fiduciary duty. Contracting, in the long-term, saves the
    government money and resources.
        Annual pay costs increases are a major expense that not only
    effects the federal government, but the Tribes administering federal
    government contracts as well. Each year Tribes are receiving fewer
    funds to operate 638 contract/compacts and at the same time being
    forced to absorb rising pay costs associated with those contracts and
    compacts. In recent years the increase has been 4 percent, yet only 2
    percent of those costs has been appropriated. USET worries that each
    year more direct service dollars are being used to fund the increases
    to pay costs. Tribes are only asking for is what is due them just like
    any other contractor.
        2. Scholarships.--USET requests that this line item be restored to
    the fiscal year 2004 enacted level. In the fiscal year 2005 Proposed
    Budget, Scholarships were cut by $547,000. The explanation from the
    Administration for this cut in funding was that there has been a
    reduction in the amount of scholarship applications over the past year.
    Once again the governments data is not correct. Most Tribes have many
    more scholarship applications than they can fund and each year many
    students are turned away. With the rising costs of higher education it
    just does not make sense to cut the scholarship program. Currently,
    Indian students receive only 18 percent of the cost of tuition ($3,000)
    from the BIA scholarship. The proposed reduction to this program would
    eliminate approximately 180 scholarships at the current rate of 18
    percent per award. This program needs more funding regardless of the
    number of applications received, because $3,000 does not go far in
    paying for a college education.
        Tribal students already fall far behind the national average in
    every level of education. The USET Tribes feel that it is vital to the
    preservation of strong communities that their children are educated.
    Please consider restoring this extremely important line item in the BIA
    budget for fiscal year 2005.
        3. Human Services.--USET requests that the line-items for both the
    Indian Child Welfare Act (ICWA) and Welfare Assistance be restored to
    at least the fiscal year 2004 enacted levels. In the fiscal year 2005
    Proposed Budget the Administration cut ICWA by $329,000 and the Welfare
    Assistance Program by $215,000. These reductions are being made to
    vital programs and many Tribes will not be able to make up that kind of
    shortfall. These programs are already grossly under-funded, yet the
    Green Book provides no explanation for this type of major reduction to
    the budget.
        Many Tribal governments rely on these funds as a stepping stone to
    accomplishing greater objectives within the community. If Tribal people
    do not have the basic necessities of life such as clothing, food, heat,
    etc., how can they be expected to be part of an expanding and thriving
    Tribal community? Congress must help Tribes care for the basic needs of
    their people.
        Tribal lands have the highest poverty rates of anywhere in the
    country, yet the Administration continues to send more money to foreign
    aid each year with little regard for the well-being of its own people.
    When will the true third-world conditions and needs of Indian country
    be considered? USET asks that Congress work to eliminate the needs in
    Indian country and begin that work by restoring funding to the Human
    Services part of the BIA fiscal year 2005 Budget.
        4. New Tribe Funding.--USET requests that as new Tribes are brought
    into the federal recognition process Congress will appropriate
    additional funding of Tribal Priority Allocations to those Tribes. USET
    believes that gaining recognition through the federal recognition
    process is essential to strengthening the sovereignty of Tribes. Many
    Tribes work years and spend countless hours to validate their
    sovereignty and gain recognition through a government-to-government
    relationship with the federal government. When these Tribes come into
    the federal system and attempt to receive the same services as the
    other Tribes, many times they are stopped due to lack of funding. It
    could take Tribes many more years to get up to the same level of
    government services as other more established Tribes. If funding is
    given to new Tribes from existing pools of money, it placed Tribes in
    competition against each other for the valuable resources they have
    been promised as dependent sovereign nations. In future funding cycles
    many more Tribes will enter the federal system. USET asks that Congress
    allocate specific funding for those new Tribes to establish themselves
    instead of slicing the existing funding sources in even thinner pieces
    for existing Tribes.
        While the items of concern are not the only items to consider in
    the BIA fiscal year 2005 Proposed Budget, they are the items that took
    the largest reductions and will effect Tribes in great ways. A proposed
    reduction of $52 million to the BIA fiscal year 2005 Budget will not
    only devastate the Tribes, but will cause further disorganization and
    lower service levels from the Bureau of Indian Affairs. The BIA is
    already strapped for funding. How are BIA programs supposed to pass
    performance measures in the future when the budget is losing major
    ground? There can be no expectation of high performance without
    adequate and sufficient funding of BIA programs. USET urges Congress to
    consider these requests carefully and halt the downward spiral caused
    by continual attempts to reduce the budget.
        Tribes do not seek a hand-out from the government, they only ask
    for what has been promised them through countless treaties, land
    exchanges, and agreements with the U.S. Government. USET asks that
    Congress uphold those treaties and promises to Tribes and protect the
    government-to-government sovereign relationship. Adequate funding of
    Indian Programs and domestic aid to Indian country would go a long way
    in protecting that relationship.
        The USET Tribes thank you for the opportunity to present our
    concerns regarding the fiscal year 2005 Proposed BIA Budget to the
    Honorable members of Congress and offer any assistance necessary to
    resolve these important issues.
                                     ______

             Prepared Statement of United Tribes Technical College

        For 35 years, United Tribes Technical College (UTTC) has been
    providing postsecondary vocational education, job training and family
    services to Indian students from throughout the nation. We are governed
    by the five tribes located wholly or in part in North Dakota. We have
    received funding through the Bureau of Indian Affairs every year since
    our founding, and since 1976 under Public Law 93-638 contract
    authority.
        The Bureau of Indian Affairs' proposal to eliminate funding for
    United Tribes Technical College makes no sense. The proposal is an
    affront to Indian youth and to Indian country generally. We are an
    educational institution that consistently has excellent results,
    placing Indian people in good jobs and reducing welfare rolls. The
    Bureau should be supporting us, not making proposals that would put us
    out of business. The elimination of BIA funding for UTTC would shut us
    down, as these funds constitute half of our operating budget. We do not
    have a tax base or state funds on which to rely.
        The request by the United Tribes Technical College Board for the
    fiscal year 2005 Bureau of Indian Affairs budget is:
      --$4 million in BIA funds for UTTC, which is $1 million over the
            fiscal year 2004 enacted level prior to the across-the-board
            reductions.
      --$4 million in BIA funds for phase one of student housing
            construction, a need identified in the 2000 Department of
            Education study. We are one of the few tribal colleges which
            offers a dormitory system, including family housing.
      --Requirement that the BIA place more emphasis on funding and
            administrative support for job training and vocational/
            technical education. The Adult Vocational Training program,
            funded at $8.7 million in fiscal year 2004, is but a shadow of
            its former self. There is no BIA leadership or advocacy for job
            training or vocational/technical education at the central or
            regional office levels.
        We are compelled to briefly comment about the funding claims made
    in the fiscal year 2005 BIA Budget justification comparing our BIA and
    Perkins funds with the BIA funds received by the colleges (TCUs) funded
    under the Tribally Controlled Colleges and Universities Act (p. BIA-
    246) The Bureau gives a grossly inaccurate impression of the relative
    amounts of per student funds of UTTC and the TCU's. UTTC per student
    funding appears relatively higher than in fact it is in relation to the
    TCUs because we, by law, use differing methodologies for counting full
    time Indian students.
        Although both methodologies use the same term ``Indian Student
    Count'' (ISC) there are two significant differences in the mechanics:
    First, under the Perkins Act we count an Indian student that takes 12
    or more credit hours as one ``ISC'' or one Full Time Equivalent (FTE)
    student. Most of our students take in excess of 12 hours per semester--
    18 hours is not unusual. Under the TCU law every 12 credit hours taken
    by an Indian student counts as one ISC. So an Indian student at a TCU
    taking 18 hours would count as 1.5 ISC while that same student at UTTC
    would count as only one ISC. Second, UTTC by law counts its ISC only in
    the summer and the fall semester, while the TCUs, by law, count
    students in summer, fall, and spring.
        To illustrate the above point, the fiscal year 2003 $3.6 million
    Perkins funding received by UTTC yields $3,358 per ISC when using the
    calculation method utilized by the TCUs, rather than $9,372 per ISC as
    shown in the BIA budget utilizing the Perkins Act method. The total
    amount of money is the same in both cases, but the per student funding
    description differs.
        Finally, we are totally perplexed about the portion of the chart in
    the fiscal year 2005 BIA budget justification that assumes that UTTC
    will receive $7,072 per student in fiscal year 2005 in non-Perkins
    Department of Education discretionary grants. The Bureau provides no
    details or backup of any kind for this preposterous projection. While
    we do compete for and receive some discretionary one-time DOEd grants--
    they are for specific projects, are not recurring, do not contribute to
    the core operations of our college and certainly are not at the level
    stated the BIA budget.
        UTTC Excels.--We are at a loss to know why the Bureau would not
    support UTTC, an institution with:
      --An 89 percent retention rate
      --A placement rate of 90 percent (job placement and going on to four-
            year intuitions)
      --A projected return on federal investment of 11 to 1 (2003 study
            comparing the projected earnings generated over a 29-year
            period of UTTC Associate of Applied Science graduates with the
            cost of educating them.)
      --The highest level of accreditation. The North Central Association
            of Colleges and Schools has accredited UTTC again in 2001 for
            the longest period of time allowable--ten years or until 2011--
            and with no stipulations. We are also the only tribal college
            accredited to offer on-line associate degrees.
        The demand for our services is growing and we are serving more
    students.--For the Spring Semester 2004, we enrolled 661 students from
    more than 45 tribes and 17 states. The majority of our students are
    from the Great Plains states, an area that, according to the 2001 BIA
    Labor Force Report, has an Indian reservation jobless rate of 75
    percent. UTTC is proud that we have an annual placement rate of 90
    percent. We hope to enroll 2000 adult students by 2008.
        In addition, as of the Spring Semester 2004, we serve 185 children
    in our Theodore Jamerson Elementary school, and 133 children in our
    infant-toddler and pre-school programs, bringing the population for
    whom we provide direct services to 979.
        UTTC course offerings and partnerships with other educational
    institutions.--UTTC offers 14 vocational/technical programs and awards
    a total of 24 two-year degree and one-year certificates. We are
    accredited by the North Central Association of Colleges and Schools.
        We are very excited about the recent additions to our course
    offerings, and the particular relevance they hold for Indian
    communities. These programs are: (1) Injury Prevention, (2) On-Line
    Education, (3) Nutrition and Food Services, (4) Tribal Government
    Management, and (5) Tourism.
        Injury Prevention.--Through our Injury Prevention Program we are
    addressing the injury death rate among Indians, which is 2.8 times that
    of the U.S. population. We received assistance through Indian Health
    Service to establish the only degree granting Injury Prevention program
    in the nation. Injuries are the number one cause of mortality among
    Native people for ages 1-44 and the third for overall death rates. IHS
    spends more than $150 million annually for the treatment of non-fatal
    injuries, and treatment of injuries is the largest expenditure of IHS
    contract health funds. (IHS fiscal year 2004 Budget Book).
        On-Line Education.--We are working to bridge the ``digital divide''
    by providing web-based education and Interactive Video Network courses
    from our North Dakota campus to American Indians residing at other
    remote sites and as well as to students on our campus. We currently
    have 47 students (15.5 FTE) taking on-line courses. We are accredited
    by the North Central Association of Colleges and Schools to provide on-
    line associate degrees. We have been invited by North Central to share
    our experiences in gaining on-line accreditation at its upcoming
    meeting in Chicago and we have been invited by New Mexico State
    University to do the same.
        At this point, nearly half of the students taking on-line courses
    are campus-based students. On-line courses provide the scheduling
    flexibility students need, especially those students with young
    children. Our on-line education is currently provided in the areas of
    Early Childhood Education and Injury Prevention We will be asking
    approval this year from the North Central Association to offer full
    degree on-line programs in the following areas: Health Information
    Technology, Nutrition and Food Science, Elementary Education, and also
    possibly Criminal Justice. This approval is required in order for us to
    offer federal financial aid to the students enrolled in these on-line
    courses.
        High Demand exists for computer technicians.--In the first year of
    implementation, the Computer Support Technician program is at maximum
    student capacity. In order to keep up with student demand, we will need
    more classrooms, equipment and instructors. Our program includes all of
    the Microsoft Systems certifications that translate into higher income
    earning potential for graduates.
        Nutrition and Food Services.--UTTC will meet the challenge of
    fighting diabetes in Indian Country through education. As this
    Subcommittee knows, the rate of diabetes is very high in Indian
    Country, with some tribal areas experiencing the highest incidence of
    diabetes in the world. About half of Indian adults have diabetes
    (Diabetes in American Indians and Alaska Natives, NIH Publication 99-
    4567, October 1999)
        We offer a Nutrition and Food Services Associate of Applied Science
    degree in an effort to increase the number of Indians with expertise in
    nutrition and dietetics. Currently, there are only a handful of Indian
    professionals in the country with training in these areas. Future
    improvement plans include offering a Nutrition and Food Services degree
    with a strong emphasis on diabetes education and traditional food
    preparation.
        We also established the United Tribes Diabetes Education Center to
    assist local tribal communities and our students and staff in
    decreasing the prevalence of diabetes by providing diabetes educational
    programs, materials and training. We published and made available
    tribal food guides to our on-campus community and to tribes.
        Tribal Government Management/Tourism.--Another of our new programs
    is tribal government management designed to help tribal leaders be more
    effective administrators. We continue to refine our curricula for this
    program.
        A newly established education program is tribal tourism management.
    UTTC has researched and developed core curricula for the tourism
    program and are partnering with three other tribal colleges (Sitting
    Bull, Fort Berthold, and Turtle Mountain) in this offering. The
    development of the tribal tourism program was well timed to coincide
    with the planned activities of the national Lewis and Clark
    Bicentennial last year. As you may know, Lewis and Clark and their
    party spent one quarter of their journey in North Dakota. UTTC art
    students were commissioned by the Thomas Jefferson Foundation to create
    historically accurate reproductions of Lewis and Clark-era Indian
    objects using traditional methods and natural materials. Our students
    had partners in this project including the National Park Services and
    the Peabody Museum at Harvard University. The objects made by our
    students are now part of a major exhibition in the Great Hall at
    Monticello about the Lewis and Clark expedition.
        Job Training and Economic Development.--UTTC is a designated
    Minority Business Center serving Montana, South Dakota and North
    Dakota. We also administer a Workforce Investment Act program and an
    internship program with private employers.
        Economic Development Administration funding was made available to
    open a ``University Center.'' The Center is used to help create
    economic development opportunities in tribal communities. While most
    states have such centers, this center is the first-ever tribal center.
        Department of Education Study Documents our Facility/Housing
    Needs.--The 1998 Vocational Education and Applied Technology Act
    required the Department of Education to study the facilities, housing
    and training needs of our institution. That report was published in
    November 2000 (``Assessment of Training and Housing Needs within
    Tribally Controlled Postsecondary Vocational Institutions, November
    2000, American Institute of Research''). The report identified the need
    for $17 million for the renovation of existing housing and
    instructional buildings and $30 million for the construction of housing
    and instructional facilities.
        We continue to identify housing as our greatest need. We have a
    huge waiting list of students some who wait from one to three years for
    admittance. For the first time in its history, in the 2002-2003 year,
    we were forced to find housing off campus for our students. Enrollment
    for the 2002-2003 year increased by 31 percent; and in 2003-2004
    enrollment increased another 20 percent. In order to accommodate the
    enrollment increase, UTTC partnered with local renters and the Burleigh
    County Housing Authority. Approximately 40 students and their
    dependents were housed off campus. The demand for additional housing
    also presents challenges for transportation, cafeteria, maintenance and
    other services.
        UTTC has now completed a new 86-bed single-student dormitory on
    campus. This dormitory is already completely full as are all of UTTC's
    other dormitories and student housing. To build the dormitory, we
    formed an alliance with the U.S. Department of Education, the U.S.
    Department of Agriculture, the American Indian College Fund, the
    Shakopee-Mdewakanton Sioux Tribe and other sources for funding. Our new
    dormitory has at the same time created new challenges such as shortages
    in classroom, office and other support facility space. However, more
    housing must be built to accommodate those on the waiting list and to
    meet expected increased enrollment.
        Some of our housing must be renovated to meet local, state, and
    federal safety codes. In addition some homes may be condemned which
    will mean lower enrollments and fewer opportunities for those seeking a
    quality education.
        Thank you for your consideration of our request. We cannot survive
    without the basic vocational education funds that come through the
    Bureau of Indian Affairs. They are essential to the operation of our
    campus and essential to the welfare of Indian people throughout the
    Great Plains region and beyond.
                                     ______

                           DEPARTMENT OF AGRICULTURE

       Prepared Statement of the American Fly Fishing Trade Association;
       American Rivers; American Sportfishing Association; Congressional
       Sportsmen's Foundation; Federation of Fly Fishers; International
        Association of Fish & Wildlife Agencies; Izaak Walton League of
    America; Northwest Sportfishing Industry Association; Pure Fishing; and
                                Trout Unlimited

        On behalf of the millions of anglers represented by the
    organizations, we are writing to thank you for your past support of the
    fish passage program within the U.S. Fish and Wildlife Service's
    (USFWS) Fisheries Program. We are recommending the strongest possible
    investment in the fish passage program for fiscal year 2005.
        There are an estimated 75,000 dams over six feet in the United
    States, and 2.5 million smaller barriers that impact fish movement. The
    fish passage program has set a goal of removing or bypassing 1,100
    barriers and providing access to 14,000 miles and 250,000 acres of
    habitat for fish reproduction and growth by 2010. The goal includes
    having projects and partners in all 50 States. To achieve this goal,
    the annual commitment required is $5 million. Most of those funds will
    go to on-the-ground restoration projects. We strongly believe that this
    level of funding is not only needed but also justified by the success
    of the program and the impact this level of funding will have.
        Fish Passage is an essential program within the Fisheries Program.
    The program re-connects aquatic species to historical habitat by
    removing or bypassing man-made barriers. The key element of this
    program is that projects are done in cooperation with partners. The
    program has been very effective in leveraging dollars at a 1:3 ratio on
    average. That leveraging means over 200 partnerships to date. The
    benefits of these on-the-ground projects and partnerships are increased
    fish populations and increased recreational fishing opportunities.
    Today, more than 44 million Americans are anglers. When they go fishing
    they spend over $41 billion, creating an economic impact of $116
    billion for the U.S. economy. This significant economic engine will
    grow unless anglers lose the opportunity to fish.
        According to the USFWS, program needs as of February 2004 are
    $72,615,958 to fund 312 projects. These projects include 441 barrier
    removal projects, totaling $44.6 million that have willing partners,
    are ready to implement, and would open 7,962 miles and 81,030 acres of
    fish habitat. Additional fish passage needs include inventories,
    surveys and planning projects, totaling $28 million.
        With appropriated funds in fiscal year 2004, 99 barriers can be
    removed or bypassed and 25,971 acres and 1,273 miles can be reopened.
    Unfortunately, at the level of funding in the President's fiscal year
    2005 budget request, this would drop to 8,039 acres and only 375 miles
    reopened with only 24 barriers being removed or bypassed.
        The Fish Passage Program deserves the strongest support Congress
    can give it. We would welcome the chance to come in and discuss the
    program with the Subcommittee staff at their earliest convenience. We
    have asked Deanna Wood of the American Sportfishing Association to
    contact them to find a time when we can get together.
                                     ______

        Prepared Statement of the American Forest and Paper Association

        The American Forest and Paper Association \1\ (AF&PA) supports
    sustainable forest management on all forest lands. Active management,
    long-term forest health and sustainability, and local level decision-
    making should be vital components of forestland policy on public lands.
    On private lands, federally-supported research and cooperative
    assistance are vital to achieving sustainable management. AF&PA
    supports USDA Forest Service and related programs that will help
    achieve these objectives. The following are recommendations for fiscal
    year 2005 appropriations for the USDA Forest Service and forestry-
    related Department of Energy research.
    ---------------------------------------------------------------------------
        \1\ AF&PA is the national trade association of the forest, pulp,
    paperboard, and wood products industry. AF&PA represents almost 200
    member companies and related trade associations (whose memberships are
    in the thousands) which grow, harvest, and process wood and wood fiber;
    manufacture pulp, paper, and paperboard products from both virgin and
    recovered fiber; and produce solid wood products.
    ---------------------------------------------------------------------------
             IMPLEMENTATION OF THE HEALTHY FORESTS RESTORATION ACT

        Our nation's federal forestlands face a forest health crisis.
    Millions of acres of federal forests across the country are at high
    risk to catastrophic wildfire, insect infestation, and disease. These
    lands pose serious risks to adjacent private forestlands and
    communities. The Healthy Forests Restoration Act (HFRA) of 2003 was a
    tremendous step forward in addressing this crisis. The fiscal year 2005
    budget needs to complement HFRA's objectives by supporting programs
    that reduce hazardous fuels and treat the threats of insects and
    disease. While the following recommendation pertains specifically to
    the USDA Forest Service, AF&PA also supports similar efforts by the
    Bureau of Land Management.
        Hazardous Fuels Reduction.--AF&PA supports the President's request
    of $266.2 million, as well as the proposal to move the funding to the
    National Forest System. Increased funding is needed for hazardous fuels
    reduction in order to protect resource values such as fish, wildlife,
    and water. There are significant treatment needs in all areas of the
    country and in all three condition classes. Given the need to
    prioritize these efforts, we encourage emphasis in areas where there is
    existing infrastructure (e.g., mills) to do the work that needs to be
    done. The movement of hazardous fuels reduction funds to NFS would
    allow better integration of these activities with the vegetation
    management work happening on the ground. We encourage continued
    collaboration between the Forest Service and the State Foresters in
    accomplishing this work.

                            ACTIVE FOREST MANAGEMENT

        Active forest management of national forests is needed to ensure
    that the Forest Service meets legislative mandates of promoting forest
    health and multiple uses. Data collected through the Resources Planning
    Act (RPA) Assessments indicate that tree growth on national forests has
    exceeded harvest almost five-fold in the last few years, and that gap
    is projected to grow larger. In addition, twice as many trees are dying
    than are being harvested.
        Forest Products.--AF&PA recommends increasing the total volume sold
    to 3.0 billion board feet, with funding of $300 million to support that
    level. Timber sales can be an important tool to achieve forest health
    objectives and will provide a means to pay for the significant costs of
    treating hazardous fuels. The Forest Service expects to achieve greater
    program efficiencies as a result of Healthy Forests Initiative tools;
    their unit costs should therefore be significantly reduced, allowing
    them to accomplish more with their appropriated funding level. Despite
    the availability of the HFI tools, it appears that some field managers
    are reluctant to use them. As such, we encourage that distribution of
    funds be weighted towards regions or National Forests that demonstrate
    accomplishments on the ground.
        Salvage sales are an important component of the timber sale program
    as a means to treat forests following insect outbreaks, fires, blow
    down, and other natural disasters. We recommend replenishment of the
    Salvage Sale Fund through appropriations in order to rebuild the
    capacity of this fund and take advantage of salvage and rehabilitation
    opportunities.
        Land Management Planning.--AF&PA supports funding at the fiscal
    year 2004 enacted level of $70 million, in order to ensure that the
    agency completes forest plan revisions on schedule. Revision of older
    plans is a high priority and it is critical that these funds not be
    diverted for other planning purposes.
        Wildlife and Fisheries Habitat Management.--AF&PA supports the
    President's request of $134.5 million to ensure that important wildlife
    habitat and conservation programs are undertaken. The drawdown in the
    Knutson-Vandenberg (KV) fund to pay for wildfire suppression costs has
    a major impact on this and other programs. Failure to completely repay
    the KV Fund diminishes implementation of much-needed wildlife habitat,
    reforestation, TSI, and other conservation projects. In some regions,
    this adversely impacts non-essential KV projects, such as fish and
    wildlife programs that are already underfunded.
        Vegetation and Watershed Management.--AF&PA supports the
    President's request of $194.3 million for this program. This program
    should address the significant reforestation backlog. AF&PA is very
    concerned about the growth in the reforestation backlog, especially
    since reforestation needs have increased since 1999, primarily due to
    wildfires.

                                WILDFIRE FUNDING

        The escalating costs of wildfire suppression are crippling the
    federal land management agencies charged with the responsibility of
    fighting fires. The strategy of transferring funds from other critical
    programs to cover wildfire suppression shortfalls has significantly
    impacted needed on-the-ground work.
        Fire Suppression Operations.--AF&PA urges the development of a
    solution that provides a source of emergency funds for wildfire
    suppression. While the President's request of $685.4 million for fiscal
    year 2005 is a significant increase over the fiscal year 2004 budget,
    it will prove to be insufficient if our forests experience a fire
    season like the ones in the past few years. We recommend that any
    consideration of emergency funds include significant sideboards that
    require implementation of, or provide incentives for, cost containment.

                                    RESEARCH

        Research helps find innovative ways to promote and enhance forest
    sustainability and provides scientifically sound data that benefits
    both public and private forests. Forest Service research contributes to
    achieving the intent of HFRA by finding new, more effective means to
    achieve healthy forests. Research investments in forest productivity,
    addressing the threats of insect and disease, and understanding forest
    management decisions on wildlife, water quality, biodiversity,
    landscapes and habitats, all contribute to efforts to achieve and
    maintain healthy forests.
        Forest Inventory and Analysis (FIA).--AF&PA supports the
    President's fiscal year 2005 budget request of $56.7 million. The FIA
    program is the most comprehensive data collection and analysis program
    to assess the sustainability and health of the nation's forest
    resources. We are very interested in working with the Committee in
    obtaining full funding for the program in fiscal year 2006 to fulfill
    the requirements contained in the authorizing legislation. As we move
    forward in implementing an annual system of data collection and
    analysis, AF&PA encourages the Forest Service to meet its existing
    commitments and to work with stakeholders in implementing the program
    efficiently and effectively.
        Forest Products Utilization and Process.--AF&PA recommends a
    funding level of $19.5 million for this program. Unfortunately, funding
    for the Forest Products Lab and experiment stations to conduct research
    on the efficient and effective use of wood fiber has suffered from
    steady erosion in budget over the last several years. Support is needed
    for the core functions of the research stations to address issues such
    as the use of small diameter wood and bioenergy production, and for the
    construction and operation of a Building Durability Test Facility at
    the Forest Products Lab to address mold and moisture issues. Funding is
    also needed for the Coalition for Advanced Housing Research for
    research on damage mitigation from natural disasters like floods,
    earthquakes and hurricanes.

                             COOPERATIVE ASSISTANCE

        The USDA Forest Service maintains vital partnerships with state
    forestry organizations, private landowners, communities, and other
    entities to reach mutually desired goals of sustainable forestry. The
    federal funding leveraged through this cooperative assistance is needed
    to achieve the objective of healthy forests.
        State Fire Assistance.--AF&PA supports sufficient funding for this
    program to ensure that States and communities have the technical,
    financial, and strategic assistance to reduce hazardous fuels and
    enhance their capacity to implement fire protection activities.
        Watershed Forestry Assistance.--AF&PA supports funding for the new
    Watershed Forestry Assistance program authorized in Title III of HFRA.
    This funding should be directed towards state monitoring and
    implementation of forestry best management practices to document and
    report on the beneficial relationship between good forest management
    and water quality.

                         FORESTRY-RELATED DOE RESEARCH

        Industries of the Future.--AF&PA urges the committee to fund the
    program at the fiscal year 2004 level of $8.021 million in fiscal year
    2005. Continuing the fiscal year 2004 level of funding will ensure that
    the advances toward energy efficiency and sound environmental benefits
    from the Agenda 2020 program are not lost. The forest product
    industry's Agenda 2020 program has a proven track record for pre-
    competitive R&D. Working with National Labs, universities, and private
    sector concerns, the Agenda 2020 program undertakes research to improve
    the energy efficiencies of the wood and paper products sectors.
    Unfortunately, the Administration's budget proposed a 63 percent
    reduction in funding for this program, which would halt ongoing
    projects before they are complete.
        Systems Integration & Production Industrial Gasification.--The
    forest products industry is engaged in the fifth year of a pre-
    competitive research program with DOE to develop power generation by
    gasifying pulping liquor and wood residuals. This new technology
    provides the research foundation for the potential to produce a net 22
    gigawatts of power from a renewable fuel source, displacing as much as
    100 million barrels of oil per year. The DOE budget proposal eliminates
    all funding for this research program just as its benefits are
    beginning to be realized. AF&PA strongly recommends that funding for
    this program not be eliminated. Continued funding is necessary to
    complete one project and continue a second project now being considered
    under an fiscal year 2004 RFP.

                                   CONCLUSION

        AF&PA appreciates the chance to provide the Subcommittee with
    testimony regarding fiscal year 2005 appropriations for the Forest
    Service and related agencies. If implemented, the funding levels
    proposed for the programs listed above will help promote sustainable
    management and forest health on our nation's public and private lands.
                                     ______

          Prepared Statement of the American Sportfishing Association

        The American Sportfishing Association (ASA) recommends the
    following as the Interior and Related Agencies Subcommittee consider
    appropriations for the Fish and Wildlife Service, Bureau of Land
    Management (BLM), National Park Service (NPS) and the USDA Forest
    Service for fiscal year 2005. The American Sportfishing Association is
    a non-profit trade association whose 600 members include fishing tackle
    manufacturers, sport fishing retailers, boat builders, state fish and
    wildlife agencies, and the outdoor media.
        The ASA makes these recommendations on the basis of briefings with
    agency staff and from years of experience with fisheries management in
    this Nation. It is important to note that sportfishing provides $116
    billion in economic output to the economy of the United States each
    year and slightly over one million jobs across the Nation.

                           FISH AND WILDLIFE SERVICE

        The ASA is especially pleased that the U.S. Fish and Wildlife
    Service's fisheries program has become more focused and driven. We
    value Director Williams' effort to put the ``fish'' back in the U.S.
    Fish and Wildlife Service. We are also pleased with the fiscal year
    2005 budget request increases for Hatchery Operations. While the ASA is
    appreciative of the broad support and increases in the hatchery
    program, there is also a need for increases in the entire fisheries
    program not just hatchery operations. Since the Service is responsible
    for much of the fisheries mitigation projects within the Federal
    Government, it is important that all aspects of the program are fully
    funded to support restoration across all agencies. We sincerely support
    the proposed $57 million request by the Administration for hatchery
    operations and maintenance but suggest that Congress appropriate $66
    million in fiscal year 2005 in order to achieve significant progress
    toward healthy fish for mitigation and restoration projects under this
    program.

    Fisheries
        A large and important segment of the Service's hatchery program
    produces fish to meet the Federal mitigation obligations at Federal
    water projects. The production from these mitigation hatcheries is
    critically important to the States, both recreationally and
    economically, and fulfills the Federal obligations that were mandated
    by Congress when these water projects were authorized. The ASA urges
    Congress to specify that the costs of production for mitigation related
    efforts be borne by the responsible agency and not by the USFWS.
        The fiscal year 2005 budget proposal proposes a reduction for the
    Anadromous Fish Management funds and ASA urges Congress to restore this
    funding and allocate a total of $10.777 million to the program in order
    to provide funds to manage cold water fisheries that are important to
    recreational anglers.
        The ASA would like to commend the formation of a new partnership.
    Public and private aquaculture interests have suffered from an almost
    total lack of U.S. Food and Drug Administration approved aquatic drugs
    and chemicals. To meet the need of drug approvals and drug development,
    the ASA recommends that Congress provide $450,000 (increase +$95,000)
    in the Fish and Wildlife Service's fiscal year 2005 budget for
    implementation of the ``Aquatic Animal Drug Approval Partnership''
    program.
        The Service's proposed increase of $1 million for hatchery
    maintenance is insufficient, and the ASA urges the Service and Congress
    to continue the progress towards reducing the maintenance backlog of
    $300 million at hatchery facilities when the majority of them are
    averaging 55 years in age. The ASA strongly urges Congress to provide
    an additional $9 million in the Service's fiscal year 2005
    appropriation for hatchery maintenance.
        The ASA recommends restoration of the proposed reduction of
    $250,000 and addition of $500,000 (+$750,000 above the President's
    Budget) for the Connecticut River Commission Migratory Fish Restoration
    Program to continue efforts to restore migratory fish in the four state
    basin of Connecticut, Massachusetts, New Hampshire and Vermont.
        Another key element of the new strategic vision relates to fish
    habitat restoration and conservation. The ASA and other fishery
    conservation organizations have initiated work with the USFWS, and the
    Sport Fishing and Boating Partnership Council to develop a National
    Fish Habitat Initiative. The initiative envisions a plan, modeled after
    the highly successful North American Waterfowl Management Plan, which
    would encourage the development of local joint ventures to reverse the
    loss of fish habitat across the nation. The ASA requests an addition of
    $500,000 in planning and development funds to the Fisheries program
    budget for plan development, and an additional $15 million for the
    Service's Fisheries Program to work with the southeastern States and
    partners to develop a Southeast Aquatic Resources Partnership as a
    model to develop a blueprint plan for fisheries.
        The ASA asks the Congress to restore full funding of $5.6 million
    (+$180,000) to combat aquatic nuisance species, which the Fisheries
    Program will use to support interdepartmental and intergovernmental
    efforts to control and eradicate alien invaders.
        The ASA also requests that Congress restore the proposed $2.6
    million reduction for fish passage and increase the budget for this
    program to $5.0 million (+$3.8 million) available nationwide to enable
    the Fisheries Program to strengthen and expand its efforts to conserve
    and restore critical aquatic habitats that support valuable
    recreational fisheries. The Service has recently reported impressive
    progress in its fish passage program--a program that is clearly
    achieving impressive results in increasing the abundance and
    distribution of native fishes and in providing additional angling
    opportunity.
        The National Survey of Fishing, Hunting, and Wildlife-Associated
    Recreation (National Survey) is an important collaborative project
    between the state fish and wildlife agencies (States) and the USFWS.
    Since 2000, the States, the fishing tackle industry, firearms industry,
    and anglers and hunters have paid for the National Survey and its
    coordination through the Multi-state Conservation Grant Program. The
    States are paying for the 2006 National Survey through a Multi-state
    Conservation Grant (MSCG) that was awarded to the USFWS for 2004-2006.
    An additional 2-year MSCG was awarded to the USFWS to pay for
    coordinating the 2006 National Survey, however the States have
    requested that the USFWS, as a major beneficiary and user of the data,
    assume costs of coordination and the ASA requests that funds be added
    to the USFWS budget to assume the annual coordination cost of $345,000
    for 2005.

    Partners for Fish and Wildlife Program
        The ASA strongly supports the President's increases for the
    Partners for Fish and Wildlife program for a total request of $50
    million. This program has over restored over 650,000 wetlands and over
    5,500 miles of stream and riparian habitat. This restoration work is
    essential to improving water quality and habitat for fisheries. The ASA
    also supports the President's requested increase of $5.023 million for
    the General Program Activities and increases of $4 million for the
    Coastal Program. Collectively, these two programs support partnerships
    between the U.S. Fish and Wildlife Service and such organizations as
    the FishAmerica Foundation that administers fisheries restoration and
    conservation grants.

                           BUREAU OF LAND MANAGEMENT

        The ASA is concerned that the fiscal year 2005 budget proposes
    essentially a static funding level. This will challenge BLM to maintain
    current levels of activity on these public lands, and does not provide
    the agency any capability to enhance its management presence and
    programs. Congress needs to carefully examine BLM's operational budget
    to bring it into parity with the other Federal land management
    agencies.

    The BLM's Fish and Wildlife Priorities
        While the ASA appreciates the fact the Secretary of the Interior
    continues to increase funding for the Cooperative Conservation
    Initiative and the Challenge Cost Share Program, we also recognize
    these undertakings are largely made possible by reallocating money from
    existing resource-based programs, especially the wildlife, fisheries
    and threatened & endangered species programs. Since these reallocated
    funds may be used for other purposes, the long-term implications are a
    reduction of program capability.

    Fisheries Management
        The Administration is requesting $12.46 million in fiscal year 2005
    for Fisheries Management. This represents a program increase of
    $745,000 from the fiscal year 2004 enacted budget, but remains
    consistent with the fiscal year 2002 enacted budget. BLM manages over
    117,000 miles of fish bearing streams and 17,000 miles of anadromous
    fish habitat that is essential to sportfishing. The ASA requests an
    additional $1 million--a small amount when considering the importance
    of economic output from recreational fishing to communities on and near
    BLM lands.

    Riparian Management
        The ASA supports BLM efforts in riparian areas, but remains
    concerned that the requested $21.54 million for this program is
    insufficient to meet all of the identified needs. The ASA requests that
    Congress add $1 million to this program, and urges BLM to continue its
    coordination with State fish and wildlife agencies in order to achieve
    optimal program results.

                             NATIONAL PARK SERVICE

    Cooperative Ecosystem Studies Units (CESUs)
        Congress intended that the Biological Resources Division (BRD) of
    the U.S. Geological Survey serve as the primary research arm of the
    Department of the Interior. Beginning with fiscal year 2001, the
    Service established 32 CESUs located in universities to coordinate and
    conduct resource research within and adjacent to the park units and to
    cooperate in other agencies' research. We believe it is necessary to
    establish a dialogue within the Department of the Interior that
    distinguishes the purposes of these CESUs from the existing Fish and
    Wildlife Cooperative Units within the BRD. The Cooperative Fish and
    Wildlife Units are effective, have long-standing cooperative
    relationships with the states, universities, private organizations and
    federal agencies. The ASA requests that Congress evaluate the
    organizational structure of the CESUs and direct NPS to establish a
    dialogue with several agencies and States about future direction of
    these units.

                              U.S. FOREST SERVICE

        The ASA continues to object to the U.S. Forest Service budget
    structure. Without specific budget line items for the fisheries
    program, the current approach still fails to promote accountability to
    conservation partners and the public. We specifically request an
    individual line item specific to fish and watershed programs to improve
    performance accountability and opportunities for integrating activities
    with fisheries conservation organizations and state fish and wildlife
    management agencies.

    Wildlife and Fisheries Habitat Management Program
        The Association supports the President's 2005 budget of essentially
    level-funding at $135 million. The Association urges that the USFS
    coordinate use of these funds closely with fisheries conservation
    organizations to fully utilize the possible coordination of efforts to
    promote sportfishing on U.S. Forest Service lands.
    Wildland Fire Management
        The ASA requests reinstatement of the $3.914 million above the
    President's budget to at least level funding for the Rehabilitation and
    Restoration program. This program is essential to coordinate work with
    the fisheries community on fuel reduction in wildland and urban
    interface.
                                     ______

             Prepared Statement of the Appalachian Trail Conference

        In behalf of the Appalachian Trail Conference, and for the reasons
    noted below, we are requesting an fiscal year 2005 appropriation from
    the Land and Water Conservation Fund for Appalachian National Scenic
    Trail land acquisition by the USDA Forest Service in the states of
    Virginia and Tennessee in the amount of $5 million. We also are
    requesting $130,000 in additional operating funds for the National Park
    Service Appalachian Trail Park Office to provide for the recruitment
    and deployment of a law-enforcement ranger position. Permit me to
    provide some background and additional justification for our request.
        Background.--The Appalachian Trail was initially established
    between 1923 and 1937 and has been maintained as a continuous footpath
    since that time. In 1968, with the passage of the National Trails
    System Act, the Appalachian Trail was designated as the nation's first
    national scenic trail. The act also authorized federal land acquisition
    to establish a permanent route and protective corridor for what then,
    as now, was America's most prominent long-distance hiking trail.
    Although the authorization was established more than 35 years ago, it
    was not until 1978 that significant appropriations from the Land and
    Water Conservation Fund were made available for federal land
    acquisition along the trail. Nevertheless, the Appalachian Trail
    project has become an outstanding example of what can be achieved
    through the collective efforts of the Congress, the affected federal
    agencies, and the private sector, represented by the Appalachian Trail
    Conference and our club and individual volunteer affiliates.
        Resource Characteristics.--The Appalachian Trail is a continuous,
    marked, 80-year-old footpath that traverses the Appalachian mountain
    chain from central Maine to northern Georgia for a distance of 2,174
    miles. The footpath and its associated protective corridor form a
    greenway extending along much of the eastern seaboard and connecting
    more than 75 public land areas in 14 states, including six other units
    of the national park system and seven national forests, as well as many
    state park, forest, and game-management units. Virtually every mile of
    the trail is within easy access of a major population center, and some
    portion of the trail is within a day's drive for two-thirds of the
    population of the United States.
        As the longest unit of the national park system, the Appalachian
    Trail provides opportunities for millions of visitors each year to
    traverse and experience much of the richness and diversity of eastern
    America: its highest mountains, its great rivers, its pastoral valleys,
    its cultural legacies. The trail also affords opportunities for
    continuous long-distance hiking that are unparalleled anywhere else in
    the world. An estimated three to four million annual visitors enjoy
    some portion of the trail, ranging from leisurely strolls to weekend
    outings to extended backpacking excursions, ranking the trail among the
    most heavily visited units of the national park system.
        In addition to its recreational qualities, the Appalachian Trail
    and its associated corridor represent an important reservoir of
    biological diversity. For example, the trail, due to its great
    latitudinal extent, passes through four of the seven primary forest
    habitats of North America. Moreover, recent natural-diversity
    inventories conducted by the Appalachian Trail Conference and a variety
    of state natural-heritage programs have identified 2,038 occurrences of
    rare, threatened, or endangered plants and animals at 516 sites along
    trail. These findings have led a number of natural scientists to
    conclude that the trail and its greenway will play an increasingly
    important role in ensuring critical habitat for many species of flora
    and fauna in the eastern United States. These findings also rank the
    Appalachian National Scenic Trail as perhaps the most biologically
    diverse unit of the national park system.
        A Public/Private Partnership.--For more than 75 years, the
    Appalachian Trail project has been recognized as one of America's most
    successful examples of private-citizen action in the public interest.
    Since the initial construction of the trail in the 1920s and '30s,
    volunteers affiliated with the Appalachian Trail Conference (ATC) have
    constructed, reconstructed, and maintained the footpath as well as a
    system of more than 250 shelters and associated facilities such as
    privies, bridges, signs, and parking areas. More recently, as a result
    of an unique 1984 agreement between the National Park Service and ATC,
    the conference has accepted management responsibility for more than
    100,000 acres acquired by the National Park Service along the trail.
    ATC, through its network of 31 club affiliates and many thousands of
    volunteers, is now responsible for virtually all phases of ``park''
    operations, including access control, structures management, public-
    health and -safety issues, and natural- and cultural-resources
    management. In 2003 for example, 4,799 volunteers contributed more than
    185,000 hours of labor along the trail: an annual contribution valued
    in excess of $2 million. In addition, each year the conference and its
    club affiliates contribute more than $2 million in operating revenues
    to support volunteer-based stewardship of the trail and educational and
    other forms of assistance to its visitors.
        Program Accomplishments.--The Appalachian National Scenic Trail
    land-acquisition programs of the National Park Service (NPS) and USDA
    Forest Service (USFS) surely rank among the most successful federal
    land-acquisition programs in the nation. With the strong support of the
    interior-appropriations subcommittees and the Congress as a whole, the
    two agencies have made truly remarkable progress in this long-term
    program: Since 1978, the NPS has acquired 2,527 parcels of land,
    encompassing more than 108,800 acres in 11 states, and protected a
    permanent right-of-way and associated resources along 616 miles of the
    trail. Similarly, the Forest Service has acquired 695 parcels,
    affecting 56,200 acres, within the proclamation boundaries of the seven
    national forests crossed by the trail and has protected more than 149
    miles of right-of-way. As a result, while in 1978 more than 800 miles
    of the trail were located on private lands, often in areas with
    inferior natural or recreational qualities, including more than 200
    miles along roads, today only approximately nine miles remain to be
    protected by the two agencies. In addition, in many instances, land
    acquisition has permitted relocations of the footpath to new areas
    possessing outstanding natural and scenic qualities.
        Funding Requirements.--In fiscal year 1999, the Congress
    appropriated $15.1 million to complete the Appalachian Trail land
    acquisition program of both the National Park Service and the USDA
    Forest Service. The two agencies have drawn on those funds ever since.
    [Each agency also has received a number of line-item appropriations
    since 1998 for several large-acreage tracts including Ovoka Farm (NPS),
    and the so-called Rocky Fork, Springer Mountain, and Gulf tracts
    (USFS)]. While approximately 50 parcels remain in the NPS program, the
    expectation is that funds remaining from the earlier appropriation will
    prove sufficient to acquire those tracts, hopefully within the next
    year. In the case of the Forest Service, however, an insufficient
    amount of funding remains. Moreover, for a variety of reasons, not all
    of the remaining parcels in the USFS program are appropriate for
    acquisition at this time.
        For fiscal year 2005, we are requesting a total appropriation of $5
    million for the USDA Forest Service Appalachian Trail land acquisition
    program. That figure includes $1 million for various parcels in the
    Jefferson/George Washington National Forest (Virginia), $1 million for
    various parcels in the Cherokee National Forest (Tennessee), and $3
    million toward the multi-phased acquisition of the so-called Rocky Fork
    tract (also Tennessee). Additional information concerning those
    properties is included in the attachments to this letter.
        The Conference also is requesting an fiscal year 2005 appropriation
    for the National Park Service in the amount of $130,000 for additional
    operating funding to permit the recruitment and deployment of a second
    ranger position. While many visitor- and resource-management functions
    have been delegated by the National Park Service to ATC, law-
    enforcement authority can not be delegated. Funding for law-enforcement
    support ultimately should be incorporated in normal ONPS allowances for
    the National Park Service's Appalachian Trail Park Office. However, no
    such funding presently is included for the proposed position. An
    additional position is needed now in order to follow up on volunteer-
    identified encroachments on NPS-owned lands, including timber theft,
    dumping, illegal ORV intrusions, etc. An additional ranger position
    also could assist in coordinating with state and local law-enforcement
    and other emergency-management agencies.
        Again, in behalf of the Appalachian Trail Conference, we wish to
    thank the chairman and members of the subcommittee for this opportunity
    to submit a request for funding, for your consideration of our request,
    and for the subcommittee's support throughout many years. Together, we
    have very nearly achieved one of the most complex and successful
    natural-resource conservation programs in the nation.

              Appalachian National Scenic Trail/Virginia Mountains

        State.--Virginia
        Region/Forest.--Region 8, George Washington and Jefferson National
    Forests
        Congressional District/Representatives.--6th District, Rep.
    Goodlatte; 9th District, Rep. Boucher
        Senators.--Allen and Warner

                             APPROPRIATION HISTORY

        Appropriations received: 1989-2002.--$4,321,179 \1\
    ---------------------------------------------------------------------------
        \1\ Dollar amount indicated in appropriations history for the
    Forest includes reprogrammed money and money received from the
    Emergency In-holding appropriation allowance.
    ---------------------------------------------------------------------------
        Purchased through fiscal year 2002.--Acres: 6,209
        Appropriated 2003.--$0
        Appropriated 2004.--$0
        2005 Administration request.--$0
        2005 Conservation request.--$1,000,000
        Acres.--420
        The requested fiscal year 2005 appropriation is intended to
    address, on an opportunity-purchase/willing-seller basis, a number of
    land-acquisition needs related to the Appalachian National Scenic Trail
    in the George Washington and Jefferson National Forests, including the
    Mount Rogers National Recreation Area.
        Appalachian National Scenic Trail ($1,000,000).--The Appalachian
    National Scenic Trail (A.T.) is a public footpath through 14 states
    across 2,173 miles of spectacular Appalachian Mountain ridgelines from
    Maine to Georgia. Management of the A.T. is a partnership among the
    USDA Forest Service, National Park Service, Appalachian Trail
    Conference (ATC), and local trail-maintaining clubs. This partnership
    has become a model for partnerships between governmental agencies and
    private groups. The local hiking clubs are made up of a small army of
    volunteers dedicated to the maintenance and protection of the A.T.
        With the passage of the 1968 National Trails System Act, and 1978
    amendments to that act, funds were authorized to provide a permanent,
    protected corridor along the entire trail route. The Congress has
    continually supported the acquisition of land for the protection of the
    A.T. The Forest Service, National Park Service and the Appalachian
    Trail Conference have worked in partnership to complete the trail
    acquisition project. Overall, about 99 percent of the entire A.T.
    corridor from Georgia to Maine is now in public ownership. Corridor
    protection within the Jefferson and George Washington national forest
    boundaries also is very close to completion: Since 1978, the Forest
    Service has acquired nearly 200 tracts and more than 15,500 acres along
    the trail within the two forests. Indeed, only about a dozen parcels
    remain to be acquired. However, not all of those parcels can or should
    be acquired in fiscal year 2005. The requested funding is targeted for
    the areas identified below, affecting seven to ten parcels, totaling
    approximately 420 acres.
        In the New River/Pearisburg area near the Virginia/West Virginia
    state line, an environmental assessment is nearing completion that will
    determine the preferred route for the trail to eliminate road-walking
    along busy Route 460 and to provide greater physical separation between
    the footpath and the adjacent Celanese industrial complex there.
    Additional lands (estimated at 200 acres, more or less) will be
    acquired on a willing-seller basis from the Celanese corporation and,
    potentially, one or two other adjacent landowners.
        At the Big Walker farm in the Nebo Valley of Bland County,
    additional land acquisition is necessary to supplement the very narrow
    right-of-way interests presently in national forest ownership. This
    area is characterized by wide-open and sweeping views of the pastoral
    landscapes unique to southwest Virginia, and additional public
    ownership (140 acres, more or less) is warranted in order to preserve
    that scenic and agricultural character.
        The 22-acre Schliefer properties are in-holdings adjacent to the
    A.T. corridor within the Mt. Rogers National Recreation Area and likely
    will be developed if they remain in private ownership. Acquisition of
    the properties would help ensure the remote, primitive character of the
    trail in the NRA.
        Other tracts include a 53-acre property in Bland County (Sudderth)
    adjacent to the footpath near its crossing of Interstate 77 and another
    parcel (Griffith) in Smyth County that has outstanding mineral rights
    that should be acquired in order to prevent future adverse impacts to
    the property.
        Constituencies.--There is broad-based support for completion of the
    Appalachian National Scenic Trail land-acquisition program in Virginia
    and throughout the full range of the trail. In particular, the
    Appalachian Trail Conference and its network of affiliated Virginia-
    based, trail-maintaining clubs are strong advocates for the program.
    Those clubs include the Potomac Appalachian Trail Club (Vienna/Front
    Royal), Old Dominion Appalachian Trail Club (Richmond), Tidewater
    Appalachian Trail Club (Norfolk/Virginia Beach), Natural Bridge
    Appalachian Trail Club (Lynchburg), Roanoke Appalachian Trail Club
    (Roanoke/Salem), Outdoor Club of Virginia Tech (Blacksburg), Mount
    Rogers Appalachian Trail Club (Marion), and Piedmont Appalachian Trail
    Hikers (North Carolina-based but maintain a trail section in Virginia).
        Other national conservation organizations also have been supportive
    of the Appalachian Trail program, in part because it spans so many
    sensitive natural and scenic resources in the eastern United States.
    Those organizations include The Wilderness Society, Sierra Club, The
    Conservation Fund, The Trust for Public Land, The Nature Conservancy,
    the Southern Environmental Law Center, the Piedmont Environmental
    Trust, and the Southern Appalachian Forest Coalition.
             Appalachian National Scenic Trail/Tennessee Mountains
        State.--Tennessee
        Region/Forest.--Region 8, Cherokee National Forest
        Congressional District.--01: Representative(s): Bill Jenkins
        Senators.--William Frist and Lamar Alexander
                             appropriation history
        Appropriations received: 1996-2002.--$5,280,000
        Purchased through fiscal year 2002.--Acres: 4,800
        Appropriated: 2003.--$4,400,000--Acres: 2,442
        Appropriated: 2004.--$3,800,000--Acres: 2,666
        2005 Administration request.--$3,000,000--Acres: 1,500
        2005 Conservation request.--$4,000,000--Acres: 1,783

        Significance.--The proposed acquisitions consist of in-holdings of
    various sizes within the Cherokee National Forest. The Cherokee
    National Forest shares a common border with National Forests in
    Georgia, North Carolina, and Virginia. The Forest encompasses several
    high-elevation mountain ranges in the Southern Appalachians with a rich
    biodiversity in both flora and fauna. Centered between the north half
    and south half of the Forest is the Great Smoky Mountains National
    Park. It is the most visited national park in the United States.
    Visitation to the entire area is very high and is steadily increasing
    due to easy access and proximity to large metropolitan areas including:
    Knoxville and Gatlinburg, Tennessee, that are within a thirty minute
    drive; Chattanooga, Tennessee, and Asheville, North Carolina, one hour;
    Atlanta, Georgia, and Lexington, Kentucky, two hours; Nashville,
    Tennessee, and Cincinnati, Ohio, three hours.
        A portion of the lands proposed for acquisition would protect the
    Appalachian National Scenic Trail (A.T.). The A.T. is a public footpath
    through 14 states across 2,173 miles of spectacular Appalachian
    Mountain ridgelines from Maine to Georgia. About 220 miles of the A.T.
    cross the Cherokee National Forest. Management of the A.T. is a
    partnership among the USDA Forest Service, National Park Service,
    Appalachian Trail Conference, and local hiking clubs.
        Acquisition of these key tracts in the Tennessee Mountains of the
    Cherokee National Forest will protect the Appalachian Trail, provide
    opportunities for public recreational uses (such as hunting, hiking,
    and fishing), improve public access, and protect critical natural
    resources, including wildlife habitat and fragile mountain watersheds.
        This request also seeks additional funding to sustain the multi-
    year/multi-phased effort to acquire the 10,000-acre tract known as
    Rocky Fork.
        Appalachian National Scenic Trail (283 acres).--A total of ten in-
    holdings are proposed for purchase for protection of the Appalachian
    National Scenic Trail (A.T.) within the Cherokee National Forest in
    Carter, Unicoi, and Greene counties. The tracts are located in the
    Sugarloaf Gap, Little Mountain, Shook Branch/Watauga, Hump Mountain,
    Allen Gap, and Buck Mountain areas. Acquisition of these scenic tracts
    will help conserve the undeveloped mountainous environment and visitor
    experiences along this popular segment of the Appalachian Trail.
        Since the 1970s, tremendous progress has been made to acquire a
    continuous publicly owned corridor surrounding the A.T. across the
    Cherokee National Forest as well as several other southern forests.
    Only a relative handful of tracts remain to be purchased. While a small
    balance remains from prior-year appropriations, additional funds are
    needed, in part due to a rerouting of the A.T. in the Shook Branch/
    Watauga area, where the trail is being relocated off a paved road with
    residences and onto a much improved route through a forested area.
    Additional funding also is needed due to significant land-value
    escalation during the past several years.
        The Appalachian Trail often is described as a national treasure. To
    complete protection of that treasure in the Tennessee Mountains
    requires additional funding. Not all of the remaining parcels in the
    A.T. program can or should be acquired in 2005. However, a number of
    important tracts can be purchased. An fiscal year 2005 appropriation in
    the amount of $1,000,000 is requested for the acquisition of ten
    parcels, affecting approximately 283 acres.
        The Rocky Fork Tract (1,500 acres).--The Forest Service proposes to
    purchase approximately 1,500 acres, which will represent one of several
    phases in a multi-year effort to acquire the substantial (10,000-acre)
    in-holding known as Rocky Fork. (Purchase of phase one, potentially
    affecting 2,130 acres, was funded in fiscal year 2003 with an
    appropriation of $4 million; purchase of phase two, potentially
    affecting 2,649 acres, was funded in fiscal year 2004 with an
    appropriation of $3.8 million). An estimated $9 million in future-year
    appropriations (fiscal year 2006 and beyond) will be required in order
    to acquire the remaining approximately 4,500 acres).
        The tract encompasses the northeast section of the Rocky Fork area
    and is situated along the crest of Rich Mountain and includes Higgins
    Ridge and the entire upper watershed of Higgins Creek. Numerous
    tributaries combine within this area to form Higgins Creek, a major
    tributary, which then flows into Indian Creek. Both Higgins Creek and
    Indian Creek are designated trout streams. The tract's northern
    boundary lies along the crest of Rich Mountain adjoining the Sampson
    Mountain Wilderness and features stunning views of distant mountain
    ranges and valleys in Tennessee, North Carolina and Virginia.
    Elevations of this tract range from 2,200 feet in the valleys to 4,400
    feet on Higgins Ridge at Frozen Knob. Ridgetops, rugged terrain,
    abundance of water and a mixture of hardwoods and evergreens provide
    excellent critical habitat for a variety of native fish and wildlife.
        The Rocky Fork tract is one of the largest undeveloped and pristine
    forested areas remaining in the rugged chain of the Appalachian
    Mountains. Rocky Fork harbors miles of native brook trout fisheries and
    vital watershed, rugged outcroppings and ridgelines featuring
    breathtaking views of distant mountain ranges and valleys including the
    Nolichucky River Valley in Unicoi and Greene Counties. Rocky Fork
    serves as critical wildlife habitat for black bear, deer, turkey,
    peregrine falcon and many other species. Much of the boundary adjoins
    National Forest, including the Sampson Mountain Wilderness. The
    Appalachian Trail is situated along the western boundary of Rocky Fork.
    Acquisition of Rocky Fork would close a substantial gap in public lands
    along of the new scenic U. S. Hwy. 23 corridor (soon to be designated
    I-26), enhance protection to the Appalachian Trail and Sampson Mountain
    Wilderness, preserve a large expanse of watershed, wildlife habitat and
    aesthetic beauty, and expand recreational opportunities, such as
    hiking, mountain biking, hunting, and fishing.
        The Forest Service has sought the acquisition of Rocky Fork for
    many years, but since the development of the U.S. Hwy 23 corridor,
    ownership of this large private holding has changed twice within the
    last four years. Thus far, purchasers have not pursued development of
    this wild area. With each transaction, combined with the expected
    completion of the U.S. Hwy 23 corridor linking the Tri-Cities in
    Tennessee to Asheville in North Carolina, development of Rocky Fork
    becomes an increasing possibility. Should this happen, an opportunity
    to preserve such a magnificent mountainous area will be lost forever.
    The estimated cost of acquiring the next 1,500-acre portion of Rocky
    Fork is $3,000,000. That amount is included in the Administration's
    fiscal year 2005 budget request.
        Constituencies.--There is growing public concern over development
    in areas that adversely affect critical ecosystems such as the above
    properties. The Cherokee Forest Land and Resource Management Plan
    addresses the need for significant land acquisition for recreation and
    ecosystem protection. Support for land acquisition by the Forest
    Service comes from local, state, regional, and national organizations,
    including the State Rivers Coordinator, The Wilderness Society, The
    Trust for Public Land, The Nature Conservancy, the State Historian, the
    Southern Appalachian Highlands Conservancy, the Tennessee Wildlife
    Resources Agency, The Conservation Fund, the Southern Appalachian
    Forest Coalition, the Southern Environmental Law Center, Partners of
    Cherokee National Forest, local sportsman groups, and the Appalachian
    Trail Conference and its local affiliates, the Tennessee Eastman Hiking
    Club and the Smoky Mountains Hiking Club.
                                     ______

                  Prepared Statement of Defenders of Wildlife

        Defenders of Wildlife is a national non-profit organization
    dedicated to saving and restoring wildlife and wildlife habitat. We
    have substantial concerns about the Administration's fiscal year 2005
    budget and make recommendations in the following priority areas.
        1. Fish and Wildlife Service (FWS) Endangered Species (ESA)
    Program.--Defenders urges an increase of $12.8 million over the
    Administration's fiscal year 2005 budget request of $17.2 million for
    the FWS ESA listing account, $52 million over the request of $58.1
    million for the recovery account, $11.6 million over the request of
    $45.5 million for consultation and $6.2 million over the request of
    $8.6 million for candidate conservation for a total ESA program of $212
    million.
        We are extremely disappointed that the President's request for the
    four main FWS ESA accounts, $129.4 million, is cut by $7.5 million or
    5.5 percent below enacted. Although the Administration contends that
    increases in grant programs will meet the same needs, these cannot
    substitute for mandated FWS obligations under the ESA. Recovery funding
    is substantially cut by $9.8 million or 14.4 percent even though FWS
    has said that more than listed 200 species are on the verge of
    extinction, primarily due to insufficient recovery funds. The increase
    Defenders requests for recovery includes funding specifically for wolf
    conservation activities conducted by the Nez Perce tribe and Idaho and
    Montana wildlife agencies and also includes, for grizzly bear
    conservation and management, $933,000 to the State of Montana, $873,000
    to the State of Wyoming and $898,189 to the FWS Grizzly Bear Recovery
    Coordinator. Also in the increase, $1.5 million is desperately needed
    for health-related research proposed in the Southern Sea Otter Recovery
    Plan to shed light on the role of disease in precipitous otter declines
    as well as additional funding for actions to support recovery of both
    northern and southern sea otters.
        The Administration requested a $5 million sorely needed increase in
    listing, but it is paid for by cuts in the other endangered species
    accounts--and even that amount will not begin to cover the $153 million
    listing backlog and more than 250 candidate species in need of
    protection under the ESA. Some of these creatures have been candidates
    for years and could become extinct while waiting for protection that
    may never come. The candidate conservation and consultation accounts
    also are cut below enacted levels by $1.2 million and $1.7 million
    respectively. Demand for efforts to conserve the long list of
    candidates while they await the Act's protection far exceeds funding--a
    $6.2 million increase over the President's request would help hire
    additional biologists and fund conservation projects. The number of
    consultations has increased from 40,000 in 1998 to more than 56,000 in
    2003 and further increases are expected. Moreover, the use of Habitat
    Conservation Plans (HCPs), which allow development to proceed while
    still protecting species, continues to expand. An $11.6 million
    increase over the president's request for consultation would help
    ensure timely consultations and effective development and monitoring of
    438 existing and 365 new HCPs.
        2. Conservation Trust Fund (CTF).--Defenders urges that the
    integrity of the CTF (also known as the conservation spending category)
    be maintained and that it be fully funded at its dedicated fiscal year
    2005 level of $1.68 billion for the Interior appropriations
    subcommittee portion of the fund. Unfortunately, the President's budget
    cuts the fund by more than $500 million below its dedicated fiscal year
    2005 level. While we greatly appreciated the subcommittee's strong
    support for fully funding and maintaining the integrity of this
    historic dedicated fund during its first two years, we are dismayed
    that in the last two years the subcommittee has backed away from its
    commitment. We understand that the subcommittee continues to be under
    substantial funding constraints not within its control, and we again
    will be working to generate congressional support for a fiscal year
    2005 302(b) allocation sufficient to allow full funding for the CTF.
    Defenders continues to believe that establishment of the CTF was the
    greatest piece of conservation funding legislation enacted in our
    lifetimes and a commitment that must be kept.
        State and Tribal Wildlife Grants Program.--Defenders of Wildlife
    and the more than 3,000 organizations nationwide in the Teaming With
    Wildlife Coalition request at least $125 million, $45 million above the
    Administration's request, for this important program for fiscal year
    2005 under the CTF. Within this amount, we strongly support increases
    for the tribal portion of the program which provides crucial funding
    for wildlife projects and assessments to conserve the many declining
    species on 100 million acres of tribal lands. We greatly appreciate the
    subcommittee's support for this program and are pleased that the
    Administration's budget recommends a critically needed increase of $10
    million. This important program gives states desperately needed funding
    to develop and implement comprehensive conservation plans to protect
    declining species and their habitats before protection under the ESA is
    necessary. State fish and wildlife agencies have identified a need that
    totals $1 billion annually--the requested amount of $125 million is
    only a modest 12.5 percent of the total annual need.
        The key to the program's success in its ability ultimately to avert
    the need to list numerous species in the future is the planning process
    which requires the states to produce a comprehensive wildlife
    conservation plan by October 1, 2005. We also believe that if the plans
    are done correctly, they can inform a whole range of additional
    programs from Land and Water Conservation Fund to farm bill
    conservation to transportation and more, becoming a blueprint for the
    state--not just for the state's wildlife grant program. To maximize its
    effectiveness in these two respects, we recommend direction from the
    subcommittee making clear that once the plans are finalized, SWGP funds
    are to be used to implement them and making clear that the plans are
    for all wildlife conservation in the state, not just under the SWGP.
        Land and Water Conservation Fund (LWCF).--Defenders urges funding
    of at least $750 million for LWCF under the CTF or $436 million above
    the President's request for fiscal year 2005: $450 million for federal
    LWCF and $300 million for state LWCF. We further urge Congress to
    maintain the integrity of the LWCF and reject the Administration's
    continued attempts to use it to fund other programs. In particular,
    Defenders urges inclusion of $3.7 million for the Suwannee Wildlife
    Corridor between Osceola National Forest and Okefenokee National
    Wildlife Refuge, the President's request for needed National Landscape
    Conservation System (NLCS) acquisitions and an additional $1.1 million
    for NLCS acquisitions in Oregon and Utah.
        The Administration continues to say that its request funds LWCF at
    its $900 million authorized level, however, the total budgeted for true
    LWCF purposes is $314.1 million, nearly $600 million below the
    authorized level. As in past years, the Administration is counting 15
    other important but non-LWCF programs to make it appear to meet the
    authorized level. At the same time, the total for LWCF continues to
    erode--while the president is proposing a slight increase over the
    fiscal year 2004 level, the amount constitutes a major cut below
    enacted levels for recent years--23 percent below fiscal year 2003, 45
    percent below fiscal year 2002, and 41 percent below fiscal year 2001.
        Other Important Fish and Wildlife Service Grants.--Defenders
    recommends $100 million for the Cooperative Endangered Species Fund,
    $10 million over the President's request and supports the President's
    request of $50 million for Landowner Incentive Grants and $10 million
    for Private Stewardship Grants under the CTF. Eighty per cent of
    habitat for more than half the species listed under the ESA occurs on
    non-federal lands. The Cooperative Endangered Species Fund provides
    grants to states for conservation activities on non-federal lands both
    for listed and candidate species. Activities funded by these grants
    include: research, species status surveys, habitat restoration, captive
    propagation and reintroduction, and planning assistance. Landowner
    Incentive Grants and Private Stewardship Grants provide funding to
    states and private landowners specifically for efforts to conserve
    species at risk on private lands. While the President's budget request
    for the Cooperative Endangered Species Fund is $8.4 million above
    fiscal year 2004 levels, it is still $6 million below fiscal year 2002
    and $15 million below fiscal year 2001.
        3. Fish and Wildlife Service National Wildlife Refuge System
    Operations and Maintenance.--Defenders and the Cooperative Alliance for
    Refuge Enhancement are requesting an fiscal year 2005 increase of $40
    million over the President's request of $387 million and urge that the
    bulk of it be directed to operations. We greatly appreciate the
    subcommittee's support in the past and ask that it be continued.
        The National Wildlife Refuge System needs a major infusion of
    funding to carry out its mission, yet the amount proposed by the
    Administration for fiscal year 2005 is flat. While appearing level-
    funded, this is an effective cut--$16 to $18 million additional funding
    is needed annually just to keep up with fixed costs. Increases also are
    needed to help address the $931 million maintenance backlog and $312
    million Tier I mission critical operations needs which include
    protection of wildlife, management and restoration of wildlife habitat,
    public outreach and visitor services, and a crippling 38 percent staff
    shortage--nearly 200 refuges have no staff on site. The Cooperative
    Alliance for Refuge Enhancement (CARE), a diverse coalition of 20
    environmental, recreation and scientific organizations has recommended
    gradual increments to take the System from its current level of $387
    million to $700 million so that it has the funds to carry out its
    mission as it embarks on its second century of wildlife conservation.
        4. Fish and Wildlife Service Migratory Bird Programs.--Defenders
    requests at least an additional $2.5 million for Migratory Bird
    Management over the President's fiscal year 2005 budget request of
    $36.6 million and at least $1 million over the $4 million request for
    the Neotropical Migratory Bird Conservation Act under the Multinational
    Species Conservation Fund. As currently funded, these programs cannot
    fulfill their mandates to adequately monitor and plan for the
    conservation of 825 species of migratory birds, of which more than 750
    species are nongame birds. Nearly 100 nongame birds are listed under
    the ESA and 131 species are on the FWS current list of Birds of
    Conservation Concern. Thus, over 25 percent of all U.S. migratory birds
    are in serious need of conservation to assure their long-term survival.
        5. Fish and Wildlife Service Marine Mammals Program.--The
    Administration has recommended a nearly 50 percent reduction in the
    already meager current $4.5 million funding level for the FWS Marine
    Mammals program, under Fish and Wildlife Management. Defenders urges
    the subcommittee to reject the proposed $2.2 million cut and instead
    fund the program at a level of $11.8 million to improve research and
    conservation efforts for these species. This funding will help support
    badly needed revisions of stock assessments for manatees, walrus and
    polar bears; ongoing trend data, carcass recovery necropsies and
    general health assessment for declining northern sea otters; and a
    study into impacts of fisheries gear and comprehensive health
    assessment for southern sea otters.
        6. U.S. Geological Survey.--Defenders supports the President's
    fiscal year 2005 budget for the National Biological Information
    Infrastructure (NBII) and recommends an increase of $6 million to
    establish the NBII State Grants Partnership program. This grant program
    will further the development, dissemination and use of sound scientific
    information about the nation's natural heritage and wildlife. The
    program will provide base funding to every state for natural heritage
    resources and wildlife information management and a national
    competitive grant pool. Ready access to this kind of information will
    reduce uncertainty, risks, and costs, and enhance conservation
    opportunities. In addition, we support $212,000 for the Interagency
    Grizzly Bear Study Team's work to research and monitor the grizzly bear
    population in the Greater Yellowstone Ecosystem.
        7. Bureau of Land Management (BLM).--The President's request
    includes amounts intended to continue streamlining regulatory
    requirements and accelerating oil and gas development permitting. Some
    oil and gas program funds should be earmarked for monitoring of oil and
    gas development impacts on wildlife and habitat in areas already under
    lease and where drilling permits have been issued. Moreover, we urge
    increases for important resource protection needs including: Integrated
    Weed Management to curb the prolific spread of invasive species;
    Threatened and Endangered species to preserve the 306 listed, 59
    candidate and 1,500 sensitive species on BLM lands; Sagebrush and
    Prairie Grassland Ecosystem Projects to apply a multi-species
    conservation approach across large landscapes; environmental review and
    monitoring of grazing permits to help improve the health of grazing
    lands; Recreation Resources Management to prevent off-road vehicle
    damage; and the National Landscape Conservation System (NLCS) which
    contains some of our country's most extraordinary natural and cultural
    resources. For the NLCS, we recommend an increase of $5 million over
    the President's request of $39 million.
        8. Forest Service: Fire Prevention and Resource Protection.--
    Defenders opposes the Administration's significant reduction in State
    and Volunteer Fire Assistance and urges that 85 percent of funds from
    the Hazardous Fuels Reduction program be redirected to State Fire
    Assistance to fund needed fuels reductions projects on non-federal
    lands around communities. We urge significant reductions for Forest
    Products and Timber Road Construction, un-needed timber industry
    subsidies, and redirection of funds to road obliteration and
    decommissioning and to resource protection programs including Wildlife
    and Fisheries Habitat Management; Wildlife, Fish, Water and Air
    Research; Land Management Planning; and Inventory and Monitoring. In
    addition, we continue to urge the subcommittee to exercise rigorous
    oversight of the Stewardship End Results Contracting program to prevent
    it from being used as a vehicle for fiscal and environmental abuse.
                                     ______

              Prepared Statement of the Eastern Forest Partnership

        On behalf of the Eastern Forest Partnership, I would like to offer
    testimony in support of land conservation funding for the Department of
    the Interior and the U.S. Forest Service through the fiscal year 2005
    Interior and Related Agencies Appropriations Bill, including in
    particular the Land and Water Conservation Fund and the Forest Legacy
    Program. Even in the face of challenging fiscal times, we feel that
    eastern forest conservation is a vital investment for America that
    conserves public dollars that would otherwise be needed for water
    treatment costs and other expenditures while also enhancing quality of
    life for more than half of the American people.
        Our member organizations, representing in total more than 170
    citizens' groups from Mississippi to Maine, are seeing the wonderful
    effects of federal conservation funding on local forests, water supply
    areas, and public lands. The major constraint is limited project
    funding. For just the Forest Legacy program alone, appropriations were
    less than a quarter of need as reflected in eligible projects on the
    U.S. Forest Service's list in fiscal year 2004.
        These land conservation projects are desperately needed because of
    momentous shifts in land use that are affecting the daily lives of more
    than half of the American people. The eastern states are losing well
    over a million acres per year of rural land to development, and now see
    more than seventy percent of the nation's logging. Large land sales of
    industrial forestland sometimes exceeding a million acres exacerbate
    the instability of eastern land use patterns.
        Unlike the western states, where sweeping areas are already
    conserved, a mere 14 percent of the eastern forest landscape is
    protected from development through public ownership or conservation
    easement. Therefore, it will be critical for the federal government to
    continue to invest in conservation programs like the Land and Water
    Conservation Fund and the Forest Legacy Program that help permanently
    protect more land from development.
        We believe that, at a minimum, the Congress should support funding
    for conservation programs at the level advocated in the President's
    fiscal year 2005 Budget. The President's impressive allocation of $100
    million for Forest Legacy, in particular, would go a long way towards
    meeting land conservation needs in the East. However, more generous
    Land and Water Conservation Fund allocations beyond the President's
    request for both the traditional federal and state sides of the program
    would be invaluable to fill out existing federal land units in the
    eastern forests and to create new units to meet growing demand. The
    steep decline in federal Land and Water Conservation Fund dollars in
    recent years has hampered the efforts of eastern land managers to
    consolidate fragmented holdings and to buffer key resource areas from
    encroaching sprawl.
        I have included below a short list of some of the top priority
    projects for the Eastern Forest Partnership in fiscal year 2005. By no
    means is this a complete list of all of the projects of importance, but
    rather represents a showcase of top projects that illustrate the depth
    of excellent land conservation opportunities across the region.

            FISCAL YEAR 2005 PRIORITY EASTERN FOREST LEGACY PROJECTS
                   [Order reflects rank in President's budget]
                            [In millions of dollars]
    ------------------------------------------------------------------------
                                                                    Amount
    ------------------------------------------------------------------------
    Walls of Jericho (TN).......................................        5.90
    Raritan River Watershed (NJ)................................        4.50
    Dragon Run (VA).............................................         .80
    Birdsboro Waters (PA).......................................        2.20
    Catawba-Wateree Forest (SC).................................        3.00
    Katahdin Forest (ME)........................................        5.00
    Knobs State Forest (KY).....................................        2.40
    Tahawus (NY)................................................        2.50
    13-Mile Woods (NH)..........................................        2.00
    Broad Creek (MD)............................................        1.50
    Surprise Lake (NY) \1\......................................        1.00
    ------------------------------------------------------------------------
    \1\ Project not included in President's Budget.

       FISCAL YEAR 2005 PRIORITY LAND AND WATER CONSERVATION FUND PROJECTS
                                  [Not ranked]
                            [In millions of dollars]
    ------------------------------------------------------------------------
                                                                    Amount
    ------------------------------------------------------------------------
    U.S. Forest Service:
        Georgia Mountain Riparian Project (GA)..................       3.000
        Sumter NF Watershed Protection (SC).....................       3.400
        Francis Marion National Forest (SC).....................       5.800
        Chattooga Watershed (NC, SC, GA)........................       2.700
        Tennessee Mountains (TN)................................       3.000
        National Forests in Alabama (AL)........................       2.300
        Daniel Boone National Forest (KY).......................       3.480
        Suwannee Wildlife Corridor (FL).........................       2.000
        Green Mountain National Forest (VT).....................       2.000
    U.S. Fish and Wildlife:
        Service Wallkill NWR (NJ)...............................       1.600
        Lake Umbagog NWR (NH)...................................       1.200
    National Park Service:
        Appalachian Trail (ME)..................................       1.730
        Obed Wild and Scenic River (TN).........................       1.569
    ------------------------------------------------------------------------

        In conclusion, we feel that these projects are all uniquely
    important given the combination of limited open spaces and pressing
    land use changes that threaten the continued existence of the eastern
    states' remaining ``green infrastructure.'' While we respect the
    critical need for land conservation funding across the nation, we feel
    that these projects illustrate the unique and historic conservation
    opportunities across the eastern forests--opportunities that are
    quickly being lost to unchecked development. We would be grateful for
    your consideration of this testimony as you move through the
    appropriations process.
                                     ______

      Prepared Statement of the Enewetak/Ujelang Local Government Council

        Mr. Chairman and distinguished members of this Subcommittee: Thank
    you for providing this opportunity to the people of Enewetak to
    describe issues that relate to our ability to live on Enewetak Atoll.
    Of immediate concern is the funding of the Enewetak Food and
    Agriculture Program. In the Compact of Free Association, as amended
    (hereinafter ``Compact''), Congress provided an annual sum of ``not
    less than $1.3 million'' for the Enewetak Food and Agriculture Program.
    That funding in the Compact is much appreciated. However, Congress has
    funded the program at a level of $1.7 million these past several years
    and that is the minimum amount necessary to provide food,
    transportation, and the continuation of the soil rehabilitation and
    agriculture work. Accordingly, this statement includes a request to
    increase the Compact funded Enewetak Food and Agriculture Program by
    $400,000 from $1.3 million to $1.7 million.
        Other issues that relate to our ability to live on Enewetak Atoll
    are: Funding of the health care program; funding of the just
    compensation award issued by the Nuclear Claims Tribunal; resettlement
    of the Enjebi people on their home island of Enjebi; monitoring of the
    our people for radiation exposure; continued monitoring of the
    environment to determine current radiation levels; and, monitoring of
    the Runit dome.
        We would first like to address the continuing challenges that life
    on Enewetak presents. These challenges are the result of the severe
    damage inflicted on our atoll by the U.S. Nuclear Testing Program. This
    committee has helped us meet some of these challenges by funding the
    Enewetak Food and Agriculture Program.
         increased funding of the enewetak food and agriculture program
        This program is necessary because over one-half of Enewetak remains
    contaminated by radiation. The remaining fifty percent of the land was
    turned into a desert-like wasteland in the course of the nuclear
    testing program. As a result of such activities, there is insufficient
    food and other resources on Enewetak atoll to support the people.
        Congress has provided a sum of not less than $1.3 million annually
    for 20 years for the Enewetak Food and Agriculture Program in the
    Compact. The Enewetak people greatly appreciate such mandatory funding.
    However, the program has been funded at a level of $1.7 million for the
    past several years and such funding level needs to continue to maintain
    the minimum components of the program. The components of the program
    include a soil and agriculture rehabilitation program, the importation
    of food, and the operation of a vessel.
        Much progress has occurred over the past several years with regard
    to the agriculture rehabilitation effort. In addition, we have become
    more and more involved with the soil rehabilitation effort and the
    planting and maintenance of food bearing plants. Funding of the program
    at the $1.7 million level these past several years has helped the
    program keep up with inflation and has created a momentum that we would
    like to maintain.
        However, the growing population, much improved agriculture
    rehabilitation techniques, and transportation expenses have increased
    the costs of the program. These costs are the costs of the necessary
    food imports; transportation costs for food imports; transportation
    costs of equipment, material, supplies, and fuel for the agriculture
    rehabilitation program; and labor costs for the accelerated agriculture
    effort. To meet these costs, the program funding needs to be increased
    to the sum of $1.7 million in fiscal year 2005. The $1.7 million is
    broken down as follows: Food and cooking fuel costs, $550,000;
    agriculture costs (labor, equipment, material, supplies, fuel,
    operations and maintenance), $850,000; transportation costs (labor,
    fuel, operations and maintenance), $300,000. Included in the three
    foregoing categories is the cost of administration of the program. Due
    to the foregoing, we respectfully request that this committee increase
    the amount provided under the Compact for this program for fiscal year
    2005 by the amount of $400,000, for a total of $1.7 million.
        We would now like to describe the award of $386 million made to us
    by the Marshall Islands Nuclear Claims Tribunal for damages we suffered
    as a result of the U.S. Nuclear Testing Program.

      FUNDING OF THE JUST COMPENSATION AWARD ISSUED BY THE NUCLEAR CLAIMS
                                    TRIBUNAL

        The issue most important to us is the funding of the $386 million
    award for just compensation made to the Enewetak people by the Nuclear
    Claims Tribunal. Enewetak was the site for forty-three of the sixty-
    seven nuclear bombs detonated by the United States in the Marshall
    Islands. The damages of the U.S. Nuclear Testing Program affect us to
    this day. It is important to remember that in 1947, prior to the
    removal of our people from Enewetak, the United States promised us that
    we would have all constitutional rights accruing to U.S. citizens, that
    we would be taken care of during our exile to Ujelang, and that we
    would not be exposed to any greater danger than the people of the
    United States.
        The constitutional rights to which we are entitled include the
    right to be justly compensated for the damages we suffered as a result
    of the U.S. nuclear testing program. In addition to the well documented
    promises made to us, the United States in the Compact (1) accepted
    responsibility for the just compensation owing for loss or damage
    resulting from its nuclear testing program and (2) agreed that the
    Marshall Islands Nuclear Claims Tribunal (``Tribunal'') make a final
    determination of the amount that would satisfy the constitutional
    requirement of just compensation.
        The Tribunal, following well established U.S. constitutional,
    legal, and regulatory principles, determined that the just compensation
    to be provided to us was an amount of $386 million in addition to what
    we received or will be receiving under the Compact. The funding of this
    amount by the United States would satisfy its constitutional obligation
    to us. This funding could be provided through the Changed Circumstances
    Petition process that has been presented to the U.S. Congress.
    Alternatively, the Congress could direct the U.S. Court of Appeal for
    the Federal Circuit to review and certify, or to reject in whole or in
    part, the award of the Tribunal similar to an existing Congressional
    provision that deals with judgments of the Marshall Islands courts
    against the United States arising from its administration of the
    Marshall Islands under the U.N. Trusteeship.
        It is important to note that this funding would provide us with the
    resources to rid our land of radiological contamination, rehabilitate
    the soil, revegetate the land, resettle the Enjebi people on their home
    island, and provide the means by which we could establish a local
    economy in the fishing and tourism sectors. The foregoing would permit
    us to once again become self-reliant and self-sufficient. Until this
    funding materializes, we require continued and increased funding of the
    Enewetak Food and Agriculture Program.

        RESETTLEMENT OF THE ENJEBI PEOPLE ON THEIR HOME ISLAND OF ENJEBI

        We, the Enewetak people, consist of two groups: The people of the
    southern part of the atoll, the Enewetak group; and, the people of the
    northern part of the atoll, the Enjebi group. The Enjebi people have
    been exiled from their home island for a period of over 56 years. They
    have not been able to resettle their home island because it remains
    contaminated. As a result, the Enjebi people need to share the limited
    land and resources with the other Enewetak people on the islands of
    Enewetak, Medren and Japtan. As the populations grow, this is becoming
    an increasingly difficult situation. Yet Enjebi cannot be resettled in
    the near term because insufficient funding exists for the cleanup and
    resettlement.
        The situation at Enjebi is difficult since Enjebi Island was ground
    zero for a number of tests. In addition, it underwent bulldozing,
    scrapping and soil removal during the 1977-80 partial cleanup
    activities. In order to make the island habitable again, radiological
    remediation and soil and plant rehabilitation are required. As
    determined by the experts, the cost for the radiological remediation
    and soil and plant rehabilitation is approximately $118 million, which
    includes the cleanup and rehabilitation of the other northern islands
    which are part of the Enjebi people's resources for food from land and
    marine areas. These costs are part of the just compensation award made
    to the Enewetak people by the Tribunal.
        In addition, the people require the housing, infrastructure, and
    other buildings necessary to permit them to live on the island while
    the rehabilitation is ongoing. These costs are estimated at $30
    million.
        In short, the cleanup and resettlement of Enjebi is projected to
    cost $148 million. The best solution is to fund the Tribunal award
    which would provide the funding for the cleanup and rehabilitation of
    all the northern islands including Enjebi, and which would provide the
    funding for the housing and other necessary infrastructure at Enjebi.
    radiation monitoring of the people, the environment, and the runit dome
        Because of the residual radiation contamination at Enewetak Atoll,
    we and our environment need to be monitored. The U.S. Department of
    Energy (DOE) and the Enewetak/Ujelang Local Government Council have
    reached an agreement on an appropriate whole body counting and
    plutonium detection regime. The DOE responsibilities under such a
    regime need to continue until Enewetak is radiologically remediated. In
    addition, the Runit Dome (Cactus Crater Containment Site) contains over
    110,000 cubic yards of material including plutonium and other
    radioactive debris. This site needs to be monitored to assure the
    integrity of the structure and to assure that no health risks from the
    radioactive waste site are suffered by us. To effect the foregoing, a
    long-term stewardship program of the Runit Dome needs to be implemented
    by the United States.

                       FUNDING OF THE HEALTH CARE PROGRAM

        In Section 102 of Public Law 96-205, the U.S. Congress, authorized
    a program of medical care and treatment for the peoples of the atolls
    of Bikini, Enewetak, Rongelap, Utrik and other Marshallese determined
    to be affected as a result of the U.S. Nuclear Testing Program in the
    Marshall Islands. The funding for such program continued, in an amount
    of $2 million annually for 15 years, under the terms of the Compact.
    The funding for such medical care and treatment program expired as of
    October 21, 2001. The RMI has provided funding for the continuation of
    this program from the Section 177 trust fund. However, that fund is now
    so depleted that the RMI cannot fund the program as of September 30,
    2004. The Congress in Section 104 of Public Law 96-205, intended such
    medical care and treatment program to continue unless terminated by the
    express approval of the Congress. Congress has not approved
    termination. The program needs to continue and the funding needs to be
    increased to $4 million annually to provide a medical safety net for
    the people of the 4 atolls and other Marshallese determined to have
    been affected by nuclear testing. Even at the $4 million level, the
    program will only be able to expend $28 per person per month for the
    program costs. The $4 million should include an inflation factor by
    being tied to the U.S. medical CPI.

