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

[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

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

__________

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COMMITTEE ON APPROPRIATIONS

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

Subcommittee on 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

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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

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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

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

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

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.
IntelliPipe^TM, 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. IntelliPipe^TM 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 IntelliPipe^TM, 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

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.

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.

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.

______

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

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:

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

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

RESETTLEMENT OF THE ENJEBI PEOPLE ON THEIR HOME ISLAND OF ENJEBI

FUNDING OF THE HEALTH CARE PROGRAM

ENEWETAK FOOD AND AGRICULTURE PROGRAM

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..............
------------------------------------------------------------------------

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:
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\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