[Senate Hearing 108-501]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 108-501
 
                        ARMY CORPS OF ENGINEERS:
                   MEETING THE NATION'S WATER RESOURCE
                       NEEDS IN THE 21ST CENTURY

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

                                HEARING

                               before the

                            SUBCOMMITTEE ON
                   TRANSPORTATION AND INFRASTRUCTURE

                                 of the

                              COMMITTEE ON
                      ENVIRONMENT AND PUBLIC WORKS
                          UNITED STATES SENATE

                      ONE HUNDRED EIGHTH CONGRESS

                             SECOND SESSION

                               __________

                             MARCH 31, 2004

                               __________

  Printed for the use of the Committee on Environment and Public Works




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               COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS

                      one hundred eighth congress
                             second session

                  JAMES M. INHOFE, Oklahoma, Chairman
JOHN W. WARNER, Virginia             JAMES M. JEFFORDS, Vermont
CHRISTOPHER S. BOND, Missouri        MAX BAUCUS, Montana
GEORGE V. VOINOVICH, Ohio            HARRY REID, Nevada
MICHAEL D. CRAPO, Idaho              BOB GRAHAM, Florida
LINCOLN CHAFEE, Rhode Island         JOSEPH I. LIEBERMAN, Connecticut
JOHN CORNYN, Texas                   BARBARA BOXER, California
LISA MURKOWSKI, Alaska               RON WYDEN, Oregon
CRAIG THOMAS, Wyoming                THOMAS R. CARPER, Delaware
WAYNE ALLARD, Colorado               HILLARY RODHAM CLINTON, New York
                Andrew Wheeler, Majority Staff Director
                 Ken Connolly, Minority Staff Director
                                 ------                                

           Subcommittee on Transportation and Infrastructure

                CHRISTOPHER S. BOND, Missouri, Chairman

JOHN W. WARNER, Virginia             HARRY REID, Nevada
GEORGE V. VOINOVICH, Ohio            MAX BAUCUS, Montana
LINCOLN CHAFEE, Rhode Island         BOB GRAHAM, Florida
JOHN CORNYN, Texas                   JOSEPH I. LIEBERMAN, Connecticut
LISA MURKOWSKI, Alaska               BARBARA BOXER, California


                            C O N T E N T S

                              ----------                              
                                                                   Page

                             MARCH 31, 2004
                           OPENING STATEMENTS

Allard, Hon. Wayne, U.S. Senator from the State of Colorado, 
  prepared statement.............................................    27
Baucus, Hon. Max, U.S. Senator from the State of Montana, 
  prepared statement.............................................    58
Bond, Hon. Christopher S., U.S. Senator from the State of 
  Missouri.......................................................     1
Clinton, Hon. Hillary Rodham, U.S. Senator from the State of New 
  York, prepared statement.......................................    19
Cornyn, Hon. John, U.S. Senator from the State of Texas..........     5
Graham, Hon. Bob, U.S. Senator from the State of Florida, 
  prepared statement.............................................    14
Inhofe, Hon. James M., U.S. Senator from the State of Oklahoma...     4
Jeffords, Hon. James M., U.S. Senator from the State of Vermont..     7
Murkowski, Hon. Lisa, U.S. Senator from the State of Alaska, 
  prepared statement.............................................    57
Reid, Hon. Harry, U.S. Senator from the State of Nevada, prepared 
  statement......................................................    59

                               WITNESSES

Cameron, Michael, Desert Rivers program director, The Nature 
  Conservancy of Nevada, Reno, NV................................    39
    Prepared statement...........................................   109
Crandall, Derrick, president, American Recreation Coalition, 
  Washington, DC.................................................    33
    Prepared statement...........................................    90
    Responses to additional questions from Senator Inhofe........    96
Faber, Scott, water resources specialist, Environmental Defense, 
  Washington, DC.................................................    51
    Prepared statement...........................................   134
Flowers, Lieutenant General Robert B., Chief of Engineers, Army 
  Corps of Engineers, Washington, DC.............................    11
    Prepared statement...........................................    71
    Responses to additional questions from:
        Senator Allard...........................................    83
        Senator Boxer............................................    75
        Senator Cornyn...........................................    77
        Senator Jeffords.........................................    78
        Senator Wyden............................................    79
Howland, William, basin program manager, Lake Champlain Basin 
  Program, Grand Isle, VT........................................    37
    Prepared statement...........................................   107
Izzo, Dominic, American Society of Civil Engineers, Washington, 
  DC.............................................................    46
    Prepared statement...........................................   114
    Responses to additional questions from:
        Senator Inhofe...........................................   118
        Senator Jeffords.........................................   120
Leone, Michael, chairman, American Association of Port 
  Authorities, Alexandria, VA....................................    36
    Prepared statement...........................................   102
    Responses to additional questions from Senator Jeffords......   107
Levy, Steve, county executive, Suffolk County, Hauppauge, NY.....    34
    Prepared statement...........................................    97
    Responses to additional questions from Senator Jeffords......    99
Myers, Hon. James T., on behalf of the National Waterways 
  Conference, Punta Gorda, FL....................................    31
    Prepared statement...........................................    86
    Responses to additional questions from Senator Jeffords......    88
Poupore, Ray, executive director, National Heavy and Highway 
  Alliance, Washington, DC.......................................    49
    Prepared statement...........................................   131
    Responses to additional questions from Senator Jeffords......   133
Woodley, Hon. John Paul, Assistant Secretary of the Army for 
  Civil Works, Army Corps of Engineers, Washington, DC...........     9
    Prepared statement...........................................    60
    Responses to additional questions from:
        Senator Boxer............................................    66
        Senator Inhofe...........................................    65
        Senator Jeffords.........................................    69
Zlotnick, Gregory A., director, Santa Clara Valley Water 
  District, San Jose, CA.........................................    47
    Prepared statement...........................................   121
    Responses to additional questions from Senator Inhofe........   124

                          ADDITIONAL MATERIAL

Charts:
    Army Corps of Engineers Projects.............................   134
    Federal Investment Lagging, Trust Fund Surplus Skyrocketing..   103
    Floodplain Restoration and Non-Structural Flood Control, 
      Truckee River, NV..........................................   112
    McCarran Ranch, Lower Truckee River, Present Condition, 
      Rendering of Restored Condition............................   113
Letters from:
    O'Dowd, John B., Colonel, U.S. Army District Engineer, 
      Department of the Army..................................... 23-25
    Williams, Joseph F., commissioner, County of Suffolk.........   100
Statements:
    American Shore and Beach Preservation Association............   144
    Grugett, George C., executive vice president, Mississippi 
      Valley Flood Association...................................   138
    Interstate Council on Water Policy...........................   143
    National Association of Flood and Stormwater Management 
      Agencies...................................................   142
    Pittman, Rod, E.G., chairman, Texas Water Development Board..   140
    Posivach, Ellen, city manager, Tarpon Springs, FL............   141
    Young, Hon. Bob, Mayor of Augusta, GA........................   139
Summary, WRDA Process Reforms...................................126-131


 ARMY CORPS OF ENGINEERS: MEETING THE NATION'S WATER RESOURCE NEEDS IN 
                            THE 21ST CENTURY

                              ----------                              


                       WEDNESDAY, MARCH 31, 2004

                               U.S. Senate,
         Committee on Environment and Public Works,
         Subcommittee on Transportation and Infrastructure,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 1:30 p.m. in 
room 406, Senate Dirksen Building, the Hon. Christopher S. Bond 
(chairman of the subcommittee) presiding.
    Present: Senators Bond, Cornyn, Chafee, Graham, Allard, 
Clinton, Reid, Wyden, Warner, Jeffords [ex officio] and Inhofe 
[ex officio].

  OPENING STATEMENT OF HON. CHRISTOPHER S. BOND, U.S. SENATOR 
                   FROM THE STATE OF MISSOURI

    Senator Bond. Good afternoon. The committee will come to 
order.
    When I came in this afternoon, I saw that we have managed 
to move traffic jams from the roads to the entrance to the 
building. I hope we have not cut too many of our witnesses or 
interested parties out.
    We will have a very large number of witnesses today. I 
assure you that all of your written statements will be included 
in the record. They are very important for us and for our 
staffs as we develop this legislation which is extremely 
important. We would ask, in the interest of completing it 
before nightfall, that you confine your oral testimony to 4 
minutes. There will be some time to ask questions and have a 
discussion, and try to get all of this testimony in today. I 
think it is extremely important because we will be considering 
the role of the U.S. Army Corps of Engineers in meeting the 
Nation's water resources and needs in the 21st Century. Again, 
I express my appreciation to all of the witnesses to come to 
testify.
    As those of you who are interested in this area know too 
well, we have not had a water bill in 4 years. Despite distant 
editorial opinion, some of it right here in this city to the 
contrary, citizens, communities, States, and certainly the 
members of the Senate see the value of what the Corps can do 
when they are allowed to do their job to provide safety, 
environmental protection, and economic opportunity for our 
Nation.
    As I have said before, every year there is a referendum on 
the Corps and what it does. We see those in the requests to the 
Water and Energy Appropriations staff here. Members from north, 
south, east, and west, Democrats and Republicans, request that 
the Corps provide assistance to real life taxpayers doing 
important things for our economy and our families out in the 
working world.
    As with other missions that are widely supported, the 
demand for services exceeds the supply of money, particularly 
with the OMB recommendations under which we suffer these days.
    Senators in this bill have requested projects which total 
more than a great deal, most of it for ecosystem restoration. 
It is clear that while I am adamant that we will have a 
balanced and forward-looking bill to present to the 
subcommittee and to the full committee, we are going to put 
some of these requests on a stringent diet.
    In the Midwest, an essential item for WRDA 2004, which is 
long overdue, must be authorization of new locks to replace the 
aging infrastructure on the Upper Mississippi River and 
Illinois waterway, and the feasibility study of navigation and 
environmental improvements, the 6-year study has been ongoing 
since 1993, if anybody wants to do the math on that.
    It has cost us over $70 million. We have not built 
anything.
    We have studied for $70 million and going on 11 years.
    At the same time, competing countries like Brazil, 
investing to build and build while we study and study and 
study. The construction time for this bipartisan effort to 
modernize locks is about 15 years under the most optimistic 
forecast. That means we are already behind the curb and we are 
at great risk of having a gridlocked navigation system before 
we get these projects in place.
    I was at a very informative hearing on the USDA last week 
which said that transportation is often lost, and the 
determinate between markets won and markets lost directly 
impacts our ability to compete and prosper. The Veteran Chief 
Economist at USDA testified that in 10 years he expects corn 
exports to increase 44 percent, most of that through the Gulf.
    The world is rapidly changing, and the past will not be the 
future. Changes are occurring in South America, Europe, and 
Asia, which suggest that we can either anticipate the 
challenge, or surrender advantages at the expense of our 
producers. Our infrastructure is not ready for those emerging 
challenges and opportunities today. In 30 years the outlook is 
far bleaker.
    The Corps takes great pains doing what Congress requires of 
it, but Congress needs to do its job as well, namely, we need 
to decide if Congress is going to focus on guessing about the 
future our shaping the future. We could possibly respond to 
conditions, or we could anticipate them and shape them. If we 
continue to study, I can guarantee you one thing, we will not 
be shipping, but we need to ship for the world markets and for 
our economy.
    The Corps needs direction from us. I learned recently that 
the system on the Upper Mississippi which handles over 60 
percent of corn exports and almost one-half of soybean exports 
is eligible for nomination to the National Registry of Historic 
places. Is the world's greatest power going to look ahead 50 
years and decides that it plans to compete with an inland 
transportation system that is an historical relic? I think we 
have to and can do better.
    The bipartisan effort to modernize our aged system 
envisions a balance with capacity to permit long-term growth as 
well as ecosystem restoration. We can and should do both.
    Additionally, there will be proposals considered to address 
perceived problems in the study process. If these proposals 
assist the process, they will be welcome. Those designed to 
delay and frustrate the process, particularly for poor and less 
advantaged communities along the rivers will not be welcome.
    I look forward to hearing from our diverse group of 
witnesses. I look forward to working with members of the 
committee to fashion a balanced bipartisan bill.
    [The prepared statement of Senator Bond follows:]

          Statement of Hon. Christopher S. Bond, U.S. Senator 
                        from the State Missouri

    Welcome to this afternoon's hearings as we consider the role of the 
U.S. Army Corps of Engineers in meeting the nation's water resource 
needs in the 21st Century. I thank our witnesses for agreeing to 
testify.
    We have not had a WRDA bill in 4 years. Despite distant editorial 
opinion to the contrary, citizens, communities, States and certainly 
members of the Senate see the value of what the Corps can do to provide 
safety, environmental protection and economic opportunity for our 
Nation. As I have said before, every year, there is a referendum on the 
Corps, which we see in Energy and Water Appropriations. Here members 
from north, south, east and west--both Democrats and Republicans--
request that the Corps provide assistance to those taxpayers out in the 
working world.
    As with other missions that are widely supported, the demand for 
services exceeds the supply of money. Senators have requested projects 
which total more than a great deal--most for ecosystem restoration--and 
it is clear that while I am adamant that we will have a balanced and 
forward-looking bill to present to the subcommittee and committee, we 
may have to subject some of these projects to a diet.
    In the Midwest, an essential item for WRDA 04, which is long 
overdue, must be authorization of new locks to replace the aging 
infrastructure on the Upper Mississippi River and Illinois Waterway. 
The feasibility study of navigation and environmental improvements has 
been ongoing since 1993 and has cost over $70 million. While our 
competitors invest to build, we study and study, and study. The 
construction time for this bipartisan effort to modernize locks is 15 
years under optimistic forecasts. This means we are already at great 
risk of having a gridlocked navigation system before we get these 
projects in place.
    USDA testified last week that transportation is often the 
determinant between markets won and markets lost and directly impacts 
our ability to compete and prosper. The Veteran Chief Economist at USDA 
testified that in 10 years, he expects corn exports to increase 44 
percent--most of that through the Gulf. The world is rapidly changing, 
and the past will not be the future. Changes are occurring in South 
America, Europe and Asia, which suggest that we can either anticipate 
the challenge or surrender advantages at the expense of our producers. 
Our infrastructure is not ready for these emerging challenges and 
opportunities today. In 30 years, the outlook is far bleaker.
    The Corps takes great pains doing what Congress requires of it, but 
Congress needs to do its job as well. Namely, we need to decide if 
Congress is going to focus on predicting the future, or shaping the 
future. We can passively respond to conditions or we can anticipate 
them and shape them. The Corps needs direction from us. I learned 
recently that the system on the Upper Mississippi, which handles over 
60 percent of corn exports and almost one-half of bean exports may be 
eligible for nomination for the National Registry of Historic places. 
Is the world's greatest power going to look ahead 50 years and decide 
that it plans to compete with an inland transportation system that is 
an historical relic. We have to do better.
    The bipartisan effort to modernize our aged system envisions a 
balance with capacity to permit long-term growth as well as ecosystem 
restoration. We can and should do both. Additionally, there will be 
proposals considered to address perceived problems in the study 
process. If these proposals assist the process, they will be welcomed. 
Those designed to delay and frustrate the process, particularly for 
poorer and less advantaged communities will not be welcome.
    I look forward to hearing from our diverse group of witnesses and 
look forward to working with members of the Committee to fashion a 
balanced bipartisan bill.

    Senator Bond. We will be having a number of Senators coming 
in and out as other commitments require them to be elsewhere. 
We have been joined by the Chairman of the full committee. I am 
going to ask him to make his comments, followed by Senator 
Cornyn while I check on a message.

 OPENING STATEMENT OF HON. JAMES M. INHOFE, U.S. SENATOR FROM 
                     THE STATE OF OKLAHOMA

    Senator Inhofe. Thank you very much, Mr. Chairman. I want 
to thank you for holding this subcommittee hearing. We have 
decided that we would go ahead and do this at the subcommittee 
level. I will be looking forward to serving in that capacity. 
We want to thank you, General Flowers. This may be your last 
time here testifying. I do not know. You will be making some 
changes on the first of July. We have been very proud of the 
leadership that you have provided and I have enjoyed working 
with you.
    The Corps of Engineers has provided a valuable service to 
the Nation for over 200 years. It has supported our troops in 
every combat that is out there, including the current operation 
in Iraq. Of course, it has also been instrumental in the 
creation of the most dynamic inland waterway system in the 
world I would say to all my friends out there in the audience, 
as well as Senator Cornyn, that many people are not aware that 
my State of Oklahoma is one of the most inland ports. We are 
most anxious to get our 9- to 12-foot channel completed. I 
think it has already been authorized. We just want to get it 
expedited as soon as possible. We also benefit from a lot of 
flood control programs. People do not realize that my State of 
Oklahoma actually has more miles of fresh water shoreline than 
any of the 50 States, including Texas. One of those reasons is 
that we have many Corps lakes and Corps activities that have 
been there.
    So, as we move forward with the WRDA bill, I am looking 
forward to it. We would like to report the bill out of the 
committee by Memorial Day. I know that is an aggressive agenda. 
However, those who question the fact that we can be aggressive 
might remember what we did with the transportation bill. We 
plan to be just as aggressive in this.
    While it is important that we ensure that the Corps is 
capable of meeting our future and water resources need, it is 
also important that we do not demand more than the Corps can 
humanly be capable of providing. No Federal Agency could 
complete all the projects requested by all Senators. It is 
important to recognize that with the limited staff and the 
limited budget available for the Corps, not to mention the 
already substantial backlog of existing projects, it would be 
unproductive to take an ``authorize everything'' approach. I am 
sure that our Chairman is not going to do that.
    So I will be looking forward to working with, Chairman 
Bond, as this progresses, in meeting that deadline of getting 
this thing out of here by Memorial Day. Thank you.
    [The prepared statement of Senator Inhofe follows:]

        Statment of Hon. James M. Inhofe, U.S. Senator from the 
                           State of Oklahoma

    First, thank you, Senator Bond, for holding this subcommittee 
hearing. I'd like to offer a special welcome to General Flowers. Today 
is likely to be the last time General Flowers appears before our 
committee, as the change of command at the Corps will take place this 
July 1st. I thank you, General, for your service as Chief of Engineers 
and wish you well in your next endeavor. The Senate and the Corps will 
miss your leadership.
    The United States Army Corps of Engineers has provided a valuable 
service to the Nation for over 200 years. It has supported our troops 
in every armed conflict in our nation's history, including the current 
operation in Iraq. The Corps has also been instrumental in the creation 
of the most dynamic inland waterway system in the world. Oklahoma, for 
example, has one of the nation's most inland ports, which provides 
hundreds of millions in economic benefits to the state.
    Oklahoma also benefits from the flood control provided by dozens of 
Corps projects, not to mention the renewable electricity that is 
produced by the Corps at many reservoirs, and clean drinking water.
    While the past successes of the Corps are important to note, the 
focus of this hearing is the future water resource needs of the Nation. 
And while I am aware of the legion of project requests that have come 
in from my fellow Senators, an important component of this hearing is 
to examine the Corps' capability, and determine what, if anything, we 
must do to ensure that the Army Corps is capable of meeting those 
needs. As our witnesses today will testify, there are significant and 
varied water resource needs across the Nation, and it is important that 
we pass a WRDA bill this year to address those needs. In order to 
increase the chances of getting a WRDA signed into law this year, I 
would like to report a bill out of the full committee by Memorial Day. 
I know that sets an aggressive schedule, but I think we should take the 
motto on the shield of the Corps to heart, which translated into 
English reads: ``Let Us Try.'' While it is important that we insure the 
Corps is capable of meeting our future water resource needs, it is also 
very important that we don't demand more of Corps than they are humanly 
capable of providing. No Federal agency could complete all of the 
projects requested by all the Senators. It is important to recognize 
that with the limited staff and limited budget available for the Corps, 
not to mention the already substantial backlog of existing Corps 
projects, it would be unproductive to take an ``authorize everything'' 
approach to drafting this bill. I think that our colleagues in the 
House have struck a good balance in terms of the overall size of the 
bill, a balance that we should strive for here in the Senate as well. 
And while I know that every Senator has his or her own priority 
projects, we should keep in mind that if each Senator demands 
everything, we may all end up with nothing. I look forward to working 
with my colleagues to ensure that we give clear direction to the Corps 
to focus on completing the highest priority and most beneficial 
projects.