                     ENEWETAK FOOD AND AGRICULTURE PROGRAM

        The Enewetak Food and Agriculture Program enables us to live on
    Enewetak. It provides funding for imported food, continued agriculture
    rehabilitation, operation of a motor vessel that brings us the imported
    food, and an operation and maintenance component conducted out of a
    facility on Enewetak known as the field station.
        1. Efforts made to increase food production.--The most significant
    aspects of the agriculture rehabilitation program are the infusion of
    nutrients into the soil and the planting of buffer plants along the
    island's shore to protect the interior plants from salt spray. The
    infusion of nutrients into the soil is accomplished by digging trenches
    and placing organic material in the trenches along with a compost
    mixture of copra cake and chicken manure. This activity is extremely
    labor intensive and requires the importation of copra cake and chicken
    manure. Although the work is progressing, additional funding is
    required to provide greater manpower and the necessary equipment,
    materials and supplies.
        2. Importation of food.--Imported food is required because of the
    poor soil condition of the land available to us and the radiation
    contamination of other lands. Imported food is now approximately
    $550,000 of the program budget and is expected to increase because of
    the increase in food costs and because of our growing population. These
    issues further illustrate the need to increase the program to $1.7
    million.
        3. Vessel.--In 1999, we purchased, repaired, and refitted a 104-
    foot motor-vessel as a replacement vessel for our 54-foot motor-sailer,
    which sank. This replacement vessel, named the KAWEWA, has greater
    capacity for cargo and passengers than the previous vessel. The KAWEWA
    permits us to transport machinery, equipment, supplies and other
    necessary cargo. It also provides transportation to members of our
    community. Both the transport of cargo and people has become extremely
    difficult in the Marshall Islands because of the lack of transport
    vessels and aircraft. The KAWEWA provides the necessary lifeline for
    goods, materials, and transportation for our community.
        4. Field Station.--Operation and maintenance of the entire program
    is conducted out of a facility referred to as the Field Station. Field
    Station personnel provide all the required agricultural work; maintain,
    service, and operate the equipment required by the various components
    of the program; make payments and maintain books of accounts; and
    coordinate the procurement of food, material and equipment.
                                   conclusion
        We thank the Congress for its past support and its consideration of
    the items described above.
                                     ______

            Prepared Statement of the Forest Landowners Association

        The Forest Landowners Association (3776 Lavista Road, Suite 250,
    Tucker, Georgia, 30084; telephone 404-325-2954) appreciates this
    opportunity to submit written testimony to the Senate Committee on
    Appropriations, Subcommittee for Interior and Related Agencies,
    regarding appropriations for the United States Forest Service, and in
    particular funding for the following programs.
        1. State and Private Forestry, Forest Health Management: The
    Emerging Pests and Pathogens Fund (proposed funding by administration
    in fiscal year 2005 Budget: $10,000,000).
        2. State and Private Forestry, Forest Health Management: Federal
    Lands and Cooperative Lands (proposed funding by administration in
    fiscal year 2005 Budget: $71,226,000).
        3. State and Private Forestry, Cooperative Fire Protection: State
    Fire Assistance (proposed funding by administration in fiscal year 2005
    Budget: $25,062,000).
        4. State and Private Forestry, Cooperative Fire Protection:
    Volunteer Fire Assistance (proposed funding by administration in fiscal
    year 2005 Budget: $5,043,000).
        5. Wildfire Fire Management, State and Private Forestry: Forest
    Health Management, Federal Lands (proposed funding by administration in
    fiscal year 2005 Budget: $7,171,000) and Forest Health Management,
    Cooperative Lands (proposed funding by administration in fiscal year
    2005 Budget: $5,482,000).
        6. Wildfire Fire Management, State and Private Forestry: State Fire
    Assistance (proposed funding by administration in fiscal year 2005
    Budget: $34,245,000) and Volunteer Fire Assistance (proposed funding by
    administration in fiscal year 2005 Budget: $8,000,000).
        7. State and Private Forestry, Cooperative Forestry: Forest Legacy
    Program (proposed funding by administration in fiscal year 2005 Budget:
    $100,019,000).

    1. STATE AND PRIVATE FORESTRY, FOREST HEALTH MANAGEMENT: EMERGING PESTS
                               AND PATHOGENS FUND

        FLA supports the creation of the Emerging Pests and Pathogens Fund,
    and the proposed funding request of $10,000,000. This fund would
    fulfill the promise of the Healthy Forests Restoration Act of 2003
    (HFRA), Title IV, Insect Infestation and Related Diseases provisions
    passed by Congress and signed by President Bush. As Congress itself
    stated in Title IV, Section 401(a)(10), ``only through the full
    funding, development, and assessment of potential applied silvicultural
    assessments over specific time frames across an array of environmental
    and climatic conditions can the most innovative and cost effective
    management applications be determined that will help reduce the
    susceptibility of forest ecosystems to attack by forest pests.'' The
    Forest Landowners Association believes Congress should appropriate this
    new fund as follows.
        a. $5,000,000 for HFRA, Section 403, Accelerated Information
    Gathering Regarding Forest-Damaging Insects: HFRA, Section 401(b)
    states one purpose of the title is ``to require the Secretary to
    Develop an accelerated basic and applied assessment program to combat
    infestations by forest-damaging insects and associated diseases,'' and
    to ``enlist the assistance of colleges and universities (including
    forestry schools, land grant colleges and universities, and 1890
    Institutions), State agencies, and private landowners to carry out the
    program.'' By appropriating $5,000,000 for the execution of HFRA,
    Section 403, the subcommittee would be helping to fund new research on
    pests and pathogens that currently threaten America's forests, both
    public and private.
        b. $5,000,000 for HFRA, Section 404, Applied Silvicultural
    Assessments: The third purpose of HFRA, Section 401(b) is ``to carry
    out applied silvicultural assessments.'' By appropriating $5,000,000
    for the execution of HFRA, Section 404, the subcommittee would be
    starting the process of addressing with positive solutions the pests
    and pathogens that currently threaten America's forests, both public
    and private.

        2. FOREST HEALTH MANAGEMENT: FEDERAL LANDS AND COOPERATIVE LANDS

        As America's forests are besieged by fire; pests and pathogens;
    weather; and other threats, it is imperative that forest health
    management efforts be continued, and even strengthened, to protect this
    natural resource. In fact, Congress recognized the dangers when it
    passed the Healthy Forests Restoration Act of 2003. The proposed fiscal
    year 2005 Budget, however, would cut funding for forest health
    management efforts by $28,039,000 from fiscal year 2004 Budget levels.
    FLA encourages the subcommittee to restore funds for Forest Health
    Management, Federal Lands and Cooperative Lands, to fiscal year 2004
    levels of $98,570,000.

    3. STATE AND PRIVATE FORESTRY, COOPERATIVE FIRE PROTECTION: STATE FIRE
                                   ASSISTANCE

        As state budget resources continue to be stretched to the limit,
    Federal assistance to enhance state fire fighting capabilities is
    critical. The destruction of public and private forests has been
    horribly demonstrated during the past three years, leading to billions
    of dollars of losses, and the deaths of those charged with fighting
    these mighty blazes. The dangers of such fires, in fact, was promoted
    as a crucial reason for the passage of the Healthy Forests Restoration
    Act of 2003. The proposed fiscal year 2005 Budget, however, would cut
    funding for State Fire Assistance by $33,267,000 from fiscal year 2004
    Budget levels. Such severe cuts seems counter-productive to the stated
    purpose of the government to help prevent and fight such fires in the
    future. FLA encourages the subcommittee to restore funds for
    Cooperative Fire Protection, State Fire Assistance, to fiscal year 2004
    levels of $58,236,000.

     4. STATE AND PRIVATE FORESTRY, COOPERATIVE FIRE PROTECTION: VOLUNTEER
                                FIRE ASSISTANCE

        The proposed fiscal year 2005 Budget proposes $5,043,000 for
    Volunteer Fire Assistance, an increase of $6,000 from the fiscal year
    2004 Budget level. While FLA believes a larger increase in funding is
    warranted by fires of the past three years, we recognize the current
    budget restraints, and support the proposed appropriation of $5,043,000
    for Cooperative Fire Protection, Volunteer Fire Assistance.

    5. WILDFIRE FIRE MANAGEMENT, STATE AND PRIVATE FORESTRY: FOREST HEALTH
                   MANAGEMENT, FEDERAL AND COOPERATIVE LANDS

        As previously stated, maintaining and enhancing all fire fighting
    capabilities is crucial to saving both forests and lives. The proposed
    fiscal year 2005 Budget, however, would cut funding for Wildfire Fire
    Management, both Federal and Cooperative Lands by a combined
    $12,110,000 from fiscal year 2004 Budget levels. Again, such severe
    cuts seems counter-productive to the stated purpose of the government
    to help prevent and fight such fires in the future. FLA encourages the
    subcommittee to restore funds for Wildfire Fire Management, both
    Federal and Cooperative Lands, to fiscal year 2004 levels of
    $24,692,000.

      6. WILDFIRE FIRE MANAGEMENT, STATE AND PRIVATE FORESTRY: STATE AND
                           VOLUNTEER FIRE ASSISTANCE

        Again, FLA believes in the need for maintenance and enhancement of
    all fire fighting capabilities to save both forests and lives. The
    proposed fiscal year 2005 Budget, however, would cut funding for
    Wildfire Fire Management, State and Private Forestry, both State and
    Volunteer Fire Assistance, by a combined $16,419,000 from fiscal year
    2004 Budget levels. Once again, such severe cuts seems counter-
    productive to the stated purpose of the government to help prevent and
    fight such fires in the future. FLA encourages the subcommittee to
    restore funds to Wildfire Fire Management, State and Private Forestry,
    State and Volunteer Fire Assistance, to fiscal year 2004 levels of
    $59,201,000.

      7. STATE AND PRIVATE FORESTRY, COOPERATIVE FORESTRY: FOREST LEGACY
                                    PROGRAM

        The Forest Landowners Association recognizes that in light of large
    operating budget deficits, Congress and the administration must cap
    spending to previous levels, or only increase spending by minimal
    amounts. The proposed fiscal year 2005 Budget, however, would increase
    funding for State and Private Forestry, Cooperative Forestry, Forest
    Legacy Program, by $35,844,000 over fiscal year 2004 Budget levels, to
    $100,019,000 in fiscal year 2005. Such a large increase seems
    unwarranted when other programs are facing actual cuts from fiscal year
    2004 levels of 50 percent or more. Therefore, FLA encourages the
    subcommittee to reduce proposed fiscal year 2005 funds for State and
    Private Forestry, Cooperative Forestry, Forest Legacy Program, to the
    fiscal year 2004 level of $64,134,000.
        The Forest Landowners Association thanks the Appropriations
    Subcommittee for Interior and Related Agencies for the opportunity to
    submit written testimony regarding fiscal year 2005 appropriations for
    the United States Forest Service. If the subcommittee has any questions
    or comments regarding this written testimony, it should contact Dr.
    Vernon R. Hayes, Jr., FLA's government affairs director, at his office
    (8204 Foxhall Road, Clinton, Maryland, 20735; telephone 301-877-6898;
    fax 301-877-6899).
                                     ______

               Prepared Statement of the High Plains Partnership

        The High Plains Partnership (HPP) mission is to establish and fully
    implement a public/private partnership, based on existing programs and
    organizations, to conserve and enrich the natural heritage of the High
    Plains region in cooperation with private landowners. The long-term
    vision of HPP is to facilitate the conservation and stewardship of
    native short, mixed and desert grasslands and dependent fish and
    wildlife resources in a landowner-friendly manner.
        The HPP partners are State Fish and Wildlife Agencies in 11 states
    (AZ, CO, KS, MT, ND, NE, NM, OK, SD, TX, and WY), Natural Resources
    Conservation Service, U.S. Forest Service, and other federal agencies;
    and many private organizations listed at the bottom of this testimony.
        Nearly 90 percent of the High Plains is privately owned; therefore,
    it is essential that public/private partnerships be developed to meet
    the shared goals of conserving and restoring declining and at-risk
    wildlife species and the native grassland habitats upon which they
    depend. HPP promotes the concept that the program can also contribute
    to the economic viability of private lands by offering private
    landowners a diverse set of incentive options. Private lands with
    diverse vegetative and wildlife communities will become increasingly
    more valuable, both financially and aesthetically, to individual
    landowners and the country at large in the future.
        The High Plains Partnership was begun in 1998 as a pilot project in
    the form of a public/private initiative to proactively conserve
    declining habitats on private lands in 5 states in the southern High
    Plains. The remarkable success of the program has led to the current
    initiative to expand to 11 states, and address many more declining and
    at-risk wildlife species. In keeping with the Secretary of the
    Interior's 4-C's philosophy of consultation, communication and
    cooperation in the service of conservation, the current initiative
    seeks to increase grassland project funding for all collaborators while
    providing on-the-ground technical support and financial assistance to
    private landowners who want to implement habitat management practices
    that benefit the land and wildlife.
        Ultimately, the goal of the HPP is to improve the status of ``at-
    risk'' species and ecosystems on private lands to reduce or remove the
    need for their protection under the Endangered Species Act. Specific
    Goals are:
        1. Improve the status of High Plains species at-risk to reduce or
    remove their need for protection under authority of the ESA;
      --restore, protect, or enhance 2 million acres of High Plains habitat
            in 10 years;
      --remove the need to list candidates such as the lesser prairie-
            chicken and black-tailed prairie dog;
      --recover or down-list species such as the black-footed ferret;
      --preclude the listing of numerous other declining grassland species;
            and
        2. Improve the economic viability of lands that are voluntarily
    managed for declining species in the High Plains by offering a diverse
    array of financial incentives to private landowners.
        A number of funding sources have been utilized during the pilot
    phase of the HPP. These sources will continue to be utilized as
    opportunities arise. However, to achieve the HPP goals, more stable
    funding is needed. To this end, we request that the U.S. Congress
    appropriate at least the $5 million line item amount President Bush
    requested be added to the Fish and Wildlife Service's Partners for Fish
    and Wildlife Program in his budget request for fiscal year 2005.
                                     ______

     Prepared Statement of the International Society of Tropical Foresters

        As a former member of the Forest Service Research Program and
    current President of the International Society of Tropical Foresters, I
    am pleased to see an increase of $14,267,000 in the President's fiscal
    year 2005 budget for Forest Service Research and Development (FS R&D).
    However, I see problems with the lack of recognition of the need for
    additional silviculturists to strengthen the Healthy Forests
    Restoration program.
        Silviculturists in Forest Service Programs generally (in National
    Forests, Research and Development, and State and Private forestry) have
    been reduced in numbers at an alarming rate during the past several
    years. Yet, they are needed to plan and carry out thinning of fire
    hazardous forest lands and in restoring cut and burned over forest
    lands through planting or natural regeneration programs.
    Silviculturists have always been the backbone of Forest Service
    management programs, and they are essential to current Healthy Forests
    Restoration programs working together with other specialists in water,
    fire, insects, diseases, ecology and wildlife habitat. I recommend that
    the Forest Service recognize the need for more silviculturists in
    Research and Development as well as in non-research programs of the
    Forest Service. This would require at least an increase in funding of
    $2,000,000 more for Research and Development and additional funding for
    the other two branches of the Forest Service.
        I also notice that the President's fiscal year 2005 budget for
    Sudden Oak Death Disease and for Forest Inventory and Analysis have
    stayed the same as the enacted budgets for fiscal year 2004. I
    recommend that these important programs be increased by $3,000,000 for
    Forest Inventory and Analysis and $1,013,000 for Sudden Oak Death
    Disease.
        The rest of the President's fiscal year 2005 budget looks good to
    me, although I would like to add a little special detail on two
    International Research Institutes that are a part of the overall
    Research programs.

          INTERNATIONAL INSTITUTE OF TROPICAL FORESTRY IN PUERTO RICO

        The International Institute of Tropical Forestry (IITF) has a
    mission of research that contributes to the sustainable use of forest
    resources, the conservation of primary forests, the rehabilitation of
    degraded lands and the management of wildlife and watersheds. This work
    is conducted in an extensive network of collaborators with the
    Institute in Puerto Rico, other Caribbean islands, and in Latin
    America. The increase of $323,000 in the fiscal year 2005 budget for
    IITF will be used to increase research on watershed conditions and
    invasive plants and animals and to optimize the delivery and practical
    use of all of the research programs of IITF.
        I would like to be sure that the $323,000 increase in the
    President's fiscal year 2005 budget for IITF be retained in the overall
    FS R&D budget.

                INSTITUTE OF PACIFIC ISLANDS FORESTRY IN HAWAII

        The Institute of Pacific Islands Forestry (IPIF) in Hawaii has a
    mission of research on invasive species, forested wetlands, and
    ecosystem restoration. The President's fiscal year 2005 budget for IPIF
    includes a $331,000 increase over fiscal year 2004. This increase will
    be used to strengthen research on invasive species and ecosystem
    restoration programs. However, other programs that supplement or
    support research on invasive species and ecosystem restoration include
    watershed research, fire research (especially since invasive plants
    have made fire prone situations) and wetlands research.
        I am pleased to see that previous FS budgets have made possible the
    construction of an office and laboratory facility to house the IPIF R&D
    and outreach programs. The construction of this $9,076,628 facility in
    Hilo, Hawaii will begin in early 2004.
        Again, as in the IITF in Puerto Rico, I would like to be sure that
    the $331,000 increase in the President's fiscal year 2005 budget for
    IPIF be retained in the overall FS R&D budget.
                                     ______

           Prepared Statement of the Mother Lode Chapter, Sierra Club

        The request: $3.2 million in Forest Service Land and Water
    Conservation Fund appropriations to purchase Sierra Nevada Inholdings.
    Funds for these purchases are included in the President's budget.
        The requested appropriation would purchase inholdings in three
    areas:
        (1) along the North Fork American Wild River in Tahoe National
    Forest,
        (2) along the Middle Fork American River on the boundary between
    Tahoe National Forest and Eldorado National Forest, and
        (3) at Barker Pass in Tahoe National Forest, on the Pacific Crest
    Trail and the west rim of the Lake Tahoe Basin.
        The Mother Lode Chapter of the Sierra Club strongly urges the
    Subcommittee to recommend this appropriation.

                         NORTH FORK AMERICAN WILD RIVER

        The requested appropriation would purchase 1,220 acres of private
    lands along the North Fork American Wild River in Tahoe National
    Forest, California, for about $1 million. The Forest Service has
    already acquired 8,200 acres along and near the Wild River, and the
    proposed purchase would finally complete the acquisitions of presently
    available large inholdings in and near the Wild River Zone.
        The North Fork American River flows down the western slope of the
    Sierra Nevada in a beautiful wild rugged canyon more than half a mile
    deep. Most of the canyon is steep-walled and narrow.
        Both the federal government and the State of California designated
    a 42-mile stretch of the North Fork American as a Wild River in the
    1970's. The designations recognized the river's outstanding wildness
    and beauty and its exceptionally pure waters.
        The river supports an excellent self-sustaining trout fishery
    managed as a Wild Trout Stream by the State of California. The canyon
    is home to numerous large mammals, including black bear and mountain
    lion, and provides habitat for 150 species of birds, including
    peregrine falcons, golden eagles, and goshawks. The canyon's varied
    ecosystems and vegetation, including a large acreage of old-growth
    forest, are almost unspoiled. Ten challenging trails descend steeply
    into the canyon, providing access for rugged hikers, backpackers, and
    fishermen seeking solitude and strenuous adventure.
        Though the canyon is remote and rugged, development which would
    degrade the beauty and naturalness of these private lands could still
    occur. A previous owner filed helicopter logging plans on the two
    parcels to be acquired. Cabin sites could be developed on these
    parcels, which would significantly degrade their naturalness and limit
    public recreational access.

                           MIDDLE FORK AMERICAN RIVER

        The requested appropriation would begin purchase of private lands
    in the canyon of the Middle Fork American River, the first major
    drainage to the south of the North Fork American. The appropriation
    would purchase 1,400 of the available 4,760 acres.
        The available lands include almost all the private land in a 25-
    mile stretch of the Middle Fork canyon. This stretch of the Middle Fork
    is the boundary between Tahoe and Eldorado National Forests.
        The canyon of the Middle Fork is even more narrow, steep, rugged,
    and remote than the canyon of the North Fork, and also possesses all
    the same outstanding features. The clean waters of the river support a
    high-quality trout fishery sustained by natural reproduction. Large
    mammals, including black bear and mountain lion, are found in the
    canyon. The canyon is an imiporant winter deer range. This remote
    unspoiled canyon provides habitat for the species of birds found in the
    North Fork, including several sensitive species--spotted owls,
    peregrine falcons, golden eagles, and goshawks. Fishermen, hunters,
    hikers and naturalists who make the strenuous descent into the canyon
    are rewarded by pristine conditions and solitude.
        The Middle Fork is a major source of high-quality water for Placer
    County and fast-growing downstream areas. Placer County has developed
    the Middle Fork for water supply and hydroelectric power; this
    development directly affects only a small proportion of the 25 miles of
    canyon. Unified management of the Middle Fork Canyon by the Forest
    Service would better protect water quality and better guarantee
    preservation of its outstanding natural attributes. Possible future
    mining and logging on private lands in the canyon could significantly
    degrade the canyon's naturalness and the purity of the Middle Fork's
    waters.
        The requested appropriation for purchasing lands in the North Fork
    American and the Middle Fork American is supported by the Placer County
    Board of Supervisors, the Board of Directors of the Placer County Water
    Agency, and civic and environmental organizations in Placer County.

                    PACIFIC CREST TRAIL LANDS AT BARKER PASS

        The requested appropriation would purchase the remaining 773-acre
    inholding at Barker Pass on the west rim of the Lake Tahoe Basin. This
    inholding is near the Pacific Crest Trail and adjacent to the Granite
    Chief Wilderness. Approximately 640 acres of adjacent lands were
    purchased with an appropriation for fiscal year 2003.
        The Barker Pass inholding includes potential habitat for two
    sensitive species, the California spotted owl and northern goshawk.
    There is also potential habitat for marten, wolverine, and Pacific
    fisher on the property.
        The Barker Pass area is heavily used by hikers, including long-
    distance hikers on the Pacific Crest Trail, and by fishermen and
    campers, who enjoy the area's attractive and relatively unspoiled
    forests and meadows.
        Development and roadbuilding on this inholding in the watersheds of
    Powderhorn and Little Powderhorn Creeks would have significant adverse
    effects on the Pacific Crest Trail, the Granite Chief Wilderness, and
    major trails into the Wilderness. Development and roadbuilding would
    increase erosion and siltation in these tributaries of pristine Five
    Lakes Creek, which flows through a beautiful wilderness canyon and
    supports an outstanding population of wild rainbow trout. Much of the
    inholding could be developed for summer residences, which would be
    especially appealing to purchasers preferring an isolated location.
    These lands are easily accessible from Lake Tahoe in summer by the
    high-standard Blackwood Canyon Road.
        Acquisition of this inholding near Barker Pass will foreclose the
    possibility of development adversely affecting the Pacific Crest Trail
    and the watersheds of the Granite Chief Wilderness.
                                     ______

       Prepared Statement of the National Association of State Foresters

                                  INTRODUCTION

        The National Association of State Foresters (NASF) is pleased to
    provide testimony on the U.S. Forest Service (USFS) $4.98 billion
    budget request for fiscal year 2005. Representing the directors of
    state forestry agencies from all fifty states, eight U.S. territories,
    and the District of Columbia, our testimony centers around those
    program areas most relevant to the long term forestry operations of our
    constituents. State and Private Forestry programs multiply the public
    benefits of Federal funding by leveraging in-kind contributions through
    cost-share programs and matching funds from states. Wildland Fire
    Management supports essential State and Private and Federal programs to
    address wildland fire. We commend the President's commitment to the
    Healthy Forests Restoration Act and the Healthy Forests Initiative in
    the USFS budget for fiscal year 2005. Our recommendations include our
    top three priorities (FLEP, Forest Health, and State Fire Assistance)
    and discuss other opportunities for Congress to further the advancement
    of sustainable management on both public and private forestland
    nationwide.

                      STATE AND PRIVATE FORESTRY PROGRAMS

    Forest Land Enhancement Program (FLEP)
        NASF urges Congress to fund FLEP at $20 million for fiscal year
    2005. The 2002 Farm Bill provided $100 million for FLEP over five
    years. Replacing the Forestry Incentives Program (FIP) and the
    Stewardship Incentives Program (SIP) by combining the best attributes
    of these predecessor programs, FLEP is able to better meet the needs of
    family forest landowners. FLEP implementation began in fiscal year 2003
    with $20 million. The result was an enormously successful and popular
    forestry cost-share, technical assistance, and educational program.
    However, $50 million was transferred from FLEP to help pay for Forest
    Service fire suppression efforts during the 2003 fire season, with $10
    million repaid by Congress. Congress' help is now needed to ensure that
    the $10 million for FLEP in fiscal year 2004 is made available to the
    Forest Service and funds are appropriated for fiscal year 2005.
        Family forest owners have demonstrated funding needs for three to
    five times the amount that could be funded in the first year. The
    President's fiscal year 2005 budget proposes the remaining $40 million
    in the FLEP account, including the $10 million appropriated for fiscal
    year 2004, would be ``canceled''. No other program provides direct
    assistance to help landowners implement forest management practices on
    family forest lands. Financial assistance typically results in a two-
    to-four-fold increase in the implementation of sustainable forestry
    practices on private lands, allowing landowners to better meet long-
    term public demand for timber, clean water, and other forest resources
    while providing environmental benefits for the general public. NASF
    recommends funding FLEP at $20 million in fiscal year 2005 by rejecting
    the language in the Administration's budget and instead reinstating the
    $40 million remaining in the account.

    Forest Health Management (FHM)
        The Forest Health Management (FHM) programs within State and
    Private Forestry are the only federal programs that address the breadth
    of forest health threats across all of our nation's forests. Every
    year, invasive species cost the American public $138 billion in losses,
    detection, and control. Providing for the prevention, detection, and
    suppression of damaging insects, diseases, and plants, this program
    also assists in the development and application of new technologies to
    address forest health problems on all lands. FHM is funded under both
    State and Private Forestry (S&PF) and Wildland Fire Management.
        NASF recommends funding S&PF Forest Health Management for Federal
    and Cooperative Lands at fiscal year 2004 levels ($54 million for
    Federal lands and $45 million for Cooperative lands) to provide the
    tools needed to address Forest Health issues across the many forest
    types and ownerships in the United States.
        NASF also recommends $15 million for Federal lands and $10 million
    for Cooperative lands to continue level support for Forest Health
    Management under Wildland Fire Management to address forest health
    problems that increase the risk of catastrophic wildland fire. Forest
    health management helps states achieve the goals of the Healthy Forests
    Initiative.

    State Fire Assistance (SFA)
        State Fire Assistance (SFA) provides much-needed financial and
    technical assistance to states for wildland fire management. It ensures
    that state resources receive the best training and can acquire and
    maintain equipment necessary to prepare them to act as the first line
    of defense for their local forests and communities. These fire fighting
    resources serve both as ``first responders'' for local situations and
    as ``ready reserves'' for large federally managed catastrophic fires.
    Further, it is the only program that currently provides some funding
    for fuel reduction work on non-federal lands. SFA is funded under both
    Cooperative Fire Protection (State and Private Forestry) and Wildland
    Fire Management in the Forest Service budget. Together with Volunteer
    Fire Assistance, these programs provide critical support for the
    wildland firefighting community.
        SFA provides the flexibility to meet different state needs, which
    may include firefighting preparedness, firefighter training, fire
    suppression, and hazardous fuel reduction, as well as prevention
    activities. In addition, the renewed focus on hazardous fuel reduction
    will wear out equipment more quickly, requiring more frequent repair
    and replacement. A reduction in SFA will be counterproductive, making
    it more difficult for states--often the first line of defense--to
    extinguish small fires quickly before they grow into large, costly
    fires.
        NASF recommends continued level funding for State Fire Assistance
    at $28 million under Cooperative Fire Protection and $51 million under
    Wildland Fire Management, as well as funding for Volunteer Fire
    Assistance at $5.0 million under Cooperative Fire Protection and $8.1
    million under Wildland Fire Management. Funding these line items at
    last year's level provides continued protection for local communities
    from catastrophic wildland fire, many of which originate on federal
    lands.
        NASF also recommends funding Community and Private Land Fire
    Assistance (CPLFA). The model for this program began with National Fire
    Plan funding in fiscal year 2001. Subsequently authorized in the 2002
    Farm Bill at $35 million per year, NASF recommends $20 million to begin
    implementation of the program in fiscal year 2005. CPLFA is the perfect
    tool to help communities leverage limited wildfire mitigation dollars
    and achieve the goals laid out in the Healthy Forests Restoration Act:
    to prepare community wildfire protection plans, restore unhealthy
    forests on private lands, and to reduce fuels around communities.

    Forest Stewardship Program
        The Forest Stewardship Program continues to serve as the foundation
    program for promoting sustainable forest management on family forest
    lands. The program compliments the Forest Land Enhancement Program
    (FLEP) by providing landowners assistance in creating sustainable
    forestry Stewardship Plans that can be implemented with cost-share
    funds from FLEP. From 1991 to 2002, the Forest Stewardship program
    turned out more than 217,000 Stewardship Plans covering more than 25
    million acres. NASF supports the President's proposed funding of $41
    million in fiscal year 2005 for the Forest Stewardship Program.

    Watershed Forestry Assistance Program (WFAP)
        NASF recommends funding the Watershed Forestry Assistance Program
    (WFAP) with the full $15 million authorized in Title III of the Healthy
    Forests Restoration Act for fiscal year 2005. Through forestry
    practices in targeted watersheds and collaborative approaches to
    watershed restoration, WFAP provides landowners, communities, and
    organizations with the technical and financial tools necessary to
    protect and restore water resources. By focusing on priority watersheds
    within each state, this unique program is able to leverage funding and
    support from local watershed partnerships to measurably increase water
    quality and overall watershed health.

    Urban and Community Forestry
        NASF recommends funding the Urban and Community Forestry program at
    $36 million in fiscal year 2005. The program leverages existing local
    efforts by assisting rural and urban communities to manage, maintain,
    and improve their tree cover and green spaces, achieving important
    social and economic benefits.

    Forest Inventory and Analysis (FIA)
        The Forest Inventory and Analysis program provides crucial forest
    information to policy makers and land managers, enabling them to make
    informed forestry-related decisions. Increasing funding for this
    program will enable the important work to continue, while improving the
    quality of information being provided. NASF recommends $64 million for
    FIA to continue progress toward implementation of the FIA strategic
    plan. Together with a well funded research program, FIA will continue
    to provide essential inventory data for addressing long-term forest
    management needs.

    Economic Action Program (EAP)
        The Economic Action Program is the only federal assistance program
    that targets forest-based economic development. With our current forest
    health threats across the country, EAP helps find local solutions to
    forest health problems while fostering economic sustainability in
    communities. State Foresters will continue to work with the Forest
    Service and rural communities to help communities deliver a focused and
    results oriented forest-based economic development program. NASF
    supports level funding for the Economic Action Program at $11 million,
    not including Congressional earmarks.

                             OTHER FEDERAL PROGRAMS

    Federal Wildland Fire Management
        NASF recommends continued funding of federal wildland fire
    management at the 10-year average. Funding is integral to quickly
    suppress small fires before they grow into large and costly fires. The
    increasing costs of wildfires--due mainly to drought, fuel
    accumulation, and the rapid expansion of the wildland-urban interface--
    makes adequate suppression funding critical. We support continued
    funding for preparedness, fire operations, and hazardous fuels
    treatment on federal land, including the $15 million provided under
    State and Private Forestry Appropriations that may be used on non-
    Federal land to protect communities at risk from adjacent USFS lands
    where hazard reduction activities are planned.

    DOI Conservation Grant Programs
        NASF supports the Department of the Interior conservation grant
    programs for private landowners to manage their land for a variety of
    public benefits. Continued funding will ensure these programs remain
    viable.

                                   CONCLUSION

        NASF seeks the Subcommittee's support for a Forest Service fiscal
    year 2005 budget that will ensure the continued delivery of a broad
    range of public benefits from privately owned forest lands.
    Collaboration among stakeholders across the landscape--federal, state,
    and local government agencies, private landowners, industry, and non-
    profit organizations--is necessary to manage for the wide range of
    forest resources and values found on all ownerships. Cooperative
    Forestry, State and Private Forestry (S&PF), and Wildland Fire
    Management provide these links, and the federal share leverages private
    dollars and provides an important catalyst for collaboration in order
    to take the work far beyond the usual boundaries of federal land
    management. Thank you for the opportunity to provide our testimony.
                                     ______

     Prepared Statement of the National Association of State Universities
                            and Land-Grant Colleges

        Mr. Chairman, on behalf of the NASULGC Board on Natural Resources,
    thank you for your support of science and research programs within the
    Departments of Interior and Agriculture. We recommend the following
    amounts for fiscal year 2005: $1 billion for U.S. Geological Survey;
    $686 million for Department of Energy Fossil Energy Research and
    Development; $96.8 million for the Department of Energy's Industries of
    the Future; a $15 million increase in USDA Forest Service Research and
    Development for cooperative agreements with universities and
    competitive grants; $5 million for Technology Transfer within the USDA
    Forest Service State and Private Forestry Cooperative Forestry Program;
    and $1.275 million for the Cooperative Ecosystem Studies Units. Further
    details on these levels are below.

                                      USGS

        As a member of the USGS Coalition, NASULGC supports $1 billion for
    USGS, which would restore the damaging cuts proposed in the President's
    budget and provide a 6.5 percent increase over the fiscal year 2004
    level to cover uncontrollable costs ($8.1 million of which would be
    absorbed through program reductions under the President's proposal),
    inflation, and ongoing science initiatives to support public policy
    decisions. We appreciate the report language in both your fiscal year
    2003 and fiscal year 2004 legislation emphasizing the importance of
    cooperative USGS initiatives. Partnerships with the academic community
    should be encouraged because they provide the USGS and the Department
    of the Interior with increased flexibility that can be used, among
    other things, to combat an aging workforce and massive looming
    retirements. This is a good beginning, but more substantial, targeted
    and well thought out investment is needed in this area.
    We recommend the following amounts for USGS budget lines
        $8,775,000 for the Water Resources Research Institutes, an increase
    of $2,354,000 over the fiscal year 2004 appropriation. The
    Administration's proposal to eliminate funding for this excellent
    partnership with state governments and universities is unjustified. The
    institutes generate $19 for each federal dollar Congress appropriates,
    but continued federal support is vital to the maintenance of these
    matching funds. This program is essential to solving emerging and
    future state, regional and inter-jurisdictional water resources
    problems, and it also provides this country's next generation of water
    scientists and engineers.
        $75,774,000 for the Mineral Resources Program (MRP), which would
    restore the MRP to its fiscal year 2003 level and provide for the
    creation of a $20 million Mineral Education and Research Initiative
    (MERIT), a peer-reviewed external grants program for applied research
    and education in mineral resources and material flows analysis
    conducted by universities, state organizations, and individuals in the
    private sector. MRP recently announced it has committed $200,000 for
    grants in fiscal year 2004, but additional funds are needed to expand
    upon this first step. The establishment of a consistently well-funded
    MERIT would follow the recommendations of three recent National
    Research Council reports and would help arrest the dramatic decline of
    minerals expertise in the United States.
        $27,000,000 for Energy Resources, an increase of approximately $2
    million over the fiscal year 2004 level. USGS provides unbiased,
    scientifically valid assessments of potential energy resources of the
    United States and the world, and examines the environmental
    consequences of developing these resources. Such information is
    critical if we are to meet increasing energy needs and develop a long-
    term energy strategy. This increase would enable restart of a long
    dormant effort to assess the nation's geothermal resources.
        $31,901,000 for the National Cooperative Geologic Mapping Program,
    an increase of $6 million over fiscal year 2004. This program contains
    FedMap, StateMap, and EdMap, which have widespread use in land-use
    planning and are key to understanding geologic hazards and minerals.
    EdMap is a training program for geologic mappers and is linked to many
    of our universities.
        $59,000,000 for Earthquake Hazards, including a $10,000,000
    increase for the Advanced National Seismic System (ANSS), which has
    been grossly under funded over the last several years. ANSS is focused
    on modernizing earthquake monitoring equipment and activities with a
    concentration in urban areas where increased capability could save a
    huge number of lives and billions of dollars in economic costs.
    Universities are full partners in ANSS.
        $80,843,000 for Cooperative Topographic Mapping, a restoration to
    the fiscal year 2004 appropriated level. This program provides state,
    local and federal emergency responders with current, reliable, and
    easily accessible geographic information and maps in emergency
    situations. The National Map, through partnerships, will provide the
    base geographic framework for the country and form the foundation for
    integrating, sharing, and using other data easily.
        $183,529,000 for Biological Resources, including $16,113,000 to
    allow full staffing for the Cooperative Fish and Wildlife Research
    Units. This is one of the most successful partnership arrangements in
    all of government, and is essential for information and outreach to
    resource managers. The units serve as a strong link between USGS and
    federal and state management agencies. Federal support is augmented by
    state and university cooperator contributions of expertise, equipment,
    facilities, and project funding, thereby enhancing the program's cost-
    effectiveness.

                             NATIONAL PARK SERVICE

        NASULGC recommends $1,275,000 in support of the Cooperative
    Ecosystem Studies Units.--CESU host universities provide research,
    technical assistance, and education consistent with the CESU mission.
    This small appropriation would provide base funding to each host
    institution and for the national office to cover operating costs. We
    suggest this funding be placed within the National Park Service under
    external programs on behalf of all thirteen federal agencies involved
    with CESU.

                              DEPARTMENT OF ENERGY

        We oppose the cuts to the Industries of the Future programs
    proposed in the President's budget, and urge you to restore them to the
    fiscal year 2003 appropriated level of $96,824,000, including
    $5,484,000 for Mining Industry of the Future.--These programs
    facilitate the formation of diverse, collaborative partnerships among
    manufacturers, suppliers, and universities to develop innovative
    technologies essential to the future competitiveness of U.S. industry.
        We also oppose the proposed cuts within Fossil Energy Research and
    Development.--Low cost fossil fuels are vital to maintaining U.S.
    economic growth and to sustaining our high standard of living.
    Universities are a substantial contributor to these research efforts,
    and the Office of Fossil Energy is a major supporter of research being
    performed at universities in partnership with industry and the national
    laboratories. NASULGC recommends $46 million for Natural Gas
    Technologies, $41 million for Oil Technology and $4 million for
    Advanced Separation, under Solid Fuels and Feedstocks, which funds a
    consortium of seven universities established to develop new
    technologies to help the U.S. mining industry produce cleaner coal and
    improve minerals recovery. We support the requested amounts for
    Sequestration Research and Development ($49 million), University Coal
    Research ($3 million) and Education and Training at Historically Black
    Colleges and Universities and Other Minority Institutions ($1 million).

                              USDA FOREST SERVICE

        NASULGC recommends the creation of a $5 million Technology Transfer
    line under Cooperative Forestry Programs in Forest Service State and
    Private Forestry (S&PF).--There is currently no formal link between
    S&PF and the university-based research, extension, and technology
    transfer capabilities in states. We believe such a link would greatly
    strengthen cooperation among S&PF, state forestry agencies, forestry
    schools, industry, and landowners. Criteria for grants and cooperative
    programs should be established by consulting with university forestry
    and related natural resources schools and other educational or
    technology transfer entities.
        We urge the strengthening of Forest Service Research and
    Development (R&D) through increased ties to university forestry
    research programs via cooperative agreements and competitive grants.
    Incremental increases for funding of cooperative agreements over the
    next five years would return their share of the R&D budget to historic
    levels of approximately 20 percent. For fiscal year 2005, we recommend
    a $5 million increase in R&D dollars committed to cooperative
    agreements. We also support the establishment of a major external
    competitive grant program in R&D to engage the broader research
    community in addressing critical research and outreach needs. In the
    fiscal year 2005 budget we recommend designation of $10 million for
    this purpose, eventually building to $40 million.
                                     ______

             Prepared Statement of the National Wildlife Federation

        Mr. Chairman, on behalf of our more than four million members and
    supporters of the National Wildlife Federation, thank you for the
    opportunity to express to your Subcommittee our funding recommendations
    for Interior Department and U.S. Forest Service programs in fiscal year
    2005. The purpose of our testimony is to recommend levels of funding
    for a few specific programs that are vital to our mission to educate,
    inspire and assist individuals and organizations of diverse cultures to
    conserve wildlife and other natural resources and to protect Earth's
    environment in order to achieve a peaceful, equitable and sustainable
    future.

      LAND CONSERVATION, PRESERVATION AND INFRASTRUCTURE IMPROVEMENT FUND
                                    (LCPII)

        Enacted at the close of the 106th Congress, the fiscal year 2001
    Interior appropriations conference report established the LCPII fund to
    address loss of open space, wildlife habitat, wildlands, and cultural
    treasures endangered by urban sprawl and development. We urge you to
    restore the commitment to fully fund LCPII at its originally dedicated
    level of $2.24 billion in fiscal year 2005, while the DOI
    appropriations portion of LCPII should receive $1.68 billion.

                                    U.S. FWS

    Endangered Species Program
        The Endangered Species Act (ESA) is one of our nation's most
    important environmental laws and we are disappointed that the
    Endangered Species Program has not been funded at the level needed to
    carry out its critical purpose of preventing extinction and recovering
    our irreplaceable wildlife. The President's budget proposal is seeking
    to cut funding for the endangered species program by $7.6 million, or
    more than 5 percent. Out of the four core endangered species programs,
    the species recovery program would suffer the deepest cuts of more then
    14 percent. Funding for candidate conservation and consultation also
    face significant reductions. The President's budget request allots only
    $129 million to ESA protections, although the needs of the FWS are much
    greater. In order for the FWS to fulfill its mission, we urge the
    Committee to appropriate at least $212 million toward the Endangered
    Species Program to fund the following critical activities:
      --Listing Program.--While the President proposes a $5 million
            increase in the listing and critical habitat account, that
            amount will not begin to cover the backlog of species awaiting
            action on proposed listings and critical habitat designations.
            More than 250 candidate species have been denied the benefits
            of the ESA's safety net due to lack of resources. Candidates
            awaiting ESA protection include the Washington ground squirrel,
            sheath-tailed bat, gunnison sage grouse, friendly ground dove,
            lesser prairie chicken, band-rumped storm petrel and the elfin
            woods warbler. Some of these creatures have been candidates for
            years and could become extinct while waiting for ESA
            protection. In order to address the backlog of listings and
            critical habitat designations, FWS needs $30 million, or a
            $12.774 million increase in the listing account. (In April
            2003, FWS estimated that it would take $30.6 million a year for
            five years, or $153 million, to clean up this backlog.).
      --Recovery Program.--Under the President's budget the recovery
            program would be reduced by $9.8 million, or 14.4 percent below
            fiscal year 2004, even though FWS has said that more than 200
            species currently listed under the Act are on the verge of
            extinction, primarily because not enough funds are available
            for recovery activities. The cut to recovery activities
            includes a $1.4 million decrease for wolf recovery in Montana,
            Idaho and Wyoming, thus potentially undermining one of the
            nation's greatest wildlife recovery success stories. Within
            this program, the Subcommittee should maintain its support of
            the Platte and Upper Colorado River Recovery Programs at last
            year's levels of $982,000 and $691,000, respectively. Loss of
            this funding would deny the Subcommittee the benefits of its
            past investments, since the Platte and Upper Colorado recovery
            programs are just now being implemented. In order to develop
            and implement recovery plans for all species that need them,
            FWS needs $110 million--a $51.8 million increase over the
            President's request.
      --Consultation Program.--Consultation was cut by $1.7 million, even
            though it is projected that FWS will review approximately
            77,000 federal actions under Section 7 in 2004, up from 56,000
            in 2003. On top of this, FWS is responsible for monitoring
            about 370 approved Habitat Conservation Plans and will be
            reviewing 280 more that are currently in the pipeline. FWS will
            also be responsible for consulting with the Department of
            Defense (DOD) for over 300 Integrated Natural Resource Plans,
            due in 2006, to ensure the DOD is adequately protecting
            wildlife and natural resources on military installations. In
            order to ensure consultations are successfully completed in a
            timely manner, we urge the Committee to increase funding for
            consultation to $57.146 million, which is $11.696 million over
            the Presidents request.
      --Candidate Conservation.--Candidate species are plants and animals
            for which the Service has sufficient information on their
            biological status and threats to propose them for listing as
            endangered or threatened under the Endangered Species Act, but
            for which listing is precluded due to lack of resources and
            other higher priority listing activities. The President has
            also proposed reducing the Candidate Conservation program by
            $1.198 million, despite the fact that efforts to protect
            candidate species at an early stage are cost-effective,
            reducing the difficulty and expense of species recovery. We
            request an increase to $14.808 million, which is $6.198 million
            over the Presidents request.

    National Wildlife Refuge System Operations and Maintenance
        NWF supports the Cooperative Alliance for Refuge Enhancement (CARE)
    recommendation of a $40 million increase over the fiscal year 2004
    level to help reduce the $931 million maintenance backlog and address
    critical operations needs in the National Wildlife Refuge System.

    State and Tribal Wildlife Grants
        NWF commends the Administration for requesting $80 million for this
    program, but the need is much larger and growing, so we ask the
    Subcommittee to increase its support to $125 million. This is the
    nation's only program to keep the species of every state common. The
    State and Tribal Wildlife Grant program reflects the wisdom and
    experience federal, state, and private partners have gained over the
    last century in restoring game species and more recently in reversing
    the decline of the non-game species that citizens enjoy in their
    communities and rural areas. The program provides states and their
    partners a broad suite of conservation tools early enough to allow for
    meaningful and effective species conservation. The program
    strategically focuses resources on those species most in need of
    conservation, leverages state and private funding, and promotes
    scientific understanding of these species and their habitats.

    Habitat Conservation
        NWF supports the Administration's request of $5 million for the
    High Plains Partnership, which is a public-private partnership to
    proactively conserve declining grassland habitats and their wide-
    ranging species. The program stretches across the eleven High Plains
    states where 90 percent of the land is privately owned. The program
    uses land owner incentives and technical assistance to address the
    needs of species like the sage grouse, lesser prairie chicken, and
    black tailed prairie dog while making the private lands more
    economically viable.

    Multinational Species Conservation Fund
        Congress demonstrated its continued commitment to the Fund last
    year by increasing the appropriation to $5.6 million for the four
    mammal programs and $4 million for migratory birds. We ask for fiscal
    year 2005 that you again support these successful programs by
    appropriating $2 million each for the Asian Elephant and African
    Elephant Conservation Funds, $3 million each for the Great Apes and the
    Rhinoceros and Tiger Conservation Funds, and $5 million for the
    Neotropical Migratory Bird Conservation Fund. These funds will enable
    the Department of Interior to expand critical support for threatened
    populations of elephants, rhinos, tigers, great apes, and neotropical
    migratory birds in their natural habitats.

               BLM NATIONAL LANDSCAPE CONSERVATION SYSTEM (NLCS)

        We request an increase of $4.6 million in operations for the NLCS
    over the fiscal year 2004 budget for resource protection, archeological
    inventories, and law enforcement capability. Additionally, we request
    an additional $1.8 million in critical land acquisitions needs above
    the President's fiscal year 2005 request.
        The NLCS is an American treasure that consists of 26 million acres
    of spectacular Western National Monuments, Conservation and Wilderness
    Areas, Trails, and Rivers. From red rock canyons to mountain peaks,
    from thousand-year-old archeological sites to dinosaur remains, these
    lands offer unparalleled opportunities for recreation, scientific
    learning, and protection of our nation's cultural history. Since its
    creation in June 2000, however, the nation's newest and most innovative
    conservation system has been underfunded, and is in critical need of
    adequate resources just to meet the planning requirements and to manage
    the growing number of visitors for these new units. The BLM is charged
    with conserving, protecting, and restoring the nationally significant
    landscapes of the NLCS. A shoestring budget, however, means critical
    needs go unmet; illegal and irresponsible off-road vehicle traffic
    increases, invasive species spread, land acquisition opportunities slip
    away, and ancient artifacts are vandalized.

    NLCS Operations request of $4.6 million
      --Headwaters Forest Reserve, California: $500,000 for restoration,
            scientific monitoring, and visitor education.
      --Grand Staircase-Escalante National Monument, Utah: $1.5 million to
            study and protect geological and palentological resources and
            support essential science programs.
      --Vermillion Cliffs National Monument, Arizona: $600,000 for resource
            protection and inventories.
      --Grand Canyon-Parashant National Monument, Arizona: $400,000 for
            cultural and historic site research and protection.
      --Canyons of the Ancients National Monument, Colorado: $150,000 to
            prevent looting and vandalism and protect cultural treasures.
      --Carrizo Plain National Monument, California: $100,000 to restore
            wildlife habitat.
      --Santa Rosa and San Jacinto Mountains National Monument, California:
            $500,000 for tamarisk removal, watershed assessment, and
            visitor education.
      --Ironwood Forest National Monument, Arizona: $150,000 for an
            increased field presence and visitor education.
      --Aqua Fria National Monument, Arizona: $350,000 for cultural
            resource protection and to improve the visitor experience.
      --Upper Missouri River Breaks National Monument, Montana: $150,000
            for an increased field presence, law enforcement, and visitor
            education.
      --Black Rock-High Rock Emigrant Trail National Conservation Area,
            Nevada: $200,000 for wilderness boundary analysis and
            protection.

    NLCS Land Acquisition request of an additional $1.8 million
        We support the President's fiscal year 2005 request for Land and
    Water Conservation Fund projects for Canyons of the Ancients, Santa
    Rosa and San Jacinto Mountains, and Agua Fria National Monuments; El
    Malpais, and Colorado Canyons National Conservation Areas; and other
    NLCS units. In addition to those projects, we urge the Subcommittee to
    fund $512,000 for land acquisition along Ankle Creek in Steens Mountain
    Cooperative Management and Protection Area, Oregon; $500,000 to acquire
    Soda Mountain inholdings in Cascade-Siskiyou National Monument, Oregon;
    and $770,000 to acquire the Calf Creek parcel in Grand Staircase-
    Escalante National Monument, Utah.

                   U.S. FOREST SERVICE FOREST LEGACY PROGRAM

        NWF commends the Administration for requesting $100 million for the
    Forest Legacy Program, but the need is much larger and growing, so we
    ask the Subcommittee to appropriate $150 million for the program.
    Forest Legacy protects environmentally important forests that are
    threatened with conversion to non-forest uses and protects local
    communities and their way of life. The program has been especially
    important in states where there are few federal land holdings and where
    timber companies are consolidating and selling their lands.

                    LAND AND WATER CONSERVATION FUND (LWCF)

        The federal LWCF provides funding for the acquisition of valuable
    wildlife habitat by the federal land management agencies. Stateside
    LWCF provides matching funds for state and local recreation and
    conservation programs. The LWCF is an important tool to help halt the
    destruction and fragmentation of millions of acres of habitat that
    occurs annually throughout the U.S. LWCF funding also helps to conserve
    and restore declining native species prior to a necessity to list them
    as endangered or threatened under the Endangered Species Act (ESA). We
    urge the Subcommittee to provide $450 million for Federal LWCF and $300
    million for Stateside LWCF in keeping with the previously agreed-upon
    levels of funding for LCPII.
        Thank you for providing us with this opportunity to testify on the
    budget requests for the Interior Department and U.S. Forest Service.
                                     ______

           Prepared Statement of the New England Forestry Foundation
        I respectfully request an appropriation of $3 million in the fiscal
    year 2005 Interior budget in Forest Service budget as part of the State
    and Private Forestry allocation for the Forest Stewardship Program and
    $2 million in Forest Legacy Program. These funds would be used in
    support of the Downeast Lakes Forestry Partnership in Washington
    County, Maine.
        Led by the New England Forestry Foundation, the partnership will
    permanently conserve 339,000 acres of forestland strategically
    positioned between more than 600,000 acres of conserved lands in New
    Brunswick and 200,000 acres of state, federal and Native American lands
    in Maine making the overall conservation impact one million acres of
    essentially uninterrupted habitat across an international boundary.
    Partners include the Downeast Lakes Land Trust, Passamaquoddy Tribe,
    Domtar Industries, Maine Department of Conservation, Sportsman's
    Alliance of Maine, and the National Wildlife Federation to name just a
    few. The most important bird breeding area identified by the US Fish
    and Wildlife Service in Bird Conservation Region 14, conservation of
    these lands is critical. The forest resource values of these lands are
    unparalleled in the northeast.
        The Partnership will:
      --Strengthen the economy of the Grand Lake Stream area by assuring
            the continued availability of the natural resource base for
            traditional uses;
      --Assure the easement lands will continue to be managed as
            forestlands;
      --Enable the locally based Downeast Lakes Land Trust to own and
            manage forestland for the benefit of the local economy and
            ecology;
      --Provide uninterrupted habitat for resident and migratory species
      --Assure the integrity of water quality on more that 60 lakes;
        The Natural Resources Conserved include:
      --More than 445 miles of lake shoreline;
      --More than 1,500 miles of river and stream shore;
      --A least eight active Bald Eagle nests;
      --More than 10 percent of the loons of northern Maine;
      --More than 54,000 acres of productive wetland;
      --A tremendous cold water fishery for salmon and bass;
      --Habitat for more than 183 bird species including at least 23
            warblers;
      --Habitat for loons, American black ducks, Canada geese, wood ducks;
      --Habitat for bear, moose, deer, pine marten, beaver, otter and other
            mammals; and
      --Historic Native American canoe routes
        Thanks you for your consideration and for this opportunity. If
    there are questions please do not hesitate to communicate with me.
                                     ______

               Prepared Statement of the Northern Forest Alliance

        The 26-million-acre Northern Forest stretching from Maine's St.
    Croix River through New Hampshire and Vermont to the Adirondacks and
    Tug Hill in New York is a lifeline to millions of Americans. Clean air,
    clean water, wilderness and abundant wildlife are but a few of the
    gifts the forest offers to the 70 million people living within a day's
    drive. The forest's capacity to grow quality timber for high-value
    manufacturing; to lure visitors with breathtaking displays of natural
    beauty; and to showcase a rich cultural and historical tradition are
    the cornerstones on which to build a robust regional economy.
        The Northern Forest Alliance is a coalition of more than 40 state,
    regional and national organizations dedicated to the protection and
    stewardship of the region. Together we represent the interests of more
    than one million people. On behalf of the Alliance I am submitting
    testimony in strong support of a significant increase in funding for
    the Forest Legacy Program to at least $150 million, and for full
    funding of the Land and Water Conservation Fund. Also, as you know, in
    2000 Congress approved Title VIII, the Conservation Trust Fund (Title
    VIII), which should be funded in fiscal year 2005 at $2.24 billion, as
    originally authorized. It is critical for conservation efforts not only
    in our region but across the country that the array of programs
    included in this title be fully funded.

      THE CASE FOR SIGNIFICANTLY INCREASED FUNDING FOR THE FOREST LEGACY
                                    PROGRAM

        In recent years the number of compelling projects in need of
    funding under the Forest Legacy Program, along with its popularity, has
    grown exponentially. A major reason for the success of the program is
    that the conservation mechanisms available under the program are able
    to address a range of legitimate conservation needs of the 21st
    century: the program enables landowners to retain ownership of their
    land and continue to earn income from it; conserves open space, scenic
    lands, wildlife habitat, and clean water; and ensures continued
    opportunities for outdoor recreational activities such as hunting,
    fishing, and hiking. In addition, with its minimum requirement of 25
    percent non-federal matching funds, the program leverages state and
    private dollars to complement federal money, creating partnerships that
    have lasting value.
        Authorized by Congress in 1990, the Forest Legacy Program helps
    preserve working forestlands and protect critical resources. As our
    population grows and land values rise, many private productive forests
    are in danger of conversion to housing subdivisions or second-home
    development. The United States loses more than half a million acres of
    privately-owned timberland to development each year. These changes are
    impacting the economic integrity of our forest-based communities, and
    they are also limiting the amount of recreational open space and
    critical wildlife habitat we all enjoy. The Forest Legacy Program,
    administered by the U.S. Forest Service through grants to states,
    provides a mechanism and a small pot of federal funds for protecting
    forestland and the multiple benefits these lands provide. It is
    increasingly apparent, however, that the modest funds historically
    provided for this program, despite the increase in fiscal year 2003, is
    woefully inadequate to meet current and future projected demand.

                     FOREST LEGACY SUPPORTS WORKING FORESTS

        A central purpose of the Forest Legacy Program is to ensure the
    continuation of a traditional working forest rather than fragmentation
    and subdivision. Under a Forest Legacy easement, the landowner or other
    parties may continue to harvest timber according to the terms of the
    agreement. If a landowner chooses to sell the timber harvesting rights,
    they may do so, but under many existing Forest Legacy easements, the
    landowner has retained harvesting rights and agreed to specific
    language governing harvest methods.
        With a tradition of using the forest that goes back hundreds of
    years, Northern Forest residents are not eager to see the forest
    subdivided and the lakeshores built up. Converting woods to house lots
    puts an end to local forest dependent businesses ranging from timber
    and paper production to guiding and cultural tourism. Breaking up the
    forest disrupts wildlife and jeopardizes water quality. Private
    driveways and ``No Trespassing'' signs change the culture and character
    of the region. And so local residents have banded together to identify
    the most important places that are for sale. They're working with state
    agencies, legislatures, non-profits and private donors to protect more
    than 800,000 acres in the Northern Forest from development this year.
        But they cannot do it on their own; they need assistance from the
    Forest Legacy Program to realize their goals. To meet growing national
    demands, the Forest Legacy Program should be funded at $150 million in
    fiscal year 2004. In the Northern Forest, we're depending on a $38-
    million-dollar investment this year to realize the potential of this
    public-private collaboration for protecting our intact forests. It's an
    opportunity that cannot be missed, for the sake of conserving a
    landscape, a regional economy, and a cherished way of life.

               FOREST LEGACY SUPPORTS PRIVATE LANDOWNERS' RIGHTS

        Through conservation easements, a landowner can voluntarily sell
    development rights, continue to generate economic activity, and
    maintain a traditional landscape for the next generation to enjoy.
    Through the purchase of conservation easements, a landowner's private
    property rights are being protected. It is the landowner who decides
    whether or not to limit development of their property, and they are
    fairly compensated for the rights purchased.

            FOREST LEGACY PROMOTES PARTNERSHIPS AND LEVERAGES FUNDS

        The Forest Legacy Program offers the opportunity for the federal
    government to work in partnership with states, local communities and
    private landowners to ensure that the multiple benefits found on forest
    lands--economic sustainability, wildlife habitat protection, and
    recreational opportunities--are secured for future generations. Since
    its inception, the program has proven extremely popular but unable to
    meet the demand across the nation. In fiscal year 2003 states submitted
    funding requests totaling over $300 million in Forest Legacy funding,
    yet less than a third was appropriated. In addition, several other
    states are in the process of enrolling in the program in the near
    future, increasing the demand for funding.

               SUMMARY: FISCAL YEAR 2005 NORTHERN FOREST REQUESTS
                              [Dollars in millions]
    ------------------------------------------------------------------------
                                                        Fiscal
                                             Total     year 2005     Total
                   Property                 project     legacy      project
                                            acreage     request      cost
    ------------------------------------------------------------------------
    Forest Legacy:
        Maine:
            Katahdin Forest..............    236,000       $5.00      $50.00
            Machias River Headwaters.....     32,630        4.00        9.15
        New Hampshire: 13-Mile Woods.....      5,316        2.00        3.8
        New York:
            Tahawus: Headwaters of the        10,035        5.00        8.50
             Hudson......................
            Sable Highlands..............    104,000        5.00        8.50
            North Branch of the Moose          2,000        1.50        8.70
             River.......................
                                          ----------------------------------
              Total Forest Legacy........    389,981       22.50  ..........
                                          ==================================
    LWCF--Federal Grants Program:
        White Mountain NF (NH & ME)......      4,945        2.76  ..........
        Silvio Conte NWR (NH & VT).......      2,000        1.0   ..........
        Lake Umbagog NWR (NH)............         10        1.20
                                          ----------------------------------
          Total LWCF--Federal Grants           6,955        4.96  ..........
           Program.......................
                                          ==================================
    LWCF--State Grants Program--the Long         410         .20  ..........
     Trail (VY)..........................
    Various Funding Sources:
        Katahdin Iron Works..............     37,000       14.20
        Downeast Lakes...................    339,000       35.0   ..........
                                          ----------------------------------
          Total Various Funding Sources..    376,000       49.20  ..........
    ------------------------------------------------------------------------

                              [Dollars in millions]
    ------------------------------------------------------------------------
              Agency/Program                     Region             Request
    ------------------------------------------------------------------------
    Economic Programs:
        USDA State and Private
         Forestry Division:
            Land Owner Assistance      National..................        $50
             Programs.
            Economic Action Programs.  National..................        $50
        USDA Rural Development         Northern Forest States....         $4
         Division: Rural Business
         Enterprise and Opportunity
         Grants.
    ------------------------------------------------------------------------

                 FOREST LEGACY IS A POPULAR AND GROWING PROGRAM

        Thirty-six States are currently enrolled in the Forest Legacy
    Program, and several other states are currently developing plans for
    enrollment in the program or considering beginning the planning
    process.
        Congressional support for the program has steadily grown, with
    funding levels increasing from $7 million in fiscal year 1999 to over
    $70 million in fiscal year 2004 Significantly the Administration has
    requested $100 million for the program for fiscal year 2004, and
    increase of $9 million over last year. Even at this level, however,
    several properties being offered for protection by willing landowners
    and states through the Forest Legacy Program could not be fully funded
    and will have to be carried over to the following year. The Northeast
    in particular has an abundance of worthwhile projects and documented
    needs for Forest Legacy funding which will go unmet unless Forest
    Legacy is significantly increased or other sources of funding are
    identified.
        The Forest Legacy Program must be funded at $150 million annually
    on a dependable basis to meet the nation's need for conserving large
    tracts of forest with easements. Legacy is an essential tool in land
    conservation because it enables a public/private partnership for
    protecting the many public benefits of large tracts of forest land. It
    is clear that Forest Legacy will play an important role in completing
    the emerging conservation projects in the Northern Forest.
        We challenge Congress to fully fund the Land & Water Conservation
    Fund at $900 million annually, State Wildlife Grants at $350 million
    annually, and to fund the Forest Legacy Program at a minimum level of
    $150 million, and the Conservation Trust Fund at $2.24 billion to meet
    the conservation needs of the 21st century.
        Mr. Chairman and ranking member, as we begin the 21st Century we
    are faced with an historic opportunity to conserve places of
    extraordinary natural and public value. The work of protecting and
    caring for these special places must be a partnership that engages
    government, businesses and non-profit organizations. But federal funds,
    leadership and expertise are a critical element of this partnership. We
    urge the continued commitment of Congress to work with the people of
    Maine, Vermont, New Hampshire and New York to protect these
    irreplaceable resources. Thank you for considering our request.
                                     ______

                Prepared Statement of the Ornithological Council

        The Ornithological Council appreciates the opportunity to submit
    this written testimony regarding the fiscal year 2005 funding for the
    U.S. Fish and Wildlife Service, the U.S. Geological Survey, and the
    Forest Service.
        The Ornithological Council consists of eleven leading scientific
    ornithological societies--the American Ornithologists' Union,
    Association of Field Ornithologists, Secc'on Mexicana Consejo
    Internac'onal para la Preservacion de las Aves (CIPAMEX), Cooper
    Ornithological Society, Neotropical Ornithological Society, Pacific
    Seabird Group, Raptor Research Foundation, Society of Canadian
    Ornithologists, Society of Caribbean Ornithology, Waterbird Society,
    and Wilson Ornithological Society--that have a collective membership of
    nearly 6,500 ornithologists. It is our mission to provide scientific
    information about birds to legislators, regulatory agencies, industry
    decision makers, conservation organizations and others, and to promote
    the use of that scientific information in the making of policies that
    affect birds and the science of ornithology.

                         U.S. FISH AND WILDLIFE SERVICE

        We recommend that the Neotropical Migratory Bird Conservation Act
    be funded at the full $5 million that is authorized.--This small
    program, which has only been funded for 2 years, has proved to be
    extremely effective in generating leveraged funds for bird
    conservation. Although the required match is 3:1, the Congressional
    appropriations for the NMBCA have actually been matched at a ration of
    4:1. Since the termination of a USAID program for Neotropical Migratory
    Birds, the NMBCA funds are critical to projects that protect, restore,
    and manage habitat for migratory birds and other wildlife in Latin
    America and the Caribbean. This work, in turn, is critical to bird
    conservation efforts within the United States. If we don't conserve the
    birds throughout their range, funds spent in the United States will not
    be as effective.
        For the Division of Migratory Bird Management, we request a $2.5
    million more than was requested by the President's budget request.--
    These funds are needed for essential bird monitoring and research. This
    science support is critical as we continue to improve capacity to
    deliver effective bird conservation. Basic population surveys are
    lacking for many species to make key management decisions. The
    President's proposed budget includes an increase of $4.6 million, but
    much of that increase is earmarked for specific projects. This still
    leaves the Division $2.5 million short of its requirements to deliver
    the minimum scientific services needed.
        As an organization whose members must obtain a wide variety of
    permits to conduct research on wild birds, we strongly recommend that
    the $767,000 in the budget be approved to fill a documented operating
    deficit in the permits program. This funding is included in the
    President's request. We stress its importance, however, not just
    because our members must have permits for their research, but because
    the research they conduct generates millions of dollars worth of
    scientific information needed for bird conservation and management.
        We also wish to express strong support for the proposed Science
    Excellence Initiative and request that it be funded with $2 million, as
    requested by the President.--Ever since the transfer of research
    biologists from the Department of Interior management agencies to the
    USGS, there have been challenges in assuring that the biological
    information needed by these agencies is conducted and the information
    transferred back to the agencies. The USFWS and the USGS have now
    started to create a positive, forward-looking program to address these
    challenges, and we hope that the Congress would encourage this effort.
    The President's request, however, failed to include the $500,000 that
    the USGS needed to fully participate in this effort. We hope that the
    Congress will provide these funds to USGS.
        We join with our colleagues in the Bird Conservation Funding
    Coalition in supporting the President's requests for:
        North American Wetlands Conservation Act--$54 million
        Joint Ventures--$11.6 million
        We also join with our colleagues in the Bird Conservation Funding
    Coalition in calling for an appropriation of $125 million for the State
    Wildlife Grants.

                        UNITED STATES GEOLOGICAL SURVEY

        We join with our colleagues in the USGS Coalition in urging
    Congress to increase the budget of the U.S. Geological Survey to $1
    billion in fiscal year 2005--the 125th anniversary of this vitally
    important federal agency.--The USGS Coalition is an alliance of 58
    organizations united by a commitment to the continued vitality of the
    unique combination of biological, geographical, geological, and
    hydrological programs of the United States Geological Survey.
        In addition to a 4 percent direct cut, the proposed USGS budget
    contains $17.2 million in uncontrollable cost increases, of which $9.1
    million would be funded in the budget and $8.1 million would be
    ``absorbed'' by various programs. Without full funding of
    uncontrollable cost increases, USGS program managers may be forced to
    curtail on-going research, hindering or preventing the delivery of data
    needed by natural resource managers and others.
        As biologists, we are of course particularly worried about the
    proposed 1.6 percent cut to the Biological Resources Discipline. The
    proposed $172 million would continue a trend of deteriorating staffing
    levels, including research and support staff and insufficient funding
    for research staff to actually do research! Without equipment,
    vehicles, research technicians, and travel funds, the scientists cannot
    do the work they are being paid to do, and that the Department of the
    Interior agencies need for proper natural resource management.

                                 FOREST SERVICE

        We support the President's requested increase of $15 million for
    Forest and Rangeland Research.--This is a vital program that generates
    world-class scientific information for the proper management of the
    natural resources managed by the Forest Service.
                                     ______

    Prepared Statement of the Washington Trails Association and the Pacific
                            Crest Trail Association

        On October 20, 2003, heavy rains pummeled the North Cascades
    mountain range, bringing record floods that uprooted old growth trees
    like matchsticks and revealed ash from an eighteenth-century eruption
    of Glacier Peak. During the resulting floods, dozens of road and trail
    bridges were washed out, and some of the most popular trails and
    campgrounds along the west slope of the Cascades were severely damaged.
    To repair the trails and campgrounds damaged by these floods, the Mt.
    Baker-Snoqualmie National Forest requires an additional $4.4 million in
    emergency appropriations.
        Current agency budgets cannot accommodate the additional burden of
    storm damage repair. Indeed, with recent cuts, recreation budgets for
    Northwest forests are barely sufficient to meet daily operational
    needs. Congress must make emergency funding available to address this
    damage. Without additional funding, more than two dozen campgrounds and
    trails enjoyed by a combined total of more than 100,000 visitors per
    year, will remain closed to the public for the foreseeable future.
        Many of the most popular hiking and climbing trails in Washington
    are no longer accessible or navigable, including:
      --a 35-mile section of the Pacific Crest National Scenic Trail
      --access to the main climbers' route up Glacier Peak
      --eagle and wildlife viewing trails along the Suiattle and Sauk river
      --the wildflower meadows of Mt. Baker's southwest flank.
        In many cases, the barriers to access are road and bridge washouts
    that will be addressed through Emergency Relief for Federally Owned
    Roads (ERFO) funding. However, emergency money has not been made
    available for trails and campgrounds. To fully restore these recreation
    opportunities, ERFO funding must be made available for trails and
    related facilities or Congress must appropriate an additional $4.4
    million to cover the cost of repairing flooded campgrounds and
    reconstructing several popular trails.
        Existing Forest Service budgets cannot absorb the costs associated
    with repairing these facilities. A combination of Congressional
    appropriations and user fees have allowed the Forest Service to conduct
    a bare minimum of maintenance and operations in recent years. There is
    no contingency for acts of nature and other disasters.

        The cost of bridge replacement and tread repair along the Pacific
    Crest National Scenic Trail ($1.2 million) is almost the entire size of
    the Mount Baker Snoqualmie National Forest's annual recreation budget.
        The Pacific Crest Trail bridges, and others included in this
    request, cross substantial glacial streams and are necessary for the
    safe passage of hikers and equestrians. In other places, hikers seeking
    to circumnavigate a section of washed out trail will be forced to
    scramble through dense forest and rough terrain--or, more likely, to
    turn back altogether. Because of the scale of the damage and the rugged
    terrain, the missing bridges and washed out trails included in this
    request represent a significant, and in some cases, insurmountable,
    hazard.
        The job of repairing these facilities will not be easy--nor will it
    be inexpensive. Particularly along the Pacific Crest Trail, extensive
    surveys will be needed to find new locations for washed out bridges and
    their approaches, as the water channels may themselves have changed
    locations. Several washed out trails will have to be relocated entirely
    because the previous site no longer exists or is stable enough to
    support recreation traffic.
        Volunteer groups such as Washington Trails Association have already
    pledged to leverage any repair funds provided by coordinating volunteer
    work parties wherever possible. This in kind contribution could easily
    total more than one hundred thousand dollars. This summer, Washington
    Trails Association has scheduled more than ten weeks of work to rebuild
    and repair storm damaged trails throughout the Cascades, in addition to
    its regular workload of annual maintenance. However, volunteers cannot
    do the engineering, surveys or bridge construction that will form the
    bulk of the storm damage repair. Additional funding from Congress is
    needed for this work.
        In the meantime, tens of thousands of Washington residents will be
    impacted by the loss of access to trails and campground facilities:
      --The Pacific Crest National Scenic Trail attracts more than 5,000
            hikers annually, including many thru-hikers' from around the
            country who pass through the area as they travel the trail's
            route from Mexico to Canada.
      --The Whitechuck Trail, which was destroyed by the floods, is used by
            several thousand visitors each year, including the more than
            1,000 climbers who use this trail as their main access route
            for Glacier Peak.
      --With 10,000 visitors each year, the Park Butte Trail is one of the
            most popular day hikes in the North Cascades.
        Businesses and outfitters who depend upon these opportunities will
    be negatively impacted until the flood damage can be repaired.
        Outdoor recreation contributes $4.1 billion to Washington's economy
    each year, possible only if our public lands are available to local
    residents and travelers from around the country and around the world.
    To ensure that recreation continues to be a key part of both a strong
    economy and a healthy community, Congress must support our parks and
    forests with adequate annual appropriations and the additional
    investment required by unusual and disastrous storm events.
        Thank you for considering this information. Please let us know if
    we can provide further information that would be helpful to the
    committee's work.
                                     ______

            Prepared Statement of the Society of American Foresters

        The Society of American Foresters (SAF) represents approximately
    17,000 forestry professionals in all sectors of the profession. SAF
    members pledge to use their conservation ethic to ensure the continued
    health and use of forest ecosystems and the present and future
    availability of forest resources to benefit society. We offer the
    following suggestions for moving toward these ideals through federal
    appropriations to the land management Agencies' charged with sustaining
    the health, diversity, and productivity of our nation's forests. With
    the understandable restriction on the length of this testimony, it is
    difficult to provide the in-depth analysis we would normally provide
    but we will gladly provide any details which need further explanation.
    The attached table outlines those items for which we offer specific
    suggestions.
        State and Private Forestry.--While we recognize the need to address
    pressing forest health and other management issues on national forest
    system lands, we are concerned with the apparent lack of attention
    given to family forest initiatives in the proposed budget. This lack of
    attention is evident in the reductions proposed for programs like
    Forest Health Management, State Fire Assistance, as well as in the
    ``cancellation'' of the Forest Land Enhancement Program.
        Family-owned forests constitute over 50 percent of the nation's
    forest lands. Almost all endangered species spend at least part of
    their time on private land. More than 80 percent of our nation's total
    precipitation falls first on private lands and 70 percent of eastern
    watersheds run through private lands. These forests are inflicted with
    some of the same problems as our federal forest lands. The goals of the
    Healthy Forest Restoration Act and the Healthy Forest Initiative, and
    the mission of the Agencies can only be met through a comprehensive
    approach to forest management, addressing these issues on both private
    and public forests.
        Forest Health Management.--With over 70 million acres of U.S.
    forestland threatened by forest health issues such as insects, disease,
    and invasive species, and over 73 million acres at risk of catastrophic
    wildfire, the Forest Health Management program is increasingly
    important for both federal and non-federal lands. Through this program,
    in both State and Private Forestry and Wildland Fire Management,
    damaging insect outbreaks are slowed, communities are protected, and
    invasive species damage is mitigated. Additionally, this program
    minimizes the likelihood of these occurrences in the future. Congress
    should fund this program at least at 2004 enacted levels to maintain
    our nation's proactive approach for these issues.
        Forest Land Enhancement Program.--FLEP has been subject to several
    problems since implementation began in fiscal year 2003, including a
    $50 million transfer of funds to cover wildfire suppression costs with
    only $10 million restored, a failure to release funding for the program
    in fiscal year 2004, and now the proposed elimination of the program in
    the fiscal year 2005 budget. FLEP is unique in that it assists family
    forest owners in implementing conservation practices on their land.
    FLEP helps make owning forestland and meeting conservation goals an
    economically viable option for family owners. Landowners can then keep
    their land as forests, rather than converting to other, often higher
    paying uses. This program assists the over 9.9 million families who own
    forests across this nation as well the hundreds of millions of people
    who rely on the clean water and air and other benefits these forests
    provide. We urge Congress to reject the proposed language and to
    restore funding and implementation of this program.
        Emerging Pests and Pathogens Fund.--While we support the concept
    behind this fund, we recommend incorporating the proposed funding into
    Forest Health Management accounts. The objectives of this fund can be
    achieved through existing mechanisms and therefore creation of a
    separate fund is unnecessary. Additionally, inadvertently, creating
    this separate fund could preclude the Agency from addressing forest
    health issues that aren't covered under this Fund but are equally
    important.
        State and Volunteer Fire Assistance.--Unfortunately, wildfires do
    not respect ownership boundaries. Thus it is important to conduct fire
    planning and prevention, community and natural resource protection, and
    hazardous fuels treatment on both federal and non-federal lands. State
    Fire Assistance makes these actions possible on non-federal lands.
    Because local fire departments or state agencies are often the first to
    arrive at both federal and non-federal lands wildfires, preparedness,
    training, and planning among these local resources is key. Funding for
    these Assistance programs under both state and private forestry and
    wildland fire management should at least be maintained at fiscal year
    2004 enacted levels, to maintain the level of preparedness and
    protection among the over 22,000 communities at risk of wildfires.
        Economic Action Programs (EAP).--With the enactment of the Healthy
    Forest Restoration Act, the Healthy Forest Initiative, and the massive
    accumulation of fuels in forests across the country, community-based
    forestry as a means to address these issues is increasingly important.
    EAP assists communities in capacity and infrastructure development and
    in improving coordination with federal agencies to address natural
    resource issues on both public and private lands. Because of the
    increasing need to improve rural community economies and address
    forestry issues through integrated approaches, EAP should at least be
    maintained at fiscal year 2004 levels in fiscal year 2005.
        National Forest System.--National forest system lands are an
    integral component of this country's forested landscape. Because of the
    interrelationships between these federally owned lands and other public
    and private lands, land management planning for these lands is
    imperative. However, the Agency spends astounding amounts of time and
    resources on planning, both project level and forest level planning.
    The proposed budget includes a decrease in funding for Land Management
    Planning, and we hope this decrease reflects expected efficiencies in
    planning rather than a decline in capability. We urge the Agency to
    produce forest planning regulations that will result in efficiencies
    and an overall reduction of the time and resources needed to conduct
    planning.
        Healthy Forest Initiative/Healthy Forest Restoration Act.--
    Management of fuel loads through mechanical treatment combined with
    other approaches such as prescribed fire and wildland fire use will
    improve the health and viability of the nation's forests. We are
    encouraged to see emphasis on forest health issues and the increase in
    the number of acres to be treated in fiscal year 2005. We encourage the
    use of stewardship contracting and other mechanisms to accomplish this
    work. Along with this emphasis, we encourage Congress and the
    Administration to address infrastructure issues associated with this
    work, including maintaining existing capacity and also building
    capacity where necessary.
        Wildland Fire Management.--Last year, wildfires burned over 3
    million acres. The 2004 season looks to be similar or worse than the
    2003 season. The costs of preparedness and suppression continue to rise
    as droughts persist, fuels build up, and the wildland urban interface
    areas become increasingly complex. For the past two years, inadequate
    suppression funding has led the Agencies to transfer funds from other
    projects to cover suppression costs. Projects that can mitigate
    wildfire risk and ultimately reduce costs as well as other critical
    forest management projects were delayed or discontinued altogether. We
    urge Congress to find a solution to the suppression funding problem.
    Any solution should include cost containment and accountability
    mechanisms to ensure the Agencies reduce costs to the greatest extent
    possible given safety and resource protection concerns.
        Rehabilitation and Restoration.--The goals of the Healthy Forest
    Initiative and the Healthy Forest Restoration Act of 2003 can only be
    achieved if fuel loads are reduced and our forests are restored to
    ecosystems that are resilient to disturbance events such as fire and
    insect outbreaks. Only then will our communities, water supplies,
    wildlife and other natural resources be protected. Congress should
    recognize the need to conduct preventative treatments such as hazardous
    fuels projects as well as rehabilitate and restore forests after fires
    to protect these valuable resources.
        Forest and Rangeland Research.--The Forest Service's research
    program is the largest forestry research effort in the United States.
    This program is critical for finding solutions to many of the forestry
    problems we face as a nation, through both short and long term research
    endeavors. We encourage the Agencies to begin utilization of the tools
    in Title IV of the Healthy Forest Restoration Act. Equally as
    important, is the transfer of knowledge to forest managers and land
    owners to implement new ideas and solutions on-the-ground. We strongly
    support the focus in the proposed budget on technology transfer of
    research findings and encourage the Agency to utilize existing
    mechanisms such as State and Private Forestry Programs and Extension
    Agents at universities across the country, to achieve this goal.
    Through this renewed emphasis, there should also be an effort to
    improve connections between the user of forest research and the
    researchers.
        Forest Inventory and Analysis.--The FIA program is the crucial
    source of information assessing the sustainability of the nation's
    forests. Today, FIA is the only program that monitors the extent,
    condition, uses, impacts of management, and health of the forest
    ecosystems across all ownerships in the United States. The program
    provides comprehensive analysis of resource trends as a basis for
    improved resource management and protection. We strongly urge Congress
    to fund the FIA program at the level authorized in the 1998 Farm Bill.
    This funding is necessary to implement the program as mandated in the
    Farm Bill, including implementing an annual inventory in all states.
        National Forest Foundation.--The National Forest Foundation
    continues to provide outstanding leadership in natural resource
    management, providing valuable programs and services to the Agency and
    the public. We encourage you to increase funding for the NFF.
        Bureau of Land Management.--The BLM manages a total of 262 million
    acres of public lands, 55 million of which are forested lands. There is
    a significant disconnect between the number of acres of forest land the
    BLM manages and the number of forest management experts that are
    employed by the BLM. Congress should appropriate increases in funding
    to address this disconnect, especially in light of the additional
    authority granted under the Stewardship Contracting provisions as well
    as the Healthy Forest Initiative and related legislation.

                                                [In millions of dollars]
    ----------------------------------------------------------------------------------------------------------------
                                                                                    Fiscal year
                                                             -------------------------------------------------------
                  Discretionary Appropriations                    2003          2004          2005        2005 SAF
                                                                 enacted       enacted      proposed       request
    ----------------------------------------------------------------------------------------------------------------
    Forest and Rangeland Research \1\.......................         250.0         214.7         229.0         214.7
    Forest Inventory and Analysis \2\.......................          55.1          56.7          56.7          68.9
                                                             -------------------------------------------------------
          State and Private Forestry Total \1\..............         284.7     \3\ 294.8         294.8         359.0
                                                             =======================================================
    Forest Health Management-Federal........................          50.0          53.8          46.0          53.8
    Forest Health Management-Cooperative....................          30.8          44.7          25.2          44.7
    Emerging Pest and Pathogens Fund........................  ............  ............          10.0  ............
    State Fire Assistance...................................          25.5      \3\ 28.3          25.1          28.3
    Volunteer Fire Assistance...............................           5.0           5.0           5.0           5.0
    Forest Stewardship......................................          32.0          31.9          40.7          40.7
    Watershed Forestry Assistance...........................  ............  ............  ............          15.0
    Forest Legacy Program...................................          68.4          64.1         100.0         100.0
    Urban and Community Forestry............................          36.0          34.9          32.0          40.0
    Economic Action Programs................................          26.3          25.6  ............          25.6
    International Forestry..................................           5.7           5.9           5.4           6.0
                                                             -------------------------------------------------------
          National Forest System Total......................       1,353.4       1,624.2       1,655.8       1,655.8
                                                             =======================================================
    Land Management Planning................................          71.7          70.0          59.1          59.1
    Inventory and Monitoring................................  ............         169.7         191.3         191.3
    Forest Products.........................................         263.6         265.0         274.3         274.3
    Hazardous Fuels.........................................         226.6         258.3         266.2         266.2
    Expedited Consultation..................................  ............  ............  ............  ............
                                                             -------------------------------------------------------
          Wildland Fire Management Total....................       1,371.0       1,688.7       1,428.9       1,494.5
                                                             =======================================================
    Preparedness............................................         612.0         671.6     \4\ 658.2         658.2
    Fire Operations.........................................         418.0     \5\ 896.4         685.4         685.4
    Rehabilitation and Restoration..........................           7.1           6.9           3.0          10.0
    Fire Research and Development...........................          21.2          22.0          19.4          22.0
    Joint Fire Sciences Program.............................           7.9           7.9           8.0          10.0
    Forest Health Management--Federal.......................  ............          14.8           7.2          14.8
    Forest Health Management--Cooperative...................           9.9           9.9           5.5           9.9
    Economic Action Programs................................           5.0  ............  ............           5.0
    State Fire Assistance...................................          46.2          51.1          34.2          51.1
    Volunteer Fire Assistance...............................           8.2           8.1           8.0           8.1
    Community and Private Land Fire Assistance..............  ............  ............  ............          20.0
                                                             -------------------------------------------------------
          Capital Improvement and Maintenance Total.........         548.5         555.2         501.1         431.2
                                                             =======================================================
    Facilities..............................................         202.3         214.4         191.3         191.3
    Roads...................................................         231.3         234.5         227.9         227.9
    Infrastructure Improvement..............................          45.6          31.6          10.0          12.0
                                                             -------------------------------------------------------
          Land Acquisition/L&WCF Total......................         132.9          67.7          68.2          25.0
                                                             =======================================================
    Other Appropriations....................................          10.3           8.5           9.1           9.1
    ----------------------------------------------------------------------------------------------------------------
    \1\ This number does not include funding for FIA, as it is broken out in a separate line.
    \2\ This includes funding allocated under S&PF and Research in the proposed budget.
    \3\ This figure does not include $30 million in supplemental funding for California in the fiscal year 2004
      Interior Appropriations bill.
    \4\ This figure does not include $8 million for Joint Fire Sciences, as we chose to separate JFS as another line
      item.
    \5\ Includes regular appropriations and supplemental appropriations.

                                     ______

      Prepared Statement of the State of Delaware, Department of Natural
         Resources & Environmental Control, Division of Fish & Wildlife

        On behalf of the Teaming with Wildlife Steering Committee, we
    request your support for the State Wildlife Grants program in fiscal
    year 2005 Interior and Related Agencies Appropriations. Teaming with
    Wildlife is a broad coalition of more than 3,000 groups who have united
    to enhance America's wildlife resources. We are dedicated to achieving
    increased federal funding for state-level fish and wildlife
    conservation, education, and recreation, to ensure a bright future for
    all fish and wildlife and the habitat on which they depend. We strongly
    urge you to appropriate $125 million for State Wildlife Grants in
    fiscal year 2005.
        The State Wildlife Grants program is the nation's core program for
    preventing wildlife from becoming endangered in every state. The
    program leverages federal funds to assist state fish and wildlife
    agencies in conserving wildlife and habitat. The federal government and
    states have had a strong partnership for decades in the conservation of
    wildlife species that are hunted and fished--this program extends the
    same support to all wildlife.
        State Wildlife Grants provide essential resources to state agencies
    to conserve fish, wildlife, and habitat, and to prevent further
    declines in at-risk fish and wildlife populations. More than 1,000
    species are imperiled, or listed as federally threatened or endangered,
    with many more under consideration for listing. While we understand
    that Congress must make difficult programmatic decisions during this
    time of fiscal constraints, it is critical to recognize that State
    Wildlife Grants ultimately save federal taxpayer dollars. Experience
    shows that efforts to restore imperiled wildlife are difficult and
    costly. State Wildlife Grants enable states to be proactive and avert
    such conservation catastrophes, saving wildlife and taxpayer dollars,
    and improving our
        The Honorable Conrad Burns April 30, 2004 Page Two quality of life
    by conserving wildlife for the benefit of millions of Americans.
    Further, in difficult budget times, the State Wildlife Grants program
    is even more effective, as it leverages federal dollars with state and
    private funds furthering national goals at less federal expense.
        We are very pleased that the President has recognized the
    significance of this program and supported $80 million for State
    Wildlife Grants in fiscal year 2005, an increase above fiscal year
    2004's enacted level. However, funding has been variable over the last
    few years and we hope to see this funding restored to the Conservation
    Trust Fund's anticipated higher level. A funding level of $125 million
    will ensure that every state receives at least $1 million to maintain
    the critical on-the-ground conservation work that they are doing.
    Reliable funding is essential for these activities to succeed over the
    long term.
        Because the State Wildlife Grants program is so effective, it
    enjoys consistent, bipartisan support in Congress. Even in a tight
    budget year, Members of Congress are asking for additional funding for
    this effective program. As you know, 52 Senators from both parties and
    every part of the nation recently signed a letter supporting a funding
    level of $100 million for State Wildlife Grants. A second letter,
    supporting full funding for the Conservation Trust Fund and, therefore,
    an effective funding level of $165 million for State Wildlife Grants,
    recently attracted the support of 50 Senators. The State Wildlife
    Grants program also enjoys strong support in the House of
    Representatives, where 111 Representatives recently signed on to a
    letter of support for a funding level of $100 million.
        We understand the many pressing needs of the nation at this time,
    but we stress that a nation strong in its international role must be
    strong in its support for and conservation of its natural resources,
    including fish and wildlife. We need and sincerely appreciate your help
    with annual funding, and are hopeful that we can work together to bring
    dependability to these funds, which will be necessary to achieve long-
    term fish and wildlife conservation objectives for all citizens.
                                     ______

      Prepared Statement of the Upper Mississippi River Basin Association

        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
    the five states' river-related programs and policies and for
    collaborating with federal agencies on regional water resource issues.
    As such, the UMRBA has an interest in the budget for both the U.S. Fish
    and Wildlife Service and the U.S. Geological Survey.

                         U.S. FISH AND WILDLIFE SERVICE

        The U.S. Fish and Wildlife Service has important responsibilities
    in the Upper Mississippi River Basin, including management of federal
    refuge lands and coordination with other federal, state, and local
    agencies on river-related ecological issues. The UMRBA strongly
    supports funding necessary to enable the Fish and Wildlife Service to
    fulfill its responsibilities in the Upper Mississippi River Basin.
        National Wildlife Refuge System.--The U.S. Fish and Wildlife
    Service administers over 250,000 acres of land and water scattered
    along the Mississippi and Illinois Rivers from the most northerly unit
    near Wabasha, Minnesota to the most southerly unit near Gape Girardeau,
    Missouri. This includes the Upper Mississippi River National Wildlife
    and Fish Refuge (NWFR), Mark Twain NWR Complex, and Illinois River NWFR
    Complex. The existence of this extensive national refuge system is, in
    part, the reason that, in 1986, Congress designated the Upper
    Mississippi River System as a ``nationally significant ecosystem and a
    nationally significant commercial navigation system.''
        The UMRBA strongly supports funding for Refuge Operations and
    Maintenance. In fiscal year 2004, operation and maintenance funding for
    the three refuges along the Upper Mississippi and Illinois Rivers will
    likely total $6 million. For the past few years, the baseline budgets
    for the refuges along the Upper Mississippi and Illinois Rivers have
    been supplemented by carryover funds from flood-related supplemental
    appropriations. However, those supplemental funds, which total
    approximately 32 percent of the fiscal year 2004 budgets for the three
    river refuges, will be fully expended this year. Yet there continues to
    be a backlog in routine maintenance and a need for additional personnel
    to address law enforcement, biological needs, flood plain forest
    management, technical assistance to private landowners, environmental
    education, and other refuge management needs. In particular, the
    refuges along the Upper Mississippi River System have responsibility
    for the operation and maintenance (O&M) of projects that the Corps of
    Engineers constructs on those refuges, under the authority of the
    Environmental Management Program (EMP). Currently, those annual O&M
    costs are estimated to be $360,000, but will likely increase within 10
    years to more than $560,000. Fully funding the O&M of EMP projects is
    vital to ensuring that these habitat restoration and enhancement
    projects are fully operational and provide lasting environmental and
    public use benefits.
        Land Acquisition.--The President's fiscal year 2005 budget request
    for acquisition of new refuge lands totals $45 million, including
    approximately $29 million for line-item acquisitions and easements. In
    fiscal year 2005, these specified projects include $500,000 for
    acquisition of 228 acres for the Upper Mississippi River NWFR Complex.
    Yet there are outstanding unmet acquisition opportunities totaling $8
    million/year for the refuges along the Upper Mississippi and Illinois
    Rivers. The UMRBA supports the fiscal year 2005 budget request for
    refuge land acquisition and is pleased that the Upper Mississippi River
    NWFR Complex is included in the Administration's list of specified
    projects.
        Ecological Services.--Funding from the Ecological Services account
    supports field offices in Rock Island (IL), the Twin Cities (MN), and
    Marion (IL), which provide most of the ecological services work on the
    Upper Mississippi River (UMR) and its tributaries. This includes work
    on threatened and endangered species, environmental contaminants,
    habitat conservation, and Partners for Fish and Wildlife. In fiscal
    year 2004, work being done by these Ecological Services field offices
    related to the Upper Mississippi River is estimated to be $375,000. The
    UMRBA supports this base funding for Ecological Services offices on the
    UMR and thus supports, at a minimum, the President's fiscal year 2005
    budget for Ecological Services.
        Fisheries.--Most of the Service's fish management on the Upper
    Mississippi River is conducted out of the La Crosse (WI), Columbia
    (MO), and Carterville (IL) Fisheries Resource Offices. These offices
    assess inter jurisdictional fish and threatened and endangered species
    (paddlefish, pallid and shovelnose sturgeon, and freshwater mussels),
    help combat aquatic nuisance species (e.g., Asian carp), and restore
    fish habitat. The UMRBA supports this important work and is thus
    concerned about the 17 percent cut proposed for Fish and Wildlife
    Management Assistance in the fiscal year 2005 Fisheries account.
    Portions of that cut will affect both general program activities
    (-$287,000) and activities related to aquatic nuisance species control
    (-$180,000). At a minimum, funding for these items should be restored
    to fiscal year 2004 levels.
        The UMRBA is particularly pleased that the President's fiscal year
    2004 budget recognizes the needs related to hatcheries, by proposing an
    increase of nearly $2 million for hatchery operation and maintenance
    funding. The National Fish Hatchery established in 1932 on the banks of
    the Mississippi River at Genoa, Wisconsin has become a center of
    excellence in the recovery of endangered mussels. The Genoa Hatchery
    cultures endangered Higgins eye pearly mussels and rears 20 species of
    fish. The Fish Health Center in La Crosse, Wisconsin, which is also
    supported by funding from the hatchery budget, provides critical
    diagnostics for diseases such as largemouth bass virus and spring
    viremia of carp.

                             U.S. GEOLOGICAL SURVEY

        The President's fiscal year 2005 budget for the U.S. Geological
    Survey reflects an overall decrease of $18.2 million, with reductions
    in water resources and biological research of $13 million and $6.9
    million, respectively. While a portion of these reductions can be
    attributed to budget restructuring that consolidates bureau-wide
    information functions, most of USGS' water resources and biology
    programs are still funded at levels below what has been provided the
    past 2 years.
        The states of the Upper Mississippi River Basin are concerned that
    the USGS' ability to provide timely and unbiased scientific information
    about complex natural systems not be compromised. There are several
    specific research and monitoring programs in the Water Resources and
    Biological Research accounts that are of particular interest to the
    UMRBA.
        Water Resources Investigations.--The UMRBA strongly supports
    increased funding for the National Streamflow Information Program
    (NSIP). The stream gaging network is essential to protecting public
    health and safety by forecasting floods and droughts, managing the
    nation's navigation system, and monitoring water quality. There are
    currently 333 stream gages operated by USGS in the five UMRBA states.
    Yet, this represents less than 65 percent of the 524 gages that are
    supposed to be operated in the five states, under the NSIP plan. The
    NSIP plan calls for 82 new gages and reactivation of 80 gages that have
    become inactive due to funding shortfalls in the past. However, it will
    be difficult to make any progress on these goals with the fiscal year
    2005 proposed budget for NSIP below what was provided in fiscal year
    2004 and fiscal year 2003. The loss of gages means the loss of the
    historical record that is needed for managing our nation's water
    resources. The UMRBA shares the commitment of water resource managers
    across the nation to the long-term stability and security of the
    nation's stream gaging program. Toward that end, UMRBA joins other
    organizations, such as the Interstate Council on Water Policy (ICWP),
    in urging Congress to increase the Administration's fiscal year 2005
    proposed budget for NSIP by a minimum of $2 million.
        The UMRBA also strongly supports funding for the Cooperative Water
    Program. The Cooperative Program is an essential tool in meeting state
    and local water science needs, including both interpretive studies and
    stream gaging. For most of its 108 years, the Cooperative Water Program
    has been a 50:50 cost-shared program between USGS and non-federal
    cooperators. Over time, increased requests by cooperators for USGS
    services, coupled with stagnant federal funding, has altered that
    proportion. In fiscal year 2003, USGS was able to provide only 36
    percent of the total Cooperative Program budget. The fiscal year 2003
    shortfall in USGS funds for the Upper Mississippi River Basin included
    $1.48 million in Wisconsin, $222,733 in Illinois, and $4,000 in Iowa.
    Nationally, the shortfall was $60 million. Similar USGS shortfalls are
    anticipated in fiscal year 2004 and fiscal year 2005. USGS funding for
    the Cooperative Program will need to increase by 28 percent to close
    this gap.
        The President's fiscal year 2005 budget proposes $12.6 million for
    the Toxic Substances Hydrology program, a cut of 15 percent. The Toxics
    Program, which conducts research on the behavior of toxic substances in
    the nation's hydrologic environments, is particularly important to the
    states of the Upper Midwest. Under this program, USGS has been studying
    the occurrence, transport, and fate of agricultural chemicals in a 12-
    state area in the Upper Midwest. This research effort, called the
    ``Midcontinent Agricultural Chemical Research Project,'' is helping to
    identify factors that affect dispersal of agricultural chemicals in
    surface and ground waters and evaluating the resulting effects in small
    streams and large rivers. The goal is to provide the general scientific
    basis needed to develop agricultural management practices that protect
    the quality of this region's water resources. Through its Toxics
    Program, USGS is also studying questions associated with hypoxia in the
    Gulf of Mexico, including the loads and sources of nutrients from the
    Mississippi River Basin. Given the important work underway in the USGS
    Toxic Substances Hydrology Program, UMRBA urges Congress to provide
    $14.9 million, at a minimum, commensurate with the fiscal year 2004
    level of funding.
        The UMRBA continues to support funding for the National Water
    Quality Assessment (NAWQA), which is slated for $62.5 million under the
    President's fiscal year 2005 budget. NAWQA is designed to answer basic
    questions about the status and trends in the quality of our nation's
    ground and surface waters, assessing 42 major river basins and aquifers
    across the nation on a rotating basis every 3-4 years. The Upper
    Mississippi River Basin includes four NAWQA study units (Upper
    Mississippi, Eastern Iowa, Lower Illinois, and Upper Illinois). The
    first three of these are in the assessment cycle that began in fiscal
    year 2004.
        Biological Research.--The President's budget request for USGS
    Biological Research is $167.6 million, reflecting an overall decrease
    of nearly $7 million from fiscal year 2004. Of particular concern is
    the reduction of $500,000 for pallid sturgeon research. Understanding
    the movements and habitat needs of this ancient, but endangered,
    species is critical to its recovery on the Mississippi and Missouri
    Rivers. While the funding cut for pallid sturgeon research is
    troubling, the President's budget also includes some good news for
    other biological research of interest to this region. In particular, a
    $1 million increase is proposed for invasive species research,
    including innovative control methodologies for Asian carp. These
    species are spreading throughout the Mississippi River Basin,
    displacing native fish and threatening already imperiled native
    mussels. The Amphibian Research Monitoring program ($500,000) will also
    improve our ability to address amphibian declines in the Upper Midwest,
    by developing better population estimates and enhancing understanding
    of the causes of malformation. Given these needs, the UMRBA recommends
    that, at a minimum, Biological Research be funded at the fiscal year
    2004 level.
                                     ______

                   Prepared Statement of The Wildlife Society

        The Wildlife Society appreciates the opportunity to provide
    comments on the proposed fiscal year 2004 budget for the Department of
    the Interior and Related Agencies. The Wildlife Society is the
    association of nearly 9,000 professional wildlife biologists and
    managers dedicated to excellence in wildlife stewardship through
    science and education. The Society supports all aspects of federal
    programs that benefit wildlife and wildlife habitat. The following
    table summarizes The Wildlife Society's recommendations for the U.S.
    Fish and Wildlife Service, Bureau of Land Management, USGS Biological
    Resources Division, and U.S. Forest Service:

                            [In thousands of dollars]
    ------------------------------------------------------------------------
                                                    Fiscal year
                                      --------------------------------------
           USDOI agency/program                         2005
                                           2004     President's    2005 TWS
                                         enacted       budget    recommended
    ------------------------------------------------------------------------
    U.S. Fish and Wildlife Service:
        State Wildlife Grants........       69,137       80,000      125,000
        North American Wetlands             37,532       54,000       65,000
         Conservation Act............
        Neotropical Migratory Bird           3,951        4,000        5,000
         Conservation Fund...........
        Partners for Fish and               42,950       50,000       50,000
         Wildlife Program............
        Migratory Bird Management....       32,096       36,668       42,096
        National Wildlife Refuge           391,493      387,657      431,493
         System (Op. and Maint.).....
        Endangered Species Program...      137,000      129,000      142,000
        High Plains Partnership......  ...........        5,000        5,000
        Science Excellence Initiative  ...........        2,000        4,000
    Bureau of Land Management:
        Wildlife and Fisheries              34,098       37,884       41,884
         Management..................
        Threatened and Endangered           21,452       21,940       26,940
         Species Management..........
        Riparian Management..........       21,540       21,540       22,540
    U.S. Geological Survey:
        Total Funding................      938,000      920,000    1,000,000
        Biological Resources Division      174,529      167,604      183,529
        Cooperative Fish and Wildlife       14,942       14,113       16,113
         Research Units..............
    U.S. Forest Service:
        Forest and Rangeland Research      269,710      281,000      281,000
        Wildlife, Fish, Threatened &       137,375      134,522      150,000
         Endangered Species..........
        National Fire Plan--                 6,914        3,000        6,914
         Restoration and
         Rehabilitation..............
    ------------------------------------------------------------------------

        We appreciate report language in recent appropriations legislation
    emphasizing the importance of cooperative Department of Interior
    initiatives. Partnerships, particularly with the academic community,
    provide the Department of Interior with increased flexibility to combat
    an aging workforce and looming retirements, and more investment is
    needed in those areas.

                         U.S. FISH AND WILDLIFE SERVICE

        Funding assistance for state wildlife conservation is one of the
    highest priority needs for wildlife at this time, providing essential
    resources to conserve wildlife, fish, and habitat, and to prevent
    further declines in at-risk wildlife populations in every state. We
    appreciate the Administration's recognition of the importance of this
    program through the $80 million request, but we strongly encourage even
    greater funding to achieve all species conservation. We recommend that
    $125 million be appropriated for State Wildlife Grants in fiscal year
    2005.
        The North American Wetlands Conservation Act is a cooperative, non-
    regulatory, incentive based program that has shown unprecedented
    success in restoring wetlands, waterfowl and other migratory bird
    populations. We are pleased by the Administration's requested increase
    for this program, but ask you to recognize that the authorized level
    for this program in fiscal year 2005 is $65 million. We recommend
    Congress appropriate the highest possible funding for the North
    American Wetlands Conservation Fund in fiscal year 2005.
        The Neotropical Migratory Bird Conservation Act provides a broad-
    spectrum approach to bird conservation sought by gamebird and non-
    gamebird advocates alike. The Wildlife Society recommends that Congress
    fund the Neotropical Migratory Bird Conservation Act at its full
    authorization of $5 million in fiscal year 2005. The Act has the
    potential to serve as a major delivery mechanism to further develop
    bird conservation strategies for songbirds, shorebirds, waterbirds, and
    other Neotropical bird species in need of conservation.
        We are pleased by the $4.5 million increase in Migratory Bird
    Management requested by the Administration for fiscal year 2005,
    especially at a time when public interest in migratory birds and the
    need for migratory bird management are increasing. However, we strongly
    encourage an additional $10 million to support the full spectrum of
    migratory bird conservation and monitoring efforts; to cover the
    Program's eroded base funding level; to enhance the Webless Migratory
    Gamebird Program; and to begin implementing the Migratory Bird
    Program's Strategic Plan, the U.S. Shorebird Conservation Plan, the
    Waterbird Conservation for the Americas plan, and the North American
    Landbird Conservation Plan.
        The Cooperative Alliance for Refuge Enhancement (CARE) was created
    several years ago to address the growing backlog of National Wildlife
    Refuge System needs. The Wildlife Society continues to support the CARE
    recommendations to eliminate the backlog of Refuge Operations and
    Maintenance, and strongly urges these recommendations be used to guide
    future budget requests. We request $40 million above the fiscal year
    2004 enacted level, an approximate 10 percent increase. This will help
    prevent backsliding on the gains we have all worked hard to obtain,
    while providing additional resources to implement the goals of the
    National Wildlife Refuge System Improvement Act, address essential
    operations needs, and to continue to reduce the $931 million
    maintenance backlog.
        We are concerned about the decrease in funding for the Endangered
    Species Program, which includes funding for candidate conservation,
    listing, consultation, and recovery of federally endangered species. We
    ask you to restore funding for these important components of the
    program to their fiscal year 2004 levels, and maintain the requested
    increase for listing efforts, for a total appropriation of $142 million
    in fiscal year 2005.
        We strongly support $4 million for the Administration's new Science
    Excellence Initiative to elevate science within the Fish and Wildlife
    Service. The initiative is aimed at enhancing partnerships with
    agencies, universities, and professional societies and improving
    application of scientific information to better guide conservation
    goals and support adaptive management and research. The President's
    budget should be increased to $4 million to adequately fund this
    important initiative. Part of the money would be dedicated to
    information acquisition, and part to building ``communities of
    practice.'' These communities would be a means for FWS to call on a
    group of scientists with particular expertise to work together on
    scientific issues within the bureau. Additional funding is needed to
    strengthen the Service's ability to analyze and address conservation
    issues that are impacting its mission.
        We support the Administration's inclusion of $5 million for the
    High Plains Partnership in the fiscal year 2005 budget. This
    collaborative effort is aimed at proactively conserving declining
    populations of wildlife and their habitats on private lands in the High
    Plains region, to prevent listing under the Endangered Species Act. We
    recommend Congress support this program.

                           BUREAU OF LAND MANAGEMENT

        Wildlife and Fisheries Management would receive a $3.789 increase
    in fiscal year 2005, largely directed to the Bureau's Sage Grouse
    Conservation Initiative. We support this increase, provided the
    Initiative is consistent with current state sage grouse management
    efforts, but we are concerned that no additional base funds are
    provided to the Bureau. This erodes the agency's staff and resources
    that are needed to ensure sound management and protection of a
    diversity of wildlife, fish and habitats, while providing for
    recreational and commercial uses of the land. We encourage Congress to
    appropriate an additional $4 million for Wildlife and Fisheries
    Management, to provide for adequate staff and operational funds.
        The Administration has requested a $488,000 decrease for the
    Threatened and Endangered Species Program. The request is inadequate to
    meet identified needs or allow the BLM to carry out its
    responsibilities under the Endangered Species Act. Significant
    increases in funding are needed in fiscal year 2005 and the next
    several years to stabilize funding and personnel needs until species
    recovery becomes effective. In light of the inequity between resource
    needs and funding levels, we strongly encourage Congress to appropriate
    an additional $5 million to the Threatened and Endangered Species
    fiscal year 2005 budget.
        BLM manages over 23 million acres of riparian or wetland areas,
    supporting some of the most ecologically diverse plant and animal
    communities on public lands. Inadequate funding for Riparian Management
    will result in the continued degradation of the environment, and
    continued inflation of future restoration costs. The Wildlife Society
    requests that Congress provide an addition $1 million for Riparian
    Management to restore these vital habitats.
        The Wildlife Society is gravely concerned about current staffing
    levels at the Bureau. The staff shortfall is not addressed in the
    fiscal year 2005 budget, and given the increased emphasis on
    accelerating completion of land use plans and expanding energy
    development on public lands, staffing shortages are resulting in fish
    and wildlife resources being inadequately addressed in agency actions.
    Additional resources must be allocated to filling vacant wildlife,
    fishery, and botany positions within the agency.

              U.S. GEOLOGICAL SURVEY BIOLOGICAL RESOURCES DIVISION

        As a member of the USGS Coalition, The Wildlife Society supports $1
    billion for USGS in fiscal year 2005. This level of funding would
    restore the cuts proposed in the President's budget and provide a 6.5
    percent increase over the fiscal year 2004 level to cover
    uncontrollable costs, inflation, and ongoing science initiatives that
    support public policy decisions.
        We recommend that Congress appropriate an additional $15.925
    million for the Biological Resources Division to allow critical
    monitoring and research projects to continue, and to eradicate the
    budget decline (in real dollars) that the program has accumulated. We
    recommend that of this amount, $1.556 million be dedicated to fully
    funding uncontrollable costs in the Division to prevent significant
    losses in operational activities. Further, we recommend that $2 million
    of the increase be allocated to the Cooperative Fish and Wildlife
    Research Units. The Units serve as a link between USGS, state agencies,
    nongovernmental organizations, and universities. Since 2001,
    insufficient funding for the Units has eroded critical staff positions,
    including at the newly established Nebraska Unit. We strongly encourage
    you to support $16.113 million for the Units in fiscal year 2005.

                              U.S. FOREST SERVICE

        We are concerned about the funding decrease in the Wildlife,
    Fisheries, and Threatened & Endangered Species programs. These programs
    have recognized almost $250 million in project opportunities in fiscal
    year 2005, yet their budget is nearly half that. To ensure that each
    National Forest has a base infrastructure of personnel to administer
    viable natural resource programs and provide base level funding for
    biologists to implement management, monitoring, and research projects,
    we recommend that Congress appropriate $150 million in fiscal year 2005
    for these programs.
        We recommend that Congress include at least $6.914 million--level
    with fiscal year 2004--for National Fire Plan rehabilitation and
    restoration in fiscal year 2005. At a time when more than 20 million
    acres of forestland have burned in the past four years, funds must be
    included in the Forest Service National Fire Plan budget for the
    exclusive purpose of rehabilitation and restoration of forest habitats.
    Furthermore, the Fire Program should be instructed to work with
    wildlife staff and partners, to identify ways in which wildlife
    benefits can be derived from fuel management projects.
        Thank you for considering the comments of wildlife professionals.
    We are available to work with you and your staff throughout the
    appropriations process. Please include this testimony in the official
    record.
                                     ______

                              DEPARTMENT OF ENERGY

           Prepared Statement of Technology Acumentrics, Westwood, MA
        Acumentrics is seeking an increase (to $50M) in the Department of
    Energy's Fossil Energy Research and Development line item for solid
    oxide fuel cell research and development under the Innovative Concepts
    program.

                            [In millions of dollars]
    ------------------------------------------------------------------------
                                                    Fiscal year
                                      --------------------------------------
    Interior Appropriations line item                   2005
                                           2004     President's      2005
                                         enacted       request     request
    ------------------------------------------------------------------------
    Department of Energy: Fossil                47           23      \1\ 50
     Energy Research and Development
     Fuels and Power Systems
     Distributed Generation Systems--
     Fuel Cells Innovative Concepts..
    ------------------------------------------------------------------------
    \1\ +$27 million.

        Background.--The objective of SECA is to drastically reduce fuel
    cell costs to make them a broadly applicable and more widespread
    commodity in the competitive, mature distributed generation and
    auxiliary power markets. SECA is engaged in the development of common
    modules for diverse applications--supporting the employment of solid
    state (semi-conductor chip) manufacturing technology to mass produce
    low-cost fuel cells for powering homes, businesses, and for providing
    auxiliary power for vehicles. This is consistent with the President's
    initiative to ``reverse America's growing dependence on foreign oil by
    developing the technology for commercially viable hydrogen-powered fuel
    cells to power cars, trucks, homes and businesses with no pollution or
    greenhouse gases.''----[White House web page]
        Significant milestones were achieved in fiscal year 2004:
      --Fuel cell stack performance of over 4,000 hours with average
            degradation rates below 0.25 percent per 500 hours;
      --Advanced fuel cell stack gross electrical efficiency to 49 percent;
            and
      --Reduced stack cost by demonstrating a 20 percent increase in power
            per unit stack volume over previous designs.
        Given these accomplishments, SECA is poised to realize the
    commercial benefits of high-efficiency, environmentally clean fuel cell
    energy technology.
        The national benefits of SECA are significant:
      --Enhances National Security by providing affordable distributed
            electrical generation technology that is inherently more robust
            than a centralized generation and transmission infrastructure;
      --Reduces greenhouse gas emissions through efficiency gains and
            potential renewable resource use;
      --Responds to increasing energy demands and pollutant emission
            concerns, while providing low-cost, reliable energy, which is
            essential to maintaining competitiveness in the world market;
      --Positions the United States to export distributed generation
            products in a rapidly growing world energy market, the largest
            portion of which is devoid of a transmission and distribution
            grid.
        Why Congress Should Provide $50 million in fiscal year 2005 for
    SECA?
      --The SECA fuel cell is needed to provide auxiliary power for the
            Army's 21st Century Truck Program.
      --SECA is the research and development into solid oxide fuel cell
            technology that enables the DOE's cost-efficient, zero emission
            power plant technologies, such as FutureGen.
        When the SECA program meets its target of $400 per kilowatt, the
    following benefits can be expected within the next 10 years:
      --Worldwide sales of $3.2 billion per year, including domestic sales
            of $1 billion per year based on a 10 percent share of expected
            electricity demands.
      --Provide domestic fuel cell power to a market of 25 million homes in
            the United States and 50 million homes in Europe.
      --Approximately $800 million per year from the sale of auxiliary
            power units for trucks, which can substantially reduce the
            emissions from idling truck engines.
      --Virtual elimination of NOX from stationary and
            transportation applications, and 50 percent reduction of
            CO2 through the use of highly efficient (60 percent)
            hybrid fuel cell systems.
        Recommendation.--Provide $50 million, an increase of $27 million,
    in funding for Innovative Concepts/SECA in fiscal year 2005.
                                     ______

               Prepared Statement of the Alliance to Save Energy

        My name is Kateri Callahan, President of the Alliance to Save
    Energy, a bipartisan, nonprofit coalition of business, government,
    environmental, and consumer leaders committed to promoting energy
    efficiency worldwide to achieve a healthier economy, a cleaner
    environment, and energy security. The Alliance was founded in 1977 by
    Senators Charles Percy (R-IL) and Hubert Humphrey (D-MN). The current
    Chair is Senator Byron Dorgan, and Vice-Chairs are Senators Susan
    Collins, Jeff Bingaman, and James Jeffords and Representative Ed
    Markey. More than 75 companies and organizations currently support the
    Alliance as Associates. I appreciate this opportunity to comment on the
    fiscal year 2005 budget for energy efficiency programs at DOE.
        The Alliance has a long history of researching and evaluating
    federal energy efficiency programs. We also have a long history of
    supporting efforts to promote energy efficiency based on partnerships
    between government and business and between the federal and state
    governments. Energy efficiency programs at the Department of Energy
    (DOE) are largely voluntary programs that further the national goals of
    broad-based economic growth, environmental protection, national
    security, and economic competitiveness. The Office of Energy Efficiency
    and Renewable Energy does this through the development of new energy-
    efficient technologies in cooperation with the national laboratories,
    by working with the private sector to deploy those technologies, and by
    fostering energy efficiency activities in the states.

                                   BACKGROUND

        Why these programs are needed.--Our nation in recent years has been
    gripped by a series of energy crises. For the third winter in four
    years, natural gas spot prices are more than twice the price of just a
    few years ago. The high prices have already caused plant closings and
    loss of manufacturing jobs, and have made many low-income homeowners
    unable to pay their heating bills. Last September, the National
    Petroleum Council, in a report requested by the Secretary of Energy,
    concluded that supply from traditional North American production will
    not be able to meet projected natural gas demand, and that ``greater
    energy efficiency and conservation are vital near-term and long-term
    mechanisms for moderating price levels and reducing volatility.''
        Recently 70,000 Californians faced a short blackout when hot
    weather created unexpected electricity demand. When a series of similar
    rolling blackouts and electricity price spikes hit California in 2000-
    2001, the state undertook a massive electricity efficiency outreach
    campaign that reduced electricity use by 7 percent in just one year,
    and thus helped avoid further shortages.
        Energy efficiency is the nation's greatest energy resource--we now
    save more energy each year due to actions since 1973 to increase energy
    efficiency than we get from any single energy source. Many of those
    efficiency improvements rely on technologies that were developed and
    deployed in part through DOE programs. If we tried to run today's
    economy without the energy efficiency improvements that have taken
    place since 1973, we would need to provide about 40 percent more energy
    than we do now.
        A record of success.--Federal energy efficiency programs provide
    enormous economic and environmental returns. A 2001 National Research
    Council report found that every dollar invested in 17 DOE energy
    efficiency research and development (R&D) programs returned nearly $20
    to the U.S. economy in the form of new products, new jobs, and energy
    cost savings to American homes and businesses. Environmental benefits
    were estimated to be of a similar magnitude. DOE itself estimates that
    its efficiency and renewables programs will result in major savings,
    including $134 billion in energy bills, 153 GW of avoided new
    conventional power plants, 1.9 quads of natural gas, and 213 MMT of
    greenhouse gas emissions in 2025.
        We cannot reap these savings without federal support, as the
    private sector alone cannot, or will not, make the needed investment--
    energy R&D spending is the lowest by any major industry and has
    declined dramatically since the 1980's.
        Budget studies and recommendations.--A series of reports and bills
    has supported a substantial increase in funding for DOE energy
    efficiency programs. In 1997, the President's Committee of Advisors on
    Science and Technology, Panel on Energy Research and Development,
    recommended that DOE energy efficiency R&D programs be more than
    doubled over six years, from $373 to $880 million (the fiscal year 2004
    budget for these R&D programs is roughly $550 million). The pending
    energy bill conference report would authorize $695 million for energy
    efficiency R&D and $600 million for grants in fiscal year 2005. The
    authorization increases up to a total of $1.625 billion in fiscal year
    2008, an increase of 85 percent over the actual fiscal year 2004
    appropriation.
        Summary of the President's Request.--The President's overall fiscal
    year 2005 budget request for DOE energy efficiency programs is $876
    million, down $2 million from the fiscal year 2004 appropriation. This
    continues a gradual slide from the $913 million appropriated in fiscal
    year 2002. Once again the President has requested major increases for
    weatherization of low-income homes and for fuel cell vehicle research.
    The money for those increases was taken from other energy efficiency
    programs--thus overall RD&D programs in energy efficiency other than
    the weatherization and state energy grants would be cut 10 percent from
    fiscal year 2004; if one excludes the long-term FreedomCar fuel cell
    vehicle program as well, remaining RD&D programs would be cut 17
    percent overall in a year.

                            ALLIANCE RECOMMENDATIONS

        We believe that a substantial increase in support for DOE energy
    efficiency programs is vital for addressing the critical energy
    problems facing our nation, and that the proven track record of DOE
    programs in reducing energy demand provides a solid foundation for such
    an increase. Thus, the Alliance recommends a doubling of federal
    support for energy efficiency over the next five years (2005-2009).
    Specifically, in 2005 we support a 20 percent increase in funding for
    DOE energy efficiency RD&D programs, as well as the increase requested
    in the President's budget for weatherization.
        This year there is an especially critical need for increased
    funding for current programs and new initiatives that will reduce
    natural gas demand. In some cases this is done by reducing electricity
    demand, as most ``peaking'' power plants and most new power plants are
    fueled by natural gas.
        It is important that these budget increases--and the increases
    proposed by the administration for weatherization and for fuel cell
    vehicles--not be taken from other efficiency programs, as most of them
    also reduce natural gas use and further other national energy
    priorities. While we fully support the weatherization and fuel cell
    programs, they do not take the place of core RD&D programs that can
    have a broader energy savings impact than weatherization and a more
    certain and more near-term impact than fuel cells. In particular the
    Alliance opposes deep cuts, such as those to the Industries of the
    Future (specific) and Insulation and Building Materials R&D programs.

    Increases needed for current programs
        Building Technologies.--Of all the DOE energy efficiency programs,
    Building Technologies has had perhaps the greatest success at reducing
    energy use. This year the buildings programs are absorbing the Zero
    Energy Buildings program. Yet the overall Buildings Technologies budget
    is reduced by 3 percent. This area is a priority for funding increases,
    with particular needs in the following areas.
      --Equipment Standards and Analysis.--Federal appliance standards
            already save an estimated 2.5 percent of all United States
            electricity use and save consumers billions of dollars.
            However, a number of standards are many years behind schedule
            and appear stalled. There are currently 15 high-priority (and
            19 other) rulemakings in progress, along with seven high-
            priority (and 19 other) test procedures under development. No
            new rules (other than two test procedures) have been issued in
            the past three years. In addition, if the consensus standards
            provision in the energy bill passes, it would add 11 more
            products to DOE's plate. Yet the Administration's budget
            proposes to reduce this line by 25 percent. The Alliance
            recommends a $2 million increase over the fiscal year 2004
            appropriations level for total funding of $12.4 million.
      --Residential and Commercial Building Energy Codes.--While
            residential and commercial building codes are implemented at a
            state level, the states rely on DOE for technical
            specifications, training, and implementation assistance. There
            are 15 states that have efficiency codes well below the newest
            model codes; if those states upgraded their codes, they would
            save 4.9 Quads of energy, primarily electricity and natural
            gas. Additional support is needed for technical assistance that
            can only be efficiently provided at a national level. Funding
            is especially needed this year to support work occurring on
            improved ASHRAE commercial codes. The Alliance recommends a
            $0.5 million increase for residential codes, for total funding
            of $1.1 million, and a $1 million increase for commercial
            codes, for total funding of $1.5 million.
      --Windows R&D.--The Windows R&D program has played a critical role in
            the development and deployment of much more efficient windows
            technologies, including dual-pane glass, low-E coatings,
            simulation tools, and efficiency ratings and labels. For a
            modest investment, these technologies have saved consumers and
            businesses billions of dollars of energy. New advanced
            technologies, such as electrochromics and aerogels, as well as
            more widespread deployment of existing technologies, could save
            billions more. Yet the program has been cut in recent years.
            The Alliance recommends a $3 million increase, for total
            funding of $8 million.
        Energy Star.--Energy Star is a successful voluntary deployment
    program that has made it easy for consumers to find and buy many
    energy-efficient products. For every federal dollar spent, Energy Star
    produces average energy bill savings of $75 and sparks $15 in
    investment in new technology. Last year alone, Americans, with the help
    of Energy Star, saved enough energy to power 20 million homes and avoid
    greenhouse gas emissions equivalent to those from 18 million cars--all
    while saving $9 billion. Additional funding is needed both to add new
    products and to increase consumer awareness and market penetration of
    Energy Star products. The President proposed a significant increase,
    from $3.7 to $5 million, but even more is needed. The Alliance
    recommends a $3 million increase for total funding of $6.7 million in
    Weatherization and Intergovernmental Programs.
        Building Codes Training and Assistance.--This account focuses on
    assistance to states for code implementation. Even in states that have
    adopted strong codes, compliance remains a serious problem. To
    strengthen enforcement and compliance, funds are especially needed to
    provide training for state and local code officials. Funds also are
    needed for improved tools to help builders and designers comply with
    the codes. The Alliance recommends a $2 million increase, for total
    funding of $6.4 million in Weatherization and Intergovernmental
    Programs.
        Federal Energy Management Program.--The federal government is the
    nation's largest energy consumer and energy waster, with Federal
    agencies using 1 percent of all energy consumed in the United States.
    However, leadership from DOE's Federal Energy Management Program (FEMP)
    has resulted in a 23.6 percent reduction in federal building energy use
    and billions of dollars in savings for the U.S. taxpayer since 1985.
    But federal energy management is facing a serious crisis because of the
    lapsed authority to utilize Energy Service Performance Contracts
    (ESPCs), an essential financing mechanism for implementing efficiency
    retrofits. FEMP needs increased support to maintain the technical
    assistance capacity that agencies need in order to identify and
    implement energy savings projects, and to be prepared to implement the
    many changes in the pending national energy policy legislation. Unlike
    the other efficiency programs, the savings from FEMP return directly to
    the federal treasury. The Alliance recommends a $3 million increase,
    for total funding of $22.7 million.
        Energy Information Administration (EIA) End-Use Surveys.--Policy
    makers need detailed and up-to-date data on how energy is used in order
    to accurately evaluate various energy policy options. Congressional
    staffs, national laboratories and industry use this data to evaluate
    appliance standards, tax incentives, and R&D spending. Businesses use
    the data to identify market opportunities, utilities for load
    forecasting, students for research projects. EIA itself uses the data
    to project future energy use trends. As funding for EIA's energy
    consumption surveys has fallen, EIA has been forced to cancel the
    transportation survey, limit surveys to every four years (rather than
    three), and drop key questions from the surveys. Continued funding at
    the current level of $2.2 million could force the EIA to drop another
    of the three remaining surveys. In order to reverse these cuts, and
    enable EIA to prepare a special report on the contributions of energy
    efficiency to the U.S. economy, the Alliance recommends a $3 million
    increase, for total funding of $5.2 million.
    New initiatives
        Public awareness campaign.--As a public education campaign is the
    quickest way of impacting consumer behavior and reducing natural gas
    demand, the Alliance recommends $3.5 million for a major national
    public campaign on natural gas efficiency.
        Energizing U.S. manufacturing performance.--The DOE Industrial Best
    Practices Program, through plant-wide energy assessments, training, and
    software and technical references, has saved an estimated 82 trillion
    BTU in 2002, worth $492 million. The Alliance recommends a $5 million
    increase to impact thousands, as opposed to hundreds, of U.S.
    factories.
        Natural gas strategic plan.--In order to assure that DOE's energy
    efficiency programs effectively target and coordinate R&D and
    deployment efforts that relate to natural gas, the Alliance recommends
    $0.2 million for a strategic plan.

                                   CONCLUSION

        DOE's energy efficiency programs have a remarkable track record of
    developing and deploying new energy efficiency technologies. A series
    of recent price spikes and blackouts shows a compelling need to boost
    these programs this year, as energy efficiency is generally the
    quickest, cheapest, and cleanest way of making energy supplies meet
    energy needs. We recognize that the fiscal situation is tight, but the
    returns will be large, and the cost of not making the investment--to
    the economy, to energy security and reliability, and to the
    environment--is simply too high.
        Thank you again for the opportunity to testify and for your support
    for energy efficiency programs.
                                     ______

              Prepared Statement of the American Chemistry Council

        The American Chemistry Council represents the nation's largest
    industrial users of natural gas. Last year, the U.S. chemical
    industry's natural gas bill increased by $6.5 billion. Higher costs
    mean U.S. producers are losing market share to foreign competitors. It
    means U.S. companies have less money to invest in their businesses. It
    means U.S. companies are reducing production and cutting jobs. U.S.
    chemical manufacturing has lost more than 90,000 jobs since 2000
    according to the Bureau of Labor Statistics. In order to keep the
    chemical industry in the United States, we must enact policies that
    promote conservation and efficiency, diversify the nation's fuel
    portfolio, increase natural gas supply and lower the price that
    consumers pay for natural gas.
        We strongly support the Interior Appropriations Committee for its
    effort to provide adequate funding to federal agency programs and
    initiatives that promote increased domestic production of natural gas
    and that fund research and development to diversify the nation's energy
    portfolio. We urge this subcommittee and the Congress to recognize that
    the current natural gas crisis makes continuing strong financial
    support for these programs critical to the survival of the domestic
    chemical industry.
    High natural gas price and volatility have taken a terrible toll on the
            chemical industry
        Three years of high prices and extreme volatility for natural gas
    have taken a terrible toll on the chemical industry. Affordably-priced
    natural gas helped make chemicals the nation's largest export industry.
    In the late 1990's the industry posted the largest commercial trade
    surpluses in the nation's history--$19.7 billion. Those exports have
    sustained hundreds of thousands of good-paying jobs.
        The United States has become a net importer ($9.6 billion last
    year) of chemical products--and much of this stunning decline can be
    traced to natural gas prices. Five years ago, chemical products poured
    from the U.S. Gulf Coast to Asia. Today, we are being beaten by Asian
    importers in our own backyards.
        Stephen Brown of the Federal Reserve Bank in Dallas recently told
    the Louisiana Public Service Commission, ``You're looking at the
    gradual destruction of employment in certain petrochemical firms. Given
    the prices of natural gas and oil, the petrochemical industry here
    could be gone in 10 to 20 years.''
        ``We have the highest natural gas prices in the industrialized
    world,'' R. William Jewell, vice president for energy at Dow Chemical,
    told the Washington Post in a recent article examining the impact of
    high natural gas prices on U.S. chemical industry employment. In the
    past two years, Dow has closed four major chemical factories in North
    America and replaced them with production from Germany, the
    Netherlands, Kuwait, Malaysia and Argentina.
        At a March 22 hearing of the Senate Environment and Public Works
    Committee Senator George Voinovich (R-OH) said higher prices have hurt
    Ohio especially, which has lost 200,000 manufacturing jobs since 2000,
    including many from the chemical industry.
        Natural gas price volatility is making chemical companies re-think
    their investment strategies. Should we put our capital spending into a
    plant in Texas, Delaware, Ohio or New Jersey that is fast becoming non-
    competitive, or should we put those same dollars into a facility in
    China? Sustained, high natural gas prices could tip the scales in
    making those decisions. ``You don't give up plants very lightly,''
    Attila Molnar, president and chief executive officer at Bayer
    Corporation, told the Chicago Tribune last week. ``But,'' the paper
    reported, ``Bayer has made no secret that its future plant investment
    will be in Asia.''
    The National Petroleum Council's report on natural gas correctly states
            that federal policies that drive demand for natural gas must be
            accompanied by federal policies that increase domestic natural
            gas production and polices that increase the diversity of fuels
            used to make power
        Last fall, the National Petroleum Council (NPC) issued a definitive
    report on natural gas markets. The NPC report projects that natural gas
    consumption by the chemical industry will decline by 25 percent in the
    next five years. Some of that will result from efficiencies, some will
    come from fuel switching, but most of that decline will come as a
    result of natural gas consuming factories shutting their doors and
    moving away.
        The NPC report is the most important wake-up call ever issued on
    natural gas. It is nothing less than an indictment of business as usual
    energy policies--policies that are fundamentally contradictory. The NPC
    stated it most succinctly:

        ``Government policy encourages the use of natural gas but does not
    address the corresponding need for additional natural gas supplies. A
    status quo approach to these conflicting policies will result in
    undesirable impacts to consumers and the economy, if not addressed. The
    solution is a balanced portfolio that includes increased energy
    efficiency and conservation; alternate energy sources for industrial
    consumers and power generators, including renewables; gas resources
    from previously inaccessible areas of the United States; liquefied
    natural gas (LNG) imports; and gas from the Arctic.''

        We have carefully reviewed the reports finding and recommendations
    and find ourselves agreeing with nearly everything it says.
      --The nation must use gas more efficiently. Some experts estimate
            that reducing power consumption by 5 percent would reduce
            natural gas consumption by 1.5 trillion cubic feet a year--
            enough natural gas to heat 18 million homes.
      --The nation must maintain a diverse fuel base and create more
            opportunities for consumers to switch fuels when market
            conditions warrant.
      --The nation must invest in energy infrastructure.
      --And the nation must increase natural gas supplies.
    ACC strongly supports funding Department of Interior and Energy
            programs and initiatives that promote increased domestic oil
            and gas production, improved natural gas infrastructure and
            research that promote energy fuel diversification and alleviate
            demand for natural gas
        Congress can help stem this unprecedented job loss in the chemical
    industry by identifying those programs and initiatives that most
    closely respond to the recommendations made by the NPC and providing
    adequate and sustained funding to them.
        First, ACC strongly supports funding programs and initiatives that
    result in increased domestic oil and gas production on Federal lands.
    This can be achieved by allocating adequate resources to the Bureau of
    Land Management's (BLM) Oil and Gas Management Program. The
    Administration's fiscal year 2005 budget request reduces funding for
    this program by $3 million and raises fees on oil and gas producers for
    each lease application or drilling permit that they apply for to make
    up for the funding shortfall.
        Given the current crisis in the natural gas market, we have grave
    concerns with the Administration's request for this program. Instead of
    imposing additional fees on domestic oil and gas producers, Congress
    should provide funding--at or above the fiscal year 2004 funding
    level--sufficient to allow BLM to effectively deal with the current
    backlog in oil and gas lease applications and drilling permits on
    Federal lands.
        Second, ACC supports funding programs that enhance our national
    energy infrastructure. The Department of Energy's Infrastructure and
    Operations Program was created to make long-term investments in
    strengthening the reliability and efficiency of the nation's natural
    gas infrastructure. Congress appropriated $8.9 million to this program
    in fiscal year 2004. The Administration, however, has proposed no
    funding for this program in fiscal year 2005. As a dominant consumer of
    natural gas, the chemical industry strongly supports this program, and
    asks the Congress to provide funds at no less than last year's level.
        Third, ACC supports the Committee's decision last year to decrease
    funding for a proposed initiative for converting Natural Gas to
    Hydrogen. We agree with the Committee's skepticism regarding supporting
    a new initiative to turn natural gas into hydrogen when the result is
    to potentially add more stress to natural gas markets by increasing
    demand on limited natural gas supplies. Instead, we agree with the
    Committee and strongly support federal funding on research initiatives
    to convert coal into hydrogen, as well as other clean coal initiatives.

                                   CONCLUSION

        We recognize that there is no quick fix to this country's current
    imbalance between domestic energy production and consumption. However,
    we believe that a sustained financial commitment to the programs
    outlined above will help set the stage for a long-term improvement in
    our nation's energy security. ACC greatly appreciates the Committee's
    past support and consideration of these programs.
                                     ______

      Prepared Statement of the American Council for an Energy-Efficient
                                    Economy

        DOE's fiscal year 2005 budget request reflects a continuing decline
    in support for important energy efficiency research, development, and
    deployment programs at a time when expanded support for energy
    efficiency is needed more than ever to protect national energy
    security, save American jobs, control rising consumer bills, and stem
    air pollution emissions. Cuts in the fiscal year 2005 budgets would
    starve a host of technologies and programs that can deliver important
    benefits. DOE's efficiency funding remains far short of the levels
    recommended by independent review panels such as the President's
    Council of Advisors on Science and Technology. ACEEE recommends overall
    that the Subcommittee fund energy efficiency programs at $900 million
    for fiscal year 2005.
        Within the overall funding picture, we recommend that the
    subcommittee increase funding for 11 especially high-priority programs
    for a total of $69 million above the Administration's request. For the
    most part, these amounts partly or fully restore funding cuts in these
    key programs relative to fiscal year 2004 appropriations. These
    increases can be largely covered by offsets in other parts of the bill.
        Our analyses of high-priority programs meriting increased support
    are described below. The program categories are listed in the order
    presented in the request, and thus do not represent an ACEEE priority
    ranking. Within each program category, ACEEE priorities are ranked in
    descending order.

                              VEHICLE TECHNOLOGIES

        The budget request for the Vehicles Technologies program for fiscal
    year 2005 is 12 percent lower than 2004 levels, and subprograms aimed
    at near-term efficiency improvements have shown even steeper declines.
    As DOE steps up R&D on hydrogen and fuel cell vehicles, it is essential
    that work on technologies available in the next 10 years be sustained.
    Our overall funding recommendation for the Vehicle Technologies program
    category is $176 million, a $19.6 million increase above the request.
    Within the program, we support the following three priorities.
        Heavy Vehicle Systems.--The multi-agency 21st Century Truck
    Partnership is slated for a 29 percent cut from 2004 levels, despite
    the enormous efficiency gains currently within reach for both light-
    and heavy-duty trucks. We recommend a $1.5 million addition under Heavy
    Vehicle Systems to the request to keep this program level-funded at
    DOE. Recommended funding level: $10.6 million.
        Advanced Combustion Engine.--The budget request reduces funding by
    34 percent from 2004 levels, which would eliminate some programs and
    cripple others. Specifically, additional resources are needed in Heavy
    Truck Engines to ensure truck efficiency gains along with attainment of
    the 2007 emissions standards; we recommend adding $3.5 million to the
    request for this program. The Off-Highway Vehicle budget of $3.5
    million in 2004, which was zeroed out in the request, should also be
    restored. Railroad interests' request that DOE coordinate a locomotive
    efficiency R&D effort merits a positive response. Recommended funding
    level: $43 million.
        Fuels Technology.--The request would cut this program category by
    $10 million, 59 percent below 2004 levels. Of greatest concern, the
    heavy-duty vehicle portion of Advanced Petroleum-Based Fuels is cut $6
    million or 60 percent in the request, down from $10.2 million in 2004;
    we recommend increasing the request by $3.2 million. The Environmental
    Impacts activity is also terminated in the request, with the inadequate
    explanation that the ``work is aligned with the mission of other
    agencies.'' We believe this activity should be continued at least at
    the 2004 level. Both of these activities address fast-approaching and
    important deadlines in the clean-up of diesel fuel. Cutting this key
    program now could jeopardize federal air quality standards, and
    reducing oil use in heavy vehicles, at a time when the public policy
    imperative for these goals has never been stronger. Recommended funding
    level: $12 million.

                 WEATHERIZATION AND INTERGOVERNMENTAL PROGRAMS

        We believe that proposed increases in grants program funding should
    be reallocated to support R&D and Gateway Deployment programs. In the
    Gateway area our priorities are as follows:
        Energy Star.--The Energy Star program is the Administration's most
    effective climate change response program, and yet it has not received
    the funding increases needed to make it truly a national program. While
    the 2005 request is an increase, it is too small ($1.3 million) to meet
    the rising need for energy-efficient products to help counter higher
    consumer gas and electricity prices. We recommend the request be
    increased by $1 million for Energy Star, to enable the program to reach
    the majority of states, where there is currently too little Energy Star
    activity. The market share of Energy Star products thus continues to
    lag in areas where support is not active. Recommended funding level: $6
    million.
        Building Codes Implementation Grants.--The Department of Energy in
    2003 succeeded in overhauling the International Energy Conservation
    Code, the nation's model for building energy codes. However, states
    will need assistance in order to review and adopt it under their EPAct
    mandates. To keep EPAct's building codes provisions from becoming an
    unfunded mandate, DOE needs to increase its codes implementation grant
    support. We recommend that $.7 million be added to the request.
    Recommended funding level: $5.5 million.
        Clean Cities.--The fiscal year 2004 request would cut Clean Cities
    36 percent from the 2004 level. This program has been the Department's
    most effective deployment program for transportation technologies that
    move the United States away from oil. Beyond its direct impacts on fuel
    savings, Clean Cities is a strategic asset in developing the
    infrastructure for alternative fuels and new transportation
    technologies. We therefore recommend Clean Cities be funded at its full
    2004 level by adding $4 million to the request. Recommended funding
    level: $11 million.

                          DISTRIBUTED ENERGY RESOURCES

        The 2005 request would cut this program category by 20 percent. Key
    program cuts include Industrial Gas Turbines (24 percent), Advanced
    Reciprocating Engines (35 percent), and Thermally-Activated
    Technologies (32 percent). We have found that these programs are making
    significant advances in addressing emissions and cost issues. Given the
    historic highs reached by natural gas prices, our recovering economy
    needs these kinds of technologies in the near future to sustain
    economic growth. We recommend adding $1 million to Industrial Gas
    Turbines, adding $4.3 million to Advanced Reciprocating Engines, and
    adding $2.4 million to Thermally-Activated Technologies. Recommended
    funding level: $61 Million.

                             BUILDINGS TECHNOLOGIES

        Appliance Standards.--DOE standards produce the greatest energy
    savings of any DOE program. DOE's analysis estimates that 12 standards
    to date have saved consumers about $25 billion, from a federal
    investment of less than $10 million a year. However, the standards
    program lacks the funding needed to address the backlog of current
    rulemakings, and pending legislation is very likely to add new
    rulemakings to the Department's agenda. Yet the fiscal year 2005
    request cuts this program by 25 percent, which runs counter both to the
    National Energy Plan and pending Congressional mandates. We recommend
    that $4.2 million be added to this vital and cost-effective program so
    that DOE can catch up on its current backlog and also gear up for
    pending legislative mandates. Recommended funding level: $12 million.
        Emerging Technologies.--The fiscal year 2005 budget request cuts
    this important program area by $5 million or 16 percent. Several key
    technologies in this area are essential to respond to the challenge of
    higher natural gas prices. They include residential and commercial AC
    systems, heat pump water heaters and commercial refrigerators, and
    windows and insulation systems. We recommend that $2 million be added
    to the Space Conditioning and Refrigeration program, $225,000 to the
    Appliances and Emerging Technologies program, and $3 million to the
    Building Envelope program. Recommended funding level: $30 million.

                            INDUSTRIAL TECHNOLOGIES

        The 2005 request would cut the Industrial Technologies program by
    $35 million, or 38 percent. This is unsupportable in the face of the
    growing need for energy efficiency in a manufacturing sector that is in
    crisis. Rising natural gas prices have already cost more than 80,000
    jobs, and combined with increasing oil and electricity prices are
    threatening to hobble the economic recovery. We recommend increases in
    the request that would level-fund the key Industrial Technologies
    programs as described below.
        Industries of the Future (Specific).--This program is slated for
    the deepest cuts in the entire request: 53 percent from 2004 levels,
    and 64 percent from 2002 levels. These cuts would cripple if not kill
    important initiatives in key sectors of the U.S. economy, and should be
    rejected. We recommend that IOF Specific be level-funded by adding $25
    million to the request. Recommended funding level: $47.2 million
        Industries of the Future (Crosscutting).--The crosscutting programs
    target key efficiency technology and practice areas such as steam,
    compressed air, and other systems, and are the source of direct
    technical assistance to thousands of manufacturers. They are especially
    important to smaller firms, whose economic survival is most at risk. As
    with IOF Specific, we recommend that the crosscutting programs be level
    funded by adding $8 million to the request. Recommended funding level:
    $39.9 million.
        We are also concerned about cuts in Industrial Technologies
    headquarters staffing that are approaching levels that would make
    effective administration possible. Current plans would reduce staffing
    by two-thirds; to ensure that these programs are well-managed, we
    recommend that report language call for staff levels that are
    commensurate with funding levels.
      support for administration increases in the fiscal year 2005 request
        ACEEE also supports some of the Administration's proposed increases
    in the request. Boosts in Residential and Commercial Buildings
    Integration programs are especially helpful. We also support a moderate
    increase in Weatherization, in the context of a balanced request that
    also funds a sound portfolio of R&D programs. Management Support:
    $5.991 million.
                                     ______

               Prepared Statement of the American Gas Association

        Mr. Chairman and Members of the Subcommittee: The American Gas
    Association (AGA) is an advocate for 192 natural gas distribution
    (utility) companies that serve 53 million homes and businesses in all
    50 states. We appreciate the opportunity to assist you with
    consideration of the U.S. Department of Energy's (DOE) fiscal year 2005
    budget request.
        AGA is pleased with the productive partnership it has with this
    subcommittee and with DOE to advance cost-shared research projects that
    serve the national interest.
        Natural gas meets one-fourth of the United States' energy needs.
    Almost all of this natural gas is produced in the United States or
    Canada, making natural gas a vital, domestic form of energy. Local
    natural gas utilities deliver natural gas through more than 1 million
    miles of underground pipelines. The terrorist acts of September 11,
    2001 and the war with Iraq have made clear the need for re-investment
    in the United States' energy infrastructure, both to facilitate greater
    reliance on domestic energy resources and to ensure their reliable
    delivery. Energy is the lifeblood of the U.S. economy, and innovative
    technologies such as distributed energy helps ensure a reliable
    electricity supply--even if a central power station or the electric
    grid is compromised.
        AGA continues to support DOE research programs such as natural gas
    vehicles and industrial research and development (R&D). Via this
    testimony, however, AGA wishes to outline two top priorities of
    particular benefit to natural gas utilities and the customers they
    serve:
        1. The Office of Fossil Energy's natural gas infrastructure
    research program, for which AGA urges Congress to appropriate $25
    million in fiscal year 2005 (an increase of $16.1 million over the
    current funding leve); and
        2. The Office of Energy Efficiency and Renewable Energy's end-use
    system integration and interface program activity within the
    distributed energy resource (DER) programs, for which AGA recommends a
    $30 million appropriation for fiscal year 2005 (an increase of $10
    million over the current funding level).
    1. Office of Fossil Energy: Natural Gas Infrastructure
        The American Gas Association strongly supports DOE's natural gas
    industry Infrastructure and operations program, which was established
    in fiscal year 2001 with an initial appropriation of $4.9 million. The
    program's goal is to make long-term investments in strengthening the
    reliability and efficiency of the nation's natural gas infrastructure.
    Projects funded by it include development of more corrosion-resistant
    material that can transport gas at higher pressure, fuel-efficient
    compressors capable of flexible compression operation, improved
    automated data acquisition, system monitoring and control techniques,
    no-dig technologies, innovative excavation and restoration systems, and
    plastic pipe technology.
        Natural gas industry response to this program has been
    enthusiastic, as evidenced by submission of more than 100 cost-sharing
    proposals by industry partners in the first year alone. These early
    proposals, totaling more than $75 million, exceeded the available
    dollars by a nine-to-one margin. All proposals met or exceeded DOE's 50
    percent cost-sharing requirement.
        For fiscal year 2004, Congress appropriated $8.9 million for fiscal
    year 2004. For the next fiscal year, however, the Administration has
    requested no funding.
        Given the importance of revitalizing the nation's aging natural gas
    infrastructure in anticipation of significantly growing demand for
    natural gas, the American Gas Association requests that Congress
    appropriate $25 million for the DOE's Fossil Energy natural gas
    infrastructure research program in fiscal year 2005.
        The natural gas industry provides substantial cost-sharing in the
    development of the technologies necessary to develop this new
    infrastructure. Significant benefits that will continue to accrue to
    all Americans as a result of an infrastructure research partnership.
    Major and novel system improvements are needed for natural gas to be
    delivered in the volumes that DOE believes will be required in the
    future. These improvements depend on new, highly efficient
    technologies.
        Some in the Office of Management and Budget argue that all natural
    gas infrastructure research should be conducted exclusively by the U.S.
    Department of Transportation. While DOT's Office of Pipeline Safety
    (OPS) conducts limited infrastructure-related work that is consistent
    with its role as a pipeline safety regulatory agency, OPS's pipeline
    R&D has focused on near-term safety, security and damage prevention
    projects and technologies, and codes and standards development. In
    contrast, DOE focuses on the long-term energy delivery issues related
    to natural gas infrastructure. Although, both departments are involved
    in R&D, the departments have different missions and their R&D programs
    reflect it. Each is essential in its own way.
        The natural gas industry's commitment to partnering with the
    Departments of Energy and Transportation is underscored by AGA's
    advocacy for passage of legislation that seeks to set aside industry
    funds to create a collaborative natural gas industry-funded research
    partnership that would complement federal research expenditures on
    natural gas infrastructure.
    2. Office of Energy Efficiency and Renewable Energy: National Accounts
            Energy Alliance (NAEA)/End-Use System Integration and Interface
        The nation's electric grid faces many technological challenges,
    ranging from generation shortfalls to transmission and distribution
    constraints. Distributed energy resources (DER) is widely considered to
    be the cheapest, cleanest and most obtainable near-term solution to
    many of these challenges. DER systems can be sited where electricity is
    needed. When waste heat from the on-site power systems is captured and
    re-used for other purposes (such as heating water, or driving
    dehumidification systems), the efficiency of distributed energy systems
    can reach 85 percent--a far more efficient use of energy resources than
    the 29 percent efficiency level for typical coal-fired electric power
    generation.
        Further, high-efficiency distributed energy resource systems
    inherently yield lower emissions, because they use less fuel and
    typically cleaner fuels than larger central power plants to achieve a
    given unit of power output. Many electric utilities are now exploring
    greater use of distributed energy resources to reduce the strain on
    congested transmission systems.
        Although DOE has spent hundreds of millions of dollars over the
    years developing DER technologies, many technical, regulatory and
    institutional barriers remain. This is especially true for
    incorporation into new construction or retrofits of large commercial
    facilities. To help commercial customers take better advantage of
    distributed energy, National Accounts Energy Alliance was established
    several years ago by the American Gas Association, the American Gas
    Foundation and the Gas Technology Institute. At its inception, the NAEA
    programs and membership were concentrated in the retail, supermarket
    and food service industries to help them develop new and standardized
    construction models that incorporate advanced distributed energy
    systems. In fiscal year 2005 and beyond, NAEA will seek to expand its
    membership to include a broader segment of the healthcare, high-tech
    and telecommunications, hotel, and targeted manufacturing industries.
        Typically, all of these construction efforts are based on a central
    construction model, with a handful of geographic-based options. For
    example, a major supermarket might retrofit a store that can generate
    part of its own electricity, then capture the clean waste heat from
    that on-site power system to remove humidity, thus improving indoor air
    quality and reducing total energy usage.
        National Accounts Energy Alliance participants have worked closely
    with manufacturers, local natural gas utilities and other partners
    through DOE's system interface and integration program to test and
    verify cutting-edge distributed energy resources.
        DER testing and technology adoption by national accounts is the
    fastest way to perform testing, disseminate the results widely, make
    necessary technology and applications corrections and subsequently
    rapidly deploy improved systems. Because of fierce competition,
    standardization, central design services and extensive building
    programs, it is extremely difficult for retailers, hospitals and other
    national accounts customers to perform such tests on newly emerging
    technologies like DER on their own.
        Efforts to test and deploy technologies being developed under the
    DER program in DOE's Office of Energy Efficiency and Renewable Energy
    are significantly under-funded. Private sector interest in these
    technologies is compelling: DOE's Office of Power Technologies receives
    nearly 10 solicitation applications (each application is typically
    developed by an entire team of companies) for every award it makes.
    While more manufacturers are entering the market, and dramatically more
    attention from states, power providers and end-users is focused on DER,
    significant RD&D requirements abound.
        DOE has spent tens of millions of dollars developing individual DER
    technologies over the past decade. However, tremendous work remains in
    the areas of system development, advanced controls and sensors, power
    quality and reliability, storage, and interconnection. DOE has studied
    the technical, regulatory, market and institutional barriers to
    widespread utilization of DER and has worked to promote commercial
    acceptance. However, to date, these programs have failed to capture the
    vision of large commercial end-users at the corporate or headquarters
    level--NAEA is focused on affecting targeted change at this point.
        We respectfully request that the Subcommittee add $10 million to
    the Administration's request for end-use system integration and
    interface program activity in the DER budget for consortiums such as
    the National Accounts Energy Alliance to conduct technology
    verification tests and build partnerships of key stakeholders for the
    rapid deployment of distributed energy technologies. Thus, we request a
    total appropriation of $30 million for fiscal year 2005.

                                   CONCLUSION

        Mr. Chairman, AGA is giving great emphasis to developing
    comprehensive programs across end-use sectors that complement each
    other and provide cheaper energy to the end-user, while reducing
    emissions and improving energy efficiency, quality, and reliability.
    And, the infrastructure research partnership between DOE and the
    natural gas industry will also have significant benefits in terms of
    safety, reliability, cleaner air and economic growth that will accrue
    to all Americans. AGA greatly appreciates your past support and
    consideration of these proposals.
                                     ______

            Prepared Statement of the American Geological Institute

        To the Chairman and Members of the Subcommittee: Thank you for this
    opportunity to provide the American Geological Institute's perspective
    on fiscal year 2005 appropriations for geoscience programs within the
    subcommittee's jurisdiction. The president's budget requests
    significant cuts in the U.S. Geological Survey (USGS). If enacted,
    these reductions would hamper the Survey's ability to carry out its
    important missions to ensure adequate natural resources, monitor
    environmental conditions and reduce the nation's vulnerability to
    natural hazards. Specifically, we ask the subcommittee to restore funds
    to the USGS Mineral Resources, National Cooperative Geologic Mapping,
    and Toxic Substances Hydrology programs. In addition, the president's
    request would decimate the Department of Energy's Office of Fossil
    Energy oil and natural gas research programs, and we ask for
    restoration of those to their fiscal year 2002 levels.
        Geoscience activities are also found in a number of other agencies
    within the subcommittee's jurisdiction. We ask the subcommittee to
    provide adequate funds for geoscience activities in the Minerals
    Management Service (MMS) Environmental Studies Program, the National
    Park Service Geologic Resources Division and the U.S. Forest Service
    Minerals and Geology Management Program, and to fully fund scientific
    research programs at the Smithsonian Institution. MMS does important
    work in energy resource assessment and collection of geoscience data.
    Geoscience programs within the land management agencies provide a
    scientific basis for land-use decisions, a role that they share with
    the USGS. The Smithsonian's National Museum of Natural History plays a
    dual role in communicating the excitement of the geosciences and
    enhancing knowledge through research and preservation of geoscience
    collections.
        AGI is a nonprofit federation of 42 geoscientific and professional
    associations that represent more than 100,000 geologists,
    geophysicists, and other earth scientists. The institute serves as a
    voice for shared interests in our profession, plays a major role in
    strengthening geoscience education, and strives to increase public
    awareness of the vital role that the geosciences play in society's use
    of resources and interaction with the environment.

                             U.S. GEOLOGICAL SURVEY

        For the fourth year in a row, the USGS faces substantial cuts in
    the administration's request. AGI thanks the subcommittee for its
    record of restoring cuts and recognizing the Survey's broad value to
    the nation. This year, we urge the subcommittee to not only put back
    funds cut in the president's request but also to provide enough
    additional support to stop the ongoing erosion of the Survey's ability
    to carry out its programs due to the rising costs of doing business.
    Uncontrollable expenses, such as cost-of-living increases for salaries,
    should not cut into the funds available to fulfill the agency's
    mission.
        Virtually every American citizen and every federal, state, and
    local agency benefits either directly or indirectly from USGS products
    and services. As was made clear by the National Research Council report
    Future Roles and Opportunities for the U.S. Geological Survey, the
    USGS's value to the nation goes well beyond the Department of the
    Interior's stewardship mission for public lands. USGS information and
    expertise address a wide range of important problems facing this
    nation: earthquakes and floods, global environmental change, water
    availability, waste disposal, and availability of energy and mineral
    resources. Some of the most important activities of the Survey serve
    the entire nation and often are most applicable to those non-federal
    lands where the nation's citizens reside. At the same time, AGI
    recognizes that the Survey does have a responsibility to provide
    scientific support for its sister land management agencies at Interior,
    an important mission that needs to be well executed if land management
    decisions are to be made with the best available scientific
    information. It is imperative that both these missions be recognized
    and valued within the Department and the White House. AGI asks the
    subcommittee to continue its efforts to help the administration better
    understand the Survey's value to the nation as a whole.
        National Cooperative Geologic Mapping Program.--AGI urges the
    subcommittee to reject the administration's requested cuts to the
    National Cooperative Geologic Mapping Program and to fund this
    important program at the fiscal year 2004 appropriated level. This
    important partnership between the USGS, state geological surveys, and
    universities provides the nation with fundamental data for addressing
    natural hazard mitigation, environmental remediation, land-use
    planning, and resource development.
        Mineral Resources Program.--This highly regarded research program
    is the nation's premier credible source for regional, national and
    global mineral resource and mineral environmental assessments,
    statistics and research critical for sound economic, mineral-supply,
    land-use and environmental analysis, planning and decision making. AGI
    urges the subcommittee to reject the administration's requested cuts to
    this program and to fund it at the fiscal year 2004 appropriated level.
    If additional funds are available to grow this program, we ask the
    subcommittee to consider funding the Mineral Education and Research
    initiative that would establish an external grant program to support
    university-based applied mineral deposits research and training in
    mineral resource issues. Such a program has been recommended by the
    National Research Council as a means of improving cooperation between
    the minerals industry, universities and government, and of arresting
    the decline in geoscience faculty research expertise in minerals
    geology.
        Advanced National Seismic System.--A key role for the USGS is
    providing the research, monitoring, and assessment that are critically
    needed to better prepare for and respond to natural hazards. When a
    massive quake struck Alaska in December 2002, a major economic and
    environmental disaster was averted because the Trans Alaska Pipeline
    System did not rupture where it crossed the fault. The pipeline's
    resilience, despite the 14 feet of ground movement, was due to
    stringent design specifications based on USGS geologic studies three
    decades ago. To ensure future successes in hazard identification and
    mitigation, the Earthquake Hazards Reduction Authorization Act of 1999
    called for a significant federal investment in expansion and
    modernization of existing seismic networks and for development of
    ANSS--a nationwide network of shaking measurement systems centered on
    urban areas. ANSS can provide real-time earthquake information to
    emergency responders as well as building and ground shaking data for
    engineers and scientists seeking to understand earthquake processes. If
    additional funds are available, this program should grow toward its
    authorized levels of $35 million in fiscal year 2005.
        Hydrology Programs.--The fiscal year 2005 budget requests a
    significant cut in the Toxic Substances Hydrology program. The Toxics
    program supports targeted, long-term research on water resource
    contamination in both surface and groundwater environments. Such
    problem-specific research in this area is highly appropriate for USGS.
    The president's request also calls for the termination of the Water
    Resources Research Institutes. AGI strongly encourages the subcommittee
    to oppose these reductions and to fully support these programs. AGI
    urges the subcommittee to reject the administration's requested cuts in
    funding for the National Water Quality Assessment and National
    Streamflow Information programs, both of which make important
    contributions to the nation.
        Homeland Security.--Another troubling aspect of the president's
    request that is not apparent from the budget documents is the lack of
    funding for the USGS activities in support of homeland security and the
    war on terrorism overseas. All four disciplines within the Survey have
    made and continue to make significant contributions to these efforts,
    but the fiscal year 2005 request does not provide any direct funding.
    Instead, those costs must be absorbed in addition to the proposed cuts.
    AGI encourages the subcommittee to recognize the Survey's important
    role in homeland security and ensure adequate support for its newfound
    responsibilities.

                   DOE FOSSIL ENERGY RESEARCH AND DEVELOPMENT

        AGI is very concerned by the significant reductions in the
    President's budget request to the Oil Technology R&D and Natural Gas
    R&D programs. The proposed 57 percent cut to oil research and 40
    percent to natural gas research would decimate these programs--programs
    which were cut in the President's request last year and only partially
    restored by the subcommittee. The research dollars spent by these
    programs go largely to universities, state geological surveys and
    research consortia to address critical issues like enhanced recovery
    from known fields and unconventional sources that are the future of
    natural gas supply. This money does not go into corporate coffers, but
    it helps American businesses stay in business by giving them a
    technological edge over their foreign competitors. AGI strongly
    encourages the subcommittee to restore these funds and bring these
    programs back to at least fiscal year 2003 levels.
        Research funded by DOE leads to new technologies that improve the
    efficiency and productivity of the domestic energy industry. Continued
    research on fossil energy is critical to America's future and should be
    a key component of any national energy strategy. The societal benefits
    of fossil energy R&D extend to such areas as economic and national
    security, job creation, capital investment, and reduction of the trade
    deficit. The nation will remain dependent on petroleum as its principal
    transportation fuel for the foreseeable future and natural gas is
    growing in importance. It is critical that domestic production not be
    allowed to prematurely decline at a time when tremendous advances are
    being made in improving the technology with which these resources are
    extracted. The recent spike in both oil and natural gas prices is a
    reminder of the need to retain a vibrant domestic industry in the face
    of uncertain sources overseas. Technological advances are key to
    maintaining our resource base and ensuring this country's future energy
    security.
        The federal investment in energy R&D is particularly important when
    it comes to longer-range research with broad benefits. In today's
    competitive markets, the private sector focuses dwindling research
    dollars on shorter-term results in highly applied areas such as
    technical services. In this context, DOE's support of fossil energy
    research is very significant both in magnitude and impact compared to
    that done in the private sector. Without it, we risk losing our
    technological edge with this global commodity.

                            SMITHSONIAN INSTITUTION

        This venerable institution was established for ``the increase and
    diffusion of knowledge.'' Those dual charges require that the
    Smithsonian not only welcome visitors to its museums but also produce
    new knowledge through scientific research. Last year, a specially
    appointed science commission released a report outlining the role of
    research within the Smithsonian. The report noted that funding erosion
    has placed the institution's world-class research facilities and
    researchers in poor financial standing. The National Research Council
    has released a report with similar findings. The message appears to
    have had a significant impact on the president's fiscal year 2005
    request, which calls for a 27 percent increase in funding, $1.5 million
    of which will go toward fulfilling the findings of these reports. AGI
    thanks the subcommittee for embracing the findings of these reports and
    starting to build up Smithsonian research.

                             NATIONAL PARK SERVICE

        The national parks are very important to the geoscience community
    as unique national treasures that showcase the geologic splendor of our
    country and offer unparalleled opportunities for both geoscientific
    research and education of our fellow citizens. The National Park
    Service's Geologic Resources Division was established in 1995 to
    provide park managers with geologic expertise. Working in conjunction
    with USGS and other partners, the division helps ensure that
    geoscientists are becoming part of an integrated approach to science-
    based resource management in parks. AGI asks the subcommittee to fully
    support the president's requested increase for the Natural Resources
    Challenge. AGI would like to see additional support for the Volunteers
    in the Park program and its associated partnerships as well as
    additional geological staff positions to adequately address the
    geologic resources in the national parks.
        Thank you for the opportunity to present this testimony to the
    subcommittee. If you would like any additional information for the
    record, please contact me at 703-379-2480, ext. 212 voice, 703-379-7563
    fax, eml@agiweb.org, or 4220 King Street, Alexandria VA 22302-1502.
                                     ______

          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 (approximately 43
    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 jurisdiction of the
    Interior and Related Agencies Subcommittee.

            DEPARTMENT OF ENERGY: ENERGY INFORMATION ADMINISTRATION

        The Energy Information Administration (EIA) has extensive
    legislative authority to collect data needed to answer a broad range of
    energy policy questions. In order to fulfill this responsibility in
    regard to the electric power industry, EIA has had to revise and expand
    its data collection to include new participants. EIA now collects
    information from all sectors of the power industry: investor-owned
    utilities, rural electric cooperatives, public power systems and
    federal utilities, as well as power marketers and non-utility
    generators.
        Most EIA data forms are filled out by all industry sectors.
    However, the Federal Energy Regulatory Commission (FERC) collects data
    from its jurisdictional utilities (investor-owned utilities) and the
    Department of Agriculture's Rural Utilities Service (RUS) collects
    information from its utility borrowers (rural electric cooperatives).
    EIA does not duplicate electricity data collected by these federal
    agencies. Thus EIA uses a small number of forms to collect comparable
    information from electric industry sectors not subject to the FERC or
    RUS reporting requirements. EIA-412 is one of these forms.
        APPA is concerned by reports that funding for the distribution,
    collection and analysis of EIA-412 will be eliminated by EIA in fiscal
    year 2005. Eliminating form EIA-412 will leave a gap in the electricity
    industry's data coverage. APPA and its members use many of the data
    items on the form to make comparisons between individual utilities and
    to compute industry averages. For example, APPA uses EIA-412 data in
    its testimony to Congress to show the level of public power's long-term
    debt, its average interest rate, and the effect of tax-exempt financing
    on the average public power retail customer compared to the investor-
    owned utility average. It will become impossible to make statements
    about these issues if the EIA-412 is discontinued.
        It is crucial that utilities, government, regulators, and the
    public all have access to reliable data in order to monitor pricing and
    structural changes in the electric utility industry and the effects of
    these changes on competition, so as to determine what regulations and
    safeguards are needed. EIA's collection of transmission, plant cost,
    bulk power transaction, and financial data addresses these competition
    issues.
        The transmission information collected by EIA on Form EIA-412
    represents about thirty percent of all large transmission lines. This
    information will be lost if the form is discontinued. In its most
    recent proposal to revise its electricity forms, EIA added a schedule
    to the EIA-412 that would capture new information on transmission
    system upgrades, and is working with FERC to encourage the Commission
    to collect comparable information from investor-owned utilities. At the
    same time that EIA is working to improve transmission information--in
    response to the renewed focus on reliability--the budget process is
    eliminating this vital information.
        The same is true of power plant data. Non-utility generators own
    more than one-third of the nation's generating capacity, and public
    power and federal utilities account for another eighteen percent. If
    Form EIA-412 is eliminated, average power plant cost and operating data
    will be based on less than half of all capacity.

                   DEPARTMENT OF ENERGY: ENERGY CONSERVATION

        APPA appreciates the Subcommittee's interest in energy conservation
    and efficiency programs at the Department of Energy's (DOE) and we hope
    that the Subcommittee will once again allocate a funding level over and
    above the Administration's request for fiscal year 2005.

    Hydrogen Research
        APPA supports the Administration's efforts to improve the
    feasibility of making available low-cost hydrogen-powered fuel cell
    vehicles. APPA believes that the availability of fuel cell technology
    for transportation is critical for cities and states that must achieve
    mandatory federal air quality standards. We appreciate the
    Administration's new emphasis on refocusing research and development
    toward the achievement of cost-effective fuel cell vehicles, and
    support its request of $16 million for hydrogen research in fiscal year
    2005.
        The fuel cell vehicle is virtually pollution-free and highly
    efficient. One of APPA's member utilities, the Sacramento Municipal
    Utilities District (SMUD) has done extensive research into this field
    and has found that even a 10 percent market penetration could reduce
    regulated air pollutants by more than a million tons a year and
    emissions of carbon dioxide by 60 million tons a year.

    Weatherization and Intergovernmental Activities
        APPA supports the Administration's request of $364 million for
    fiscal year 2005 for helping to increase the efficiency of commercial
    and residential buildings, including weatherization assistance, the
    state and community energy conservation programs. APPA is particularly
    supportive of the weatherization assistance program as it has been
    effective at helping low income citizens afford their energy bills
    while at the same time reducing energy usage.

     DEPARTMENT OF ENERGY--FOSSIL ENERGY RESEARCH AND DEVELOPMENT PROGRAMS

    Coal Research Initiative--Clean Coal Power Initiative
        APPA strongly urges the Subcommittee to support the
    Administration's request of $287 million for fiscal year 2005 for the
    Clean Coal Power Initiative. This initiative makes possible joint
    government-industry research, development and demonstration of new
    technologies to enhance the reliability and environmental performance
    of coal-fired generators. Coal is a vital fuel source for producing
    electricity that will become an even more viable domestic resource if
    we can reduce emissions of criteria pollutants and carbon dioxide from
    coal fired plants.

    Distributed Generation Fuel Cells
        APPA is disappointed with the Administration's request of $23
    million for fiscal year 2005 for distributed generation fuel cell
    research and development and encourages the Subcommittee consider a
    funding increase more reflective of the allocation made in fiscal year
    2004 of $71 million. APPA member systems as well as DOE, the National
    Rural Electric Cooperative Association (NRECA) and the Electric Power
    Research Institute (EPRI) have cosponsored carbonate fuel cell
    research, testing and the first utility scale demonstration of a
    carbonate fuel cell power plant. APPA member systems are leaders in the
    field of fuel cell power plants and have benefited from the
    prioritization that the Subcommittee has given to funding DOE's
    research and development programs over and above what the
    Administration has requested in the last several years.
                                     ______

     Prepared Statement of the Coal Utilization Research Council (CURC) \1\

                           SYNOPSIS OF CURC TESTIMONY

        This testimony focuses upon the following three topics:
    ---------------------------------------------------------------------------
        \1\ The CURC is an ad-hoc group of electric utilities, coal
    producers, equipment suppliers, state government agencies, and
    universities. CURC members work together to promote coal utilization
    research and development and to commercialize new coal technologies.
    Our 40+ members share a common vision of the strategic importance for
    this country's continued utilization of coal in a cost-effective and
    environmentally acceptable manner.
    ---------------------------------------------------------------------------
        1. Adequate funding is required in order to achieve the goals of
    the DOE-CURC-EPRI Clean Coal Technology Roadmap;
        2. Recommended increases in funding for several DOE coal based R&D
    programs; and
        3. Support for funding of the FutureGEN project.

                       THE CLEAN COAL TECHNOLOGY ROADMAP

        The CURC, the Department of Energy (DOE), and the Electric Power
    Research Institute (EPRI) have agreed upon a clean coal technology
    roadmap (see CURC website at www.coal.org). The roadmap identifies a
    number of research, development and demonstration priorities that, if
    pursued, could lead to the successful development of a set of coal-
    based technologies that will permit the long-term use of coal in a cost
    effective, highly efficient and environmentally superior manner as
    compared to currently available technology. The roadmap outlines the
    technology steps necessary in order ultimately to develop and
    demonstrate technologies capable of near zero emissions to the air or
    water. These same technologies would provide low cost, competitively
    priced electricity or other useful products to end use consumers. In
    addition, the roadmap includes a technology development program for
    carbon management, defined as the capture and sequestration of carbon
    dioxide. In the event public policy requires CO2 management
    at some future time cost effective technologies will then already be
    under development.
        Using the roadmap as a tool to guide our nation's coal research and
    development (R&D) efforts, CURC has examined the fiscal year 2005
    budget request for coal. Our specific inquiry is to judge whether DOE's
    coal program will result in the timely achievement of the agreed upon
    roadmap goals. Based upon those roadmap goals--agreed to by CURC, EPRI
    and DOE--we have determined that the goals of the roadmap cannot be
    achieved within the timeframes specified with the budgets requested.
    While it is understood that the Committee must make difficult choices
    among many meritorious programs, the CURC strongly encourages the
    Congress to consider the following: The United States possesses within
    its own borders more than 250 years of supply of coal at current rates
    of consumption. Coal supplies more than one half of the energy for the
    electricity generated in this country. The clean coal technology
    roadmap provides a guide for the development of technologies to use
    coal more cleanly, efficiently and cost effectively.
        CURC strongly believes that funding for several coal programs must
    be increased if we are to successfully reach the goals of the consensus
    roadmap. Those recommended budget levels are set forth in the following
    table:

                                SPECIFIC FUNDING RECOMMENDATIONS FOR THE COAL R&D PROGRAM
                                                [In millions of dollars]
    ----------------------------------------------------------------------------------------------------------------
                                                                                                        CURC fiscal
                                                                      Administration   CURC roadmap      year 2005
                           Technology program                           fiscal year     annual R&D       proposed
                                                                       2005 request     budget \1\        budget
    ----------------------------------------------------------------------------------------------------------------
    IGCC/GASIFICATION...............................................           34.45          106.00           66.00
    ADVANCED COMBUSTION SYSTEMS.....................................  ..............           18.00           15.00
    INNOVATIONS FOR EXISTING PLANTS.................................           18.05           43.00           23.00
    ADVANCED TURBINES...............................................           12.00           17.00           25.00
    CARBON SEQUESTRATION............................................           49.00           79.00           49.00
    ADVANCED RESEARCH...............................................           30.50        \2\ 4.00           31.00
    COAL DERIVED FUELS & LIQUIDS....................................       \3\ 16.00       \4\ 13.00           31.00
    FUTUREGEN/CCPI..................................................          287.00          240.00          240.00
                                                                     -----------------------------------------------
          TOTAL.....................................................          447.00          520.00          480.00
    ----------------------------------------------------------------------------------------------------------------
    \1\ This number is 80 percent of the total R&D amount required and represents the federal contribution. It is
      assumed that industry would provide the other 20 percent required to carry out the R&D. The annual budgets are
      based upon the CURC Roadmap from fiscal year 2003 through fiscal year 2010; the annual budgets from fiscal
      year 2011-fiscal year 2020 are not reflected.
    \2\ For materials.
    \3\ Specifically for hydrogen R&D.
    \4\ To fund new programs for coal derived liquids.