    Senator Bond. That is a tall stump to jump, Mr. Chairman. 
We are going to need some help from the Administration getting 
some information to us. We will look forward to hearing that.
    Now we are very pleased to have with us another member of 
the committee, Senator Cornyn.

 OPENING STATEMENT OF HON. JOHN CORNYN, U.S. SENATOR FROM THE 
                         STATE OF TEXAS

    Senator Cornyn. Thank you, Chairman Bond. I would like to 
express my gratitude to Chairman Inhofe and you for scheduling 
this important hearing. It has been more than 4 years since the 
passage of the last Water Resources Development Act. Since that 
time, the water resources needs of the Nation have continued to 
change and, indeed, expand.
    In fact, it is expected that water will be the leading 
economic driver of the 21st Century. As such, we must be 
postured to focus on developing environmentally sustainable 
projects that incorporate the grassroots values and interests 
of regions and local communities. The severe droughts of recent 
times have reminded us that we cannot take our water resources 
for granted. The stakes are high in terms of our environment 
and our economy.
    History also teaches that we can no longer manage water for 
single purposes. We must manage water to integrate all its uses 
in an environmentally sustainable way. Many States and regions 
of the Nation have already begun the process of developing 
comprehensive water plans to meet the long-term water resources 
requirements needed to continue the economic and environmental 
sustainability of our Nation's water infrastructure.
    In my home State of Texas alone, the State and local 
communities have identified almost $18 billion of capital needs 
to ensure adequate water resources are available to Texans to 
meet the projected 50-year needs required to maintain the 
economic vitality of the State. The enormity of this problem is 
not, of course, limited to Texas alone and it cannot be ignored 
at any level of Government.
    Mr. Chairman, I have received written statements from water 
interests, including Mr. Rod Pittman, chairman of the Texas 
Water Development Board, and Mayor Bob Young of Augusta, GA. 
These statements point strongly to the Federal role in 
providing technical assistance, data, and analysis to support 
our State and local governments in managing water resources.
    Mr. Chairman, I would ask consent that these statements be 
entered into the record.
    Senator Bond. Without objection, so ordered.
    Senator Cornyn. These statements, of course, affirm what I 
have been talking about and what I know this subcommittee and 
committee believe, and that is that the Corps of Engineers is 
uniquely positioned to support State and local government 
leadership for integrated management and development of the 
Nation's water resources.
    I would like to quote from the statement of the Chairman of 
the Texas Water Development, Mr. Rod Pittman, who said,

     ``Recently, Board staff have been working more closely with the 
Corps and that benefits from this enhanced relationship confirms that 
the payoff for even more collaboration is considerable.''

    His testimony is evidence that Corps partnerships with 
State and local governments can and work well to strengthen the 
management of our water resources. The Corps of Engineers must 
have the tools to enable them to work more closely with local 
and State partners to identify water needs and strategies for 
meeting these needs across the Nation.
    We should give the Corps a primary mission in supporting 
State and local leadership of integrated water management. By 
sharing data and water analysis among the Federal, State, and 
local sectors, we can improve water management in this country 
and save money at all levels of government. Enactment of WRDA 
can make this happen.
    I would also like to acknowledge the important role WRDA 
plays on the traditional mission of the Corps. The Corps is an 
invaluable part of the efforts throughout the country to 
address the ravages of coastal erosion and flooding. They are 
also vitally important to keeping our national economic engine 
working with the construction and maintenance of our navigable 
waterways. I look forward to working with the committee in 
moving WRDA along, and setting the stage for the future of 
water resources management in Texas and across the Nation.
    Thank you, Mr. Chairman.
    [The prepared statement of Senator Cornyn follows:]

  Statement of Hon. John Cornyn, U.S. Senator from the State of Texas

    Thank you, Mr. Chairman. I just want to say a few words as we begin 
this hearing.
    It has been more than 4 years since passage of the last Water 
Resources Development Act. Since that time, the water resources needs 
of the Nation have continued to change. In fact, it is expected that 
Water will become one of the leading economic drivers of the 21st 
Century. As such, we must ensure that we are postured to focus on 
developing environmentally sustainable projects that incorporate the 
``grass roots'' values and interests of regions and local communities.
    The severe droughts of recent have reminded us that we cannot take 
our water resources for granted. The stakes are high in terms of our 
environment and our economy. History also teaches that we can no longer 
manage water for single purposes. We must manage water to integrate all 
its uses in an environmentally sustainable way. Many States and regions 
of the Nation have already begun the process of developing 
comprehensive water plans to meet the long term water resources 
requirements needed to continue the economic and environmental 
sustainability of our Nation's water infrastructure. In my home State 
of Texas alone, the State and local communities have identified almost 
$18 billion of capital needs to ensure adequate water resources are 
available for Texans to meet the projected 50-year needs required to 
maintain the economic viability of the State. The enormity of this 
problem is not limited to Texas, and cannot be ignored at any level of 
government.
    Mr. Chairman, I have received written statements from water 
interests including Mr. Rod Pittman, Chairman of the Texas Water 
Development Board, and Mayor Bob Young of Augusta, GA. These statements 
point strongly to the Federal role in providing technical assistance, 
data, and analysis to support our State and local governments in 
managing water resources. Mr. Chairman I ask consent that these 
statements be entered with my statement in the record.
    These statements affirm what I have been talking about: that the 
Corps of Engineers is uniquely positioned to support State and local 
government leadership for integrated management and development of the 
Nation's water resources. I would like to quote from the statement of 
the Chairman of the Texas Water Development Board, Mr. Rod Pittman. He 
says, ``Recently, Board staff has been working more closely with the 
Corps, and the benefits from this enhanced relationship confirms that 
the payoff for even more collaboration is considerable.'' His testimony 
is evidence that Corps partnerships with State and local governments 
can and will work well to strengthen management of water resources.
    The Corps of Engineers must have the tools to enable them to work 
closer with local and State partners to identify water needs and 
strategies for meeting these needs across the Nation. We should give 
the Corps a primary mission in supporting State and local leadership of 
integrated water management. By sharing data and water analysis among 
the Federal, State, and local sectors, we can improve water management 
in this country and save money at all levels of government. Enactment 
of WRDA can make this happen.
    I would also like to acknowledge the important role WRDA plays on 
the traditional missions of the Corps. The Corps is an invaluable part 
of efforts throughout the county to address the ravages of coastal 
erosion and flooding. They are also vitally important to keeping our 
national economic engine running with the construction and maintenance 
of our navigable waterways. I look forward to working with the 
Committee in moving WRDA forward and setting the stage for the future 
of water resources management in Texas and the Nation.

    Senator Bond. Thank you very much, Senator Cornyn.
    We have been joined now by the Ranking Member of the full 
committee, Senator Jeffords. Welcome, Senator.

OPENING STATEMENT OF HON. JAMES M. JEFFORDS, U.S. SENATOR FROM 
                      THE STATE OF VERMONT

    Senator Jeffords. Thank you, Mr. Chairman.
    Today we will hear testimony from Administration officials 
and witnesses from around the country on the Army Corps of 
Engineers' Water Resources Programs. Starting with the Water 
Resources Development Act of 1986, this committee has 
considered legislation to authorize the Corps projects in the 
Nation's interest on a biennial schedule.
    Some years, we did not get a bill; some years, we did.
    This year, we have not yet received an Administration WRDA 
proposal. Nevertheless, I am optimistic that at the end of this 
session of Congress, we will see a WRDA 2004 to be enacted into 
law. Not too much time remains this year, but I think we can do 
it.
    Last week, members of my committee staff traveled to 
Vermont where they were joined by military officers and 
civilians of the Corps' North Atlantic Division, the New York 
District and the New England District. In Bennington, Norwich, 
and Barre, my staff and the Corps personnel hosted roundtable 
workshops with State and local officials, conservationists, and 
other interested Vermonters to talk over how to make the Corps' 
processes more tangible for smaller cities and towns.
    I would like to take this opportunity to thank Brigadier 
General Bo Temple, Colonel John O'Dowd, Lieutenant Colonel 
Brian Green, Jan Rasgus, Joe Vietri, Bobby Byrne, Gene 
Brickman, and Paul Tumminello for making these workshops an 
outstanding success. I am pleased to express my thanks to them.
    Mr. Woodley and General Flowers, as you both already know, 
you have a great team there. I want to amplify that.
    One participant in the Barre workshop joins us here this 
afternoon. Bill Howland is the executive director of the Lake 
Champlain Basin Program. He will speak about the Corps' mission 
of ecosystem restoration. The Basin program is a best-case 
scenario for Corps participation, as I am sure your testimony 
will tell us. Thanks, Bill, for making the trip down from 
Vermont.
    Another project in Vermont that has seen some real 
progress, thanks to the hard work of the Corps, is the 
Waterbury Dam. Unfortunately, troubling budget cuts from the 
Corps threaten the steps forward made in the past few years.
    The Civil Works Program of the Corps is critical. The 
President's proposed budget will put the Corps in critical 
condition.
    I am committed to working to keep the Corps at the adequate 
national funding levels to deal with the needed projects that 
will enhance and improve our country's and our communities' 
water resources. It is important to listen to everybody 
concerning program changes and the needs of the Corps. I think 
we have a very distinguished panel to testify before this 
committee today.
    Thank you, Mr. Chairman.
    [The prepared statement of Senator Jeffords follows:]

           Statement of Hon. James M. Jeffords, U.S. Senator 
                       from the State of Vermont

    Today, we will hear testimony from Administration officials and 
witnesses from around the country on the Army Corps of Engineers water 
resources programs. Starting with the Water Resources Development Act 
of 1986, this Committee has considered legislation to authorize Corps 
projects in the nation's interest on a biennial schedule. Some years, 
we didn't get a bill; some years, we did. This year, we have not yet 
received an Administration WRDA proposal. Nevertheless, I am optimistic 
that at the end of this Session of Congress, we will see a WRDA 2004 be 
enacted into law. Not too much time remains this year, but I think we 
can do it.
    Last week, members of my Committee staff traveled to Vermont where 
they were joined by military officers and civilians of the Corps' North 
Atlantic Division, New York District, and New England District. In 
Bennington, Norwich, and Barre, my staff and the Corps personnel hosted 
roundtable workshops with State and local officials, conservationists, 
and other interested Vermonters to talk over how to make the Corps 
processes more tangible for smaller cities and towns. I would like to 
take this opportunity to thank Brigadier General Bo Temple, Colonel 
John O'Dowd, Lieutenant Colonel Brian Green, Jan Rasgus, Joe Vietri, 
Bobby Byrne, Gene Brickman, and Paul Tumminello for making those 
workshops all outstanding successes.
    Mr. Woodley and General Flowers, as you both already know, you've 
got a great team there. One participant at the Barre workshop joins us 
here this afternoon. Bill Howland is the Executive Director of the Lake 
Champlain Basin Program, and he will speak about the Corps mission of 
ecosystem restoration.
    Ecosystem restoration is where Vermont's needs and the Corps' 
capabilities match best. The Basin Program is a best-case scenario for 
Corps participation, as I'm sure your testimony will tell us. Thanks, 
Bill, for making the trip down from Vermont.
    Another project in Vermont that has seen some real progress thanks 
to the hard work of the Corps is the Waterbury dam. Unfortunately, 
troubling budget cuts for the Corps threaten the steps forward made in 
the past few years.
    The civil works program of the Corps is critical; the President's 
proposed budget will put the Corps in critical condition. I am 
committed to working to keep the Corps at adequate national funding 
levels to deal with the needed projects that will enhance and improve 
our country's, and our communities', water resources.
    It's important to listen to everybody concerning program changes 
and the needs of the Corps, and I think we have very distinguished 
panels to testify before this Committee today.
    Thank you.

    Senator Bond. Thank you, Senator Jeffords.
    We have been joined by Senator Chafee.
    Senator Chafee. Thank you, Chairman Bond. I would just like 
to say to the General, congratulations on helping us with our 
Providence River dredging project. It is going along well. Mr. 
Chairman, I know I have a very positive experience with the 
Corps in my State, but I know in different regions of the 
country there are other issues.
    I look forward to the hearing.
    Senator Bond. Thank you very much, Senator Chafee.
    As I have told the witnesses, and I will tell my 
colleagues, because we have such a long list of witnesses, we 
have our witnesses to give us the highlights and edited version 
of their testimony. We will take the full testimony in the 
record.
    Our first panel is the Honorable John Paul Woodley, 
Assistant Secretary of the Army for Civil Works of the Army 
Corps of Engineers, and Lieutenant General Robert B. Flowers, 
Chief of Engineers, the Army Corps of Engineers.
    Mr. Woodley.

STATEMENT OF HON. JOHN PAUL WOODLEY, ASSISTANT SECRETARY OF THE 
 ARMY FOR CIVIL WORKS, ARMY CORPS OF ENGINEERS, WASHINGTON, DC

    Mr. Woodley. Thank you, Mr. Chairman. It is always a 
delight and a pleasure to be with you in this historic hearing 
room. I just wish that all the 25,000 incredibly dedicated 
professionals that work in the Civil Works Program of the Corps 
of Engineers could be here today to hear the words that the 
subcommittee has had for the efforts that they have.
    Senator Bond. Please convey them.
    Mr. Woodley. I do my poor best, Mr. Chairman, to undertake 
that.
    It is privilege once again for me to appear with my 
colleague, a great leader, a great engineer, and a great 
soldier, Lieutenant General Robert B. Flowers, the 50th Chief 
of the Army Corps of Engineers. He and I earlier this month, 
Mr. Chairman, provided our Civil Works Strategic Plan to the 
committees and subcommittees of Congress responsible for water 
development authorizations and appropriations, including this 
subcommittee.
    We recognize the plan is and probably always will be a work 
in progress. We are anxious to work with you and our colleague 
at the Office of Management and Budget, the other House, and 
other interested Americans across the country to establish our 
program goals, objectives, and performance measures, to provide 
a sound basis for setting our performance targets, and building 
future budgets.
    That is exactly the type of thing, Mr. Chairman, that we 
and the Corps of Engineers in the Civil Works Program look to 
the Water Resources Development Act to provide for us your 
direction on water resources development that will provide the 
content for that strategic plan, and the direction that the 
Nation wishes to take in this regard.
    We are looking forward to pursuing those projects that are 
fully justified and to improve the ways in which we implement 
and fund them. The Strategic Plan identifies some broad 
principles for our work going forward to evaluation using sound 
analytic methods, current data where necessary or where 
appropriate, and external peer review processes for our 
analysis and science.
    We want to see those projects that meet current economic 
and environmental standards and address contemporary needs.
    We have set out these principles, but I want to mention 
that peer review is certainly something that needs to be 
addressed in this context. We are very supportive of requiring 
an outside independent peer review, where appropriate, for 
Corps projects. This can be a very useful tool and would add 
significant credibility to our project analysis and in our 
decisionmaking process and ability to judge on the merits of a 
program.
    Looking forward, we are expecting very soon to seek our 
public comments on draft reports that are underway for two 
important studies during this calendar year. The one you 
mentioned, Mr. Chairman, the Upper Mississippi River/Illinois 
Waterway Navigation Study, as well as the Louisiana Coastal 
Area Ecosystem Restoration Study. Both of these are of critical 
importance to the Nation.
    We are working within our Administration and with 
interested parties in the Basin and in Louisiana and State 
parties as a project sponsor to completing these studies in a 
timely manner. Our goal for each of these, Mr. Chairman, is 
that our recommendations will be technically sound, 
environmentally responsibly, highly cost effective, and in the 
best overall interest of the Nation.
    Once again, thank you very much for the opportunity to 
appear. I would ask that my full statement be placed in the 
record in its entirety.
    Senator Bond. Without objection, so ordered.
    Thank you very much, Mr. Woodley. That sounds good.
    Now, as has been noted, this may be General Flowers last 
opportunity of testifying before Congress. I know it is with 
great sadness that he is leaving in June. His smile gives it 
away.
    [Laughter.]
    Senator Bond. But General Flowers, I would like to 
congratulate you on your heroic efforts to keep the Corps alive 
through a period that can only be called ``thin and thin.'' We 
welcome your testimony.