        IGCC/Gasification.--Funding in fiscal year 2005 must be increased
    above the President's request of $34.45 million. The budget request
    will limit support for the major Presidential initiatives on hydrogen
    and FutureGEN, and severely compromise the schedule and the ability to
    meet improved cost, reliability and efficiency goals in the DOE/CURC/
    EPRI Roadmap. CURC recommends funding the program at $66 million in
    fiscal year 2005 and directing the additional funds to the following
    activities: (1) an additional $18.6 million to accelerate pilot and
    intermediate scale work and field testing, including refractory testing
    and temperature monitoring in commercial units, advanced sorbents for
    sulfur to allow SCR use on combustion turbines for ultra-low
    NOX and FutureGEN design configuration testing, and
    activities at the PSDF for testing and advanced air separation module
    testing; (2) an additional $1 million each for high-pressure designs
    for various coal ranks and increased system reliability; and (3) an
    additional $12 million for ultra-low emissions development for
    H2 production and CO2 separation (necessary for
    FutureGEN technologies) and to accelerate air, H2 and
    CO2 separation R&D.
        Advanced Combustion Systems.--CURC recommends that DOE restore
    funding for coal combustion-based R&D to $15.0 million. DOE's fiscal
    year 2005 Advanced Combustion program should be designed to support the
    following: (1) $5 million for oxy-fuel firing development to facilitate
    the capture and sequestration of CO2 while enhancing
    combustion efficiency; (2) $5 million for chemical looping technology
    development of highly efficient, innovative power generation plants
    with CO2 capture and hydrogen generation capability; (3)
    $2.5 million for ultra-supercritical steam cycles for advanced boiler
    and steam turbine development; and (4) $2.5 million for systems
    analysis and component development including integration with
    CO2 capture (currently funded in the sequestration program).
    Fully funding this program at the recommended level will enhance the
    development of high efficiency, superior environmental performance, and
    CO2-ready combustion technologies.
        Advanced Turbines.--We cannot achieve coal conversion efficiencies
    exceeding 50 percent and turbines capable of utilizing coal derived
    synthetic gas or hydrogen derived from coal in the timeframes set forth
    in the roadmap with the amount of funds requested in fiscal year 2005.
    The fiscal year 2005 request of $12 million is directed at R&D in high
    efficiency gas turbines configured for use of hydrogen produced from
    coal. While CURC supports this effort, the latest generation of gas
    turbines (the ``G'' and ``H'' class of turbines) are not ready to meet
    the demands of the proposed coal-based advanced power plant cycles
    (e.g., IGCC with or without CO2 capture, or FutureGEN) nor
    are they ready to meet the environmental standards that are expected to
    be required in the future. While CURC supports this activity, we
    recommend adding $13 million to the turbine program in fiscal year 2005
    and focusing the increased funding in three key areas: (1) $7 million
    for fuel flexible low emissions combustion research; (2) $4 million for
    syngas and H2 tolerant materials and coating systems; and
    (3) $2 million for sensors and monitors for syngas and H2
    gas turbines.
        Innovations For Existing Plants.--CURC recommends that additional
    funding be allocated to the Fine Particulate Control/Air Toxics
    subprogram to allow a meaningful mercury emission control program to
    proceed. The President's request of $9.95 million for this subprogram
    leaves only $1.5 million for new demonstrations of mercury control
    technologies, and for already-solicited toxicology and epidemiology
    studies of fine particulate matter. CURC recommends increasing the
    budget for this subprogram by $5.4 million, for a total of $15.35
    million in fiscal year 2005. Increased funding will allow three new
    mercury control demonstration tests to proceed.
        Carbon Sequestration.--DOE sequestration R&D program is supposed to
    result in the development of a portfolio of safe and cost-effective
    greenhouse gas capture, storage and mitigation technologies by 2012.
    Successfully achieving this goal will require directing R&D money at
    promising pilot scale projects. The current program is focused on
    developing efficient, low-cost, advanced CO2 separation
    approaches. In fiscal year 2005, DOE has requested additional funding
    to continue this focus and complete pilot tests on advanced capture
    technologies related to membrane and hydrate configurations. CURC
    commends DOE for re-focusing the core R&D program to support ongoing
    pilot-scale work. The requested budget level is sufficient to further
    those activities in the coming year. However, CURC believes that more
    pilot demonstrations are required and a cost-effective means to achieve
    this goal is through establishment of several national sequestration
    pilot test centers that would have the capability to run multiple
    pilot-scale tests of pre-combustion, membrane, and post-combustion
    CO2 capture technologies.
        Advanced Research.--Coal utilization science and related programs
    are essential to assure the development of advanced coal utilization
    and conversion technologies. CURC supports funding for the development
    of advanced materials aimed at steam power generation applications in
    ultra supercritical modes. In addition, this program should support
    research topics across the spectrum of the roadmap in such a way that
    creative embryonic research, which could lead to the application of
    novel concepts in support of the roadmap, will be funded. Continued
    development of instruments, sensors and materials for advanced
    diagnostics and controls for coal-based systems is required and
    additional funding is needed for this research to reduce the technical
    risk of advanced power generation technologies, such as gasification,
    that are dependent on sensors and controls. It is a concern that the
    fiscal year 2005 request for the two programs in the Coal Utilization
    Science and Materials subprogram (each at $8 million) is being
    requested to continue existing work, which limits the opportunity for
    new competitive enabling research. In the materials subprogram, it also
    implies cutting back on ultra high temperature intermetallic research,
    which is relevant to Vision 21and FutureGEN objectives.
        Coal Derived Fuels And Liquids.--CURC recommends $31 million in
    fiscal year 2005 for the three major elements of the Coal Fuels
    Program. CURC supports funding the Transportation Fuels & Chemicals
    subprogram at $22 million. This recommendation includes $16 million for
    new hydrogen research in advanced separation membranes, developing
    hydrogen-carrier liquid fuels, on-board reforming, storage and
    utilization, and component development. CURC recommends $2 million each
    for: (1) reactor/process development research; (2) technologies for
    producing liquid transportation fuels and chemicals from coal; and, (3)
    computational modeling for the optimization of co-production and
    polygeneration coal-based power systems. CURC recommends $4 million for
    the Advanced Fuels Research subprogram to support technology
    development for advanced fuels and chemicals, including hydrogen, and
    recommends $5 million for the Solid Fuels & Feedstocks subprogram.
        FutureGEN/Clean Coal Power Initiative (CCPI).--Commercial scale
    demonstrations of complete systems are essential in determining whether
    or not components can be successfully and cost-effectively integrated.
    CURC supports funding for the coal demonstration projects anticipated
    through the CCPI and the FutureGEN projects. DOE fiscal year 2005
    budget requests $237 million to fund FutureGEN and $50 million to fund
    the CCPI program. CURC recommends that the Congress consider the
    following: (1) For the FutureGEN project to proceed, Congress must
    provide assurance to the private sector participants that the
    government is committed to the project; in other words, there must be a
    fully enforceable commitment by the government that it's contribution
    to the project is available in the same way the government is asking
    the private sector to make a similar up-front commitment. (2) For the
    CCPI program to be successful, a budget request of $50 million to
    support the second solicitation is not adequate. When combined with
    already appropriated and available funds, CCPI 2 will have only $280
    million available to make awards.
        Finally, when considered in the context of the entire coal R&D
    budget, CURC cannot support, for example, funding FutureGEN if it is to
    be accomplished at the expense of the coal R&D and CCPI programs. If
    the base R&D programs are cut back to fund FutureGEN, government and
    industry cannot reach the goals of either the roadmap or FutureGEN.
    This is so because the technologies that are currently under
    development in the coal R&D program are expected to be utilized in the
    FutureGen program. Congress is urged to consider first adding
    substantial additional appropriations to the coal R&D budget and the
    CCPI program, and secondly, reallocating the total requested funds for
    the coal program while providing needed assurances and commitments
    regarding the future availability of funds for the advanced coal
    demonstration programs contemplated in this year's budget request.

                                   CONCLUSION

        Success in advanced clean coal technology development promises to
    preserve the coal option for fuel diversity and assures that continued
    growth in the use of coal will be accompanied with low costs to
    consumers, minimal impacts upon the environment, and guaranteed energy
    security for our nation now and well into the future. DOE/CURC/EPRI
    roadmap identifies a variety of advanced coal-based energy systems to
    achieve those goals. To ensure that these technologies will be
    developed the government's long-term commitment must be assured and
    funding for these programs must be substantially increased.
                                     ______

         Prepared Statement of the Coalition of Northeastern Governors

        The Coalition of Northeastern Governors (CONEG) is pleased to
    provide this testimony to the Senate Subcommittee on Interior and
    Related Agencies regarding fiscal year 2005 appropriations for the
    Energy Conservation programs of the U.S. Department of Energy. The
    Governors appreciate the Subcommittee's support for these programs, and
    recognize the difficult funding decisions which confront the
    Subcommittee this year. At a time of heightened attention to the
    security, reliability and efficiency of the nation's energy systems, we
    believe that modest federal investment in these programs provides
    substantial energy, economic and environmental returns to the nation.
    In recognition of the contribution which energy efficiency and
    conservation programs make to costeffective energy strategies, the
    CONEG Governors request that funding for the State Energy Program be
    increased to $74 million, and that funding for the Weatherization
    Assistance Program be increased to $291 million in fiscal year 2005.
    The Governors also request that funding for the Northeast Home Heating
    Oil Reserve be maintained at $5 million in fiscal year 2005.
        The Department of Energy's State Energy Program and Weatherization
    Assistance Program provide valuable opportunities for the states,
    industry, national laboratories and the U.S. Department of Energy to
    collaborate in moving energy efficiency and renewable energy research,
    technologies, practices and information to the public and into the
    marketplace. Administered by the 50 states, District of Columbia and
    territories, these programs are an efficient way to achieve national
    energy goals, as they tailor energy projects to specific community
    needs, economic and climate conditions.
        State Energy Assistance Program.--The State Energy Program (SEP) is
    the major state-federal partnership program for energy. It provides a
    vitally important part of total energy funding to state energy offices,
    for it allows them to tailor the energy activities to fit the
    particular energy priorities and needs of each state. As the nation
    moves to enhance the security of its energy infrastructure, the energy
    emergency preparedness activities long provided by state energy offices
    take on heightened significance.
        Increased SEP funding in fiscal year 2005 will ensure that States
    can continue to rely upon state energy offices to serve as their
    essential energy emergency preparedness officials in providing this
    vital public security and safety function. As part of the nation's
    strategy for a balanced, reliable energy system, SEP also helps move
    energy efficiency and renewable energy technology into the marketplace.
    Through the SEP, states also assist schools, municipalities,
    businesses, residential customers and others in both the private and
    public sectors to incorporate the practices and technologies which help
    them manage their energy use wisely.
        The modest federal funds provided to the SEP are an efficient
    federal investment, as they are leveraged by non-federal public and
    private sources. According to a study of the SEP done by the Oak Ridge
    National Laboratory at the request of U.S. Department of Energy, every
    dollar in SEP funding yields $3.54 in ``leveraged'' funding from the
    state and private sectors, and results in $7.23 in annual energy cost
    savings. This adds up to over $256 million in annual energy costs
    savings. These savings estimates do not capture the valuable public
    benefits, such as energy emergency planning and preparedness, provided
    by SEP. In short, the Oak Ridge report concludes that the SEP, with its
    impressive savings and emissions reductions, ratios of savings to
    funding and payback periods, offers effective operations and a
    substantial positive impact on the nation's energy situation.
        Weatherization Assistance Program.--The Weatherization Assistance
    Program (WAP) helps low-income households better manage their ongoing
    energy use, thereby reducing the heating and cooling bills of the
    nation's most vulnerable citizens. According to the U.S. Department of
    Energy, low-income households spend 14 percent of their annual income
    on energy, compared to 3.5 percent for other households. The
    Weatherization Assistance Program strives to reduce the energy burden
    of low-income residents through such energy saving measures as the
    installation of insulation and energy-efficient lighting, and heating
    and cooling system tune-ups. These measures can result in energy
    savings as high as 30 percent.
        Northeast Home Heating Oil Reserve.--The nation's heightened
    emphasis on energy security places renewed importance on the Northeast
    Home Heating Oil Reserve. The Northeast, with its reliance upon
    imported fuels for both residential and commercial heating, is
    particularly vulnerable to the effects of supply disruptions and price
    volatility. The Reserve provides an important buffer to ensure that the
    states will have prompt access to immediate supplies in the event of a
    supply emergency.
        In conclusion, we request that the Subcommittee increase funding
    for the State Energy Program to $74 million and for the Weatherization
    Assistance Program to $291 million; and that it maintain funding at the
    level of $5 million for the Northeast Home Heating Oil Reserve in
    fiscal year 2005. These programs have demonstrated their effectiveness
    in contributing to the nation's goals of environmentally sound energy
    management and improved economic productivity and energy security.
        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 these
    programs to the Northeast.
                                     ______

             Prepared Statement of the Battelle Memorial Institute

        Mister Chairman and Honorable Members of the Committee: clean,
    secure and affordable energy--for stationary power as well as for
    transportation--is critical to the nation's prosperity. Ensuring that
    the United States is making full use of domestic energy reserves,
    reducing its dependence on foreign energy supplies, and addressing the
    concerns associated with atmospheric concentrations of greenhouse gases
    requires deeper scientific understanding and new technologies. With
    advanced developments in fuel cells producing energy from hydrogen,
    lightweight materials, carbon sequestration for clean fossil fuel
    energy generation and bio-based products, we can to meet the nation's
    growing energy needs while responding to these challenges.
        In this past year, the Department has begun addressing several of
    these key issues through the establishment of the FreedomCAR and
    Hydrogen Fuel Initiative and the FutureGen Initiative. These
    initiatives highlight the unique role the Federal government plays
    developing science and technology and in stimulating programs and
    policies that will foster private innovation by reducing the pre-
    commercial risks of essential, breakthrough technologies, and in
    assessing and confirming the environmental and economic performance of
    energy innovations. Although Battelle is a major operator of
    laboratories for the Department of Energy, \1\ this testimony reflects
    the company's commercial perspective. As a leading independent
    research, development and commercialization company, Battelle partners
    with many firms to create new products and companies focused on
    bringing breakthrough solutions and products to the marketplace. \2\
    Through these activities, Battelle has gained direct knowledge of the
    commercial market drivers for new energy solutions.
    ---------------------------------------------------------------------------
        \1\ Battelle, through direct operations, joint venture subsidies
    and partnerships is engaged in operation of the Pacific Northwest
    National Lab, Oak Ridge National Lab, Brookhaven National Lab and
    National Renewable Energy Laboratory.
        \2\ Founded as a charitable trust in the State of Ohio, Battelle's
    operational revenues exceed $1 billion annually for research and
    development. In conjunction with its efforts to bring the benefits of
    research to the public, Battelle invests over $70 million annually in
    some six to ten commercial ventures seeking to bring innovations from
    its research to the marketplace.
    ---------------------------------------------------------------------------
        While there are many reasons to advocate each element of the
    Interior Appropriations budget, the following details Battelle's view
    of the most critical priorities for Federal energy research:
      --Distributed Generation Systems
        --solid State Energy Conversion Alliance (SECA)
      --Combined Hydrogen and Near Zero-Emission Power
        --FutureGen
        --Zero Emission Research Center
      --Transportation
        --Fuel Cell Technology, Transportation Systems
        --Heavy Vehicle High Strength Weight Reduction Materials
      --Bio-Based Products
        A table provided at the end of this document summarizes the
    recommendations for budget priorities.

              DISTRIBUTED GENERATION POWER SYSTEMS: SECA AND HITEC

    Solid State Energy Conversion Alliance
        The SECA program seeks to develop commercial commitment to the
    rapid development of low-cost, low-emission, high-efficiency solid
    oxide fuel cells that, by design, are focused on meeting the commercial
    market requirements of a deregulated energy market. Unlike prior
    efforts in fuel cells, SECA has focused equally from its inception on
    both the economic and technical challenges required to achieve a
    breakthrough energy generation alternative that is viable on a broad
    scale.
        A recent analysis of the support required by commercial development
    teams and the aligned core technology priorities that have emerged from
    industry workshops suggests that the SECA effort could effectively
    utilize funding of $50 million the next fiscal year. Failure to expand
    the funding to this level will seriously jeopardize the progress that
    has been made in engaging and stimulating industry to invest in
    advanced fuel cells for distributed generation that are fundamentally
    designed to be economically viable. It also increases the risk of
    failure to develop a commercial product and imperils the development of
    the supporting research, academic programs and supply industries
    required to meet the future demand for employees and component
    manufacturers for this new generation of low-emission, high-efficiency
    fuel cells.
        Battelle acknowledges the ongoing budget constraints, but realizing
    the importance of this program, we urge an expansion of the
    Administration's request from $23 million to a minimum of $50 million
    in fiscal year 2005 and significant increases for the out years.
    Adequate funding for the High Temperature Electrochemisty Center and
    the Transportation budgets also will support the acceleration of the
    SECA program goals.

              FUTUREGEN--COMBINED HYDROGEN AND ZERO-EMISSION POWER

        The FutureGen Project is intended to design, build, and operate the
    worlds first near-zero emission coal-fueled hydrogen and power plant.
    The value to the global economy of developing this class of technology
    could literally be trillions of dollars.\3\ FutureGen technology also
    offers the potential to sustain affordable electricity prices to U.S.
    consumers over the coming decades in the face of ever increasing
    environmental requirements. Because the benefits are large, but
    diffusely distributed across the U.S. economy, the FutureGen Project is
    particularly well-suited to Federal funding through a public-private
    partnership.
    ---------------------------------------------------------------------------
        \3\ Through the use of peer-reviewed economic modeling, the Global
    Energy Technology Strategy Project concluded that central power plant
    and hydrogen production coupled with capture & sequestration could
    reduce the global cost of addressing climate change by trillions of
    dollars. The Global Energy Technology Strategy project includes
    participation from industry, government, and environmental NGOs in more
    than ten countries. It is one of the world's leading efforts to
    systematically explore the role of technology within the future U.S.
    and global energy system. (Edmonds, J., et al 2000. Battelle).
    ---------------------------------------------------------------------------
        FutureGen would be designed and built using a suite of advanced
    component technologies that are incorporated into an integrated system.
    Component technologies will include: advanced oxygen-blown
    gasification, coal gas clean-up processes, hydrogen and carbon dioxide
    separation technologies, an advanced hydrogen turbine, fuel cell
    technology, carbon sequestration, and others. Wherever, possible the
    research and engineering goal will be to push performance upward while
    driving down the cost. For some components, such as sequestration,
    there will be significant scientific challenges involved in predicting
    and monitoring the fate and effects of carbon dioxide that is injected
    into deep geologic formations. Public education and stakeholder
    involvement will also need to be central to the effort, as public
    acceptance of the technology is a critical project goal. Once the
    initial facility is completed, it is intended to be a world-class test
    bed for other advanced technologies. Given the scale of the scientific
    and engineering challenges, as well as the need for extensive
    stakeholder involvement, it is clear that FutureGen is far more than a
    traditional demonstration project. Further, with over 95 percent of all
    U.S. fossil-fueled power plants within 50 miles of a potential
    sequestration site,\4\ the results of FutureGen have the potential to
    be widely applicable.
    ---------------------------------------------------------------------------
        \4\ Based upon a screening analysis conducted as part of the Global
    Energy Technology Strategy project.
    ---------------------------------------------------------------------------
        The President's fiscal year 2005 budget request includes $237M for
    FutureGen with an outlay of $18M. Battelle supports protecting in
    statutory language the full $237M toward FutureGen design and
    construction and that $18M be made available in fiscal year 2005. It is
    extremely important to the viability of the project that the $237M be
    protected so that industry can have some level of assurance that the
    project will proceed and that the project merits their investment of
    several hundred million dollars in it. Further, it is extremely
    important to the scientific and technical integrity of the project that
    funds for FutureGen do not drain valuable resources from the base
    fossil energy R&D program. The FutureGen project will rely heavily on
    the base program for the underpinning science and technology that is
    necessary for FutureGen to be successful.
        Battelle also supports the establishment of a zero-emissions
    research and technology center which was included in the fiscal year
    2004 Interior Appropriations Senate Report. We understand that this
    center will focus on sequestration science and is consistent with the
    goals of FutureGen and the Department of Energy's sequestration
    program.''

                                 TRANSPORTATION

    Fuel Cell Technology for Transportation Systems
        Battelle firmly believes that fuel cells offer the long-term
    benefits of reduced fuel consumption, reduced emissions and broad
    applicability. To achieve commercial acceptance, substantial
    breakthroughs in both electrochemistry and production technology are
    necessary. Despite significant progress, the wide-scale adoption of
    fuel cells as a reliable prime mover is not likely until several
    decades in the future. However, the adoption of smaller fuel cells as
    ``auxiliary power'' units for heavy trucks and autos is a realistic
    goal for this decade, providing significantly lower fuel consumption
    than engine-driven generator sets and near-term stimulus to the
    production volume of fuel cells.
        Effectively integrating new technologies, such as the solid oxide
    fuel cells developed by SECA, requires a clear system-level
    understanding of the consequences and benefits of their use in truck
    designs. It also requires a coordinated effort between base technology
    being developed through programs such as SECA and the development,
    demonstration and deployment for specific applications such as
    transportation. Battelle believes the coordinated effort between SECA
    and Transportation should be encouraged and efforts expanded to
    integrate solid oxide fuel cells into heavy vehicle auxiliary power
    unit applications. Battelle encourages the subcommittee to support
    increasing Fuel Cell Technologies, Transportation Systems to $9.6
    million with the additional $2 million focusing on developing solid
    oxide fuel cells specifically for heavy vehicle applications. The
    additional resources will directly support technology goals of both the
    21st Century Truck Partnership and the Hydrogen Program.

             HEAVY VEHICLE HIGH STRENGTH WEIGHT REDUCTION MATERIALS

        A strong U.S. heavy truck industry is a critical component of a
    healthy economy. This industry is faced with major challenges over the
    next several years with respect to meeting future emission standards,
    reducing operating costs and maintaining vehicle efficiency. The 21st
    Century Truck Partnership has established technology goals that will
    address these challenges over the next 10 years. Reducing heavy truck
    weight by 5,000 pounds is one of the primary goals that enable
    efficiency on a ton-mile basis. The development of new technologies to
    reduce vehicle weight by 2010 and beyond will require an accelerated
    and coordinated national research and development program between heavy
    truck manufacturers, suppliers and research institutions.
        Funding for breakthroughs in the development of cost-competitive
    lightweight materials and advanced manufacturing processes for heavy
    vehicles is critical to meeting future goals. However, the fiscal year
    2005 request is $1 million below the fiscal year 2004 appropriation.
    Increased funding will allow heavy vehicle manufacturers to introduce
    lightweight materials onto heavy vehicles, reducing the weight of their
    trucks, increasing fuel efficiency and maintaining U.S. jobs and
    manufacturing leadership. To have an impact in this decade and beyond,
    lightweight materials are required and funding should be increasing not
    decreasing. Battelle believes that this is a critical shortfall and
    supports a $2.0 million increase for accelerating breakthrough programs
    in for Heavy Vehicle High Strength Weight Reduction Materials.

                             BIO-BASED PRODUCTS R&D

        Bio-based alternatives to petroleum-derived chemicals and materials
    are essential in developing a balanced future energy supply. Bio-based
    products provide the additional revenue streams that allow
    biorefineries to both produce large quantities of biofuels and to be
    economically viable. As the integrated biorefineries of the future are
    established, the bio-based chemicals and materials will continue to be
    essential economic drivers necessary to support the expansion of
    domestically produced biofuels. Battelle has teamed with major corn and
    wheat processors and chemical companies to accelerate the transition of
    these bio-based technology concepts into production.
        Over the last year, Battelle and its researchers at Pacific
    Northwest National Laboratory have made significant progress in this
    area. Through partnerships with industry and DOE, we have taken one
    technology concept to the demonstration stage at the site of a major
    commercial corn processor. In alignment with DOE's Office of Biomass
    Programs, we also have identified a focused set of highest priority
    chemical intermediate building blocks that can be produced from biomass
    resources.
        To effectively produce these intermediate building blocks from
    biomass, two efforts are needed. First, industry/DOE/laboratory
    partnerships such as those funded through the Interior Appropriations
    to establish advanced biorefineries should be continued. In addition, a
    laboratory-led program funded by DOE's Office of the Biomass Program to
    develop enabling R&D is needed The recent prioritization of needs in
    the area will allow this effort to proceed with a sharp focus on key
    issues including improved catalysis and bioprocessing using advanced
    fungal micro-organisms. Taken together, these efforts will help achieve
    energy savings and develop a balanced domestic energy supply.
        Battelle's industrial partners, including the crop associations,
    the agricultural processing industry, and select chemical industries,
    are committed to efforts to implement bio-based products and fuels.
    Battelle supports the Administration's budget request for bio-based
    products and recommends at least that level of funding be appropriated.
        We appreciate your attention to and interest in the Department of
    Energy's fuel, power and emission programs. Your continued support is
    essential to the success of the private sector/government partnerships
    in building a strong economy, global competitiveness and a healthy
    environment.

                        SUMMARY OF SUGGESTED ALLOCATIONS
                            [In millions of dollars]
    ------------------------------------------------------------------------
                                                             Fiscal year
                                                       ---------------------
                                                           2004       2005
    ------------------------------------------------------------------------
    Fossil Energy, Distributed Generation Systems:           35.0       50.0
     Innovative Concepts Solid State Energy Conversion
     Alliance.........................................
    Fossil Energy, President's Coal Research                  9.0  \1\ 237.0
     Initiative FutureGen.............................
    Energy Conservation, Vehicle Technologies, Fuel           7.6        9.6
     Cell Technologies Transportation Systems.........
    Energy Conservation, Vehicle Technologies, Fuel           7.8        9.8
     Cell Technologies Heavy Vehicle High Strength
     Weight Reduction Materials.......................
    Energy Conservation, Industries of the Future             8.8        8.7
     (Crosscutting) Biomass and Biorefinery Systems
     R&D..............................................
    ------------------------------------------------------------------------
    \1\ $237M of previously appropriated funds from the Clean Coal
      Technology Program is available to potentially support FutureGen.
      Battelle's suggestion is to protect in statute these funds for
      FutureGen design and construction activities, and consistent with the
      DOE program plan, make $18M available in fiscal year 2005 for pre-
      conceptual design and planning activities.

                                     ______

         Prepared Statement of the Biomass Energy Research Association

        This testimony pertains to the request for appropriations in fiscal
    year 2005 by the Department of Energy (DOE), Office of Energy
    Efficiency and Renewable Energy (EERE), for mission-oriented biomass
    energy research, development, and deployment (RD&D) funded under the
    Interior and Related Agencies Bill. The Biomass Energy Research
    Association (BERA) recommends that $33,000,000 be appropriated for
    these high-priority biomass programs in fiscal year 2005. Separate
    statements have been submitted in support of biomass RD&D performed by
    EERE under the Energy and Water Development Bill, and on forest biomass
    energy production by the U.S. Department of Agriculture Forest Service
    (USDAFS) under the Interior and Related Agencies Bill.
        The specific programs and budgets that BERA recommends for fiscal
    year 2005 are:
      --Incorporation of the Bioenergy and Bioproducts Initiative (BBI),
            created as a result of ``The Biomass Research and Development
            Act of 2000'' and Title IX of the Farm Bill, into EERE's
            Biomass RD&D funded by the Interior and Related Agencies Bill:
            $10,000,000. For industry cost-shared demonstration projects.
      --Under Biomass Programs, Biomass and Biorefinery Systems R&D,
            Utilization of Platform Outputs: $8,000,000. For continuation
            of commodity organic chemicals-from-biomass RD&D.
      --Under Industrial Technologies Program, Industries of the Future
            (Crosscutting), Gasification Programs: $11,000,000. For
            restoration of advanced black liquor gasification scale-up.
            This program targets two different processes, the development
            of which has been cost-shared by industry from the start.
            However, federal support is now zeroed-out, but it is still
            essential because without it, completion of the process
            development work at the existing large-scale facilities built
            in Virginia and North Carolina is unlikely. The technology
            should enable the U.S. pulp and paper industry to become more
            than energy self-sufficient.
      --Under Industrial Technologies Program, Industries of the Future
            (Specific), Forest and Paper Products Industry: $3,000,000. For
            continued development of advanced biomass processing
            technologies that operate at higher efficiencies.
      --Under FreedomCAR and Vehicle Tech Program, Fuels Technology, Non-
            Petroleum Based Fuels and Lubricants, Renewable and Synthetic
            Fuels Utilization: $1,000,000. For biomass-based fuel
            formulations.
        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 programs that we strongly urge
    be continued, restored, 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, fuels, and chemicals 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 original goal of the Biomass and Bioproducts Initiative (BBI)
    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 recommended funding level for industry cost-shared demonstration
    projects. 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 USA 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 RECOMMENDATIONS

        BERA's project recommendations consist of a balanced program of
    mission-oriented RD&D on conversion research and technology transfer to
    the private sector. Advanced conversion processes and power generation
    technologies, alternative liquid transportation fuels, and chemicals
    and hydrogen from biomass 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.
        As a result of the management and program restructuring started in
    fiscal year 2002 by EERE, major changes continue to be made in biomass
    RD&D funded under the Interior and Related Agencies Bill in the
    Industrial Technologies Program (formerly the Office of Industrial
    Technologies). With the exception of the BBI, BERA's recommendations
    for biomass RD&D are presented using EERE's program headings.

    Bioenergy and Bioproducts Initiative (BBI)
        BERA strongly urges that the BBI be added to the industry cost-
    shared scale-up projects in fiscal year 2005 at the funding level
    recommended by BERA, and that the highest priority be given to
    development of this program component.

    Biomass Programs, Biomass and Biorefinery Systems R&D, Utilization of
            Platform Outputs
        Commodity Organic Chemicals from Biomass (Formerly Agriculture
    Vision).--This program was started in fiscal year 1999. Projects were
    selected that used a variety of biomass feedstocks to produce
    industrial products such as chemicals, coatings, plastics, lubricants,
    and composite materials. The overall goal was to develop the
    technologies necessary to displace 10 percent of the fossil feedstocks
    with biomass for the production of commodity organic chemicals and
    chemical products. When the goal is fully implemented, it was projected
    to reduce fossil feedstock usage by 0.189 quad in 2010, and 0.545 quad
    in 2020. BERA indicated in previous testimony that it is important to
    include the process energy displaced too. In 1999, for example, the
    total fossil feedstock converted to chemicals was approximately 1.26
    million BOE/day. Ten percent of this value is 126,000 BOE/day, while
    the corresponding process energy consumption was about 136,000 BOE/day,
    or a total of about 0.6 quad annually. The potential energy savings is
    evident.
        EERE reported in fiscal year 2003 that no new research
    solicitations would be issued, and that the existing program would be
    integrated with the EERE-wide bioenergy and bioproducts solicitations
    that focus on biorefinery development. However, the existing university
    grants may be increased, and new solicitations may be issued in this
    area. Twelve active projects were scheduled to be continued at that
    time. They focused on novel separations technology; the production of
    plastics, foams, adhesives, and coatings based on sugars and vegetable
    oils; lower cost and energy use in harvesting, pre-processing, and
    biomass storage; and the modification of crops to reduce the cost,
    processing requirements, and energy consumption in the use and
    conversion of the crops to products. It was expected that 2 projects
    will involve scale-up to pilot-scale demonstrations with industry, and
    1 or 2 will involve commercialization projects on new biopolymers or
    solvents. Technology breakthroughs were expected that will improve
    plant composition for conversion to products, and provide novel, lower
    cost, less energy-intensive harvesting and storage technology.
        EERE requested a total of $8,280,000 for fiscal year 2005 to
    continue this research and to focus on development of processes that
    can be integrated into biorefineries. In fiscal year 2004, the budgets
    were $3,304,000 for thermomochemical conversion products, $5,104,000
    for bioconversion products, and $400,000 for technical management. A
    budgetary breakdown was not provided for fiscal year 2005. The goals in
    fiscal year 2004 were to evaluate the existing portfolio of projects in
    fiscal year 2003, to select and continue those projects that are
    commercially promising with significant potential for energy savings,
    to complete validation at the pilot scale in partnership with industry
    of one new biobased product with long-term potential sales greater than
    2 billion lb/yr for economic, technical, and product viability, and to
    increase product yields and energy efficiency in key chemical product
    chains by more than 30 percent.
        BERA believes that this effort is very worthwhile. Successful
    commercialization of organic chemicals-from-biomass research is
    expected to result in many regional and national benefits because
    virtually all commodity organic chemicals and products--including
    plastics and petroleum- and natural gas-derived chemicals--can be
    manufactured from biomass. Focusing on reducing the energy intensity of
    established organic chemical commodities as well as on new products
    where appropriate has a high probability of commercial success and of
    displacing significant amounts of fossil fuels.

    Industrial Technologies Program, Industries of the Future
            (Crosscutting)
        Gasification Programs (Formerly Industrial Gasification).--The
    largest part of this research, which started several years ago, was the
    industry cost-shared program to develop and commercialize the
    gasification of black liquor. In the appropriations request for fiscal
    year 2004, DOE states that funding for technology development and
    validation appear to be within industry's capability, so funding was
    not requested in view of the industry's ability to pursue further
    development without DOE support. While industry has provided all
    funding for a small-scale, black liquor gasification facility in
    Canada, there has been no such commitment from paper companies for
    projects in the United States. Therefore, BERA strongly urges that this
    program be continued with industry cost-sharing to the point where
    industry will assume all financial risks.
        There are several reasons that support BERA's position. Black
    liquor gasification provides a pathway to combined electric power
    generation and the recovery and recycling of chemicals for the pulp and
    paper industry at much higher efficiencies than the industry currently
    realizes from combustion methods. Presuming there is wide-spread
    acceptance of one or both of the two basic processes under
    development--high-temperature processing at the facility in New Bern,
    North Carolina, and low-temperature processing at the facility in Big
    Island, Virginia, both of which are operational--adoption by the pulp
    and paper industry is projected to eliminate all power purchases and to
    make the industry energy self-sufficient. Large-scale use of these
    technologies would provide about 30 GW of renewable generating
    capacity, which is about three times the capacity of today's biomass-
    fueled generating systems. Also, it is estimated that industry's use of
    this technology would reduce carbon emissions by more than 30 million
    tonnes each year. The pulp and paper industry currently purchases over
    90 TWh of electricity annually.
        It is important to emphasize that the pulp and paper industry has
    been involved in cost-sharing these programs since they were started;
    it has a sizable investment in this effort to date. The benefits of
    their participation will probably be lost if the programs are zeroed-
    out at this time. According to discussions with industry
    representatives during review of this research by BERA, the industry is
    not expected to continue the work without DOE support because of its
    current economic position and the risks involved.

    Industrial Technologies Program, Industries of the Future (Specific)
        Forest and Paper Products Industry.--EERE staff has estimated that
    this effort can reduce fossil energy usage by 0.080 quad in 2010, and
    0.258 quad in 2020.
        The program for fiscal year 2003 was described as follows:
    Sustainable Forestry consists of approximately 8 projects on
    biotechnology, tree physiology, and sustainable soil productivity,
    including the continuation of studies to develop process models to
    predict the effect of forest management on growth and productivity on
    managed forests; Energy Performance consists of approximately 12
    projects on efficiency, heat recovery, wood and paper drying, deposit
    formation in boilers, and corrosion-resistant materials for black
    liquor gasifiers; Environmental Performance consists of approximately 7
    projects to develop advanced pollution prevention technologies, reduce
    pollution abatement costs, and demonstration of volatile organic
    compound emissions reductions at a forest products mill; Improved
    Capital Effectiveness consists of approximately 10 projects focused on
    system and process efficiency and materials of construction and
    fabrication; Recycling consists of approximately 7 projects to reduce
    energy use and fiber deterioration in recycling, improving separation
    technologies, expanding the use of recycled fibers, and optimizing
    drying processes; Sensors and Controls consists of 5 projects on the
    development of actuators and control devices, process and product
    measurement and modeling, data interpretation, and a wireless
    microwave-based moisture sensors for use in wood-drying kilns.
    Substantial programmatic reductions have occurred because the
    corresponding appropriations for fiscal year 2003 and fiscal year 2004
    were $10,488,000 and $8,000,000, and the request for fiscal year 2005
    is $3,000,000. Detailed R&D by project type and the status of the
    existing projects could not be found for fiscal year 2004 and fiscal
    year 2005.
        One of the goals for fiscal year 2005 is to continue to support
    voluntary efforts by the American Forest & Paper Association and other
    industry organizations to improve their energy efficiency and
    environmental performance through the industry's Agenda 2020. This
    activity includes cost-shared research. In fiscal year 2004, those
    activities with the highest long-term energy savings potential were
    scheduled to be continued, such as development of new paper dewatering
    techniques, advanced sustainable forestry projects, scale-up of solid
    waste recovery technology, and the selection of new projects that help
    improve energy efficiency and environmental performance that industry
    would not undertake without federal support. However, the stated goal
    for fiscal year 2005 is to fund a smaller number of larger projects
    that have high energy savings potential. BERA agrees with this
    approach.

    FreedomCAR and Vehicle Program, Fuels Technology, Non-Petroleum Based
            Fuels & Lubricants
        Renewable and Synthetic Fuels Utilization.--This research addresses
    the formulation and evaluation of biomass-based fuels when used alone
    and as blending agents in petroleum fuels. Specific areas being
    investigated include the effects on bulk fuel properties, storage,
    handling, toxicity, volatility, and engine performance. Presuming
    similar work is not in progress by industry, BERA agrees with this
    effort.
                                     ______

                     Prepared Statement of Caterpillar Inc.

        Caterpillar Inc. appreciates the opportunity to present its
    comments for the record addressing the Department of Energy fiscal year
    2005 budget request for heavy-duty transportation research and
    development within the Office of FreedomCAR and Vehicle Technologies
    (FCVT). Caterpillar Inc., a Fortune 100 company headquartered in
    Peoria, Illinois, is the world's largest manufacturer of construction
    and mining equipment and diesel and natural gas engines used in a
    variety of applications. We are the leading worldwide supplier of
    heavy-duty off-road vehicles and diesel engines for medium and heavy-
    duty on-road trucks, competing globally, with a large U.S.
    manufacturing base.
        Our longstanding partnership with the Department of Energy has
    resulted in the development of an R&D technology road map to assure
    that project goals are consistent with national priorities and fiscally
    responsible. Some building blocks for Caterpillar's innovative, fuel-
    efficient and clean Advanced Combustion Emissions Reduction Technology
    (ACERT) are a direct result of collaborative R&D efforts between our
    company and the DOE.
        As such, Caterpillar is concerned with the significant reductions
    in key line items in the fiscal year 2005 FreedomCAR and Vehicle
    Technologies Program budget submission. Caterpillar understands the
    need for the Department to focus attention on emerging technologies
    such as fuel cells and hydrogen power. We believe it is equally
    important to maintain and accelerate R&D efforts that will provide
    ``bridge technologies'' to meet the needs of our nation and our
    transportation industry through this decade and the next. Our comments
    will focus on seven program areas plus a note on the 21st Century Truck
    Partnership. These provide the collaboration and funding of the bridge
    technologies that are essential to improving fuel efficiency and
    retaining the competitiveness of our nation's commercial transportation
    sector.
        Heavy Truck Engine.--The Heavy Truck Engine Program, with an fiscal
    year 2005 agency request of $10.4 million, is a competitively-bid, 50
    percent industry cost shared program designed to squarely address the
    impact on fuel efficiency of upcoming federal emission standards. These
    emissions reductions--targeted for model year 2007 and again in 2010--
    could result in a 10 percent fuel penalty for heavy-duty trucks, which
    currently consume 30 percent of on-road transportation fuel.
        Moreover, additional owning and operating costs associated with
    emissions reduction equipment is apt to cause a shift from diesel to
    gasoline engines in the lower use range of heavy trucks. The shift
    would cause fuel use to increase by 33 percent for these trucks since
    gasoline engines are less efficient than diesels. Given the less
    efficient new diesel engines and some shift from diesel to gasoline
    engines, we might expect to see a 20 percent increase in fuel use
    rather than a 10 percent decrease that a successful DOE program could
    provide. That's a difference of 30 percent in fuel use by commercial
    trucks or approximately 1 MBPD (million barrels per day) which
    represents 40 percent of current Mid East OPEC oil imports.
        Caterpillar's focus in this program includes the development of
    advanced fuel and combustion systems, exhaust aftertreatment systems
    and friction reduction to help improve fuel efficiency.
        In the 3 years since the program's inception, we have learned that
    the technical challenges are even greater than originally expected.
    Significant fuel penalties are a near certainty unless a technology
    breakthrough is created through this DOE program. Progress on HCCI
    (Homogeneous Charge Compression Ignition) combustion with near zero
    emissions has been very positive and beyond expectations. The
    Caterpillar/DOE project now leads the world on HCCI combustion and has
    already overcome one (sufficient power density) of the two primary
    technical obstacles to commercial viability. However, much work remains
    to provide the overall control capability needed for market acceptance.
        The application of exhaust aftertreatment technologies has numerous
    challenges also addressed in this program. At last year's DOE DEER
    (Diesel Engine Emission Reduction) conference, Caterpillar demonstrated
    a class 8 truck that met the 2007 emissions regulation without a
    significant fuel efficiency penalty. As a result, we have more time
    than usual to develop a fuel efficiency improvement by the 2007
    deadline. With the extraordinary progress on HCCI combustion, this Cat/
    DOE project is on track to meet the next emission level in 2010 with
    ultra clean, breakthrough combustion technology requiring a minimum of
    aftertreatment and providing improved fuel efficiency.
        The Caterpillar/DOE team has proven it can deliver at least one
    half of a true technology breakthrough and is now best positioned to
    deliver the full technology solution. Caterpillar strongly urges the
    subcommittee to approve the funding level needed to fully meet the
    program goals. Our program has huge payback potential, solid overall
    program design, management and fit. It is 50 percent cost-shared by
    industry, and is performing beyond expectations.
        We strongly recommend fiscal year 2005 funding for this line item
    at $20 million (fiscal year 2004 actual was $11.8 million, fiscal year
    2005 request is $10.4 million) to reflect the urgency of pulling
    forward technologies to meet the fuel efficiency and emissions
    challenges facing our transportation system and to take advantage of
    the recent strides towards clean and fuel efficient combustion. These
    types of technology breakthroughs are rare and a big win in reducing
    foreign oil dependence and improving the environment and U.S.
    competitiveness.
        Advanced Petroleum Based Fuels.--Two activities conducted within
    this subprogram have had the active participation and support of the
    heavy-duty diesel engine industry. In the first instance, the Advanced
    Petroleum Based Fuels (APBF) activity for heavy-duty engines began with
    an evaluation of new fuel formulations and their impact on the two most
    promising types of future aftertreatment systems. This program is the
    only program addressing these critical issues where all the key
    industry and government stakeholders agreed on the program design and
    execution, and agreed to accept the results. This leads us to a more
    informed public policy debate and more effective use of technology for
    the public good. The introduction of reliable aftertreatment devices
    with the most cost effective and compatible fuel for heavy-duty engines
    is critically important to meeting our national goals of cleaner air
    and improved fuel efficiency.
        In addition to the fuels/aftertreatment effects work, this program
    includes a new effort that finally brings the engine companies and the
    energy companies together to tailor the fuel properties (within
    commercially viable limits) to the new ultra clean and efficient
    combustion regimes. This effort holds enormous potential for meeting
    national efficiency and emissions goals and for improving U.S.
    competitiveness. Congress approved $10.3 million in fiscal year 2004
    for the combined light duty and heavy-duty line item with $6.3 million
    of that for heavy-duty. We strongly urge Congress to maintain the
    heavy-duty portion at that same level ($6.3 million) again in fiscal
    year 2005 despite the request of only $4.0 million.
        Materials Technology/Advanced Heavy-Duty Propulsion Materials.--New
    and improved materials are a key enabler for many engine system
    programs. With the recent breakthroughs in new, clean and efficient
    combustion regimes in our DOE programs, the development of new and
    improved materials is critically important. Along with the commitment
    to this breakthrough technology are the engine's structural challenges
    in accommodating the much higher pressure rise rates of HCCI. These are
    slightly beyond the traditional design options with current materials.
    So along with the combustion development we also must advance the
    materials technology to assure a commercially viable breakthrough
    engine.
        The heavy-duty portion of the fiscal year 2004 Materials Technology
    line item was only $5.8 million of the $39.7 million enacted. An
    additional $2 million could be well utilized, to address HCCI
    structural needs and accelerate aftertreatment development in areas
    showing new promise. We urge the subcommittee to increase the Fiscal
    2005 requested level by $2 million, bringing the total to $41.8 and
    providing $7.8 million for the heavy-duty portion.
        Combustion and Emissions Control.--An important element of this
    comprehensive program, currently underway at Sandia Livermore, Lawrence
    Livermore and Los Alamos national laboratories, focuses on the need to
    understand fundamental combustion processes, the development of
    computer modeling of these processes and validation on laboratory
    engines. The development of sophisticated computer modeling is
    important for the timely, cost-effective introduction of future clean
    and efficient power systems for a variety of engine applications. This
    program funds several Cooperative Research and Development Agreements
    (CRADA's) working on the development of exhaust aftertreatment
    technologies requiring the unique talent and equipment available at the
    DOE national laboratories. Caterpillar urges the subcommittee to fund
    this line item at $24 million (an increase of $2 million over the DOE
    request), and allocate it equally between light-duty (FreedomCAR) and
    heavy-duty (21CTP) projects.
        Vehicle System Optimization.--In recent years, impressive gains in
    heavy truck fuel efficiency have been first developed and demonstrated
    by the Caterpillar/DOE ``More Electric Truck Program''. The basic
    effort replaces all belt and gear driven accessories such as water
    pumps, oil pumps, fans, air conditioning compressors, etc. with
    electric motor driven accessories that then can be managed on a power-
    by-demand strategy. This improves efficiency by not overpowering
    accessories at higher engine speeds and also by providing the
    electrical infrastructure for an auxiliary power unit (apu, for reduced
    idling of the main engine), electric turbo compounding of the engine
    and an integrated starter/generator for varying degrees of powertrain
    hybridization.
        Further work is needed to incorporate power management of
    aftertreatment and a fuel cell apu for maximum benefit of the system
    optimization and to develop the new system for the best early market
    entry truck application. We recommend an increase of $1.5 million over
    the DOE requested $10.3 million.
        Off-Highway Vehicles.--According to the U.S. Environmental
    Protection Agency, non-road diesel engine emissions of oxides of
    nitrogen (NOX) will comprise 38 percent of all mobile
    service NOX emissions by 2010 with diesel particulates (PM)
    accounting for 60 percent of all mobile source PM emissions. The USEPA
    has initiated a phased-in emission reduction timetable. Tier 3
    regulations are scheduled to be phased in during 2006 to 2008 and Tier
    4 is to be phased in during 2008 to 2014. Without major technological
    breakthroughs, these emission requirements will cause a significant
    increase in fuel use. And while some technologies developed for on-road
    engines can be transferred to non-road applications, the lack of
    cooling airflow to the engines, differing duty cycles, a much harsher
    environment and use of extremely high sulfur fuel necessitate the
    development of new technologies to meet the demands of off-highway
    equipment.
        Without the DOE program, as with the heavy truck engine program, a
    fuel use increase is inevitable beyond EIA future energy use
    predictions. The lower fuel prices in the United States do not create
    enough customer pull for fuel efficiency to justify a 100 percent
    industry investment to develop this technology. A 10 percent increase
    in fuel use in off-highway does not equal the total used for on-highway
    but it is significant nonetheless. In fact, dedicating research and
    development resources to make off-highway vehicles 10 percent more
    efficient is a sound investment. It allows us to leverage technology
    from the heavy truck engine program, find ample opportunity for
    increased emissions and fuel efficiency in the off-highway sector, and
    rely on strong industry support for leveraged programs using the full
    array of technology options and providing clear paths to
    commercialization.
        In fiscal year 2004 Congress increased the funding level to $3.5
    million, earmarking the funds for emissions, fuel cell and locomotive
    R&D. However, DOE has terminated the program for 2005. Caterpillar
    strongly supports retaining the fiscal year 2004 Congressional funding
    level of $3.5 million with $2.0 million earmarked for high efficiency
    off-highway equipment.
        Health Impacts.--The data from the ``source apportionment,''
    ``ambient ozone,'' ``comparative toxicity'' and other related studies
    conducted under this line item, and the now terminated ``Environmental
    Impacts'' line item, are the only accurate measurements available and
    are vitally important to identifying the health and environmental
    impacts of various technology options for land vehicle propulsion.
    Despite the obvious importance of these activities, no other agency has
    been willing to fund this work. DOE has undertaken the effort because
    of the direct relationship between emissions reductions, fuel
    efficiency and potential health/environmental impacts of some choices
    if a proper and complete evaluation is not conducted. To ignore health/
    environmental impacts during this type of R&D could easily lead to the
    wrong fuel, combustion, or aftertreatment technology choice with
    negative health and environmental impacts. An example of a new project
    this line could help is the Advanced Collaborative Emissions Study
    (ACES) which is a cooperative effort between DOE, EPA, EMA (Engine
    Manufacturers Association), MECA (Manufacturers of Emission Controls
    Association), and API (American Petroleum Institute) to study potential
    impacts of the new aftertreatment options that lower the traditional
    emissions of concern. In pursuing this, however, we need careful
    evaluation for any new, unanticipated emissions. We urge Congress to
    increase this line item by $2 million over the request, making it $4
    million for fiscal year 2005.
        21st Century Truck Partnership.--The 21st Century Truck Partnership
    was created to provide a systems-wide approach to addressing our
    national transportation priorities. This collaborative effort includes
    16 companies and the Departments of Energy, Defense and Transportation
    and the Environmental Protection Agency. The partnership embraces 214
    projects with annual federal funding approaching $120 million.
    Operating within the 21st Century Partnership, industry and government
    will develop critical R&D synergies and establish technology priorities
    to avoid any funding redundancies. Caterpillar supports this unique R&D
    collaborative effort and commends the Department of Energy for its
    leadership. We are active participants and are constantly looking for
    higher ROI projects to support and lower ROI projects to terminate.
        Mr. Chairman, Caterpillar believes that the FreedomCAR and Vehicle
    Technologies Program effectively addresses real-world technology
    challenges through the leveraging of public and private sector
    resources. Achieving the goals set forth in these programs is
    critically important to meeting our nation's energy and environmental
    imperatives while maintaining the competitiveness of our transportation
    sector.
                                     ______

     Prepared Statement of the Center for Advanced Separation Technologies

        Chairman Burns and Members of the Subcommittee, I represent the
    Center for Advanced Separation Technologies (CAST), which is a
    consortium of seven leading U.S. mining schools. I appreciate the
    opportunity to submit this testimony requesting your committee to add
    $4 million to the 2005 Fossil Energy Research and Development budget,
    U.S. Department of Energy, for advanced separations research. The
    research in advanced separations is an integral part of the Solid Fuels
    and Feedstocks Program of the Fossil Energy R&D.

                  CENTER FOR ADVANCED SEPARATION TECHNOLOGIES

        The Center for Advanced Separation Technologies (CAST) was formed
    in 2001 between West Virginia University and Virginia Tech with the
    objective of developing technologies that can help the U.S. coal
    industry produce cleaner solid fuels with maximum carbon recovery in
    environmentally acceptable ways. Initially, the scope of work was
    limited to developing efficient solid-solid and solid-liquid separation
    technologies. In 2002, five other universities: Montana Tech of the
    University of Montana, University of Kentucky, University of Utah,
    University of Nevada, Reno, and New Mexico Tech, joined the consortium
    to develop crosscutting technologies that can also be used by the U.S.
    minerals industry. As a result, the scope of work was expanded to
    chemical/biological separations and environmental control. By working
    together as a consortium, we can take advantage of the diverse
    expertise available in the member universities and our research
    activities can address the interests of different geographical regions
    of the country. Doing research as a consortium is consistent with the
    recommendation of a recent National Research Council (NRC) report, part
    of the National Academy of Science. The report states that ``consortia
    are a preferred way of leveraging expertise and technical inputs to the
    mining sector,'' and suggests that the U.S. Department of Energy
    support ``academia, which helps to train technical people for the
    industry.''
        The United States is the second largest mining country of the world
    after China, followed by South Africa and Australia. In 2003, the U.S.
    mining industry produced a total of $56.9 billion of raw materials,
    including $19.3 billion from coal and $37.6 billion from minerals.
    Australia is a much smaller mining country, but it is investing
    extensively in advanced separations research. It has a total of five
    centers of excellence in the area of advanced separations research. As
    a result, Australia exported $3 billion worth of mining technologies
    and services in both 2001 and 2002, and its government has developed
    plans to increase the exports to $6 billion by 2010. In the U.S., CAST
    is the only center of excellence in advanced separations research as
    applied to coal and minerals processing.

                                    PROGRESS

        With the generous funding approved by your Committee, a total of 31
    research projects are being carried out at the seven CAST member
    universities. The project selection was made by an industry panel in
    accordance with the priorities set forth in the CAST Technology Roadmap
    created as a result of the workshop held in Charleston, WA, August 14-
    15, 2002. The research results were presented at the First Annual CAST
    Workshop, Charleston, WV, November 19-21, 2003. The meeting was
    successful with 120 participants, 60 percent of which from industry.
        U.S. coal companies in the eastern and interior regions are under
    pressure due to declining coal reserves, escalating production costs,
    and competition from western low-sulfur coals. Yet, considerable
    amounts of fine coal is lost during cleaning operations due to the lack
    of appropriate solid-solid and solid-liquid separation technologies,
    particularly the latter. The loss of fine coal contributes to high
    production costs and results in a large number of refuse impoundments
    that create serious environmental concerns. To address these problems,
    several solid-liquid separation (i.e., dewatering) methods have been
    developed by CAST. Nalco Company recently acquired a license for the
    chemical dewatering technologies, some of which are already being used
    in industry. CAST also developed a hyperbaric centrifugal filtration
    method, which is under license negotiations with Decanter Machine, Inc.
    More recently, a method of minimizing the loss of ultrafine coal in
    screen bowl centrifuges has been developed. To date, four major coal
    companies have implemented this technology. Combined with a deep-cone
    thickener, which is being evaluated by CAST, the new dewatering
    technologies may be used to eliminate the troublesome refuse ponds.
        The cost of recovering copper in the United States is high due to
    low ore grades. To combat this situation, CAST is developing a
    revolutionary method of extracting copper from chalcopyrite, which is a
    difficult-to-leach copper mineral, by dispersing nano-sized silica
    particles in solution. Copper recoveries of up to 88 percent have been
    achieved in the laboratory-scale tests conducted to date. The largest
    copper company in the U.S. (Phelps Dodge Corporation) has shown keen
    interest in this technology. In Montana, the use of cyanide for gold
    leaching is banned to protect the environment. A noncyanide leaching
    process is being developed with a promising 82 percent gold recovery in
    initial tests. In addition, a new flotation technology has been
    developed to produce highvalue trona (sodium carbonate mineral)
    products. General Chemical Company is planning to conduct pilot-scale
    tests during the summer of 2004. If the results are satisfactory, a new
    processing plant will be constructed in Wyoming.
        According to an EPA report to Congress, the cost of removing 90
    percent of mercury from combustion gas is $3.10 per MWh or $37,800 per
    pound of mercury. In an effort to reduce this cost, CAST has developed
    a novel metallic filter that can remove 95 percent of mercury, and a
    new sensor capable of detecting less than 1 ppb (parts per billion) of
    mercury.

                         NEXT STEP AND FUNDING REQUEST

        CAST is developing a broad range of advanced separation
    technologies that can be used by both the coal and minerals industries.
    While some of the research results are already in use in industry, many
    other promising technologies will be brought to commercial application
    with further research.
        Your Committee approved $3 million for fiscal year 2004. This year
    we are requesting $4 million of funding i) to continue to develop
    crosscutting advanced separation technologies that can benefit both the
    U.S. coal and minerals industries and ii) to initiate new research
    activities in mercury removal. The additional $1 million we are
    requesting will be used to develop advanced mercury removal
    technologies.
        According to the rules proposed by EPA on December 15, 2003, pre-
    combustion separation technologies can help the industry reduce control
    costs significantly. Recent research conducted by CAST member
    universities has shown that approximately 70 to 80 percent of the
    mercury can be removed from some of the eastern U.S. coals using
    advanced pre-combustion separation technologies. Further research is
    needed to develop alternatives to the costly post combustion control
    technologies such as activated carbon injection (ACI).
        The advanced separation technologies developed by CAST can also be
    used to remove the spent activated (or unburned) carbons from fly ash.
    Removal of mercury-loaded carbons is critically important for recycling
    the combustion by-product and for preventing the toxic element from
    being released into the environment. Furthermore, the advanced
    separation technologies developed by CAST can play an important role
    for developing zero-emission coal technologies, e.g., by providing
    appropriate minerals (serpentines) that can be used to sequester carbon
    dioxide.
                                     ______

          Prepared Statement of the Consortium for Fossil Fuel Science

                          OVERVIEW AND FUNDING REQUEST

        The U.S. Department of Energy has announced two major programs
    based on hydrogen. ``FreedomCar'' envisions a new generation of
    vehicles powered by fuel cells, while the goal of ``FutureGen'' is to
    develop hydrogen-based, pollution-free, power plants that use hydrogen
    produced from coal in both fuel cells and hydrogen-fired turbines. This
    document outlines a hydrogen research program to be conducted by
    faculty and students from the five universities (University of
    Kentucky, West Virginia University, University of Utah, University of
    Pittsburgh, and Auburn University) that comprise the Consortium for
    Fossil Fuel Science (CFFS). The research will focus on the production
    of hydrogen and hydrogen-rich liquid fuels from coal-derived syngas,
    coalbed methane, and other hydrocarbons using C1 chemistry, an area in
    which the CFFS has significant expertise and experience. The CFFS is
    requesting $2.5 million from the U.S. Department of Energy, Office of
    Fossil Energy (DOE-FE), in fiscal year 2005 to initiate this research
    program. As in previous years, the five CFFS universities will provide
    $0.25 of cost-sharing for each federal $1.00, for a total cost-share of
    $625,000 in fiscal year 2005.
        The overall goals of the program are:
        1. Develop technology to produce high purity hydrogen from coal-
    derived syngas, hydrocarbons produced from syngas, coalbed methane, and
    other hydrocarbons.
        2. Develop catalytic processes to produce high-hydrogen content
    liquids from coal-derived syngas and to dehydrogenate them to produce
    pure hydrogen in fuel cell-powered vehicles.
        3. Develop novel solid materials that have high capacity for safe
    hydrogen storage.
        4. Improve technology for the large-scale production of hydrogen-
    rich syngas from coal.

                                RESEARCH PROGRAM

        The CFFS research program on hydrogen has been formulated through
    consultation and discussions with program managers at the DOE-FE
    National Energy Technology Laboratory (NETL) and with the members of
    the CFFS Industrial Advisory Board (Chevon-Texaco, Eastman Chemical,
    Air Force Research Laboratory, U.S. Army National Automotive Center,
    Conoco-Phillips, and Electric Power Research Institute). The program
    should contribute significantly to accomplishing the goals in four of
    the six critical hydrogen research areas DOE-FE has identified in the
    Fuels Program budget for fiscal year 2005, as summarized below.
    Small-scale hydrogen production systems with CO2 capture/sequestration
            capability
      --A continuous fluid-bed reactor will be developed for catalytic
            dehydrogenation of methane and other hydrocarbon gases to
            produce pure hydrogen and carbon nanotubes in a single step.
            This process produces no CO or CO2; instead, it
            converts all carbon into a valuable solid by-product, carbon
            nanotubes. The pure hydrogen product can be used directly in
            polymer electrolyte membrane (PEM) fuel cells used in vehicles.
      --Decomposition of hydrocarbons in supercritical water will be
            investigated. This reaction should result in the separation of
            a hydrogen-rich gas phase from a CO2-rich liquid
            phase.
      --Aqueous phase reforming of coal-derived ethylene glycol and
            polyethylene glycol proceeds more easily than reforming of
            hydrocarbons. Reforming and the water-gas-shift are both
            favorable at the same low temperature to produce hydrogen with
            very low levels of CO.
      --Some companies favor direct methanol fuel cells for many
            applications. However, ethanol (produced either from coal or
            corn) may be a better choice because it has higher hydrogen
            content and a good environmental image. The CFFS will
            investigate catalytic steam reforming of ethanol to produce
            hydrogen with very low concentrations of CO or CO2.
        The goal of this research is to develop several novel approaches
    for making a hydrogen product containing little or no CO or CO2 from
    coal-derived hydrocarbons or coalbed methane.
    Producing high hydrogen content liquids from coal for subsequent on-
            board production of hydrogen in vehicles powered by fuel cells
      --Develop catalytic synthesis and hydrogenation processes to produce
            hydrocarbon liquids of high hydrogen content from coal-derived
            syngas.
      --Investigate the hydrogenation reaction of liquid hydrocarbons in
            supercritical fluid CO2.
      --Develop catalysts consisting of metal nanoparticles on novel
            supports (carbon nanofibers, molecular sieves, silica gels) to
            produce hydrogen by partial dehydrogenation of liquid fuels.
        The goal is to produce hydrogen in vehicles from liquid carriers
    that fit into the current refueling station and fuel tank
    infrastructure. Furthermore, high hydrogen content liquid fuels may
    yield more miles per gallon in conventional vehicles.

    Storing and delivering hydrogen
        Solid materials are an attractive option for storage and delivery
    of hydrogen. Such materials are much safer, flame-resistant, hydrogen
    carriers than gas or liquid storage tanks. CFFS scientists will
    investigate four types of novel hydrogen storage materials: (i)
    stacked-cone carbon nanotubes; (ii) silica glass nano-balloons; (iii)
    phosphine metal polyhydrides; and (iv) metal hydride alloys.
        Achieving the DOE goal of 8-15 weight percent hydrogen capacity
    would not only stimulate the hydrogen economy but could also lead to a
    new industry producing storage materials.
    Development of advanced system components
      --One key to more efficient large-scale production of hydrogen from
            coal-derived syngas is improving the water-gas shift reaction
            (WGS). The CFFS will investigate economical iron-based ferrite
            compounds containing secondary elements (zinc, nickel, etc.) as
            WGS catalysts.
      --Autothermal reforming of hydrocarbon fuels will be investigated as
            a possible direct route for producing a hydrogen-rich gas for
            solid-oxide fuel cells (SOFC).

                                    SUMMARY

        The Consortium for Fossil Fuel Science is requesting $2.5 million
    in fiscal year 2005 to initiate an integrated multi-year research
    program focused on four of the six critical hydrogen research areas
    identified in the DOE Fossil Energy Research and Development budget
    request. An overview of the program is presented in the Table below.
    Column 1 gives the hydrogen research area identified in the Fossil
    Energy budget request, while column 2 briefly summarizes the overall
    objective of the CFFS research effort in that area.

    ------------------------------------------------------------------------
        DOE fossil energy budget area         CFFS program area objective
    ------------------------------------------------------------------------
    Small-scale hydrogen production        Produce high purity hydrogen from
     systems with CO2 and CO removal.       coal-derived syngas,
                                            hydrocarbons produced from
                                            syngas, coalbed methane, or
                                            other hydrocarbons.
    High hydrogen content coal-derived     Develop catalytic processes to
     liquids for on-board production of     produce and dehydrogenate high-
     hydrogen in vehicles.                  hydrogen content liquid fuels
                                            from coal-derived syngas.
    Storing and delivering hydrogen......  Synthesize novel solid materials
                                            that have high capacity for safe
                                            hydrogen storage.
    Advanced system components...........   Improve technology for
                                            production of hydrogen-rich
                                            syngas from coal.
    ------------------------------------------------------------------------

        Achievement of these goals will accelerate the development of a
    hydrogen economy. We believe this can be accomplished within a three to
    five year research program.
                                     ______

                       Prepared Statement of Cummins Inc.

        Cummins Inc is pleased to provide the following statement for the
    record regarding the Department of Energy's fiscal year 2005 budget for
    Energy Efficiency and Renewable Energy and Fossil Energy programs.
    Cummins Inc., a global power leader, is a corporation of complementary
    business units that design, manufacture, distribute and service engines
    and related technologies, including fuel systems, controls, air
    handling, filtration, emission solutions and electrical power
    generation systems. Cummins is headquartered in Columbus, Indiana. We
    share the goal of improving our air quality and are committed to
    pursuing technologies that benefit the environment. We request that the
    Committee fund the programs as identified below.

                     ENERGY EFFICIENCY AND RENEWABLE ENERGY

    Office of FreedomCAR and Vehicle Technologies (FCVT)
        Advanced Combustion Engine R&D--Heavy Truck Engine.--Diesel engine
    emissions have been reduced by about 90 percent over unregulated
    levels. By 2010, the engine manufacturers will have to reduce
    NOX emissions another 90 percent to near zero levels.
    Technologies to meet these levels require significant additional R&D
    work. Although some technologies show initial promise in controlled
    laboratory experiments, there are serious and fundamental technical
    roadblocks to the development of a system that will be technically and
    commercially robust to the required emissions life of 435,000 miles.
    The Department of Energy's Heavy Truck Engine program is designed to
    aggressively address technology issues in this area to meet emissions
    standards with fuel economy levels as good as or better than previous-
    generation products. The level of technical challenge is very high and
    DOE's Heavy Truck Engine program must be focused and accelerated to
    meet this challenge on time. Cummins urges that $20M be appropriated
    for the program for fiscal year 2005.
        Advanced Combustion Engine R&D--Off-Highway Heavy Vehicle Engine
    R&D.--Meeting stricter emissions standards for off-highway vehicles and
    machines is particularly challenging. Off-highway vehicles and machines
    operate under severe environmental conditions, including high dust,
    debris, a wide range of altitudes, temperatures and vibration. Off-road
    engines are applied to hundreds of different types of equipment in a
    wide range of industries, such as agriculture, construction and mining.
    Off-road markets are very sensitive to installed cost for engine
    components. The absence of natural cooling and limited space for
    accessories and engine components significantly limits emissions
    compliance strategies. The Department of Energy's Off-Highway Vehicle
    Engine R&D program is designed to transfer applicable on-highway
    technologies to off-road vehicles without sacrificing fuel consumption,
    system complexity and equipment space. To date, solutions in this area
    have been cost prohibitive for the total system and deemed infeasible.
    Since its beginning in 2002, the Off-Highway program has made
    significant progress in developing analytical tools used to define key
    combustion design parameters and their sensitivities for engine-out
    emissions. Continued funding is critical to investigate lower cost
    architectures with reduced fuel consumption penalties. Cummins urges
    that $3.5M be appropriated for this program for fiscal year 2005.
        Advanced Combustion Engine R&D--Combustion and Emission Control
    R&D.--The Department of Energy's Combustion and Emissions Control R&D
    program funds CRADA activities at the National Laboratories on improved
    emissions and fuel efficiency through the development of advanced
    combustion systems for heavy and light truck applications. Almost all
    highway trucks, urban bus, off-road vehicles, marine carriers, and
    industrial equipment are powered by diesel engines due to their
    excellent fuel economy, power density, reliability and durability.
    Diesel engines burn as much as 35 to 45 percent less fuel than gasoline
    engines of comparable size, and emit 25-33 percent less greenhouse
    gases. The emissions of diesel engines have been reduced by about 90
    percent over the last 30 years with massive investment from industry.
    The 2007 EPA diesel emissions standards impose stringent further
    reductions in emissions, requiring an additional 90 percent reduction
    in both NOX and particulate matter. This cost-shared program
    aims at the definition and development of key aftertreatment
    technologies that may make the attainment of these difficult goals
    possible. While carefully controlled laboratory experiments are showing
    some early promise, much work needs to be done to overcome very
    significant technical hurdles that remain. Cummins urges that $24M be
    appropriated for this program in fiscal year 2005. A funding split
    under the program between the 21 Century Truck Partnership (21CTP) and
    the FreedomCAR Partnership is recommended as follows: 21CTP--$8.5M (as
    requested by DOE) and FreedomCAR--$15.5M.
        Fuels Technologies--Non-Petroleum Based Fuels & Lubes: Heavy and
    Medium Duty Natural Gas Vehicle Engine R&D--Efficiency and Emissions
    Improvement.--The need for energy diversification for on-road vehicles,
    has created a demand for natural gas engines for urban commercial
    vehicle applications. However, current natural gas engines sacrifice
    fuel efficiency compared to diesels in similar applications. Natural
    gas combustion technologies offer the potential to meet 2010 emissions
    with simpler more durable systems and reduce or eliminate the fuel
    efficiency loss. The engine industry has invested millions of dollars
    to produce natural gas products, but cannot support alone these high-
    risk and high payback potential technologies. The Department of
    Energy's Heavy and Medium Duty Natural Gas Vehicle Engine R&D program
    is designed to develop natural gas engine technologies to meet 2007/
    2010 emissions standards earlier than mandated without sacrificing
    energy efficiency and platform simplicity. Technology development for
    natural gas power plants can also aid in the transition to hydrogen
    engines in the future. Similarities in fuel storage, fuel metering,
    vehicle safety and combustion can be exploited to develop efficient,
    very clean, hythane (natural gas & hydrogen mixture) or hydrogen
    engines. Cummins urges that $2M be appropriated for this program in
    fiscal year 2005.
        Fuels Technologies--Advanced Petroleum Based Fuels (APBF).--Because
    of the excellent fuel efficiency, power output, reliability and
    durability of diesel engines, almost all highway trucks, off-road
    vehicles, marine and industrial equipment are powered by diesel
    engines. EPA's 2007 diesel emissions standards impose very strict
    emissions levels, requiring the treatment of engine-out exhaust to
    assure compliance. These engine systems are required to meet emissions
    standards over a 435,000 mile lifetime. The Department of Energy's
    Advanced Petroleum Based Fuels-Diesel Emissions Control (APBF-DCE)
    program is a government and industry partnership between DOE, Engine
    Manufacturers Associations (EMA) and Manufacturers of Emissions Control
    Association (MECA). The goal of this program is to study the durability
    and reliability of aftertreatment systems relating to sulfur content in
    fuel and identify fuel properties of petroleum based fuels that will be
    critical for future emissions compliance. Cummins urges that $6.0M be
    appropriated for this program in fiscal year 2005.
        Materials Technologies--Propulsion Materials Technology.--The
    Department of Energy's advanced materials program is a critical enabler
    for technologies being developed for heavy duty engine systems to
    achieve lower emissions, higher engine efficiencies and subsystem
    reliability/durability. In the Heavy Duty Market, a 25 percent
    reduction in engine weight translates to a 6 percent reduction in fuel
    consumption and a similar reduction in emissions. The development of
    these cost effective materials and manufacturing processes will
    contribute to fuel efficient vehicle systems and will lead to lower
    manufacturing costs. The scope of materials development will impact
    NOX and PM reduction system materials, advanced materials
    for air handling to reduce corrosion with the introduction of EGR
    system, fuel system materials, and engine system efficiency increases.
    Increase request of $5.0M by $2.0M to bring the program total to $7.0M
    in fiscal year 2005 to develop materials required for energy efficiency
    gains, technologies to reduce manufacturing costs and aftertreatment
    systems. Cummins urges that $7.0M be appropriated for this program in
    fiscal year 2005.

                                 FOSSIL ENERGY

    Office of Power Technologies (OPT)--Distributed Energy Resources
        Distributed Generation Technology Development--Advanced
    Reciprocating Engine Systems.--Gas and electric power industry
    restructuring has created opportunities for distributed power
    generation. Natural gas fueled reciprocating engine power plants are
    preferred for reliability, low operating costs, high up time, and
    unattended operations. These engines have not kept pace with the fuel
    efficiency of their diesel engine counterparts. Enhancements in fuel
    efficiency, reliability, operating costs and emissions are necessary to
    be competitive with other technologies in these applications. The
    purpose of this program is to develop advanced natural gas technologies
    and products that increase efficiency towards 50 percent and reduce
    NOX to 0.1 g/bhp-hr. These goals are aggressive. But, when
    met, will yield consumer savings roughly 100 times greater than the
    program costs. By working in partnership with the DOE, the ARES
    industry partners will work towards removing technical barriers to
    energy efficiency and emissions enhancements. The benefits of
    government/industry collaboration are key advanced technology
    development and integration that would be high-risk for industry alone.
    This partnership will help create attractive natural gas products for
    North American markets as well as for the growing power generation
    markets worldwide. Progress in 2003 included: engine fuel efficiency
    improvements, tools for combustion system and controls analyses, higher
    power density engine concepts, in-cylinder flow dynamics optimization
    and higher efficiency air handling system. Cummins urges that $17M be
    appropriated for this program in fiscal year 2005.

                  OTHER POWER SYSTEMS--DISTRIBUTED GENERATION

        Solid State Energy Conversion Alliance (SECA).--The key goal for
    this project is to develop a modular, cost effective 3-10 kW solid
    oxide fuel cell (SOFC) system. SOFC's will play an important role in
    securing the nation's energy future by providing efficient,
    environmentally sound electrical energy. SOFC cell systems can generate
    low-noise, highly reliable power with significantly lower fuel
    consumption and exhaust emissions compared to existing fossil fuel
    technologies. However, the high cost of fuel cell technologies prevents
    their broad public use. The goal of SECA program is to create a cost
    effective SOFC that can be mass produced in modular form. The
    development of high volume production technologies for SOFC fuel cells
    will reduce per unit costs and allow SOFC to be an affordable energy
    option for a variety of applications. This is a ten-year program that
    combines the efforts of the DOE national laboratories, private
    industry, universities, and other research organizations. This program
    is highly ranked in the OMB review in 2004. Significant progress was
    made in 2003. Improvements in cell performance and near target level
    stack degradation were achieved. Eighty percent fuel utilization in the
    stack operation and high efficiency (98 percent) electrical power
    inverter were demonstrated. A catalytic partial oxidation reactor, at
    bench scale, with LPG and natural gas demonstrated carbon-free
    conversion without the use of steam. A kW scale prototype including
    balance of plant and controls, reformer, and simulated stacks has been
    fabricated and used for model and controls calibration. Cummins urges
    that $50M be appropriated for this program in fiscal year 2005.

                          ADVANCED COMBUSTION ENGINES

        Health Impacts.--After treatment technologies are unique for heavy
    duty diesel engines. These systems may include precious metal,
    adsorbers, reductants and complex reaction mechanisms to meet EPA's
    2007/2010 emissions requirements. The key goals of the health impacts
    project is to identify whether these systems may develop unintended
    emissions or effects; produce a high quality and health relevant
    characterization of the emissions from the latest heavy-duty diesel
    engines and emissions control systems; and collaborate with the Health
    Effects Institute (HEI) for understanding health implications and
    evaluate health risks of new versus older engine technologies. Cummins
    urges that $3M be appropriated for this program in fiscal year 2005.
        Thank you for this opportunity to present our views on these
    programs which we believe are of great importance to the U.S. economy
    through viable transportation and power generation systems, to the
    public well-being through cleaner air, and to our national security by
    contributing to an energy-independent future.
                                     ______

              Prepared Statement of the Detroit Diesel Corporation

        Detroit Diesel Corporation (DDC), a DaimlerChrysler Company,
    provides this statement for the record addressing the Administration's
    fiscal year 2005 budget request for the Department of Energy's Office
    of FreedomCAR and Vehicle Technologies (OFCVT). Specifically, the
    following line items and recommendations are addressed in this
    statement:
      --Heavy Truck Engine--$20.0 million funding recommended
      --Combustion and Emission Control--$24.0 million funding recommended
      --Heavy Vehicle Propulsion Materials--$5.8 million funding
            recommended
        We generally support the Administration's budget request for OFCVT,
    but we respectfully urge the Committee to consider further enhancements
    to critical key line items that require prompt and immediate attention
    to reduce the United States demand for petroleum. These key line items
    will have immediate near-term impact on energy security, will decrease
    emissions of criteria air pollutants and greenhouse gases, and will
    enable the U.S. transportation industry to sustain a strong and
    competitive position in the domestic and world markets. Specific
    relevant OFCVT R&D programs enjoy substantial industry cost share
    demonstrating a matched commitment by the U.S. industry. In order to
    bring to fruition the intended results, these programs require
    sustained or increased levels of funding.
        DDC's world headquarters and its main manufacturing plant are
    located in Detroit, Michigan. DDC employs over 6,000 persons who
    design, manufacture, sell and service engines for the transportation
    and power markets. Our products cater to heavy-duty trucks, coach and
    bus, automobiles, construction, mining, marine, industrial, power
    generation and the military. DDC has operations and manufacturing
    centers in various regions of the United States, along with a network
    of over 100 distributors and 2,700 dealers throughout the United States
    and worldwide. The DDC Series 60 engine has revolutionized the truck
    engine technology, consistently setting new global performance, fuel
    economy and life cycle cost standards. It has been the most popular
    heavy-duty truck engine in the United States for the past thirteen
    years.
        Detroit Diesel recognizes the Administration's FreedomCAR agenda,
    and its attention to both near-term and long-term energy sufficiency.
    The long-term vision focuses on potential emerging technologies, such
    as fuel cells and hydrogen-based transportation energy. However, it is
    not anticipated that these technologies will be viable for Heavy Duty
    applications in the foreseeable future. Therefore, we believe that it
    is equally important to further develop fuel-efficient clean diesel
    technologies. With appropriate Government support, these technologies
    will have a significant impact on surface transportation fuel use, in
    line with the Energy Secretary's remark that ``there should be no let
    up in our efforts to make conventional motor vehicles run cleaner and
    more efficiently'', made in his speech at Detroit Economic Club on
    February 7, 2003. In this regard, our comments will focus on the
    program line items that provide substantial potential payback for this
    important area of national interest.
        We generally support the Administration's budget request, while
    respectfully urge the Committee to consider further enhancements to the
    following two line items under the proposed fiscal year 2005 Advanced
    Combustion Engine R&D program element: Heavy Truck Engine and
    Combustion and Emission Control, as well as to the Material Technology
    program element.
        The Heavy Truck Engine has a fiscal year 2005 request of $10.436
    million, less than the enacted budget in recent years. The 2007 Federal
    emissions mandates require an extremely aggressive R&D development plan
    to identify and implement new technologies. Recent specific findings
    suggest that EPA's initial estimates have underestimated the negative
    economic impact of the U.S. 2004 regulations by an order of magnitude.
    The 2007/2010 mandates will further reduce both NOX and
    particulate emissions by an additional 90 percent from the 2004 levels.
    The technological complexities of meeting highly stringent emissions
    reduction while maintaining and ultimately improving the fuel economy
    within an extremely short time frame is the toughest challenge ever
    faced by the U.S. heavy-duty transportation industry. We believe this
    provides the strongest rationale for significant increases in the
    Government support to these competitively bid, collaborative, 50-50
    cost-shared R&D programs. DDC is investigating advanced combustion
    systems, alternative emissions reduction technologies including engine
    and exhaust aftertreatment systems, and smart control strategies within
    an integrated powertrain. Fiscal year 2004 funding appropriation was
    $12.9 million. We urge the committee to consider increasing the Heavy
    Truck Engine line item by an additional $9.6 million above the fiscal
    year 2005 budget request (Total = $20 million) to assert and support
    the urgency of accelerated development of these related high risk
    emerging technologies.
        The Combustion and Emission Control activity focuses on the
    development of advanced emission control technologies for clean diesel
    engines for U.S. personal transportation vehicle applications as well
    as a heavy truck component supporting the goals of the 21st Century
    Truck Partnership. For decades to come, clean diesel engines are the
    most relevant solution simultaneously offering significant fuel economy
    savings, reduced exposure to climate change issues and a cleaner
    environment. Initial developments show potential for lower emissions
    meeting the mandated 2007/08 Tier 2 levels while maintaining the diesel
    engine's inherently superior fuel efficiency. The initial performance
    results are compelling, but many questions remain unanswered regarding
    emerging technologies for aftertreatment and integration of a total
    technically viable system. We suggest enhancing the Administration's
    $22 million request in this area by an additional $2 million (Total =
    $24 million) to handle the urgent technical issues of the relevant
    emerging technologies.
        The Materials Technologies is a separate OFCVT program element that
    includes Heavy Vehicle Propulsion Materials line item request of $5
    million, below fiscal year 2004 levels. It has been long recognized
    that advanced materials are a key critical technology area for U.S.
    global competitiveness. For many years, the most popular DDC Series 60
    truck engine has touted the first worldwide application of structural
    ceramic and advanced tribological coatings. We request the restoration
    of the funding back to the fiscal year 2004 level ($5.8 million) to
    leverage the insertion of advanced materials into applications
    supporting the previously mentioned emerging technologies.
        We take this opportunity to affirm our strong endorsement to the
    proposed Department of Energy's fiscal year 2005 referenced budget
    requests with the stated specific enhancements. The trend setting
    partnership between the U.S. Government and a key industrial base
    addresses this country's and world needs in critical areas of
    transportation, energy security, economy and environment. The exemplary
    track record through competitive leveraging of Government funding by
    substantial industry cost share and the emerging high potential results
    of these partnerships warrant strong Congressional endorsement. This
    affords a unique opportunity for a justifiable and a highly effective
    return on investment of the U.S. taxpayers' money.
                                     ______

      Prepared Statement of the Electric Drive Transportation Association

                           INTRODUCTION AND OVERVIEW

        This testimony is presented on behalf of the Electric Drive
    Transportation Association (EDTA), a national, non-profit organization
    of electric utilities and other energy providers; automobile, bus and
    other equipment manufacturers and their suppliers; state and local
    governments, and others that have joined together to advocate greater
    use of electric drive technologies to further national environmental,
    economic and energy security goals. A complete membership list is
    attached. These comments focus on the state of the electric drive
    industry and specifically on the programs underway at the U.S.
    Department of Energy (DOE) that support electric drive technologies
    (battery electric, hybrid and fuel cell vehicles.).

                   WHY ENCOURAGE ELECTRIC DRIVE TECHNOLOGIES?

        Close to one-half of the petroleum consumed for transportation in
    the United States is imported, and the United States demand for oil is
    projected to increase by nearly 50 percent by 2025. Every day, eight
    million barrels of oil are required to fuel over 200 million vehicles
    that constitute our light-duty transportation fleet. Also, it has been
    estimated that 60 percent of Americans live in areas where levels of
    one or more air pollutants are high enough to affect public health and/
    or the environment. Given these realities, it is imperative that
    industry and government, working together, develop affordable and
    reliable electric drive transportation options to both assist this
    country in weaning itself off of imported oil and improving the air
    quality in the communities that we live and work in.

                      STATE OF THE ELECTRIC DRIVE INDUSTRY

        After many years of research and development, the world's major
    automobile manufacturers, as well as many independent small businesses,
    have made battery electric vehicles (BEVs) available to the
    marketplace. Since 1996, nearly 6,000 BEVs have been leased and/or sold
    in the United States. Today, few, if any, BEVs are being manufactured
    and sold in the United States; however, many of high technology
    components developed (e.g. computerized drive systems, tires, advanced
    materials) for these vehicles are being applied to hybrid and fuel cell
    electric vehicles. In addition, some automakers have developed and are
    selling small, low speed electric vehicles (aka neighborhood electric
    vehicles) that have applications in planned communities, college
    campuses, in station car applications, and other urban settings where
    space and travel distances are limited. In addition, there is growing
    use of non-road and industrial EVs, especially at airports and other
    location where air pollution is severe.
        Hybrid electric vehicles (HEVs) are making inroads in the
    marketplace. As of February 2004, Honda and Toyota have leased and/or
    sold 122,658 HEVs in the United States. Other automobile manufacturers
    have announced plans to introduce hybrids into the marketplace over the
    next two to three years, with Ford marketing its hybrid Escape by third
    quarter, 2004; and Honda and Lexus planning to introduce a hybrid
    Accord V6 and the RX400h luxury SUV respectively later this year.
    General Motors has announced their intention to introduce a full line
    of hybrid vehicles ranging from full-size SUVs and pickups. In addition
    to light-duty hybrid offerings, hybrid electric buses are being used
    throughout the country. For example, GM will outfit over 230 transit
    buses with hybrid electric technology for King County Metro Transit and
    Sound Transit in the state of Washington. Grid-connected hybrid
    technologies also are being pursued by the electric utility industry,
    regulators, the environmental community and the automotive industry as
    a means to improve the environmental performance and fuel savings of
    such technologies. DaimlerChrysler's Sprinter Group and EPRI have
    formed an alliance to build and test three plug-in hybrid Sprinter vans
    with 20 to 30 miles all-electric range.
        In order to lessen the impact that truck idling has on both energy
    security and overall emissions, efforts are being undertaken to
    electrify interstate and other truck stops. According to Argonne
    National Laboratory, long haul trucks idling overnight consume 838
    million gallons of fuel annually, and produce significant quantities of
    CO, NOX and CO2 emissions. Electrification of
    parking spaces at truck stops can alleviate this issue without
    sacrificing driver comfort.
        The world's major automobile manufacturers and President Bush have
    made the development of fuel cell vehicles and hydrogen fuel a high
    priority. Fuel cell electric vehicles and supporting infrastructure are
    still in their infancy, and require continued research and development
    to ensure their success in the marketplace. A handful of fuel-cell-
    based passenger cars have been leased to government and universities,
    but they are not yet available for sale to the public. As of March 2004
    the California Fuel Cell Partnership, which started in 1999, has
    demonstrated 55 fuel cell vehicles. The Partnership also expects to
    facilitate members' placement of up to 300 fuel cell cars and buses by
    the end of 2007. In addition to the vehicles, the Partnership is
    testing fuel alternatives, identifying fuel infrastructure issues,
    conducting joint studies, and preparing the California market for this
    new technology.
        Additionally, the DOE is expected to announce shortly the winners
    of a five-year hydrogen validation project solicitation, which is to be
    the first large-scale demonstration project combining hydrogen-fueled
    vehicles with refueling infrastructure and hydrogen production
    components. The five proposals are from: DaimlerChrysler and Ford, each
    teamed with BP; General Motors partnered with Shell Hydrogen; Hyundai
    joined with ChevronTexaco; and an international coalition of
    automakers, BMW, Honda, Nissan and Toyota with Air Products as their
    hydrogen supplier. The primary goal of the validation project is to
    gather data on all the related aspects of a hydrogen-based
    transportation economy, including fuel cell vehicles as well as
    hydrogen production, delivery and dispensing. This initiative is very
    important and the EDTA encourages the Congress to provide sufficient
    funding to insure that this program is implemented as planned.