  STATEMENT OF LIEUTENANT GENERAL ROBERT B. FLOWERS, CHIEF OF 
       ENGINEERS, ARMY CORPS OF ENGINEERS, WASHINGTON, DC

    General Flowers. Mr. Chairman and distinguished members of 
the subcommittee, it is an honor to be testifying before you 
again, and along with the Secretary to testify on the role that 
the Corps of Engineers plays in meeting the Nation's water 
resources needs.
    The Corps has a long history of public service, from our 
beginnings in 1775 at Bunker Hill to our challenges in the 21st 
Century. The mission of the Corps has evolved from that of 
builder to the roles of developer/manager and protector of 
water resources. The Corps has always adapted to the changing 
needs of the Nation, and we will continue to do so.
    Our Civil Works Program has changed, along with society's 
changing needs, values, and priorities for good water 
management. For example, the Water Resources Development Act of 
1986 emphasized the national expectation that project partners 
be more involved in the formulation and financing of solutions 
to water resources problems. We responded to this direction and 
the Nation's needs.
    Today the greatest water challenge facing our Nation is 
managing our water resources in a fully integrated manner to 
sustain both our environment and our economy. The Corps is 
ready for this role.
    There are three areas in which the Corps is making changes. 
First, reducing the backlog. Frankly, we have too many projects 
on the books. Some do not address solutions in a contemporary 
way. We are considering projects for deauthorization. We have 
billions of dollars worth of inactive projects that technically 
remain on our books, whose designs will not solve the original 
problems or for which there is no longer support.
    Second, we have been working very hard internally to 
transform the Corps and improve business processes. We are 
making our processes more open and collaborative. We are 
becoming a team of teams within the organization, focusing on 
eight regional business centers which will move effectively and 
deliver service to the public and the Armed Forces.
    We have established the Corps environmental operating 
principles as a clear commitment to accomplishing our work in 
environmental sustainable ways, and with the express purpose of 
instilling these principles as individual values in all members 
of the Corps team. We are undertaking major investments in 
improving economic methods and tools for all of our planning 
activities, but in particular for navigation evaluations. We 
have allocated additional resources to strengthen our internal 
review capability. The Office of Water Project Review in 
headquarters effectively doubles the size of our Policy 
Compliance Review staff.
    Third, we have reaped immense benefits from the increased 
collaboration and partnership within the Federal Government and 
with non-Governmental organizations to move us toward a 
watershed approach. We have already established watershed 
principles and published watershed guidance for our field 
offices. Some recent watershed management efforts, such as the 
Comprehensive Everglades Restoration Plan, already promote 
active participation of all interested parties in planning and 
decisionmaking. A similar effort is taking place with the 
Louisiana Coastal Area Ecosystem Restoration Project.
    Quite frankly, we need to do more. We need Congress' help 
if we are to truly take a watershed approach.
    Transforming the Corps will not be easy, but we stand ready 
to work with all of you to address these issues. Water 
resources management infrastructure has improved the quality of 
our citizens' lives and supported the economic growth and 
development of this country.
    Our systems for navigation, flood and storm damage 
reduction projects, and efforts to restore aquatic ecosystems 
contribute to our national welfare. The stream of net benefits 
realized has reduced transportation costs, avoided flood and 
storm damages, and improvements in environmental value have 
been considerable.
     The Civil Works Program is a valuable asset in support of 
the National Security Strategy. It provides a trained and 
experienced work force with world-class expertise who respond 
quickly to our Nation's need in times of emergency and threat.
    The Corps of Engineer employees are supporting the global 
war on terror with a wide range of capabilities. Civil Works 
employees are architects, engineers, scientists, and other 
specialists, and are providing invaluable assistance in helping 
to restore and rebuild Iraq and Afghanistan's infrastructure.
    Throughout my career, I have been privileged to work with 
the outstanding men and women who make up the Army Corps of 
Engineers. I am making the changes necessary to ensure the 
continued integrity of the Corps Civil Works Program so that 
the Corps can continue to fulfill its role in addressing the 
many water resources needs of this great Nation.
    Thank you, Mr. Chairman and members of the subcommittee.
    I am prepared to answer your questions. I would ask that my 
full statement be placed in the record in its entirety.
    Senator Bond. Without objection, so ordered.
    Thank you very much, General Flowers.
    I am going to ask the staff to run the 4-minute time on me 
and all the other questioners. I have a couple of hours worth 
of questions. I will try to submit all but about 40 minutes of 
them for the record.
    Let me begin with Mr. Woodley. Given what we have heard on 
the overall process the Corps has followed, does the 
Administration have an official position on the Mississippi 
River/Illinois Waterway Project?
    Mr. Woodley. No, Mr. Chairman, except that we are in favor 
of proceeding and completing the analysis. It is the analysis 
that is underway that we will be using to formulate our 
position and will be using to inform our decisionmaking 
process.
    Senator Bond. I realize you are new to the scene, Mr. 
Woodley, but for over 10 years and $70 million, and with the 
NAS and USDA saying that we cannot make a forecast 50 years in 
advance, what are we getting for all the money we spent on this 
project, an answer that anyone can have confidence in, despite 
all the hard work and best intentions?
    Mr. Woodley. We certainly hope so, Mr. Chairman.
    Senator Bond. Well, Mr. Woodley, what do you think the 
price of corn will be, the price of rail, the price of water 
transport, Chinese demand for corn, Argentine corn production, 
the new corn-based industrial products that will emerge through 
biotechnology, the demand for ethanol, the demand for barge-
borne container shipping, and other factors given the 
international geopolitical and economic conditions in say, 
2030?
    [Laughter.]
    Senator Bond. All right.
    Mr. Woodley. I thought that was what we were going to get 
for our $70 million, Mr. Chairman.
    Senator Bond. You do not have it and you are not going to 
get it.
    [Laughter.]
    Senator Bond. I have a transcript of some testimony from 
the Secretary of Agriculture and Dr. Keith Collins, the Chief 
Economist that I will share with you in the record about 
agriculture exports, water transportation, and the reliability 
of forecasts beyond 10 years. Dr. Collins noted that 
transportation efficiency and the ability of farmers to win 
markets at higher prices are fundamental related, demonstrated 
by history. He said that he would expect corn exports over the 
next 10 years to rise about 45 percent with 70 percent of that 
growth through the Gulf.
    I asked him why he did not do a 50-year forecast, and he 
noted that doing it for 10 years is heroic enough. There are 
too many risk factors going on for us to go beyond a decade.
    End of story.
    General Flowers, is it true that first half of the last 
century, the first feasibility report for a navigation project 
on the Mississippi River said the current system was not 
justified before Congress told them to find a better answer?
    General Flowers. Yes, sir; that is absolutely true.
    Senator Bond. General Flowers, is it clear to you and the 
stakeholders that you consult that Congress was acting in the 
best interest of the region and the Nation by rejecting Major 
Hall's original finding that the navigation project on the 
Mississippi River was not feasible?
    General Flowers. Sir, it would appear that Major Hall had 
it wrong.
    Senator Bond. General, could you describe the overall 
process for the study and where you are in the process in terms 
of transparency? Can you give a rough estimate as to how many 
public meetings, public hearings, and other public events have 
been held to discuss the issues related to the Lock and 
Ecosystem Restoration Study?
    Mr. Woodley. Yes, sir. I would like to start by answering 
the last part first. Since the beginning of the study in 1993, 
there have been 35 meetings of the Governors Liaison Committee, 
28 meetings of the Economic Coordinating Committee, among the 
States along the Upper Mississippi and Illinois waterways, and 
we have had 44 meetings of the Navigation and Environmental 
Coordination Committee. There have been 130 briefings for 
special interest groups. We have distributed 24 newsletters. 
There have been six sets of public meetings to present in 46 
locations. We have had about 4,285 personnel attend those 
meetings.
    As you indicated, sir, this study has been going on since 
1993. We have amassed a huge amount of data and a body of 
knowledge that is useful. We have achieved that with the money 
that has been received. When we restarted the Upper Mississippi 
Navigation Study following the criticisms and the National 
Academy of Science report in 2001, we established to be a very 
open, collaborative process, and very inclusive.
    Recognizing, as you have noted, that we were moving from an 
area that we were comfortable with and analyzing our projects 
of micro-economics to one of macroeconomics and looking at 
something as big as the Upper Mississippi and Illinois Waterway 
system.
    So the decision was made in this very collaborative process 
to identify a range of alternatives, apply all of the knowledge 
that we had gained, all of the various economic models, and 
bring them into this process. We have done that.
    Our intent is to base our recommendations on all of this 
amassed knowledge.
    Senator Bond. Thank you very much, General.
    Following the tradition of this committee, we will go back 
and forth from the Majority to the Minority side. I see that we 
have been joined by the Senator from Florida, Senator Graham.
    Senator Graham. Thank you very much, Mr. Chairman.
    Mr. Chairman, I would ask that my opening statement be made 
part of the record.
    Senator Bond. Without objection, so ordered.
    [The prepared statement of Senator Graham follows:]

  Statement of Hon. Bob Graham, U.S. Senator from the State of Florida

    Mr. Chairman, thank you for calling this hearing today. It is very 
important that we take this opportunity, at the beginning of the 
process of organizing a WRDA bill for 2004, to establish some goals for 
what we want to achieve in this legislation.
    By way of example I propose that this subcommittee should focus on 
the following goals:
    goal 1 begin eliminating the operations and maintenance backlog
    The latest figures I have heard for the Corps' operations and 
maintenance backlog range from $33 billion to $48 billion. I understand 
that the Corps will testify today that the backlog has been reduced to 
about $11 billion, but that number is largely derived from the fiscal 
year 05 budget request cancellation of beach restoration projects 
nationwide.
    As a Senator from a coastal State, I can assure you that simply 
canceling these projects to give the appearance of a reduced backlog is 
not an acceptable answer.
    I would like to see real steps taken to deauthorize Corps projects 
that are no longer economically justifiable. I offer an ideal candidate 
project in my own State--the Apalachicola River in northwest Florida. 
Dredging of the Apalachicola is not only economically wasteful, it is 
damaging to the local economy and the environment.
    I want to thank Mr. Scott Faber, who will testify later in this 
hearing, for the excellent work he has done to help deauthorize the 
Apalachicola River project.
    We can continue to ignore the backlog of Corps projects and simply 
authorize and authorize as each WRDA bill comes along. Or we can take 
the fiscally responsible route and prioritize our nation's needs based 
on some kind of rational process of review.
           goal 2 bring some much needed reforms to the corps
    One of the most important elements lacking in the Corps' current 
structure is an independent review of Corps projects.
    This committee recognized the role for independent peer review when 
we authorized the Comprehensive Everglades Restoration Plan (CERP) in 
WRDA 2000. In fact, the Indian River Lagoon Project, the first CERP 
project for authorization this year, is being reviewed independently 
right now. I want to thank Secretary Woodley and General Flowers for 
their foresight in initiating this process. Independent review is 
invaluable if we are to choose projects that represent a responsible 
use of taxpayer money.
    I look forward to hearing the testimony from our witnesses.
    And, Mr. Chairman, I look forward to working with you to draft a 
WRDA bill that we can proudly bring before the full Senate. Mr. 
Chairman, I have some testimony from the city of Tarpon Springs in 
Florida regarding alternative water supply projects.
    I request that the City's testimony be included in the record. 
Thank you.

    Senator Graham. Mr. Chairman, I have a statement from the 
city manager of Tarpon Springs, FL, which I would like to have 
entered into the record.
    Senator Bond. Without objection, so ordered.
    [The referenced document follows on page 141.]
    Senator Graham. Thank you very much.
    I am sorry, Mr. Woodley, I did not get to hear your 
commentary, so I am going to address most of my questions to 
General Flowers.
    General Flowers, I was interested in the emphasis that you 
gave. I believe it was No. 1 in your list of priorities on 
maintenance. Could you evaluate the status of our inland 
waterway system? Where was it in 1990 and where is it today? 
Where do you project it will be 10 years from now?
    General Flowers. An indicator that I would use, and that I 
think had great credibility, is the report card that the 
American Society of Civil Engineers does every 2 years. The 
last one done was in 2003. In 2003, the American Society of 
Civil Engineers gave the inland waterways a D-plus grade.
    Senator Graham. That was in what year?
    General Flowers. 2003. They rate 16 areas of U.S. 
infrastructure, one of which is the inland waterway system.
    That grade, would it have been given about 10 years ago, 
probably would have been a C or a C-plus. Most of our inland 
waterway systems and our sets of locks and dams have reached or 
exceeded their design life. I have great concern that in 
another 10 years that something might not happen that would 
cause the system to fail.
    Senator Graham. At the current level of funding, what do 
you think the grade is likely to be in the year 2010?
    General Flowers. Sir, we will probably be failing by the 
year 2010 at where we are now, sir. Each year our backlog of 
critical maintenance for our inland waterway system grows. We 
are currently at over $1 billion in critical maintenance 
backlog for our inland waterway system.
    Senator Graham. What are some of the consequences of this 
declining maintenance of our inland waterway system?
    General Flowers. Sir, we have had outages on the inland 
waterway system, gates that fail, concrete that is badly 
falling and in some cases exposing the reinforcing steel, 
causing great concern. Because it is a system, if you have a 
breakdown at a critical code on the system, it can shut down 
the system. Today we move well over 2 billion tons of commerce 
on our inland waterway system.
    Senator Graham. Has it resulted in either increased cost or 
greater interruption of service to users and end-users?
    General Flowers. Yes, sir; it has. I would have to take 
that for the record and indicate to you the magnitude of that.
    But I can tell you it has.
    Senator Graham. Thank you.
    Senator Bond. Without objection, so ordered.
    Senator Graham. Organizationally, how much responsibility 
for dealing with this maintenance backlog is at the district 
level, and how much of it is at the headquarters level?
    General Flowers. Sir, we have made an attempt, because of 
the amount of funds that we have been given, to use them as 
wisely as we can. We have all of our districts articulate the 
needs within the area that they are responsible for. We are 
organized on watersheds.
    We then bring all that forward through our regions, and 
then try to take a business line approach as to how we would 
prioritize and what we would fund in order to try to get the 
best and be the best stewards we could of the money that we 
have been given.
    The data is put together at the local level. It is then 
regionalized. We make strategic decisions collaboratively with 
our districts, our regional business centers, our divisions, 
and Washington.
    Senator Graham. You mentioned, as another one of your 
priorities, that there are more projects to which you have been 
given responsibility than there are dollars to pay for them.
    Senator Bond. Senator Graham, somebody sat on the timer.
    I think you may be getting close to it.
    Senator Graham. We have a second round.
    Senator Bond. I am concerned. This one panel is very 
important, but I am concerned about the number of witnesses we 
have.
    Senator Graham. Well, then I am going to go to a Florida 
issue which relates to what we have been talking about.
    One of the most inefficient inland waterway systems in 
terms of costs of maintenance by ton weight or dollar value of 
product ship, and in terms of the cost of economic damage to 
the area through which it runs is the Apalachicola River in the 
panhandle of Florida. Would that be the kind of river that you 
might consider recommending for deauthorization in order to 
free up some money that could be used on higher priority inland 
waterway projects in the Mobile Office district?
    General Flowers. Sir, it will compete in the manner that I 
described earlier. If it were low use, then it probably would 
not be a candidate for deauthorization, if we are talking about 
operation and maintenance funds, but it might not receive any 
money to be maintained.
    Senator Graham. If the President fails to recommend 
operation and maintenance funding for an active project, is 
that tantamount to an Administration statement that they think 
it should be deauthorized?
    Mr. Woodley. I do not believe we would send you a signal in 
such veiled terms, Senator. If we asked to have something 
deauthorized, then that would be an explicit recommendation.
    Senator Graham. One last question, Mr. Chairman.
    What are we to assume if the Administration, and 
particularly if it is a repetitive non-recommendation of 
operation maintenance funds for an active project? Does that 
not seem to say that the Administration believes the project 
may not be either economically or environmentally or otherwise 
sustainable?
    General Flowers. It would seem that I would say really 
nothing more than given the other priorities, that priority was 
not able to be met. We have and we are prepared to offer up 
suggestions for deauthorization, as I indicated in my opening 
statement. We have several. I do not recall off the top of my 
head if that is one of them.
    Senator Graham. Thank you. Thank you, Mr. Chairman.
    Senator Bond. Thank you very much Senator Graham.
    We will now turn back to Senator Cornyn. Senator Clinton 
has come in. We will then go to Senator Chafee and Senator 
Allard after that. We will try to see if we can get the timer 
working.
    Senator Cornyn. Thank you, Mr. Chairman.
    Secretary Woodley and General Flowers, we have a saying in 
my State that perhaps is not just limited to Texas and that is 
that whiskey is for drinking, but water is for fighting.
    Certainly there are very few issues that are more important 
in my State, to our economy and to the quality of life, and to 
our environment than water issues. But I note that just from 
your testimony here today and other background information, 
obviously that the number of demands on the Civil Works mission 
of the Army Corps of Engineers dwarfs any commitment that we 
have been able to make so far to fund or perhaps to prioritize 
that work.
    But General Flowers, I want to ask you specifically about 
the watershed approach to projects. As I understand from your 
testimony, you believe that perhaps there is a better approach 
than is currently allowable under the single focus, 
geographically limited projects focus under which the Corps 
currently works that would allow for what you call the 
watershed approach. It would allow you to look at water needs 
more comprehensively in a way that eliminates inner basin 
disputes, among other things.
    Would you please expand a little bit more upon what the 
current impediments are and what the Corps needs in order to 
deal with this in a better, more sensible fashion?
    General Flowers. Yes, sir. As a consequence of WRDA 1986, 
with its emphasis on cost sharing, et cetera, we have become a 
project-focused agency where we tend to look at a project in 
isolation and determine whether or not this particular project 
is economically justified.
    I believe the engineering and the science is good enough 
today for us to go back to our roots, which was a more 
comprehensive look at water resources that would allow, I 
believe, the decisionmakers to make more informed decisions on 
commitment of resources as we move forward.
    I think we are looking for some strategic direction from 
the Congress. We, the Corps of Engineers, are looking for some 
strategic direction from the Congress on how we should move to 
the future.
    Senator Cornyn. Well, it is my hope certainly that we can 
provide that guidance through this reauthorization and 
otherwise. Just in the short time that I have, let me also 
followup on a comment that you made, I believe, in response to 
the Chairman's question about the Mississippi River. You 
referred to large volumes of data that the Corps has generated.
    I am just wondering. Is the data that the Corps generates 
and accumulates, is that generally available to local and State 
government, or are there things that we need to look at that 
would perhaps allow for greater sharing of that information 
that would, in turn, facilitate the overall mission of 
improving water resource projects in our States and across the 
Nation?
    General Flowers. Sir, I think we do need some additional 
authority to permit us to share and to provide technical 
information and data that we have to State and local 
governments. I think that would be something very worthwhile.
    The old paradigm was always if the Federal Government was 
involved, we had to be paramount and there had to be a Federal 
interest before we could be involved with something.
    I think the day is probably coming where it is smart if a 
Federal Agency has information that will aid the State or local 
government, and can be value added for them to do their job of 
providing better governance, that we ought to be able to do 
that without having to take over.
    Senator Cornyn. Thank you. Mr. Chairman, my time has 
expired for now. Thank you.
    Senator Bond. Thank you very much, Senator Cornyn. I will 
go out of order on this side, Senator Clinton, if you do not 
mind, since we have been joined by the ranking member of the 
subcommittee who has a few other jobs trying to help run the 
floor which is always interesting.
    Senator Reid, thank you very much for being with us.
    Senator Reid. Thank you, Mr. Chairman.
    Senator Clinton, I will be very, very brief. I simply want 
to be a voice crying in the wilderness. I think that you do a 
great job for the Corps. We have given you very few tools to 
work with in recent years. I repeat, you have done much with a 
little bit. It is a shame that we do not give you more.
    Thank you, Mr. Chairman.
    General Flowers. Thank you, sir.
    Senator Bond. Amen.
    I will go to Senator Clinton.
    Senator Clinton. Thank you, Mr. Chairman.
    I happen to agree with that comment by my friend and 
colleague. I think that the Corps does a tremendous amount of 
good, and particularly in my State of New York we see many 
examples of that. I am looking forward to the next panel when 
we will have a New York witness, the Suffolk County Executive, 
Steve Levy. We have some specific issues about shoreline 
protection and beach erosion that are very important to us.
    I would ask, Mr. Chairman, that my entire opening statement 
be placed in the record.
    Senator Bond. Without objection, so ordered.
    [The prepared statement of Senator Clinton follows:]