                  FREEDOMCAR AND VEHICLE TECHNOLOGIES PROGRAM

        The mission of the DOE's FreedomCAR and Vehicle Technologies
    Program is to develop more energy efficient and environmentally
    friendly highway transportation technologies that enable the United
    States to use less petroleum. The long-term aim is to develop ``leap
    frog'' technologies that will provide Americans with greater freedom of
    mobility and energy security, with lower costs and less impact on the
    environment. Research and development activities underway by two main
    DOE programs--the Hydrogen and Fuel Cell Infrastructure Technology
    Program and the Vehicles Technology Program--are key to advancing
    electric drive technologies and meeting the mission and goals of the
    Administration's multi-year, $1.2 billion FreedomCAR and Hydrogen Fuel
    Initiative. The FreedomCAR and Hydrogen Fuel Initiative has at its goal
    an industry decision to commercialize hydrogen-powered fuel cell
    vehicles by the year 2015 and the vision of a diverse, secure and
    emission-free energy future. The 21st Century Truck Partnership also is
    supported through this program, which has similar objectives and is
    focused on improving and developing engine systems, heavy-duty hybrids,
    parasitic losses, truck safety and idling reduction. Listed below are
    specific subprograms of interest to EDTA that are components if these
    two initiatives:
        Vehicle Systems.--The Vehicle Systems subprogram funds R&D on
    advanced vehicle technologies and auxiliary equipment that could assist
    with improving the fuel economy of light and heavy duty vehicles. EDTA
    supports the Administration's request of $13.8 million for this
    program.
        Hybrid and Electric Propulsion.--While initial consumer acceptance
    of light-duty hybrids appears to be high, significant cost reductions
    need to take place before full volume marketing of both light and
    heavy-duty hybrids will occur. The EDTA supports the efforts of
    industry and the federal government to develop affordable light and
    heavy-duty hybrid electric vehicles with high fuel economy and ultra
    low emissions. DOE's fiscal year 2005 goals include developing advanced
    energy storage technologies (e.g., lithium ion cells) for hybrid and
    electric vehicle applications; developing an advanced battery for use
    in fuel cell hybrid vehicles; the development of low cost converters
    and motor controllers; the validation of technical targets for
    components and subsystems, and the development of efficient, cost-
    effective heavy hybrid components and systems to support the 21st
    Century Truck Program. EDTA also encourages DOE to demonstrate plug-in
    hybrid technologies to assess both the emissions reductions and fuel
    savings that these energy efficient technologies can provide to the
    transportation sector. The Hybrid and Electric Propulsion Program was
    funded at $45.56 million last year. EDTA believes this program should
    be funded at the increased level requested by the Administration in
    fiscal year 2005 ($51.8 million).
        Materials Technology.--The development of cost-effective materials
    and material manufacturing processes that can contribute to the
    development of fuel-efficient cars and trucks is an important component
    to the FreedomCAR and 21st Century Truck Partnerships. It is
    anticipated that by 2006 the Transportation Materials Technologies R&D
    activities will reduce the projected production volume cost of carbon
    fiber from $12 per pound in 1998 to $3 per pound by 2006. The EDTA
    encourages full funding of this program at the level of funding
    provided in fiscal year 2004 for this program ($40.24 million).
        Fuel Cell Technology.--There is near unanimous consensus among
    industry, government and environmental groups that fuel cell technology
    represents the best promise for a long-term solution to the energy and
    environmental issues associated with transportation. However, many
    issues remain to be resolved, including the cost and durability of
    transportation and stationary fuel cells, the development of fuel
    processors for transportation, stationary, APU and portable power
    applications; and the need to validate integrated vehicle and
    infrastructure systems to ensure they can operate in real-world
    operating conditions. The Fuel Cell Technology Program is a critical
    component to assuring that the technologies that are developed will
    translate into cost effective products for the 21st Century. EDTA
    encourages full funding for this program at the $77.5 million level
    requested.
        Hydrogen Technology.--As reported in the Department of Energy's
    February 2004 Hydrogen Posture Plan, the technical challenges to
    achieving a hydrogen economy include lowering the cost of hydrogen
    production, delivery, storage, conversion and end-use applications. The
    Administration's fiscal year 2005 budget request for Hydrogen
    Technology is $95.3 million. These funds would be used to assist in
    reducing the cost of distributed production of hydrogen from natural
    gas by a factor of three to four; enabling cost competitive production
    of hydrogen from renewables; and, providing storage technology that
    enables greater than 300 mile driving range for vehicles. Attaining a
    ``hydrogen economy'' will require a coordinated national effort and
    sustained activities by diverse public and private stakeholders. EDTA
    believes this program should be funded at or above the level requested
    by the Administration in fiscal year 2005. These funds should be used
    for the R&D projects already identified by the DOE and its industry
    partners. Congress, last year, directed that a significant portion of
    funds be used on specific projects requested by Members of Congress.
    The Committee is urged to appropriate funds for the technology
    initiatives identified by the DOE; diverting scarce funds will delay or
    jeopardize the achievement of specific and important technology
    building blocks.
        Technology Introduction.--The Technology Introduction subprogram
    accelerates the adoption and use of alternative fuel and advanced
    technology vehicles to help meet national energy and environmental
    goals. The primary functions of the Technology Introduction subprogram
    include legislative and rulemaking support for the Energy Policy Act of
    1992 (EPAct) alternative fuel and fleet activities; testing and
    evaluation of advanced technology vehicles; and advanced vehicle
    competitions. EDTA encourages the Administration to support funding for
    these programs at the level requested by the Administration ($6.014
    million). In addition, EDTA encourages DOE to allow federal, state and
    alternative fuel provider fleets to meet their EPAct vehicle
    acquisition requirements through the use of low speed electric vehicles
    and light, medium and heavy-duty hybrid electric vehicles as a means to
    reduce fuel consumption and to support increased use of electric drive
    technologies in the marketplace.
        Clean Cities Program.--DOE's Clean Cities Program is helping the
    United States to achieve energy security and environmental quality
    goals through encouraging and supporting the purchase and use of
    alternative fuel vehicles (AFVs) at the local level, especially in
    niche markets such as schools, airports, and municipal bus fleets.
    Approximately 547,964 AFVs are operating in public and private fleets
    through this unique, voluntary program. If comprehensive energy
    legislation pending before the Congress is favorably considered and
    enacted into law, it will authorize up to $200 million for 15 Clean
    Cities coalitions to demonstrate the important role that low speed
    electric vehicles, electric bikes and scooters, electric ground support
    equipment, hybrids in a variety of weight classes, and battery and fuel
    cell buses can play in alleviating transportation-related pollution and
    educating the public about the important role that these technologies
    can play in our cities and towns. If this major initiative is
    authorized through enactment of energy legislation then the
    Administration and Congress are encouraged to provide appropriations
    through the Clean Cities to implement this program. The Clean Cities
    program was funded at $11.11 million in fiscal year 2004. The Clean
    Cities Coalitions are seeking $16 million in fiscal year 2005 funding
    for the Clean Cities program. EDTA believes this is an important
    program and any funds made available by this Subcommittee will be used
    wisely by the enormous cadre of local stakeholders who comprise the
    more than 80 designated Clean Cities.

        OTHER AUTHORIZATIONS AND INCENTIVES INCLUDED IN PENDING ENERGY
           LEGISLATION THAT WOULD BENEFIT ELECTRIC DRIVE TECHNOLOGIES

        Energy legislation pending before the Congress also includes two
    additional programs of importance to the EDTA. First, $32 million is
    authorized for the DOE to conduct a five-year, secondary use EV battery
    demonstration program. If successfully demonstrated for secondary,
    stationary-use applications (e.g., peak shaving, transmission deferral,
    back-up power and transmission quality improvement applications), this
    program could result in a lower upfront cost of battery systems and
    thereby make EVs more competitive. Second, pending energy legislation
    would allow federal, state, and alternative fuel providers to meet
    their EPAct fleet obligations through the purchase and use of electric
    drive technologies such as low speed electric vehicles, hybrids in a
    variety of weight classes, and fuel cell cars, trucks and buses.
    Mandated fleets should be allowed the flexibility to use additional
    electric drive transportation options to meet their EPAct fleet
    requirements since it not only will provide them with additional fleet
    compliance options, but will assure manufacturers a guaranteed market
    for their products.
        Pending energy legislation also includes important consumer-based
    tax incentives to support the purchase and use of battery, hybrid and
    fuel cell electric vehicles and supporting infrastructure. Targeted tax
    incentives can be an effective means by which government can help
    assure that electric drive technologies, in a variety of weight
    classes, are successfully introduced into the marketplace. EDTA members
    believe that such incentives should be limited in their scope and
    duration, and available now and in the immediate future as these new
    and dramatically different technologies are introduced to consumers.

                                   CONCLUSION

        The success of electric drive technologies in the marketplace
    continues to require the support of both industry and government,
    working together, to bring down costs and to conduct the outreach
    activities necessary to encourage the market adoption of electric drive
    transportation options. The federal government's role should continue
    to focus on participating with industry in efforts to advance electric
    drive transportation technologies through research activities like the
    Hydrogen, Fuel Cells and Infrastructure Technologies Program and the
    Vehicles Technology Program; through continued testing of advanced
    transportation technologies through the Test and Evaluation Program;
    and through outreach and education efforts like those included in both
    the Clean Cities program and the Technology Program.
                                     ______

             Prepared Statement of the Fuel Cell Power Association

        The Fuel Cell Power Association (FCPA) appreciates the opportunity
    to submit this statement to the U.S. Senate Committee on
    Appropriations, Interior and Related Agencies Subcommittee regarding
    fiscal year 2005 Department of Energy (DOE) Office of Fossil Energy
    (FE) stationary fuel cell R&D programs. FCPA urges you to commit the
    resources needed to accelerate the pace of the DOE stationary fuel cell
    programs. To meet U.S. goals for secure, reliable, clean, cost-
    effective power, our nation needs to increase our national commitment
    to stationary fuel cell power generation technologies. FCPA recommends
    the following funding levels for fiscal year 2005.

       OFFICE OF FOSSIL ENERGY--DISTRIBUTED GENERATION SYSTEMS--FUEL CELLS
                            [In millions of dollars]
    ------------------------------------------------------------------------
                                                                    Amount
    ------------------------------------------------------------------------
    SECA (Solid State Energy Conversion Alliance)..............           50
    High-Efficiency High-Temperature Hybrid Systems............           21
    ------------------------------------------------------------------------

        Funding levels proposed by the Administration's fiscal year 2005
    Budget represent a 68 percent cut from last year's DOE FE stationary
    fuel cell appropriation. This cut leaves the SECA program under funded
    by $27 million, and completely eliminates the DOE funding for High-
    Efficiency High-Temperature Hybrid Systems work called for in both the
    Vision 21 and FutureGen initiatives to achieve cost-effective, high
    efficiency, near-zero-emissions electricity from coal. Restoring the
    DOE FE Stationary Fuel Cell Program funding to last year's level of $71
    million will move the U.S. closer to the following benefits.
        Secure and Reliable Distributed Energy, making electricity
    available at the location where it is needed, detachable from the
    transmission grid when it goes down, or able to operate grid free in
    remote locations.
        Maximum Fuel Flexibility, reducing dependence on foreign fuel
    sources since fuel cells can operate on several domestic fuel resources
    like natural gas, ethanol, methanol, coal gas and hydrogen.
        Superior Fuel Efficiency, conserving fuel resources through simple
    cycle electrical system efficiency of 40 percent on synthetic gas and
    50 percent on natural gas, fuel cell /turbine hybrid electrical
    efficiency 60 percent on synthetic gas and up to 75 percent on natural
    gas, and combined heat and power efficiency up to 85 percent.
        Environmentally Preferred Power Technology, using non-combustion
    fuel conversion technology that avoids the formation of nitrogen oxide
    and enables the capture of carbon dioxide for sequestration.
        U.S. Power System Exports, maintaining the nation's position of
    market preeminence in the area of cost-competitive, zero-emissions
    power generation systems to meet the rapidly growing global energy
    market. The Federal government should be accelerating, not
    decelerating, the pace of fuel cell market availability. It is critical
    that Congress and the Administration make these technologies a top
    funding priority, budgeting and appropriating the resources needed to
    drive this much needed power generation technology toward full
    commercialization. This funding shortfall will delay the full
    development and deployment of these technologies. Following is a
    summary of DOE programs that need significantly more funding in order
    to achieve planned program milestones and accelerate stationary fuel
    cell system availability.

                 SECA (SOLID STATE ENERGY CONVERSION ALLIANCE)

        The DOE SECA R&D program goal is to develop a new generation of
    lower cost fuel cells. To attain lower costs, the program will focus on
    integration of design, high-speed manufacturing, and materials
    selection. The program also aims to realize the full potential of fuel
    cell technology through long-term materials development. The SECA
    program is focusing on the development and mass production of 3-10kW
    solid-state fuel cell modules. Ultimately, these fuel-flexible, multi-
    function fuel cells will provide future energy conversion options for
    large and small-scale stationary and mobile applications. The program
    is targeting the achievement of stack fabrication and assembly costs to
    permit system costs of $400/kW, near-zero emissions, and compatibility
    with carbon sequestration. The program is in the first phase of a
    three-phase program plan:
        Phase 1--Technology development-leading to $800/kw product
        Phase 2--Manufacturing development-leading to $600/kw product
        Phase 3--Cost reduction and commercialization-leading to $400/kw
    product
        The program consists of two critical elements. Currently there are
    six integrated industrial development teams that serve as DOE's cost-
    sharing partners to provide R&D, manufacturing and packaging
    capabilities needed to move the technology forward into the targeted
    stationary and auxiliary power markets. The teams design fuel cell
    systems, develop materials, and will ultimately deploy technologies.
    There are also 28 core technology developers that support the
    industrial development teams, providing problem-solving research needed
    to overcome barriers identified by the industry teams. The core
    technology developers are universities, national laboratories, and
    other research-oriented organizations. The SECA participants are listed
    below:
        Manufacturing Teams.--Acumentrics, Cummins Power Generation
    (SOFCo--McDermott International), Delphi Automotive Systems (Battelle
    Memorial Institute), Fuel Cell Energy (Materials and Systems Research,
    Inc./GTI/EPRI), General Electric Power Systems, and Siemens
    Westinghouse Power Corporation.
        Core Technology Organizations.--Argonne National Laboratory,
    California Institute of Technology, Ceramatec, Functional Coating
    Technologies, Gas Technology Institute, Georgia Tech Research, Lawrence
    Berkeley National Laboratory, Lawrence Livermore National Laboratory,
    Los Alamos National Laboratory, Montana State University, NexTech
    Materials, National Energy Technology Laboratory, Northwestern
    University, Oak Ridge National Laboratory, Pacific Northwest National
    Laboratory, Sandia National Laboratories, SAIC, Southwest Research
    Institute, Texas A&M University, TIAX, University of California-Irvine,
    University of Florida, University of Illinois, University of Missouri,
    University of Pittsburgh, University of Utah, University of Washington,
    Virginia Tech.

                HIGH-EFFICIENCY HIGH-TEMPERATURE HYBRID SYSTEMS

        In addition to fully funding the SECA fuel cell cost reduction
    program, the Federal government must continue to fund it's High-
    Efficiency High-Temperature Hybrid Systems development effort at last
    year's level of $21 million. The Administration's Budget request has
    called for the complete elimination of the effort.
        High-Efficiency High-Temperature Hybrid Systems will combine fuel
    cells and gas turbines to provide the synergy needed to realize the
    highest efficiencies and lowest emissions of any fossil energy power
    plant. These fuel cell/turbine systems will use the rejected thermal
    energy and combustion of residual fuel from the high-temperature fuel
    cells to drive a gas turbine. The gas turbine helps reduce the balance
    of plant cost, and improve overall efficiency. The higher the
    efficiency, the better job we are doing in conserving and extending the
    availability of our domestic natural resources.
        Successful development of High-Efficiency High-Temperature Hybrid
    Systems will:
      --Achieve the 60 percent coal syngas efficiency and up to 75 percent
            efficiency on natural gas;
      --Reduce emissions to ultra low levels of less than 1 ppm
            NOX; and
      --Provide the basis for meeting Vision 21 and FutureGen system goals.
        DOE fuel cell R&D programs have laid much of the technological
    groundwork for these hybrid power systems. These programs have helped
    initiate market acceptance of the initial high-temperature fuel cell
    products, enabling manufacturers to strive for integrated hybrid
    systems. Maturity of these integrated hybrid systems is essential to
    meet the DOE goals for its coal-based Vision 21 and FutureGen
    initiatives.
        The High-Efficiency High-Temperature Hybrid Systems effort has
    involved the design, construction and testing of fuel cell/turbine
    hybrid units to investigate the integration aspects of the fuel cell
    and turbine. This allows investigators to acquire design information
    and operational data that will be utilized in the design of multi-
    megawatt high efficiency Vision 21 power plants. Recent proof-of-
    concept tests of a sub-megawatt class power plant have verified that
    this technology works, and just as importantly, that it can be
    implemented in design and construction of a variety of power plant
    sizes, from sub-megawatt units to multi-megawatt and larger scale power
    plants. Field-testing at this smaller scale must be completed to
    provide the basis for the design, construction and testing of larger
    scale units. Cost reductions from performance improvement, stack
    material and manufacturing cost reduction, balance of plant
    improvements, and fuel cell life extension must also be pursued.
        Large plants based on these technologies hold enormous promise for
    providing high efficiency green power from domestic fossil fuels.
    Further refinement of the core fuel cell technology developed under
    High-Efficiency High-Temperature Hybrid System program projects will
    lower capital costs and extend fuel cell life to lower the fuel cell
    cost-of-electricity. Commercially viable fuel cell power generation
    technologies have been validated by demonstrations. Commercialization
    is beginning--but much work needs to be done to achieve a viable
    commercial and competitive status, and to validate the potential for
    hybrid systems. More systems technology development is needed to make
    it cost-effective for multi-megawatt applications including the large
    highly efficient coal power plants envisioned in Vision 21 and
    FutureGen concepts.
        The Fuel Cell Power Association promotes the interests of the fuel
    cell industry by facilitating communication on the essential role the
    government plays in improving the economic and technical viability of
    fuel cells for stationary power. Contact FCPA at 202.669.7575 (phone),
    703.757.8274 (fax), P.O. Box 1408, Great Falls, VA 22066,
    FCPA@advocatesinc.com.
                                     ______

               Prepared Statement of the Gas Turbine Association

        The Gas Turbine Association (GTA) appreciates the opportunity to
    provide the U.S. Senate Appropriations Committee, Interior and Related
    Agencies Subcommittee with our industry's statement regarding the
    following fiscal year 2005 Department of Energy (DOE) Turbine R&D
    funding levels. Our nation's investment in the DOE programs brings
    technology innovation that will allow the United States to continue to
    serve as the world's principal source for clean turbine power
    generation systems.

                   GTA RECOMMENDED FUNDING LEVELS FOR DOE R&D

     OFFICE OF FOSSIL ENERGY--PRESIDENT'S COAL RESEARCH INITIATIVE, CENTRAL
                            SYSTEMS, ADVANCED SYSTEMS
                            [In millions of dollars]
    ------------------------------------------------------------------------
                                                                    Amount
    ------------------------------------------------------------------------
    TURBINES (increase $13 million)............................           25
    ------------------------------------------------------------------------

    OFFICE OF ENERGY EFFICIENCY AND RENEWABLE ENERGY--DISTRIBUTED GENERATION
                             TECHNOLOGY DEVELOPMENT
                            [In millions of dollars]
    ------------------------------------------------------------------------
                                                                    Amount
    ------------------------------------------------------------------------
    Microturbines..............................................          7.0
    Industrial Gas Turbines (increase $1 million)..............          4.0
    Technology Based--Advanced Materials and Sensors...........          8.2
    End-Use System Integration and Interface...................         19.8
    Fuel Flexibility (increase $750,000).......................          1.0
    ------------------------------------------------------------------------

            TURBINES MAKE CLEAN COAL AND FUTUREGEN GOALS ACHIEVABLE

        DOE Office of Fossil Energy (FE) fiscal year 2005 budget states the
    following goal related to the President's Coal Research Initiative,
    ``The Advanced Power Systems activity, within the Central Systems
    subprogram, will develop, by 2010, advanced power systems capable of
    achieving 50 percent thermal efficiency at a capital cost of $1,000/Kw
    or less for a coal-based plant.'' GTA believes that increasing the
    plant efficiency and increasing equipment output are keys to driving
    down Integrated Gasification Combined Cycle (IGCC) system capital cost
    to $1,000kW. Moreover, the development of this cost-competitive IGCC
    system is a prerequisite for the subsequent development of the
    FutureGen systems envisioned in the budget (the FutureGen system will
    demonstrate carbon capture technology combined with an IGCC system
    capable of running on hydrogen).
        The development of cost-competitive IGCC and FutureGen systems are
    important goals that are currently being pursued under the DOE FE
    Turbines program. Unfortunately, the fiscal year 2005 severely under
    funds technology R&D in the Turbines program, pushing the completion
    dates far beyond the 2010 target date for the $1,000/kW IGCC. To
    achieve success by the 2010 target, Federal investment in Turbines
    program requires $25 million per year over the next five years, not the
    $12 million level set forth in the fiscal year 2005 Budget.
        GTA recommends that Congress appropriate an additional $13 million
    over the budget request. The increased funding would be allocated in
    the following manner:

                            [In millions of dollars]
    ------------------------------------------------------------------------
                                                                    Amount
    ------------------------------------------------------------------------
    Syngas Turbine Technology R&D..............................          9.0
    Pure Hydrogen Research in Support of FutureGen.............          1.5
    NETL In-House Combustion Research..........................          1.0
    Coatings Research..........................................          1.0
    University Turbine Systems Research........................          0.5
    ------------------------------------------------------------------------

             TURBINES PROGRAM--OVERCOMING THE TECHNOLOGY CHALLENGES

        Presented below are recommended funding increases for the Turbines
    program in the fiscal year 2005 budget to facilitate the attainment of
    the performance goals of a 50 percent efficient coal fired IGCC plant
    at a cost of less than $1,000/kW with near zero emissions, and turbines
    capable of hydrogen combustion.

    Initiate Syngas Turbine Technology R&D Activities (increase $9 million)
        The basic Syngas Turbine Technology Improvement R&D activities will
    take place under the program's Broad Based Finical Assistance (BBFA)
    solicitation. The two fundamental areas of Turbine R&D that will be
    conducted under the BBFA are: (1) Improvement in combustion turbine
    performance with coal derived synthesis gas, and (2) Development of
    NOX emissions reduction technology for fuel flexible
    turbines. The primary objective of both areas of interest is to improve
    the overall performance of combustion turbines, in terms of emissions
    and efficiency, when used in IGCC applications. While initial Phase 1
    planning has been accomplished, Syngas Turbine R&D has yet to begin.
    Funding to start Phases II work requires a significant increase over
    the proposed fiscal year 2005 request. Without this funding Phase II of
    this work will not be initiated. This will greatly reduce the potential
    to achieve the DOE Program Specific Performance Goal of a 50 percent
    efficient coal fired IGCC plant at a cost of less than $1,000/kW and
    near zero emissions.

    Develop the Capability to Combust Hydrogen in Turbines (increase $1.5
            million)
        As the potential to produce hydrogen from coal becomes attractive
    the ability to utilize this fuel in a gas turbine becomes paramount.
    This funding increase would be used to support basic and applied
    research to address combustion of hydrogen with either oxygen or air.
    Market incentives for the private sector to address this opportunity
    and the associate risk are limited.

    Fully Fund NETL In-house Syngas Combustion Studies (increase $1
            million)
        The NETL in-house combustion group is a recognized world leader in
    combustion science. The requested increase in funds will allow this
    group to fully explore the combustion phenomena and emissions
    associated with the use of coal derived syngas and hydrogen fuels. With
    out this funding the full range of conditions and gas compositions will
    not be explored and the ability to achieve the PSPG will be
    compromised.

    Initiate Advanced Thermal Barrier Coatings for Syngas Turbines
            (increase $1 million)
        In order to increase the efficiency of combustion turbines in IGCC
    applications turbine inlet temperatures need to be increased. Currently
    to reduce risk turbines that operate on coal derived syngas are
    configured to run at a reduced firing temperature. This de-rating
    reduces the efficiency of the power system. In order to increase the
    firing temperature existing thermal barrier coatings (TBC)s need to be
    evaluated at higher temperature in a coal derived syngas environment.
    Additionally new TBC are needed that would be more applicable to syngas
    conditions. Without this work there will be little basis for increasing
    the firing temperature and overall efficiency of combined cycle
    equipment (strongly influenced by gas turbine design) in IGCC
    applications.

    Fully Fund the University Turbine Systems Research Program (increase
            $0.5 million)
        The University Turbine Systems Research Program, a consortium of
    105 U.S. universities working closely with the combustion turbine
    industry, has demonstrated considerable success in developing new
    technologies and developing trained people for the industry. The
    requested increase in funds will enable meeting the more difficult
    challenge of dealing with coal gas than with natural gas, and to
    respond to the increased need for fellowships in the industry from
    universities.

             DISTRIBUTED ENERGY TO SECURE AMERICA'S ECONOMIC FUTURE

        Much of the 21st century's demand for power will be met through the
    increased use of distributed energy systems. The United States needs to
    rapidly expand its supply of distributed energy for the nation's
    electricity security and economic future. The Northeast power blackout
    last August verified the concerns of many experts that our electricity
    grid is vulnerable and in desperate need of upgrade. The Blackout
    occurred at time when the U.S. economy was just beginning its
    transition toward recovery. As the nation's economic rebounds and
    expands, economic growth will intensify the demand for dependable and
    secure power will soar. The lack of available, secure and reliable
    power will stifle economic growth and job creation.
        As America struggles with the question of how to fix the
    electricity grid infrastructure, DOE Office of Energy Efficiency and
    Renewable Energy (EERE) Distributed Energy Programs are working on the
    research, development and deployment of clean and efficient turbines
    and microturbines to provide the dependable and secure power needed in
    America today. Distributed generation turbines and microturbines
    provide:
      --Secure and reliable electricity at the point of demand through the
            placement of small customized power plants on-site, isolating
            critical facilities from grid outages.
      --Dependable and secure power for growing high-tech commercial and
            industrial facility, eliminating economic losses associated
            with poor power quality.
      --New sources of ``just-in-time'' dispatchable power that can be
            instantly called upon to shore up instabilities in our
            country's electricity grid.
      --New power capabilities, strategically located to fix transmission
            bottlenecks, deferring or even eliminating the need for long-
            lead-time transmission line approvals and construction.

             MICROTURBINES--CRITICAL ENABLER OF DISTRIBUTED ENERGY

        Microturbines are currently being deployed in distributed energy
    applications with competitive costs, performance, and emissions in
    selected applications. They are ideally suited to alternate fuels,
    combined heat and power (CHP) applications, and remote siting.
        Today's microturbines have:
      --25 to 1,000 kW output ranges
      --Ultra-low-emissions (< 5 ppm NOX)
      --Fuel flexibility (gaseous and liquid renewable natural resource
            fuels)
      --Proven ultra-high-fuel-efficiency CHP advantages
      --Exceptionally low installation and operational costs
        While microturbines are now entering the distributed energy market,
    improved microturbine technologies are needed to expedite the
    installation of clean, efficient and affordable systems. Once the goals
    of the DOE EERE Advanced Microturbine Program have been achieved,
    microturbines can significantly expand distributed energy market
    potential and deliver the public benefits that flow from distributed
    energy. The microturbines being developed under the EERE Microturbine
    program will have with higher electrical efficiency, using
    significantly less fuel to further conserve natural and renewable
    resources.
        DOE EERE Advanced Microturbine program goals call for a 40 percent
    electrical efficiency microturbine that can maintain ultra-low-single
    digit NOX emissions with a system cost below $500kW. The
    program will achieve these goals with a combination of tactics that
    include raising the operating temperature by integrating advanced
    ceramics to avoid the use of additional cooling systems, and by
    developing affordable high temperature recuperator technologies using
    advanced alloys. The advanced microturbine program performance criteria
    requires equipment capable of 11,000 hours of reliable operations
    between major overhauls and a service life of at least 45,000 hours.
    Improvements in durability will come from reliable, highly effective
    recuperators, increased load capability bearing design, and improved
    high temperature materials. The Advanced Microturbine Program plans to
    deliver a single design capable of operating on gas, liquid, biofuels
    (bio liquids, digester gas and landfill gas) and waste fuels will be
    coupled with ultra-low-NOX technology.

                   INDUSTRIAL TURBINES (INCREASE $1 MILLION)

        The Industrial Gas Turbine program enhances the efficiency and
    environmental performance of gas turbines for applications up to 20MW.
    The research focuses on advanced materials research, such as composite
    ceramics and thermal barrier coatings that improve performance and
    durability of industrial gas turbines. Work on low emissions
    technologies R&D under the program promises to improve the combustion
    system by greatly reducing the NOX and CO produced without
    negatively impacting turbine performance. R&D and testing will
    demonstrate innovative high temperature materials for combustor liners,
    shrouds, blades and vanes in gas turbines to improve endurance levels
    beyond 8,000 hours. GTA recommends that Congress provide fiscal year
    2005 funding at levels at least equal to last year's appropriations.

                TECHNOLOGY BASED--ADVANCED MATERIALS AND SENSORS

        This research provides long-term R&D in the area of materials,
    sensors, information technologies, power electronics, combustion
    modeling and assessments of crosscutting impacts and benefits of the
    developments of distributed generation systems and end-use
    applications. This research provides long-term R&D in the area of
    materials, sensors, information technologies, power electronics,
    combustion modeling and assessments of crosscutting impacts and
    benefits of the developments of distributed generation systems and end-
    use applications.

                    END-USE SYSTEM INTEGRATION AND INTERFACE

        Activities in this area develop highly efficient integrated energy
    systems that can be replicated across an end-use sector, incorporating
    the technologies developed in the Distributed Generation Technology
    Development subprograms into the efficient packaged systems. This will
    maximize the use of affordable distributed energy resources in
    industrial process and high-tech data processing and telecommunications
    industries in order to make the U.S. energy system cleaner, more
    efficient, and more reliable.

                      FUEL FLEXIBILITY (INCREASE $750,000)

        Phase one studies in partnership with turbine manufacturers to
    define gaseous, liquid, and blended fuel combustion related issues, and
    to define a technical roadmap that will lead to improving the multi-
    fuel distributed generation capabilities of turbine equipment.
                                     ______

          Prepared Statement of the Gasification Technologies Council

        The Gasification Technologies Council (GTC) submits this statement
    addressing fiscal year 2005 appropriations for the U.S. Department of
    Energy's (DOE) research and development programs for Integrated
    Gasification Combined Cycle (IGCC), Turbines, and Fuels & Chemicals. We
    also wish to comment on proposed funding for the Clean Coal Power
    Initiative (CCPI) and the FutureGen project. Total proposed funding for
    IGCC; Turbines; Fuels & Chemicals; and CCPI is $310,628,000. We cannot
    support FutureGen appropriations that divert funds from the Fossil
    Energy R&D program or CCPI.
        The Gasification Technologies Council (GTC) represents companies
    that provide technologies, equipment and services, or own and operate
    plants that account for more than ninety-five percent of the
    gasification and Integrated Gasification Combined Cycle (IGCC) capacity
    worldwide. The Council is the trade association of the gasification/
    IGCC industry.
        Gasification related technologies are the key elements in the DOE's
    strategy to bring extremely clean, highly efficient coal based power
    generation into the marketplace. Achieving this objective is critically
    important to our economy, to our environment, and to reducing our
    dependence on foreigh sources of energy. This aligns the gasification
    program with President Bush's Clear Skies, hydrogen economy, energy
    security and climate change initiatives. Continuing and robust research
    and development programs for IGCC, turbines, and fuels and chemicals
    are necessary to achieve the goal of state-of-the-art, competitive
    gasification-based technologies.
        The level of funding cuts proposed for the fossil energy R&D
    program for fiscal year 2005 will seriously compromise the achievement
    of these goals.
      summary of proposed changes to budget request and program direction
      --The IGCC R&D program for fiscal year 2005 should be funded at a $54
            million level, up from the $35 million requested.
      --The turbines program should be funded at a $25 million level,
            instead of the $12 million requested.
      --The Fuels and Chemicals Program funding should be $31.2 million,
            instead of the $16 million requested.
      --The Clean Coal Power Initiative (CCPI) should be funded at a level
            of $150-200 million for fiscal year 2004 instead of the $50
            million requested. to stay on track with President Bush's goal
            of a ten year, $2 billion program.
      --Funding for the FutureGen project should be derived from newly
            appropriated revenue sources and not transfers from the CCPI
            program as is proposed in the fiscal year 2005 budget, which
            would in effect tap $237 million in CCPI money for FutureGen.
      --The Congress should reiterate to the Department the requirement
            that full and open competition will be employed in all
            selections for the FutureGen project--site, technology and
            equipment and services providers.

                        RECOMMENDATIONS BY PROGRAM AREA

        The following discussion identifies specific recommended changes in
    program areas.

               INTEGRATED GASIFICATION COMBINED CYCLE (IGCC R&D)

        The fiscal year 2005 budget request for IGCC would cut funding for
    this core program by almost one third. The GTC recommends adding $20
    million to the fiscal year 2005 appropriation including $10 million for
    advanced gasification concepts and reliability/performance
    improvements; $4 million for advanced gas cleaning/multi-component gas
    cleaning; $4 million for advanced hydrogen/carbon dioxide separation;
    and $2 million for the organization and management of a Gasification
    University Consortium.

                  RECOMMENDED IGCC FUNDING FOR FISCAL YEAR 2005
                            [In thousands of dollars]
    ------------------------------------------------------------------------
                                                       Fiscal year
                                            --------------------------------
                                                2004       2005
                                              adjusted   request   2005  GTC
    ------------------------------------------------------------------------
    Gasification Systems Technology........     29,334     15,305     15,305
    Systems Analysis/Product Integration...      3,912      4,000      4,000
    Vision 21..............................     16,622     14,800     14,800
    Program Support........................        504        345        345
    Other (see text).......................  .........  .........     20,000
                                            --------------------------------
          IGCC TOTAL.......................     50,372     34,450     54,450
    ------------------------------------------------------------------------

                                GAS TURBINE R&D

        An adequately funded gas turbine research and development program
    is essential to achieving the cost reduction and efficiency/output
    improvements necessary for near term IGCC deployment and, over the long
    term, to the success of the FutureGen project. Delays in achieving
    these improvements could have a ripple effect on IGCC deployment
    through the CCPI during this decade and with FutureGen in the next.
        The latest generation of gas turbines (the ``G'' and ``H'' class of
    turbines) are not ready to meet the demands of proposed coal-based
    advanced power plant cycles (e.g., ITM and OTM based IGCC cycles with
    or without CO2 capture, or FutureGen) or of the
    H2 Economy and they are not ready to meet the stricter
    environmental standards that are expected to be required in the future.
    The DOE NETL's Turbine Program needs increased support (a total of $25M
    in fiscal year 2005) to allow DOE to work with industry to meet these
    Consensus Roadmap destinations on schedule given the Turbine Program's
    shortfall in funding over the last two years. Research and development
    in four key areas need increased support:
      --Fuel Flexible Low Emissions Combustion
      --Syngas and H2 Tolerant Materials and Coating Systems
      --Sensors and Monitors for Syngas and H2 Gas Turbines
      --University Gas Turbine Research Program

              RECOMMENDED TURBINE R&D FUNDING FOR FISCAL YEAR 2005
                            [In thousands of dollars]
    ------------------------------------------------------------------------
                                                       Fiscal year
                                            --------------------------------
                                                2004       2005
                                              adjusted   request   2005  GTC
    ------------------------------------------------------------------------
    Existing Programs......................     12,000     12,000     12,000
    Fuel Flexible Low Emissions Combustion.  .........  .........      7,000
    Syngas & H2 Tolerant Materials &         .........  .........       4000
     Coating Systems.......................
    Sensors & Monitors for Syngas and H2     .........  .........       2000
     Gas Turbines..........................
                                            --------------------------------
          Turbines Total...................     12,000     12,000     25,000
    ------------------------------------------------------------------------

                               FUELS & CHEMICALS

        This effort to cost effectively produce fuels and chemicals from
    coal is becoming more important daily in the face of rapidly rising
    natural gas and petroleum prices which are driving the U.S. fertilizer
    and chemical industries overseas, running up utility bills for
    homeowners, threatening economic recovery and adding to our growing
    trade imbalance. Important R&D efforts underway are necessary to move
    coal into these market segments and relieve pressure on oil and natural
    gas prices.
        Research into production of coal derived fuels and chemicals is
    necessary to enable further development of ``polygeneration''
    facilities which have the capability of producing not just electricity
    and steam, but also chemicals and fuels (both hydrogen and liquid
    fuels) as well. Such polygeneration facilities will ultimately improve
    the overall economics of building and operating gasification-based
    power generation plants, thereby accelerating their deployment into the
    marketplace and bringing with them substantial environmental and
    efficiency advances as well as.
        This important program also plays an integral role in laying the
    technical foundations for allowing coal to play a role in any future
    hydrogen economy.

           RECOMMENDED FUELS & CHEMICALS FUNDING FOR FISCAL YEAR 2005
                            [In thousands of dollars]
    ------------------------------------------------------------------------
                                                       Fiscal year
                                            --------------------------------
                                                2004       2005
                                              adjusted   request   2005  GTC
    ------------------------------------------------------------------------
    Syngas Membrane Technology.............      6,552  .........      6,552
    Ultra Clean Fuels......................      8,786  .........      8,786
    Hydrogen from Coal.....................      4,879     15,840     15,840
                                            --------------------------------
          Fuels Total \1\..................     20,217     15,840    31,178
    ------------------------------------------------------------------------
    \1\ Does not include all subcategories.

                 CLEAN COAL POWER INITIATIVE/FUTUREGEN FUNDING

        GTC recommends that appropriations for the Clean Coal Power
    Initiative be maintained at no less than $150-200 million for the
    coming fiscal year to maintain momentum for President Bush's commitment
    to a ten-year, $2 billion program.
        The Administration's proposal to provide FutureGen with $237
    million of CCPI funds and to limit fiscal year 2005 CCPI appropriations
    to $50 million is completely contrary to what industry had been advised
    regarding the source of funding for FutureGen and would send the wrong
    signal to potential industrial investors in the CCPI program. Such a
    drastic reduction in support for the CCPI program would seriously
    compromise program objectives at a time when the need for the program
    is greater than it has ever been. It is also puzzling insofar as the
    current FutureGen report published by the DOE in March 2004 indicates
    that DOE direct funding for the project for fiscal year 2005 is
    projected at only $18 million.
        We recommend CCPI fiscal year 2005 appropriation of $150-200
    million and a clear direction from the Congress that any funding for
    FutureGen should be provided separately and not from funding intended
    for the Clean Coal Power Initiative.

                    COMPETITIVE SOLICITATIONS FOR FUTUREGEN

        The April 21, 2003 Federal Register request for information
    regarding the FutureGen program indicated that, ``The Department will
    require that the Consortium use fair and open competition to select the
    host site; engineering, design, and construction services; and major
    equipment modules''. The GTC heartily endorses the need for competition
    in the project.
        We were troubled, however, when the March 2004 program report on
    FutureGen made specific reference to the transport reactor, now in
    development at the Power Systems Development Facility in Wilsonville,
    AL a number of times. Reference to a specific technology--especially a
    gasification unit that will be the core of the FutureGen plant--in the
    report is inappropriate, giving the impression of an official DOE
    endorsement of that technology.
        We urge the Committee in its report on the appropriations bill to
    express its strong endorsement of free and open competition for all
    aspects of the FutureGen project.
                                     ______

                 Prepared Statement of General Electric Energy

        The following testimony is submitted on behalf of General Electric
    Energy (GE) for the consideration of the Committee during its
    deliberations regarding the fiscal year 2005 budget requests for the
    Department of Energy's (DOE) Fossil Energy program.
        Continued technology advancement is a key to realizing the
    potential for cleaner, more efficient power generation. In addition, by
    improving the U.S. technology base, government-private sector programs
    will enhance the international competitiveness of U.S. industry.
    Several important DOE programs deserve the Committee's support.

      SOLID OXIDE FUEL CELL (SECA DERIVED)/TURBINE SYSTEMS FOR COAL BASED
                                POWER GENERATION

        Power generation systems employing an integrated fuel cell/gas
    turbine have the potential to revolutionize the way the nation will
    meet its future need for clean, efficient, cost effective power from
    our abundant coal resources. These systems would be capable of using a
    range of fuels of national importance--hydrogen, coal or biomass
    derived synthetic gases, as well as natural gas. Utilizing coal derived
    synfuel, solid oxide fuel cell (SOFC)/turbine system studies have shown
    efficiencies up to 20 percent greater than today's coal based power
    generation technologies. When operated on natural gas, SOFC/turbine
    systems have the potential to exceed an unprecedented 65 percent
    efficiency. Fuel cell/gas turbine systems also can be a building block
    for the hydrogen economy and can be compatible with FutureGen type
    plants employing carbon sequestration for zero carbon emissions. In
    addition, GE Energy sees an initial market in the 1MW to 10MW size
    range for dispersed power applications. These systems would avoid grid
    congestion with enhanced reliability while being more efficient and
    cleaner than any fossil energy electric generating technology today.
        GE Energy recommends that $10 million be appropriated for the
    Department of Energy to be used in fiscal year 2005 for a multi-year,
    industry cost-shared program to develop an integrated solid oxide fuel
    cell and gas turbine system for coal based power generation, building
    upon technology derived from DOE's Solid State Energy Conversion
    Alliance (SECA) program.--The program would culminate in demonstration
    of a megawatt-size solid oxide fuel cell/turbine system at the proposed
    FutureGen powerplant or another integrated gasification combined cycle
    (IGCC) facility in the 2012 to 2014 time period. Spin-off opportunities
    will result in megawatt class products for alternate fuels in the same
    time period. GE envisions an effort along the lines of the very
    successful Advanced Turbine Systems program of the 1990's, and a
    comparable opportunity to secure U.S. technology leadership in this
    field.
        GE Energy has worked closely with the Department of Energy to align
    this program development vision with the Department's goals both for
    the SECA program and the overarching goals for zero carbon emission
    generation of electricity. The proposal for ``SECA-Derived Solid Oxide
    Fuel Cell/Turbine System Development for Coal Based Power Generation''
    reflects these efforts and addresses the need to overcome technology
    challenges in both the solid oxide fuel cell itself and integrated
    system. The technological solutions then must be rigorously validated
    for the operational conditions, performance, and size unique to large,
    megawatt class systems.

                                      SECA

        SECA seeks to develop a new generation of lower cost ($400/kw) fuel
    cells that can deliver fuel flexible, ultra-low emission, ultra-high
    efficiency power to the United States, through a program featuring
    industrial teams of fuel cell developers and a core technology group of
    national laboratories, universities and technology firms. GE Energy is
    a SECA participant through our Torrance, California, Hybrid Power
    Generation Systems team. GE appreciates the Congressional support for
    the SECA program in the past, and supports full funding for the SECA
    program in fiscal year 2005 in order to keep this leading research and
    development effort on track toward achieving its ambitious technical
    and cost goals. The recommendation above for an SOFC/gas turbine system
    program is in addition to a fully funded $50 million for SECA in fiscal
    year 2005. GE recognizes DOE's interest in focusing fuel cell R&D
    activities through the SECA program, and intends to continue to work
    with the Department as the SECA program evolves.

                                    TURBINES

        GE recommends that funding be increased by $12 million for the
    Turbines program, within the Fossil Energy/Central Systems budget
    line.--This program represents the Department's primary research effort
    focusing on gas turbines for electricity production and is designed, as
    explained in the budget request, to enable the low cost implementation
    of major policy initiatives in the areas of climate change, reduced
    powerplant emissions and future generation technologies. Continued
    turbine research and development provides a path to greater efficiency
    and lower emissions in the use of the nation's most abundant domestic
    energy resource--coal--as well as the technology base for the eventual
    use of hydrogen. Turbines fueled by syngas are an indispensable step on
    the technology continuum that must evolve for a future hydrogen
    economy. The importance of this technology requires that adequate
    resources be provided in fiscal year 2005, particularly to advance work
    initiated through the Department's Broad Based Financial Assistance
    solicitation.
        The Turbines program will develop the enabling technology for high
    efficiency syngas turbines for advanced IGCC systems. In addition, this
    program must also support the technology necessary to achieve hydrogen-
    capable turbines that will be integral to the design of zero emission
    FutureGen plants. GE has experience with gas turbines operating on fuel
    blends containing hydrogen, and has performed laboratory demonstration
    tests on high hydrogen content fuel. This experience highlighted the
    need for development of advanced combustion technology in order to
    drive down NOX emissions and enable advanced hydrogen
    generation processes. In addition, current strategies for effective
    integration of all major subsystems need to be reviewed and redefined
    for use with hydrogen fuel.
        GE commends to the Committee's attention the testimony submitted by
    the Gas Turbine Association (GTA) relative to the allocation of the
    requested $12 million in funding above the budget submission within the
    Turbine program budget. In particular, GE encourages the Committee to
    increase funding for DOE NETL's Broad Based Financial Assistance
    solicitation, which would allow the ongoing Phase I planning activities
    to move to Phase II designs, which will address improving overall
    performance of turbines in IGCC applications.

                                COAL TO HYDROGEN

        The continued pressure on world energy sources has substantially
    increased our national focus on preparing for the hydrogen economy. GE
    Energy sees a significant opportunity for government leadership to
    encourage earlier adoption of hydrogen fuels to enable the
    establishment of a hydrogen market beyond the current industrial gas
    market.
        Early hydrogen production will continue to be provided by
    centralized reforming of natural gas and distribution of compressed
    gaseous and liquid hydrogen. However, all aspects of primary energy
    conversion to hydrogen need development to support the eventual
    hydrogen economy. Within the Interior Appropriations bill, GE supports
    funding for the Fossil Energy coal to hydrogen program, which ties
    closely to IGCC gas turbine development.
        Strong government support in this area, along with other research
    and development activities funded under other appropriations bills,
    will be critical to the timely development of enabling technologies to
    enable us to achieve the vision of a hydrogen-fueled energy sector.

                     NATURAL GAS INFRASTRUCTURE RELIABILITY

        The importance of the Department's pipeline integrity, safety and
    reliability research and development activities was reaffirmed by
    Congress in the Pipeline Safety Improvement Act of 2002, which
    authorized $10 million for the Department of Energy in each of fiscal
    years 2003 through 2006 for research to insure the integrity of
    pipeline facilities. Within the Natural Gas Technologies program,
    funding should be maintained for the delivery reliability subprogram
    within the infrastructure program. No funds for this program were
    included in the Department's fiscal year 2005 budget request, and the
    budget documentation indicates that only two research projects to
    develop sensors for plastic and metal pipes are planned in fiscal year
    2005, to be funded through the natural gas exploration and production
    program.
        Currently, our Nation's installed infrastructure of 480,000 miles
    of transmission pipeline has a replacement cost estimated to be
    approximately $540 billion. The median age for most of this pipe is
    1960 vintage. In response to the Pipeline Safety Act of 2002, a massive
    increase in pipeline internal inspection activity will be required by
    government. This will result in increased costs and also has the
    potential to affect availability as lines are taken out of service for
    inspection or repair. To meet these challenges, industry needs new or
    enhanced technologies to find more of the potential defects more
    quickly and with greater accuracy/characterization. Additionally, more
    risks need to be covered in a single passage of the inspection systems
    (i.e., corrosion and cracking, metal loss and deformations, etc.). The
    cost of developing such new tools can be in the tens of millions of
    dollars. With no proven track record and lacking market acceptance for
    these new technologies, the investment risk is unacceptably high. The
    Department's R&D program provides a vital link to bridge the gap
    between the need for new technology and substantial risks associated
    with developing that technology. For this reason, GE Energy recommends
    that funding for this vital program be restored to at least the level
    of the fiscal year 2004 appropriation ($7 million). Without this
    funding, essential projects in the infrastructure area will be
    terminated.

                          CLEAN COAL POWER INITIATIVE

        GE also supports sustained funding for the Clean Coal Power
    Initiative (CCPI). This program should provide a vital opportunity for
    the demonstration of IGCC technologies that hold the key to the
    environmentally acceptable use of coal for future power generation. The
    CCPI offers a unique opportunity to demonstrate these technologies on a
    commercial scale--a step that is critical to the ultimate commercial
    acceptance of this technology.

             CROSS CUTTING TECHNOLOGIES--CERAMIC MATRIX COMPOSITES

        GE recommends that funding be provided for Ceramic Matrix Composite
    (CMC) crosscutting technology material development. CMCs offer greater
    than 200 degrees F capability when compared to current metal plus
    coating technology. This increased capability provides potential
    benefits in power output, efficiency, emissions, and part life
    depending on how the material is designed and utilized in product
    applications. Potential opportunities include power generation (gas
    turbines), industrial process heating (hot metal gas forming), and
    transportation (truck brake) markets. CMCs could thus provide an
    enabling technology for all of the applications included under the
    Distributed Energy Resource Program (Industrial Gas Turbines and
    Microturbines) and Industries Of The Future (IOF) initiatives within
    the Energy Conservation budget account.

                               COMBUSTION SYSTEMS

        GE recommends that this budget line be restored to the fiscal year
    2004 funding level. This level of funding is required to ensure the
    successful completion of ongoing technology improvement programs
    initiated by DOE's Broad Based Financial Assistance solicitation under
    Advanced Combustion Systems. Completion of these programs is critical
    for cleaner coal-fired plants better able to meet stricter
    environmental requirements (lower CO2 emissions per kilowatt
    generated).
                                     ______

      Prepared Statement of Integrated Building and Construction Solutions

        Integrated Building And Construction Solutions [IBACOS] urges the
    Subcommittee on Interior and Related Agencies to provide $20 million,
    only $1 million above the President's request, for the Department of
    Energy's (DOE) fiscal year 2005 Residential Buildings Program. We
    further urge that any increase over last year's funding level be
    directed to the industry teams to accommodate the new requirements of
    the program.
        IBACOS, through DOE, has significantly improved the efficiency and
    livability of U.S. homes.--IBACOS is a founding team in DOE's Building
    America Program, which consists of five industry consortiums (teams).
    The IBACOS Building America Team is made up of more than 30 leading
    companies from the home building industry, including equipment
    manufacturers, builders, design firms, and other parties interested in
    improving the overall quality, affordability, and efficiency of our
    nation's homes and communities. Although we are located in Pittsburgh,
    PA, our team members come from across the country. Our associated
    building product manufacturers and trade associations include: North
    American Insulation Manufacturers Association (NAIMA) of Washington,
    DC; Dupont of Wilmington, DE; Carrier Corporation of Indianapolis, IN;
    Whirlpool of Benton Harbor, MI; USG Corporation of Chicago, IL;
    Lithonia of Georgia; and Owens Corning of Toledo, OH. Our builder
    partners includes such large builders and developers as Pulte Homes of
    Bloomfield Hills, MI; Tindall Homes of Trenton, NJ; Aspen Homes of
    Denver, CO; Hedgewood Homes of Atlanta, GA; Summerset Development
    Partners of Pittsburgh, PA; Noisette Development Partners of North
    Charleston, South Carolina; Civano Development Partners of Tucson, AZ;
    Washington Homes (a division of K. Hovnanian) of VA; and John Laing
    Homes of Denver, CO. Other builders and developers in CA, CO, GA, IN,
    NC, NJ, NY, NV, SC, and TX also participate.
        Through these and other partners, Building America has had direct
    influence in increasing the efficiency of nearly 25,000 homes to date.
    All of these homes use at least 30 percent less energy than a code
    compliant home, and many exceed 50 percent in savings.
        We have been working with DOE's Residential Buildings Program since
    the start of the Building America Program in 1993. Along with the four
    other teams, we represent more than 200 residential builders,
    developers, designers, equipment suppliers, and community planners. All
    Building America partners have a common interest in improving the
    energy efficiency and livability of America's housing stock, while
    minimizing any increase in home costs. Many of the products used
    actually result in a lower cost, while others experience only marginal
    increases in first cost and absolute reductions in cash flow. In
    pursuit of this common interest, the five Building America teams pursue
    common activities that will ultimately assist all homebuilders and
    benefit the nations' homebuyers.
        Building America teams, such as IBACOS, have the ability to
    research and develop new technologies and processes, as well as
    demonstrate and diffuse information throughout the building community.
        We are working to significantly expand the active team
    participation in Building America, but, perhaps more importantly, we
    are finding innovative new ways to increase the energy efficiency of
    the nation's housing stock, and are encouraging the diffusion of
    information to hundreds of builders through participation in research
    partnerships, national conferences, technical committees and the
    Internet. In fact, in working with Owens Corning, we helped introduce a
    market based program, System Thinking, in which Owens Corning is
    applying lessons from Building America to more than 100 builders in all
    regions of the country.
        DOE helps develop and implement widespread innovation in the
    fragmented residential construction industry.
        The new residential construction industry accounts for the
    production of 1.6 million single-family homes per year (over $70
    billion in revenue) and approximately 20 percent of total energy use in
    the United States.
        Despite its size and impact, the industry is exceptionally
    fragmented. It comprises nearly 100,000 builders, many building only a
    few homes per year, others as many as 35,000. A multitude of
    residential product manufacturers, architects, trades, and developers
    further compound the problem of an industry in which it is very
    difficult to implement widespread technological innovation. Building
    America acts as an aggregator for identifying and pursuing research
    needs and consolidating relationships between the industry and National
    Labs.
        Additionally, there has been little incentive for builders to
    improve on energy efficiency for a number of reasons. First, energy and
    resource efficiency does not necessarily contribute to the bottom line
    of the builder; instead, it benefits the homeowner and the nation.
    Second, because builders cannot directly recoup costs for up front
    investments through energy savings (since they do not own the homes),
    they have little reason to spend more initially. Third, adopting new
    technologies and training staff and trades to properly install new
    systems and products is costly and problem-ridden. Fourth, builders are
    not good at sharing knowledge among competitors, so DOE's role is
    critical to expanding the practices beyond the first builders in.
        For these reasons, we are working to create higher performance,
    quality homes for no incremental costs, along with associated training,
    management, and technology transfer methodologies. We believe that
    because of this work, energy and resource efficiency, durability, and
    affordability will eventually be commonplace in the home building
    industry.
        DOE plays a critical role in bringing this research, development,
    and outreach agenda to the marketplace.
        Current research activities include:
      --Systems integration, technology and process research and
            development to improve energy efficiency
      --Indoor air quality
      --Safety, health, and durability of housing
      --Thermal distribution efficiency
      --Incorporation of passive and active solar techniques
      --Techniques that increase builder productivity and product quality
      --Reduction of material waste at building sites
      --Use of recycled and recyclable materials
      --Building materials improvements
      --Envelope load reduction and durability
      --Mechanical systems efficiencies and appropriate sizing
        Through DOE, significant energy saving results have been achieved
    in residential construction, and encouraging research results on
    systems integration have helped to increase overall energy efficiency.
        Results of the experience gained by the Building America teams has
    been reflected in both DOE and HUD roadmapping sessions, development of
    research priorities for National Labs, and cooperation on programs
    within DOE/BTS. For example, the Building America Program is working
    cooperatively with the Windows program at BTS to ensure that advanced
    window products are incorporated into high efficiency residential
    housing. Additionally, collaborative research activities with the
    National Labs, including NREL, ORNL, and LBNL have resulted in the
    sharing of knowledge and resources that bridges the gap between Federal
    research programs and the industry.
        The Residential Buildings Program improves the affordability of
    homes by reduced energy use, and results in better use of capital and
    natural resources. The scale of impact is exemplified by the 50 percent
    savings in the average new home built today--the equivalent of the
    energy used by a sports utility vehicle for one year. And, the home
    will have a useful life of 100 years.
        Investing in residential construction technology makes economic and
    market sense. By using improved materials and techniques, the
    Residential Buildings partners promote wiser use of resources and
    reduce the amount of waste produced in the construction process.
    Because of the homes' improved efficiency, emissions from electrical
    power will be reduced, potentially eliminating 1.4 million tons of
    carbon from the atmosphere over the next ten years. DOE's residential
    programs will also save consumers more than $500 million each year
    through reduced energy bills. These savings are permanent and
    significant.
        IBACOS supports efforts across the government to integrate
    activities in the residential building area. This includes work with
    the Partnership for Advancing Technologies in Housing (PATH), the
    National Institute of Standards and Technology, the Housing and Urban
    Development, and the Environmental Protection Agency. We at IBACOS are
    working with PATH communities as a part of Building America. One of the
    PATH communities is in Tucson, AZ. IBACOS, through the Building America
    Program, is working with the developer and builders on a 2,600-home
    sustainable new town called Civano. Through detailed monitoring, the
    homes in this community are proving to be at least 50 percent more
    efficient than comparable homes. Many of these homes are being heated
    and cooled for less than $1 a day. Other communities in which Building
    America is serving as a partner with developers, builders, and PATH are
    Village Green in CA, Summerset at Frick Park in PA, and emerging
    communities in Denver, CO, North Charleston, SC, and in Florida.
    Communities are now under construction that will yield upwards of
    80,000 units over the next seven years. All of these units will result
    in savings between 30 percent and 50 percent of their energy cost and
    serve to create market momentum, influencing many other local builders.
        The Building America Program is also partnering in the Zero Energy
    Buildings (ZEB) effort.--ZEB activities develop strategies to
    effectively integrate renewable energy technologies into energy
    efficient buildings. We feel strongly that renewable energy
    technologies need to be incorporated into Building America research and
    development activities. However, we are concerned that the integration
    of ZEB, from its own subprogram in Energy and Water Appropriations,
    will require the whole of the President's suggested budget increase. In
    truth, additional funding is needed for the Building America Program's
    new program requirements including increased energy efficiency goals,
    increased demand from lead builders, contractors and suppliers for
    direct participation in the program, expansion of applications in
    existing building stock, and design for integration of on-site power
    generation.
        Over the past couple years, the mission and requirements of the
    Building America Program have grown. Two years ago, we began being
    responsible not only for R&D and builder education in new home
    construction but also, the teams were asked to take on the renovation
    market. Existing home renovation is very different from new home
    construction and, without the additional funding, these activities will
    continue to be very limited. Additionally, efficiency targets for the
    Building America Teams have been increased from 30 percent minimum to
    50 percent minimum by 2010 and a 70 percent efficiency increase by
    2020. The Teams are also now responsible for onsite power goals of 10
    percent by 2010 and 30 percent by 2020. All of these new requirements
    are dependent on requisite funding.
        We look forward to continuing to work with DOE to research and
    develop the technology and process necessary to deliver higher
    performance homes to the U.S. market, as well build markets for more
    efficient equipment and technologies.
        We at IBACOS urge you to provide $20 million for the DOE fiscal
    year 2005 Residential Buildings Program. Along with the industry cost
    share in the program of at least 100 percent, this program has and will
    continue to significantly catalyze improvements in what has
    traditionally been a very fragmented industry.
                                     ______

         Prepared Statement of the Interstate Mining Compact Commission

        My name is Gregory E. Conrad and I am Executive Director of the
    Interstate Mining Compact Commission. I appreciate the opportunity to
    present this statement to the Subcommittee regarding the views of the
    Compact's member states concerning the fiscal year 2005 Budget Request
    for the Office of Surface Mining (OSM) within the U.S. Department of
    the Interior. In its proposed budget, OSM is requesting $58 million to
    fund Title V grants to states and Indian tribes for the implementation
    of their regulatory programs and $202.6 million for state and tribal
    Title IV abandoned mine land (AML) program grants. Our statement will
    address both of these budgeted items.
        The Compact is comprised of 20 states that together produce some 60
    percent of the Nation's coal as well as important noncoal minerals. The
    Compact's purposes are to advance the protection and restoration of
    land, water and other resources affected by mining through the
    encouragement of programs in each of the party states that will achieve
    comparable results in protecting, conserving and improving the
    usefulness of natural resources and to assist in achieving and
    maintaining an efficient, productive and economically viable mining
    industry.
        OSM has projected an amount of $58 million for Title V grants to
    states. As you know, these grants support the implementation of state
    regulatory programs under the Surface Mining Control and Reclamation
    Act (SMCRA) and as such are essential to the full and effective
    operation of those programs. While this amount does not meet the
    states' estimates for their projected program operating costs,
    particularly those associated with the escalating cost of travel and
    replacement of equipment (especially vehicles and computers), the
    budgeted amount will allow us to meet our most direct and critical
    responsibilities for conducting regulatory operations to minimize the
    impact of coal extraction operations on people and the environment.
        It is essential that the states continue to receive the statutorily
    required 50 percent matching federal grant amounts in fiscal year 2005.
    If this does not occur, it likely will result in the classic ``SMCRA
    Catch-22'' situation: where there is inadequate funding to support
    state programs, some states will be faced with either turning all or
    portions of their programs back to OSM or, in other cases, will face
    potential lawsuits for failing to fulfill mandatory duties in an
    effective manner. Of course, where a state does, in fact, turn all or
    part of its Title V program back to OSM (or if OSM forces this issue
    based on an OSM determination of ineffective state program
    implementation), the state would be ineligible for Title IV funds to
    reclaim abandoned mine lands. This would be the height of irony, since
    the states have recently worked diligently to convince the Interior
    Department, OMB and Congress about the need to increase funding for
    state Title IV AML work.
        OSM's own Budget Justification Document acknowledges the importance
    of the states receiving adequate program funding:

        ``To implement their regulatory programs effectively and
    efficiently, States must be able to meet their own uncontrollable cost
    increases. States report that most of their costs, particularly
    personnel, face uncontrollable increases. This program is personnel
    intensive; salaries and benefits make up seventy percent of total
    program costs. States must have sufficient staff to complete permitting
    and inspection and enforcement actions needed to protect citizens of
    the coalfields. When funding falls below program needs, programs may be
    unable to keep active sites free of offsite impacts, reclaim mined
    areas, and prevent injuries. In a recent study, ten of the 24 program
    States reported that they had to spend State funds above the required
    fifty percent match to meet their program needs.''----[OSM Budget
    Justification Document, ``Environmental Protection'', page 86.]

        Some may argue that there are at least a handful of states who
    either are unable to meet the 50 percent state match or are unable to
    spend all of the federal funds allocated to them in a particular grant
    year. This merely reflects the reality of the significant fiscal
    challenges facing these states as they attempt to balance record
    deficits with their desire and intent to continue operating effective
    state regulatory programs. Rather than focus on the occasional
    inability to match federal dollars or the limited deobligation of year-
    end moneys, we believe it is more critical to investigate the potential
    mechanisms for assisting the states to meet their financial
    requirements, either through increased overall grant funding or through
    adjustments to the current funding formula. This will become
    increasingly important as the federal government is faced with the
    dilemma of either securing the necessary funding for state programs or
    implementing those programs (or portions thereof) themselves--at
    significantly higher costs.
        A key aspect of funding for state programs has been the development
    and implementation of performance measures, which assess both the
    effectiveness and efficiency of program operation. The states have been
    working jointly with OSM to develop these measures and we remain
    committed to their future use. We believe that these measures, similar
    to the current GPRA measures, will clearly justify and support full and
    adequate funding for state Title IV and Title V regulatory programs.
        With regard to funding for state Title IV Abandoned Mine Land (AML)
    program grants, we were greatly heartened by the President's proposed
    budget for fiscal year 2005, which has proposed an increase of $53
    million for state AML grant funding above last year's approved level of
    $149 million. We were also encouraged by the Administration's
    recognition of the vital importance of reauthorizing fee collection
    authority to support the continuation of the Title IV program given the
    amount of work left to be done.
        The future of the AML Fund and its potential impacts on the
    economy, public safety, the land, our Nation's waters and the
    environment will depend upon how we manage the Fund and how we adjust
    the current provisions of SMCRA concerning the Fund. As we draw closer
    to the September 30, 2004 expiration date, we are beginning to see more
    proposals for how the Fund should be handled and how SMCRA should be
    amended, if at all. The states and tribes, through IMCC, the National
    Association of Abandoned Mine Land Programs and the Western Governors
    Association have over the past several years advanced proposed
    amendments to SMCRA that are few in number and scope and that reflect a
    minimalist approach to adjusting the existing language in SMCRA and to
    incorporate only those changes necessary to accomplish several key
    objectives. They are as follows:
      --To extend fee collection authority for at least 12 years.
      --To significantly increase annual allocations to states and tribes
            to address AML problems. This has been one of the greatest
            inhibitions to progress under Title IV of SMCRA in recent years
            and must be addressed if we are to enhance the ability of the
            states and tribes to get more work done on the ground within
            the extended time frame of 12 years or longer.
      --To confirm recent Congressional intent to eliminate the Rural
            Abandoned Mine Program (RAMP) under Title IV and to reallocate
            those moneys to the historic coal production share. While these
            moneys would be used primarily to address high priority coal-
            related sites, the states and tribes may coordinate their
            efforts with the Natural Resources Conservation Service and the
            local soil and water conservation districts in an attempt to
            address their concerns as well.
      --To assure adequate funding for minimum program (under-funded)
            states who have consistently received less than their promised
            share of funding ($2 million) over the past several years,
            thereby undermining the effectiveness of their AML programs.
      --To address a few other select provisions of Title IV that will
            enhance the overall effectiveness of the AML program, including
            remining incentives, state set-aside programs, handling of
            liens, and enhancing the ability of states to undertake water
            line projects.
      --Finally, to address how the accumulated, unappropriated state and
            tribal share balances in the Fund will be handled (assuming
            that the interest in the Fund is no longer needed to address
            shortfalls in the UMW Combined Benefit Fund), while at the same
            time assuring that an adequate state share continues for the
            balance of the program to insure that all states and tribes are
            well-positioned and funded to address existing AML problems.
        Mr. Chairman, it is obvious from an assessment of the current
    inventory of priority 1 and 2 sites that there will not be enough money
    in the AML Trust Fund to address all of these sites before fee
    collection is set to expire in September. It is even more obvious that,
    regardless of what the unappropriated balance in the Fund is (currently
    $1.5 billion) and what future fee collections will add to that balance
    over the next year, recent Congressional appropriations for state and
    tribal AML program grants have been woefully inadequate and have not
    keept pace with our ability and desire to address the backlog of old as
    well as continually developing high priority AML problems. We are
    therefore faced with a significant challenge over the next few months--
    and that is to reconcile all of the various interests and concerns
    attending the administration of the AML program under Title IV of SMCRA
    in a way that assures the continuing integrity, credibility and
    effectiveness of this successful and meaningful program under SMCRA.
        The states welcome the opportunity to work with your committee, Mr.
    Chairman, and other affected parties to address the myriad issues that
    attend the future ability of the AML Fund to address the needs of
    coalfield citizens Any adjustments to Title IV of SMCRA must be
    presented and considered in a judicious and productive environment that
    allows for all affected parties' concerns to be heard and addressed,
    including coalfield residents who are directly affected by AML dangers
    and who have been adversely impacted by the unappropriated balance that
    delays further restoration of their communities. In this regard, it
    should be kept in mind that any legislative adjustments which have the
    result of significantly undermining state AML funding or the efficacy
    of state AML programs could lead state legislatures to seriously
    reconsider SMCRA primacy entirely--both Title IV and Title V. This very
    scenario was contemplated by the framers of SMCRA who structured the
    Act so that the Title IV AML program would serve as an incentive for
    states to adopt and implement Title V regulatory programs. Should the
    AML ``carrot'' be eliminated, the desire to maintain Title V primacy
    could be seriously re-thought by some state legislatures, particularly
    during difficult budget times, thus placing OSM in the undesirable
    position of having to run these programs at a significantly increased
    cost to the federal government. Hence the importance of assuring that
    the current state share provisions in SMCRA are held harmless in any
    proposed restructuring of the current allocation formula.
        We also urge the Subcommittee to support adequate funding for OSM's
    training program, including moneys for state travel. These programs are
    central to the effective implementation of state regulatory programs as
    they provide necessary training and continuing education for state
    agency personnel. Additionally, the states are key players in OSM's
    training program, providing instructors for many of the courses. IMCC
    also urges the Subcommittee to support adequate funding for TIPS, a
    program that directly benefit the states by providing needed upgrades
    to computer software and hardware. In this regard, we strongly support
    the proposed increase of $600,000 for the training program and TIPS.
        Finally, IMCC requests continuing support for the Acid Draining
    Technology Initiative (ADTI), a nationwide technology development
    program with a guiding principle of building consensus among Federal
    and State regulatory agencies, universities and the coal industry to
    predict and remediate acid drainage from active and inactive coal and
    metal mines. This collaborative effort receives funding and other
    support from industry and several federal agencies for specific
    projects. OSM has provided ADTI $200,000 for the last four fiscal
    years, which has been a consistent source of funding for activities
    related to acid mine drainage from coal mines and has been instrumental
    in accomplishing ADTI's goals. We support continued funding for this
    vital initiative.
        In conclusion, we want to reiterate that adequate Title V grants
    are the lifeblood of effective state regulatory programs. Should states
    be unable to operate these programs due to funding constraints, the
    federal government will be faced with the burden of operating
    regulatory programs at a substantially increased cost (generally 30 to
    50 percent more). Further, without Title V programs in place, states
    are unable to access Title IV funds. In the final analysis, it behooves
    everyone--OSM, the Congress and the states--to commit the resources
    necessary to assure strong and effective state programs that will
    achieve the purposes and objectives of SMCRA, thereby protecting the
    environment where active mining operations occur and enhancing the
    environment through remediation of past problems associated with
    abandoned mines.
                                     ______

     Prepared Statement of the National Association of Abandoned Mine Land
                                    Programs

        My name is Steve Hohmann and I am the Director of the Kentucky
    Division of Abandoned Mine Lands and also the President of the National
    Association of Abandoned Mine Land Programs (NAAMLP). I am submitting
    this statement on behalf of the NAAMLP. The NAAMLP is a tax exempt
    organization consisting of 30 states and Indian tribes with a history
    of coal mining and coal mine related hazards. These states and tribes
    are responsible for 99.5 percent of the Nation's coal production. All
    of the states and tribes within the NAAMLP administer abandoned mine
    land (AML) reclamation programs funded and overseen by the Office of
    Surface Mining (OSM) pursuant to Title IV of SMCRA, Public Law 95-87.
    This statement reflects where I believe the states and tribes are
    coming from when we look to the future of the AML program and its
    funding.
        We strongly feel that the future of the AML program should continue
    to focus on the underlying principles and priorities upon which SMCRA
    was founded--protection of the public health and safety, environmental
    restoration, and economic development in the coalfields of America.
    Over the past 25 years, tens of thousands of acres of mined land have
    been reclaimed, thousands of mine openings have been closed, and
    safeguards for people, property and the environment have been put in
    place.
        Based on information maintained by OSM in its Abandoned Mine Land
    Inventory System (AMLIS), as of September 30, 2003, the states and
    tribes have obligated 94 percent of all AML funds received and $1.7
    billion worth of priority 1 and 2 coal-related problems have been
    funded and reclaimed. Another $319 million worth of priority 3 problems
    have been funded or completed (many in conjunction with a priority 1 or
    2 project) and $343 million worth of noncoal problems have been funded
    or reclaimed.
        Please remember that the AML program is first and foremost designed
    to protect public health and safety. Even though accomplishments in the
    inventory are reported in acreage for the sake of consistency, the bulk
    of state and tribal AML projects directly correct an AML feature that
    threatens someone's personal safety or welfare. While state and tribal
    AML programs do complete significant projects that benefit the
    environment, the primary focus has been on eliminating health and
    safety hazards first and the inventory of completed work reflects this
    fact.
        What the inventory also reflects, at least to some degree, is the
    escalating cost of addressing these problems as they continue to go
    unattended due to insufficient appropriations from the Fund for state
    and tribal AML programs. Unaddressed sites tend to get worse over time,
    thus increasing reclamation costs. Inflation exacerbates these costs.
    The longer the reclamation is postponed, the less reclamation will be
    accomplished. The inventory is also dynamic, which we believe was
    anticipated from the inception of the program. The states and tribes
    are finding new high priority problems each year, especially as we see
    many of our urban areas grow closer to what were formerly rural
    abandoned mine sites. New sites also continually manifest themselves
    due to time and weather. For instance, new mine subsidence events and
    landslides will develop and threaten homes, highways and the health and
    safety of coalfield residents. This underscores the need for continual
    inventory updates, as well as constant vigilance to protect citizens.
    In addition, as several states and tribes certify that their abandoned
    coal mine problems have been corrected, they are authorized to address
    the myriad health and safety problems that attend abandoned noncoal
    mines.
        In the end, the real cost of addressing priority 1 and 2 AML coal
    problems likely exceeds $6 billion. The cost of remediating all coal-
    related AML problems, including acid mine drainage (priority 3 sites),
    could be 5 to 10 times this amount and far exceeds available monies.
        It should also be kept in mind that, since grants were first
    awarded to the states and tribes for AML reclamation, over $3 billion
    has been infused into the local economies of the coalfields. These are
    the same economies that have been at least partially depressed by the
    same abandoned mine land problems that the program is designed to
    correct. In fact, those dollars spent in economically depressed parts
    of the country, such as Appalachia, could be considered part of an
    investment in redevelopment of those regions. The AML program
    translates into jobs, additional local taxes, and an increase in
    personal income for the Nation's economy. For each $1 spent on
    construction, $1.23 returns to the Nation's economy. For each $1
    million in construction, 48.7 jobs are created (U.S. Forest Service
    IMPLAN, 1992 data for non-residential and oil and gas construction).
    The AML expenditures over the past 25 years have returned over $4
    billion to the economy and have created some 150,000 jobs.
        The ability of the states to accomplish the needed reclamation
    identified in current inventories is being constrained by the low level
    of funding for state AML programs. Since the mid-1980's, funding for
    state AML grants has been declining. Up until this year, we have seen
    the President's budget propose significant reductions for state AML
    grants, which Congress has ultimately (and thankfully) restored. While
    we are well aware of the Administration's budgetary efforts to meet
    other priorities related to Homeland Security and the War on Terrorism,
    we believe it is vital to release AML money that is already statutorily
    dedicated for reclamation thereby increasing the security of the
    American homeland in the nation's coalfields.
        We were greatly encouraged by the President's proposed budget for
    fiscal year 2005, which has proposed an increase of $53 million for
    state AML grant funding above last year's approved level of $149
    million. The NAAMLP firmly believes that the most important method to
    address the nation's AML problem is to significantly increase funding
    allocated to states and tribes for reclamation. Lack of adequate
    funding has been the greatest inhibition to progress under Title IV of
    SMCRA in recent years and must be addressed if we are to enhance the
    ability of the states and tribes to get more work done on the ground
    within any foreseeable time frame. Adequate, equitable, and stable
    funding must be provided to the states and tribes on an annual basis
    that will allow them to address the AML problems their citizens are
    experiencing and to implement their respective AML programs to provide
    the services intended by SMCRA.
        The NAAMLP further realizes that the Administration's proposed
    increase of $53 million for AML in fiscal year 2005 is closely tied to
    the AML fee reauthorization proposal advanced by OSM and embodied in
    H.R. 3778 and S. 2049. While the members of the NAAMLP do not currently
    have a consensus position on those specific bills, we firmly support
    reauthorization of the AML program and advocate increased AML funding
    regardless of the legislative approach to reauthorization. Any
    reauthorization proposal that is enacted should contain provisions that
    guarantee increased funding to AML states and tribes into the future in
    order to protect their citizens from the hazards of abandoned mines.
        Finally, our members also endorse the Administration's fiscal year
    2005 budget increase of $260,000 to OSM's National Technical Training
    Program (NTTP). This program mainly serves the NAAMLP membership by
    providing specialized training to AML staff in NEPA requirements, AML
    design, and construction management. The training program also includes
    a component that provides technical training in computer software
    applications and software sharing which allows states and tribes to
    employ computer aided design techniques to enhance the AML design
    process.
        Thank you for the opportunity to submit this statement. Please
    contact me if the NAAMLP can provide more information or assist the
    subcommittee in any way.
                                     ______

      Prepared Statement of the National Association for State Community
                               Services Programs

        As Chair of the Board of Directors for the National Association for
    State Community Services Programs (NASCSP), I am pleased to submit
    testimony in support of the President's 2005 Budget request of $291.2
    million for the Department of Energy's (DOE) Weatherization Assistance
    Program (WAP) and in support of $74 million for the DOE State Energy
    Programs (SEP). NASCSP is the member organization representing the
    states on issues related to the WAP and the Community Services Block
    Grant. The state offices represented by our organization would like to
    thank this Committee for its continued support of the WAP and SEP
    through the years. The $227.6 million in WAP funds provided by the
    Committee in 2004 is expected to result in:
      --An additional 93,750 homes occupied by low-income families
            receiving energy efficiency services, thereby reducing the
            energy use and associated energy bills;
      --Greenhouse gases and environmental pollutants being significantly
            reduced due to the decrease in energy use by these newly
            weatherized homes; and
      --Nearly 16,000 full time, highly skilled, jobs being supported
            within the service delivery network and in related
            manufacturing and supplier businesses.
        The WAP is the largest residential energy conservation program in
    the nation and serves a vital function in helping low-income families
    reduce their energy use. Developed as a pilot project in 1975, the WAP
    was institutionalized in 1979 within DOE and is operated in all 50
    states, the District of Columbia, and on several Native American
    reservations. The funds are used to improve the energy efficiency of
    low-income dwellings using the most advanced technologies and testing
    protocols available in the housing industry. The energy conservation
    resulting from these efforts helps our country reduce its dependency on
    foreign oil and decreases the cost of energy for families in need. With
    lower energy bills, these families can increase their usable income and
    buy other essentials like food, shelter, clothing, medicine, and health
    care.
        The WAP provides an energy audit for each home to identify the most
    cost-effective measures, which typically include adding insulation,
    reducing air infiltration, servicing the heating and cooling systems,
    and providing health and safety diagnostic services. For every dollar
    spent, the WAP returns $2.83 in energy and non-energy benefits over the
    life of the weatherized home, based on the Energy Information
    Administration's long-term energy prices outlook and studies conducted
    by the Oak Ridge National Laboratory. Since the program's inception,
    more than 5,100,000 homes have been weatherized using federal, state,
    utility and other monies.
        As we all know, these are troubling times facing our nation--war,
    budget deficits, homeland security needs, and a slowed economic
    recovery. These times create added financial burdens for all Americans,
    but especially for those who live at or below the poverty line. Low-
    income families have always spent a disproportionate share of their
    income for energy needs than their middle-income counterparts. For
    example, a typical middle class family pays about 3 to 7 percent of
    their annual income for energy costs (heat, lights, air conditioning,
    appliances and hot water). Low-income families pay nearly the same
    dollar amount each year for energy but this amount represents a
    significantly higher percentage of their total household income (14 to
    20 percent). In times of energy shortages and escalating energy costs,
    the energy burden for these families can reach 25 to 40 percent or more
    of their available income.
        When energy costs rise, like they have during the 2003-04 heating
    season, even a nominal increase can have a dramatic negative impact on
    low-income families. The expected increase in this year's energy costs
    may amount to an additional $250 for most families. For middle-income
    families, this increase will amount to less than one quarter of one
    percent of the total household income. For many low-income families;
    however, a $250 increase will result in a 3 to 5 percent increase and
    will require families to go without other important essentials like
    food, medicine, or clothing to meet this higher financial demand.
        These families need long-term solutions to help them reduce their
    energy use both now and in the future--resulting in lower energy bills.
    That is the primary mission of the Weatherization Assistance Program:

        ``To reduce heating and cooling costs for low-income families,
    particularly for the elderly, people with disabilities, and children,
    by improving the energy efficiency of their homes while ensuring their
    health and safety.''

        The Oak Ridge National Laboratory report entitled State Level
    Evaluations of the Weatherization Program in 1990-1996: A Meta-
    evaluation That Estimates National Savings found that the WAP
    significantly improved its energy savings results during those years.
    In 1996, the Program showed savings of 33.5 percent of gas used for
    space heating--up from 18.3 percent savings in 1989. The increase in
    savings was based in large part on the introduction and use of more
    sophisticated diagnostic tools and audits. Families receiving
    weatherization services can reduce their heating energy use by an
    average of 22 percent, making the cost for heating their homes more
    affordable. The Evaluation report also concluded that the WAP possessed
    a favorable cost-benefit ratio. Simply stated, the federal funds
    provided to support the Program have a 140 percent return on
    investment, or nearly $2.83 in benefits for every dollar invested. By
    reducing overall energy use, families can realize average savings of
    $250 or more each year, thereby helping families move closer to
    economic self-sufficiency.
        The WAP has always served as a testing ground and provides a
    fertile field for the deployment of research conducted by national
    laboratories. For example, the Oak Ridge National Laboratory developed
    the National Energy Audit (NEAT) for use by local agencies in assessing
    cost effectiveness of service delivery. Oak Ridge is currently
    investigating the cost effectiveness of including certain base load
    measures (water heater replacement, lighting, motor efficiency) into
    the Program and continues to test other protocols and material
    installation techniques to help state and local agencies improve their
    field operations. The Florida Solar Energy Center and the state of
    Hawaii are working on the development of cost effective solar hot water
    heaters. The State of New York, working in concert with the local
    utility companies and the State Energy Research Development Authority,
    has implemented a refrigerator replacement program to test the impact
    of providing base-load services to conserve energy and reduce costs.
        One of the major outcomes of WAP field deployment is that the
    private sector eventually adopts these technologies. This pattern has
    been established through several advancements including blower door-
    directed air infiltration, duct system testing and sealing, furnace
    efficiency standards, and insulation and ventilation protocols. The
    acceptance of these standards and protocols by the private sector is
    enormously important as builders attempt to construct new properties or
    rehabilitate existing ones using a renewed energy efficiency
    philosophy.
        Of equal importance to the technological and programmatic
    foundation are the WAP contributions in achieving overall national
    energy policies and social strategies. Some examples of how the Program
    helps achieve these goals include:
      --Reducing harmful green house gas through reduced CO2
            emissions by avoiding energy production. Each time a house is
            weatherized, the reduction in energy needs reduces the
            environmental impact associated with creating that energy
            reduction of sulfur dioxide, carbon, and other pollutants
            spilled into the atmosphere from the burning of fossil fuels
            like oil, coal, kerosene, wood, gas, and propane.
      --Increasing jobs in communities throughout the country. For every
            one million dollars invested in the WAP, more than 51 full time
            jobs are created and supported in the states. Another 20 jobs
            are created in companies who provide goods and services to the
            Program. With the $291.2 million requested in the President's
            budget, nearly 20,000 full-time, above minimum wage jobs are
            supported in local communities and in related service and
            material industries.
      --Investing money into communities through job creation, local
            purchasing of goods and services, and tax revenues. These
            investments result in many secondary benefits. These residual
            benefits, known as ``economic benefit multipliers,'' are
            applied to local community investment to value the real worth
            of money used locally. This multiplier is 3.5 to 4 times the
            actual investment. This means that an investment of $291.2
            million in the WAP could yield nearly $1.3 billion in economic
            benefits to local communities.
      --Reducing consumption of imported fuels by reducing residential
            energy consumption. Our country currently imports nearly 60
            percent of its oil from foreign countries. This figure is
            higher than the import percentage in the 1970s, when the oil
            embargo threatened our ability to operate as a nation. The
            conservation efforts of the WAP network will help reduce our
            country's dependency on foreign oil, thereby strengthening our
            country's national security.
        In 2001, the Administration earmarked the WAP as a ``Presidential
    Priority'' in its National Energy Policy Plan. President Bush committed
    $1.4 billion to be added to WAP over a ten-year period to help
    thousands of low-income families meet their energy needs while reducing
    their energy burden. Each year since then, the Administration has asked
    for higher appropriations levels in their budgets submitted to
    Congress. In response to these higher budget requests, Congress voted
    to fund the WAP in 2004 at $227.6 million--$61 million less than the
    President's request. Again in 2005, the President, in keeping with his
    commitment to WAP as a ``priority'' within his energy strategy, has
    asked Congress to appropriate $291.2 million for the Program. Our
    organization strongly supports the President's request and would
    respectfully request this Committee to provide the funding at the
    budget request level of $291.2 million to meet the President's priority
    status for the WAP.
        In addition to the state grant funds included in this year's
    request, the states are also supporting an initiative being sponsored
    by the Office of Management and Budget to conduct an overall evaluation
    of the WAP to establish its cost effectiveness as a federal investment.
    The last in-depth evaluation of the WAP occurred in 1989, with various
    meta-evaluations being conducted in subsequent years. This new
    evaluation initiative will help solidify the Program's claim of
    outstanding energy conservation and long-term assistance to low-income
    families in need. The evaluation will take approximately three years to
    complete and could cost nearly $9 million. NASCSP respectfully requests
    that a line item in the Appropriations bill be created to set-aside
    these funds from the traditional state formula grant activity and that
    the Department of Energy be given the decision of how these funds will
    be set-aside (either within one year or over an extended period of
    time).
        NASCSP is also concerned about the low level of funding proposed
    for the State Energy Programs (SEP) in 2005. SEP enjoys a broad
    constituency, supporting state energy efficiency programs that include
    energy generation, fuels diversity, energy use in economic development,
    and promoting more efficient uses of traditional energy resources. SEP
    funding has fallen steadily from a recent high in 1995 of $53 million
    to its fiscal year 2004 level of $45 million. The President's fiscal
    year 2005 request is $42 million. The state energy offices are the
    crucial centers for organizing energy emergency preparedness. They have
    been asked to do much new work in the sensitive area of infrastructure
    security. Taking into consideration this growing burden, the increasing
    difficulty of managing energy resources, together with increasing
    opportunities for states to implement cost-saving measures, we are
    supporting their request of $74 million for fiscal year 2005. This
    level would restore the program's recent funding cuts, enhance their
    ability to address energy emergency preparedness, and allow for
    inflationary impacts since 1995.
        By the evidence provided herein, this Committee can be assured that
    the increase in WAP and SEP funding will provide essential services to
    thousands of low-income families, resulting in greater energy savings,
    more economic investments, increased leveraging of other funds, and
    less reliance on high-cost, foreign oil--outcomes that will benefit the
    nation. NASCSP looks forward to working with Committee members in the
    future as we attempt to create energy self-sufficiency for millions of
    American families through these invaluable national programs.
                                     ______

        Prepared Statement of the National Association of State Energy
                                   Officials

        Mr. Chairman and members of the Subcommittee, the National
    Association of State Energy Officials (NASEO) submits this testimony in
    support of funding for a variety of U.S. Department of Energy programs.
    Specifically, we are testifying in support of no less than $365.2
    million in funding for the State Grant programs, including, the State
    Energy Program (SEP) ($74 million) and the Weatherization Assistance
    Program (WAP) ($291.2 million). This figure moves in the direction of
    President Bush's promise included in his campaign issue paper to double
    the Weatherization Assistance Program and the State Energy Program.
    This campaign promise would provide $76 million for SEP and $306
    million for WAP. We also support an important program which has been a
    dramatic success, the State Energy Programs Special Projects (SEP
    Special Projects) account, which should receive at least level funding
    of $16.5 million. SEP Special Projects has set a standard for state-
    federal cooperation and matching funds to achieve critical federal and
    state energy goals. These programs are successful and have a strong
    record of delivering savings to low-income Americans, homeowners,
    businesses, and industry. We also support the increase proposed in the
    President's budget for the Energy Information Administration (EIA) and
    an increase of $600,000 for EIA's State Heating Oil and Propane Program
    in order to cover the added costs of doubling the frequency of
    information collection (to weekly), the addition of natural gas, and
    increasing the number of state participants. Generally, EIA funding is
    a critical piece of energy emergency preparedness and response. NASEO
    continues to support at least level funding for a variety of critical
    deployment programs, including Rebuild America, Energy Star and Clean
    Cities. The industries program should be funded at a $100 million level
    to promote efficiency efforts and to maintain U.S. manufacturing jobs,
    especially in light of the loss of millions of these jobs in recent
    years. Proposed cuts in these programs are counter-productive and are
    detrimental to a balanced national energy policy. The states also
    strongly support increased funding for the State Technology Advancement
    Collaborative (STAC). The fiscal year 2004 conference report allocated
    $5 million for STAC and recommended that DOE direct other resources
    into this successful initiative. It is a new area of cooperation. Our
    hope is that STAC will speed procurement and dramatically improve
    multi-state/federal cooperation and coordination.
        Over the last year, both oil and gas prices have been rising in
    response to international events as well as very low domestic
    inventories. Even in the absence of the international situation, the
    United States may very well find itself in the grips of an energy
    crisis as summer approaches. In addition, we now have quantifiable
    evidence of the success of the SEP program, which we did not have in
    years past, which demonstrates the unparalleled savings and return on
    investment to the federal taxpayer of SEP.
        In January 2003, Oak Ridge National Laboratory (ORNL) completed a
    study and concluded, ``The impressive savings and emissions reductions
    numbers, ratios of savings to funding, and payback periods . . .
    indicate that the State Energy Program is operating effectively and is
    having a substantial positive impact on the nation's energy
    situation.'' The ORNL study found that $1 in SEP funding yields:
      --$7.23 in annual energy cost savings
      --1.17 million source MMBTUs saved
      --$3.54 in leveraged funding from the states and private sector
      --Annual energy savings of 41,358,478 BTUs
      --Annual cost savings of $256,422,600
        The annual cost-effective emissions reductions associated with the
    energy savings are equally significant: (1) Carbon--719,251.8 metric
    tons; (2) VOCs--127.2 metric tons; (3) NOX--5,739 metric
    tons; (4) PM10--144.8 metric tons; (5) SO2--7,655.7 metric
    tons; and (6) CO--968.7 metric tons.
        It is important to note that the actual program benefits are even
    greater since the ORNL study quantifies the benefits of only 14 SEP
    program areas, representing about 60 percent of SEP funding. This means
    that the savings above are calculated on 100 percent of SEP funding but
    include only 60 percent of the results. Results not quantified include
    clean energy production activities such as demonstration of alternative
    fuels, development of wind energy resources, and geothermal activities.
    In addition, essential energy emergency preparedness and response
    activities are not quantified by the ORNL study (since the study
    focused only on energy efficiency activities).