        Statement of Hon. Hillary Rodham Clinton, U.S. Senator 
                       from the State of New York

    Thank you, Mr. Chairman. I am pleased to be here today to talk 
about the Water Resources Development Act. I am particularly pleased 
that we have a New York witness, Suffolk County Commissioner Steve 
Levy. I look forward to his testimony and the testimony of all of our 
witnesses.
    In my brief opening remarks, I want to touch on several points. 
First, I want to talk about some of the important work that the Corps 
is doing in my State of New York. Second, I want to talk about some 
policy changes that the Administration has included in the fiscal year 
2005 budget. And finally, I want to talk about some of the things that 
I hope we can address as we put together the WRDA bill in the EPW 
committee this spring.
    Just 2 days ago, I was on Long Island, where I had the opportunity 
to learn first-hand about important work that the Corps of Engineers is 
doing with a range of Federal, State, and local partners. The purpose 
of the Corps' study there--which is known as the Fire Island to Montauk 
Point Reformulation Plan--is to develop a comprehensive, long-term plan 
to protect areas that are prone to flooding, erosion and other storm 
damage. This plan would replace the numerous ad-hoc measures that have 
been used to protect individual areas with a comprehensive management 
approach that considers the entire coastal system.
    Unbelievably, the Administration zeroed this project out in their 
fiscal year 2005 budget, even though this long-running study is just a 
few years from completion. I know that Steve Levy will have more to say 
about that project, but it is one example of vital work that the Corps 
of Engineers is doing in New York.
    The Corps is also doing critical work at the Port of New York and 
New Jersey. The Port of New York and New Jersey is the largest port 
complex on the East Coast of North America, and is a major economic 
engine and trade hub for the region and the country. In 2002, the Port 
of New York/New Jersey handled 21.6 million tons of general cargo, and 
accounted for 60 percent of the containerized cargo handled by all 
North Atlantic ports, and about 14 percent of containerized cargo 
handled by all U.S. ports. Because of the increasing number of ever-
larger ships in international shipping, the Port is currently working 
with the Corps and State agencies to deepen and widen several channels 
in the Port. These improvements are critical to the competitiveness our 
economy, which is increasingly trade dependent.
    Mr. Chairman, there are many other projects that the Corps is 
working on in New York--literally from Buffalo to the tip of Long 
Island. And I look forward to working with the Chairmen and Ranking 
Members of the full committee and the Transportation and Infrastructure 
committees as we move forward with WRDA so that we can enhance some of 
the ongoing projects and lay the groundwork for others.
    I also hope that in context of the WRDA bill, we can address 
several important policy issues. First, I want to register my strong 
opposition to the policy reversal contained in the President's fiscal 
year 2005 budget with respect to beach renourishment. This was 
reflected in the budget, and communicated to States and localities in 
New York and other coastal States in a February 2 letter from Assistant 
Secretary Woodley.
    That letter informed States and communities that: ``the 
Administration has determined that Federal participation beyond the 
initial renourishment phase no longer can be supported in the budget.'' 
This decision not only breaks commitments made by the Federal 
Government to States and communities in Project Cooperation Agreements 
that have already been executed; it also flies in the face of policy 
established by Congress in the 1996 WRDA bill.
    Unfortunately, this is part of a larger agenda that the 
Administration has to starve beach renourishment projects. The fiscal 
year 2005 budget cuts $121 million from fiscal year 2004 levels for 
beach projects, and I am going to be working with my colleagues here, 
as well as Tim Bishop and others in the House to restore some of these 
cuts.
    Finally, I want to briefly touch on several other issues that I 
think we need to look at in WRDA. I strongly believe that the Corps 
does outstanding work throughout New York, and I know that this work is 
valued by my constituents. At the same time, there have been several 
reports over the last several years that have shaken public confidence 
in the way that the Corps analyzes its projects, and in the way that 
the Corps mitigates ecological damage caused by its projects.
    I have had some experience with this myself in dealing with what is 
known as the Great Lakes Navigation Study, a Corps of Engineers study 
that is in its initial phases. This study contemplates what I believe 
to be an ecologically damaging proposal to deepen and widen shipping 
channels in the St. Lawrence Seaway for what are questionable economic 
benefits. I have worked to put an end to this study, but if the study 
must go forward, it has to be done in a credible manner. And I think 
that the public deserves to expect credible analyses when it comes to 
large Corps projects. So I think we need to look at those issues as we 
go forward.
    Thank you.

    Senator Clinton. I want to emphasize two of the projects 
that are of particular concern to New York. First, the question 
has been raised about the ongoing work for the Fire Island to 
Montauk Point shoreline reformulation plan. It is troubling 
that the President's fiscal year 2005 budget reverses policy 
with respect to beach renourishment.
    In a February 2d letter, Secretary Woodley, you informed 
local communities and coastal States like New York of this 
reversal of policies, that you had determined that Federal 
participation beyond the initial renourishment phase no longer 
can supported in the budget. Now, this reversal breaks faith 
with decades of understanding on the part of States and 
communities made by the Federal Government and embodied in 
project cooperation agreements that have already been executed.
    It does fly in the face of policy established by Congress 
in the 1996 WRDA bill. It particularly impacts on the southern 
shore of Long Island, the Fire Island to Montauk project which 
has been exhaustively studied now for 20 years.
    We have spent about $30 million in State, local, and 
Federal money. We are less than 2 years away from actually 
finishing this incredibly complex study so that then 
communities could determine their priorities.
    The amount of money that would be required to finish this 
study, after all these years, is relatively minuscule compared 
to the Corps' budget and to the overall budget that we are 
looking at. I would strongly urge that you work with us to try 
to figure out a way. It is one thing not to start new projects 
or to tell communities that if we start this project you are 
not going to get the Federal share for renourishment.
    But to take a project that has been going on for 20 years, 
which has literally brought everybody together after lots of 
conflict to look at the environmental and economic impacts, I 
think is a waste of taxpayer dollars because we are right at 
the brink of actually doing what is not only a tremendous job 
for this section of our coastline, but which will have 
implications for the rest of our coastline around the country. 
There are many lessons that can be learned from that.
    I would like to work with you, Mr. Secretary, to try to 
find a way to just push this over the goal line. We are 
literally at the one-yard line. We have gone so far down the 
field together. Could we work together?
    Mr. Woodley. Absolutely, Senator. I would be delighted to 
look into that and work with you on it.
    Senator Clinton. Thank you, sir.
    Second, there is another project. I heard you mention as I 
came in that you have suggestions for deauthorization. I want 
to give you one so you can add it. As I try to find, with your 
cooperation, help to finish the shoreline project, I think that 
we should end the very beginning efforts with respect to the 
Corps Great Lakes Navigation Study. There is a considerable and 
growing body of opinion that if it were to lead to any action 
in the St. Lawrence River, it would cause severe environmental 
and associated economic problems.
    I would really urge that you take a hard look at this.
    There will be a very long road to go down before any 
conclusions were drawn. There will be just every opposition one 
can imagine to going forward. But to the extent that the study 
continues, I want to ensure that the Corps conducts it in a way 
that fully addresses all of the issues. Public involvement is 
critical. It is my understanding that a reconnaissance study 
was released in February 2003 with a commitment from the Corps 
to conduct a supplemental study that will look in detail at the 
current navigation system before you move to a full feasibility 
study.
    It has been more than a year since that memorandum of 
agreement was signed with respect to the supplemental study, 
but there has been no public information about the scope or 
plan for the study. I think that we should have a commitment 
for some public hearings.
    General, I would ask that you make a commitment to having a 
public hearing to look at this study in New York at your 
earliest possible convenience.
    Mr. Woodley. Yes, sir.
    Senator Clinton. Thank you. Thank you, Mr. Chairman.
    Senator Bond. Thank you very much, Senator Clinton.
    I will now turn to Senator Chafee.
    Senator Chafee. Thank you, Mr. Chairman.
    Where are we on independent review of large-scale projects? 
How is the Corps looking at that?
    General Flowers. Sir, we have testified that we would 
welcome independent review. We have requested funds to do an 
independent review, and to do a look-back at our previous 
projects. I think an independent review is a worthy subject to 
be put into a WRDA bill, were one to be done that would, again, 
provide some strategic direction to the Corps and set our left 
and right limits as we move forward. We welcome that.
    Senator Chafee. How much did you budget for that? Did you 
say you budgeted for that?
    General Flowers. I think we requested $500,000; yes, sir.
    Senator Chafee. Is there language in the House bill that 
you support?
    General Flowers. I believe we are not to comment on pending 
legislation. I do not recall off the top of my head the 
language that was in the bill, sir, so I would have to take 
that one for the record, I guess.
    Senator Chafee. Thank you.
    Senator Bond. Without objection, so ordered.
    General Flowers. But we are in favor of independent review. 
I think there is a dollar value at which it should be done. The 
only thing that we have testified to is that we would recommend 
that there would be concurrent review so that it does not add 
additional time onto an already very lengthy process.
    Senator Chafee. Thank you, General. That is all I have.
    Thank you, Mr. Chairman.
    Senator Bond. Thank you, Senator Chafee. That will help us 
with the time.
    Senator Jeffords.
    Senator Jeffords. Thank you, Mr. Chairman.
    Good afternoon. I would like to talk about the Waterbury 
Dam, Mr. Woodley. The Waterbury Dam is one of three dams 
designed and constructed by the Corps in the 1930's. It was 
built in response to a 1927 flood in which 55 people lost their 
lives, and damages were up to $13.5 million in those days. They 
were included in the Winuski River Basin.
    I remember it only because my parents were alive at that 
time. This roared down through the State and took out towns and 
everything else. The dam was rebuilt mainly as a flood 
prevention program. Now we are concerned as to the health of 
that dam and what the plan is. It was built in response to that 
flood.
    Since 1985 there has been concern about the stability of 
the dam. The Army Corps is stabilizing it, and it is nearing 
completion. In fact, today the New York District is announcing 
the restart of construction work on the dam. Now that spring is 
approaching Vermont.
    I ask unanimous consent to include the letter of March 24th 
from the New York District describing the project.
    Senator Bond. Without objection, so ordered.
    [The referenced document follows:]
    [GRAPHIC] [TIFF OMITTED] T4601.004
    
    [GRAPHIC] [TIFF OMITTED] T4601.005
    
    [GRAPHIC] [TIFF OMITTED] T4601.006
    
    Senator Jeffords. The total project cost is about $21 
million. We have appropriated $18 million to date. Yet, the 
President's fiscal year 2005 budget proposes to cancel the 
Waterbury Dam project and to move the money that Congress 
specifically appropriated to that project to others.
    Can you explain to me why the Administration apparently 
believes that protecting the lives of 10,000 Vermonters and 
preventing almost $300 million in flood damage is not a 
valuable project?
    Mr. Woodley.
    Mr. Woodley. Yes, sir. Senator, I think that we would have 
to say that that is a valuable project and that it is work that 
needs to be undertaken and should be undertaken.
    The budgetary recommendation reflects a concern about 
whether that project is appropriately placed within the mission 
of the Corps of Engineers institutionally, and nothing more 
than that. It is not a conclusion as to the beneficial and, 
indeed, essential nature of the project.
    Senator Jeffords. Well, from my own knowledge of that 
particular situation, I would say that probably the amount of 
water that is behind that dam now is probably well in excess of 
what it was in the days of that flood. There has been progress 
made, but it seems to always come to a halt and does not go 
anywhere. I am deeply concerned about it.
    I think the Corps built the dam. How can it be outside the 
mission of the Corps who constructed it?
    Mr. Woodley. That is a very good question. Your question is 
a very, very good question, Senator.
    [Laughter.]
    Senator Jeffords. What does it mean? It mystifies me.
    I hope you will come back with an answer.
    Mr. Woodley. Yes, sir.
    Senator Bond. Without objection, so ordered.
    Senator Jeffords. You have said that there are many needs 
for the Corps. Yet, the Administration has not proposed the 
Water Resources bill since taking office. Is the Administration 
going to support a WRDA bill this year?
    Mr. Woodley. Senator, I think that the Administration, as 
of right now, has no position on whether to support or not.
    Whatever the bill----
    Senator Jeffords. Well, that means right now they are not 
supporting it; right?
    Mr. Woodley. We have a position on a House bill that 
indicated that we had considerable concerns with the bill, but 
we would be anxious to work with the House to go forward on 
legislation. But as of today, we are not supporting a bill.
    Senator Jeffords. That is bad news.
    My time is up. All right. Thank you, Mr. Chairman.
    Senator Bond. Sorry, Senator; we are going to submit all 
these questions for the record.
    I think you had a good questions for the record. I would 
like to welcome you to the Repair-70-Year-Old-Facilities Club.
    We will make you a charter member of that. I like historic 
relics, but not when they are major waterways projects.
    Senator Allard.
    Senator Allard. Thank you, Mr. Chairman. Thank you for 
allowing me to participate in this hearing.
    I would like to make my full statement a part of the 
record.
    Senator Bond. Without objection, so ordered.
    [The prepared statement of Senator Allard follows:]

             Statement of Hon. Wayne Allard, U.S. Senator 
                       from the State of Colorado

    Thank you, Mr. Chairman. I appreciate that you have allowed me to 
participate in today's hearing. While I am not a member of the 
Transportation and Infrastructure Subcommittee, the content of this 
afternoon's hearing is of great interest to me. I am especially 
interested to learn more about water supply infrastructure and the roll 
of the Corps of Engineers in providing such projects to communities who 
are struggling to build adequate water systems. As the Committee moves 
forward with the Water Resources Development Act of 2004, I look 
forward to working with you and my colleagues on the Committee.
    The mission of the Corps is, in part, to provide quality, 
responsive engineering services to the Nation. Such services include 
planning, designing, building and operating water resources and other 
civil works projects and providing design and construction management 
support for other Federal agencies. I find this mission compelling, 
especially given the historical needs of the arid West, whose cities 
are desperate to find safe, clean and abundant sources of water. In 
Colorado, Corps projects have provided both opportunity and promise, as 
well as sound environmental stewardship in some of the most sensitive 
ecosystems in the country.
    As you are aware, I have been recently working with the Corps of 
Engineers on a project known as the Arkansas Valley Conduit, which is a 
pipeline that will provide the small, financially strapped towns and 
water agencies along the lower Arkansas River in Colorado with safe, 
clean, affordable water.
    Projects like the conduit are familiar to the Corps, which first 
got involved in water supply in the 1850's, when it built the aqueduct 
that still serves Washington, DC, and some of its suburbs in Northern 
Virginia. Today, it continues to operate the aqueduct and the two water 
purification plants it feeds; the water then flows into local systems. 
Cities and industries across the Nation tap into Corps reservoirs to 
meet municipal and industrial water supply needs; and today the Corps' 
reservoirs supply water to nearly 10 million people in 115 cities. In 
the drier parts of the Nation, water from Corps reservoirs is also used 
for agriculture.
    The Arkansas Valley Conduit, which was first authorized by Congress 
in 1962, will deliver fresh, clean water to dozens of valley 
communities and thousands of people along the river. To be exact, the 
Conduit will supply 16 cities and 25 water agencies in Bent, Crowley, 
Kiowa, Prowers, Pueblo and Otero counties, with water when completed. 
In short, the Conduit will serve a geographic area slightly larger than 
the State of New Hampshire with desperately needed clean water.
    I believe the Corps is an organization committed to its mission. It 
is extremely important that the Water Resources Development Act move 
forward with expediency and that the members of this committee, through 
the WRDA authorization, will continue to allow the Corps an opportunity 
to buildupon its legacy of constructing critical components of our 
national water infrastructure and water supply systems.
    There are several other projects that I look forward to working on 
with the Committee and the Corps. I have submitted these projects to 
the Committee and look forward to discussing them with you all in the 
near future. But for now, I hope my colleagues as well as the Army 
Corps of Engineers will leave this committee hearing today with a keen 
understanding of the importance that the Corps' water supply legacy, a 
legacy dating to the 1850's, will mean to me as the bill moves forward.
    Thank you, Mr. Chairman.

    Senator Allard. I would like to address this to the panel.
    As you are aware, I have recently been working with the 
Corps of Engineers on a project known as the Arkansas Valley 
Conduit which is a pipeline that will provide the small, 
financially strapped towns and water agencies along the lower 
Arkansas River in Colorado with safe, clean, and affordable 
water.
    Projects like the conduit are familiar to the Corps which 
first got involved in water supply in the 1850's when it built 
the aqueduct that still serves Washington, DC and some of its 
suburbs in Northern Virginia. This aqueduct is going to provide 
water supply for some 16 cities, some 25 water agencies, and an 
area that is a little bit larger than the State of New 
Hampshire.
    The question is: The Arkansas Valley conduit, which is a 
pipeline that would deliver safe and clean affordable water to 
the citizens of Southeastern Colorado, would you care to share 
with me some other examples of water supply projects that the 
Corps is working on that may be similar to the conduit, and 
that are either authorized or currently under construction?
    General Flowers. One moment, sir.
    Senator Allard. Maybe or just one or two. It does not have 
to be a complete list, and then after the hearing you can 
supply the complete list to the committee and to our office.
    We would appreciate that.
    General Flowers. We would be happy to do that.
    We have projects, sir, that we have done with water supply 
as key components in Southeastern Kentucky, and West Virginia. 
I would submit a longer list for the record.
    Senator Allard. I would appreciate that very much. I think 
that is a good start. Thank you.
    Senator Bond. Without objection, so ordered.
    Senator Allard. The second question is this. It is my 
understanding that the Corps has authority in several States, 
including the State of New Mexico, to assist with the design 
and construction of publicly owned water-related infrastructure 
and resource development and protection projects. The 
assistance is for such projects as waste water treatment and 
related facility water supply, conservation and related 
facilities, storm water retention and remediation, 
environmental restoration, and surface water resources 
protection development.
    Would you mind explaining a little more about this program 
and the successes you have had with it?
    General Flowers. Sir, we have, from time-to-time, been 
given authority by the Congress to do projects in conjunction 
with local municipalities and counties. One that I had an 
opportunity to visit not too long ago was in Charleston, SC, 
where we have done work directed by Congress with the city 
there on out-falls on water works, et cetera.
    Again, I would submit a longer list of where we have done 
this for the record, sir.
    Senator Allard. Good. I will submit all these questions to 
you for a little more detailed question. If you would provide 
that to the committee and to our office, we would appreciate 
that. Thank you.
    General Flowers. Yes, sir.
    Senator Bond. Without objection, so ordered.
    Senator Allard. I appreciate all your work at the Army 
Corps of Engineers, and would second Senator Reid's comments.
    I am interested to learn more about the working 
relationship between the Corps of Engineers and the Bureau of 
Reclamation. Would you please cite examples of projects where 
the Bureau and the Corps have worked together and how the 
relationship has been structured so that management of the 
Bureau and Corps projects are coordinated?
    General Flowers. Sir, we have established agreements and 
partnerships with every Federal Agency that deals in the water 
area. We have made it a major point of emphasis for my time as 
Chief of Engineers to sign memorandums and partnership 
agreements with other agencies.
    The Bureau, having a very similar mission to the Corps of 
Engineers, is a very valued partner. We have worked very 
closely with the Bureau on the American River in California.
    I think that probably would be the best example. There are 
dams there that have been constructed by the Corps of Engineers 
and that are now operated by the Bureau of Reclamation.
    Senator Allard. Thank you for your response.
    Mr. Chairman, I see my time has expired. Thank you.
    Senator Bond. Thank you very much, Senator Allard.
    Now we turn to Senator Wyden.
    Senator Wyden. Thank you, Mr. Chairman.
    I also note that General Strock is out in the audience.
    We have appreciated the help that you have given us in the 
Pacific Northwest. You have been very gracious and understand 
our issues. I look forward to your position as the new chief of 
engineers.
    If I could, General Flowers, we are concerned as you 
probably know in the Pacific Northwest about the remote 
operation of the dams. I was curious if you were familiar with 
the experiment of eliminating skilled operators at the Flat 
Iron facility in Colorado. Have you followed that?
    General Flowers. Sir, I am not aware of that one.
    Senator Wyden. Well, there was a pretty serious explosion 
there in December 1995. The news report said,

     ``The force of the explosion lifted 10,000 pound 
hatches.''