                    EXAMPLES OF RECENT SEP-FUNDED ACTIVITIES

        California.--The SEP program has helped California leverage other
    funding sources for projects. The Public Agency Energy Efficiency Loan
    Program has operated since 1979, and it has awarded over $160 million
    in low cost loans to 750 organizations, with total energy cost savings
    of over $130 million annually. This helps hospitals, schools and
    colleges. The California Energy Commission instituted a demand response
    program which has reduced peak demand (250 MW in 2002), and they are
    operating a statewide pilot for dynamic pricing. Since 1998, the
    Commission's renewable energy promotion program has helped bring 420 MW
    of new facilities on line. Under the SEP Special Projects program the
    State has received $14 million, leading to leveraging of $85 million in
    non-federal funds for innovative projects.
        Kansas.--The State is concentrating efforts on energy efficiency in
    colleges and universities, other state institutions and municipal
    buildings. Utilizing energy service performance contracts, the State
    has developed $80 million in projects, with annual savings of $7.2
    million so far, impacting 22 million square feet of space. The projects
    range from municipal buildings in Topeka and Manhattan to the
    University of Kansas Medical Center. In other areas, the state energy
    office is promoting wind energy development, innovative photovoltaic
    applications and soybean/diesel use as a transportation fuel.
        Maryland.--The Maryland Energy Administration (MEA) is strongly
    promoting Energy Star products in the State. $1 million has been made
    available to market Energy Star appliances, lighting, lighting fixtures
    and heating and cooling equipment. The Governor has been an active
    participant in the advertising campaign. The State provides a 7-1 match
    for the basic SEP grant. The State has also been actively promoting
    industrial partnerships, with over 100 companies participating in
    energy assessments, training or specific process efficiency or other
    energy projects. The energy performance contracts developed in 2003
    with MEA's assistance totaled $14 million. A separate state agency loan
    program for energy efficiency helped universities and hospitals, and
    other state-supported institutions. A Green Building Tax Credit was
    launched in late 2003, with an allocation of $25 million to offset the
    higher costs of design and construction associated with green
    buildings. $34 million in projects have already been encouraged.
    Maryland is focusing on energy projects associated with economic
    development.
        Mississippi.--The breadth of this State's programs are staggering.
    The Energy Division provided almost $1.2 million in grants to a diverse
    group including Holmes County Schools, Oktibbeha Economic Development
    Authority, North Panola School District, City of Jackson, Alcorn State
    University, Coast Transit Authority, Delta Transit System, City of
    Natchez, etc. Loans for innovative energy/economic development projects
    have included Foster Millworks and Timber Productions, Mississippi
    River Corporation and Laurel Lumber Company (this project utilized
    waste wood to reduce natural gas usage). Energy performance contracts
    have been executed totaling approximately $34 million. Almost $3
    million in energy efficiency lease-purchase financing loans have been
    provided to state institutions, colleges and school districts.
        Montana.--The State is focusing on residential energy efficient
    housing. A new $500 State energy conservation tax credit for new and
    existing homes built above code has dramatically changed the
    residential housing market. A focus on public buildings, multi-family
    housing, schools and local governments through a partnership with DOE's
    Rebuild America Program has stimulated an $11.5 million investment in
    energy efficiency on over 2 million square feet of building space. The
    State also issued $7.5 million in general obligation bonds to fund 60
    projects for energy efficiency in State-owned buildings. SEP provides
    engineering and technical support to allow these projects to go
    forward. Montana is also working to promote alternative fuels use in
    Yellowstone and Grand Teton Parks through a regional coalition.
        Nevada. They have focused on a wide variety of projects. Working
    with the Clark County School District, the energy office has helped
    produce energy savings of $6.7 million over the past three years alone,
    with $4 million in 2003. The State is focusing on increasing the
    effectiveness of energy codes by working with builders and local code
    officials. Utilizing SEP and other funds, the State is promoting use of
    alternative fuels. Expansion of renewable energy facilities has also
    been a priority of this office, including wind, solar and geothermal
    plants.
        New Mexico.--The State played a key role in the development of the
    204 MW New Mexico Wind Energy Center, which commenced operations in
    2003. The State is also working with Mexico to improve energy
    efficiency in the border region. The energy office is developing energy
    performance contracts, which have produced enormous savings for Santa
    Fe Community College and the Albuquerque Housing Authority, to name
    two. The energy office has also reviewed 122 construction plans for
    public schools in the State to ensure compliance with energy codes and
    to suggest energy cost savings opportunities.
        North Dakota.--The energy office has instituted a performance
    contracting and State Facility Energy Improvement Program, the latter
    utilizing State-issued bonds to finance projects with a 10-year payback
    or less. $4.5 million in projects for 37 buildings has been instituted,
    with a payback of 6.3 years. Twelve institutions have also participated
    in performance contracting with $14 million in improvements funded,
    involving 184 buildings with annual savings of approximately $1.5
    million annually. SEP has also allowed the State to conduct resource
    modeling, which has assisted in the development of wind energy
    resources.
        South Carolina.--The energy office has focused on economic
    development projects. For example, the state played a key role in the
    development of the 5 MW Palmetto Landfill/BMW LFGTE project, which
    provides 25 percent of the BMW facility's power needs. The State has
    also put into use (or encouraged private companies to utilize) 1,200
    alternative fuel vehicles. In fiscal year 2003 alone, the state
    committed $3 million to finance 11 energy efficiency projects for five
    state agencies, one school district and a local government, which is
    projected to save $12 million in lifetime energy costs. These public
    sector energy efficiency programs have generated nearly $50 million in
    life-cycle savings since the start of the program, with $12.9 million
    of energy office investment.
        Vermont.--In Vermont, over $7 million has been invested in schools
    for energy efficiency. The energy office is also working with farmers
    on innovative methane production programs utilizing animal waste,
    including anaerobic digesters. The State has promoted a residential
    energy code, which includes training for architects and builders.
    Starting in 2003, financial incentives have now been provided for
    solar, wind and solar hot water systems.
        West Virginia.--The State has been working on industrial energy
    efficiency programs for many years. Working with West Virginia
    University, the state has identified industrial process efficiency
    improvements in five plants in 2003 alone, with annual savings of $2
    million, with a federal investment of only $75,000 through SEP. Some of
    the other innovative projects include: (1) boric acid alternatives to
    heat treatment (kiln drying) for pallet lumber manufacturers, to save
    energy and costs; (2) development of a poultry house biofilter project
    to remove ammonia; and (3) promotion of energy efficiency programs for
    aluminum, chemical, forest products, glass, metals casting, mining and
    steel industries.

                                   CONCLUSION

        In conclusion we would like to remind the Subcommittee of the
    successes that state energy offices deliver to the taxpayer in spite of
    the relatively small federal investment in the program. This modest
    federal investment, through the State Energy Program, is the type of
    success that state-federal energy partnerships can deliver. The states'
    success is based upon our ability to directly meet the needs of
    taxpayers, small business people, farmers, and industry. We are asking
    for $74 million in funding for SEP for fiscal year 2005; a small price
    to pay for success. As Congress and the Administration consider the
    development of a new energy policy, we understand the need to
    prioritize funding. We need to achieve a balance between demand-side
    and supply-side resources. The programs we discuss herein can help us
    address our energy problems, both in the near-term and the long-term.
                                     ______

            Prepared Statement of the National Hydrogen Association

        The National Hydrogen Association (NHA) supports the President's
    Budget Request for FreedomCar under the vehicle technologies section of
    the Energy Efficiency and Renewable Energy program, and the President's
    FutureGen initiative for new technologies including carbon
    sequestration and the hydrogen from coal initiative under the Fossil
    Energy section of the U.S. Department of Energy's budget. The National
    Hydrogen Association encourages the Committee to consider an increase
    of $7 million to be added to the technology validation line item in the
    fuel cell technologies program of the Energy Conservation section of
    the Department of Energy's budget, increasing the total for the fuel
    cell technologies program from $77.5 million to $84.5 million.
        The Committee is familiar with the challenges and the potential of
    fuel cells for transportation and is aware of industrial commitments to
    fully develop and test this technology before it is put in the hands of
    consumers. Technology validation is necessary at various intervals to
    assure progress is occurring and money, both public and private, is
    being appropriately spent. Therefore, the National Hydrogen Association
    urges the Committee to consider the request for an increase in
    technology validation.
        The National Hydrogen Association recognizes three primary drivers
    to a future fueled by hydrogen. They are:
      --Energy Security
      --Economic Prosperity
      --Environmental Stewardship
        The President's coal initiative with carbon sequestration as
    identified in the budget request, addresses each one of these drivers.
    Furthermore, the NHA has identified the commercialization of fuel cells
    and other hydrogen-related technologies as taking place in stationary
    applications before transportation applications. The President's coal
    program incorporates hydrogen production and use thus enabling a
    commercialization path with environmental consideration built in. The
    National Hydrogen Association supports the requested increase in this
    program.
        The NHA is aware, as are members of the Committee, that the
    transition to hydrogen is complex. Technological challenges must be met
    and commercialization barriers lowered to attract industrial interest
    and money to leverage federal dollars. This Committee has required
    cost-sharing of DOE-funded projects. The NHA supports the cost-share
    requirement but urges the Committee to send a strong message of support
    to the corporate and small business community that their investment in
    this somewhat risky future will be recognized. Please send this message
    by a full appropriation of the President's budget request for
    FreedomCar, the zero-emission coal initiative, and a fuel cell
    technology program funded at $84.5 million.
        The National Hydrogen Association is a trade membership association
    comprised of over 86 industry, small business and university/research
    members dedicated to enabling the transition to hydrogen. Since its
    inception in 1989, the NHA has fostered the development of hydrogen
    technologies and their utilization. It is committed to the ideas that
    hydrogen can be produced from domestic resources, distributed as an
    energy carrier for use in transportation and stationary applications,
    and barriers to commercialization can be overcome. All of these ideas
    are at various stages of implementation as part of the transition to a
    hydrogen energy future.
        Thank you for allowing this testimony to be submitted for the
    record.
                                     ______

             Prepared Statement of the National Mining Association

        The National Mining Association's (NMA) member companies account
    for the vast majority of the coal, metals and minerals mined in the
    United States today. This statement presents the mining industry's
    views on the fiscal year 2005 budget for the following agencies: Office
    of Fossil Energy, Office of Energy Efficiency and Renewable Energy,
    Energy Information Administration, the U.S. Geological Survey and the
    Bureau of Land Management.

                            OFFICE OF FOSSIL ENERGY

        NMA strongly supports the President's FutureGen initiative
    announced last year by Department of Energy (DOE) Secretary Spencer
    Abraham. The integration of coal gasification technology, combined
    cycle electricity generation, hydrogen production and carbon
    sequestration is an important step for our nation's energy future. Over
    the long term, domestic coal can continue to provide the basis for
    affordable electricity and become the basis for affordable hydrogen for
    transportation and other uses. When coupled with carbon sequestration,
    America can move rapidly toward energy independence with near zero to
    zero emissions.
        The DOE's fiscal year 2005 budget requests $237 million for the
    FutureGen project and $50 million for the Clean Coal Power Initiative
    (CCPI). The NMA supports the Administration's funding request for
    FutureGen using previously appropriated funds for the Clean Coal
    Technology Program. However, the NMA is concerned that the
    Administration's support for the FutureGen project has come at the
    expense of the CCPI and basic coal R&D programs. The technologies
    developed in the CCPI and coal R&D programs are integral to the success
    of the FutureGen project. The alliance of coal and utility companies
    interested in cost-sharing the FutureGen project with the federal
    government warned the Administration that this type of request could
    jeopardize the future technological integrity of the FutureGen project.
    The NMA urges the Congress to restore the shortfalls in the CCPI and
    the deep cuts to the coal R&D programs while providing statutory
    language which would dedicate the total $237 million to the FutureGen
    project in this and future fiscal years.
        Ongoing R&D activities must be maintained and expanded to support
    the greater use of coal while addressing the new SO2,
    NOX and mercury standards proposed under the Clear Skies
    Initiative and by pending EPA regulations. NMA recommends that DOE
    restore funding for the advanced coal combustion program and the
    advanced turbine research program. Coal utilization science and related
    programs are also essential to assure the development of advanced coal
    technologies. NMA supports funding for the development of advanced
    materials aimed at steam power generation in ultra supercritical modes.
    The current request is only adequate to continue existing work, thus
    limiting the opportunity for new research. DOE should use a portion of
    the funds appropriated for this program for new projects.
        The funding specifically allocated for the Integrated Gasification
    Combined Cycle program must be increased from the requested $34.45
    million. The requested level severely limits support for hydrogen
    initiatives and FutureGen. NMA recommends that the funding levels be
    increased to $66 million to accelerate pilot and intermediate scale
    work and field testing as well as for design work needed for various
    coal ranks and for increased system reliability.
        Carbon Capture and Sequestration.--The DOE Carbon Capture and
    Sequestration program is designed to develop a portfolio of cost
    effective greenhouse gas capture, storage and mitigation technologies
    to the point of commercial readiness by 2012. The program is an
    important part of the President's FutureGen initiative. The current
    program is focused on developing efficient, low cost approaches to
    advanced CO2 separation technologies. In fiscal year 2005
    the funding requested will continue this focus and complete pilot
    projects begun this year. NMA supports the $49 million requested for
    this program and believes that it should be expanded to allow DOE to
    undertake more pilot demonstration projects for pre-combustion,
    membrane and post-combustion CO2 capture technologies. Many
    of these projects will be of a longer term nature, but research must
    begin now.
        Solid Fuels and Feedstocks Research.--Research is needed to develop
    advanced technologies for the recovery, separation and utilization of
    coal resources economically and in an environmentally acceptable
    manner. The research being conducted by CAST (Coal Advanced Separation
    Technologies) is directed toward this goal. Support for this program is
    not included in the DOE fiscal year 2005 budget request. NMA supports
    restoring $5.0 million for advanced separation research.
        NMA supports continued funding of the Steubenville Comprehensive
    Air Monitoring Program (SCAMP) to develop information essential for
    defining the relationship between fine particulate matter (PM)
    concentrations in ambient air and the fine PM concentrations to which
    individuals are exposed. SCAMP is co-funded by the Department of
    Energy, the Ohio Coal Development Office, the National Mining
    Association, the American Petroleum Institute, the Electric Power
    Research Institute, the American Iron and Steel Institute, and CONSOL
    Energy Inc.
        University Research.--The DOE should continue to provide strong
    support for research on mining at U.S. academic institutions. Although
    we are pleased that DOE has requested the same level of funding as
    received in fiscal year 2004--$3 million--we would urge Congress to
    increase this to $5 million. Mining engineering departments continue to
    consolidate and some are closing, due to lack of funding, diminishing
    the national capability to develop fundamental sciences to improve
    mining practices, and impairing the ability of the universities to
    train future generations of mining engineers. We cannot have a viable
    mining industry in the United States without education to support the
    research and the people needed to keep the United States in the
    forefront of mining and environmental technology. An increase in
    funding to $5 million for university research, with the increase
    dedicated to projects that focus on mercury control technologies, is
    important to support our educational system.

                OFFICE OF ENERGY EFFICIENCY AND RENEWABLE ENERGY

        The Mining Industry of the Future Program.--The 70 percent funding
    reduction proposed in the Administration's budget must be rejected and
    funding levels should be restored to at least the $4.9 million level
    appropriated for fiscal year 2004. The proposed cut to $1.4 million
    would essentially be marking the beginning of the end of the program
    for mining. Several of the projects underway would have to be halted in
    mid-stream after monies have already been expended. The eight projects
    selected for funding in January would be cancelled and no more research
    solicitations could be issued. The Mining Grand Challenge that was
    issued in March will not be funded. Response to the program has been
    overwhelming since its inception in 1999. Since then, 132 proposals
    totaling nearly $150 million have been received. Clearly there is a
    need for mining research that is not being satisfied as only a portion
    of these projects could be funded. Of the total projects started to
    date, industry's cost share is just over 54 percent, or about $36
    million.
        In January 2004, eight new mining and exploration projects were
    selected. If these get underway, the total number of active projects
    funded would be 43, 19 of which are active and 14 of which have been
    concluded or will be completed this summer. As required by the
    Government Performance Results Act, an evaluation of the energy saved
    by these projects indicates that: 20 of the mining projects funded in
    fiscal year 2003 will save 167 trillion Btus annually by year 2020, and
    22 mining projects funded in fiscal year 2004 will save 205 trillion
    Btus annually by year 2020. If the program continues, NMA and DOE will
    conduct a review of the roadmap developed in 1999 to ascertain if
    research objectives have been met and to revise the roadmap to meet
    realities of today.
        NMA has incorporated the Mining Industry of the Future program into
    its Mining Climate Action Plan (MICAP) developed in response to the
    Administration's request to industry to voluntarily reduce greenhouse
    gas emissions. The proposed cuts would jeopardize the ability of the
    mining industry to meet our stated goals under this plan.

                    ENERGY INFORMATION ADMINISTRATION (EIA)

        In addition to its value to the nation, the functions performed by
    the EIA are of significant importance to the mining industry. EIA's
    unbiased analysis and independent short and long-term forecasts form a
    basis for reasoned and responsible policy decisions by the Congress,
    the DOE and other government agencies on both the Federal and State
    levels. EIA's independence and objectivity are especially important as
    governments develop policies to respond to energy price increases and/
    or to possible energy shortages. EIA's energy data collection and
    dissemination responsibilities are essential to the development of
    sound public policy and to the industry's ability to evaluate
    production and market trends and to make investment decisions that
    accrue benefits to the nation. NMA supports the Administration's
    request for a $3.9 million increase in funding for EIA for a total of
    $85 million for this important agency.

                         U.S. GEOLOGICAL SURVEY (USGS)

        The USGS's role in mineral information, exploration, identification
    of geological hazards and mapping offers important support to the
    mining industry. In addition, the USGS is the only source for the
    majority of the United States' statistical data on mining and minerals
    commodities. This information provides the basis for informed policy
    decisions by the Federal government and is extensively used by other
    governmental agencies, by Members of Congress and by State and local
    governments, as well as industry, academia and nongovernmental
    organizations. Our nation is becoming more dependent upon foreign
    sources to meet its metals and minerals requirements as exploration and
    development of domestic resources are declining. The development of a
    National Minerals Policy to halt and reverse this trend is vital to our
    nation's economic future and our national security. NMA opposes the
    proposed $6.7 million reduction of funding for the Mineral Resources
    Program in the fiscal year 2005 budget request.

                        BUREAU OF LAND MANAGEMENT (BLM)

        The Department of the Interior's (DOI) fiscal year 2005 proposed
    budget reflects the department's intent to administratively implement
    both a 26 percent increase in the annual mining claims maintenance fee
    and a new cost recovery mechanism on mining and other BLM permitting
    activities. It serves no constructive purpose to increase claims fees
    or require complete cost recovery for government activities affecting
    the permitting of domestic mining operations, when government delays in
    these very activities are driving critical mining projects from the
    United States to other areas of the world. International studies done
    in 2003 by Behre Dolbear mining consultants and the Fraser Institute
    identify the mine permitting process in the United States as ``one of
    the most inefficient in the world.''
        Before DOI imposes higher fees for its permitting activities, we
    strongly recommend that Congress require DOI to take concrete actions
    to reduce the delays and expense attendant to the current permitting
    process. In 1999, Congress appropriated $800,000 for a National Academy
    of Sciences (NAS) study of ``Hardrock Mining on Federal Lands.'' NAS
    found a number of shortcomings, including: inadequate staff and
    resources; no timeframes for permit completion; no systematic
    evaluation of the source of permit delays and possible solutions; no
    coordination between those responsible for NEPA compliance and permit
    reviews; long delays on cultural and tribal resource issues; and, lack
    of early, consistent cooperation and participation by all federal,
    state and local agencies involved in the NEPA process.
        None of these problems have been dealt with adequately to date. We
    respectfully request that until accomplishment of the above stated
    steps identified by the NAS four years ago, cost recovery mechanisms
    and increases in current claims maintenance fees should be postponed.
    We encourage Congress to prohibit implementation of the fee increases
    set forth in the proposed budget, at least until the department fully
    implements the NAS recommendations and there is tangible proof that the
    permitting system has been improved.
                                     ______

    Prepared Statement of the National Research Center for Coal and Energy,
                            West Virginia University

        Chairman Burns and Members of the Subcommittee: Our testimony is
    directed to programs in the Office of Fossil Energy and the Office of
    Energy Efficiency and Renewable Energy in the U.S. Department of
    Energy.

                             INTRODUCTORY COMMENTS

        We advocate a strong energy research program, which is based on the
    best use of our indigenous natural resources while minimizing our
    dependence on imported energy forms. Coal is an abundant fuel in the
    United States; Wyoming mined more coal in 2001 than eight of the ten
    other top producing nations. Coal provides more than half of our
    electrical energy and can be the source of clean, affordable liquid
    transportation fuels. Coal will be the near-term source of supply for
    hydrogen for advanced power and transportation systems. Fossil Energy
    programs in research & development and clean coal technology deployment
    will be the backbone for developing new technologies for zero emissions
    coal-based systems for generating power, for producing liquid
    transportation fuels, chemicals, and high-value-added products, and for
    making hydrogen--but only if adequate funding is provided to meet
    objectives outlined in well defined energy roadmaps. We cite in
    particular the plan developed by the Coal Utilization Research Council
    working jointly with the Electric Power Research Institute and the
    Office of Fossil Energy.
        Clean coal-based technologies are necessary for meeting both our
    national and global needs for clean energy and for ensuring our energy
    security. We urge the continued support of the Subcommittee for the
    Coal and Power Program of the Office of Fossil Energy and for the fuels
    programs of the Office of Energy Efficiency and Renewable Energy.
    Programs of particular concern are discussed below.

                             FOSSIL ENERGY PROGRAMS

        Fuels Program.--Funding for the fuels research program in fiscal
    year 2005 has been requested by the Administration at a level of $16
    million and allocated exclusively for programs in hydrogen production
    from coal. While we applaud the increased funding for the hydrogen
    program compared to the $5 million requested for fiscal year 2004, we
    are deeply concerned regarding the absence of Administration requests
    for research directed toward liquid transportation fuels. With our
    national, and indeed global, dependence on automobiles, large fleets of
    trucks, aircraft, and marine vessels, we continue to need advanced
    research to develop clean burning fuels for the private, commercial,
    and military transportation sectors. In addition to environmentally
    friendly fuels, our nation also must increase our energy security and
    decrease our growing dependence on imported oil and liquid natural gas.
        We support continued funding for a well-rounded coal fuels research
    program in the Office of Fossil Energy and make the following
    recommendations /requests to the Subcommittee:
      --Funding is requested for the work of the Consortium for Fossil Fuel
            Science [CFFS] supported by the Subcommittee in fiscal year
            2004. The CFFS program will focus on advanced research to
            support the hydrogen program requested by the Administration.
            We recommend continuation of the CFFS in fiscal year 2005. The
            Consortium has requested funding of $2.5 million in its
            testimony.
      --Under the China-United States Bilateral Agreement, our nation has
            an opportunity to study the design, construction, operation,
            and environmental & economic impacts of large coal-based liquid
            fuels production facilities to be constructed in China. We
            recommend the addition of $0.5 million to the Fossil Energy
            program to conduct this study. The plant operators will provide
            significant cost sharing. This program is funded at a level of
            $100,000 currently under the Fuels program.
      --We note that the FutureGen program proposed by the Administration
            has the essential elements to produce liquid fuels, not just
            hydrogen, and urge the Subcommittee to recommend that DOE
            include liquid fuels production along with demonstrating
            advanced gasification, hydrogen production and carbon
            sequestration technologies under the FutureGen initiative.
      --It is critical that sufficient funding be provided for the Ultra
            Clean Fuels Program to complete projects that were started
            several years ago. These projects should be supported to
            completion so that we may reap the benefits from earlier
            investments.
      --It is important that we maintain a strong program to ensure our
            nation's ability to meet the increased demand for coal to
            support both our current power generation fleet and the new
            markets that will be created to support the hydrogen
            initiatives. Research is needed to develop advanced
            technologies for the recovery, separation, and utilization of
            coal resources economically and in an environmentally
            acceptable manner. Funding for the Center for Advanced
            Separations Technology [CAST] is requested at a level of $4
            million to expand its program to address separations problems
            encountered in areas such as mercury emissions control. The
            Subcommittee supported funding for the base CAST program at a
            level of $3 million for fiscal year 2004.
      --Funding is requested to continue the coal extraction program in
            fiscal year 2005 at a level of $1.7 million. In addition,
            funding for the Consortium for Premium Carbon Products from
            Coal should be continued at a level of $1 million. Both of
            these programs focus on producing useful (and high value-added)
            carbon products from coal. The need for these products is more
            critical than ever since many of the traditional sources of
            carbon products are reduced due to the loss of coking ovens
            associated with steel manufacturing and the necessity of
            finding alternative sources other than imported petroleum for
            such products.
        Focus Area for Computational Energy Science.--This program develops
    models for, and dynamic simulations of, advanced energy plants to
    improve the development schedules and to reduce the costs of new
    plants, and supports the President's Climate Change Initiative. The
    modeling results are applicable to a wide variety of fossil energy
    technologies such as fuel cells, advanced turbines, combustion systems,
    and chemical reactors. We request additional funding of $3 million for
    this program over and above the Administration fiscal year 2005 Budget
    of $4 million for a total of $7 million for this program in fiscal year
    2005. The added funding provides support for computational energy
    researchers nationally in areas related to the mission of the National
    Energy Technology Laboratory.
        Advanced Research Programs.--The Advanced Research Program supports
    a wide range of projects that develop enabling technologies for the
    advanced power generation systems currently being developed. This
    program also provides support for university-based research, for which
    one of the benefits is the education of the next generation of energy
    scientists and engineers. We recommend continued strong support for the
    Advanced Research Program. Increased support is recommended for two
    initiatives recently initiated by the Subcommittee. The first program
    is HiTEC, the High Temperature Electrochemistry Center. We recommend an
    addition of $2 million to the Administration budget request to enable
    this Center to increase the number of universities able to participate
    in this program. The second program is the new enabling research
    initiative to support the FutureGen program that is headquartered at
    Montana State University. We recommend continuation of this program for
    fiscal year 2005 at a level of $10 million.
        Oil and Gas Programs.--With numerous technical experts predicting
    the near-term decline in oil and natural gas production, and the
    increased cost of oil due to the actions of cartels like OPEC, it is
    essential that we sustain our oil and gas programs at sufficient levels
    to ensure adequacy of supply. Funding for these programs should be
    restored to at least their fiscal year 2004 levels of $35 million and
    $43 million, respectively.
        The regional resource centers funded under the Petroleum Technology
    Transfer Council [PTTC] provide technology and training to many small
    oil and gas companies throughout the nation. The expertise available to
    small operators through these centers contributes to the success of
    important programs such as regional carbon sequestration partnerships
    and enhanced coal bed methane production that provides over 7 percent
    of our natural gas fuel supply. We recommend that the PTTC program be
    continued in fiscal year 2005 at a level of $3 million.

                           ENERGY EFFICIENCY PROGRAMS

        Industries of the Future.--We are concerned that the fiscal year
    2005 Administration budget request has significantly reduced funding
    for the Industries of the Future program, a program that has
    demonstrated significant return on investment and enabled our energy
    intensive industries such as steel and aluminum to maintain
    manufacturing jobs in the United States. Of particular concern is the
    drastic reduction in funding for the Industries of the Future
    (Specific) Program which enables our energy intensive industries to
    rally together in focal programs which build strong partnerships. We
    request that the Industry of the Future programs in both the specific
    and crosscutting technologies be restored to at least their combined
    fiscal year 2004 level of $93 million.
        FreedomCAR and Vehicle Technologies Program.--As with the Fossil
    Energy programs, we are concerned about the Vehicle Technologies
    Program regarding the focused investment in hydrogen research at the
    expense of research in traditional liquid fuels. Our nation will use
    traditional liquid fuels into the foreseeable future as we develop
    hydrogen technologies. While it is important that we continue
    investments in advanced liquid fuels, the present budget request from
    the Administration has essentially deleted funding for these areas. We
    should continue work toward developing non-petroleum based fuels. We
    request that the Subcommittee restore funding for Fuels Technology
    programs to the fiscal year 2004 level of $24.65 million. We have a
    particular interest in the following:
      --Non-Petroleum Based Fuels and Lubricants: We request funding for
            continuing the programs of the National Research Center for
            Alternative Fuels, Engines and Emissions at a level of $2
            million in fiscal year 2005.
      --Automotive Lightweight Materials: We request funding for continuing
            the Metal Matrix Composites program at a level of $1 million in
            fiscal year 2005.
      --Fueling Infrastructure: There are over 130,000 natural gas vehicles
            and over 300,000 compressed natural gas cylinders in use.
            Detailed visual inspection must be performed every three years
            or 36,000 miles. There are few certified inspectors, with no
            widely available program to train such individuals. We request
            $1 million to continue an initiative begun in fiscal year 2003
            to develop a Natural Gas Vehicle Compressed Natural Gas
            Cylinder Safety Inspection and Certification Training program
            under the leadership of the National Alternative Fuels Training
            Consortium [NAFTC]. The NAFTC is an organization of 23
            institutions distributed nationally that provide training in
            alternative fuel vehicle safety and maintenance.

                                CLOSING COMMENTS

        Thank you for the opportunity to offer testimony on these important
    programs. We appreciate the support of the Subcommittee.
                                     ______

                     Prepared Statement of Plug Power, Inc.

        Plug Power urges the Appropriations Subcommittee on Interior and
    Related Agencies to support the President's request of $77.5 million
    for the proton exchange membrane (PEM) fuel cell program in the
    Department of Energy's (DOE) Energy Efficiency and Renewable Energy
    Office. We also urge inclusion of language that ensures the
    continuation of a stationary PEM fuel cell program at the DOE.
        Plug Power is a leading developer and manufacturer of on-site
    energy systems based on proton exchange membrane (PEM) fuel cells for
    stationary applications. The Company was formed in 1997 as a joint
    venture between Edison Development Corporation, a DTE Energy company
    and Mechanical Technology Incorporated. Plug Power's strategic partners
    include GE Fuel Cell Systems, DTE Energy Technologies, Vaillant GmbH,
    Honda R&D Co., Ltd., Engelhard Corporation and Celanese Ventures. The
    Company's headquarters are located in Latham, N.Y., with offices in
    Washington, D.C., and The Netherlands.
        Plug Power currently sells a 5kW reformer based fuel cell powered
    by natural gas or LPG for grid parallel applications and a hydrogen
    fueled fuel cell for back up/UPS and battery replacement applications.
    In August 2004, Plug Power will also launch an On Site Hydrogen
    Generator capable of supplying hydrogen for applications such as
    generator cooling.
        Key to Plug Power's success is leveraging the strengths of partners
    and suppliers to ensure that value is added at every step of the design
    and manufacturing process. Plug Power has assembled a team with
    extensive engineering knowledge, experience in the business of
    manufacturing and an eagerness to work with you, the customer.

                        STATIONARY FUEL CELL DESCRIPTION

        A stationary fuel cell is an on-site, electrochemical energy
    conversion device, which converts the chemical energy from a fuel
    directly into electricity and heat. When operated directly on hydrogen,
    the fuel cell produces this energy with clean water as the only by-
    product. Although hydrogen is the primary fuel source for fuel cells,
    the process of fuel reforming allows for the extraction of hydrogen
    from more widely available fuels such as natural gas and propane.
    Eventually, we believe that hydrogen will also be generated from
    electricity created from renewable sources such as solar, wind, or
    biomass.

                         STATIONARY FUEL CELL BENEFITS

      --Our traditional central generation model for supply of power in the
            United States is failing to meet the needs of a growing economy
            with increasing demand for high-quality power. There are
            weaknesses in power generation, transmission and distribution
            infrastructure that can best be met with the new paradigm of
            distributed generation: placing the generating assets on-site,
            where both the thermal and electric energy is needed. Fuel
            cells will be an important technology component in our nation's
            distributed generation portfolio.
      --Fuel cells require hydrogen and oxygen to react chemically and
            produce electricity (and heat) and can therefore use any
            hydrogen rich fuel, or direct hydrogen. This allows fuel cell
            products to be ``customized'' for customers' available fuel. It
            also provides the option of renewably generated hydrogen for a
            fully renewable and zero emissions energy system.
      --Fuel cells can provide highly reliable electricity. Some studies
            estimate that power quality and reliability issues cost our
            economy as much as $150 billion per year in lost materials and
            productivity alone, while others have reported estimates as
            high as $400 billion per year (source: Bear Stearns, April 2000
            Distributed Energy, p. 8).
      --Because fuel cells provide electricity at the site of consumption,
            they reduce the load on the existing transmission and
            distribution system. Siting the fuel cells at the point of
            consumption also avoids the line losses (up to 15 percent)
            inherent in moving electricity and provides an alternative to
            costly and unattractive traditional power lines.
      --Because fuel cells make both electric and thermal energy where it
            is needed, the heat can be recaptured in combined heat and
            power applications to attain combined efficiencies of over 80
            percent.
             need for government fuel cell research and development
        Plug Power is enthusiastic about the President and Congress'
    commitment to hydrogen and fuel cell technology, made evident by the
    increased budget request and last year's appropriations level. We feel
    that there is a vital role for the U.S. Government, and specifically
    the Department of Energy, to work with industry on pre-competitive
    research and on systems architecture and integration with specific
    products and applications in mind. These efforts begin with a
    fundamental understanding of the PEM fuel cell stack membranes,
    catalysts, plates, as well as reformer fundamentals as they relate to
    contaminant resistant catalysts and hydrogen storage technology.
    Further, the availability of higher quality heat from high temperature
    (150C to 200C) PEM stacks requires fundamental research on stack
    components and associated systems that further increases the value and
    impact of stationary power systems. Breakthrough research is still
    necessary in the development of reliable and cost effective stationary
    PEM fuel cell systems.
        Another area of high interest is the coupling of hydrogen
    generation and reformation for stationary and automotive applications
    to further increase overall efficiency and impact the progress toward
    widespread fuel cell use and greater energy independence. The results
    of all these efforts are universally applicable to fuel cell power
    systems, speed their commercial introduction, and move the United
    States closer to energy independence.

             IMPORTANCE OF PEM STATIONARY FUEL CELL PROGRAM AT DOE

        As I mentioned in a letter to Secretary Abraham, I am extremely
    concerned about the recommendations of the Committee on Alternatives
    and Strategies for Future Hydrogen Production and Use (National Academy
    of Engineering), and how these recommendations might be used to
    undermine portions of the Department of Energy Hydrogen and Fuel Cell
    Program.
        In particular, one of the major demand side findings of the panel
    is that DOE strategy does not adequately define integrated stationary
    and transportation trade off opportunities and it therefore calls for a
    further study. We would support such a study; however, the report goes
    on to recommend that in view of scarce resources, the Department should
    discontinue the PEM stationary RD&D Program. This latter
    recommendation, if realized in a change to DOE policy, would prove
    devastating to the current stationary programs in which Plug Power and
    its partners participate. The finding of the panel and the
    recommendation that results from such finding are clearly inconsistent.
    The finding of the panel must be addressed more directly--commission a
    study to determine what the Department's next steps should be prior to
    leaping to the conclusion that particular programs should be summarily
    terminated.
        Additionally, the study calls for stimulating both hydrogen demand
    from fuel cell technology, as well as hydrogen production from a
    variety of sources. Again, I agree. But we need to develop that
    hydrogen production to marry with something--fuel cells. I firmly
    believe that the R&D of back-up, standby, stationary base power and
    portable fuel cells provide the bridge to vehicular fuel cells and to a
    distributed hydrogen production system in the short term for several
    reasons.
        First, stationary/portable fuel cells are the precursor to
    transportation fuel cells. Early applications, such as stand by and
    back up power provide the basis for continued development of a nascent
    commercial fuel cell industry. It is the area in which companies such
    as Plug Power are vigorously pursuing cost reduction, reliability
    improvements, and supply chain development issues. The industry will
    not hit transportation price points until commercialization of early
    fuel cell technology applications yield first. The industry will most
    likely start by engaging with significant niche applications and then a
    growing stationary market will develop where the price points are
    higher than those for the automotive industry.
        U.S. companies involved in the supply chain to the fuel cell
    industry are also very concerned about the continuation of a stationary
    program because it is seen as an effort that will yield profitability
    sooner. Without that shorter-term effort, they will be unable to
    continue to develop technologies that go into fuel cells--stationary,
    portable or automotive. Additionally, fuel cell companies, such as Plug
    Power, will be unable to establish firm supplier bases for fuel cell
    specific parts: parts that will also be needed in a future
    transportation fuel cell industry. We need to be able to get costs
    under control and establish that fuel cell supplies and components are
    commodities rather than specialty products.
        Second, stationary fuel cell applications that rely on hydrogen,
    such as standby and back-up power fuel cells, provide the first entry
    for distributed hydrogen production. We are, as always, faced with a
    ``chicken or egg'' problem in introducing fuel cell vehicles. Is it the
    fuel cell vehicle or the hydrogen infrastructure that comes first? No
    company will invest heavily in a distributed hydrogen infrastructure in
    hopes that ``they will come.'' Stationary and portable applications,
    however, provide some demand in the short term and therefore a
    rationale for beginning to develop that hydrogen infrastructure. These
    same types of systems that power stationary systems may also be able to
    provide distributed hydrogen on a small scale for 10s to 100s of
    vehicles as the market is getting started.
        Third, the introduction of stationary or other fuel cell power
    systems at the commercial/consumer level will foster acceptance and
    support from the broad public of the Hydrogen Economy and the benefits
    of fuel cells by eliminating the concerns and uncertainty generated by
    the introduction of a new technology. Further, the mass introduction of
    units in the field and the accumulation of real world operating data
    will prove invaluable in advancing the technology and evaluating
    economics in a way that is applicable to all applications. Reliability
    improvements, cost reductions and technology advances are dependent on
    these data.
        In summary, it is my hope that the Subcommittee and DOE, not only
    continue to fully fund PEM fuel cell R&D, but also recognize the
    synergies between stationary and transportation PEM Fuel cell
    development and continue the stationary program for years to come.
                                     ______

                   Prepared Statement of the Southern Company

        Mr. Chairman and Members of the Committee: Southern Company
    operates the Power Systems Development Facility (PSDF) (http://
    psdf.southernco.com) in Wilsonville, AL for the U.S. Department of
    Energy's (DOE's) National Energy Technology Laboratory (NETL) and
    several industrial participants.\1\ The PSDF was conceived as the
    premier advanced coal power generation research and development (R&D)
    facility in the world. It has fulfilled this expectation. I would like
    to thank this subcommittee for its past support of the PSDF and request
    its continued support. This statement requests a $7 million increase in
    DOE's Coal and Power Systems budget for the PSDF. The Administration's
    budget requests $18 million for the PSDF in fiscal year 2005; however,
    $25M is necessary to conduct the future test program agreed to with DOE
    (see details below) and to support FutureGen--the integrated hydrogen
    and electric power production and carbon sequestration research
    initiative proposed by President Bush. DOE's FutureGen Program Plan
    submitted to Congress on March 4, 2004 described the transport gasifier
    (one of the technologies under development at the PSDF) as a promising
    candidate for inclusion in FutureGen because:
    ---------------------------------------------------------------------------
        \1\ Current participants include Southern Company, EPRI, Kellogg
    Brown and Root, Siemens Westinghouse Power Corporation (SWPC), Peabody
    Energy, the Burlington Northern Santa Fe Railway Company, and the
    Lignite Energy Council. The Lignite Energy Council includes major
    producers of lignite, who together produce approximately 30 million
    tons of lignite annually, the nation's largest commercial gasification
    project, and investor-owned utilities and rural electric cooperatives
    from a multi-state area that generate electricity from lignite, serving
    two million people in the Upper Midwest region. The Council also has
    over 250 contractor/supplier members who provide products and services
    to the plants and mines. Air Products and Chemicals, Praxair, Inc., and
    Pall Corporation have proposed significant future participation. In
    addition to the Wilsonville plant site major work is planned for the
    PSDF, or components are being developed at the following locations:
    Grand Forks, ND (sub-scale gasifier testing), Houston, TX (gasifier
    development); Orlando, FL (gas turbine low-NOX burner),
    Pittsburgh, PA (filter fabrication), Allentown, PA and Tonawanda, NY
    (advanced air separation technology); and Deland, FL (filter
    fabrication).

        ``. . . its high throughput relative to size, simplicity, and
    reduced temperature of operation compared with current gasifiers, will
    yield benefits throughout the FutureGen plant. The transport gasifier
    has been successfully operated in the air-blown mode at the Power
    Systems Development Facility (PSDF); however, oxygen-blown operation is
    required for FutureGen, and PSDF's operational phase in the oxygen-
    blown mode is in its early stages.
        ``Current efforts at the PSDF are focused on developing the
    performance database for the transport gasifier in the oxygen-blown
    mode using a variety of coal feedstocks from lignite through bituminous
    coals. With planned upgrades to the oxygen supply and related systems,
    the capacity of the existing transport gasifier is expected to nearly
    double. Planned improvements in the coal feed system, particulate
    control device, and the char cooling and removal system will
    significantly increase overall reliability of the transport gasifier,
    which would further reduce costs. The target is to achieve 95 percent
    availability rather than the 75 percent-80 percent availability typical
    of today's gasifiers.
        ``Because of its simplicity in design and lower temperature of
    operation, the transport gasifier can potentially reduce the capital
    cost of an IGCC plant by up to 20 percent (or from $1,400 to $1,120/kW)
    over those employing today's technologies. In addition, the operations
    and maintenance costs are expected to be lower and availability higher
    because of the lower temperature of operation.''

        A key feature of the PSDF is its ability to test new systems at an
    integrated, semi-commercial scale. Integrated operation allows the
    effects of system interactions, typically missed in unintegrated pilot-
    scale testing, to be understood. The semi-commercial scale allows the
    maintenance, safety, and reliability issues of a technology to be
    investigated at a cost that is far lower than the cost of commercial-
    scale testing. Capable of operating at pilot to near-demonstration
    scales, the PSDF is large enough to produce industrial scale data, yet
    small enough to be cost-effective and adaptable to a variety of
    technology research needs.
        Southern Company also supports the overall $33 million increase in
    the President's Coal Research Initiative within DOE's Fossil Energy R&D
    program for fiscal year 2005 recommended by the Coal Utilization
    Research Council (CURC \2\). The goals of the Clean Coal Technology
    Roadmap developed by DOE, EPRI, and the CURC are achievable with
    funding at this increased level.
    ---------------------------------------------------------------------------
        \2\ CURC has over 40 members interested in coal-based energy
    systems including major universities, coal companies, railroads,
    electric generators, and technology suppliers. CURC members also
    include EPRI, the United Mine Workers of America, the Edison Electric
    Institute, the National Mining Association, and the National Rural
    Electric Cooperative Association.
    ---------------------------------------------------------------------------
        The Roadmap identifies the technical, economic, and environmental
    performance that advanced clean coal technologies can achieve over the
    next 20 years. Over this time period coal-fired power generation
    efficiency can be increased to over 50 percent (compared to the current
    fleet average of 32 percent) while producing de minimis emissions and
    developing cost-effective technologies for carbon dioxide
    (CO2) management. EPRI recently used the modern financial
    technique called ``Real Options'' to estimate the value of advanced
    coal R&D.\3\ The major conclusion of this study is that the value to
    U.S. consumers of further coal R&D for the period 2007-2050 is at least
    $360 billion and could reach $1.38 trillion. But, for these benefits to
    be realized the critically important R&D program outlined in the Clean
    Coal Technology Roadmap must be conducted.
    ---------------------------------------------------------------------------
        \3\  EPRI Report No. 1006954, ``Market-Based Valuation of Coal
    Generation and Coal R&D in the U.S. Electric Sector'', May 2002.
    ---------------------------------------------------------------------------
                                    SUMMARY

        The United States has always been a leader in energy research.
    Adequate funding for fossil energy research and development programs
    will provide this country with secure and reliable energy while
    reducing our dependence on foreign energy supplies. Current DOE fossil
    energy research and development programs for coal, if adequately
    funded, will assure that a wide range of electric generation and
    hydrogen production options are available for future needs. Congress
    faces difficult choices when examining near-term effects on the Federal
    budget of funding energy research. However, significantly increased
    support for advanced coal-based energy research is essential to the
    long-term environmental and economic well being of the United States.
    Prior DOE clean coal technology research has already provided the basis
    for $100 billion in consumer benefits at a cost of less than $4
    billion. Funding the Clean Coal Technology Roadmap beginning with
    CURC's recommendation of $33 million above the Administration's budget
    request for DOE coal R&D can lead to additional consumer benefits of
    between $360 billion and $1.38 trillion.
        One of the key national assets for achieving these benefits is the
    PSDF. The fiscal year 2005 funding for the PSDF needs to increase to
    $25 million to support construction of new technologies that are
    critical to the goals of the Clean Coal Technology Roadmap and to the
    success of President Bush's FutureGen program. The major
    accomplishments at the PSDF to date and the future test program planned
    by DOE and the PSDF's industrial participants are summarized below.

                              PSDF ACCOMPLISHMENTS

        The PSDF has developed testing and technology transfer
    relationships with over 50 vendors to ensure that test results and
    improvements developed at the PSDF are incorporated into future plants.
    Major subsystems tested and some highlights of the test program at the
    PSDF include:
        Transport Reactor.--The transport reactor has been operated
    successfully as a pressurized combustor and as a gasifier in both
    oxygen- and air-blown modes and has exceeded its primary purpose of
    generating gases for downstream testing. It is projected to be the
    lowest capital cost coal-based power generation option, while providing
    the lowest cost of electricity and excellent environmental performance.
        Advanced Particulate Control.--Two advanced particulate removal
    devices and 28 different filter elements types have been tested to
    clean the product gases, and material property testing is routinely
    conducted to assess their suitability under long-term operation. The
    material requirements have been shared with vendors to aid their filter
    development programs.
        Filter Safe-Guard Device.--To enhance reliability and protect
    downstream components, ``safe-guard'' devices that reliably and
    completely seal off failed filter elements have been successfully
    developed.
        Coal Feed and Fine Ash Removal Subsystems.--The key to successful
    pressurized gasifier operation is reliable operation of the coal feed
    system and the filter vessel's fine ash removal system. Modifications
    developed at the PSDF and shared with the equipment supplier allow the
    coal feed equipment to perform in a commercially acceptable manner. In
    addition, an innovative, continuous process has been designed and
    successfully tested that reduces capital and maintenance costs and
    improves the reliability of fine ash removal.
        Syngas Cooler.--Syngas cooling is of considerable importance to the
    gasification industry. Devices to inhibit erosion, made from several
    different materials, were tested at the inlet of the gas cooler and one
    ceramic material has been shown to perform well in this application.
        Instrumentation.--Several instrumentation vendors have worked with
    the PSDF to develop and test their instruments under realistic
    combustion and gasification conditions.
        Fuel Cell.--A 0.5 kW solid oxide fuel cell manufactured by Delphi
    has undergone initial successful testing on syngas from the transport
    gasifier marking the first time that a solid oxide fuel cell has been
    operated on coal-derived syngas.
        Combustion Turbine Burner.--Integrating the existing 3.8 MW
    combustion turbine with a new syngas burner developed by SWPC has
    allowed further system automation and controls development.

                            PSDF FUTURE TEST PROGRAM

        Future testing at the PSDF is focused on supporting FutureGen and
    the Technology Roadmap. These programs aim to eliminate the
    environmental issues that present barriers to the continued use of coal
    including major reductions in emissions of SO2,
    CO2, NOX, particulates, and trace elements
    (including mercury), as well as reductions in solid waste and water
    consumption. The focus will remain on commercialization of these new
    technologies as well as those currently under development at the PSDF.
    Assuming adequate funding, work at the PSDF will include:
        Oxygen-Blown Transport Gasifier.--Continue the development of the
    oxygen-blown transport gasifier to further optimize its performance,
    explore feedstock flexibility, increase system pressure, and provide
    syngas for testing of downstream systems.
        Air Separation Membranes.--Test advanced air separation membrane
    modules provided by U.S. manufacturers to evaluate membrane performance
    and system integration issues.
        Coarse Ash Handling.--A new type of coarse ash depressurization
    system, with no moving parts or valves has been developed and will be
    tested. Like the fine ash removal system successfully developed
    earlier, this system will reduce capital and maintenance cost and
    improve plant reliability.
        Advanced Syngas Cleanup.--Test new advanced syngas cleanup systems
    for reducing hydrogen sulfide, hydrochloric acid, ammonia, and mercury
    to near-zero levels.
        H2/CO2 Separation Technologies.--Integrate
    and test advanced H2/CO2 separation technologies
    to assess their performance on coal-derived syngas.
        Syngas Cooler.--Test alternative designs that are less complex,
    have lower capital cost, and offer better control of the syngas exit
    temperature.
        New Particulate Control Device Internals.--Evaluate alternative
    filter system internal designs from several vendors.
        Improved Fuel Feed Systems.--Alternatives to conventional lock
    hopper feed systems have been identified and will be evaluated. The
    results will be applicable to all dry-feed gasifiers.
        High-Temperature Heat Exchangers.--The PSDF has been identified as
    a suitable location for testing of high-temperature heat exchangers
    that can be used in both advanced combustion and gasification
    technologies.
        Syngas Recycle.--Add a syngas compressor to allow the use of syngas
    for instrument purges, aeration to promote recycle solids flow, filter
    back pulse gas, and burner cooling flow at startup to produce higher
    heating value syngas and more closely match commercial operating
    conditions.
        Fuel Cell.--Install and test a 5 to 10 MW hybrid fuel cell/gas
    turbine module.
        Sensors.--Several vendors have begun testing their sensors for a
    variety of functions, including control of temperature and coal feed
    rate; detection of gaseous species, tar, and dust at low
    concentrations; and detection and continuous measurement of hazardous
    air pollutants.
                                     ______

                Prepared Statement of SAGE Electrochromics, Inc.

        SAGE Electrochromics, Inc., located in Faribault, Minnesota, is a
    developer of energy saving electrochromic (EC) window products and is
    working in partnership with the U.S. Department of Energy (DOE.) We at
    SAGE urge you to recommend a budget level of $7,000,000 for the
    Window's Technologies Program at Department of Energy (DOE) in fiscal
    year 2005 Interior Appropriations.

                         DESCRIPTION OF ELECTROCHROMICS

        An electrochromic window (door or skylight) is a solar control
    device that regulates the flow of light and heat with the push of a
    button. The window tint can be varied from fully colored to completely
    clear or anywhere in between. The EC properties are achieved through
    thin metal oxide layers on one of the glass surfaces, otherwise the
    construction is similar to the standard insulating glass unit (IGU)
    used in millions of homes and office buildings.

                     THE UNIQUE BENEFITS OF ELECTROCHROMICS

        Industrial and government partners in the DOE EC program are
    performing cost shared research and development that will lead to
    significant energy and cost savings by fundamentally changing the
    nature and function of window products for tomorrow's buildings.
    Significant savings in the cooling and lighting loads can be achieved
    while reducing peak electricity demand. Just as important is the
    ability of EC technologies to improve visual and thermal comfort and
    thereby increase worker productivity and the aesthetics of the home or
    office space.
        Traditionally, adding windows to a building envelope has meant
    reducing energy efficiency because the other materials in the structure
    are much more energy efficient. However, with EC technology, windows
    will become multifunctional energy saving appliances in the home or
    office space and thereby will allow increased use of windows for
    aesthetic reasons. The Lawrence Berkeley National Laboratories (LBNL)
    estimated that the use of EC in average size windows in commercial
    buildings will reduce cooling electricity consumption by up to 28
    percent, lower peak electrical power demand by 6 percent and decrease
    lighting costs by up to 19 percent for the entire building perimeter
    zone.
        In the residential sector, use of electrochromic windows could lead
    to a 65 percent reduction in cooling over the existing installed base
    and a 47 percent reduction in cooling over the best performing glass
    used today--spectrally selective low-E. Heating savings compared to the
    installed base and that used in new construction today are 61 percent
    and 31 percent respectively. This will be even more important for the
    customer's bottom line as the cost of energy becomes increasingly
    market driven.
        National energy savings are also impressive. The calculated
    national total energy savings for all market segments due to EC glazing
    adoptions show energy savings of 0.71 quads across all market sectors,
    which translates into total annual national energy cost savings of
    $11.5 Billion. These estimates are based on current EC technology,
    which is expected to improve during the marketing period. Additionally,
    the LBNL estimates do not include the use of occupancy sensors, which
    could substantially reduce cooling costs in the summer and heating
    costs in the winter simply by switching the EC glass to the completely
    darkened or clear states at the appropriate time.
        Although energy and energy-related costs savings are significant,
    additional benefits accrue from using EC technology and may even be
    more important. Reduced fading of fabrics has significant cost impacts
    in many installations. Glare control and greater thermal comfort, as
    well as the ability for full daylighting have been shown to increase
    worker productivity and reduce absenteeism. Ability to change building
    design to take advantage of more window space is a significant
    architectural benefit and may result in additionally energy savings. It
    is estimated the EC industry could easily grow to over $15 Billion in
    the U.S. building industry alone--with another $12 Billion in military,
    specialty and transportation sectors.
             additional work to be done requires further investment
        DOE has supported this research and development for the past few
    years, but insufficient funding has been split among a number of
    players in the industry. Traditionally, activities have focused on
    development of durable electrochromic materials and devices for use in
    building applications. This research has brought the technology a long
    way; however, it has become clear that the industry needs and will cost
    share pre-competitive research in three areas. First, basic materials
    and device processing research for EC windows must continue, which is
    the principal area funded by the DOE EC program in prior years. Second,
    technology and engineering activities focused on large area
    manufacturing, improved productivity, and higher yields should now
    begin. And third, systems engineering and applications research focused
    on design, specifications, installation and lifetime of electrochromic
    windows in buildings need to be expanded.
        In Materials and Processing Research and Development, near term
    activities must focus on continued optimization of the device and the
    individual thin film layers. Improved optical performance is needed to
    insure user satisfaction and broad adoption of this energy saving
    technology. Advanced materials for better dynamic range will result in
    maximum daylighting for building occupants while still eliminating
    glare from computer display terminals. Low cost materials will be
    introduced along with rapid processing technologies (e.g. plasma
    enhanced deposition for faster throughput). Additionally, the EC device
    electrical properties must be adjusted to enable reproducible switching
    without complex control hardware that adds cost and could degrade
    reliability.
        With respect to Large Area Manufacturing Technology and
    Engineering, future activities should include quality improvement
    programs to reduce defects and increase yields. Also, advanced
    manufacturing technologies such as bar coding will be implemented for
    flexible manufacturing with reduced costs for tooling and product
    changeovers. High volume production of large area EC glazings will
    require the implementation of in-situ diagnostics for real-time
    automatic control of thin film uniformity. Additionally, consensus EC
    window performance requirements must be developed together with
    standards setting organizations and will entail significant testing in
    the initial stage to establish the technical basis for performance
    requirements.
        In Systems Engineering and Application, the DOE program must
    include extensive field trials of electrochromic windows in buildings.
    Occupant feedback on performance, comfort level and other parameters
    will be solicited and utilized to design ergonomic control algorithms
    and hardware. Multiple window control should also be demonstrated so
    the industry can learn how to tie the adjacent windows together for
    solar management of the overall space. Long term testing of switchable
    window systems over the full range of outdoor climatic conditions is
    required to assess product reliability. And finally, EC window
    performance requirements must be developed together with standards
    setting organizations--which will entail significant testing upfront to
    establish the technical basis for performance criteria.
          department of energy's commitment to electrochromic research
        We are pleased to align ourselves with the Bush Administration's
    commitment to electrochromic research. The following is a quote from
    the Department of Energy's fiscal year 2005 Budget Request to Congress
    for Window Technologies:

        ``In fiscal year 2005, competitive research, cost-shared with
    industry, will be conducted to further improve product performance,
    manufacturer yields, and fundamental manufacturing processes of
    electrochromic devices that have successfully passed rigorous
    laboratory durability and field tests. This will pave the way for a
    range of competing products in the market place with greater market
    appeal through uniform coatings, high reliability and reduced costs.''

        An important DOE goal is the attainment of zero energy buildings
    (ZEB). This requires highly insulated dynamic control windows.
    Switchable smart windows will be combined with high R-value
    technologies (e.g. aerogels) to develop the type of ``superwindow''
    needed for maximum energy savings. Partnerships must be established
    among advanced technology organizations, major window companies, and
    the DOE to fabricate, install and test these next generation window
    systems.
                                     ______

         Prepared Statement of the Biomass Energy Research Association

        This testimony pertains to the Biomass Energy Research
    Association's (BERA) recommendations for fiscal year 2005 in support of
    the USDA's Forest Service (USDAFS) initiation of a targeted research,
    development, and deployment (RD&D) program. The objectives are to
    develop advanced, economically practical methods for collection and
    removal of forest wastes, underbrush, and small-diameter tree thinnings
    for use with the production of virgin forest biomass from large-scale,
    sustainable energy plantations. It is estimated that 190 million acres
    of federal forests and rangelands face very high catastrophic risks of
    fire and that this program can play a major role in minimizing these
    hazards while simultaneously improving the growth and harvesting of
    woody biomass for energy, fuels, and chemicals. BERA recommends that
    $34,000,000 be appropriated for this high-priority RD&D in fiscal year
    2005. Separate statements have been prepared for submission on other
    biomass energy RD&D performed by the Department of Energy's (DOE)
    Office of Energy Efficiency and Renewable Energy (EERE) under the
    Interior and Related Agencies Bill and under the Energy and Water
    Development Bill.
        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 in all its forms from waste
    and virgin biomass that can be economically utilized by the public, and
    to serve as a source of information on biomass RD&D policies and
    programs. Please note that BERA does not solicit or accept federal
    funding to sustain its work.
        On behalf of BERA's members, I would like to thank you, Mr.
    Chairman, for the opportunity to present our Board's position on the
    funding of forest biomass-for-energy RD&D. Specifically, BERA's Board
    of Directors recommends that the appropriations for this program in
    fiscal year 2005 be allocated as follows.
      --Continue the Biobased Products and Bioenergy Research (BPBR)
            program of the USDAFS which has been in progress since 1992:
            $3,000,000.
      --Compile all relevant technical and economic information and data on
            the methods used to eliminate catastrophic forest fires:
            $2,000,000.
      --Collect DOE's forest biomass research results, including those from
            short-rotation forestry, obtained from laboratory and field
            projects conducted over the last 25 years and consolidate them
            with those of the USDAFS: $1,000,000.
      --Evaluate the technical value and economics of the consolidated
            results in collaboration with selected states and industrial
            organizations, DOE's EERE, and others including participation
            by Canada and countries that may already have advanced
            technologies in-hand: $4,000,000.
      --Develop an optimized RD&D plan for implementation in the USA and
            Canada with industry participation including the use of the
            best available technologies in the field to control and
            eliminate forest fires and to build and operate large-scale,
            sustainable, forest biomass energy plantations: $4,000,000.
      --Initiate the RD&D plan with industry participation and cost sharing
            of scale-up projects: $20,000,000.
        This new RD&D program recommended by BERA has been structured in
    accordance with the Healthy Forest Restoration Act of 2003 (H.R. 1904).
    We urge that it be funded starting in fiscal year 2005.

                                   BACKGROUND

        An important need exists to expand the USDAFS' RD&D program; it
    concerns the large, repetitive, wide-spread losses that have occurred
    in the Nation's forests over the last several years because of wild
    fires. Such fires are supported by the accumulation of dense
    undergrowth and brush coupled with poor forest management practices,
    insect infestation and disease that increase the number of dead trees,
    and other factors. The loss and injury to fire fighters and others;
    large property, financial, and esthetic losses; and environmental harm
    have resulted in commercial forests as well as in privately and
    federally owned forests. BERA believes that this problem can be
    optimally addressed when combined with the development of large-scale,
    forest biomass energy plantations, and that funding should be provided
    to start an RD&D program as described in this testimony as soon as
    possible. Each of these targeted goals is essential to the long-term
    sustainability of the forest and biomass energy industries in North
    America and to help reduce and displace fossil fuel consumption.
        One of the original goals of the Bioenergy/Bioproducts Initiative,
    which was created as a result of ``The Biomass Research and Development
    Act of 2000,'' and Title IX of the Farm Bill, was to triple U.S. usage
    of bioenergy and biobased products. Although the timeframe has been
    extended out to 2015 or 2020, a strategic plan has been developed to
    reach this goal by the multi-agency Biomass Research and Development
    Board (BRDB) co-chaired by the Secretary of Energy and the Secretary of
    Agriculture. Substantial increases in biomass energy and fuel
    consumption are clearly needed because of what has happened to U.S.
    crude oil, natural gas, and electricity markets, our continually
    increasing dependence on imported oil, the renewed importance of
    achieving U.S. energy security, and the impacts of environmental
    issues. For example, crude oil imports have steadily increased from an
    average of 6.1 million bbl/day in 1992 to an average of 9.0 million
    bbl/day in 2002, while the corresponding crude oil imports per capita
    were 8.7 and 11.8 bbl/capita-year. It is time to determine whether
    practical biomass energy systems can be developed that are capable of
    displacing much larger amounts of fossil fuels than they have in the
    past. The amount of biomass energy consumption in 2002 was about 1.7
    million barrels of oil equivalent (BOE) per day, approximately 79
    percent of which was wood-based. Conversion of the recovered wood
    ``trash'' alone for use as an energy resource at a rate of only 1.0 dry
    ton/acre-year from the 190 million acres mentioned previously can
    potentially double this amount of biomass energy consumption.
        In fiscal year 2002, DOE began to restructure EERE's biomass RD&D
    program; this process is continuing. The critical research to develop,
    plant, grow, and manage energy crops, particularly forest biomass, for
    conversion to cost-competitive energy and fuels has been terminated,
    and the funds requested by DOE for biomass feedstocks are for
    infrastructure development only, such as for transportation and
    storage. DOE stated that other agencies or departments are better
    suited to handle this research. While DOE's feedstock production
    program has made significant research contributions over the last 25
    years, BERA strongly endorses the idea that the USDA should assume
    responsibility for this program. The USDA has a long history in biomass
    production and is recognized worldwide for its accomplishments in
    developing advanced agricultural and forest biomass production methods.
    Woody feedstocks are essential for the production of much larger
    amounts of affordable biomass energy, fuels, and chemicals than have
    been realized to date. BERA has submitted testimony in support of
    forest biomass energy RD&D by USDAFS for fiscal year 2003 and fiscal
    year 2004, but funding was not provided by the Conferees or requested
    by USDAFS. BERA strongly recommends that RD&D on woody biomass
    production for dedicated energy and feedstock uses be continued by the
    USDAFS under the Interior and Related Agencies Bill.
        Expansion of USDAFS' program by adding the two targeted objectives
    recommended by BERA enables a considerably higher probability of
    significantly increasing the contribution of biomass to primary U.S.
    energy demand by displacing more fossil fuel usage and eliminating a
    national fire hazard. The key to this eventuality is the deployment of
    technologies for producing and recovering low-cost virgin and waste
    forest biomass for conversion to cost-competitive supplies of energy,
    fuels, and chemicals. Forest biomass is the Nation's and the world's
    largest reserve of renewable carbon resources. Without the availability
    of economically competitive forest biomass feedstocks, the probability
    of tripling biomass energy consumption in the United States is
    doubtful. Ultimately, this RD&D program is expected to lead to
    commercial, sustainable energy plantations that are integrated with
    conversion processes in biorefineries supplied with forest-based fuels
    and feedstocks. Multiple product slates will be produced that are
    sufficiently flexible to meet market conditions and demands.
        In the remaining paragraphs, I would like to elaborate on the high-
    priority forestry research that BERA strongly urges be continued or
    started.

                              BERA RECOMMENDATIONS

    USDAFS Research for Biobased Products and Bioenergy for Fiscal Year
            2005
        The USDAFS plans to continue its BPBR program to develop new and
    more economical technologies for the production, management, harvest,
    and utilization of woody materials for energy and high-value products.
    This work builds on the USDAFS' expertise on industrial wood recycling,
    wood chemistry, and wood-plastic composites; small-diameter timber
    harvesting and utilization; and experience in intensively managed
    silvicultural systems. The research is a natural complement to the
    forest waste recovery and woody feedstock production RD&D for energy,
    fuels, and chemicals by the USDAFS that BERA recommends be added to its
    overall program.

    Information and Data on Forest Fires
        In-depth searches of USDFS and state and federal government reports
    and files, the national and international literature, and discussions
    with experts will be conducted to compile relevant information and data
    on forest fires. Technical information, economic data, and historical
    references will be compiled and organized in a report that will be used
    to establish the bases for assessing the consolidated results of these
    searches and the following consolidated report of DOE's forest biomass
    RD&D program.

    DOE's Research and Field Results
        DOE has conducted an extensive forest biomass production program
    from the 1970's up to 1992. This research included laboratory and field
    projects performed by academe, national laboratories, research
    institutes, and the private sector. The program emphasized the
    development and selection of special species, hybrids, and clones of
    trees, and advanced growth, management, and harvesting procedures for
    dedicated energy crops. Research on short-rotation tree growth and the
    screening of tree species in small-scale test plots was carried out in
    several areas of the country. Depending on the geographic location,
    woody species recommended as energy feedstocks from the test-plot
    results included hybrid poplars, willow, eucalyptus, black locust, and
    others. In collaboration with DOE, BERA recommends that the documented
    results of these efforts be collected and consolidated with those of
    the USDAFS' RD&D efforts on woody biomass production. Further, it is
    recommended that a plan be developed and implemented for preserving the
    large amount of improved woody crop clonal materials produced both by
    the USDAFS and the university collaborators of DOE.

    Evaluation of the Consolidated Results
        BERA recommends that selected state and company representatives,
    representatives from Canada and other countries, and others be invited
    to join with the USDAFS and DOE's EERE for the purpose of evaluating
    the consolidated data and information compiled by the USDAFS in this
    program. The first objective of this assessment is to carefully
    examine, analyze, and evaluate the historical records of wild forest
    fires throughout North America and tree species in terms of their
    potential for sustained growth in energy plantations at maximum yields
    under acceptable growth conditions in different geographic regions. The
    second objective is to update and perform comparative economic analyses
    of what appears to be effective forest fire prevention methodologies
    and conceptual plantation designs to assist in the selection of systems
    for field tests. Presuming the industrial organizations that
    participate in this work are experienced in large-scale, commercial
    tree production and forest fire prevention, their inputs will be
    invaluable in performing the next phase of this program, which consists
    of producing an RD&D plan.

    Development of an Optimized, Advanced RD&D Plan
        The purpose of this phase of USDAFS' program is to produce a 10-
    year, strategic RD&D plan that continues the research necessary to
    obtain the data and information needed for optimization of methods for
    recovering and removing waste biomass and small-diameter thinnings from
    forests and the testing of their efficacy on preventing forest fires,
    to design forest plantations for different regions of North America,
    including environmental impacts, and to integrate fire prevention
    methods with forest biomass production. The management, growth,
    harvesting, storage, and transport to hypothetical processing plants of
    both the waste and virgin biomass should be included in this work. The
    resulting system designs should lead to industry cost-shared field
    projects to demonstrate medium-scale, sustainable, forest biomass
    production and the removal of residuals in several geographic
    locations. It is important to include a schedule of milestones over the
    life of the RD&D.

    Initiation of the RD&D Plan With Industry
        Considerable progress has been made on the efficient production of
    short-rotation woody crop and multi-crop systems. In addition, research
    on tissue culture techniques and the application of genetic engineering
    methods to low-cost energy crop production have shown promise. This
    research should be continued to develop advanced biomass production
    methods that can meet the anticipated feedstock demand.
        BERA also recommends that industry cost-shared, scale-up projects
    of at least 1,000 acres in size be installed and operated in different
    regions of the country as a forerunner to commercial energy plantations
    in which dedicated energy crops are grown and harvested for use as
    biomass resources. The results of this work will provide sufficient
    operating and capital cost data to afford second generation economic
    data for larger modular systems and to perfect the design of
    sustainable energy plantations. The scale-up projects should be
    strategically located and should utilize the advanced woody biomass
    production methods developed in the research programs. Successful
    completion of this work will help biomass energy attain its potential
    by providing the data and information needed to implement the design,
    construction, and operation of practical forest biomass production
    methods for sustainable energy plantations that can supply low-cost
    feedstock for conversion to heat, steam, electric power, liquid and
    gaseous fuels, and chemicals.
        It is expected that during the first year of this program, fiscal
    year 2005, site studies can be completed to facilitate the selection of
    specific areas that are deemed suitable for energy plantation
    construction, and that installation on at least one site can be
    started. DOE should be involved in this program where appropriate so
    that their work on biomass infrastructure can be applied to program
    goals such as the design and operation of integrated biomass production
    and conversion systems.
                                     ______

          Prepared Statement of Siemens Westinghouse Power Corporation

                           SUMMARY OF RECOMMENDATIONS

        The Siemens Westinghouse Power Corporation believes that energy
    technology R&D is essential to our nation's future and respectfully
    offers the following funding level recommendations in the fiscal year
    2005 DOE Fossil Energy R&D budget for Interior Appropriations
        Central Systems--Turbines--$25 million.--To support FutureGen by
    the development of including advanced materials, combustion processes,
    and advanced sensors and diagnostics, along with university-led
    research. FutureGen is likely to succeed only if support for this core
    R&D program is increased to meet the program goals.
        Distributed Generation--High Temperature Stationary Fuel Cells--
    $21.5 million.--For continuation of research for stationary power
    generation fuel cells.
        Distributed Generation-SECA--$50 million.--To fully-fund on-going
    research for next generation high power density stationary power fuel
    cell systems (SECA)
      --The United States has placed a high priority on developing cleaner
            more efficient electric power generation technologies;
      --The Administration's 2005 budget proposal has significantly under
            funded the core fossil energy R&D budget which unless
            corrected, will adversely affect progress toward developing
            cleaner and more efficient coal based technologies like
            FutureGen which will be required to meet the increasingly
            demanding environmental, siting and efficiency demands for new
            generation technologies;
      --New proposals being debated in the Congress will significantly
            tighten environmental standards but today's technologies are
            unlikely to meet these standards without additional R&D
            investments;
      --The Administration is addressing the need for advanced energy
            technologies through initiatives like the Clean Coal Power
            Initiative and FutureGen, as well as the Freedom Car and
            Freedom Fuels proposals. Implicit in all of these initiatives
            is the need to employ our extensive technology capabilities to
            first utilize coal, our most abundant, dependable and least
            expensive energy source. As we move to develop advanced coal
            technologies like integrated gasification combined cycle
            (IGCC), advanced gas turbines and stationary fuel cells are
            certain to play key roles in the U.S. generation supply mix;
      --The National Research Council's recent report on DOE's Vision 21
            program recommended that ``additional commitments should be
            made to develop, design and test large scale turbine and fuel
            cell power systems that can function successfully on both
            synthesis gas (syngas) and hydrogen; ``The full potential of
            these cleaner burning and more efficient cold-based generation
            technologies cannot be achieved without continued investments
            in advanced gas turbines and stationary fuel cell
            technologies.''
      --The Administration has correctly recognized the need for continued
            R&D funding support for the cost shared, industry-DOE gas
            turbine program but without significant increases in research
            to develop gas turbines that can burn synthetic gas derived
            from coal we are unlikely to meet our expectations in important
            programs such as FutureGen or IGCC.
      --The fiscal year 2005 funding level for high temperature stationary
            fuel cell power generation applications is zero. This is
            despite the widespread recognition that the development of
            stationary fuel cell applications is necessary before success
            in the transportation sector is feasible. Successful
            commercialization of stationary fuel cells should provide key
            technology building blocks that will be required for the
            transportation programs to reach the aggressive goals which
            have been established.
      --Under the proposed fiscal year 2005 budget, the Administration's
            stationary fuel cell and turbine program funding commitments
            fall significantly short of those needed for these two key
            technologies if the United States is to achieve the
            Administration's laudable commercialization objectives.
        Under the Advanced Turbines--Central Systems--budget line, Siemens
    Westinghouse Power Corp. recommends a 2005 funding level for DOE's
    refocused Turbine program of $25 million. While this level is well
    above the Administration's recommendation of $12 million, it is
    conservative when compared to DOE-Stakeholder estimates that the
    program should be funded at a $40 million a year level if we are to
    achieve the cost and reliability criteria necessary for widespread
    market penetration of high-efficiency coal plants.
        Under Distributed Generation--High Temperature Stationary Fuel
    Cells we recommend a funding level of $21.5 million.--Without continued
    funding, the high temperature fuel cell programs will not be completed
    in a timely fashion to enable their market deployment within the next
    three years. A significant portion of the tasks remaining will directly
    apply to and benefit the SECA program, especially as larger sized
    systems above 10 kW are developed over time utilizing the SECA
    technology. The $21.5 million funding level will also enable Siemens
    Westinghouse to continue progress toward the aggressive cost reduction
    targets mandated by DOE.
        Under the Distributed Generation--SECA budget line, we also
    recommend the funding be increased from the $23.5 million recommended
    by the President to $50 million.--The Solid State Energy Conversion
    Alliance or SECA, which this budget line supports, holds great promise
    for delivering an advanced planar solid oxide technology that will make
    possible smaller and more efficient fuel cell for the stationary and
    transportation markets. The cost reductions and technology developed
    under SECA will enable both stationary and transportation applications.

                             FUTUREGEN GAS TURBINES

        The Department of Energy, in cooperation with industry, has funded
    research and development through its Advanced Turbine Program, which
    has made U.S. gas turbines the most advanced in the world. The latest
    generation of gas turbines, in a combined cycle configuration, is
    almost twice as efficient as the existing fleet of power plants, while
    at the same time producing much lower emissions. This gas turbine based
    advanced generation technology can also be deployed with investment
    costs that are among the lowest now available in the marketplace on a
    $/kW basis. But in order to meet the demands of a carbon constrained
    world, the technology needs to evolve to meet the technology and
    environmental demands we expect for future coal based power generation
    concepts such as FutureGen.
        The United States is in the process of committing itself to major
    improvements in both the efficiency and the emission levels of coal
    powered power plants under DOE's core Clean Coal research and
    development programs. The Administration has also committed itself to
    development of the hydrogen economy through the FutureGen program. We
    can also expect that the FutureGen initiative will result in
    significant improvements in emission and efficiency levels for existing
    coal burning generation facilities while at the same time moving us to
    a new generation of technologies like CO2 capture ready
    Integrated Gasification Combined Cycle (IGCC). IGCC holds the potential
    of using the U.S.'s vast reserves of cheap and abundant coal in ways
    that are substantially cleaner, more efficient and which will be
    technologically ready to sequester CO2.
        While the Administration has recognized the important role of the
    gas turbine in preserving future U.S. coal markets by including funding
    for the Turbine program in its 2005 DOE R&D budget proposal, the level
    is significantly below that required to support the FutureGen program
    in several critical technologies including: advanced materials,
    sensors, and combustion technologies which will be required of advanced
    syngas-ready turbines. To enable advanced turbine technologies that
    will operate on natural gas, synthetic gas from coal or hydrogen, we
    recommend that the funding level be increased to $25 million. At this
    level we can accelerate the R&D needed for synthetic coal gas and
    FutureGen hydrogen applications. Our recommendation reflects the
    technology needs identified by DOE and others and is also consistent
    with the view that the turbine program is an integral and key enabling
    component of the NEP, the CCPI and FutureGen. This increased level of
    funding will also permit adequate support for the University Turbine
    Systems Research Program. This program has played a key role in
    encouraging pre-competitive basic science program participation by the
    university community and has been a major source of graduate level
    recruitment for the power generation industry.
        Unfortunately, today's advanced gas turbines that use technologies
    developed under DOE's Advanced Turbine Systems program will require
    major technology advances if they are to play the key roles envisioned
    by the Administration's initiatives for several reasons:
      --Today's turbine technologies cannot efficiently and reliably use
            the coal-derived synthetic fuel gas or high hydrogen content
            gas produced by gasification technology and which are essential
            to the Department of Energy's FutureGen initiative.
      --We do not have the materials or coating systems available that will
            permit today's advanced turbines to operate at the much higher
            operating temperatures needed to lower the cost of IGCC plants
            that provide coal derived syngas or hydrogen to the turbine.
      --We do not have the integrated diagnostic equipment, such as real
            time on-board sensors, to permit the higher levels of
            reliability needed in these future highly integrated systems.
            Thus without significant additional research and development in
            combustion science, advanced real time sensors and diagnostics
            and advanced materials and coating systems, we run the very
            real risk that other advanced technology components could be
            ready for deployment, but lack the key component, the advanced
            gas turbine.
      --With the successful resolution of these technology challenges, the
            United States will be able to increase its national security,
            lower consumer costs and reduce emissions.

                                   FUEL CELLS

        Stationary fuel cell technology has advanced rapidly in recent
    years and is broadly and increasingly seen as the stepping stone to
    long term transportation applications. In particular, fuel cell
    stationary power applications are now a technological reality although
    their costs currently limit their application to niche markets where
    the high costs can be justified.
        The Siemens Westinghouse Pittsburgh-based tubular solid oxide fuel
    cell (SOFC) technology is at a critical pre-commercialization stage
    with an urgent need for continued pre-commercial demonstrations for
    product development required to assure commercial viability. The
    current focus on cost reduction efforts is also essential to ensure a
    competitive technology which is crucial to the development of high
    volume manufacturing for commercialization. While the SOFC program has
    resulted in needed cost reductions, additional work on advanced cell
    manufacturing, manufacturing assembly and fabrication technologies is
    critical to achieve the mandated DOE cost reduction targets. Additional
    demonstrations are needed to ensure that these cost reductions have
    long term benefits and are sustainable.
        The Solid Energy Conversion Alliance or SECA, is the only fuel cell
    program which is funded in the Administration's proposed fossil energy
    budget. But the program is funded at a level of only $23.5 million
    compared to $34.5 million in the fiscal year 2004 budget, a reduction
    of 32 percent despite the increased DOE contract awards! The SECA
    program holds great promise but at the Administration recommended level
    of $23.5 million, it is unlikely to achieve its goals in a timely
    fashion. We recommend therefore that the Distributed Generation--SECA
    budget line be increased to $50 million. At this level the program can
    meet its contract obligations to fund existing commitments and confirm
    this far reaching new program of research and development.
        To date, our efforts have produced a superior technology that has
    demonstrated the longest running fuel cell of any kind, the longest
    running high temperature fuel cell system and the world's first high
    efficiency fuel cell/microturbine hybrid. Instead of eliminating DOE's
    program continued federal support is critical to achieving the
    program's milestones and commitments. To achieve these additional cost
    reductions we recommend a fiscal year 2005 funding level for high
    temperature fuel cell applications under the Distributed Generation
    budget line of $21.5 million. The technology and know how developed
    over the next two years under the tubular solid oxide fuel cell program
    is also expected to directly benefit the SECA program.
                                     ______

                  Prepared Statement of SOFCo-EFS Holdings LLC

                                  INTRODUCTION

         Chairman Burns, Ranking Member Dorgan, and members of the
    Subcommittee, I am pleased to submit testimony for the Subcommittee's
    consideration on a program for the Department of Energy.
        SOFCo-EFS Holdings LLC (SOFCo-EFS) has been developing integrated
    fuel cell systems and fuel processors since 1994. SOFCo-EFS employs
    highly skilled people in Alliance, Ohio and Lynchburg, Virginia.
        We currently receive Department of Energy Solid State Energy
    Conversion Alliance (SECA) funding for our research efforts while
    providing a private sector match to government dollars provided.
    However, the SECA program is being threatened. I would request that
    SECA receive full funding at $50 million in fiscal year 2005 in order
    to sustain continued research in fuel cells for commercially viable
    applications. Any reduction in this amount will slow the program and
    jeopardize other fuel cell research programs which are in step with the
    SECA timeline for development. The currently proposed 55 percent
    reduction will jeopardize SECA's overall viability.
        SOFCo-EFS has been recognized as a leader in the emerging fuel cell
    industry at the state and national level. In 2003, SOFCo-EFS received
    an Emerging Technology Award from Ohio Governor Bob Taft and the Ohio
    Department of Development, along with a proclamation from the Ohio
    House of Representatives recognizing SOFCo-EFS' ``tremendous record of
    technological innovations.'' As a member of one of the original SECA
    industry teams, SOFCo-EFS was recognized as one of the leading solid
    oxide fuel cell developers in the United States. However, SOFCo-EFS'
    contribution to the fuel cell industry is not limited to technology
    development.
        SOFCo-EFS has been instrumental in establishing Ohio based fuel
    cell initiatives and in growing support for the technology in both the
    industrial and education sectors. It is a founding member of the Power
    Partnership for Ohio, a major government-university-industry
    cooperative venture supporting the development and commercialization of
    fuel cells and the Ohio Fuel Cell Coalition, a growing organization
    dedicated to education, advocacy and aiding collaboration and
    networking in order to build job opportunities around fuel cell
    technology.