    It was a pretty forceful explosion. I guess what we are 
concerned about, both during the recent East Coast blackout and 
the recent Flat Iron plant situation, it seems to us that we 
ought to be maintaining as many people onsite as we possibly 
can with training in order to deal with these kinds of safety 
issues. Would you agree?
    General Flowers. Sir, I do.
    Senator Wyden. Well, given that, why is the Corps pushing 
forward with proposals to have remote operation? I just asked 
you about the Colorado situation. I broadened it out to address 
what is going on in the East Coast of the United States. But it 
seems to me that in the Colorado and the East Coast situations, 
there is a parallel. Yet, in spite of the concern, to your 
credit, you have said, ``It is serious, it looks like we going 
ahead with remote operation.''
    Are you willing to take another look at that and try to 
make sure that we do not go forward in the Northwest with a 
proposal that I think that has been risky both for the East 
Coast of the United States and for what happened in Colorado?
    General Flowers. Yes, sir; we will take a very hard and 
thorough look at that. I share your concern with having an 
unmanned facility and for the safety of the public.
    Senator Wyden. I appreciate that because I think the 
combination of those three situations really warrants that you 
all take a fresh look at it.
    General Flowers. Sure.
    Senator Wyden. The only other thing I would like to do, Mr. 
Chairman, is this. There has been great concern at one of our 
communities, Columbia Gorge Community College, with respect to 
the training of individuals who would be running the power 
grid. They have had some excellent programs there and would 
like to be part of an effort to work with you all in the 
future.
    Chairman Bond, given the shortness of time, I would just 
like to submit for the record a number of questions that deal 
with education and training as it relates to a number of our 
community colleges that would like to work with the Corps.
    With your unanimous consent, I would like to pose those in 
writing. That would be very helpful.
    Senator Bond. Senator Wyden, we will have opportunities to 
ask questions. I would not want our witnesses to feel that they 
are being slighted. So we will have questions.
    Senator Wyden. Very good.
    Senator Bond. We would ask all the witnesses, if they 
could, within a week to try to respond to the questions. We 
thank you for submitting them.
    Without objection, so ordered.
    Senator Bond. We are hearing some unfortunate news about 
the highway bill in the House. That is why we are trying to 
find out what is happening.
    Senator Wyden. Good luck on that one, too.
    [Laughter.]
    Senator Bond. All I know right now is that it does not look 
good. That is the bad news.
    Senator Graham.
    Senator Graham. While the panel is still within earshot, I 
would like to add to the several people who have spoken 
positively about your work. I am particularly impressed with 
what is happening in the Everglades. It is a mammoth and 
extremely complex project and it is being handled with the 
highest level of professionalism. I congratulate you on that.
    Finally, and this may relate to your comment about the 
highway bill, we have just heard from the General that in 1990, 
our inland waterway was a C. Today it is a D. And by the year 
2010, he projects it will be an F. You could give the same 
grades to almost every area of America's infrastructure. We 
have passed success transportation bills which, if nothing 
else, have guaranteed that the transportation system will get 
worse in America.
    We have to get serious about this infrastructure. We talk 
about all kinds of deficits--budget deficits, trade deficits. 
We have a horrendous infrastructure deficit. This committee has 
a front row seat in responsibility to do something. I hope that 
we will start with this.
    Senator Bond. I appreciate your comments, Senator Graham. 
That is what we intend to do, because this is a tremendous 
need.
    I would join in the very kind words that you have said 
about General Flowers. We have appreciated very much his great 
leadership. We wish him well.
    Mr. Woodley, thank you very much for your testimony.
    There will be additional questions coming for the record.
    Without objection, so ordered.
    Now we have a very interesting panel. We would like to call 
up the Honorable John T. Myers, a former colleague, who will be 
testifying on behalf of the National Waterways Conference.
    We have Derrick Crandall, president of the American 
Recreation Coalition; Mr. Steve Levy, county executive of 
Suffolk County, NY; Michael Leone, chairman of the American 
Association of Port Authorities; William G. Howland, basin 
program manager, Lake Champlain Basin Program; and Michael 
Cameron, Desert Rivers program director of the Nature 
Conservancy of Nevada.
    There will also be testimony included in the record of Mr. 
George Grugett, executive vice president of the Mississippi 
Valley Flood Association.
    Without objection, so ordered.
    We will ask our witnesses to take their seats. As I 
indicated, your full statements will be made a part of the 
record. We ask that in order to get all of this testimony and 
the questions in this afternoon, if you will try to keep your 
oral presentations to 4 minutes, it would be very helpful. Then 
we can get into a round of questions.
    With that, I will call first on Congressman Myers.

  STATEMENT OF HON. JOHN T. MYERS, ON BEHALF OF THE NATIONAL 
             WATERWAYS CONFERENCE, PUNTA GORDA, FL

    Mr. Myers. Thank you very much, Mr. Chairman, and members 
of the committee. Coming here in this position is a little bit 
different. I spent hundreds of hours on that side of the dais 
and coming now a few times on this side, I know just how we are 
pushing for time here and how often that happened.
    But you know, just sitting here, I was thinking. History 
has a way of repeating itself. How many times I have heard this 
story about how we have never had enough money, or it was not 
the right time to do what needed to be done. How many times, 
both Democrat and Republican Administrations I have served 
with, there was never was enough money allocated by the budget 
process to adequately fund the Corps of Engineers and the job 
they had to do. Their hands were tied.
    I thought of the O&M, the Operation and Maintenance, and 
maintenance particularly. I have gone back and reviewed some of 
the projects that we undertook in this year and how we 
neglected not spending the amount of money on maintenance that 
we should have spent. It is like being pound foolish and dollar 
wise. We just did not have enough votes to get the job done.
    I know you are going to hear this same thing. I am glad to 
hear that you are going to get WRDA out, hopefully by Memorial 
Day. I hope you are right. I certainly know it is needed. I was 
encouraged also about the Upper Mississippi. I farm in Indiana 
and I spend my winters in Florida. I have the best of two 
worlds.
    Senator Graham. We have a wise man before us.
    Mr. Myers. I have the best of two worlds. But nevertheless, 
I am a farmer in Indiana also. If you can get the corn prices 
up in the Upper Mississippi, why it is going to help all of 
farmers and help our country in balance of trade and all these 
things.
    Senator Bond. Corn beans, Florida rotation. CBF.
    Mr. Myers. That is true. I remember in 1986 the WRDA bill 
that year, we opened up what the called the use tax, a 20 cents 
fuel tax be put into a trust fund to help get enough money to 
do the job that we just did not have enough tax money to spend. 
Jim, you remember, you were there. I voted for it.
    I caught a lot of thunder from the water users that it was 
a use tax and they could not afford it. The railroads did not 
have to pay it. It helped for a long time, several years. Now 
we have run into that same obstacle once again.
    We do not have enough tax dollars. What concerned us that 
last week when my friends back in the House on the 
Appropriations Committee, they have the right idea, balancing 
the budget. I could not disagree with that.
    But at whose expense? That is what I want to urge upon you. 
It takes courage, I know, because the media is going to come 
back and say, ``Well you are building locks and dams for rich 
people that run their ships up and down. They are luxury 
liners. They are going to tell you that their boondoggles are 
going to be pork barrels for your State or for your 
congressional district.''
    I always ran into that problem. So it takes courage to do 
the job that you are going to have to do. It is going to take 
courage. But we are on the right track. The Corps has done a 
great job on a limited amount of funds. But they deserve the 
best. You can give them guidance.
    One other thing. I have highlighted in my statement three 
or four things I think are most important. Everything is 
important, I think. One of the criteria is that I think we need 
to clarify the definition of what is a distinct group of 
animals or plants. The species is distinct. What is it? I think 
you should ask that the National Academy of Sciences should put 
out a ruling: What is the distinct definition of a species?
    I remember one time in Tennessee years ago we had a 
waterway project. It was held up for 2 years because of a 
particular snail darter. Nobody knew what a snail darter was.
    Do you remember that, Jim? We went through that. We held up 
that project for over 2 years.
    I recall visiting the Supreme Court when the proponents 
brought in five vials of a snail darter. It was a little dinky 
fish like that. But what happened is that they brought those 
five vials in and the opponents of the snail darter brought 
their expert in, a professorial type from a university. They 
asked him to define which one of those five specimens was a 
snail darter. The expert picked the wrong one. So I think you 
have to certainly help alleviate the problem by asking the 
National Academy of Sciences to do something about that, and to 
define what a species is.
    I appreciate the opportunity to come back and visit with 
you. You are doing a great job. I hope you are right. I would 
ask that my full statement be placed in the record in its 
entirety.
    Senator Bond. Without objection, so ordered.
    Senator Bond. Thank you very much, Congressman Myers.
    Mr. Crandall.

 STATEMENT OF DERRICK CRANDALL, PRESIDENT, AMERICAN RECREATION 
                   COALITION, WASHINGTON, DC

    Mr. Crandall. Thank you, Mr. Chairman, and distinguished 
members. I am delighted to appear here today on behalf of the 
recreation interests in this country and to underscore the 
importance that the Corps plays as a tremendous provider of 
recreation. In fact, it is the No. 1 provider of recreation 
among all Federal Agencies. As you may know from the results of 
a national study on recreational lakes, there are 1,800 man-
made federally managed lakes providing some 900 million 
recreation visits every year, and directly accounting for $44 
billion worth of activity.
    What I would like to do today is talk just a bit about the 
difficulties that the Corps faces in doing what has been a 
wonderful job in providing recreation. I would also emphasize 
that we are beginning to recognize the true value of 
recreation, not just from an economic standpoint, but also from 
a standpoint of our physical health.
    We recognize that today some two-thirds of all Americans 
fail to get the Surgeon General's recommended level of physical 
activity. The Corps' lands and waters are a marvelous 
opportunity to engage in recreation at natural health and 
fitness centers. We certainly encourage continued use of these 
areas.
    The National Recreation Lakes study commission identified 
the fact that the Corps had a billion dollar backlog in the 
recreation facilities that now exist at Corps projects. These 
are projects that were largely built back in the 1950's and 
1960's. Frankly, they are simply worn out. They need new 
capital investment. They need expansion because the population 
of the United States has increased dramatically since that 
time.
    We come here today saying that that investment needs to be 
made to provide continued quality recreation experiences, but 
it does not have to come through huge increases in Federal 
expenditures. In fact, through a combination of use of programs 
that this panel has, in fact, created, things like the Wallop 
Road Trust Fund, and Scenic Byways, the Recreational Trails 
Program, and more, and the investments that the States can make 
on Corps projects through fees and through partnerships. We 
have a wonderful opportunity to continue the tradition of 
outstanding recreation opportunities on public lands and public 
waters.
    My testimony goes into some depth about the opportunities 
to look at some of the new and innovative partnerships that 
could be undertaken. One thing that is absolutely certain, the 
Fee Demonstration Authority that now exists for the retention 
of fees in national parks and national forests of the Bureau of 
Land Management and the Fish and Wildlife Service needs to be 
provided to the Corps of Engineers. It makes no sense to 
collect fees at Corps campgrounds and at boat ramps, and not 
allow those fees to be retained and used to operate those 
facilities.
    But there is more that needs to be done. We have outlined a 
series of innovative steps that could be undertaken in 
partnership with State and local governments and the private 
sector that would involve potentially billions of dollars of 
investments in sorely needed recreation facilities.
    We believe that those kinds of investments will ensure that 
the Corps continues to be a large and important provider of 
recreation.
    I would end by simply underscoring the promise of an 
experience of Chicago in the mid-1990's. The Chicago lake front 
had become a serious financial challenge to the city.
    Demand for boat slip rentals was extremely high, as was 
other lake shore activities, but lake shore activities became a 
$2 million drain on the city's park and recreation department.
    However, through turning over the lake shore operations to 
a seasoned management company, skilled in operating marinas, 
the city and this company developed a reinvestment strategy. 
Fifty-two million dollars was invested. As a result, in less 
than 4 years, a complete turnaround had been made. That lake 
shore is now generating $11 million in positive cash-flow, 
which even after enhanced operations along the lake shore, 
provides $6 million in annual subsidies for the city to use for 
a variety of recreational programs, including a marvelous 
sailing program for handicapped youth.
    Thank you very much. I would ask that my full statement be 
placed in the record in its entirety.
    Senator Bond. Without objection, so ordered.
    Thank you, Mr. Crandall. That certainly is an interesting 
example.
    Senator Clinton. Mr. Chairman?
    Senator Bond. Yes?
    Senator Clinton. Mr. Chairman, if I might, I would just 
take the opportunity to introduce Executive Levy to you. He has 
been elected to serve as the Suffolk County Executive. He took 
office in January and has a tremendous record of public service 
and a deep interest in these issues. I appreciate the 
committee's invitation to have him here today.
    Senator Bond. Thank you very much for the introduction, 
Senator Clinton.
    Mr. Levy.

  STATEMENT OF STEVE LEVY, COUNTY EXECUTIVE, SUFFOLK COUNTY, 
                         HAUPPAUGE, NY

    Mr. Levy. Thank you, Chairman Bond and Senator Clinton for 
the kind invitation. I am the county executive of Suffolk 
County on Long Island in New York, with a population of 1.4 
million. It is the largest suburban county within the State.
    As the county executive, I am dealing with issues ranging 
from police departments, to community colleges to budget 
deficits, to ethics reform.
    But this issue, shore line protection, will have a more 
profound impact on future generations than all of those other 
issues combined. Our shore line defines Long Island. It is what 
makes Long Island, Long Island. We are at a critical crossroads 
right now. Decisions are going to be made within the next 2 
years which will have historic implications.
    My children and grandchildren 50 or 100 years from now are 
going to look back at this year, 2004, as being either the year 
where the Federal Government continued its commitment to 
preserving the beaches that they hopefully will enjoy, or they 
will look back at 2004 as being the year that the Federal 
Government reversed its commitment and allowed those beaches to 
simply disintegrate.
    I am here to say that in the past we have always been able 
to count on the Federal Government as we look into the future, 
as the Senator had stated. But we are looking here at a seismic 
shift in Federal policy.
    Just a couple of days ago, Senator Clinton and I were in a 
helicopter along the South Shore of Long Island. When you look 
down, you see the strip of Long Island which runs parallel to 
the mainland of Long Island. You see the rough shores of the 
Atlantic Ocean pounding on Fire Island.
    In between Fire Island and the main land you see this great 
body of water called the Great South Bay. You see how calm it 
is. Because it is so calm and you have this barrier reef, it is 
allowed for us to develop a tremendous shellfishing industry 
which would be gone without this replenishment. It has allowed 
us to have recreational boating for millions of people within 
the metropolitan area. And most importantly, it has allowed us 
to have a flourishing tourist industry. The biggest part of our 
economy on Long Island is our tourist industry. It will be 
wiped out if we do not have this further commitment to shore 
line preservation.
    As Senator Clinton said, we have come far. We have spent 
$30 million on this project already. We just need about $2 
million this year and maybe $2 million next year to complete 
the project. It is like running a 26-mile marathon and stopping 
after the 25th mile. We need to proceed.
    With this study we will be able to look at things such as 
protecting our beaches, preventing flooding of our homes in the 
area, protecting natural habitats, providing for greater public 
access, building up our dunes, and creating greater 
navigational safety for our boats.
    I want to say one final thing because it is not just a 
matter of having the study. It is what you do with the study 
thereafter. We need the money to proceed to make sure we are 
moving forward with the preservation of our shore line.
    Within this budget, we would be cut to the point where 
right now we put in about nine or 10 percent of the total 
share.
    Hereafter we in the local level would have to put up to 30 
percent of the total share of beach restoration and all the 
other moneys that go into this overall project. It is not 
sustainable. We cannot do it. We would be wiped out. That is 
why we are here for your help.
    I have never come so far to speak for just 4 minutes, but 
it could be the most important 4 minutes of my tenure as the 
county executive. We ask for your help. We thank you for your 
consideration. I would ask that my full statement be placed in 
the record in its entirety.
    Senator Bond. Without objection, so ordered.
    Thank you very much, Mr. Levy. We think the 4-minute limit 
is a driver of eloquence.
    [Laughter.]
    Mr. Leone.