                FUEL CELLS AND REVITALIZATION OF LOCAL ECONOMIES

        The potential of fuel cells as a clean, efficient, reliable source
    of electric power has been recognized worldwide. Over 650 installations
    have successfully demonstrated these benefits. However, the widespread
    introduction of fuel cells into commercial markets requires further
    technical advancement, cost reduction, and in some cases development of
    new infrastructure. Because of the potential for reducing dependence on
    foreign oil, and the positive impact on emissions reduction, power
    quality and reliability, and domestic jobs, the creation of a robust
    fuel cell industry is in the national interest.
        Numerous federal agencies have sponsored programs aimed at the
    development and demonstration of fuel cell technology. While most of
    these programs have reached technical success, few programs have
    focused on the cost reductions required to achieve market acceptance.
    For example, the application of fuel cells by NASA has received
    attention. However, mission specific features are the critical criteria
    for these systems, not manufactured costs for commercial applications.
    In fact, most estimates indicate that current fuel cell costs, factored
    for high volume production, are between 2 and 10 the costs required
    for large scale penetration into commercial markets.
        In Ohio we have seen the steady loss of manufacturing jobs as the
    historical manufacturing base matures and labor costs become the
    governing factor. Since 2001, over 168,000 manufacturing jobs have been
    lost. Fuel cells offer great prospects for new, high technology jobs,
    many of which can be created through extensions of the existing
    manufacturing infrastructure. Governor Taft has recognized this
    potential, and has committed state support for advancing the fuel cell
    industry in Ohio.

     DEPARTMENT OF ENERGY'S SOLID STATE ENERGY CONVERSION ALLIANCE (SECA)
                                    PROGRAM

        The DOE Solid State Energy Conversion Alliance (SECA) is a flagship
    program for moving fuel cells to a stage of development that will
    create the opportunity to gain the national benefits through widespread
    public use. This program is unique in structure and goals. Through a
    competitive process it has combined the top academic, government, and
    non-profit research organizations with six product oriented teams to
    deliver fuel cell systems that meet specific product specifications and
    high volume manufactured cost targets.
        The SECA program supports solid oxide fuel cell (SOFC) system
    development. These systems are generally believed to offer the highest
    efficiency and lowest cost option, if certain critical targets are
    overcome. Unlike other fuel cell technologies, SOFC's do not require
    pure hydrogen for a fuel, and they have been demonstrated to high
    durability. In addition, since these systems operate at temperatures in
    excess of 700C, they offer options for efficient combined heat and
    power applications. Because of these features, it is believed that
    SOFC's are attractive for a wide range of distributed power and
    auxiliary power applications. These large markets exist today, and can
    be penetrated without changes in infrastructure or fuels, if cost and
    performance are competitive. Because of this, we see the SECA program
    as one of the critical pathways toward helping the nation begin to
    capture the promise of fuel cells.
        The effort to develop affordable, reliable technology within a well
    defined product line is difficult and risky. Obviously, this is the
    domain of private industry, and rarely funded by government programs.
    Product line extensions have well understood market projections,
    manufacturing sales and distribution costs, and customer feedback
    processes. Even with these in place, many products fail. Obviously,
    this is the domain of private industry with very little support from
    government funds. However, disruptive technologies pose greater
    opportunities and threats. Since they usually do not fit within
    specific product lines, the markets, costs, and timing are uncertain.
    Thus, the risk is too high for most companies to undertake aggressive
    development. Fuel cells fit within this classification. Some estimates
    indicate the total market as high as $250 billion per year. But, the
    timing and the commercialization costs are highly uncertain. Because of
    the benefit to national priorities and the great promise for
    revolutionizing the way we live, government support is warranted to
    help industry to overcome these risks so that fuel cells move
    aggressively into the market place.
        The SECA program is in the third year of a ten-year, three-phase
    schedule. This schedule has a 20/50/50 industry cost share requirement
    for the respective phase and a 60/40 funding split between industry-led
    teams and national laboratory/academia themes. At this stage, all teams
    are on schedule to meet cost/performance targets for the first phase.
    (It is noteworthy that the $800 per kilowatt manufactured cost target
    would qualify systems for certain high performance markets without
    further cost reduction). Thus, in addition to the fit with national
    goals, the SECA program provides a strong program performance
    justification for maintaining the original funding level, i.e. $50
    million per year for phase one. Any reduction in this amount will slow
    the program, and the currently proposed 55 percent reduction will
    jeopardize the overall viability.

                                   CONCLUSION

        It is strongly urged that the Congress appropriate the additional
    $27 million of funding needed to supplement the Department of Energy's
    request of $23 million for SECA. This will allow SECA to retain its
    original funding level, and allow the DOE to continue to pursue this
    program as long as program metrics are met. Overall, this will create
    jobs, improve the security of our nation, and reduce the environmental
    impact of electric power production.
                                     ______

     Prepared Statement of the State Teachers' Retirement System, State of
                                   California

        Department of Energy--Elk Hills School Lands Fund: $36 million for
    fiscal year 2005 installment of Elk Hills compensation.
        Congress Should Appropriate the Funds Necessary to Fulfill the
    Federal Government's Settlement Obligation to Provide Compensation for
    the State of California's Interest in the Elk Hills Naval Petroleum
    Reserve.

                                    SUMMARY

        Acting pursuant to Congressional mandate, and in order to maximize
    the revenues for the Federal taxpayer from the sale of the Elk Hills
    Naval Petroleum Reserve by removing the cloud of the State of
    California's claims, the Federal Government reached a settlement with
    the State in advance of the sale. The State waived its rights to the
    Reserve in exchange for fair compensation in installments stretched out
    over an extended period of time.
        Following the settlement, the sale of the Elk Hills Reserve went
    forward without the cloud of the State's claims and produced a winning
    bid of $3.65 billion, far beyond most expectations. Under the
    settlement between the Federal Government and the State, the State is
    to receive compensation for its claims in annual installments over 7
    years without interest. Each annual installment of compensation is
    subject to a Congressional appropriation. In each of the past 6 fiscal
    years (1999-2004), Congress has appropriated a $36 million installment
    of Elk Hills compensation for the State.
        The State respectfully requests an appropriation for fiscal year
    2005 of $36 million from the Elk Hills School Lands Fund for the
    seventh installment of compensation for the State's claim, as called
    for by the terms of its Settlement Agreement with the Federal
    Government.
        The Elk Hills appropriation has the broad bipartisan support of the
    California Senate and House delegation.

                                   BACKGROUND

        Upon admission to the Union, States beginning with Ohio and those
    westward were granted by Congress certain sections of public land
    located within the State's borders. This was done to compensate these
    States having large amounts of public lands within their borders for
    revenues lost from the inability to tax public lands as well as to
    support public education. Two of the tracts of State school lands
    granted by Congress to California at the time of its admission to the
    Union were located in what later became the Elk Hills Naval Petroleum
    Reserve.
        The State of California applies the revenues from its State school
    lands to assist retired teachers whose pensions have been most
    seriously eroded by inflation. California teachers are ineligible for
    Social Security and often must rely on this State pension as the
    principal source of retirement income. Typically the retirees receiving
    these State school lands revenues are single women more than 75 years
    old whose relatively modest pensions have lost as much as half or more
    of their original value to inflation.

              CONGRESSIONAL DIRECTION TO SETTLE THE STATE'S CLAIMS

        In the National Defense Authorization Act for fiscal year 1996
    (Public Law 104-106) that mandated the sale of the Elk Hills Reserve to
    private industry, Congress reserved 9 percent of the net sales proceeds
    in an escrow fund to provide compensation to California for its claims
    to the State school lands located in the Reserve.
        In addition, in the Act Congress directed the Secretary of Energy
    on behalf of the Federal Government to ``offer to settle all claims of
    the State of California . . . in order to provide proper compensation
    for the State's claims.'' (Public Law 104-106, Sec. 3415). The
    Secretary was required by Congress to ``base the amount of the offered
    settlement payment from the contingent fund on the fair value for the
    State's claims, including the mineral estate, not to exceed the amount
    reserved in the contingent fund.'' (Id.)

                 SETTLEMENT REACHED THAT IS FAIR TO BOTH SIDES

        Over the course of the year that followed enactment of the Defense
    Authorization Act mandating the sale of Elk Hills, the Federal
    Government and the State engaged in vigorous and extended negotiations
    over a possible settlement. Finally, on October 10, 1996 a settlement
    was reached, and a written Settlement Agreement was entered into
    between the United States and the State, signed by the Secretary of
    Energy and the Governor of California.
        The Settlement Agreement is fair to both sides, providing proper
    compensation to the State and its teachers for their State school lands
    and enabling the Federal Government to maximize the sales revenues
    realized for the Federal taxpayer by removing the threat of the State's
    claims in advance of the sale.

       FEDERAL REVENUES MAXIMIZED BY REMOVING CLOUD OF STATE'S CLAIM IN
                              ADVANCE OF THE SALE

        The State entered into a binding waiver of rights against the
    purchaser in advance of the bidding for Elk Hills by private
    purchasers, thereby removing the cloud over title being offered to the
    purchaser, prohibiting the State from enjoining or otherwise
    interfering with the sale, and removing the purchaser's exposure to
    treble damages for conversion under State law. In addition, the State
    waived equitable claims to revenues from production for periods prior
    to the sale.
        The Reserve thereafter was sold for a winning bid of $3.65 billion
    in cash, a sales price that substantially exceeded earlier estimates.
        proper compensation for the state's claims as congress directed
        In exchange for the State's waiver of rights to Elk Hills to permit
    the sale to proceed, the Settlement Agreement provides the State and
    its teachers with proper compensation for the fair value of the State's
    claims, as Congress had directed in the Defense Authorization Act.
        While the Federal Government received the Elk Hills sales proceeds
    in a cash lump sum at closing of the sale in February, 1998, the State
    agreed to accept compensation in installments stretched out over an
    extended period of 7 years without interest. This represented a
    substantial concession by the State. Congress had reserved 9 percent of
    sales proceeds for compensating the State. The school lands owned by
    the State had been estimated by the Federal Government to constitute
    8.2 to 9.2 percent of the total value of the Reserve. By comparison,
    the present value of the stretched out compensation payments to the
    State has been determined by the Federal Government to represent only
    6.4 percent of the sales proceeds, since the State agreed to defer
    receipt of the compensation over a 7-year period and will receive no
    interest on the deferred payments.
        Accordingly, under the Settlement Agreement the Federal Government
    is obligated to pay to the State as compensation, subject to an
    appropriation, annual installments of $36 million in each of the first
    5 years (fiscal years 1999-2003) and the balance of the amount due
    split evenly between years 6 and 7 (fiscal years 2004-2005).

                      THE MONEY IS THERE TO PAY THE STATE

        The funds necessary to compensate the State have been collected
    from the sales proceeds remitted by the private purchaser of Elk Hills
    and are now being held in the Elk Hills School Lands Fund for the
    express purpose of compensating the State.
        For each of the last 6 fiscal years, Congress has appropriated a
    $36 million installment of Elk Hills compensation to the State, leaving
    a balance of approximately $108 million owing to the State under the
    settlement.

    CONGRESS SHOULD APPROPRIATE THE FUNDS NECESSARY FORTHE FISCAL YEAR 2005
                     INSTALLMENT OF ELK HILLS COMPENSATION

        The Administration's proposed fiscal year 2005 Budget did not
    propose any appropriation for the 7th annual installment of Elk Hills
    compensation due for fiscal year 2005. The Administration provided no
    explanation, but stated in the accompanying budget documents: ``In
    light of the delays in equity finalization, the Department [of Energy]
    expects to consult with the State of California in calendar year 2004
    to discuss a revised payment schedule.''----(Fiscal year 2005 Budget
    Appendix, at p. 403).
        Upon further consideration of its position, the Administration has
    determined to amend the President's fiscal year 2005 Budget to request
    $36 million for the seventh installment of Elk Hills compensation,
    payable in fiscal year 2005. (See letter from the Secretary of Energy
    Spencer Abraham to Rep. Bill Thomas, dated April 5, 2004, attached). In
    his letter, Secretary Abraham states, ``the Administration has reviewed
    the level of fiscal year 2005 funding for the Elk Hills School Lands
    Fund in light of your letter, and we have concluded that an additional
    payment of $36 million in fiscal year 2005 would be appropriate. The
    Administration will submit to Congress a budget amendment for this
    amount.'' (p. 1).

                                   CONCLUSION

        The State respectfully requests an appropriation for fiscal year
    2005 of $36 million from the Elk Hills School Lands Fund for the
    seventh installment of compensation for the State's claim, as called
    for by the terms of its Settlement Agreement with the Federal
    Government.

    Attachment.
                                       The Secretary of Energy,
                                         Washington, DC, April 5, 2004.
    Hon. William M. Thomas,
    U.S. House of Representatives, Washington, DC.
        Dear Congressman Thomas: Thank you for your February 26, 2004,
    letter inquiring about the Administration's budget request for the
    seventh payment under the School Lands Settlement Agreement executed on
    October 11, 1996 by the Department of Energy (DOE) and the State of
    California pursuant to title XXXIV of the Defense Authorization Act for
    fiscal year 1996 (Act).
        Let me assure you that the Administration is fully committed to
    fulfilling the Department's obligations under the Settlement Agreement,
    which was executed in connection with the sale of the Government's
    interest in Naval Petroleum Reserve No. 1, also known as Elk Hills.
    Additionally, I am pleased to inform you that the Administration has
    decided to amend its fiscal year 2005 Budget to include a request for
    an additional payment of $36 million in fiscal year 2005, bringing
    total fiscal year 2005 funding to $72 million.
        The President's fiscal year 2005 Budget submitted to Congress in
    February 2004 included the $36 million provided in the fiscal year 2004
    Interior and Related Agencies Appropriations Act for the next payment
    under the Elk Hills School Lands Settlement Agreement, which becomes
    available for payment on October 1, 2004, the beginning of fiscal year
    2005. The Budget did not include any request for additional funding due
    to the uncertainty concerning the amount that ultimately will be due
    the State. The equity finalization process has proceeded more slowly
    than anticipated at the time of the Agreement. The Department currently
    expects equity finalization to be completed by the end of fiscal year
    2007, at which time (assuming no further delays) we will know the
    amount due to the State under the terms of the Settlement Agreement.
        Nevertheless, the Administration has reviewed the level of fiscal
    year 2005 funding for the Elk Hills School Lands Fund in light of your
    letter, and we have concluded that an additional payment of $36 million
    in fiscal year 2005 would be appropriate. The Administration will
    submit to Congress a budget amendment for this amount.
        The delays in the equity finalization process and the payment
    schedule clearly warrant consultation between the State and the
    Department, and I have instructed our legal representatives to contact
    the State's representatives to discuss the status of our equity
    finalization process with the State and the payment schedule under the
    Agreement.
        If the Department may be of further help, please contact me or Mr.
    Rick A. Dearborn, Assistant Secretary for Congressional and
    Intergovernmental Affairs, at (202)586-5450.
                Sincerely,
                                                       Spencer Abraham.
                                     ______

                Prepared Statement of the U.S. Fuel Cell Council

        Chairman Burns, Ranking Member Dorgan and honorable members of the
    committee. The fuel cell industry is requesting that this subcommittee
    support an increase of $20 million over President Bush's request of
    $77.7 million for the Energy Conservation Budget within the Department
    of Energy (DOE) as well as a restoration of funds to fiscal year 2004
    levels for the Office of Fossil Energy.
        On behalf of the 115 companies from across the country that we
    represent, the U.S. Fuel Cell Council would first like to thank you for
    the opportunity to share our thoughts with you. Also, thank you for
    your support of our industry last year. The increases you were able to
    obtain for the Fossil Energy Office program, as well as your ability to
    hold onto much of the President's increased request for the program in
    the Energy Efficiency and Renewable Energy Office, was greatly
    appreciated.
        Mr. Chairman, the Fuel Cell Industry has a proud record of working
    hand-in-hand with our government counterparts. In his 2003 State of the
    Union Address, President Bush committed our nation to building a
    hydrogen economy as a way to decrease our dependence on foreign oil,
    improve the environment and obtain greater energy independence. Since
    the President made that commitment, our technologies have received
    favorable attention by Congress, the Administration, as well as the
    public.
        As you know, fuel cells are devices that convert chemical energy in
    fuel to electricity and heat without combustion. Fuel cells transform
    the way power is generated and delivered, because they are:
      --Secure, reliable and provide high-quality power at the point of
            demand, with some systems able to provide ``free'' thermal
            energy as well as electric energy;
      --Fuel-efficient, using far less fuel to generate power than needed
            by comparable technologies; and
      --Clean, emitting virtually no pollution during the power generation
            process.
        As an industry, we are happy to report that we are making
    significant strides in carrying out the President's mission, and we are
    committed to ensuring a continued and aggressive competitive Research
    and Development program within the Department of Energy to advance
    America's transition to a hydrogen economy.
        A committee of the National Academies of Science (NAS) recently
    examined the Department of Energy's hydrogen and fuel cell vehicle
    program and concluded that a transition to hydrogen ``could
    fundamentally transform the U.S. energy system, creating opportunities
    to increase energy security . . . while reducing environmental
    impacts.''
        The National Academy study also recognized the enormous long-term
    potential of the hydrogen economy, and recommended expanding research
    in fuel cell cost reduction and durability, and in hydrogen storage,
    delivery and safety. The report, ``The Hydrogen Economy: Opportunities,
    Costs, Barriers, and R&D Needs'' stated it was ``impressed by how well
    the hydrogen program has progressed.''
        Again, the U.S. Fuel Cell Council wants to build on this momentum.
    We encourage this committee to increase funding from the budget request
    by $20 million to bring total fuel cell funding in the Energy
    Conservation Budget to $97.7 million. This compares with a $65.2
    million level in 2004. These funds support competitive solicitations
    for research and development of components, reformers, stacks and fuel
    cells systems in portable, stationary, transportation and micro
    applications. Increases in funding will be used to fund industry
    efforts to improve reliability, decrease costs and move technology
    forward. The industry is also pleased to see an emphasis on codes and
    standards, and we are actively pursuing standards for
    telecommunications applications as well as equipment separation
    distance standards.
        In general, fuel cells and surrounding systems developed within the
    Conservation account are Proton Exchange Membrane (PEM) fuel cells. PEM
    is a highly versatile technology, and we encourage DOE to fund the full
    range of applications: portable and micro fuel cell systems, stationary
    fuel cell systems, and transportation related fuel cell systems. The
    USFCC is very encouraged by the consistent funding request for the
    Freedom Car initiative.
        Our industry is also developing larger scale fuel cells for
    stationary applications under the Office of Fossil Energy (FE), and we
    are concerned about the alarming 68 percent decrease in the FE
    Distributed Generation Systems Budget funding request. For fiscal year
    2005, all but one funding line has been eliminated and the remaining
    Solid State Energy Conversion Alliance (SECA) funding was reduced to a
    mere $23 million. We urge the Subcommittee to provide at least $50
    million for the all-important work under SECA and to restore the level
    for Fuel Cell funding to the fiscal year 2004 appropriated amount of
    $71 million.
        Allow me to briefly review some of the programs that fall under
    your jurisdiction within the Office of Energy Efficiency and Renewable
    Energy and the Fossil Energy Office. They include: Transportation
    Systems; Distributed Energy Systems; Stack Component R&D; Fuel
    Processor R&D; Technology Validation; Technical/Program Management
    Support; and the Solid State Energy Conversion Alliance (SECA).

                             TRANSPORTATION SYSTEMS

        Transportation Systems R&D addresses key barriers to fuel cell
    systems for transportation applications. These barriers include
    attaining low cost and high-durability technical targets. Due to the
    strong level of industry development of complete systems, this program
    does not develop integrated systems. Rather, it seeks component
    technology critical to system integration.

                           DISTRIBUTED ENERGY SYSTEMS

        Distributed Energy Systems develops high-efficiency PEM fuel cell
    systems as an alternative power source to grid-based electricity for
    buildings and other stationary applications. The program supports the
    Hydrogen Fuel Cell and Infrastructure Technology (HFCIT) program by
    overcoming barriers to stationary fuel cell systems that will enable
    the widespread use of fuel cells in distributed energy applications.

                              STACK COMPONENT R&D

        Stack Component R&D focuses on critical technical hurdles for PEM
    fuel cell stack components for both stationary and transportation
    applications. Hurdles include cost, durability, efficiency and overall
    performance. The success of these research and development efforts will
    assist the industry in making their decision regarding
    commercialization of fuel cells.

                               FUEL PROCESSOR R&D

        The Fuel Processor R&D program helps develop fuel processors for
    transportation, stationary, auxiliary and portable power generation.
    Fuel processing technology will enable fuel cells to be fuel-flexible--
    capable of reforming gasoline, methanol, ethanol, natural gas and
    propane into hydrogen. Due to the current lack of hydrogen
    infrastructure, this technology will enable fuel cells, which operate
    more efficiently and in an environmentally friendly manner, to be used
    until hydrogen becomes more readily available.

                             TECHNOLOGY VALIDATION

        Technology Validation is coordinated with other government programs
    and is a 50/50 cost shared effort between the government and industry
    for automobile manufactures, energy companies, suppliers, universities
    and states. The effort will validate components under real-world
    conditions, and assist industry by providing safety, maintenance and
    fueling data. Technology validation will also be critical to help
    industry make commercialization decisions by 2015.

                      TECHNICAL/PROGRAM MANAGEMENT SUPPORT

        The Technical/Program Management program provides the analysis
    framework and technical support to meet the DOE's planning process. It
    also keeps the research and development agenda on target to meet and
    exceed goals.

                                      SECA

        The Solid State Energy Conversion Alliance, under DOE's Office of
    Fossil Energy, works in conjunction with the National Energy Technology
    Laboratory and the Pacific Northwest National Laboratory to develop
    commercial, cost-effective solid oxide fuel cell prototypes for diverse
    applications. The solid-oxide fuel cells will help mitigate
    environmental concerns associated with current methods of generating
    electricity from fossil fuels.
        As you know, the fuel cell industry is emerging, and in the short
    term, is dependent on industry-government collaboration, particularly
    for research, development and demonstrations.
        Mr. Chairman, allow me to take a moment to say a word about
    demonstrations, which have received a lot of negative attention lately.
    In our opinion, recent comments mischaracterize demonstrations as
    premature and distractive to developing fuel cell technology. Our
    council feels that a structured and comprehensive demonstration program
    is particularly important for the development of our industry.
    Demonstrations serve as extensions of DOE's research, designed to
    obtain performance and durability data in real world environments. In
    fact, the chairman of the NAS committee has recently characterized
    research, development and demonstration as a ``continuum'' in the
    commercialization process.
        Let me conclude by saying that America is poised to lead the world
    in fuel cell and hydrogen technology; however, other countries,
    particularly Japan, continue to gain on our progress. That said, if
    America expects to be the dominant producer and user of fuel cells, we
    must continue to make commitments that will move us toward President
    Bush's vision of a sustainable hydrogen economy.
        To that aim, the 115 members of the U.S. Fuel Cell Council
    encourage robust funding for all of the fuel cell activities under your
    jurisdiction.
        Thank you for considering our requests, and we thank you for your
    steadfast support over the years.
                                     ______

                    DEPARTMENT OF HEALTH AND HUMAN SERVICES

         Prepared Statement of Advocates for Health, Public Parks, and
                                   Recreation

        The undersigned organizations urge your support for a fiscal year
    2005 appropriation of $200 million from the Land and Water Conservation
    Fund for assistance to state and local governments, and $50 million for
    the Urban Park and Recreation Recovery Program.
        Recent revelations in the Journal of the American Medical
    Association (March 10, 2004) on the increasing rate of mortality
    attributable to physical inactivity and poor diet increase the
    imperative to invest in public park and recreation facilities that
    encourage active lifestyles. The 400,000 deaths annually due to
    physical inactivity and poor diet is the ``largest increase among all
    causes of death,'' the report observes. Also, Kenneth H. Cooper, M.D.,
    M.P.H. recently noted, ``(Today) our kids are fatter and less fit than
    they have been in the history of this country.'' (Statement to National
    Governors' Association, Winter Meeting, Feb. 22, 2004.)
        A report by the National Center for Chronic Disease Prevention and
    Health Promotion reinforces our recommendations. The Center observed,
    ``(C)haracteristics of our communities such as the accessibility and
    location of parks, trails, sidewalks and recreation centers . . . may
    play an even greater (than social environments) role in promoting or
    discouraging an individual or family's level of physical activity.''
        Congressional support for increased public access through
    recreation development and resource conservation holds high potential
    for at least stabilizing costs over the long term. For example, the
    four diseases that may be prevented by appropriate active lifestyles,
    including active recreation--heart disease, cancer, stroke, and
    diabetes--are life-threatening and costly to treat. The Centers for
    Disease Control and Prevention has observed that if physically inactive
    people were to become sufficiently active, we could potentially reduce
    health care costs by over $75 billion a year. Active recreation also
    can promote mental health; it can reduce feelings of anxiety and
    depression.
        Youth, especially, can benefit from active recreation. About 15
    percent of all children are obese, a condition that increases the risk
    of high blood cholesterol, high blood pressure, and diabetes. By being
    physically active on a regular basis, often at public parks and
    recreation sites, youth may be able to avoid or delay health problems
    associated with obesity and related conditions.
        With appropriate funds, thousands of public park and recreation
    facilities in American communities will be created, restored, and
    expanded, thus offering greater opportunity for active lifestyles. We
    urge your support for federal-state-local fiscal partnerships that will
    further these objectives.

    Richard Hamburg, Director of Government Relations, American Heart
            Association
    John Thorner, Executive Director, National Recreation and Park
            Association
    Jacqueline vdH Sergent, MPH, RD, LDN, Health Promotion Coordinator,
            Granville-Vance District Health Dept, Oxford, NC
    Donna Nichols, State Directors of Health Promotion and Education, Texas
    Barbara J. Moore, PhD, President and CEO, Shape Up America!, Portage,
            WI
    Arlene Prather-O'Kane, RNC, Program Manager, Black Hawk County Health
            Department, Waterloo, IA
    Nicole Mayernik, MPH, Health Promotion Coordinator, Rockingham County
            Dept. of Public Health, Wentworth, NC
    Paddy Rossbach, RN, President and CEO, Amputee Coalition of America,
            Knoxville, TN
    Robert L. Guenther, Vice President, Public Policy, United Fresh Fruit &
            Vegetable Association
    Margo G. Wootan, D.Sc., Director of Nutrition Policy, Center for
            Science in the Public Interest
    Carol Tucker Foreman, Distinguished Fellow & Director, The Food Policy
            Institute, Consumer Federation of America
    Sue Koob, Executive Director, Preventive Cardiovascular Nurses
            Association
    Robert Klaus, President and CEO, Oral Health America, Chicago, IL
    Dan Flynn, Secretary General, US Soccer Federation
    John Koskinen, Acting Executive Director, US Soccer Foundation
    Cherie Tucker, Executive Director, American Youth Soccer Organization
    Jane Voichek, Ph.D., President, Society for Nutrition Education, James
            Cosgrove, Executive Director, US Youth Soccer
    David Watt, Executive Director, American Running Association, American
            Medical Athletic Association
    Karen Votava, Executive Director, East Coast Greenway Alliance,
            Wakefield, RI
    Richard Olken, Executive Director, Bikes Belong Coalition, Boston, MA
    Leonard A. Cohen, PhD, Director, Research Animal Facility, Institute
            for Cancer Prevention, Valhalla, NY
    Harold Goldstein, DrPH, Executive Director, CA Center For Public Health
            Advocacy, Davis, CA
    Sara B. Bonam, President, Association of State and Territorial Public
            Health Nutrition Directors
    Becky J. Smith, PhD, CHES, CAE, Executive Director, American
            Association for Health Education
    Amy Joy Lanou, Ph.D., Nutrition Director, Physicians Committee for
            Responsible Medicine
                                     ______

       Prepared Statement of the Confederated Tribes of the Warm Springs
                             Reservation of Oregon

                                    SUMMARY

        Mr. Chairman, I am Garland Brunoe, Chairman of the Confederated
    Tribes of the Warm Springs Reservation. I hereby submit the following
    requests for the fiscal year 2005 BIA and Indian Health Service
    appropriation:
        (1) Add $2 million to BIA TPA Forestry designated for Warm Springs,
        (2) Restore Endangered Species funding in Non-Recurring Programs to
    $2,679,000,
        (3) Add $500,000 to BIA Water Management Planning and Pre-
    Development in Non-Recurring Programs designated for Warm Springs water
    settlement implementation studies,
        (4) Add or earmark $500,000 for Warm Springs in BIA Law
    Enforcement, Special Programs and Pooled Overhead, and
        (5) Add $2,232,000 to IHS Hospitals and Clinics to fulfill U.S.
    commitments in the Warm Springs IHS Joint Venture Agreement Pilot
    Project.

    (1) Add $2 million to BIA TPA Forestry designated for Warm Springs
        We request the addition of $2 million to the Bureau of Indian
    Affairs Tribal Priority Allocation budget specifically for the BIA
    Forestry program at Warm Springs. Forestry funding was slashed by
    nearly 20 percent in fiscal year 1996, crippling the BIA's capability
    to manage our forest as a trustee. In fiscal years 2003 and 2004, the
    Administration acknowledged this shortage by requesting BIA TPA
    Forestry increases of $1.5 million for each year. But the Forestry
    program is so underfunded that those increases were principally
    dedicated to forested reservations that previously had no TPA Forestry
    funding. Forested tribes such as Warm Springs, with already existing
    TPA Forestry budgets, regardless of their insufficiency, saw no
    appreciable increase.
        The insufficiency of BIA Forestry funding has been documented many
    times over past years in internal BIA documents and by outside
    independent observers. In fact, the Second Indian Forest Management
    Assessment Team (IFMAT-II) report, mandated by Congress to be done
    every ten years by a fully independent assessment team, was issued in
    December 2003 with a key finding that the federal funding of Indian
    forests is strikingly below that for National Forests and recommending
    that BIA Forestry funding be increased by $119 million annually to
    achieve funding parity. At Warm Springs, the consequences of a
    historically insufficient Forestry program have been manifested by our
    Tribe's lawsuit against the BIA for timber mismanagement. The case is
    again before the appeals court and remains unresolved since 1996. From
    the time the Tribe initially prevailed and proved that the BIA breached
    its trust responsibility, there has been no appreciable increase in BIA
    TPA Forestry funding for our Reservation. In fact, the BIA has actually
    reduced BIA Forestry funding at Warm Springs from the early 1990's.
        The $2 million increase for Warm Springs is necessary if the BIA is
    to rectify its Forestry inadequacies on our Reservation and fulfill, as
    a trustee, its legal duties and obligations to properly manage the
    Tribes' forest resources.

    (2) Restore Endangered Species funding in Non-Recurring Programs to
            $2,679,000
        This budget item includes the only funding provided by the Bureau
    of Indian Affairs for northern spotted owl and marbled murrelet
    compliance requirements under the Endangered Species Act for Northwest
    tribes. In fiscal year 2003, Warm Springs received $103,000 for this
    mandate, a reduction from the fiscal year 2000-02 levels of $191,000.
    The program was initiated by Congress in direct response to management
    requirements necessitated by the owl and murrelet listings under the
    ESA. It was subsequently combined with funding for a ferret program
    that the Administration unsuccessfully sought to eliminate in fiscal
    year 2002 (Congress funded the total ESA program at $3 million.) In
    fiscal year 2003 the Administration sought unsuccessfully to eliminate
    both activities and requested only $197,000 for the program. Congress
    appropriated $2,679,000. In fiscal year 2004 the Administration again
    sought to dramatically reduce both activities. Congress partially
    restored the program to $2,172,000, a reduction of $507,000 from fiscal
    year 2003.
        For fiscal year 2005, $2,189,000 is requested for the BIA ESA
    program. We ask that the program be restored to at least the fiscal
    year 2003 level of $2,679,000. The funds are essential to our
    compliance with Endangered Species Act management requirements. The
    2003-2004 reduction in funding from established levels and increasing
    compliance costs severely constrain our ability to meet those
    requirements, which in turn sharply restricts the planned timber sales
    levels essential for the employment and operation of our sawmill and
    for the revenues necessary to support our tribal governmental
    operations. Most other federal agencies have comparatively lavish ESA
    compliance budgets. It is both inequitable and startlingly callous that
    ESA funding for Indian tribes, whose economies are often among the most
    beleagured, should be treated so dismissively, particularly when, for
    at least the timber tribes, their economy is so dependent on the
    sufficient funding of this federal mandate.

    (3) Add $500,000 to BIA Water Management Planning and Pre-Development
            in Non-Recurring Programs designated for Warm Springs water
            settlement implementation studies
        In opening, we note that the Administration has requested lower
    funding levels for Water Management, Planning, and Pre-Development in
    fiscal years fiscal year 2003 and fiscal year 2004, and has effectively
    frozen the program at this diminished level for fiscal year 2005.
        Warm Springs specifically requests $500,000 be provided for the
    Warm Springs Tribe to complete the studies and planning necessary for
    Water Management Planning and Pre-Development on the Reservation. In
    1997, Warm Springs was the first tribe in many years to reach a
    negotiated water settlement with the United States and the State of
    Oregon. This settlement left most of the water in the Metolius and
    Deschutes Rivers and eliminated the need for the expensive water
    development legislation that normally accompanies tribal water
    settlements. But financial support is still needed for the Tribe to
    realize many of the benefits of the settlement, including development
    of a Comprehensive Warm Springs Water Development Plan, conduct of
    water quality modeling for the Deschutes River Basin, and examining
    potential energy development. An increase of $500,000 will allow the
    Tribe to pursue these projects and will help assure that the Tribe and
    the United States both participate in the benefits of settlement.

    (4) Add or earmark $500,000 for Warm Springs in BIA Law Enforcement,
            Special Programs and Pooled Overhead
        Beginning in the early 1960's, as the Tribe began to assert more
    jurisdiction and authority over reservation law enforcement, the BIA
    responded by gradually transferring federal funding elsewhere. Today,
    such a response is specifically prohibited by the Indian Self-
    Determination Act.
        Law enforcement and public safety remains a very high priority at
    Warm Springs. In the past three years, Tribal leaders have worked to
    improve law enforcement capability on the reservation by augmenting
    Tribally-funded police officers, corrections officers, investigators
    and fire medics with additional personnel and equipment supported in
    part by BIA law enforcement funds.
        For fiscal year 2005, we note that the Administration has requested
    an increase of more than $10,000,000 for Law Enforcement programs.
    However, we understand that 80 percent of that increase is targeted to
    operate 8 new BIA jails. Our concern is that the fiscal year 2005
    requested increase, like the $20 million increase requested by and
    provided to BIA Law Enforcement Services for fiscal year 2004, will be
    directed to those locations where tribes have left law enforcement
    responsibility entirely up to the BIA. Tribes such as Warm Springs that
    have stepped forward to help share local law enforcement
    responsibilities must not be penalized for having done so, and should
    share in BIA LES funding increases.
        The needs at Warm Springs are severe. Our tribal police force is
    extremely overextended, and no other law enforcement authority (State
    Police, County Sheriff, U.S. Marshall, ect.) patrols or operates at
    Warm Springs. Major crime has increased on our Reservation to the
    degree that the FBI has assigned an additional agent in the area.
    Additionally, the Warm Springs jail, designed and built by the BIA,
    fails to meet current federal requirements, especially for juvenile
    offenders. Our law enforcement circumstances are dire and the BIA must
    not be permitted to continue sidestepping its responsibilities for the
    public safety of the Warm Springs Reservation. Accordingly, we request
    that the Congress direct an increase of $500,000 in BIA Law Enforcement
    Services for Warm Springs.

    (5) Add $2,232,000 to IHS Hospitals and Clinics to fulfill U.S.
            commitments in the Warm Springs IHS Joint Venture Agreement
            Pilot Project
        In 1993 the Congress, Indian Health Services (IHS) and the Warm
    Springs Tribe entered into an innovative ``Joint Venture Pilot
    Project'' to improve health care facilities and services at Warm
    Springs. The Tribe financed and constructed a new clinic to federal
    standards and the Congress and IHS agreed to fully fund and staff an
    enhanced health care program in the new facility. However, the federal
    funding actually provided has been far short of the promise. Moreover,
    for the last several years inadequately funded federal mandates have
    further diminished health services at Warm Springs. We request a
    $2,232,000 increase in funding IHS Hospitals and Clinics to offset
    unfunded pay costs, to adjust for 12 percent medical inflation and to
    provide full direct services for Warm Springs.
        Mr. Chairman, that concludes the Warm Springs testimony on the
    fiscal year 2005 BIA and IHS appropriations.
                                     ______

      Prepared Statement of the Confederated Tribes of the Siletz Indian
                                  Reservation

                                  INTRODUCTION

        My name is Delores Pigsley, I am Chairman of the Confederated
    Tribes of the Siletz Indian Reservation. Our territory, while located
    on the beautiful Oregon Coast, is rural and isolated, especially from
    critical health care services. I submit this written testimony to the
    Appropriations Committee seeking additional funds for the Indian Health
    Service and for specific health programs at Siletz.

                          IHS FISCAL YEAR 2005 BUDGET

        Overall, with regard to the President's fiscal year 2005 request
    for Indian Health Service, we note that the request represents a mere
    $45 million or 1.6 percent increase over last year's enacted level. It
    is noted that the fiscal year 2004 IHS appropriation was subject to two
    budget recissions totaling $36.4 million. If the recission amounts were
    added back to the IHS' final fiscal year 2004 allocation, the
    President's request would only be a .3 percent increase. This is a
    shameful and deliberate attempt to abrogate the federal responsibility
    for health care to Indian people that was pre-paid by Indian lands and
    property and guaranteed in treaties and executive orders. We must, at
    the very least, have a budget that accounts for medical inflation of 10
    percent of $126.3 million; population growth of $59.8 million; and Pay
    Act increases of $36 million. This is needed just to preserve our
    current level of services.
        The Confederated Tribes of Siletz operate a small ambulatory health
    facility under Public Law 93-638 Self-Governance Compact with the
    Indian Health Service. Our small facility provides more than 24,000
    primary care visits each year, consisting of medical care, dental
    services, optometry and pharmaceutical. In addition, our health program
    consists of mental health, substance abuse, community health, diabetes
    program and numerous health promotion/disease prevention activities.
    Below, we discuss our most immediate health care funding needs.

    Contract Health Services
        Adequate funding of medical inflation, population growth and
    deferred CHS is critical to the health and well-being of our Siletz
    Tribal Members. Because the majority of our tribal population does not
    live within reasonable commuting distance to our clinic, we operate and
    rely heavily on Contract Health Services for hospitalization, specialty
    care and primary care that is not easily accessible through our
    facility because of distance. Insufficient resources in this program
    has resulted in unfunded, deferred health care requests such as CT
    scans, hernia repair, knee and/or hip surgeries, psychological
    counseling, back surgeries and many other treatments that do not meet
    current funded levels of priority. Our patients must become sicker to
    meet priority for treatment, which is contrary to the Tribe's goals of
    promoting health and well-being for our membership. At a minimum, CHS
    inflationary increases totaling $59.4 million should be added to the
    2005 IHS appropriation. Our Siletz CHS program needs an earmark of $1.8
    million to meet unmet CHS needs.

    Pharmaceuticals
        Pharmaceuticals are the fastest growing cost for our health
    program. Last year alone our CHS spending in this category exceeded
    $400,000. Combined with pharmacy costs in our health clinic, we spent
    over $1 million in 2003 in this area. Each year for the past three
    years pharmaceutical costs have risen by nearly 40 percent, compared to
    the dismal average 3 percent inflation in Indian health appropriations.
    We are well aware that it will take active management of our pharmacy
    programs, in addition to access to lower-cost pharmaceuticals, to
    regain control over pharmacy costs. We recommend a $2 million separate
    line item for pharmaceuticals so the Siletz Tribe can implement cost
    savings programs to control use and to purchase needed pharmaceuticals.

    Pain Management Program
        The Siletz Tribe is very interested in establishing a Pain
    Management program. Narcotic addiction and medication diversion within
    the Siletz Community has become increasingly problematic. Patients with
    real chronic pain often must rely on medications alone to cope with
    daily living. We envision development of a holistic approach to pain
    management encompassing social/physical/emotional/cultural
    interventions. Group patient education and support meetings will be
    combined with personal training and 1:1 therapeutic movement,
    acupuncture and traditional healing to assist our members in achieving
    their highest potential. A special earmark appropriation of $750,000 to
    support further development and implementation of the program is
    recommended.

    Siletz Community Health Clinic Remodel and Expansion Project
        Our facility was constructed in 1990 without Indian Health
    Facilities appropriations. Our Tribe recognized the health care
    shortage in our community and labored to meet those needs through
    alternative funding sources. In ten short years our program has
    outgrown our building, and many services are housed in other locations.
    Medical, dental and pharmacy areas are overcrowded and diminish our
    capacity. Our Substance Abuse program and Contract Health Services are
    off-site. Medical records are overflowing. We need to embark on a major
    remodel and expansion to maintain quality services. We intend to
    leverage some of our own third-party collections to obtain other
    funding from outside sources. Congressional support for a special
    earmark of $2.75 million for architecture, engineering and
    construction--plus an additional $5 million recurring staffing package
    is recommended.
                                     ______

        Prepared Statement of the National Congress of American Indians

        On behalf of the more than 250 member tribal nations of the
    National Congress of American Indians, we are pleased to present
    testimony on fiscal year 2005 appropriations for the Bureau of Indian
    Affairs and Indian Health Service.
        On February 2, President Bush proposed a $2.4 trillion budget for
    fiscal year 2005 that included level funding and numerous decreases for
    Indian programs, continuing the trend of consistent declines in federal
    per capita spending for Indians compared to per capita expenditures for
    the population at large.
        We are deeply disappointed that this budget does not reflect
    leadership by this Administration to take on the ``Quiet Crisis'' which
    has resulted from underfunding of federal Indian Programs according to
    a 2003 report of the bipartisan U.S. Civil Rights Commission. While we
    recognize that this budget reflects fiscal belt-tightening across the
    board, we believe this quiet crisis should be a national priority to
    address--certainly as worthy of focus as programs such as sending a
    manned mission to Mars which this Administration has prioritized
    instead. We hope that Congress will work with tribes to see this
    priority better reflected in the budget process.
        The Administration's proposed budget does not reflect the
    priorities of Indian Country to fully fund Indian health care, Tribal
    Priority Allocations, contract support, school facilities, and services
    at the local level. These priorities have been laid forth by the BIA/
    Tribal Budget Advisory Council, as well as by tribal leaders in budget
    consultations with IHS and other agencies. We ask that these
    recommendations be taken more closely to heart as the fiscal year 2005
    budget advances.

               BUREAU OF INDIAN AFFAIRS/OFFICE OF SPECIAL TRUSTEE

        The BIA budget request for fiscal year 2005 is $2.3 billion, a drop
    of $52 million from the 2004 enacted level. In the BIA budget, the
    costs of OST-BIA reorganization are effectively punishing tribes for
    the Department's own trust mismanagement--a double injury to individual
    and tribal trustees hurt by this mismanagement. With continuing focus
    on a reorganization plan that NCAI and numerous tribes have opposed,
    the 2005 BIA budget proposes a net increase of $42 million in trust-
    related programs, and cuts to other programs to offset trust increases
    that result in a de facto decrease in critical tribal funding within
    BIA of over $100 million. Other key areas of the BIA budget, such as
    Tribal Priority Allocations and initiatives that support education and
    economic development, remain deeply under-funded.
        Tribal Priority Allocations (TPA).--TPA funding is the main source
    of tribal resources to provide governmental services at the local level
    for most tribes. Funding for this account supports ongoing services at
    the local tribal level for such critical needs as housing, education,
    natural resource management, and tribal government services. Since
    tribes have flexibility to use TPA funds to meet the unique needs of
    their individual communities, these funds are an essential resource for
    tribes to exercise their powers of self-governance. This account, key
    to tribal self-determination, has been deeply underfunded for years.
    According to a 2003 report by the U.S. Commission on Civil Rights, the
    percentage of BIA funds provided to TPA has steadily dwindled since
    1998. Between fiscal year 1998 and fiscal year 2003, TPA spending power
    has decreased by $36.5 million or 4.4 percent. Unfortunately, the
    proposed fiscal year 2005 budget fails to even address inflationary
    costs, with only a $5 million increase requested for this key account.
    NCAI recommends at least a 5 percent increase in TPA for fiscal year
    2005 to address inflationary cost increases, a total increase of $35
    million over the fiscal year 2004 enacted level.
        According to the U.S. Census Bureau's Poverty in the United States:
    2001, 31 percent of reservation inhabitants live in poverty, 2.7 times
    higher than the national poverty rate. Likewise, unemployment for
    American Indians averages 43 percent--twice the rate during the Great
    Depression--compared to the national rate of 5.5 percent. Simply put,
    tribal governments simply cannot continue to provide essential
    government services to our growing--and disproportionately poor--
    population without a substantial increase in our TPA funds.
        Self-Determination Pay Cost Increases.--NCAI recommends that 638
    Pay Costs be restored to full funding for tribes in the fiscal year
    2005 Interior Appropriations budget. In the past, the 638 Pay Cost
    account has matched what the Administration and Congress provide for
    federal workers employed by federal agencies each year. But tribes
    received only 15 percent of their 638 Pay Cost funding in fiscal year
    2003 and about 30 percent in fiscal year 2004. As a result of these
    decreases, tribes' core service funding is effectively rendered far
    less than nearly a decade ago. This underfunding seriously undermines
    tribes' ability to provide critical services promoting the public
    safety, security, and well being of communities already suffering some
    of the worst living standards in America. Some federal agencies may be
    able to absorb such an onslaught of cuts, but tribes--wrestling with
    well-documented funding shortfalls to begin with--cannot. The Pay Cost
    disparity between federal and tribal employees seriously undermines the
    federal Indian policy of self-determination and self-governance.
        Office of Special Trustee.--The budget request includes a
    significant initiative to increase funding for trust management within
    the BIA and the Office of Special Trustee. The request included a
    significant increase of $53.3 million to the Indian Land Consolidation
    account, a welcome increase to an area supported by NCAI and tribes as
    vital to long-term trust management reforms. However, $109 million
    would be directed toward a historical accounting without mutually
    acceptable parameters established on how to undertake this
    extraordinary complex task. The Office of Special Trustee would receive
    a $113.6 million increase--to $322.7 million--which is partially offset
    by a $63 million cut to BIA Construction and a $13.5 million cut to BIA
    Other Recurring Programs. Within BIA Construction accounts, Education
    Construction will lose $65.9 million--despite a terrible backlog of new
    school construction needs that everyone agrees must be taken care of
    promptly.
        Tribal leaders have repeatedly emphasized that funding needed to
    correct problems and inefficiencies in DOI trust management must not
    come from existing BIA programs or administrative monies--yet once
    again, this year's budget request reduces effective funding for tribes
    to fund a reorganization that tribes have opposed. It is critical that
    the Department request additional funding from Congress to correct the
    internal problems created through their administrative mistakes rather
    than depleting existing, insufficient BIA program dollars for these
    purposes.
        Contract Support Costs (CSC).--Contract Support Cost (CSC) funds
    are the key to self-determination for tribes--these funds ensure that
    tribes have the resources that any contractor would require to
    successfully manage decentralized programs. The President requested a
    $2 million reduction in funding for BIA contract support costs, down to
    a proposed level of $133.3 million from the fiscal year 2004 request of
    $135.3 million. The shortfall in BIA CSC (including direct CSC) is
    estimated to be $51 million by year end fiscal year 2005, a shortfall
    which continues to penalize tribes that elect to operate BIA programs
    under the self-determination policy. Additional CSC appropriations are
    needed to implement the self-determination and self-governance policy
    as supported by Congress. An additional $25 million is needed in BIA to
    fully fund CSC (excluding direct contract support costs).
        School Operations.--NCAI and the U.S. Civil Rights Commission have
    called for badly needed increases to funding for BIA School
    Operations--but rather than addressing the tremendous need that exists
    for classroom dollars, transportation, and contract support for
    tribally operated schools, this critical account would be decreased
    under the proposed budget to $522.4 million, down $6 million from the
    enacted amount in fiscal year 2004.
        Proposed funding for Administrative Cost Grants--the equivalent of
    contract support for tribally operated schools--not only fails to come
    close to addressing the drastic shortfalls faced in this account, but
    would actually be cut. Despite current funding that is approximately 70
    percent of the formula required by law for essential Administrative
    Cost Grants that support sound management of tribally-operated schools,
    the President's budget would cut funding for this critical line item by
    $3.8 million to $45.3 million for fiscal year 2005.
        With the added burden of implementing the requirements of the No
    Child Left Behind Act, additional funding for ISEP is absolutely
    critical to the continuing function of BIA schools. NCAI also remains
    deeply concerned about the impact of OIEP's consolidation of line
    officers on BIA school functions.

                             INDIAN HEALTH SERVICE

        The fiscal year 2005 funding request for the Indian Health Service
    marks a rise of $45 million over the fiscal year 2004 enacted level--
    but falls far short of addressing the overall growth in population and
    rapidly increasing medical costs which have resulted in expanded unmet
    needs in Indian Country. The HHS discretionary budget has increased at
    a much faster rate than the total IHS budget since 1975, despite
    estimates that between 1998 and 2003, the service population of IHS has
    increased at least 11.5 percent and industry experts estimate that
    medical costs have grown 10 to 12 percent annually.
        Proposed funding for Indian health care facilities construction
    would be cut by more than half under the proposal, down from $94
    million enacted in fiscal year 2004 to $42 million requested in fiscal
    year 2005. Funding for Maintenance and Improvement as well as Medical
    Equipment for Indian health facilities would receive level funding in
    the proposed budget. Yet IHS facilities have an average age of 32 years
    and medical equipment is used for twice the normal life span in IHS
    facilities as compared to general facilities. According to the National
    Indian Health Board, in 2001, there was a $900 million backlog in unmet
    needs for health facilities, impeding Indian access to care and
    contributing to the degenerating health conditions in Indian Country.
        Contract Health Service.--About a quarter of IHS' budget for
    Clinical Services is dedicated to contracted care. The amount required
    to meet the needs of the Contract Health Service programs in Indian
    Country is estimated to be $1 billion, but the request for Contract
    Health Services would provide only $497 million for fiscal year 2005,
    less than half the amount needed to run the program. NCAI recommends an
    increase to Contract Health Services of $175 million in fiscal year
    2005, which would fund approximately 60 percent of the documented need.
        Contract Support Costs.--The fiscal year 2005 request for IHS
    contract support costs is $267.4 million, the same as enacted in fiscal
    year 2004 and $3.3 million less than enacted in fiscal year 2003.
    Contract support costs are necessary for tribes' ability to
    successfully administer IHS programs under the tribal self-
    determination policy. The transfer of federal Indian programs to tribal
    operation consistently results in improved service delivery, increased
    service levels, strengthened tribal institutions, and has led to
    exceptional innovations in Indian Country health care. The failure to
    fully fund contract support costs has emerged as the leading impediment
    to realizing the full promise of the Self-Determination policy since
    the chronic underfunding of contract support effectively penalizes
    tribes for exercising their self-determination rights. NCAI urges an
    additional $100 million to meet the shortfall for IHS contract support
    costs.
        Despite slight increases, IHS' real spending per American Indian
    has fallen over time, after adjusting for inflation and population
    growth. The IHS spends roughly $1900 per person per year on
    comprehensive health services, far below expenditures per person by
    public and private health insurance plans, and 50 percent of what is
    spent for health care for federal prisoners. Even when IHS non-medical
    expenditures per person are accounted for, IHS spends less on its
    service users than the government spends on any other group receiving
    public health care.
        While important gains have been made in funding for diabetes
    prevention and treatment efforts, progress toward the goal of
    eliminating health disparities for American Indians and Alaska Natives
    will require coordinated, concerted efforts--and increases across the
    board in the IHS budget.

                                   CONCLUSION

        NCAI realizes Congress must make difficult budget choices this
    year. As elected officials, tribal leaders certainly understand the
    competing priorities that you must weigh over the coming months.
    However, the federal government's solemn responsibility to address the
    serious needs facing Indian Country remains unchanged, whatever the
    economic climate and competing priorities may be. We at NCAI urge you
    to make a strong, across-the-board commitment to meeting the federal
    trust obligation by fully funding those programs that are vital to the
    creation of vibrant Indian Nations. Such a commitment, coupled with
    continued efforts to strengthen tribal governments and to clarify the
    government-to-government relationship, truly will make a difference in
    helping us to create stable, diversified, and healthy economies in
    Indian Country.
                                     ______

           Prepared Statement of the Ramah Navajo School Board, Inc.

                                    ABSTRACT

        The Ramah Navajo School Board, Inc. (RNSB) expresses its
    appreciation for the opportunity to submit its views on matters coming
    before the 108th Congress. The United States of America, through its
    legislative body the Congress, has established a relationship with the
    indigenous people of the lands encompassed by the present boundaries of
    the United States and has committed to provide education, health,
    protection, and maintenance of the identified tribal territories in
    payment for the confiscation of lands, water, air, and natural
    resources through treaties. The Indian Health Service has been
    designated primary steward for the provision of health care services to
    the American Indian population. Since its inception in 1955, the Indian
    Health Service has never been funded adequately to stem the health
    problems associated with the impoverished state of American Indian
    reservations. The Ramah Navajo School Board, Inc., supports complete
    funding of $16-to-$19 billion for the Indian Health Service and the
    passage of the American Indian Health Care Improvement Act wherein
    funds will be allotted through its various Titles.

                              COMMUNITY BACKGROUND

        The Ramah Navajo community, located in west central New Mexico
    bridging both Cibola and McKinley counties, is a part of the larger
    Navajo Nation, but is geographically located outside of the Navajo
    Nation boundary. Because of its location, the Ramah Navajo community
    has been largely ignored by the larger Navajo Nation, county
    governments, and state governments. The Ramah Navajo School Board, Inc.
    (RNSB) was established on February 6, 1970, because of the lack of
    support from the local county school district and the State of New
    Mexico in the replacement of the condemned public school. Students were
    then bused to schools in Gallup, New Mexico, approximately 55 miles
    away or Grants, New Mexico, about 60 miles away. In addition, some
    students were being placed in Indian boarding schools, even further
    from the Ramah Navajo community, separating students from home and
    family. RNSB then obtained funding to build a community school with the
    assistance of the Ramah Navajo Chapter, which allowed RNSB to operate
    the school and provide for a culturally relevant curricula.
        Encouraged by the success of this initiative, RNSB was approached
    by community members concerned about the lack of stable health care
    services. Health care then was part-time and sporadic at best. RNSB
    utilized PL. 93-638 to obtain funds from the Indian Health Service to
    establish the first health clinic in 1978--the Pine Hill Health
    Center--which now provides medical, dental, optometric, audiology, and
    emergency medical services with ambulance transportation to other
    facilities.

                                 JUSTIFICATION

        The Pine Hill Health Center is a Federal Qualified Health Care
    (FQHC) facility, which serves the Ramah Navajo Community, including a
    large number of non-Indian patients. It is the only primary health care
    facility within 45 miles of the next health care service. The cost
    associated with its operations continues to rise, and now, apparently,
    without any relief in sight in light of the President's proposed budget
    of $2.9 billion for all of Indian Health Service and the 500-plus
    American Indian tribes. Factors contributing to cost increases for the
    Pine Hill Health Center include:
      --Continuing increases in the number of patients seen at the
            facility.
      --Community population continues to increase annually with people
            moving in and approximately 60 new babies being born in the
            community every year.
      --Elder population continues to achieve longevity, but this also
            increases age-associated elderly maladies.
      --These age groups, the very young and the elderly, require
            continuing health care services.
      --Because our Health Center is only a primary care facility, some of
            our severely ill and injured patients have to be transferred to
            Zuni Hospital or to Albuquerque if the acuity of the patient
            warrants more extensive care.
      --Diabetes continues to be a growing problem for the American Indian
            population, including our Ramah Navajo people. We have seen a
            local increase of 15 patients who were pre-dialysis during the
            1999-2003 period. Our review of the present IHS budget is that
            it is inadequate to address the tide of this disease.
      --Patients afflicted with respiratory conditions are adversely
            affected by the extremes of temperature at our location near
            the continental divide (8,000 ft.).
      --And, of course, all health care costs are rising with inflation.
        Therefore, the Ramah Navajo School Board, Inc., is requesting
    congressional funding increases in the IHS budget for fiscal year 2005
    in order that our American Indian people can receive health care
    comparably offered to others in this country. Indian Health programs
    receive per capita expenditure of only $2,500, compared to the
    following:
      --Medicare enrollees at $5,915.
      --Veteran Administration medical care costs at $5,214.
      --U.S. Personal Medical Care Services at $5,065.
      --Medicaid enrollees at $3,879.
      --Medical Care for Prison Inmates at $3,803.
      --Federal Employee Health Benefits at $3,725.
        This is a disgraceful disparity. American Indian health funding is
    below all of these. Please support our efforts to provide quality and
    safe health care to the Ramah Navajo community people and bring the
    level of health care for our people up to that of the average American.
                                     ______

                                RELATED AGENCIES

           Prepared Statement of the American Association of Museums

        Chairman Burns, Senator Stevens, and distinguished members of the
    Subcommittee, the American Association of Museums (AAM) is pleased to
    submit testimony concerning the fiscal year 2005 budgets of the
    National Endowment for the Arts (NEA) and the National Endowment for
    the Humanities (NEH).
        The American Association of Museums, headquartered in Washington
    D.C., is the national service organization that represents and
    addresses the needs of museums and to enhance their ability to serve
    the public. AAM disseminates information on current standards and best
    practices and provides professional development for museum
    professionals to ensure that museums have the capacity to contribute to
    life-long education in its broadest sense and to protect and preserve
    our shared cultural heritage. Since its founding in 1906, AAM has grown
    to more than 16,000 members across the United States--nearly 10,500
    individual museum professionals and volunteers, more than 3,000
    museums, and 2,500 corporate members.
        The museum community has enjoyed a positive and productive working
    partnership with both the NEA and NEH for many years. Whether they have
    worked in conjunction with the Institute of Museum and Library Services
    or on their own, the contributions of the NEA and NEH to the vitality
    of America's museums and the public services they provide to our
    communities can not be underestimated. These two agencies have provided
    invaluable support to America's museums since their inception, and we
    fully support them and the good work they do for the American people.
        Consequently, we view the proposed fiscal year 2005 budgets for the
    NEA and NEH with great optimism. We appreciate the Administration's
    strong support for each agency and fully support the President's
    request of $162 million for the National Endowment for the Humanities
    and are interested in the opportunities presented by the new NEA
    program, American Masterpieces: Three Centuries of Artistic Genius.
        As the committee knows, the core of the NEH request is an increase
    of $26.7 million to expand an initiative begun two years ago entitled
    We the People. We fully support this investment designed to advance the
    public's understanding of American history, culture, and civics. We the
    People will further NEH's core functions--advancing scholarship,
    education, preservation, and access to intellectual and cultural
    resources and public understanding of the humanities--and will do so in
    a way that develops Americans' abilities as citizens.
        While we are pleased with the Administration's request for new
    funding to support the American Masterpieces initiative to help broaden
    public access to and understanding of our rich artistic heritage, we
    respectfully request that this increase be matched with a $31 million
    investment in the NEA's core mission to support and promote the
    presentation, preservation and creation of the arts in America and to
    fund the Challenge America initiative, which uses the arts to enhance
    America's communities through grants for arts education, youth-at-risk,
    cultural preservation, community arts partnerships and improved access
    for all Americans.
        We recognize that we are in the midst of a national crisis both at
    home and abroad and that difficult budget decisions need to be made,
    but we urge the committee to consider the economic, educational and
    social return even a modest increase in the federal investment in the
    arts and humanities would bring to the people we all serve.
        It would be incorrect to suggest that artistic and cultural events
    would cease without funding from the federal government. However, we
    are convinced that America would not have the rich, diverse and vibrant
    artistic community we have in this country if it were not for the
    investments both large and small organizations have received from the
    NEA over the last 35 years. The recognition that comes from being
    awarded NEA grant funding is invaluable to cultural organizations. It
    helps them leverage additional private support--NEA requires grant
    recipients to match all awards up to a ratio of four to one--that
    allows organizations to continue to grow and mature long after the
    federal money is gone. Dollar for dollar, private funding simply cannot
    match the leveraging effect of even a modest amount of government
    funding.
        Even leaving aside the educational and social value of
    strengthening the federal investment in the arts, both of which are
    substantial, the economic value speaks for itself. According to a 2002
    study by Americans for the Arts, the nonprofit arts industry alone
    generates $134 billion annually in economic activity, supports 4.85
    million jobs and returns $1.4 billion to the federal government in
    income taxes. NEA seed money has helped make this possible.
        Last year in testimony before this subcommittee, NEA Chairman Dana
    Gioia stated that one of his five primary goals for the NEA was to
    ``reclaim its leadership role in American culture.'' He said, the
    Endowment

    ``must enter a new era, confident of its civic responsibilities in a
    society overwhelmed by commercialized electronic mass entertainment.
    The NEA must enlarge the conversation of American public life to
    include the arts. It must promote, preserve, and celebrate the best of
    our culture, old and new, classic and contemporary. It must reacquaint
    America with its own best self.''

    For, as he so rightly put it, ``nothing less is worthy of our nation.''
        A budget of $170 million would enable the NEA to further its
    efforts to support and promote creativity in the arts in communities
    throughout all 50 states. Building on the success of the agency's
    recent tour of Shakespeare, the NEA is working to ensure that great art
    is available to all Americans, especially those in traditionally
    underserved areas including rural communities and inner-city
    neighborhoods. With additional resources, the NEA can fully fund the
    Challenge America initiative and use the strength of the arts to
    enhance America's communities.
        Mr. Chairman, culture is what defines, builds and binds our
    communities. In cities and towns across America, one finds numerous
    examples of arts, culture and the humanities being used as educational
    tools, economic engines, sources of civic pride, and catalysts for
    fostering multicultural understanding. America needs a prudent and
    forward thinking investment in our artistic and cultural institutions
    to present our enormously distinguished and diverse artistic legacy to
    all Americans, and the rest of the world, to promote creativity in our
    society, and to preserve the artistic heritage of our past for future
    generations. We ask the committee to make that investment and support a
    budget of $170 million for the NEA for fiscal year 2005.
        We also ask the committee to support the administration's request
    of $162 million for the National Endowment for the Humanities. The NEH
    plays an important role in the American experience. In fact, the
    humanities are essential to democracy. They are the basis for reasoned
    discourse and make possible the shared reflection, communication, and
    participation upon which democratic society depends. In last year's
    testimony, NEH Chairman Bruce Cole made a very compelling case for
    supporting the NEH's budget. He said:

        ``At this critical time, it is urgent that Americans understand the
    principles, events, and ideas that have defined our past and shape our
    future. Democracy, unlike other forms of government, is not self-
    perpetuating. Its principles and practices must be cultivated in order
    to be transmitted and sustained.''

        The NEH is the largest single source of funding for humanities
    programs in the United States, enriching American intellectual and
    cultural life through support to museums, archives, libraries,
    colleges, universities, state humanities councils, public television
    and radio, and to individual scholars. Thus it is well positioned to
    help redress the deficiencies identified by numerous studies and
    reports that show that students in K-12, and even college, have a poor,
    or at best confused, understanding of our nation's history and the
    ideals and principles of democracy upon which it was founded.
        Increasing support for NEH is critical to addressing the nation's
    future needs in education. With more than two-thirds of our nation's K-
    12 curriculum dedicated to the humanities, including subjects such as
    reading, literature, history and civics, continuing this support is
    crucial to addressing our nation's needs in education and correcting
    the problem of ``American amnesia'' as Chairman Cole put it.
        The reach of the NEH's programs extend beyond the classroom and
    lecture hall by engaging the public in the humanities through exhibits
    in museums, libraries, and historical organizations; the varied
    programs of the state humanities councils; and a variety of other
    activities. In a recent national public opinion survey, almost 9 out of
    10 Americans (87 percent) said museums are one of the most trustworthy
    sources of information among a wide range of choices. This high level
    of trust can in part be attributed to the careful research that goes
    into developing museum exhibitions and programs. NEH grants, in
    addition to being invaluable in supporting efforts to preserve and
    protect our vast cultural, historic, and artistic resources held in
    trust for the American people in our museums, are also invaluable in
    supporting efforts to research those treasures and put them into
    historical context. An object or artifact without context tells no
    story and teaches nothing.
        As with the NEA, a modest investment through the NEH produces rich
    dividends. NEH seed money for high quality projects and programs, and
    NEH's reputation for scholarly excellence, leverages millions of
    dollars in private support for humanities projects and brings the
    humanities alive for millions of Americans each year--from the youngest
    students to the most veteran professors to men and women who simply
    strive for a greater appreciation of our nation's past, present, and
    future.
        Federal support for the humanities has historically received
    bipartisan support in Congress, from the Endowment's creation in 1965
    to the present day. Every American President has said that the
    humanities play an essential role in American life and are worthy of
    federal support and this administration is no exception, as evidenced
    by their strong support for the We the People initiative. We strongly
    support this program and the NEH in general and ask the committee to
    fully fund the administration's budget request of $162 million for
    fiscal year 2005 for this extremely valuable agency.
        Mr. Chairman, we firmly believe that the NEA and the NEH are both
    essential resources and leaders for the American people in their
    respective areas. The museum community is proud to partner with both
    agencies to provide high quality programs and services for the people
    we all serve.
        The NEA and NEH are focused on serving the American public and the
    needs of our communities to ensure that we all have access to the
    cultural and intellectual legacy of our democracy. Additional funding
    would enable the agencies to not only pursue their new and innovative
    initiatives, but also to increase their ability to invest in their core
    missions. We of course recognize, Mr. Chairman, that you and your
    colleagues are under intense pressure to balance the funding needs of
    the many worth programs under your jurisdiction. We would ask you
    though to consider carefully the good work being done by the NEA and
    NEH for the American people and do what you can to fund these urgently
    needed increases.
                                     ______

       Prepared Statement of the American Association of Museums and the
                       Society for Historical Archaeology

        Mr. Chairman and members of the Subcommittee: I am Jason Hall,
    Director of Government and Public Affairs for the American Association
    of Museums, presenting written testimony on behalf of a consortium
    consisting of the American Association of Museums and the Society for
    Historical Archaeology.
        As you know, Section 10 of the Native American Graves Protection
    and Repatriation Act (Public Law 101-601--``NAGPRA'') authorizes the
    Secretary of the Interior to ``make grants to Indian tribes and native
    Hawaiian organizations for the purpose of assisting such tribes and
    organizations in the repatriation of native American cultural items''
    and to ``make grants to museums for the purpose of assisting the
    museums in conducting the inventories and identification required under
    sections 5 and 6.'' While we appreciate the Congress and the President
    agreed in the Interior bill to provide funding of approximately $2.5
    million for fiscal year 2004 to allow the statutorily-mandated
    repatriation process to proceed, we respectfully urge Congress to
    increase the appropriation to at least $5 million for fiscal year 2005.
    We present the following reasons in support of this request.
        As you are aware, NAGPRA is remedial legislation. Congress enacted
    the law in 1990 in large part to assure that Native American remains
    and funerary and other objects retained by the federal government and
    museum community are returned under the law to appropriate tribes and
    organizations for reburial or other appropriate treatment. As remedial
    legislation, NAGPRA will not remedy the problem Congress sought to
    resolve unless adequate dollars are appropriated so that tribes and
    museums can complete the repatriation process--which is now under way
    but which necessarily proceeds slowly in many cases because of
    essential museum-tribe consultation and other factors. Repatriation is
    a high priority of the museum and tribal communities, which do not have
    adequate funds to do the necessary work required by NAGPRA.
        Since repatriation is the subject of federal legislation as well as
    regulations and administrative guidelines, the U.S. government has a
    trust responsibility to Indian tribes and their members in the area of
    repatriation. This trust responsibility imposes strict, binding
    fiduciary standards on the conduct of executive agencies, here the
    National Park Service and the Department of the Interior, in its
    treatment of tribes in repatriation matters. Adequate funding for
    tribes, museums and universities is necessary to carry out the
    statutory mandates of Congress.
        At the same time, it is clear that the communities and sovereign
    Indian tribes represented by the consortium have been called upon to
    take a much increased role in implementing Public Law 101-601 in the
    past several years, as the mandated summaries and inventories of museum
    holdings were largely completed by museums and sent to the tribes in
    mid-November, 1993, and mid-November, 1995, respectively. Activity has
    intensified immensely in recent years and will continue to do so as the
    number of actual repatriations continues to increase.
        The consortium's testimony provides information on how the
    requirements of the law are creating significant costs for our
    communities and seeks your support for funding for the grant program
    authorized in the law, so that we can continue to comply with it in a
    timely and responsible way. Let me start by addressing in generic terms
    the needs of the museum community. In order to comply with Public Law
    101-601, museums have to engage in activities falling into four
    categories: (1) preparation of inventories, in the case of human
    remains and associated funerary object, and written summaries, in the
    case of unassociated funerary objects, sacred objects and cultural
    patrimony; (2) notification and consultation with Native American
    groups and visitation by those groups to museum collections; (3)
    research to identify cultural affiliation of human remains and objects;
    and (4) repatriation.
        To prepare the inventories of human remains and funerary objects
    which were due by November 16, 1995, museums have needed to: physically
    locate every item within the museum's storerooms; locate and review
    existing records to compile information necessary to determine whether
    a funerary object is ``associated'' or not, and to determine the
    cultural affiliation of the objects; catalog any remains ad objects
    that are not catalogued; document (e.g., measure and photograph) and
    analyze the human remains and funerary objects; and compile an
    inventory of human remains and funerary objects containing the
    information required under Public Law 101-601, including cultural
    affiliation. The delay in promulgation of the final regulations, and
    the late start and low level of grant funding for repatriation grants
    to the tribes and museums, have slowed the process such that a
    significant number of museums were not able to prepare inventories by
    the November 16, 1995 deadline, despite timely and continuing good
    faith efforts, and had to appeal for extensions.
        With respect to unassociated funerary objects, sacred objects and
    objects of cultural patrimony, museums were required to and did,
    prepare a written summary by November 16, 1993 rather than an itemized
    inventory of their collections. Nevertheless, many museums needed to
    undertake many tasks similar to those noted above in order to collect
    the required information. Throughout all of this, museums have needed
    to consult with native American tribes which might have an interest in
    the objects. The time and funds spent on consultation with Native
    American peoples varies according to the physical proximity of the
    museum to the particular group.
        Once the inventory and written summary are complete, the museum
    must identify the tribal representatives authorized to accept
    repatriable objects and formally notify those representatives. Tribal
    representatives must travel to the museums to examine the objects and
    consult with the museum. Remains and artifacts must be packed and
    shipped to the appropriate Native American group. During this process,
    disagreements may arise as to the disposition of items covered by
    Public Law 101-601, and these issues must be resolved.
        Let me turn to some specific cases. On December 6, 1995, the Senate
    Committee on Indian Affairs held an oversight hearing on the
    implementation of NAGPRA. Final NAGPRA regulations, with some sections
    still incomplete, were published two days prior to the hearing. Two
    years later, the Interior Department published an interim rule on one
    of those incomplete sections, the civil penalties section. But as of
    April 2001, there have been no final regulations issued on the three
    remaining sections (future applicability, culturally unidentifiable
    remains, and unclaimed items from Federal or tribal lands.)
        Representatives from the National Park Service, the NAGPRA Review
    Committee, three affected tribes, and a witness representing both the
    American Association of Museums and an affected museum, testified about
    compliance with the law. NPS witness Katherine Stevenson noted that the
    NPS had made 83 NAGPRA grant awards totaling $4.37 million since the
    beginning of the program, but that over that time, they had received
    337 grant proposal requests totaling nearly $30 million, and she
    conceded that the Interior Department's $2.3 million request for fiscal
    year 1996 did not meet the valid needs demonstrated in the grant
    applications from museums and the tribes. Since that 1995 testimony,
    the situation has remained much the same in terms of funding needs. As
    of April 2002, the NPS has been able to make 351 NAGPRA grant awards
    totaling approximately $21.3 million since the beginning of the
    program, but during that time, it has received well over 770 grant
    proposals totaling more than $52 million, and funding has essentially
    been flat at $2.3 million, and more recently $2.5 million annually. The
    $2.5 million appropriation continues to fall short of valid needs.
        The witness representing museums in 1995, William Moynihan,
    President of the Milwaukee Public Museum, testified about the effort of
    his museum to comply with the law. He noted that the ``Milwaukee Public
    Museum will have committed well in excess of half a million dollars by
    1997 to deal with the legislation. Existing staff in our Anthropology/
    History Section have been reallocated from their normal duties to
    NAGPRA-related activities, a large team of volunteers assembled, and
    trained student interns and work-study students hired.'' He noted that
    the Museum has been collecting anthropological and archaeological
    materials for over 100 years, that included in the holdings are the
    remains of 1,500 individuals, and that the collections are not
    computerized. Despite these difficulties, the museum had completed a
    physical inventory of over 22,000 Native American ethnographic objects,
    and a preliminary inventory of 50,000 archaeological objects; sent
    summaries to 572 tribes and native Alaskan and Hawaiian groups;
    followed up with hundreds of calls to tribes; and taken a variety of
    other actions to comply with the law.
        On a broader scale, we have results from the American Association
    of Museums' 1994 repatriation survey of 500 of its member institutions,
    including all of its natural history museums and a selected sample of
    its art and history museums. The survey response rate was 43.6 percent.
    Of those responding, 76 percent of the natural history museums, 43
    percent of the history museums and 23 percent of the art museums had
    Native American objects. Those respondents--a little more than 200--
    alone had almost 3.5 million objects which fell into NAGPRA categories,
    and that does not include 15 responding natural history museums,
    including 3 large institutions, which could not give an estimate of
    their NAGPRA-related holdings. An overwhelming number of these
    institutions noted how lack of final regulations and of NAGPRA grant
    funding had hindered or prevented their repatriation efforts.
        Estimating aggregate costs is not possible from the survey data,
    given the great disparities in how institutions calculated their own
    costs. It is clear, however, that thousands of institutions across the
    country are affected to some degree by NAGPRA costs.
        The Native American community is also incurring major expenses in
    attempting to comply with the requirements and deadlines of NAGPRA. As
    you know, the repatriation process involves sacred items and, most
    importantly, human remains, not just artifacts. In this light we must
    approach the funding issues related to the Act. A 1994 repatriation
    survey done by the National Congress of American Indians indicated that
    some tribes had received hundreds of NAGPRA summaries from museums, and
    that the need for outside funding to hire experts to help them analyze
    these materials and subsequent NAGPRA inventory materials is virtually
    universal. From the dozens of responses to the survey, it is apparent
    that most tribes do not have the capacity to comply with the Act. For
    example, the Shingle Springs Rancheria/Miwok/Maidu tribe reported,
    ``Our tribe has been well versed in the purpose and intent of NAGPRA.
    The response from museums (the sending out of surveys to the tribes at
    the November 1993 deadline) has been astounding. We have received over
    100 notices. However, we cannot respond or take advantage because of
    lack of funds.'' This tribe estimated its financial needs at
    approximately $35,830. And at the December 1995 Senate oversight
    hearing, Cecil Antone of the Gila River Indian Community noted that the
    Community had received over 150 letters from various museums and
    federal agencies about the disposition of NAGPRA-related collections.
    The needs of the tribes vary depending on the number of responses they
    have received, their present and future ability to comply with the Act,
    and what, if any, experience their tribe has had with projects of this
    sort. In fact, tribal responses estimating funding needs ranged from
    ``unknown'' to ``very much'' to ``$2 million.''
        In October 1990, the Congressional Budget Office estimated NAGPRA
    implementation costs to museums of $40 million and to tribes and native
    Hawaiian organizations of $5-10 million over 5 years, assuming that
    museums and federal agencies hold between 100,000 and 200,000 Native
    American remains and that the cost to inventory and review each remain
    would be $50-150. Those estimates now appear to be very low in light of
    our experience since that time. As a result, viable tribal and museum
    request for grants continue to exceed available funds by a large
    margin. In addition, museums cannot repatriate to the tribes until
    appropriate notices go into the Federal Register, and there is
    currently a backlog of about 150 such notices at the NPS, about a
    year's worth, due to lack of staff to process them.
        In closing, let me add that while the museums and tribes must have
    this grant program funded simply to comply with the requirements of
    NAGPRA, it is also true that the grant program will accomplish far more
    than compliance. Museums and tribes have discovered that the exchange
    of data required under NAGPRA is yielding new information that helps us
    all. In the process of identifying sensitive cultural items, museums
    are learning much more about their entire collections. Delegations of
    elders and religious leaders have supplied valuable new insights about
    many objects in the repositories they have visited, and in turn they
    are discovering items of immense interest to their own tribes, the
    existence of which had been unknown in recent generations. Few items in
    these categories are being sought for repatriation; it is simply that
    access to the collections has led to much better mutual understanding
    and exchange of knowledge. While the repatriation process will
    eventually end as the transfer of materials is completed, the long-term
    relationship created between museums and tribes will continue.
        Thus, this funding will not just support expenses mandated by law.
    It is also an excellent investment that serves the public interest
    now--and will continue to pay dividends in the future--through more
    accurate and respectful exhibits and education programs that are the
    fruits of long-term collaborations.
        Finally, we respectfully urge you to keep in mind that we are
    talking in large part about the reburial of the remains of human
    beings, and that under a reasonable and dignified standard, Native
    American repatriation and reburial should be treated with the utmost
    priority and dignity.
        The consortium appreciates this opportunity to testify on this
    issue.
                                     ______

                  Prepared Statement of Americans for the Arts

        Americans for the Arts is pleased to submit written testimony to
    the Senate Appropriations Subcommittee on the Interior in support of
    fiscal year 2005 appropriations for the National Endowment for the Arts
    (NEA) at an increased funding level of $170 million. Americans for the
    Arts is the nation's leading nonprofit organization for advancing the
    arts in America. With more than 40 years of service and more than 5,000
    organizational and individual members and stakeholders across the
    country, it is dedicated to representing and serving local communities
    and creating opportunities for every American to participate in and
    appreciate all forms of the arts.
        Of the requested funding, $31 million would expand the NEA's
    ability to perform its core mission--to support the creation,
    preservation and presentation of the arts in America--and strengthen
    the Challenge America initiative, which uses the arts to enhance
    America's communities through grants for arts education, youth-at-risk,
    cultural preservation, community arts partnerships and improved access
    to the arts for all Americans. The remainder of the increase would fund
    the President's request for an additional $18 million to fund a major
    new initiative, American Masterpieces: Three Centuries of Artistic
    Genius and to cover increased administrative and grantmaking costs.
        Local arts agencies are Americans for the Arts' key constituency
    and advancing full and affordable access to the arts remains at the
    heart of our mission. Local arts agencies can be either a private
    community-based cultural organization or a unit of local government.
    Their primary mission is to provide funding and service support to
    their local cultural organizations, provide services to artists or arts
    organizations, and/or present arts programming to the public. Further,
    they meet community needs by using the arts to address social,
    educational, and economic development issues. Local elected leaders
    increasingly look to partner with their local arts agencies in programs
    dealing with everything from tourism to at-risk youth. In fact, 91
    percent of local art agencies use the arts to address these and other
    community development issues. 78 percent have three or more ongoing
    collaborations. Typically, local arts agencies lead community cultural
    planning--a community-inclusive process of assessing local cultural
    needs and mapping a plan of implementation.
        It is important to note that NEA leadership and support have played
    pivotal roles in creating and sustaining local arts agencies, which
    have grown in number from 500 in 1965, when the NEA was established, to
    4,000 today. Three quarters of all existing local arts agencies are
    private non-profit organizations.
        As important grantees of the NEA, local arts agencies are stewards
    of government funds, which are instrumental in leveraging local
    government funds as well as other private resources and are vital to
    the creation of thousands of local arts projects--projects that nurture
    the growth and artistic excellence of local artists while creating jobs
    and fostering critical local, state and federal tax revenue. Federal
    funds are more important than ever: although local arts agency budgets
    saw steady growth for nearly a decade, changing economic conditions in
    fiscal year 2003 and fiscal year 2004 have sparked declines in funding
    for these agencies.

                   LOCAL ARTS AGENCIES AND CHALLENGE AMERICA

        In addition to strengthening the nation's educational
    infrastructure, as demonstrated above, NEA also is also making a
    determined effort to bring the arts to all Americans through the
    Challenge America initiative. The initiative's four broad-based goals
    are:
      --To connect arts organizations more closely with families and
            communities,
      --To provide access to the arts in underserved areas,
      --To encourage the development of cultural organizations in
            communities not previously served by the NEA, and
      --To support and strengthen community arts organizations.
        Since its initial funding, the Challenge America community
    development grants have reached hundreds of community arts
    organizations across the country, targeting organizations in rural
    communities or inner city neighborhoods with limited arts resources.
    Using these community development grants, local arts agencies have
    partnered with other community organizations to tackle projects from
    developing economic cultural tourism plans and restoring historic
    structures to addressing the educational needs of a community using the
    arts. Examples of recent Challenge America grants to local arts
    agencies include:

    Tucson-Pima Arts Council Inc. (Tucson, AZ), $10,000
        The Tucson-Pima Arts Council strives to make arts and culture a
    vital part of Southern Arizona. This NEA grant is designed to support
    promotion of the Tucson Cultural Arts Festival as a major tourist
    attraction. Project partners will plan and implement marketing efforts
    to expand the three-year-old Family Arts Festival into a larger and
    more tourist-focused event by reaching out to potential visitors from
    Mexico, timing promotions to lure tourists arriving at the beginning of
    the winter season, and creating weekend tour packages with hotels and
    resorts. The Metropolitan Convention and Visitor's Bureau and the U.S./
    Mexico Trade Commission will assist in the completion of this project.

    Arlington County Cultural Affairs Division (Arlington, VA), $35,000
        This Northern Virginia organization creates an environment that
    encourages excellence within the Arlington area arts community. As part
    of its mission, it provided programs and services that build community
    and transform lives by enhancing enjoyment and understanding of, and
    participation in, the arts. These NEA grant funds supports two
    initiatives, ``Hereabouts: Creating Connections through Culture'' and
    ``ArtsWork Neighborhood Heritage Project,'' two programs that will
    include a series of mini-tours of senior centers and libraries and also
    feature a youth employment training program.
        These grants, and many others like them, help communities that are
    working hard to ensure that their children are exposed to the arts--a
    critical component of education at every grade level, both inside and
    outside the classroom.

               LOCAL ARTS AGENCIES AND EDUCATION: A CRITICAL LINK

        The arts play a vital role in the academic success of America's
    students. Exposure to the arts from a young age strengthens student
    problem-solving and critical thinking skills, ultimately leading to
    higher standardized test scores. Similarly, the arts teach students the
    skills necessary to succeed in life and have proven to assist in
    leveling the ``learning field'' across socio-economic boundaries.
        Sixty-six percent of local arts agencies implement arts education
    programs and activities, while others partner with or fund other
    organizations and agencies to address arts education issues. Arts
    education programs include supporting artists in the schools, designing
    curricula, and/or advocating for arts education. Nearly one half of
    local arts agencies have at least one full-time equivalent staff member
    who is dedicated to arts education.
        NEA grants to local arts agencies not only recognize the enormous
    positive impact that the arts can have on the future of today's
    students, they also confirm the role of such agencies in mobilizing
    community-based cultural and artistic resources to ensure that the arts
    help students fulfill their potential. Accordingly, the NEA has awarded
    numerous grants to local arts agencies designed to support educational
    arts programs in communities across the country. For example:

    San Francisco Arts Commission, $50,000
        To support ongoing, comprehensive arts education and teacher
    development programs. The program will provide ongoing arts education
    activities for all elementary school and child development center
    students and professional development for educators in the San
    Francisco United School District.

    East Side Arts Council, St. Paul, MN, $18,000
        To support the Arts InFusion Project. A series of artist
    residencies will be designed as a means to integrate the arts into the
    basic school curriculum of three schools.

    Watauga County Arts Council, Boone, NC, $30,000
        To support The Playhouse Project. This multidisciplinary arts
    exploration program for children (age 5 and under) and their parents
    includes storytelling sessions, ``art safaris,'' and artist-led
    training for parents and educators.

    An increase in NEA funding will enrich the lives of more people, in
            more communities, throughout the country
        Local arts agencies are key players in improving community life,
    from offering in-school and after-school educational programs for
    children to working with local law enforcement to reduce crime.
    Similarly, local arts agencies are strengthening our communities'
    economies every day by increasing tourism, urban renewal, and
    attracting new businesses, all while contributing vital dollars in
    local, state and federal tax revenue. We urge this subcommittee to make
    a commitment to supporting education and community building projects
    through local arts agencies by appropriating $170 million for the
    National Endowment for the Arts.
                                     ______

          Prepared Statement of the American Symphony Orchestra League

        On behalf of America's orchestras, the American Symphony Orchestra
    League urges the subcommittee to approve fiscal year 2005 funding for
    the National Endowment for the Arts (NEA) at the level of $170 million.
    This level of funding includes an $18 million increase requested by
    President Bush to support American Masterpieces: Three Centuries of
    Artistic Genius and a $31 million increase in grant-making funds to
    support and promote the creation, preservation, and presentation of the
    arts in America.
        The American Symphony Orchestra League is the national service
    organization for more than 900 symphony, chamber, youth, and collegiate
    orchestras, with budgets ranging from less than $25,000 to more than
    $25 million. Together with the NEA, we share a common goal of
    strengthening orchestras as organizations and promoting the value of
    the music they perform.
        The resolve of American orchestras to reach all segments of the
    communities they serve has never been stronger. Composer residencies at
    orchestras are on the rise. The number of education staffers at
    American orchestras has grown at least tenfold in the last 25 years.
    Orchestras are working to increase the representation of their diverse
    communities both on stage and in the audience.
        All of these efforts come at a cost that cannot be covered by
    ticket sales alone. The grants awarded to orchestras by the NEA, and
    support provided to orchestras through NEA funds administered by state
    arts agencies, provide critical support for projects that increase
    access to music in communities nationwide. NEA funding both directly
    supports local projects and also spurs critical giving from other
    sources like private foundations, corporations, and individual
    contributors. Given the current economic strain on all funding sources,
    the NEA's commitment is especially meaningful today.
        A few quick facts about the state of American orchestras:
      --Supported by a network of musicians, volunteers, administrators,
            and community leaders, America's adult, youth, and college
            orchestras total more than 1,800 and exist in every state and
            territory, in cities and rural areas alike. They engage more
            than 76,000 instrumentalists, employ (with and without pay)
            more than 11,000 administrative staff, and attract more than
            250,000 volunteers and trustees.
      --American orchestras have never been in greater demand. In the
            course of a season, orchestras perform nearly 30,000 concerts
            to total audiences nearing 31 million. Current attendance at
            concerts is 10 percent higher than a decade ago.
      --Orchestras are amazingly resilient, though their economic structure
            is delicately balanced. They are strongly supported by their
            communities and musicians. During the last recessionary period,
            eight orchestras ceased operations. Today, in each of those
            eight communities, a new or restructured orchestra of
            comparable scale has emerged.