 STATEMENT OF MICHAEL LEONE, CHAIRMAN, AMERICAN ASSOCIATION OF 
                PORT AUTHORITIES, ALEXANDRIA, VA

    Mr. Leone. Mr. Chairman, and distinguished members of the 
committee, I am Mike Leone. I am the chairman of the American 
Association of Port Authorities and a port director of the 
Massachusetts Port Authority. I am testifying today on behalf 
of AAPA's 82 public port members.
    This Nation has been served well by regular authorizations 
of the Water Resources Development Act. There is a critical 
need for Congress to return this legislation to its biennial 
cycle.
    With WRDA 2004, this committee can significantly refocus 
water resources policy in this Nation. As this committee is 
well aware, deep draft ports move more than 95 percent of U.S. 
overseas trade by volume. On average, each State relies on 
between 13 to 15 ports to handle 95 percent of its imports and 
exports.
    Public ports also play a critical role in the mobilization, 
deployment, and resupply of U.S. military forces. Public ports 
provide 13 million direct and indirect jobs and port users 
contribute approximately $200 billion in Federal, State, and 
local taxes. Of this amount, $16 billion is generated directly 
in U.S. Customs duty revenues on imported goods.
    Public port authorities make substantial investments in the 
Nation's port and harbor infrastructure. Next year alone, port 
authorities will invest $2.2 billion, nearly twice as much as 
they did in 1995. This rate of increase closely matches the 
growth rate for containers moving through our ports, which is 
doubling every 10 years, as illustrated in this chart we have.
    Ocean carriers are responding to this increased demand in 
trade by building larger vessels. These vessels require deeper 
navigation channels, which can only be achieved through 
significant contributions from both Federal and local project 
sponsors.
    However, funding for the Corps Civil Works Program has 
decreased by 50 percent in the last 30 years. The Corps primary 
responsibility must be to keep the Nation's navigation channels 
open and navigable. AAPA urges the committee to ensure that the 
Corps' navigation mission receives your highest priority in 
this year's WRDA.
    Construction and maintenance needs of the Nation's 
navigation system are simply not being met. As shown on the 
chart, spending on navigation is barely higher than 10 years 
ago. AAPA estimates that deep-draft projects needs 
approximately $500 million for construction and $735 million 
for operations and maintenance in fiscal years 2005.
    The Harbor Maintenance Tax is dedicated toward funding the 
Federal share of operation and maintenance costs. Yet, the 
Administration's fiscal year 2005 budget proposal estimates 
that the surplus in the Harbor Maintenance Tax Trust Fund will 
grow to more than $2.6 million, while providing only $600 
million in O&M funding. If this surplus continues at its 
current pace, it will likely reach $5 billion by the end of the 
decade, as illustrated in the chart.
    On behalf of AAPA, I urge this committee to authorize 
guaranteed funding of the trust fund, ensuring that funds 
collected are spent for their intended purposes similar to the 
Highway Trust Fund. AAPA believes sponsors are providing a 
greater share of the cost of navigation channel deepening than 
Congress expected when it mandated cost sharing in 1986.
    AAPA urges the committee to consider seven proposals to 
modernize the Corps, improve its relationship with local 
project sponsors, and more efficiently manage the Nation's 
water resources. These proposals are laid out in my submitted 
testimony.
    AAPA is working to improve our industry's partnership with 
the Federal Government. Specifically, AAPA has recently 
launched a quality partner initiative with the Corps and at 
AAPA's recent conference, I signed a memorandum of 
understanding with Secretary Woodley to improve these efforts.
    In conclusion, Mr. Chairman, AAPA looks forward to working 
with the committee to modernize the Corps of Engineers, and 
address funding shortfalls for the development and maintenance 
of the deep-draft navigation system. The benefits will be 
increased trade, meaningful economic impact on communities all 
across the country, and more jobs for hard-working Americans. 
AAPA appreciates your leadership on behalf of the U.S. port 
community.
    Thank you. I would ask that my full statement be placed in 
the record in its entirety.
    Senator Bond. Without objection, so ordered.
    Thank you very much, Mr. Leone.
    Senator Jeffords, you had already mentioned our next 
witness. Did you want to say anything else with respect to Dr. 
Howland?
    Senator Jeffords. No.
    Senator Bond. All right. Then I will let his previous 
comments and my brief introduction stand.
    Dr. William Howland.

   STATEMENT OF WILLIAM HOWLAND, BASIN PROGRAM MANAGER, LAKE 
            CHAMPLAIN BASIN PROGRAM, GRAND ISLE, VT

    Mr. Howland. Thank you, Chairman Bond, and distinguished 
members of the committee. Thank you for inviting me here to 
testify about the important role of the Army Corps of Engineers 
in managing our Nation's water systems.
    Our Lake Champlain Basin Program is an international 
partnership to restore water quality and to improve the economy 
of the Lake Champlain Basin. Our partnership involves the 
States of New York and Vermont, the Province of Quebec, and 
numerous Federal Agencies, including the Environmental 
Protection Agency, the Department of Agriculture, the 
Department of the Interior, and the Army Corps of Engineers, 
and public stakeholder groups.
    Cleaning up pollution in a lake is exceedingly difficult 
and expensive. It always includes interrupting the flow of 
pollutants into the drainage system to prevent further 
contamination. Pollution prevention requires changing the way 
that things work in the landscape that drains into the lake.
    Lake Champlain, as in the Great Lakes and other parts of 
the Nation, ecosystem restoration efforts often require 
advanced engineering design, expertise, and leadership that 
communities and States simply cannot provide.
    The competence and the engineering expertise of the Army 
Corps is a vital resource for planning, designing, and 
executing restoration plans. In the Lake Champlain watershed, 
with the Corps' support, an infestation of water chestnut, 
which is an invasive aquatic plant that has dominated the 
entire southern part of the Lake for years, is now nearly under 
control. This summer we expect to begin work on projects to 
intercept storm water runoff into Lake George in New York, part 
of the Lake Champlain ecosystem, and also to stabilize eroding 
stream banks in the watershed in Vermont.
    The role of the Army Corps' Environmental Restoration 
Authority is a vital nationwide asset, getting projects done 
and done professionally, dam removable projects, wetlands 
restoration, fish passages, and stream bank stabilization to 
restore degraded ecosystems. They strengthen our Nation's 
economy and they ensure that we will be providing clean 
drinking water to our citizens.
    One of the greatest restoration projects in the history of 
the Nation is underway in the Everglades and South Florida with 
Army Corps leadership. From Texas to Mississippi in the 
Louisiana Coastal Area Ecosystem, wetlands are disappearing at 
the rate of 22,000 acres per year. The Army Corps is a partner 
with the State of Louisiana on a study that will enable us to 
better understand this problem and how to mitigate and minimize 
the losses.
    There are similar case histories and projects, large and 
small, across America, and accolades from the communities in 
which the Corps is working. America today faces unprecedented 
challenges of ecosystem damages and a decline in groundwater 
quality, weed infested waterways, and polluted lakes and 
estuaries. These problems have compromised drinking water 
supplies for millions of Americans, caused desperate struggles 
for survival in the tourism and recreation industries, and they 
have created an alarming trend toward more and greater problems 
in the near future.
    The Corps of Engineers is a vital part of our service.
    It works in our homeland to bring the best tools in the 
Nation to guide the problem solving that we need.
    Mr. Chairman and members of the committee, I would like to 
direct your attention particularly to the challenge we face 
regarding the Corps Continuing Authorities Programs and 
Sections 206 and 1135. The existing program limits of $25 
million each have simply not kept pace with the current needs 
that we have and that are now a fraction of what America needs 
them to be. In the Lake Champlain watershed this means that 
several ongoing projects are going to be suspended due to this 
national shortfall.
    Suspending projects mid-steam as we have just heard in 
other testimony is never a good bargain. It does not save money 
and it is does not avoid expense.
    Finally, the work of the Army Corps of Engineers on 
environmental restoration is not only about conservation 
philosophy. It is not about environmental ethics only. It is 
also about our Nation's economic engines. As we know so well in 
the Northeast, it is about the vitality of the tourism economy 
and the quality of life that keeps recreation businesses in 
business. It is about trucks on the highway, and the pulse of 
commerce in trade. It is about reducing bankruptcies and 
maintaining jobs. It is about the smell of the tap water in the 
cities and the towns across the Nation.
    I hope the members of the committee will continue to 
recognize, to appreciate, and to support the vital role of the 
U.S. Army Corps of Engineers in service to the American 
homeland, and in particular will fully support their 
environmental restoration programs.
    I thank you for the opportunity to testify today. I would 
ask that my full statement be placed in the record in its 
entirety.
    Senator Bond. Without objection, so ordered.
    Thank you very much, Dr. Howland.
    Now we will hear from Michael Cameron.

 STATEMENT OF MICHAEL CAMERON, DESERT RIVERS PROGRAM DIRECTOR, 
           THE NATURE CONSERVANCY OF NEVADA, RENO, NV

    Mr. Cameron. Thank you, Mr. Chairman, and members of the 
subcommittee. Thank you for the opportunity to testify today.
    I am Michael Cameron, the Desert Rivers program director 
for the Nature Conservancy of Nevada.
    I am here today to make several recommendations regarding 
the Ecosystem Restoration Provisions of WRDA. The Nature 
Conservancy works to preserve the plants and animals that 
represent the diversity of life on earth.
    Because more than half of all species depend on fresh water 
environments, the Conservancy has formed a partnership with the 
Corps on major river systems across the country.
    Based on our experience with the Corps, I am here to offer 
three primary recommendations: First, for reasons that have 
already been detailed having to do with the great need for WRDA 
across the country, the Conservancy urges Congress to enact 
WRDA this year.
    Second, we urge Congress to raise the funding ceiling for 
the Corps' Continuing Authorities Program, Sections 1135 and 
206, Ecosystems Restoration Programs, from $25 million per year 
to $100 million, and individual project ceilings from $5 
million to $10 million. The CAP programs are delivering cutting 
edge projects, but financial demand nationally currently 
exceeds authorized levels by a ratio of two-to-one.
    Third, allow credit for early implementation of ecosystem 
restoration features. The Corps currently has authority to 
credit non-Federal sponsors for early implementation of flood 
walls, levys, or other features that reduce flood damages. It 
is an anomaly that similar crediting is not allowed for 
ecosystem restoration. Credit for early implementation will 
result in better projects, delivered more quickly, and at a 
lower cost to taxpayers.
    Fourth, eliminate the unlimited financial liability that 
non-Federal sponsors assume under the CAP program when the 
Corps decides unilaterally to continue a project that is over-
budget and has exceeded the Federal funding limit of $5 
million.
    I will briefly describe two Corps projects on the Truckee 
River in Nevada that support these recommendations. The Truckee 
River flow is 110 miles from Lake Tahoe to its terminus in 
Pyramid Lake in the high desert.
    In the 1960's, the Truckee, like scores of rivers in the 
West, was straightened, walled, and channelized for flood 
control. One major unintended consequence was the loss of 75 
percent of the River's biological richness, as measured by lost 
species, forest canopy, and water quality. More recently, in 
1997, a 100-year flood caused an estimated $600 million in 
damages to the local economies of the cities of Reno and 
Sparks.
    Two Corps projects are now responding to the local 
communities' needs for both ecosystem restoration and flood 
control. The Truckee Meadows flood control project enjoys broad 
local support for an excellent project. The major local 
concern, however, is the length of time it is taking to reach 
implementation.
    River restoration is likely to be called for in the final 
project and for reasons specific to the project, restoration 
will likely need to be implemented before any other project 
features. The local sponsors, the cities of Reno and Sparks in 
Washoe County have both the land and the funding to begin 
restoration today, but are inhibited by the lack of a mechanism 
for crediting the work. Were credit allowed, project 
implementation could be expedited by as much as 2 years, and 
perhaps more.
    The McCarran Ranch, a 1135 project, will restore 5 miles of 
river downstream of Reno and Sparks. In addition to 
dramatically improving riparian and wetland habitat, and aiding 
the recovery of species like the Lahontan cutthroat trout, the 
McCarran Ranch 1135 project is serving as a model for the 
restoration strategies proposed under the Truckee Meadows Flood 
Control Project.
    With an earmark from Congress in fiscal year 2004, the 
McCarran Ranch 1135 project had been on track to begin 
construction this year. Unfortunately, the financial needs of 
all of the Corps 1135 projects nationally so far exceeds 
available funds that the Corps has stopped work on virtually 
all of their 1135 projects, including McCarran Ranch.
    The overall excellence of the CAP program is rendered 
meaningless when a lack of sufficient funds causes whole 
projects to start and stop repeatedly. The $25 million limit on 
these programs is less than 1 percent of the Corps' annual 
budget, and should be raised to $100 million annually.
    In sum, the Conservancy recommends enactment of WRDA this 
year, raise the funding ceilings for CAP programs and projects, 
and allow credit for early implementation of ecosystem 
restoration.
    Thank you very much. I would ask that my full statement be 
placed in the record in its entirety.
    Senator Bond. Without objection, so ordered.
    Thank you very much, Mr. Cameron.
    My thanks to all of you. We will begin the questioning now.
    Mr. Crandall, Missouri is very fortunate to have Corps 
recreation lakes which are extremely important and which I have 
enjoyed using. You talked about some cooperative partnerships.
    Do you think that recreation users would be willing to pay 
more user fees if the user fees were specifically dedicated to 
go to the site where the fee is applied? Would this help meet 
the challenges, or are you citing the Chicago example to 
suggest that more public/private partnerships would generate 
resources?
    Mr. Crandall. Mr. Chairman, there is certainly room for 
both. There is no question but that boaters and angles and 
other recreationists already pay fees in many, many cases.
    Certainly I am very familiar with some of the partnerships 
that exist in your State on Table Rock Lake and others that are 
marvelous examples of that.
    We have not fully capitalized on these partnerships. One 
comment in my testimony talks about the ability to capitalize 
on an existing authority, something that the Department of 
Defense knows a lot about, called NAFI, Non-Appropriated 
Funding Instrumentalities, and applying that same concept used 
on bases to operations of Corps of Engineers facilities for 
recreational purposes.
    We believe that with some encouragement by the Congress, 
more creativity and innovation can be seen out there on the 
grassroots level and will have a dramatic and beneficial 
impact. There is no doubt that Americans are not looking for 
free or cheap recreation. They are looking for good quality 
recreation. So as long as we retain that focus on providing 
memorable, valuable experiences, I think Americans are willing 
to pay more in fees. Recreation is a $400 billion a year 
industry as you look at what Americans spend right now out of 
their checkbooks and their pocketbooks. We certainly do not 
believe there is an aversion to reasonable fees.
    Senator Bond. Thank you very much.
    Congressman Myers, I gather what your view would be to say 
that rather than waiting around while the Corps tries to 
predict the future, that Congress should step up to its role to 
shape the future and to make this Nation effective, 
competitive, and prosperous, such as previous years have been 
in trying to shape the infrastructure.
    I will ask you a rhetorical question. Is it the proper role 
of Government to encourage competition in providing our 
producers with multiple shipping options, including water? Or 
can our country do just fine with highway and rail?
    Mr. Myers. That is an easy question; is it not?
    Senator Bond. Do not swing too hard. I do not want you to 
hurt yourself.
    [Laughter.]
    Mr. Myers. Which one do you want me to answer first? I 
think that we are very fortunate with the transportation system 
that we have in this country. Back in the first Congress, 
Congress asked Alexander Hamilton to develop a policy, a plan 
for the country, a fledgling country here. How could we be 
competitive in world markets? How are we going to do it?
    His suggestion, No. 1, was transportation. We had to 
develop a transportation system, not one or the other; all of 
them. Our transportation system, I think, is the best in the 
world. Now, Europe has a very good water system, and has a 
pretty good rail system. But our air system, our navigation, 
our waterways, is growing every year. The bad news is that we 
are wearing it out. It has been worn out. I think that we 
cannot say one or the other. We need all three of them. That 
keeps competition, too.
    The Tennessee Valley Authority tells us that barging on the 
Tennessee Rivers saves $10.67 a ton.
    Senator Bond. They save Missouri farmers on the Missouri 
River $200 million a year in shipping costs.
    Mr. Myers. Missouri needs some attention, too. A few years 
ago I remember flying in, with all the mud and stuff up on the 
fields. The Missouri and the Illinois River running into the 
upper reaches of the Mississippi River, a vital part of getting 
grain out of the Midwest.
    Here again, we are having trouble meeting the balance of 
trade around the world. Agriculture can do a great job, a great 
job in helping meet that need to balance the trade. We have to 
get it to the ports, or we cannot sell it.
    Senator Bond. Your full statement will be in the record and 
we will put ribbons on them.
    Senator Jeffords.
    Senator Jeffords. Thank you, Mr. Chairman.
    Again, I want to welcome Bill Howland here from the Lake 
Champlain Basin area.
    The Lake Champlain Basin Program in Vermont where you work 
has led to the cleanup of hundreds of acres of habitat for 
wildlife and recreation for Vermont and New York. In your 
statement you describe the type of history that the Corps has 
with the State of Vermont, the partnership that just now 
developed and why the Ecosystem Restoration Authorities are the 
essential component of that partnership.
    Mr. Howland. I think, Senator, in past years the Army Corps 
was known in Vermont, as in many States, for large projects, 
big dams, grand programs, which were necessary for flood 
control. They were implemented.
    I think the change is that the Corps has a mandate now to 
be far more responsive to the immediate needs of a State, 
Vermont and other States as well. The programs that we see now 
are responsive to some of the problems that were actually 
caused by some of the earlier Corps activities and by the 
nature of development over many years.
    So instead of large projects, the Corps now is focusing on 
small grants programs with communities, supporting aquatic 
nuisance species control in waterways as in Lake Champlain.
    New York and Vermont benefit from that. Under Section 542, 
the Corps is developing with the Lake Champlain Basin Program, 
a means to implement funding for ecosystem restoration that 
will really draw on the existing programs of community 
involvement and State involvement that already have been put 
together by the Basin Program.
    We find a great deal more responsiveness to our immediate 
needs by the Corps. That is a shift in the pattern of Corps 
activities.
    Senator Jeffords. Are these Continuing Authorities Program 
particularly important for small and rural communities?
    Mr. Howland. I believe that they are, Senator. In fact, 
they are vital. The kinds of programs that are being supported 
are ones that would simply not otherwise happen. Many of the 
communities in Vermont and also in upstate New York, which will 
be eligible for these Corps expenditures under Section 542, 
these programs will be played out in communities that 
themselves have relatively few people, but they are part of a 
watershed that is troubled.
    Where the watershed has been compromised where stream bank 
restoration programs are needed, et cetera, these communities 
largely say that they land rich and dirt poor.
    There is no way that a community can cope with the expenses 
that they face in cleaning up the watershed or stabilizing the 
rivers, or controlling the pollutions, the phosphorus or 
nitrogen that flows in to those rivers without assistance from 
the corps.
    Senator Jeffords. There are those who argue that the 
ecosystem restoration should not even be a part of the Corps 
mission. Can you comment on that with particular focus on what 
you hear from the localities in Vermont?
    Mr. Howland. Well, Senator, I believe that the Corps of 
Engineers represents the best tools and the best expertise that 
we have in the Nation for handling problems associated with our 
waterways and our drainage systems. I hope that we can continue 
to bring those tools to the communities and to the tasks that 
need them so much. So I believe it is an appropriate part of 
the Corps mission.
    Ecosystem restoration is always an essential investment in 
our future. We live in a time where the price of gasoline is 
$1.70. The price of a bottle of drinking water downstairs is 
about twice that. If you think about that, we all need that 
water. Our children depend upon it. I think this is a good 
place for the Corps to invest its energy and for the Federal 
Government to show the leadership that we need.
    Senator Jeffords. I see my time is up. May I ask one more 
question?
    Senator Bond. Certainly. We will give you a Mulligan.
    Senator Jeffords. I will switch to Mr. Cameron, if that is 
all right.
    Mr. Cameron, one area that I am particularly interested in 
is water quality and the degree to which urban storm water 
runoff plays a role in altering habitat and harming ecosystems. 
Can you speak a little about your experience in Nevada in 
dealing with some of the harmful effects of storm water runoff?
    Mr. Cameron. Well, it is critical issue in our community. 
Reno/Sparks is a community of 350,000 people, much of it 
developed in the flood plain right along the river. We are in 
an arid region of the country, so we do not have a lot of flow 
by Eastern standards. The runoff that does come off the 
hardened surfaces has a great impact on the Truckee River.
    To the extent that the local governments, the Cities of 
Reno and Sparks in Washoe County have developed a multi-agency 
effort and a regional storm water quality management plan. It 
has been vigorously pursued and is being implemented and is 
seen as one of the top priorities for watershed protection for 
our river system in Nevada.
    Senator Jeffords. Thank you.
    Thank you, Mr. Chairman.
    Senator Bond. Thank you very much, Senator Jeffords.
    Senator Clinton.
    Senator Clinton. Thank you, Mr. Chairman. I want to thank 
all of the witnesses. Each of you has really contributed to the 
discussion about how we move on these important issues. I share 
your concern about the water of our Nation in every respect 
because of the implications that we could very well face all 
kinds of pressures on our water systems that are even greater 
than what we currently see today. We are falling behind in what 
we are trying to do. We can fall even further behind with the 
pressures of tomorrow.
    But I wanted to ask Executive Levy a question. If the 
President's budget proposal is adopted, and the Fire Island to 
Montauk Point Reformulation Study is not funded, what do you 
think the negative impacts would be on Suffolk County?
    Alternatively, if the study goes forward, what could be the 
positive impacts?
    Mr. Levy. Thank you for the question, Senator. The 
consequences can be dire in many ways. There is life at stake 
here as well. There have been instances where recreational 
boaters and fishermen have lost their lives trying to navigate 
the very rough inlets because we are not taking proper care 
through dredging and other important mitigating measures.
    Of course, we mentioned a little earlier about our tourist 
industry. Just to give you an idea of how expensive this is, it 
is estimated that we derive revenue anywhere from $175 million 
to $250 million a year from tourism, a large component of which 
is our beautiful beaches.
    Anytime you see that is put together of the world's best 
beaches, not just the Nation's, but the world's beaches, you 
have the Riviera, you have Honolulu, and you always have a 
beach from Long Island on that list. That is not going to be in 
the future if this plan does not progress.
    We have 160,000 boats on the Long Island shore. We have 
over 150,000 homes that are impacted, that can be flooded if we 
do not take an overall action plan. So this is not a program 
here that is designed to put some sand on a beach to protect 
some rich person's home. This is a plan that has a holistic 
effect on 1.5 million. Their lives are on the line.
    Our economy is on the line. This really is a crossroads in 
history. We need this program to progress.
    Senator Clinton. I know when we were in that helicopter 
together, and we were looking down at the very rough waters of 
the Atlantic there, and then you could see where erosion had 
eaten away at these barrier islands to the point where some of 
them were not much wider at certain points than from here 
across the way to the other side of this dais.
    It was shocking to see it from the air. It is one thing to 
walk the beach, enjoy the water, and go boating, but you see 
how over time this has really been impacted. I have to applaud 
the Corps because they have taken this to such a serious 
extent. They have looked at everything. It is hard to know 
exactly what to do. Some of the decisions that were made back 
in the 1960's, it turns out were bad decisions because they did 
not have the extent of the scientific knowledge that we do 
today.
    I just want to underscore your assessment about what could 
happen should this study not continue.
    Mr. Levy. And if I could just say, when we were up in that 
helicopter and we looked down, not only did we see how 
beautiful the island was, but how vulnerable it was as well, 
and how thin it was. If we do not take proper precautions, it 
could be wiped out in a nanosecond. But we can protect it very 
easily if we just maintain our commitment.
    Senator Clinton. Of course, then you would wash over into 
the Great South Bay. You would wash up under the mainland and 
it could have far-reaching economic effects in terms of 
disaster costs.
    Mr. Chairman, I was talking with a friend of mine about 
having taken this helicopter trip. This is someone from another 
part of the country. I talked about the beaches on Long Island, 
particularly along Fire Island where we were. He looked at me 
quizzically and he said, ``I did not know there were beaches in 
New York.''
    [Laughter.]
    Senator Clinton. So if nothing today, I think we have that 
very clear that we not only have beautiful beaches, but 
endangered beaches that we are trying to make sure could be 
preserved for future generations.
    Thank you, Mr. Chairman.
    Senator Bond. Thank you, Senator Clinton. I have enjoyed 
the beaches on Long Island, so I am aware of them.
    Senator Jeffords. Mr. Chairman?
    Senator Bond. Do you have another question? I was going to 
be generous, because I was going to slip one in myself.
    [Laughter.]
    Senator Jeffords. I would like to submit a question for the 
record.
    Senator Bond. Without objection, so ordered.
    Is there anything else you want to submit, Senator Clinton.
    Senator Clinton. We may very well, Mr. Chairman.
    Senator Bond. Without objection, so ordered.
    There is one point I forgot to raise with Congressman 
Myers. In your testimony you referred to the European model 
where they are actually encouraging freight movements to water 
and off the highways. You also emphasized container shipping 
with barges which might be the wave of the future.
    Can you give us just a little bit of an idea of how that 
would work and what you see are the prospects there?
    Mr. Myers. Great prospects for this in the future. I am 
surprised it is not used more. We put these containers on 
trucks, haul them to a port some place. We even put them on 
airplanes today, these big containers. I do not know why it is 
not used more. But we have several. I think there is one on the 
Tennessee-Tombigbee. I believe there is a little bit out there. 
I am trying to think where else I have seen it in my years.
    Containers are an excellent way. Water is the cheapest way 
in dollars. It is the cleanest environmentally. It does not go 
through any large cities in polluting the system. Then there is 
safety.
    I live just about 3 miles from Interstate 75. About a month 
ago a tank truck blew up on a highway on Interstate 75, about 3 
miles from where I live. A cement bridge was destroyed. Now, 
last week, a cement bridge in Connecticut was destroyed. I 
think I read that there was some place here on Interstate 95 
again, today a wreck. The safety of the water transportation, 
if nothing else, is there.
    But the cost is the biggest thing, both environmentally as 
well as dollars to the shipper. I just do not know why we have 
not done a very good job. Again, I am going to plead to each of 
you if you would present to a service club back home--Kiwanis, 
Rotary, Lions Club, the Chamber of Commerce--the American 
people do not understand the importance of something that they 
have inherited--inland waterways of 25,000-plus miles, and the 
cost of shipping in every respect. I just do not think we are 
doing a very good job of selling it.
    I know sometimes it is not politically popular to talk 
about these issues, but it is so important. It is such a safe 
and clean way, and an available way today. It is deteriorating. 
Let us do something about it. Thank you.
    Senator Bond. Thank you very much, Congressman Myers.
    Thanks to all of you on the panel. We do appreciate your 
written testimony. We thank you very much for giving us the 
guidance that we will need as we draft the bill and try to 
stand on the very ambitious schedule that has been outlined for 
us.
    Now we will call the third panel. We have Dominic Izzo of 
the American Society of Civil Engineers; Gregory A. Zlotnick, 
director of the Santa Clara Valley Water District; Ray Poupore, 
executive director of the National Heavy and Highway Alliance; 
and Scott Faber, water resources specialist of Environmental 
Defense.
    Mr. Izzo, if you would begin, please.