        $31 MILLION INCREASE TO SUPPORT THE CREATION, PRESENTATION, AND
                            PRESERVATION OF THE ARTS

        The NEA is a critical component in the network of public, private,
    corporate, and philanthropic support that makes the work of America's
    orchestras possible. Arts organizations and the communities they serve
    benefit from NEA support in a number of ways: direct grants to
    organizations; distribution of NEA funds through state arts agencies;
    Challenge America awards for access, education, and community
    development projects; and national NEA-supported leadership
    initiatives. The NEA's capacity to fund these programs remains much
    lower than it was during its peak level of funding at $176 million in
    1992. Increasing the NEA's fiscal year 2005 appropriation from the
    current level of $121 million to $170 million will allow for a $31
    million increase in funding to support the arts in American communities
    through the NEA's various grant-making programs.
        In the most recently completed grant year, fiscal year 2003, the
    NEA's Grants to Organizations included 87 grants to orchestras and the
    communities they serve, supporting arts education for children and
    adults, expanding public access to performances, preserving great
    classical works, and fostering the creative endeavors of contemporary
    classical musicians, composers, and conductors.
        In addition to these grants, in September of 2003, the NEA
    announced a one-time funding initiative providing grants to 25
    orchestras in communities traditionally underserved by the NEA.
    American Symphony Orchestra League Board Chair Lou Mason joined NEA
    Chairman Dana Gioia and U.S. Representative Ander Crenshaw in
    announcing these awards at an event in Jacksonville, Florida, hosted by
    the Jacksonville Symphony Orchestra. Each grant is for $10,000, and
    supports concerts, education activities, and community events, and
    leverages key funding from other state and local sources:
      --The Meridian Symphony Orchestra received a grant to support a
            community concert featuring guest soloist Patrice Jackson, a
            2000 Sphinx Competition winner. The primary goals of the Sphinx
            Competition are to encourage, develop, and recognize classical
            music talent in the Black and Latino communities. The program
            features Jackson in a performance of Elgar's Cello Concerto.
      --A grant to the Mobile Symphony supports a composer-in-residency
            program. Composers William Banfield and Kenji Bunch participate
            in the residency, which includes a premiere of Banfield's
            Structures, community engagement activities, and an educational
            component for elementary school students.
      --A grant to the Stockton Symphony supports a subscription series
            concert. Repertoire includes a world premiere by composer
            Sheila Silver, Beethoven's Piano Concerto No. 3 with pianist
            Peter Takacs, and Mozart's Symphony No. 41 (``Jupiter''). The
            orchestra increases its marketing efforts for the concert by
            using radio and television advertising in an effort to raise
            public visibility of the event.
        In addition to direct grants, the NEA supports important national
    initiatives that reach communities throughout the country. Through
    these national grants, the NEA exercises its unique federal leadership
    role, identifying and supporting specific initiatives that strengthen
    the creative process and improve the business practices of the
    nonprofit arts in America. As just one example of its national
    leadership, the NEA has provided key funding for a partnership between
    the American Symphony Orchestra League and Meet The Composer. The Music
    Alive residency program, designed to connect composers with a wide
    range of orchestras and local communities, draws on the creative
    strengths of composers as artistic collaborators, teachers, and new-
    music advocates. During residencies of two to eight weeks in
    communities of all sizes, composers guide their host orchestras'
    presentation of new music and assist in the performance of their own
    works, interacting with board members, musicians, administrative staff,
    and the community in education and outreach activities. NEA support
    provides direct resources for the Music Alive program, serves as a
    catalyst for further funding, and elevates the visibility of the
    program as a potential national model.
        For each project funded by the NEA, there are many other worthy
    initiatives that go unrecognized by federal support due to lack of
    adequate funding. We ask you to expand the NEA's ability to perform its
    core mission through a $31 million increase to support and promote the
    creation, preservation, and presentation of the arts in America and to
    fund the Challenge America initiative, which uses the arts to enhance
    America's communities through grants for arts education, youth-at-risk
    programs, cultural preservation, community arts partnerships, and
    improved access to the arts for all Americans.

      $18 MILLION INCREASE FOR AMERICAN MASTERPIECES: THREE CENTURIES OF
                                ARTISTIC GENIUS

        The $18 million increase for the NEA requested by President Bush in
    fiscal year 2005 will further strengthen public access to excellence in
    the arts through a program titled American Masterpieces: Three
    Centuries of Artistic Genius. The program will direct new resources in
    three areas:
      --Touring programs by major and mid-sized arts organizations,
            presenting acknowledged masterpieces to new audiences.
      --Local presentations of American art forms, including works of
            American music.
      --Arts education efforts that will combine in-school programs with
            the touring and local presentation of artistic masterpieces.
        We strongly urge your support for this important new initiative.
    Orchestras are poised to participate in the American Masterpieces
    project, and look forward to this opportunity to increase public access
    and appreciation for America's treasured composers and newest artistic
    voices. While the NEA is committed to expanding public access to the
    arts, it is steadfast in its support for a quality artistic product.
    Just as standards of artistic excellence are the primary criterion for
    NEA grant decisions, artistic excellence continues to guide the day-to-
    day operations and missions of American orchestras.
        The Endowment's unique ability to provide a national forum to
    promote excellence, both through high standards for artistic products
    and the highest expectation of accessibility, remains one of the
    strongest arguments for a federal role in support of the arts. We ask
    you to support creativity and access to the arts by approving President
    Bush's request for $18 million in funding for the NEA initiative
    American Masterpieces: Three Centuries of Artistic Genius, and
    approving an additional $31 million increase in grant-making funds, for
    a total $170 million appropriation for the National Endowment for the
    Arts.
                                     ______

        Prepared Statement of the Association of American Universities,
     American Council on Education, and the National Association of State
                      Universities and Land-Grant Colleges

        The Association of American Universities, the American Council on
    Education, and the National Association of State Universities and Land-
    Grant Colleges appreciate this opportunity to submit for the record
    testimony in support of the National Endowment for the Humanities
    (NEH). Through our combined memberships, our associations represent
    virtually all of the research universities in the country--institutions
    that educate large numbers of the nation's undergraduate and graduate
    students and conduct the bulk of the country's basic research. We
    respectfully request that the Subcommittee provide the President's
    request of $162 million for NEH in fiscal year 2005. Approximately half
    of the NEH budget goes to institutions of higher education in the form
    of grants for research and scholarship, classroom teaching,
    preservation efforts, media programming, and museum exhibits. While
    AAU, ACE, and NASULGC are aware of current constraints on domestic
    discretionary spending, we strongly urge the committee to provide the
    President's request. Now is the time for the federal government and
    universities to preserve the nation's diverse heritage, history, and
    traditions by increasing support for humanities projects and
    facilities.
        Our associations have a long interest in the humanities, both as an
    object of research and as a critical element of an undergraduate
    education. For example, AAU established a Task Force on the Role and
    Status of the Humanities in 2001 to examine how humanities are being
    taught at large research universities and whether they are receiving
    appropriate emphasis. The task force, made up of university presidents
    and other university leaders, will release a report shortly that calls
    on research universities to make humanities a major part of
    institutional strategic planning; strengthen the recruitment and
    placement process for humanities graduate students; and promote the use
    of digital and information technology in the humanities. The goal is to
    translate the report into an action plan for members of AAU and other
    interested colleges and universities that provides guidance and
    leadership for current and future humanities projects.
        A robust NEH is important to humanities education at all levels.
    The fiscal year 2005 request for NEH represents an increase of $26.7
    million (19.7 percent) over fiscal year 2004. Some $33 million of the
    $162 million total request would be for the ``We the People''
    Initiative. ``We the People'' proposals are submitted to NEH core
    program offices and evaluated through NEH's merit review process. The
    goal of the initiative is to deepen Americans' knowledge and
    understanding of our national heritage through:
      --new scholarship, such as the American Editions and Reference Works,
            both fundamental scholarly resources for understanding our
            identity as a nation;
      --K-16 education programs, such as summer seminars and institutes;
      --projects to preserve and provide access to nationally important
            documents and artifacts; and
      --public programs in libraries, museums, and historical societies,
            including exhibitions, film, radio, and Internet-based
            programs.
        NEH plays a unique role in our nation. Many of NEH's projects are
    unlikely to be funded by any single state or institution because of
    their scale and magnitude. Only an agency like NEH--with its broad
    vision and funding--can support such projects, which include
    bibliographies, encyclopedias, and reference projects related to the
    papers and writings of great leaders. The writings include those of
    presidents George Washington, Ulysses S. Grant, and Dwight Eisenhower,
    as well as those of other notable Americans, such as Frederick
    Douglass, Benjamin Franklin, Elizabeth Cady Stanton, Lewis and Clark,
    Thomas Edison, and Mark Twain. NEH has also supported educational
    television documentaries such as Ken Burns's Civil War, The West, and
    Jazz, and biographical films on Theodore Roosevelt, Woodrow Wilson,
    Charles Lindbergh, and George C. Marshall.
        NEH also plays an important role in preservation and access.
    Millions of books, manuscripts, documents, recordings, and other
    cultural material are at risk because the United States lacks a
    permanent infrastructure for knowledge preservation and access. The
    requested increase for NEH will help create the tools needed to
    organize, interpret, and preserve information in the humanities. NEH's
    Newspaper Program has supported newspaper preservation projects in each
    of the fifty states, the District of Columbia, Puerto Rico, and the
    U.S. Virgin Islands. Again, such efforts are of substantial benefit to
    the entire nation but are unlikely to be funded by any individual state
    or institution.
        Several examples of university projects funded in fiscal year 2003
    and fiscal year 2004 include:

    University of Wisconsin: Dictionary of American Regional English
        The Dictionary of American Regional English (DARE) is a multi-
    volume reference tool that records the thousands of words, phrases, and
    pronunciations that vary from one part of the country to another. Based
    on extensive fieldwork in more than 1,000 communities and on a
    comprehensive collection of written materials, DARE traces the history
    of each word as it has been used in America. DARE is used by teachers,
    writers, librarians, physicians, forensic linguists, journalists, and
    historians, as well as by readers who simply appreciate the variety,
    wit, and wisdom found in the quotations that illustrate each entry in
    the Dictionary. (``We the People'' project)

    George Washington University: Eleanor Roosevelt and Human Rights
            Project
        The goals of the project are to: collect, annotate, and publish
    Eleanor Roosevelt's political writings in print and electronic format;
    encourage teachers, scholars, and citizens around the world to use
    these documents to further the discussion of democracy and human
    rights; and to serve as a resource center for those interested in
    Eleanor Roosevelt's public life and human rights movement. (``We the
    People'' project)

    Tulane University: The Louisiana Purchase--A History in Maps, Images
            and Documents on CD-ROM
        This multimedia CD-ROM project has brought together leading
    scholars from the United States, Europe, and Canada to interpret more
    than 100 digital images from numerous archives to tell the story of the
    Louisiana Purchase. The images show the Purchase in the context of
    commerce and culture in the United States and Europe, the Caribbean,
    and the larger colonial world. Interpretive summaries prepared by
    scholars introduce each electronic image.

    UCLA: Digital Library Initiative
        The project serves as a database of digital copies and electronic
    transliterations of clay tablets from collections in museums in Europe,
    the Middle East, Russia, and the United States. These literary texts
    use a wedge-like script called ``cuneiform'' and date back to the late
    4th and 3rd millennium B.C. Graphics software allows the clay tablets
    to be presented digitally, while other tools provide linguistic
    analysis.

    University of Iowa: Project on the Rhetoric of Inquiry
        This year marks the third decade of Iowa's Project on the Rhetoric
    of Inquiry, launched in 1983 with the help of NEH. The project examines
    the ways in which disciplines employ argument and language to define
    their foundations and knowledge claims as well as the political,
    cultural, professional, and intellectual institutions that govern the
    knowledge industry. Federal and state financial support for humanities
    work over the past two decades has enabled the project to become an
    internationally recognized forum for scholarship, instruction, and
    public programming.

    Cornell University: Preservation Projects
        Cornell University has been using NEH funds to coordinate the
    identification and preservation of aging volumes on American
    agricultural history and rural life published between 1820 and 1945 and
    held by land-grant universities around the country. The most recent
    phase of the project is targeting materials in Georgia, Illinois,
    Michigan, North Carolina, and Ohio. A second project is working to
    preserve 3,600 titles in Cornell's world-renowned Witchcraft collection
    documenting the history of the Inquisition and the persecution of
    witches. The preservation of brittle books and newspapers and the
    concomitant creation of online catalog records have significantly
    enhanced the ability of students, scholars and the general public to
    gain access to these materials. Finally, NEH is funding the development
    at Cornell of an on-line, self-directed tutorial and the presentation
    of five intensive workshops on digital preservation management. An
    increasing number of important documents are becoming available in
    digital form only, a fragile medium. The tutorial and the workshops are
    intended to assist those who are developing or implementing digital
    preservation programs in libraries, archives and cultural institutions.
        Research universities, small private institutions, state colleges,
    and community colleges use NEH grants to conserve and nurture America's
    heritage, bring the humanities to the community, expand knowledge, and
    educate the next generation of Americans. The NEH-supported Summer
    Seminars and Institutes program provides an opportunity for high school
    and college teachers to spend six to eight weeks learning from and
    working with leading scholars in the humanities. These sessions provide
    an exhilarating boost to the participants, regenerate their enthusiasm,
    and facilitate the transfer of new knowledge.
        The NEH has enjoyed bipartisan support throughout its 39-year
    history and has been the most important source of federal support for
    humanistic endeavors in the United States. AAU, ACE and NASULGC
    strongly urge the committee to provide the $162 million that the
    President requested for NEH in fiscal year 2005. Continued investment
    in the humanities is essential to enriching American life by promoting
    the study of history and culture.
        Again, thank you for this opportunity to submit testimony.
                                     ______

     Letter From the Association of Research Libraries and the Council of
                       Library and Information Resources

                                                        April 30, 2004.
    Hon. Conrad Burns,
    Chairman, Subcommittee on the Interior and Related Agencies, Committee
            on Appropriations, U.S. Senate, Washington, DC.
        Dear Chairman Burns: This letter is submitted on behalf of the
    Association of Research Libraries (ARL) and the Council on Library and
    Information Resources (CLIR). ARL and CLIR write in support of the
    fiscal year 2005 budget request of $162 million for the National
    Endowment for the Humanities (NEH) and, in particular, the $18.9
    million request for the Preservation and Access Division, which is
    crucial to preserving our American heritage.
        NEH plays a vital role in preserving our historic and cultural
    legacy, improving education at all levels, and helping Americans to
    better understand the life of their Nation. The Preservation and Access
    Division of NEH was created to help advance knowledge and understanding
    of the humanities in America. Through its broad range of grant
    programs, the Division supports projects that preserve and increase the
    availability of resources, such as books, journals, newspapers,
    photographs, and films that are crucial for research, education, and
    public programming in the humanities.
        In 1987, Congress took a significant leadership role in recognizing
    the crisis confronting this country's vast printed intellectual
    heritage. It was then estimated that more than 12 million volumes in
    the research libraries of the United States were at risk of
    deterioration simply because they were printed on an unstable medium--
    acidic paper. Library stacks were lined with thousands of books,
    journals, and newspapers that were already so brittle that pages broke
    when they were turned. As a result, Congress allocated resources to NEH
    to coordinate and support the efforts of the library community to
    preserve these resources through microfilming the intellectual content
    of, and to provide broad access to, fragile materials. This effort,
    known as the Brittle Books Program, was envisioned as a long-term
    effort to preserve millions of important volumes. Today it is estimated
    that some 25-30 percent of the printed holdings in the Nation's
    research libraries are deteriorating because of paper acidity, and
    other materials, such as photographs, films, and sound recordings are
    in danger because of their composition and/or storage media. The
    requested fiscal year 2005 funding will enable the Division to continue
    preserving America's heritage through the support of the following
    projects and programs:
      --Microfilming the contents of brittle books and serials;
      --Preserving and establishing access to other threatened humanities
            resources, such as newspapers, and archival collections of
            unique materials;
      --Enabling institutions to stabilize humanities collections by
            improving storage, housing, and security;
      --Developing regional preservation and consultation services to help
            smaller cultural institutions obtain the advice and knowledge
            they need to preserve their collections;
      --Continuing the education and training of preservation
            administrators and conservators; and
      --Supporting research and development to improve preservation and
            access methods and technologies and preservation assistance
            grants that focus on small and mid-sized institutions.
        The Division of Preservation and Access has demonstrated
    exceptional leadership in keeping America's heritage from perishing. In
    fiscal year 2003, NEH allocated 63 grants and estimates distributing
    222 awards in fiscal year 2004. At the fiscal year 2005 request level,
    the Division could make approximately 222 grants, including an
    estimated 150 Preservation Assistance grants and an estimated 72 awards
    to create, preserve, and make available cultural resources important to
    research, education, and knowledge of the humanities.
        As shown, funding for NEH is absolutely critical to ongoing
    programs of interest to the library community: the Brittle Books
    Program, the U.S. Newspaper Program, and Preservation Education and
    Training. Without Congressional support for NEH, fragile material in
    libraries and repositories in universities, colleges, and communities
    across the country would be in danger of permanent loss.
        In addition to advocating for support of NEH and the Preservation
    and Access Division, ARL and CLIR also encourage funding for the
    Administration's request of $33 million for the We the People
    initiative, which would further enhance NEH's core functions in
    critical areas, including Preservation and Access. The initiative, a
    response to the lack of basic historical knowledge among many
    Americans, was created to enhance teaching, research, and understanding
    of American history and culture. Of particular interest to the research
    library community is one of the initiative's key programs: the effort
    to convert microfilms of historical newspapers into digital files and
    to mount them on a national database that would be accessible to all
    Americans at no cost through the Internet. This effort is a partnership
    between NEH, which would fund the digitization projects, and the
    Library of Congress, which would mount and maintain the resources over
    time. The resulting searchable textbase would serve as a permanent
    resource for the American people and for education, research, and
    public programming. We strongly encourage support for this initiative.
        Although microfilming serves as a great tool for preserving
    America's books and newspapers, materials such as films, videos,
    photographs, tapes, and visual recordings are also in danger. ARL and
    CLIR strongly support the efforts of NEH to complement its preservation
    program with grants for the digitization of library materials. Digital
    technology provides new opportunities to extend the reach of humanities
    resources into every classroom, library, and home. To that end, many
    repositories of specialized and rare materials are digitizing their
    holdings to provide students, educators, and scholars easy access to
    them. Moreover, libraries and other humanities organizations are
    providing online access to an ever-increasing body of knowledge created
    in electronic journals, books, and databases that are available only in
    electronic form.
        Although the transition to digital libraries creates new
    opportunities, there are new challenges that also arise. As with print
    resources, digital information requires preservation, which cannot be
    achieved simply by building digital repositories. Successful digital
    preservation will require collaborative agreements and efforts
    involving authors, publishers, technologists, and librarians. It will
    be important for NEH to continue to receive sufficient funding to
    allocate grants so that the public can be assured that the raw
    materials of scholarship in all major repositories will be preserved
    for future generations.
        As noted above, NEH also provides critical assistance to our
    Nation's libraries, archives, historical societies, and other
    repositories for preservation education and training. Grants in this
    area help support U.S. graduate programs in art and material culture
    conservation; preservation workshops, surveys, and information services
    to hundreds of cultural institutions; and targeted workshops for staff
    who manage digital imaging and preservation microfilming projects.
        Another point to mention is NEH's active approach to help ensure
    preservation of the cultural heritage in Iraq. NEH announced this
    special initiative, ``Recovering Iraq's Past'' in July of 2003 to
    support endeavors that would protect and document edifying resources in
    Iraq's archives, libraries, and museums. The Endowment anticipates
    distributing nine awards in fiscal year 2004 that would assist in
    ensuring these resources are available for future access.
        Information, education, and knowledge are the pillars of our
    country's domestic progress and international leadership in the twenty-
    first century. The existence and support of humanities is vital to
    ensure a successful democracy by means of reflection, participation,
    and communication. The Nation must preserve the historical record
    accumulated by past generations to ensure the success of future
    generations.
        Before closing, we'd like to take this opportunity to acknowledge
    the outstanding leadership of the NEH Division of Preservation and
    Access demonstrated by Dr. George Farr over the past 15 years. Through
    Dr. Farr's vision, the NEH played a central role in the development of
    a national preservation infrastructure that has allowed libraries, with
    the help of NEH funding, to preserve more than one million brittle
    books, catalog more than 200,000 U.S. newspapers and film 67 million
    newspaper pages, and preserve more than 36 million archaeological,
    ethnographic, and historical objects. He has also led the way in
    support of projects to digitize the rich array of resources that
    libraries hold in their collections making them available to the public
    on the Web. Dr. Farr's passion for preservation and access, his kind
    and compassionate demeanor, and his never-failing sense of how the
    mission of preservation and access serve the research and educational
    needs of the humanities in this country will be sorely missed as he
    retires this summer. Dr. Farr's service to the Nation, to the
    humanities, and to the library community has been extraordinary. We
    very much appreciate the Subcommittee's continuing support of NEH and
    its programs.
                Sincerely,
                          Duane E. Webster, Executive Director,
                                     Association of Research Libraries.

                          Richard Detweiler, Interim President,
                          Council on Library and Information Resources.
                                     ______

       Prepared Statement of the Federation of State Humanities Councils

        Mr. Chairman and members of the subcommittee, I very much
    appreciate the opportunity to present written testimony on behalf of
    the state humanities councils, the state-based programs of the National
    Endowment for the Humanities. I am writing in support of the
    Administration's fiscal year 2005 Budget Request for the National
    Endowment for the Humanities which seeks funding of $162 million,
    including $33 million for the We the People (WTP) initiative on
    American history, culture and civics. The Administration's fiscal year
    2005 budget request for NEH also includes the critically important
    request for $31.829 million in funding for state councils through the
    Federal-State Partnership line. Of the $9.9 million allocated for WTP
    in the fiscal year 2004 bill, the agency directed $3.8 million to the
    state humanities councils to carry out activities at the state and
    local level, and we hope that councils will receive at least that
    proportion of any increased WTP funds for fiscal year 2005.
        I am Marc Johnson, chair of the board of the Federation of State
    Humanities Councils and also chair of the Board of the Idaho Humanities
    Council, where I have been honored to serve since 1998. My involvement
    with the Federation and the Idaho Council are passionate volunteer
    pursuits, which have given me enormous pleasure and satisfaction. I do
    not possess an academic background in humanities but nonetheless hold a
    fervent belief that an understanding and appreciation of our nation's
    history and literature; the study of our culture and institutions;
    where we have been as a people and where we are going are matters of
    utmost importance to all Americans. This is, of course, the critical
    work of the state councils and the NEH. My professional life includes a
    partnership in a Pacific Northwest-based public affairs and strategic
    communications consulting firm. I also serve as the President of the
    non-profit Andrus Center for Public Policy at Boise State University in
    my hometown of Boise, Idaho.
        For three decades, the state humanities councils have promoted the
    use of history and literature to connect individuals with each other
    and with the life of their community. Thus the councils were well
    positioned to move quickly to identify and develop a wide array of
    programs that could realize the aims of the We the People initiative.
    With additional funds, councils are prepared to expand these important
    programs in the coming year and develop new activities, further
    extending the critical federal funds by using them to leverage state
    and private resources.
        It is easy to underestimate the value of the work of the National
    Endowment for the Humanities and the state humanities councils in a
    time when there are so many pressing demands on federal dollars, but to
    do so is to ignore the tremendous importance of the awareness,
    reflection, learning and dialogue that humanities programs stimulate.
    No one can deny that now more than ever Americans need more rather than
    less opportunity to understand our own history and system of
    government, to engage in civil and informed dialogue, and to learn
    about and appreciate the cultures of our neighbors. We need a fully
    engaged citizenry with the skills and knowledge to address our most
    pressing problems. All these are the needs that humanities programs
    address.

                     PROMOTING AN UNDERSTANDING OF HISTORY

        State humanities councils are the single best source of ideas and
    resources within their states for increasing the understanding of our
    history among our citizens. Through Chautauquas, reading and discussion
    programs, speakers bureau presentations and community grants, councils
    make possible reflection on history and culture in even the most remote
    communities in their states.
        Chautauqua programs, for example, which are now sponsored by many
    of the councils, offer both history education and community-building
    activities, as residents gather to learn about the events and figures
    who shaped our country while also working together to create their own
    educational activities, often focused on how the history of their
    community relates to national patterns. In the coming year the Great
    Plains Chautauqua, a coalition of councils in North Dakota, South
    Dakota, Kansas, Nebraska, and Oklahoma, will feature ``From Sea to
    Shining Sea,'' a program that will involve communities in each of these
    states in week-long exploration of the Lewis and Clark expedition
    through the perspectives of William Clark, Sacagawea, and York, as well
    as the Indian leader Tecumseh and the fur trader John Jacob Astor. Each
    evening residents of the community, along with visitors who drive for
    miles to share in this experience, gather under a tent to listen to and
    engage in dialogue with these historical figures. Daytime activities
    developed by community members themselves involve children, families
    and adults in additional educational experiences. Though the Great
    Plains Chautauqua has the longest history, similar Chautauqua programs
    are now sponsored by councils in dozens of other states each summer.
        Some councils will use new WTP funds to move beyond the local
    level, in support of statewide history programs. The Montana Committee
    for the Humanities in 2005 will conduct a conference on varieties of
    Montana heroism, using original scholarship to highlight such figures
    as Custer, Mike Mansfield, and Chief Joseph.
        Councils also sponsor thousands of speaker and reading and
    discussion programs across the country, often in communities so small
    or so rural or in urban centers so underserved that these are the only
    live educational programs available. Using funds made available through
    the WTP initiative, councils are planning to expand these valuable
    programs to attempt to meet needs that consistently far outdistance the
    resources. In Arizona, for example, where 36 scholars gave 149
    presentations in 2003, the council is planning to address the We the
    People initiative by adding speakers to talk about such fundamental
    American values as civil rights and equality under the law. The New
    York Council for the Humanities will create a special We the People
    edition of their Speakers Bureau, offering 40-50 new topics in American
    history, under such themes as the ideals and history of the American
    Revolution, the founding documents and progress of American democracy
    ``toward a more perfect union,'' and immigration and the idea of
    America. The Washington council hopes, with new funds, to add 50
    presentations on topics of American history to offer in community
    settings as well as classrooms. In Utah the WTP additions to their
    Roads Scholars Speakers Bureau will include such topics as ``The Top
    Ten Surprises in the First Ten Amendments,'' along with presentations
    on Alexander Hamilton and Lewis and Clark. The Virginia Foundation for
    the Humanities will expand its Speakers Bureau to include Virginia
    Literary Award writers whose books explore subjects related to the
    upcoming 400th anniversary of the Jamestown Colony.
        Council reading and discussion programs offer an even more
    interactive educational opportunity, involving participants in
    discussions with their neighbors around ideas that arise from carefully
    chosen texts. The North Carolina Humanities Council, in collaboration
    with the state's Center for the Book, will develop a new discussion
    series entitled ``The South: Recapturing Our Identity Through
    History.'' The Maine Humanities Council, which already offers a
    significant number of reading and discussion programs on themes of
    American history and culture, intends to create several new series,
    including one on The American Revolutionary Generation and another
    called Being Ethnic, Becoming American.
        Indeed, many councils are using the We the People initiative to
    advance efforts to connect with both new Americans and those who have
    been marginalized through inadequate reading skills. The California
    Council for the Humanities, through its ``Becoming Californians/
    Becoming Americans'' program, will ``allow diverse Californians to
    explore the stories of immigrants, including the contributions of
    centuries of diverse immigrant populations toward the development of
    America's rich civic culture.'' The critically important effort to
    engage the immigrant community is a part of a number of humanities
    council programs, arising from council recognition that our society
    will be strengthened and unified only if these newest residents are
    engaged rather than ignored or isolated. The Nebraska Humanities
    Council hopes to use new WTP resources to expand the Prime Time family
    reading program (originated by the Louisiana Endowment for the
    Humanities) that has just been launched for low income/low literacy
    Spanish-speaking families who have immigrated to rural communities near
    meat-packing centers, where there are few other local support systems
    to help acclimate families and prepare their children to succeed in
    school. The Maine Humanities Council, under its New Books/New Readers
    program offers a series on American history that is extremely well
    received by an audience--many of whom are of foreign birth and in Maine
    as part of a refugee resettlement program--that is eager to become more
    knowledgeable about the history of America.
        It is equally important to inform long-term residents about the
    many cultures that daily change the face of our nation, and many
    councils have joined that effort as well. The Michigan Humanities
    Council, to take one example, will invite grant proposals from local
    communities that address Michigan's ``inclusive identity,'' looking at
    the ways the state's very diverse communities address the tension
    between the local and the larger affiliations.
        Several councils are proposing traveling exhibitions that will
    inform citizens about untold stories or unexamined history of their
    states. The Missouri council, in a partnership with tribal advisors,
    exhibit designers and historians, will create three exhibits that will
    reinterpret the history of tribes long gone from the state. The West
    Virginia council is developing a traveling exhibition on the West
    Virginia statehood process, to educate citizens of the state on the
    ``constitutional questions, the role of slavery, economics, geography
    and politics that led to the break from Virginia.''
        A number of councils are using new technology to offer hundreds of
    thousands of their state's citizens resources to learn about the
    history and culture of their states through new electronic
    encyclopedias. This is particularly important at a time when the influx
    of newcomers, from other regions and other countries, is increasing
    daily in so many states. The Nevada Humanities Council is using new WTP
    funds to establish a website exploring the history of Las Vegas, a
    complicated city that will celebrate its centennial in 2005 but whose
    past is often clouded by fiction and misinformation. Councils in
    Georgia, Arkansas, South Carolina and many other states are drawing on
    their top scholars to develop sophisticated online encyclopedias to
    make the state's history available and usable to lifelong as well as
    newly arrived residents.

                       SUPPORT FOR TEACHERS AND STUDENTS

        In addition to the very important educational opportunities for the
    public, state humanities councils continue to provide critical support
    for humanities teachers, often offering the only in-depth content-based
    humanities training available to teachers in the state. The Idaho
    council will offer a weeklong summer institute on ``An Unfulfilled
    Revolution: The Presidency of Thomas Jefferson,'' which will immerse
    teachers in study and discussion with major Jefferson scholars from
    four universities and include curriculum development sessions. The
    Oregon council's ``Encounters'' institute will use primary documents,
    records and oral histories to lead secondary school teachers through an
    interdisciplinary study of Lewis and Clark's journey. The Illinois
    council will focus on more recent history, offering their teachers an
    in-depth study of the economic challenges to the American dream in the
    1930s with ``Caught in the Crucible: America in the Great Depression.''
        This support for teachers is supplemented by many councils through
    sponsorship of the highly successful National History Day program,
    which involves humanities scholars and public history professionals
    directly with students through a mentoring and judging process. In
    Maryland, the council-sponsored program involves more than 8,000
    students and their families and addresses urgent educational needs in
    the state. Councils in Georgia, Hawaii, Nevada, and New Mexico are,
    like the Maryland council, primary sponsors of this important
    opportunity for students to conduct historical research and create
    educational programs, and a number of additional councils lend support
    to the program in their states.

                                 ONGOING NEEDS

        Councils are highly skilled at extending their very limited dollars
    by developing partnerships and by using federal funds to leverage state
    and private resources. Because of this they will be able to put the
    relatively small amount of additional funding provided in last year's
    appropriation through the We the People initiative to good use. But the
    need for humanities programs in the states far exceeds the resources
    state councils are able to gather to try to meet them. The amount
    councils are able to allocate to regrant funds, which provide the
    resources that enable grassroots groups to shape and implement their
    own programs on local history and community issues, fall woefully short
    of the requests made. The invaluable work that councils do to support
    the cultural infrastructure in their states, from support for programs
    in local libraries to technical assistance to small museums and
    historical societies, could be vastly expanded with adequate resources.
    Thousands more teachers and families could benefit from the
    professional and literacy training that councils have become so skilled
    at providing.
        The state humanities councils are deeply grateful for the support
    that this subcommittee has shown for their work in the past, but our
    work in local communities makes us painfully aware of how much remains
    to be done to deepen citizens' understanding of our history, strengthen
    their resolve to engage with their fellow citizens in addressing our
    most pressing problems, and thereby preserve the democracy that we all
    care about so passionately.
                                     ______

             Prepared Statement of the National Humanities Alliance

        Mr. Chairman and Members of the Subcommittee: The National
    Humanities Alliance (NHA) writes to register our support for President
    Bush's request for $162 million for the fiscal year 2005 appropriation
    for the National Endowment for the Humanities. The Alliance is pleased
    to submit testimony in support of the National Endowment for the
    Humanities (NEH) on behalf of the NHA membership of eighty-nine
    scholarly and professional associations; organizations of museums,
    libraries, historical societies, higher education, and state humanities
    councils; university-based and independent humanities research centers
    and others concerned with national cultural policies.
        The humanities are integral to American life and our democratic
    form of government. Each step in America's journey towards the federal
    form of democratic government--the Declaration of Independence, the
    Articles of Confederation, the United States Constitution, and the Bill
    of Rights--was formed by individuals steeped in political theory and
    other humanistic learning. Many of our best leaders of today and
    yesterday to varying degrees think about the government within a
    humanities framework (i.e., human rights, the concepts of liberty and
    balance of power, the relationships between federal, state and local
    government, etc.). It is especially worth noting that a democracy such
    as ours is dependent upon a citizenry that understands and acts upon
    the humanities base from which America grew. If the citizenry forgets
    that background and framework, our democracy will be in peril. An
    appreciation of the relationship of the humanities to democracy was a
    key factor in the establishment of the NEH almost forty years ago.
        Congress enacted the National Foundation on the Arts and the
    Humanities Act of 1965 in order ``to promote progress and scholarship
    in the humanities and the arts in the United States.'' This act
    established the National Endowment for the Humanities as an independent
    grant-making agency of the federal government to support research,
    education, and public programs in the humanities. In that legislation,
    Congress defines the term humanities as ``the study of the following:
    languages, both modern and classical; linguistics; literature; history;
    jurisprudence; philosophy; archaeology; comparative religion; ethics;
    the history, criticism, and theory of the arts; and those aspects of
    the social sciences which have humanistic content and employ humanistic
    methods.''
        A mark of the special value of NEH is its ability to respond
    rapidly and effectively to extraordinary circumstance that require fast
    action to preserve historical and cultural resources. Most recently,
    the agency launched ``Recovering Iraq's Past,'' an initiative to
    support projects to preserve and document Iraq's cultural resources and
    to develop education and training opportunities for Iraq's librarians,
    archivists, and preservation specialists. For example, a recent grant
    to the Massachusetts College of Art is for the conservation assessment
    of first millennium BC Neo-Assyrian palaces and related structures in
    Nineveh and Nimrud, Iraq.
        But the Iraq initiative is the latest in a series of NEH
    initiatives in response to devastating hurricanes in Florida,
    Louisiana, Hawaii, and Guam; floods in the Midwest; and an earthquake
    in California. ``Disaster Relief'' grants of up to $30,000 were
    provided to historical organizations, museums, libraries, and other
    cultural and educational institutions to help recover and preserve
    collections that were damaged as a result of these natural disasters.
    NEH has also been able to rapidly respond to changing circumstances
    overseas, probably most notably in the early 1990s when a series of
    grants supported scholarly research in recently opened archives in
    newly democratized countries, such as the former Warsaw Pact countries
    of Eastern Europe and the republics formerly part of the Soviet Union.
        The President's request for fiscal year 2005 is $162 million with
    $33 million of the proposed request for continuation of the We the
    People special initiative. As noted above, we support the President's
    request. We recognize that Congress faces unusually difficult choices
    this year in the face of rising deficits and the war on terrorism. But
    the work of NEH is critical for the American people not only to
    preserve and provide access to our history and culture but also more
    specifically to understand our place in the international community and
    to understand the heritage we are fighting to retain. While the nation
    must spend hundreds of billions of dollars in defense of our way of
    life, a $162 million appropriation through NEH can be seen as a small,
    but very important, investment in assuring a citizenry that understands
    the issues underlying this struggle.
        On a practical note, we welcome the administration's recognition of
    the critical role that NEH plays in preserving our historic and
    cultural record, improving education at all levels, and helping
    Americans to understand their lives and the life of their nation. While
    we are not asking the committee to recommend more at this time than the
    $162 million proposed for the agency, we want to make clear that the
    sum does not provide enough for the agency to play the role for which
    it was created. Basically, the NEH is trying to carry out its important
    mandate with less than half of the funding in constant dollars that it
    commanded 25 years ago.

                                    TABLE.--NEH APPROPRIATIONS, FISCAL YEAR 1970-2004
                                      [In five-year intervals, millions of dollars]
    ----------------------------------------------------------------------------------------------------------------
                                                                                Fiscal year
                                                     ---------------------------------------------------------------
                                                       1970    1975    1980    1985    1990    1995    2000    2004
    ----------------------------------------------------------------------------------------------------------------
    Nominal $.......................................     8.9    79.1   150.1   139.5   156.9   172.0   115.3   135.3
    Constant $ (2004)...............................    42.8   275.9   341.6   243.1   225.2   211.7   125.5  135.3
    ----------------------------------------------------------------------------------------------------------------
    Note.--``Nominal'' values are the amounts appropriated by Congress. ``Constant'' values (expressed in 2004
      dollars) are adjusted for inflation according to the annual CPI-U.

                      WE THE PEOPLE--A SPECIAL INITIATIVE

        Shortly after Bruce Cole, the art historian who became the eighth
    chairman of NEH, arrived at the endowment in late 2001, he began
    considering ways that the NEH could increase its effectiveness in
    assisting Americans to understand more fully their history and
    appreciate the forces and factors underlying our form of democracy. The
    We the People (WTP) special initiative grew from his discussions with
    NEH staff and others. The program was first introduced in the agency's
    fiscal year 2003 request, but shortly thereafter the White House became
    interested in WTP and saw it as an activity that promised to strengthen
    the teaching of American history and culture, while at the same time
    helping the American public to become more engaged in studying our
    history. As you may know, the President pledged to provide $100 million
    for the WTP initiative over four years. In a White House Rose Garden
    Ceremony in September of 2002, President Bush introduced the expanded
    We the People initiative with remarks that included the following:

        ``Our Founders believed that the study of history and citizenship
    should be at the core of every American's education. Yet today, our
    children have large and disturbing gaps in their knowledge of history .
    . . Ignorance of American history and civics weakens our sense of
    citizenship.''

        Now, in its first year with special funding, We the People is
    stimulating a wide variety of new projects that advance our knowledge
    of the events, ideas, and principles that define the American nation.
    The initiative has drawn scholars, teachers, filmmakers, museum
    professionals, librarians, state humanities council leaders and other
    individuals engaged in humanities work to develop projects on the most
    significant events and themes in the nation's history and culture.
    Another feature of WTP is that it builds upon almost 40 years of
    significant projects funded by NEH.
        Research and Fellowships.--Research is the engine that provides
    content and sometimes structure for other humanities activities.
    Documentary editing projects make accessible collections of papers of
    U.S. leaders in politics, history, literature and other areas. Past
    grants have supported work on papers of many presidents from Washington
    to Eisenhower. WTP has been able to fund a number of important projects
    including the papers of Frederick Douglass (Indiana University) and
    James K. Polk (University of Tennessee, Knoxville), and the Documentary
    History of the Ratification of the Constitution (University of
    Wisconsin, Madison).
        Much of the research being carried out under WTP is through
    fellowships to individual scholars. Three examples of the wide range of
    topics are: Gershwin: A Critical Biography (Howard Pollack, University
    of Houston); Northern Sierra Miwok Oral Literature and History (Suzanne
    Wash, Independent Scholar, Davis, CA); and The Republicanism of James
    Madison: the Authority of Public Opinion (Colleen Sheehan, Villanova
    University).
        Education.--Education is, of course, at the center of the WTP
    initiative. One example of this is a new NEH teacher training/
    professional development program called ``Landmarks of American
    History,'' which offers a series of workshops for school teachers held
    at sites of historical distinction in the United States. ``Landmarks of
    American History'' seminars include: The Mark Twain House Teacher
    Workshop, focusing on Twain's work, cultural legacy, and his era in
    American history; Crossroads and Conquest: People, Place, and Power on
    the Vancouver National Historic Reserve--History and cultures of
    Vancouver and the historic Northwest; and Planned and Preserved:
    Savannah's Three-Century History.
        Public Programs.--It is through NEH-funded public humanities
    programming that the endowment works most directly with the American
    public. From travelling exhibits in local museums and libraries to
    film, television and radio productions, NEH media projects reach
    literally millions of citizens in communities throughout the United
    States. WTP documentary films focus on such key figures in American
    history as Andrew Jackson, Benjamin Henry Latrobe, and John and Abigail
    Adams. Other national public projects supported through WTP include:
      --When Women Went to WW II.--The University of North Carolina,
            Greensboro is developing a traveling exhibition for libraries
            that provides interpretive programs about women in military
            service during World War II;
      --Transitions in the Apache World: The Fort Apache Legacy.--With this
            grant, the White Mountain Apache (Fort Apache, Arizona) will
            develop a permanent exhibit including both traditional culture
            and the changes that took place after establishment of Fort
            Apache.
        State Humanities Councils.--The network of 56 state humanities
    councils has proven to be very effective in delivering humanities
    programming to small towns and rural areas that might not otherwise
    have access to such programs. WTP funding, which will be distributed in
    the summer, will permit each council to increase activities
    significantly. Examples of SHC plans include:
      --North Carolina will expand its ``Let's Talk About It'' reading and
            discussion program in libraries. A new series to be developed
            jointly with the North Carolina Center for the Book is The
            South: Recapturing Our Identity Through History;
      --Pennsylvania will expand the history section of its speakers
            bureau. Pennsylvanians will be able to participate in lecture/
            discussions on such topics as: The Scots Irish in Pennsylvania;
            Pittsburgh Melting Pot: The Faces of Western Pennsylvania; and
            Betsy Ross and the Making of an American Legend;
      --Virginia is undertaking four projects on ``We the People and 2007''
            (2007 being the 400th anniversary of Jamestown, ``the germ of
            the American Republic''). Activities include an oral history
            project entitled Virginia's Stories, a speakers bureau
            involving Virginia writers, and radio programs on Historic
            Jamestowne.
        Preservation and Access.--The WTP initiative is supporting an
    impressive array of activities, from the digitization of 19th century
    U.S. newspapers to the preservation of state archives. Examples of
    current projects include:
      --Pennsylvania Newspaper Project.--Microfilming (Pennsylvania State
            University, Main Campus, University Park)--The preservation
            microfilming of approximately 222,210 pages of newspapers, as
            part of Pennsylvania's participation in the U.S. Newspaper
            Program.
      --Preserving the Past and Ensuring the Future (Alaska State Library
            and Archives, Juneau).--The preservation assessment of 19th-c.
            territorial and 20th-c. statehood records of Alaska.
      --Preservation Assessment of Architectural Drawings Collections
            (University of Washington Libraries, Seattle).--The
            preservation assessment of a collection of architectural
            drawings that document the history of building in the Puget
            Sound area from the 1870s to the present.
        Challenge Grants.--Challenge grants have also thrived under We the
    People, with awards going to such institutions as the Georgia
    Historical Society, Massachusetts Historical Society, Mississippi
    Department of Archives and History, Northwest Museum of Arts and
    Culture (Spokane), University of California, Berkeley (library), and
    University of Washington (museum).
        Note.--There are other programs with federal funding entitled ``We
    the People''. The program at NEH is unique because it is centered upon
    the agency's past activities and capitalizes on its strengths in terms
    of staff, first-rate peer review process, and focus on humanities
    content. Other initiatives, such as the Department of Education's
    civics education program, may complement NEH's effort but certainly
    will not duplicate it.

                     WE THE PEOPLE AND NEH'S CORE PROGRAMS

        As you know, the $27 million increase for NEH is almost entirely
    devoted to the We the People special initiative. The peer review
    process at NEH, from which all successful applications must emerge with
    very high ratings, is itself highly respected and often emulated. The
    impact of the We the People initiative has been very positive across
    the core programs of the NEH. NEH's planning office reports that
    overall applications are up 8 percent, with significantly greater
    increases in select areas such as Summer Stipends (up 10 percent and
    Summer Seminars (up 20 percent.) The WTP funding can broaden the reach
    of core programs by directly funding select applications submitted to
    core programs, thereby freeing funds for other highly rated projects.
        While the We the People initiative is serving at present as the
    most visible of NEH's activities, the core programs of the Endowment,
    which have developed over four decades, are the backbone of the federal
    involvement in the humanities. The NEH is the largest single funder of
    humanities programs in the United States. The leadership provided by
    NEH is critical for the national effort to:
      --develop Americans' knowledge and understanding of the nation's
            history and traditions, its values and beliefs;
      --preserve and provide access to our nation's historical and cultural
            resources;
      --strengthen teaching and learning in history, literature, language
            and other humanities subjects in schools and colleges;
      --facilitate research and original scholarship in the humanities;
      --provide opportunities for lifelong learning in the humanities for
            all Americans;
      --strengthen the institutional base of the humanities.
                                     ______

                   Prepared Statement of Preservation Action

        Preservation Action respectfully submits this testimony in support
    of $50 million for the State Historic Preservation Offices and $12
    million for the Tribes as part of the fiscal year 2005 Department of
    Interior Appropriations Bill.
        America's historic resources are as diverse as its citizenry. Rural
    settlements and their attendant agricultural structures dot the
    landscape of the far west. Lighthouses stand sentinel on our
    shorelines, while county courthouses tower above the plain. Small town
    main streets tell of an earlier era. Dense urban districts and large
    industrial complexes offer the historic face of our larger cities. The
    scenic byway and the ubiquitous train station, the tiny house and the
    multi-story apartment building, all have a story to tell. And now, the
    relics of a more recent past--cold war military installations, the
    centers of pioneering air and space development, and the mid-century
    suburb--are achieving significance as well.
        Through the National Historic Preservation Act of 1966, the Federal
    government has made a commitment to preserve and maintain this
    patrimony, in all its diversity, for generations to come. But, historic
    preservation is more than a celebration of the past, it is an economic
    engine for the future. Historic preservation activities rebuild and
    reuse existing infrastructure, revitalize main streets, restore the tax
    base and generate tourism. Preservation has transformed neglected
    warehouse districts into multi-use residential and entertainment
    centers, struggling commercial strips into retail destinations, and
    abandoned houses into thriving neighborhoods. In an age of rapid
    development it is a way to harness economic energy and put it to work
    for existing communities. It is the answer to growth's unintended
    consequences.
        Acknowledging the important role that preservation plays in the
    health and welfare of our communities, Congress has asked each state,
    through its State Historic Preservation Officer and many Tribes through
    their Tribal Preservation Officers, to work in partnership to achieve
    the goals of the Historic Preservation Act. Indeed, in 1976, it created
    the Historic Preservation Fund (HPF), endowed it with Outer Continental
    Shelf Oil Lease proceeds, and authorized it at $150 million annually.
    This funding, matched by the States and Tribes, is to carry out the
    mandates of the Act including 106 Review of federal actions and their
    consequences for historic resources; certification of rehabilitation
    activities eligible for receipt of the Historic Rehabilitation Tax
    Credit; survey and documentation of historic resources; and technical
    assistance (architectural, planning, archeological, etc.) to local
    communities, state and federal agencies and individuals.
        Unfortunately, the Historic Preservation Fund as a whole has rarely
    received even half of its authorized amount and the annual
    appropriation to States and Tribes in recent years, though level, has
    essentially represented a cut when adjusted for inflation and cost-of-
    living considerations, the Historic Preservation Fund appropriation to
    States and Tribes has declined markedly. For the Tribes, this decline
    comes at a time when new Tribes are being added every year, making each
    slice of the pie ever smaller. In the end, year after year the States
    and Tribes can do little more than meet their base obligations.
        At a time of fiscal restraint at both the federal and state level,
    this under funding is particularly un-productive. It thwarts the
    stimulative aspects of historic preservation and impedes the ability of
    private individuals and organizations to contribute in real ways to
    achieving our nation's heritage protection goals. Unlike so many other
    federal programs, federal historic preservation activities do not rely
    on acquisition or federal intervention to achieve the vital objectives
    of the National Historic Preservation Act. Rather, they give property
    owners and local citizens the tools they need to restore and protect
    heritage resources for the benefit of the entire community. Every
    federal dollar is over matched, and every federal dollar serves as a
    catalyst for additional private and public investment.
        From our perspective, there is no component of the program that
    better illustrates the economic power of the federal-State partnership
    than the Historic Rehabilitation Tax Credit. This tax incentive program
    leveraged more than $2.7 billion in private investment for historic
    resources in 2003. In that year alone, tax act projects rehabilitated
    or created 15,374 housing units and created 62,230 jobs. On the ground
    these numbers translate into comfortable high-quality places for people
    of average means to live. They mean that boarded up and vacant
    buildings are restored and re-opened as viable business enterprises and
    are put back on the tax rolls for the benefit of the entire community.
    They mean that the federal government, working with its partners,
    quadrupled its investment, put people to work, and repaired the fabric
    of our neighborhoods. The tax act program carries out the spirit of the
    National Historic Preservation Act in concrete ways.
        Owners and developers depend on their State Historic Preservation
    Officers for National Register nominations and advice on project
    design. The National Park Service depends on them for project analysis
    and recommendations to expedite their review.
        Unfortunately, due to funding restraints State Offices, on average,
    have just one staff person dedicated to rehab credit review, which
    slows processing and curtails their ability to partner with developers
    to save historic resources.
        Similarly, only when the Historic Preservation Fund appropriation
    allows, State offices offer grants to help restore National Register
    properties. These grants are often the catalyst for additional public
    and private investment. When restoration grants are not available,
    historic buildings are allowed to deteriorate. For the first time since
    the 1970's increased funding in fiscal year 2001 allowed substantial
    disbursement of restoration grants, it also gave State Offices the
    opportunity to invest in long overdue infrastructure improvements
    (e.g., geographic information system upgrades). These investments
    totaled nearly $11 million in fiscal year 2001. However, the cuts in
    fiscal year 2002, 2003 and level funding in 2004 reduced that
    investment. Further reductions could serve to zero out restoration and
    project grants leaving untold thousands of projects without the seed
    money they need to ensure there success.

                                   CONCLUSION

        The tax act program, 106 review, and indeed preservation activities
    of all kinds, can not work without the technical support,
    administrative commitment, time and effort of the State and Tribal
    Historic Preservation Offices. We are a nation experiencing tremendous
    growth. We are a nation rallying in the face of terrorist threats. We
    are a nation which has turned to its heritage as a source of comfort
    and strength in a new and uncertain era. We must find a way to create a
    thriving future that does not compromise our natural and historic
    resources. Historic preservation, as defined and guided by the National
    Historic Preservation Act, must remain an integral part of how we do
    business in all our communities. This cannot happen without a renewed
    commitment from Congress to adequate funding for the Historic
    Preservation Fund. Please approve funding for the State Historic
    Preservation Offices at $50 million, and the Tribes at $12 million in
    fiscal year 2005.
                                     ______

               Prepared Statement of the Smithsonian Institution

        The 158-year-old Smithsonian Institution, the world's largest
    museum and research complex, is in the midst of an energetic
    revitalization to wipe out a $1.5 billion backlog of maintenance
    expenditures and modernize a huge inventory of outmoded exhibits. New
    museums and exhibits, such as the National Air and Space Museum's
    colossal Steven F. Udvar-Hazy Center, adjacent to Dulles Airport, the
    National Museum of Natural History's spectacular Kenneth E. Behring
    Family Hall of Mammals, and the National Museum of American History's
    largest exhibit ever, America on the Move, have all opened to rave
    reviews and overwhelmingly positive public response. In less than three
    cold winter months, the new air and space center at Dulles welcomed
    more than half a million visitors and became the Smithsonian's fourth
    best-attended facility!
        In 2004, momentum will be maintained with the openings of the
    stunning new National Museum of the American Indian on the Mall in
    September and the first comprehensive exhibit covering the country's
    military history, The Price of Freedom, in November at the National
    Museum of American History. In 2006, we will reopen the Patent Office
    Building, home to the National Portrait Gallery and the Smithsonian
    American Art Museum. The Smithsonian has recently inaugurated two major
    new, state-of-the art scientific research facilities: the Smithsonian
    Tropical Research Institute's new marine biology research station in
    northwest Panama and the Smithsonian Astrophysical Observatory's
    Submillimeter Array telescope on the top of Mount Mauna Kea in Hawaii.
    We're moving forward because of a powerful public/private partnership.
    The value of these initiatives totals $867 million, with 47 percent
    coming from the American taxpayer and 53 percent from the private
    sector. Maintaining this partnership is vital to the Smithsonian's
    continued revitalization.
        The Smithsonian depends on direct congressional appropriations for
    roughly two-thirds of its funding. That consistent, strong support is
    key to leveraging the backing the Institution receives from other
    public and private sources for the other one-third of its funding. The
    Smithsonian is committed to continuing to work closely with both the
    Congress and OMB to justify continued support. The Institution is also
    improving its performance on the President's Management Agenda to
    advance financial management, utilize e-government, improve human
    capital planning and management, and integrate budgeting and long-term
    performance goals.
        Key to the Smithsonian's recent revitalization success has been a
    significant change in its management. Since the start of the new
    decade, approximately two-thirds of the incumbents in the Institution's
    top 75 positions have been replaced. The Smithsonian has never had a
    stronger group of museum, research center or administrative department
    directors.
        Science at the Smithsonian is progressing. Of the 76
    recommendations made in ``The Report of the Smithsonian Institution
    Science Commission'' submitted to the Board of Regents in January,
    2003, 60 are completed, eight are under way, and the remaining eight
    will be addressed as additional resources become available. Among
    priority recommendations made by the Science Commission were those
    related to more funds for fellowships and scholarly study awards and
    for care of the collections at the National Museum of Natural History.
    Increases for these have been included in the Smithsonian's fiscal year
    2005 budget request.
        On March 17 the American Zoo and Aquarium Association (AZA) granted
    the standard five-year accreditation to the Zoo, clearly reflecting
    that we have resolved their concerns related to accreditation. During
    2003, the Zoo made substantial progress on improving its facilities;
    raising more private and public sector money than ever before; hiring
    new talent; expanding staff training; increasing the animal
    collections; and providing supporters with a better understanding of
    longstanding problems, its plan for the future, and the resources
    required to realize the plan. Nonetheless, we realize a great deal
    still remains to be done and that it is crucial that we accelerate the
    rate of our progress.
        Given budget realities, Smithsonian priorities fall into four major
    categories. The first is funding to keep the Institution's museums
    operating, collections safe, and research programs intact. These
    include requirements for staff salaries and benefits, legislated pay
    raises, utilities, postage, communications, and rent--in other words,
    what can be referred to as non-discretionary costs.
        The second priority is funding for security-related items,
    including all programs and activities for security for staff, visitors,
    collections, and facilities and to protect against terrorist actions.
    This includes funds for additional staff for visitor screening at Mall
    museums and for integrating the National Postal Museum guard force into
    the Smithsonian security force. Facilities Capital funds are included
    to continue construction of the new Pod 5 at the Museum Support Center
    for the storage of the National Museum of Natural History's collections
    stored in alcohol.
        The third priority is funding increases for recommendations made by
    the National Academy of Public Administration (NAPA) in a
    congressionally-mandated report published in 2001, such as critical
    facilities revitalization and information technology needs. This
    request includes funding to continue to repair some of our oldest and
    most heavily-visited museums. NAPA recommended that facilities
    revitalization be funded at $150 million per year for ten years. This
    past year, an outside engineering firm recommended that the Arts and
    Industries Building be closed because of its deteriorating roof. This
    request contains funds to cover most of the costs to close the Arts and
    Industries Building and relocate its staff, collections and data. As
    for Zoo facilities, Congress added funds in fiscal year 2004 to
    complete Asia Trail I, and $14.5 million is requested to begin Asia
    Trail II, which will provide safer and better facilities for our
    elephants. Funds are requested to develop a master plan for
    revitalization of Zoo facilities. The Smithsonian is also continuing
    information technology initiatives such as implementation of the
    Enterprise Resource Planning system, infrastructure modernization, and
    meeting information technology security requirements.
        The fourth priority is securing the financial resources necessary
    to operate three new museums: the National Air and Space Museum's new
    Steven F. Udvar-Hazy Center in Northern Virginia, which opened in
    December 2003; the National Museum of the American Indian (NMAI) which
    opens on the National Mall in September 2004; and the National Museum
    of African American History and Culture (NMAAHC), which was just
    created by an Act of Congress. The Smithsonian is honored that NMAAHC
    will become part of the Institution. A working-group has been convened
    to begin discussions on site selection and initial staff hiring, and $5
    million is requested in fiscal year 2005 to support this effort. NMAI
    anticipates 4.5 million visitors annually, which will require staff to
    provide public programs and visitor services. The Udvar-Hazy Center is
    requesting additional staff for education and Web programs to further
    address the President's national education goals.

                        FISCAL YEAR 2005 BUDGET REQUEST

        For fiscal year 2005, the Smithsonian requests $628 million, a
    $31.7 million increase over the fiscal year 2004 appropriation. The
    increase focuses on Facilities Capital for which $128.9 million is
    requested in fiscal year 2005. This increase is essential for the
    Institution's $1.5 billion backlog of overdue revitalization; it will
    avoid crises like the recent closure of the historic Arts and
    Industries Building due to the condition of its roof and the facilities
    deterioration at the Zoo. The Salaries and Expenses request is $499.1
    million.

                             SALARIES AND EXPENSES

        This appropriation covers the cost of operating 17 Smithsonian
    museums, the National Zoo, and nine research centers, including such
    items as salaries of more than 4,000 on-board federal staff,
    maintenance and repair of more than 400 buildings and structures,
    conservation and care of the 143 million items in collections, and
    security of 25 million annual visitors, staff, and artifacts.
        Mandatory Items.--An increase of $9.9 million is requested for non-
    discretionary costs. This eliminates most of the unspecified reductions
    and across-the-board reductions included in the fiscal year 2004
    appropriation and allows for reapplication of savings in the utilities
    program for increased rent costs. However, no additional funds are
    provided specifically to cover the 1.5 percent pay raise the
    Administration proposes for Federal workers, nor allow for the cost of
    the difference between legislated pay raises and budgeted pay raises in
    fiscal year 2004 and fiscal year 2003. These unfunded $15.6 million in
    pay raises will be met by delaying hires, including those vacancies
    created by the buyout, and other cost savings mechanisms. The
    Smithsonian's five most-visited venues have reduced staff by 19 percent
    since 1993, and programs such as traveling children's exhibits, Save
    Outdoor Sculptures, and museum-based teacher and student education
    programs have been curtailed or eliminated.
        Security.--An increase of $2.0 million for staff for electronic
    screening devices in the National Air and Space Museum, the National
    Museum of Natural History and the National Museum of American History.
        Information Technology (IT).--An increase of $1.9 million to
    establish a new IT infrastructure that will provide image, audio, and
    video digital asset management, web content management, and portal
    functions necessary for E-commerce. This increase will also strengthen
    Smithsonian IT security.
        Zoo Accreditation.--A $.8 million increase for five new positions
    at the Zoo: an integrated pest management specialist, a veterinarian, a
    veterinary care technician, and two animal behavior specialists. All
    positions respond directly to recommendations of outside, expert
    advisory bodies.
        Science Commission.--An additional $.8 million increase for
    fellowships. The Science Commission underscored the important
    synergistic benefits of pre- and post-doctoral fellowships to research
    programs and strongly recommended an increased budget. The Commission
    also called for improved collections care at the National Museum of
    National History, which is made more urgent by the planned move of
    collections stored in alcohol from the Mall. A $.7 million increase is
    requested in this budget for collections care at Natural History.
        New Museums.--The Udvar-Hazy Center is now open, and the National
    Museum of the American Indian will be open by fiscal year 2005. Much of
    the effort to move collections and prepare exhibits will have been
    completed before fiscal year 2005. This allows a reduction of $7.8
    million in the budgets for NMAI and the Udvar-Hazy Center. However, a
    $5.0 million increase is requested for the National Museum of African
    American History and Culture (NMAAHC), the first budget request for
    this museum; it will provide support for the site selection process,
    initial fund-raising staff, and the initial management and planning
    staff. Twenty-seven new positions are requested for NMAAHC.
        Other Reductions.--In addition to the $9 million previously
    mentioned in new museums and utilities, there are three other
    reductions totaling $2.7 million in this request. As planned, there is
    a reduction of nine Federal staff and $.7 million for fund raising at
    NMAI. The fund-raising function, as planned, transfers to private
    funding when the Museum opens. There is a $1.0 million reduction to
    Natural History's Repatriation program. This no-year funded program is
    not using funds as rapidly as expected, and prior year funds are
    available to fund fiscal year 2005 efforts. Lastly, the Scientific
    Instrumentation program, which keeps the Smithsonian on the cutting
    edge of equipment development, will be reduced from $5.0 million to
    $4.0 million.

                               FACILITIES CAPITAL

        The Facilities Capital request includes $111.9 million for the
    revitalization/renovation of existing facilities, $9.0 million for the
    construction of new facilities and $8.0 for planning and design of
    future projects. In 2001, at the Committee's request, the Smithsonian
    asked the National Academy of Public Administration (NAPA) to review
    and evaluate the Institution's facility needs. NAPA said that $1.5
    billion would be needed over ten years for the Smithsonian to meet such
    needs. Because such funding increases, large enough to reach what NAPA
    has said is necessary, have not been possible due to budget
    constraints, the Smithsonian has obtained modest annual revitalization
    increases and carefully set priorities for facility revitalization
    funding. This budget continues gradual revitalization increases, but
    remains significantly short of the $150 million per year requirement.
        Patent Office Building (POB).--Consistent with our 2001 estimates,
    the total estimated Federal cost for revitalization of POB remains $166
    million. The $44.4 million request in fiscal year 2005 completes the
    Federal funding to restore POB, the historic, third oldest government
    building in Washington, DC. In addition to the Federal component, we're
    also raising $50 million in private funds for building enhancements,
    the most significant of which will enclose the courtyard to create
    additional public space. Half of the $50 million has already been
    committed by private sector donors.
        National Zoo.--The request includes $19.5 million for
    revitalization projects. Of this amount, $14.5 million will begin work
    on Asia Trail II. Asia Trail I will be completed with the fiscal year
    2004 appropriation thanks to the Congressional increase of $15.0
    million for this purpose. Asia Trail I revitalizes the area from the
    Connecticut Avenue entrance to the Panda house. Asia Trail II addresses
    the elephant area and, when completed, will provide an elephant area
    consistent with current standards of care for a small multi-
    generational herd and will allow the Zoo to build a secure facility for
    its rapidly growing young bull elephant.
        Arts and Industries Building (AIB).--The budget includes $25.0
    million for closure of AIB and moving most of the staff as well as the
    Institution's Archives and data center from the building. No funds are
    included to renovate the building. The move is being done on an
    emergency basis because two buildings of similar age and roof design
    experienced roof collapses last year, and an engineering assessment of
    the AIB roof advised the Smithsonian to vacate the building.
        National Museum of American History (NMAH).--The budget requests
    $10.0 million for infrastructure renovations in NMAH. A private donor
    has committed $80 million to renew several exhibit areas in the Museum.
    To complement this work, Federal funds will be needed over several
    years to renovate the building's obsolete infrastructure such as
    electrical systems, HVAC systems, bathrooms, stairways, elevators,
    escalators, etc., that private donors simply will not fund.
        National Museum of Natural History (NMNH).--Similar to NMAH, $7.0
    million is requested for infrastructure renovation at NMNH. These funds
    will renovate infrastructure in NMNH and complement $16 million
    contained in the fiscal year 2004 Omnibus Appropriation for the
    Commerce Department to renew a hall of NMNH and create an Oceans
    Natural History Hall.
        Museum Support Center (MSC) Pod 5.--The request includes $8.0
    million to continue construction of MSC's Pod 5 in Suitland, Maryland.
    This facility will provide fire code-compliant storage for Natural
    History specimens stored in alcohol currently housed on the Mall.
        Facilities Capital Balance.--The balance of the Facilities Capital
    request finances the Institution's $1 million share of a $17 million
    gamma ray telescope facility in Arizona; planning and design of fiscal
    year 2006 and fiscal year 2007 revitalization projects including a
    master plan for revitalization of the National Zoo; and $6.0 million
    for smaller revitalization projects throughout the Smithsonian and
    project management for the revitalization program.

           LIST OF WITNESSES, COMMUNICATIONS, AND PREPARED STATEMENTS

                                  ----------
                                                                       Page

    Abraham, Hon. Spencer, Secretary, Office of the Secretary,
      Department of Energy...........................................     1
        Prepared statement...........................................     7
        Summary statement............................................     4
    Advocates for Health, Public Parks, and Recreation, prepared
      statement......................................................   484
    American:
        Association of Museums, prepared statement...................   493
            And the Society for Historical Archaeology, prepared
              statement..............................................   495
        Chemistry Council, prepared statement........................   400
        Council for an Energy-Efficient Economy, prepared statement..   402
        Council on Education, prepared statement.....................   503
        Fisheries Society, prepared statement........................   225
        Fly Fishing Trade Association, prepared statement............   350
        For the Arts, prepared statement.............................   498
        Forest and Paper Association, prepared statement.............   351
        Gas Association, prepared statement..........................   404
        Geological Institute, prepared statement.....................   406
        Hiking Society, prepared statement...........................   227
        Indian Higher Education Consortium, prepared statement.......   292
        Institute of Biological Sciences, prepared statement.........   230
        Public Power Association, prepared statement.................   409
        Rivers, prepared statement...................................   350
        Sportfishing Association, prepared statements..............350, 353
        Symphony Orchestra League, prepared statement................   501
    Appalachian:
        Mountain Club, prepared statement............................   231
        Trail Conference, prepared statement.........................   356
    Association of:
        American Universities, prepared statement....................   503
        Research Libraries and the Council of Library and Information
          Resources, letter from.....................................   505

    Battelle Memorial Institute, prepared statement..................   415
    Bennett, Senator Robert F., U.S. Senator from Utah, opening
      statement......................................................   118
    Biomass Energy Research Association, prepared statements.......418, 472
    Bosworth, Dale N., Chief, Forest Service, Department of
      Agriculture....................................................    75
        Prepared statement...........................................    86
        Summary statement............................................    84
    Burns, Senator Conrad, U.S. Senator from Montana:
        Opening statements..................................1, 75, 115, 189
        Prepared statements.....................................2, 117, 190
        Questions submitted by............................44, 101, 148, 209
    Byrd, Senator Robert C., U.S. Senator from West Virginia:
        Opening statement............................................    15
        Questions submitted by.......................................    66

    California Industry and Government Coalition, prepared statement.   232
    Campbell, Senator Ben Nighthorse, U.S. Senator from Colorado,
      questions submitted by.........................................   178
    Caterpillar Inc., prepared statement.............................   422
    Center for Advanced Separation Technologies, prepared statement..   425
    Chippewa Ottawa Resource Authority, prepared statement...........   295
    Chugach Regional Resources Commission, prepared statement........   301
    Coal Utilization Research Council (CURC), prepared statement.....   411
    Coalition of Northeastern Governors, prepared statement..........   414
    Cochran, Senator Thad, U.S. Senator from Mississippi:
        Prepared statement...........................................   148
        Questions submitted by.......................................   177
    Colorado River Board of California, prepared statement...........   234
    Confederated Tribes of the:
        Siletz Indian Reservation, prepared statement................   487
        Warm Springs Reservation of Oregon, prepared statement.......   485
    Congressional Sportsmen's Foundation, prepared statement.........   350
    Consortium for Fossil Fuel Science, prepared statement...........   427
    Crownpoint Institute of Technology, prepared statement...........   305
    Cummins Inc., prepared statement.................................   428

    Defenders of Wildlife, prepared statement........................   360
    Detroit Diesel Corporation, prepared statement...................   431
    DeWine, Senator Mike, U.S. Senator from Ohio, questions submitted
      by.............................................................   187
    Domenici, Senator Pete V., U.S. Senator from New Mexico:
        Questions submitted by.......................................   218
        Statement of.................................................   204
    Dorgan, Senator Byron L., U.S. Senator from North Dakota:
        Opening statements..................................3, 77, 118, 191
        Questions submitted by.................................63, 182, 221
    Doris Day Animal League, prepared statement......................   235

    Eastern Forest Partnership, prepared statement...................   363
    Ecological Society of America, prepared statement................   236
    Enewetak/Ujelang Local Government Council, prepared statements.261, 365

    Federation of:
        Fly Fishers, prepared statement..............................   350
        State Humanities Councils, prepared statement................   507
    Fond du Lac Band of Lake Superior Chippewa, prepared statement...   309
    Forest Landowners Association, prepared statement................   368
    Fort Peck Tribes, prepared statement.............................   307
    Fuel Cell Power Association, prepared statement..................   436

    Gas Turbine Association, prepared statement......................   438
    Gasification Technologies Council, prepared statement............   441
    General Electric Energy, prepared statement......................   444
    Greasewood Springs Community School, prepared statement..........   341
    Great Lakes Indian Fish and Wildlife Commission, prepared
      statement......................................................   311
    Grim, Charles W. D.D.S., M.H.S.A., Assistant Surgeon General,
      Director, Indian Health Service, Department of Health and Human
      Services.......................................................   189
        Biographical sketch of.......................................   197
        Prepared statement...........................................   195
        Summary statement............................................   192

    Hartz, Gary J., Assistant Surgeon General, Acting Director,
      Office of Public Health, Director, Indian Health Service,
      Department of Health and Human Services........................   189
    High Plains Partnership, prepared statement......................   370
    Highlands Coalition, prepared statement..........................   239

    Institute of American Indian and Alaska Native Culture and Arts
      Development, prepared statement................................   314
    Integrated Building and Construction Solutions, prepared
      statement......................................................   447
    International:
        Association of Fish & Wildlife Agencies, prepared statement..   350
        Society of Tropical Foresters, prepared statement............   370
    Interstate Mining Compact Commission, prepared statement.........   449
    InterTribal Bison Cooperative, prepared statement................   317
    Intertribal Timber Council, prepared statement...................   319
    Izaak Walton League of America, prepared statement...............   350

    Kashdan, Hank, Director, Program and Budget Analysis, Department
      of Agriculture.................................................    75

    Lac du Flambeau Band of Lake Superior Chippewa Indians, prepared
      statement......................................................   322
    Leahy, Senator Patrick J., U.S. Senator from Vermont, questions
      submitted by...................................................    69

    McSwain, Robert G., M.P.A., Director, Office of Management
      Support, Indian Health Service, Department of Health and Human
      Services.......................................................   189
    Metlakatla Indian Community, prepared statement..................   303
    Mother Lode Chapter, Sierra Club, prepared statement.............   371

    National:
        American Indian Court Judges Association, prepared statement.   298
        Association for State Community Services Programs, prepared
          state-
          ment.......................................................   454
        Association of:
            Abandoned Mine Land Programs, prepared statement.........   452
            Conservation Districts, prepared statement...............   244
            State Energy Officials, prepared statement...............   456
            State Foresters, prepared statement......................   373
            State Universities and Land-Grant Colleges, prepared
              statement..............................................   503
            University Fisheries and Wildlife Programs, prepared
              statement..............................................   246
        Conference of State Historic Preservation Officers, prepared
          statement..................................................   248
        Congress of American Indians, prepared statement.............   489
        Council for Science and the Environment, prepared statement..   250
        Humanities Alliance, prepared statement......................   510
        Hydrogen Association, prepared statement.....................   459
        Institutes for Water Resources, prepared statement...........   252
        Mining Association, prepared statement.......................   460
        Recreation and Park Association, prepared statement..........   255
        Research Center for Coal and Energy, West Virginia
          University, prepared statement.............................   462
        Wildlife Federation, prepared statement......................   377
    Navajo Nation, prepared statements........................324, 327, 329
    Nebraska:
        Boyer Chute National Wildlife Refuge, prepared statement.....   264
        Game and Parks Commission, prepared statement................   266
    New England Forestry Foundation, prepared statement..............   380
    Northern Forest Alliance, prepared statement.....................   381
    Northwest Sportfishing Industry Association, prepared statement..   350
    Norton, Hon. Gale A., Secretary, Office of the Secretary,
      Department of the Interior.....................................   115
        Prepared statement...........................................   124
        Summary statement............................................   119

    Ornithological Council, prepared statement.......................   384

    Partnership for the National Trails System, prepared statement...   269
    Pinon Community School, prepared statement.......................   341
    Plug Power, Inc., prepared statement.............................   465
    Preservation Action, prepared statement..........................   513
    Pure Fishing, prepared statement.................................   350

    Ramah Navajo School Board, Inc., prepared statements......332, 334, 491
    Red Lake Band of Chippewa Indians, prepared statement............   336
    Reid, Senator Harry, U.S. Senator from Nevada:
        Opening statement............................................    16
        Questions submitted by.......................................   183
    Rey, Hon. Mark, Under Secretary for Natural Resources and
      Environment, Department of Agriculture.........................    75
        Prepared statement...........................................    81
        Summary statement............................................    79
    Rivers and Trails Coalition, prepared statement..................   278

    SAGE Electrochromics, Inc., prepared statement...................   470
    San Diego County Water Authority, prepared statement.............   279
    Scarlett, Lynn, Assistant Secretary, Policy, Management, and
      Budget, Department of the Interior.............................   115
    Seminole Tribe of Florida, prepared statement....................   339
    Shiprock Alternative School, prepared statement..................   341
    Siemens Westinghouse Power Corporation, prepared statement.......   475
    Skokomish Tribe of Washington State, prepared statement..........   344
    Smithsonian Institution, prepared statement......................   514
    Society:
        For Animal Protective Legislation, prepared statement........   279
        Of American Foresters, prepared statement....................   387
    SOFCo-EFS Holdings LLC, prepared statement.......................   477
    Southern Company, prepared statement.............................   467
    State of Delaware, Department of Natural Resources &
      Environmental Control, Division of Fish & Wildlife, prepared
      statement......................................................   390
    State of:
        Utah, letter from............................................   283
        Wyoming, letters from......................................284, 285
    State Teachers' Retirement System, State of California, prepared
      statement......................................................   479
    Stevens, Senator Ted, U.S. Senator from Alaska:
        Opening statements.........................................119, 207
        Questions submitted by.................................62, 111, 175

    Teaming With Wildlife Steering Committee, prepared statement.....   287
    Technology Acumentrics, Westwood, MA, prepared statement.........   396
    The:
        Fund for Animals, prepared statement.........................   237
        Humane Society of the United States, prepared statement......   241
        Nature Conservancy, prepared statement.......................   257
        Ocean Conservancy, prepared statement........................   267
    Trezise, John, Director, Office of Budget, Department of the
      Interior.......................................................   115
    Trout Unlimited, prepared statement..............................   350
    Tyner-Dawson, Eugenia, Acting Deputy Director, Indian Health
      Service, Department of Health and Human Services...............   189

    U.S. Fuel Cell Council, prepared statement.......................   482
    United South and Eastern Tribes, Inc., prepared statement........   345
    Upper Mississippi River Basin Association, prepared statement....   391
    USGS Coalition, prepared statement...............................   288

    Vanderwagen, William C. M.D., Acting Chief Medical Officer,
      Indian Health Service, Department of Health and Human Services.   189

    Washington Trails Association and the Pacific Crest Trail
      Association, prepared statement................................   385
    Wildlife Management Institute, prepared statement................   290
    Wyoming State Engineer's Office, letter from.....................   286

                                 SUBJECT INDEX

                                  ----------

                           DEPARTMENT OF AGRICULTURE

                                 Forest Service

                                                                       Page

    Additional Committee Questions...................................   101
    Categorical Exclusions...........................................    99
    Clean Audit Opinion..............................................80, 83
    Collaborative Processes..........................................    86
    Conclusion: Entering A New Century of Service....................    92
    Conservation.....................................................    92
    Education Efforts................................................    99
    Effects of Fire Borrowing........................................    93
    Fire Suppression.................................................    95
    Firefighting Cost Analysis.......................................    94
    Forest:
        Legacy Program...............................................    90
        Management...................................................    99
    Grazing..........................................................    96
    Hazardous Fuels..................................................    84
    Healthy Forests:
        Initiative...................................................    82
        Restoration Act..............................................79, 81
    Invasive Species.................................................    84
        And Noxious Weeds............................................    77
    Legislative Proposals............................................    80
    Loss of Open Space...............................................    85
    Overview.........................................................81, 87
    Performance and Financial Management Accountability..............    89
    Progress Towards Healthy Forests and Grasslands--Protecting
      Communi-
      ties...........................................................    87
    Proposed Budget:
        Decreases....................................................    76
        Increases....................................................    75
    Recreation.......................................................    90
    Reducing the Threat of Catastrophic Wildfire.....................    88
    Research.........................................................    89
    Stewardship Contracting..........................................    98
    Unmanaged Recreation.............................................    86
    Wildland Fire....................................................    78
        Suppression..................................................    91

                              DEPARTMENT OF ENERGY

                            Office of the Secretary

    Additional Committee Questions...................................    44
    Alaska:
        Arctic Energy Office.........................................    24
        Energy Resources.............................................25, 62
    Carbon Sequestration.............................................     5
    Central Asian Production.........................................    53
    Clean:
        Air Act--New Source Review...................................39, 41
        Coal Power:
            Initiative and FutureGen.................................     9
            Technology Program.......................................27, 37
        Energy Technology Export (CETE) Initiative...................    68
    Climate Change Initiative and Energy Conservation Budget Cuts....    71
    Current Crude Import Levels......................................    52
    Energy:
        And Environmental Research Center............................ 3, 33
        Budget.......................................................     5
        Conservation.................................................    11
        Efficiency Budget Cuts.......................................    69
        Information Administration................................... 6, 14
        Savings Performance Contracts (ESPC).........................    32
    Federal Energy Management Program................................    70
    Foreign Investment in FutureGen..................................    35
    Fossil:
        Energy.......................................................     8
            Budget...................................................     4
                Cuts.................................................    31
                Request vs. the Energy Bill..........................    66
            Distributed Generation--Fuel Cells--Solid State Energy
              Conversion Alliance (SECA).............................    51
        Domestic Gas Production/Imports..............................    58
        Domestic Oil Production/Imports..............................    51
            Fuels....................................................    60
            FutureGen................................................    49
    FutureGen....................................................19, 35, 63
    Gas Hydrates.....................................................    25
    Gasoline Stocks..................................................    53
    Grid Reliability and Federal Lands...............................    59
    Hydrogen:
        Fuel Cells...................................................    33
            Vehicle Program..........................................    34
        National Research Council Report.............................    55
        Technology Validation Program................................    57
    Import/Export Authorization Funds................................    53
    Investing in America's Energy Future.............................     7
    Iraqi Production.................................................    52
    Moab Atlas Tailings..............................................    24
    Mountain States Energy (MSE) Contract Extension..................    49
    National Energy Technology Laboratory (NETL):
        DOE Office of Energy Assurance...............................    66
        Reorganization Plan..........................................    68
    Natural Gas......................................................    22
        As a Fuel of Choice..........................................    22
        Savings......................................................    70
    Naval Petroleum and Oil Shale Reserves--Rocky Mountain Oil
      Technology Center (RMOTC)......................................    61
    Off-Highway Engine:
        Program......................................................    36
        R&D..........................................................    61
    Oil:
        Research Budget Figures......................................    52
        Technology Development.......................................    10
    Other Fossil Energy R&D..........................................    11
    Petroleum Reserves...............................................    11
    President's Coal Research Initiative.............................     8
    Reasons for Proposed Termination of Off-Highway Engine Programs..    36
    Recent R&D Accomplishments:
        Energy Conservation..........................................    47
        Fossil Energy................................................    44
    Solid State Lighting.............................................    54
    Spinning Reserve Demonstration Projects..........................    72
    Tankless Water Heaters...........................................    72
    Update on World Oil Markets......................................    52
    Water Heater Standards--Energy Star..............................    71
    Weatherization...................................................     6
    Yucca Mountain...................................................    17
        Funding......................................................    44
        Rail Corridor................................................    43
        Silicosis Issue..............................................    43

                    DEPARTMENT OF HEALTH AND HUMAN SERVICES

                             Indian Health Service

    Additional Committee Questions...................................   209
    Alcoholism.......................................................   212
    Assessments/Reimbursements.......................................   209
    Base Funding.....................................................   221
    Change In Health Problems........................................   211
    CHEF Program.....................................................   200
    Contract Health Services.............................198, 201, 214, 221
    Diabetes.........................................................   204
        Fund.........................................................   213
        Program......................................................   218
    $18 Million Request..............................................   199
    EPI Centers......................................................   200
    Epidemiology Centers.............................................   210
    Facilities.......................................................   193
        Construction Priority List...................................   216
    Funding Disparities..............................................   201
    Gallup Indian Medical Center.....................................   205
    Health Care Facilities Construction..............................   193
        Decrease.....................................................   217
    Homeland Security/Bioterrorism...................................   217
    Indian Health Care Improvement Fund (IHCIF)......................   223
        Into Psychology Program--Montana.............................   214
    Injury Prevention Program........................................   215
    Joint Venture Construction Program...............................   216
    Medical Equipment................................................   217
    Mental Health/Suicide Prevention.................................   202
    National Budget Priorities/Constraints...........................   194
    Overall Departmental Budget......................................   194
    Patient Contacts.................................................   203
    Professional Staff Shortages.....................................   219
    Recruitment......................................................   203
    Sanitation Construction........................................193, 218
    Sudden Infant Death Syndrome.....................................   222
    Telemedicine.....................................................   211

                           DEPARTMENT OF THE INTERIOR

                            Office of the Secretary

    Abandoned Mine Lands.............................................   120
        Reauthorization..............................................   159
    Additional Committee Questions...................................   148
    Addressing Long-Standing Challenges..............................   125
    BIA:
        Budget.......................................................   178
        Claim Settlements and Overall Funding Level..................   157
        Detention Center Funding.....................................   157
        Reorganization...............................................   180
        School Construction..........................................   157
        Tribally Controlled Colleges.................................   156
    Budget Overview..................................................   124
    Bureau of Land Management......................................175, 183
        Cost Recovery and Reductions in Oil and Gas Program..........   153
        Hazardous Fuels Work and Cost Containment....................   154
        Litigation Costs.............................................   139
        Range Monitoring.............................................   154
        Wild Horse and Burro Program.................................   151
    Cooperative Conservation.........................................   123
    Cost Containment.................................................   155
    Eastern Nevada Landscape Coalition...............................   185
    Endangered Species Listings......................................   147
        Program......................................................   179
    Enemy Swim Day School Replacement................................   182
    Energy Policy Act--MMS...........................................   168
    Financial Management System......................................   172
    Fire Fighting Budgeting..........................................   179
    Fish and Wildlife Service........................................   176
        Consultation.................................................   163
    Hazardous Fuels Reduction........................................   178
    Healthy Forests:
        Consultations................................................   146
        New ESA Consultation Procedures..............................   167
    Improving Law Enforcement and Security...........................   132
    Indian:
        Land Consolidation...........................................   181
        Trust........................................................   121
            Management...............................................   122
    Information on:
        Landowner Incentives Program to Support $20 Million Increase.   137
        Litigation Costs for BLM.....................................   141
        Natural Gas Reserves on Public Lands.........................   142
        Park Police Chief............................................   139
        The Cost of the Wolf Recovery Program........................   144
    Internet Shutdown.........................................121, 146, 164
    Investing in Conservation........................................   127
    Land Management Challenges.......................................   130
    Landowner Incentives Grant Program...............................   136
    Landsat..........................................................   143
    Litigation Costs.................................................   143
    Management Excellence..........................................124, 133
    Managing Resources...............................................   131
    Midnight Rider Removed...........................................   180
    Monitoring and Science--Keys to Performance......................   131
    National Parks...................................................   119
        Funding:
            Operations...............................................   171
            Project Funding..........................................   171
        Service......................................................   186
            Security Costs...........................................   175
    Natural Gas:
        Production in Gulf of Mexico.................................   162
        Reserves.....................................................   141
    Office of:
        The Special Trustee--Overall Funding.........................   158
            Self Governance..........................................   159
        Tribal Consultation..........................................   181
    OSM--State Regulatory Grants.....................................   167
    Park:
        Maintenance Backlog..........................................   120
        Police Chief.................................................   138
        Service Backlog..............................................   179
    Partnerships.....................................................   173
    Payments in Lieu of Taxes........................................   133
    Preserve America.................................................   174
        Heritage.....................................................   129
    Range Monitoring.................................................   145
    Royalty-in-Kind/Strategic Petroleum Reserve......................   162
    Snowmobiles in Yellowstone.......................................   174
    Status of Other School Construction Projects.....................   183
    Tribal:
        Controlled Community Colleges................................   135
        Detention Center.............................................   147
        School Construction........................................147, 182
        Self Governance..............................................   181
    U.S. Geological Survey...........................................   185
        Landsat Failure..............................................   169
        Program Mission..............................................   170
        Status of Reports............................................   170
    United Tribes Technical College................................134, 182
    Wild Horse and Burro.............................................   137
    Wildland Fire....................................................   122
    Wolf Recovery....................................................   144
    Wolves...........................................................   148

                                       -