STATEMENT OF DOMINIC IZZO, AMERICAN SOCIETY OF CIVIL ENGINEERS, 
                         WASHINGTON, DC

    Mr. Izzo. Mr. Chairman and members of the committee, good 
afternoon. My name is Dominic Izzo. As you may know, I had the 
honor to serve as Principal Deputy Assistant Secretary of the 
Army for Civil Works from July 2001 until November 2002. I 
could not have done my job in that difficult time without the 
strong support of this committee and its distinguished members. 
So thank you.
    It is a great privilege for me to appear before this 
committee today as a private citizen to testify on behalf of 
the American Society of Civil Engineers, to present the 
Society's views on the Water Resources Development Act and the 
future of the U.S. Army Corps of Engineers.
    I have to say that I have been very heartened by all of the 
testimony that I have heard today. It has been fantastic.
    I am glad to hear so many people speaking well of the 
Corps.
    They have been subjected to a great deal of scrutiny in 
Congress and by the news media in recent years, as you well 
know. That has led to widespread public criticism of the Corps 
and its programs.
    Some of that criticism was deserved; much of it was not.
    Regardless of one view, we heard the refrain again and 
again:
    It is time to reform the Corps of Engineers. Let me state 
at the outset one key point. The Corps of Engineers does not 
need major overhaul.
    Like any institution, it can work better, but that is as 
true of Congress and other large Government Agencies as it is 
of the Corps. The larger point needs to be made as well. I have 
heard other speakers make it, and that is that the Nation needs 
the Corps of Engineers because the Corps is uniquely situated 
to deal with large water resource projects having a distinctly 
national original impact.
    No short-term process reforms, no matter how well-
intentioned or necessary, should be allowed to deflect the 
Corps from its mission of providing comprehensive 
infrastructure and environmental protection for the Nation's 
water resources.
    Certainly the Corps can improve some things: its economic 
analysis. Better mathematical models may provide better 
projections. In the end, however, these are just estimates 
based on many assumptions, and like all estimates, they can 
change.
    Better uncertainty analysis may help warn decisionmakers of 
these risks. To improve economic analysis and avoid a 
decisionmaking gridlock on Corps projects, we should consider 
establishing the economic value of environmental cost and 
benefits. Of course, this is a challenge to economists and 
policymakers alike, but we believe it can be accomplished.
    Done properly, it will facilitate determining appropriate 
mitigation for major projects. The Administration should revise 
the principles and guidelines in coordination with the 
environmental community and industry to achieve a consensus 
that will move much needed Federal water resources projects 
forward.
    Finally, we should recognize that the justification of 
large projects for investment by the Federal Government remains 
a political decision. The principle that the benefits of the 
project must exceed the cost is a good one, but more than pure 
economic benefits and construction costs are at stake.
    There are political, social, economic, and environmental 
costs and benefits. These must all be weighed carefully.
    Setting priorities for Government spending unquestionably 
requires a political decision. No mathematical or economic 
modeling can change this. It can only provide a better 
framework for making an informed decision.
    Revising the principles and guidelines to emphasize 
uncertainty analysis and include the economic value of 
environmental costs and benefits should provide the data for 
political leaders to select the best projects for Federal 
funding. The Corps must have the best analysis that modern 
engineering, economics, and environmental science can provide.
    I believe it has that now and it will continue to do so.
    This committee can assist the Corps in improving its 
planning and analysis in this WRDA, but I urge you as the first 
step in WRDA to reaffirm the mission of the Corps as the 
Nation's lead Agency for water resource projects. There should 
be no doubt that the Corps is the leader.
    Thank you very much. I would ask that my full statement be 
placed in the record in its entirety.
    Senator Bond. Without objection, so ordered.
    Thank you very much, Mr. Izzo.
    Now we will turn to Mr. Zlotnick.

STATEMENT OF GREGORY A. ZLOTNICK, DIRECTOR, SANTA CLARA VALLEY 
                  WATER DISTRICT, SAN JOSE, CA

    Mr. Zlotnick. Good afternoon, Mr. Chairman. My name is Greg 
Zlotnick. I serve as an elected member of the Board of 
Directors of the Santa Clara Valley Water District, a public 
agency providing wholesale water supply, flood management, and 
watershed stewardship to 1.7 million residents of California's 
Silicon Valley.
    Thank you for holding this hearing and inviting my 
participation today. You have asked me to discuss our Agency's 
experiences with the Corps of Engineers and suggest process 
improvements in the Civil Works Program.
    Our Guadalupe River project through the heart of Silicon 
Valley is considered a national model as an excellent example 
of what the Corps can accomplish working with local sponsors as 
true partners. After litigation was threatened against the 
project, as a consequence of an endangered species listing late 
in the process, the Corps joined in a collaborative process 
that we initiated to resolve mitigation issues, resulting in a 
refined project acceptable to all.
    This did not go unnoticed. The San Jose Mercury News 
editorialized, ``At a time when government bashing is an 
overplayed sport, the Guadalupe Flood Control River Restoration 
Project is a great example of how government can get it 
right.''
    Another example of partnering is the 16,000-acre Salt Pond 
Restoration Project getting underway in the South Bay.
    In March 2003, these salt ponds were acquired by the State, 
the Federal Government, and private foundations to restore them 
to wetlands. Our concern was to ensure flood protection was 
incorporated into the restoration effort. We enthusiastically 
sought Corps involvement.
    Not everyone was so enamored of the Corps, however. The 
lead State agency for the restoration effort only knew the old 
Corps, environmentally ambivalent, bureaucratically challenged, 
and unresponsive to local perspectives. We knew, however, that 
the Corps could be a valuable and valued partner. So we 
recently coordinated a meeting between the officials of the 
skeptical State agency and the Corps here in Washington. I am 
glad to say that we are now all together partners on this 
project.
    While we are encouraged by the Corps' shift toward 
promoting multi-purpose watershed projects, projects still take 
too long. Multiple decades is simply unacceptable. The Corps 
must do better. Together we can do better. Feasibility and 
preconstruction phases of projects in particular present 
opportunities for improvement.
    Recent changes to a more streamlined reconnaissance study 
process have been a big help, but we further suggest allowing a 
local sponsor to undertake a recon investigation on its own 
initiative, with the Corps monitoring rather than doing the 
work, but still making the Federal interest determination.
    This would allow the Federal interest to be determined 
prior to coming to Congress for a new start. Project 
cooperation agreements represent another opportunity for 
improvement. All construction agreements must receive ultimate 
sign-off in the Assistant Secretary's office. This is overkill.
    District commanders should be empowered to tailor project 
cooperation agreements, subject to general principles from 
headquarters, to the capabilities and track record of the local 
sponsor. This should also apply to feasibility and 
preconstruction phases, as well as advanced work.
    When a local sponsor is willing and able to get moving on a 
project, to reduce potential flood damages as well as total 
project costs, the Corps system should accommodate this as long 
as the sponsor's work is integral to the project. Such 
partnering agreements, as included in the House bill, would 
take advantage of local capabilities without forfeiting 
national policy oversight, and allow qualified local sponsors 
to accelerate projects.
    NED criteria guiding feasibility analyses also need to be 
reevaluated, as they are too narrow and undervalue the indirect 
benefits of flood protection and environmental restoration in 
the calculus of project cost benefit ratios.
    Accountability for delay in the feasibility and design 
stages need to be enhanced as well. It is extremely frustrating 
to watch years go by on a study with no discernible progress on 
a project. Feasibility studies, as well as detailed design and 
preconstruction activities, should be completed on date-certain 
basis. Costs associated with and attributable to Federal delay 
should not be passed on to local sponsors and should be 100 
percent Federal responsibility.
    On a separate note, we believe that in recent years OMB has 
gone beyond its proper role in dealing with the Corps on 
congressionally funded projects. OMB is now apparently doing 
technical reviews of Corps reports, which is beyond its 
expertise and appropriate scope of purview, significantly 
slowing down the process on already approved projects.
    Mr. Chairman, the Santa Clara Valley District has a long 
history with the Corps, not always smooth, but now very 
positive, progressive, and always improving in meeting the 
needs of our region. We consider ourselves true partners. As 
the committee considers how to improve Corps processes and 
reaffirm Congress' commitment to a vigorous civil works 
program, we urge the empowerment of field officers and local 
sponsors to build flexibility and innovation into this system, 
as well as allowing for local dollars to flow early to save 
lives, protect the economic vitality of our communities, and 
let sponsors and the Corps meet challenges we confront together 
more effectively and efficiently.
    Thank you, Mr. Chairman, for your time and consideration.
    I would be glad to answer any questions you may have. I 
would ask that my full statement be placed in the record in its 
entirety.
    Senator Bond. Without objection, so ordered.
    Thank you very much, Mr. Zlotnick.
    Mr. Pourpore.

 STATEMENT OF RAY POUPORE, EXECUTIVE DIRECTOR, NATIONAL HEAVY 
              AND HIGHWAY ALLIANCE, WASHINGTON, DC

    Mr. Poupore. Thank you, Mr. Chairman. I do appreciate the 
opportunity to testify this afternoon. My name is Ray Poupore. 
I am the executive director of the National Heavy and Highway 
Alliance.
    This Alliance represents the key construction traits that 
build our Nation's infrastructure. They are the laborers, the 
operating engineers, carpenters, iron workers, cement masons, 
Teamsters, and the brick layers. These unions represent over a 
million men and women that actually build every day with their 
hands our Nation's infrastructure.
    But let me digress for just a moment, Mr. Chairman, and 
take this opportunity to thank you and your entire committee 
for the outstanding job you did on reauthorizing the highway 
bill. We just hope that the House can catch up with you guys.
    It does not look too good. But we certainly appreciate that 
effort. That is going to put a lot of men and women to work in 
this country. We need good jobs and we need good paying jobs. 
That is the reason I am talking before you this afternoon.
    There is a dramatic need for the opportunity to create good 
jobs right here in America. That opportunity that the Corps of 
Engineers has put forth in their construction program for the 
Upper Mississippi River and Illinois Waterway can create 
thousands of good-paying American jobs, help improve our 
competitiveness in a global economy, and ensure a sound 
environment.
    We have already heard this afternoon testimony about the 
current condition of that lock-and-dam system. We know it was 
not designed to meet today's competitiveness. It was designed 
70 years ago when we were using steamships. We need to step up 
to the plate and address the deficit in our waterway 
infrastructure. We have two major problems that are facing us 
right now within that region. The first is insufficient funding 
to keep the existing system working efficiently. Second, we 
have capacity constraint for future growth. We have 600-foot 
locks. We need 1,200-foot locks.
    Everybody agrees that out of those 37 locks in that system, 
only 3 are 1,200 feet long.
    We are working closely with the Midwest Area River 
Association, MARC 2000. They are trying to put men and women to 
work with the unions that I represent. This program that the 
Corps of Engineers has for expanding our infrastructure and 
navigation system is a job-creating machine in two ways.
    First, by building these 7 to 12 locks, we would create 
over 3,000 jobs per year for as many as 30 years.
    Second, those jobs will help the communities in the areas 
where they are built. We need the committee's support for 
construction authorization for at least seven new locks on the 
Mississippi Dams 20 through 25 and in the LaGrange and Peoria 
locks on the Illinois waterway. We would seriously like you to 
take a long look at that.
    It is important to recognize that we are not rebuilding the 
entire system, Mr. Chairman, nor are we adding dams or changing 
anything other than placing an additional lock in these pre-
existing structures. This plan to build new locks at these 
locations received overwhelming support at public meetings held 
this past fall, with 82 percent endorsing that we move forward.
    Our union members joined with industry representatives and 
farmers from the region to endorse the need to prepare for our 
future in terms of jobs, exports, and overall competitiveness. 
Over $180,000 in environmental mitigation is included as well.
    So in closing, the National Heavy and Highway Alliance and 
its key construction trade unions strongly support the 
modernization of the Upper Mississippi and Illinois River lock 
system because it will ensure a more competitive economy, a 
sounder environment, and it will create thousands of skilled 
good-paying jobs.
    We are proud of the previous work that Americans have done 
in the past. We think it is time that we step up and provide 
the future and opportunity to have a first-class waterway 
infrastructure in place.
    Mr. Chairman, I thank you for this opportunity. I would be 
willing to answer any questions you may have. I would ask that 
my full statement be placed in the record in its entirety.
    Senator Bond. Without objection, so ordered.
    Thank you very much, Mr. Poupore.
    Mr. Faber.

     STATEMENT OF SCOTT FABER, WATER RESOURCES SPECIALIST, 
             ENVIRONMENTAL DEFENSE, WASHINGTON, DC

    Mr. Faber. Senator Bond, it is good to see you again.
    It has been about 6 years since we stood under the arch 
together to celebrate our efforts to help restore the 
Mississippi and Missouri Rivers. I certainly hope we will have 
something to celebrate again this summer.
    Senator Bond. Well, we look forward to it.
    Mr. Faber. I fear, like General Flowers, this may be my 
last opportunity to testify before you, but only because of the 
substance of my comments, not because I am going on to some 
greater reward.
    [Laughter.]
    Senator Bond. That could happen.
    Mr. Faber. That could very well happen. I will do my best.
    [Laughter.]
    Senator Bond. We did work together with the Missouri Farm 
Bureau. We always look forward accommodating the various 
divergent interests. We would be happy to hear your testimony.
    Mr. Faber. Thank you, Senator. Let me just start by saying 
that environmental groups like Environmental Defense and the 
National Wildlife Federation, and the American Rivers recognize 
that we need to build levys to protect our cities, and that we 
need to have reliable water-borne commerce to move bulk 
commodities, and that we need deeper ports to expand trade.
    It is our concern, however, that as worthwhile as many of 
these projects are, that they do sometimes have devastating 
impacts on the environment. We simply want to be reasonably 
certain that these projects are indeed worth building, and that 
whatever impacts they have are fully mitigated. I do not think 
anyone would question the wisdom of building the flood wall to 
protect St. Louis, or deepening the New York-New Jersey harbor.
    But we simply want to be sure that these projects are 
indeed worth building and that the impacts are fully and 
quickly mitigated. The reason I am here today is this. We have 
heard so much about some of these studies. Now three GAO 
panels, the Army's Inspector General, and four separate panels 
of the National Academy of Sciences have found significant 
problems with specific Corps studies, either project benefits 
have been overestimated, project costs have been 
underestimated, or both.
    It is our desire to simply make sure that the Corps uses 
the very best economic tools, as Mr. Izzo mentioned, that those 
analyses are subject to outside peer review, and that if indeed 
a project does need to go forward, that whatever impacts there 
are, that they are fully and quickly mitigated, and 
concurrently mitigated, if possible.
    The track record is troubling. Many of the projects that 
have been constructed in the last 50 years have not produced 
the benefits that have been predicted. When you step back and 
look at historic waterway projects, you will find that only 2 
of the 15 projects constructed since World War II have 
attracted as much commercial traffic as the Corps originally 
predicted.
    That is very troubling for several reasons. One, obviously, 
is that billions and billions of dollars might have been 
invested elsewhere. But it is probably more troubling because 
now as a result of that, we are spending 29 percent of our 
maintenance funding on waterways that carry only 2 percent of 
the traffic.
    It goes back to what Senator Graham was saying. We have a 
billion dollar maintenance backlog. Does it not make sense to 
focus our maintenance dollars on those waterways like the 
Mississippi, like the Ohio, that carry 90 percent of the 
traffic on the waterways system?
    We think that using the best economic tools and subjecting 
them to peer review is the surest way to make sure that future 
investments are really economically sound. We think that peer 
review has to have three critical features.
    No. 1, it cannot delay studies. We have proposed that 
reviews be concurrent with public review, so the same time the 
public is reviewing a study, a panel is looking at that study 
as well. No. 2, the panels be truly independent, that they be 
appointed by someone outside the Corps.
    No. 3, there are very, very predictable triggers for 
review. We have proposed four triggers. Any project that costs 
$25 million, when a Governor requests review, when a Federal 
Agency charged with review requests review, or when the 
Secretary determines that the project is so controversial that 
it determines review. It is our sense that that sort of system 
would avoid much of the controversy that has cast the sort of 
cloud of suspicion over the Corps.
    Let me just make a few comments about the Upper 
Mississippi. I know my time has expired, but I know you would 
be disappointed if I did not.
    Let me start by saying that we agree that delays on the 
Mississippi River are important, that we need to address them, 
and that the transportation needs of farmers are very 
important. That is why we support taking immediate steps, 
beginning in 2005, or in 2004 if possible, to deploy helper 
boats, and to begin to pilot traffic scheduling as the Corps 
has now proposed, while we take the time to complete the 
analysis that the Corps has begun on the need for longer locks.
    Based on what we know today, and based on what the National 
Academy of Sciences said, the justification for building locks 
today is not very strong. Traffic is declining. The economic 
tools that the Corps is using, frankly underestimates some of 
the other designations for grains, such as ethanol plants and 
feed lots.
    We think that the region and the Nation would benefit from 
taking a few more months to complete a credible analysis of 
this project. In the meantime, let us go out and do the things 
that we know can work.
    Thank you. I would ask that my full statement be placed in 
the record in its entirety.
    Senator Bond. Without objection, so ordered.
    Thank you, Mr. Faber.
    Mr. Izzo, would you like to comment on Mr. Faber's 
comments? I thought there were several things that might be 
within your scope.
    Mr. Izzo. Well, first of all, I would like to say that I 
always thought that EDF was one of the more cooperative groups 
on the environmental side when I was working here. I do 
appreciate their help on several issues.
    I just have to differ that we would gain a whole lot by 
further study on the Upper Mississippi. I have a very open mind 
on the whole issue. If the political decision were to remove 
the dams, if that is what the folks up there want, I think we 
could do that.
    On the other hand, I do not think the folks up there want 
that. I think the issue that we have is whether we want to have 
grain exports out of the Upper Mississippi Valley or not.
    I always took the position that, ``Well, we ought to get 
the Secretary of Agriculture and the Secretary of Commerce to 
really vote on this. It is not really the Corps of Engineers 
job.''
    The Corps can tell you that it is reasonable that you will 
get some economic benefit, just like you will get some 
environmental effect. They could quantify that to a certain 
degree.
    But the overall impact on the policy for the country really 
is one of agriculture and commerce. All the engineer is going 
to do is implement these. These guys have been trying their 
hearts out for almost 10 years to come up with an economic 
analysis that people will agree with. Sometimes you just cannot 
agree on those exact numbers.
    Senator Bond. The problem is they are trying to do a 50-
year study when nobody in their right mind has the foggiest 
idea of what it is going to look like in 50 years.
    Dr. Collins, the Chief Economist in the USDA, said his best 
longest term guess was 10 years when there would be about a 40 
percent increase in corn exports but beyond that, it was not 
even worth speculating. I think you have to realize that you 
either spend your time trying to guess the future, or you shape 
it.
    If we continue to study it, as I said earlier, I guarantee 
that we will not be shipping the commodities and grain that we 
need in the future because these locks and dams are going to 
come down.
    Mr. Poupore, I had heard the figure of 48 million man-hours 
of work on the locks and dams. I have stood at the edge with 
your members and others watching the sheets of water cascading 
through locks that were supposedly keeping the water from 
coming down steam, and just hoping that the things did not 
break like your 70-year dam in Vermont.
    The 48,000 man-hours includes what area and what projects?
    Mr. Poupore. Those were the seven locks described in my 
testimony. Five are on the Mississippi and two on the Illinois 
waterway. Those seven, along with the maintenance of the 
current lock system on the Mississippi, translates to 
approximately 48,000 man-hours of work for construction 
workers.
    Senator Bond. Mr. Zlotnick, I was most interested to hear 
about your cooperative relationship between the Santa Clara 
Valley Water District and the Corps. What, in your opinion, is 
the single-most important reform or efficiency that we could 
make to the Corps system? Why would say that?
    Mr. Zlotnick. Well, I think from our perspective, Mr. 
Chairman it is to allow the districts to take a little more 
responsibility and have some more authority to work with local 
sponsors more directly in terms of approving and moving forward 
when the local sponsor has the capability to do so.
    In that way the local sponsors do not feel, in essence, 
they are being held hostage, if you will, to things coming back 
to Washington and getting lost in the load that is back here. 
We think that an Agency like ours, for example, that has a long 
track record and has lots of capability and, frankly, is fairly 
aggressive because we are trying to protect not only an 
important part of California, but in terms of the Nation's 
economy, Silicon Valley is quite critical.
    We have abilities that we are able to move forward on.
    We think that working as partners and as we have developed 
various projects with the districts, that perhaps it makes 
sense to say, ``subject to the national policy guidelines that 
the districts have to abide by.'' The districts can say, ``OK, 
we can move forward with you in oversight, not necessarily 
doing all the work ourselves, but as partners.''
    As I said, that would speed things up, we think. It would 
just also be more efficient overall. It also would be much more 
reflective of the local communities' desires for projects as 
well.
    Senator Bond. Mr. Faber, I do not want to slight you by not 
asking you a question. Is a big part of the environmental 
problem on the Mississippi River sedimentation? Do you see that 
problem as being caused by locks and dams? Are the locks in and 
of themselves any grave threat to the environment?
    Mr. Faber. Well, Senator, as you well know, the traffic 
moving on the Mississippi River through locks has some effect 
on the environment. It pushes sediment into the backwaters and 
side channels that are critical nurseries for wildlife.
    It uproots the marsh plants that the ducks and fish rely on 
as a food source. There is some direct killing of fish and 
other organisms as the barges move through the water.
    But it is by no means the biggest threat to the species 
that depend upon the Mississippi River or the millions of 
people whose livelihoods depend upon the health of the 
Mississippi River. In fact, it is really the construction and 
operation of the infrastructure, not the traffic itself, that 
is a much more significant threat.
    That is why I am so encouraged that the Corps of Engineers, 
working with the States, has developed a restoration plan to 
address those historic threats that Senator Clinton mentioned. 
We did not really fully understand when we authorized the lock 
and dam system in the 1930's.
    I think by itself the decision about whether or not to 
build locks is not properly seen as a question about what is in 
the best interest of the health of the Mississippi River.
    I see it as two other questions:
    Are we going to use the best available economic analysis to 
decide whether or not to add big new investments to the already 
enormous backlog of authorized projects, the $41 billion 
backlog? Are we going to use the best available economics to 
decide whether to spend $150 million a year presumably for 15 
years and perhaps more?
    I think the second question is: Is that $150 a year that we 
would spend extending the length of locks be better spent 
deepening a port or increasing the height of the flood wall at 
St. Louis?
    That sort of prioritization is not something that we have 
done very well, but it is at the heart of this issue. It is a 
huge investment. If we go ahead and approve the expansion of 
locks, it will drain at least 10 percent of the annual 
appropriations for the for the construction appropriations for 
the Corps for decades.
    That is the sort of question we should be asking. What are 
those dollars competing with? I hope that is what we have a 
chance to think about as we move forward.
    Senator Bond. Thank you.
    Senator Jeffords.
     Senator Jeffords. Mr. Faber, in your testimony you state 
that the Corps replaces wetland with fewer acres of less 
valuable habitats. Can you provide additional examples of this 
problem?
    Mr. Faber. Absolutely. The problem generally is this.
    Hypothetically, the Corps will occasionally replace 100 
acres of wetland with 10 acres of trees and not always do it 
concurrent with the construction of the levy or the dam that 
has destroyed the 100 acres of wetlands.
    Another example would be the expansion of the levy along 
the lower Mississippi River where the Corps is replacing 
several thousand acres of bottomland with a few thousand acres, 
or about one-third of the acres by reforesting agricultural 
lands.
    There are many examples where the Corps has gone through 
this process of replacing thousands of acres of valuable 
wetland habitat or flood plain habitat with a few hundred 
acres. Frankly, I think this is just a matter of clarifying 
what Congress wrote in 1986 to simply require that we replace 
apples-with-apples, that we replace wetlands-with-wetlands, and 
that we do it as quickly as possible, and concurrently if 
possible.
    The ideal situation would be to simply replace each acre of 
wetlands with a similar or superior acre of wetlands. This 
would not even require the Corps to meet the standard that the 
Agency forces private developers to meet.
    Typically when a private developer destroys a wetland, they 
have to replace that acre on a two-to-one or a three-to-one 
basis. If we could merely get to a one-to-one in-kind 
replacement system, that would be real progress.
    Senator Jeffords. Should the Corps meet the same standards 
that private developers meet when they impact the wetlands?
    Mr. Faber. Well, yes, and I think in particular the mandate 
that developers try to wetland impacts before they go ahead and 
construct a development should apply to these civil works 
projects as well. But simply requiring that the Corps at least 
meet a one-to-one ratio, not even requiring that they meet the 
same standard that developers make, we would consider real 
progress when compared with what we are doing today.
    Senator Jeffords. What steps should we take to ensure that 
mitigation projects are successful? How do we find out?
    Mr. Faber. One of the real struggles with mitigation is 
that the track record of this relatively new science is not 
very good, that in general about half of these mitigation 
projects. But there is no ex post facto review to see whether 
Corps mitigation is actually producing the benefits that the 
Corps has promised.
    So what we believe makes sense is to have the Fish and 
Wildlife Service, which is involved in developing these 
mitigation plans, and the Corps develop a mitigation tracking 
system to make sure that one, mitigation is being completed 
concurrently or not later than the end of the next fiscal year, 
and then two, make sure that the mitigation is successful.
    If it is not successful, to have some sort of contingency 
plan to again try to mitigate successfully.
    Senator Jeffords. I think I asked this to the Corps 
earlier. What changes should be made to Section 1135 and 
Section 206 programs? What changes, if any, would you recommend 
for those two programs?
    Mr. Faber. I think there are three critical changes that 
need to be made to those programs that are very popular and 
heavily oversubscribed. One is that the authorized ceiling for 
both programs be lifted to $100 million annually and that the 
per project cap be lifted to $10 million annually. But I think 
a probably more important reform that Mr. Zlotnick hinted at in 
some ways is to give local units of government the ability to 
study and design these small projects, subject to review and 
approval by the Corps.
    We have already given local units of government the ability 
to do this for small flood control projects, and to allow local 
units of government, counties, and municipalities, subject to 
Corps review and approval, to design the small aquatic system 
restoration projects. It would save an extraordinary amount of 
money and take advantage of the fact that these local units of 
government usually know a heck of a lot more about these 
resources than the Federal Government.
    I think that is a complaint that I have heard over and over 
again in Vermont and New England generally. The cost to the 
Corps of designing these projects, these small restoration 
projects, is much, much greater than the cost would be if the 
local unit of government were able to design the project 
subject to the Corps' oversight.
    Senator Jeffords. In your testimony you proposed that 
independent review should not delay studies. I think most 
members of this committee share that sentiment. How would the 
review system that you propose ensure that studies are not 
delayed?
    Mr. Faber. What we proposed is that at the same time the 
public is reviewing a Corps feasibility study, which is 
generally 180 days by regulation, that the panel also be 
reviewing the study so that those reviews occur concurrently.
    In that way it would not add any time to the already two-
to-three year planning process.
    What we would also propose is that if this panel simply 
cannot get its work done in that timeframe, that the Corps 
continue on, that 180 days is certainly enough time to review 
these feasibility studies and provide the Corps some feedback 
on their merits.
    We think it has two benefits. One obviously is that it does 
not add any time to the process, but the other is that that 
allows the panel to review the entire draft feasibility study 
and draft environmental impact statement. One of the problems 
with the House passed bill is that the review would start 
sooner and end before the Corps has completed work on its 
studies. These mechanical questions, I think, are really 
important. We need to make sure that the panels are reviewing a 
complete enough product so the public has some faith that that 
review is really meaningful.
    Senator Jeffords. Thank you very much. Those are helpful 
answers. I appreciate it.
    Thank you, Mr. Chairman.
    Senator Bond. Thank you, Senator Jeffords.
    I might ask Mr. Izzo one last question.
    Half the money going into the Corps is paid by user fees.
    They are coughing up the money. Where do they think these 
dollars should be spent?
    Mr. Izzo. The users obviously want it to be spent on what 
they paid the fees for. I know this is a major issue for both 
the Inland Waterway Users Fund and the Harbor Trust Fund.
    That money just continues to accumulate as one of the 
previous speakers showed you in the chart.
    Senator Bond. There is no question among those who are 
paying the freight of where those investments should be made.
    Mr. Izzo. Absolutely.
    Senator Bond. Gentlemen, we will have additional questions, 
I am sure, from many of the members of the committee. We would 
appreciate your responding to those.
    Without objection, so ordered.
    I would invite any of you who have further thoughts, and 
perhaps there are some comments from other witnesses that have 
given you new ideas, or you wish to offer a contrary view, we 
invite those views. We would ask that you get them in by next 
week, by April 7, if you can.
    Without objection, so ordered.
    Senator Bond. We have gone through a lot of testimony 
today. I will look forward to reviewing the written testimony, 
as I am know the members of the committee will.
    Senator Jeffords, do you have anything further?
    Senator Jeffords. No; I go along with you on your request. 
I think that would be very helpful. I deeply appreciate the 
time that you have all put into appearing here.
    I think you have given us many things to work upon.
    Senator Bond. Thank you very much.
    The hearing is adjourned.
    [Whereupon, at 4:11 p.m., the subcommittee was adjourned, 
to reconvene at the call of the chair.]
    [Additional statements submitted for the record follow:]

            Statement of Hon. Lisa Murkowski, U.S. Senator 
                        from the State of Alaska

    Mr. Chairman, thank you for calling this hearing on such an 
important issue. I'm pleased that the Committee will be 
considering a Water Resources Development Act this year. The 
U.S. Army Corps of Engineers has an important mission in my 
State, which includes thousands of miles of coastline and 
numerous harbors.
    To begin, I would like to discuss a few Corps-related 
issues that are important to my State.
    I have some concerns about the Corps' performance-based 
approach to developing its budget request. Such an approach 
gives priority to funding projects that have the highest 
``economic and environmental returns,'' according to the Corps. 
Earlier this month, at a hearing of the House Appropriations 
Subcommittee on Energy and Water Development, Assistant 
Secretary of the Army Woodley referenced this approach.
    As my State contains many small, isolated communities that 
are only accessible by air or sea, I have concerns about this 
approach. That is why I am supporting a provision in the House 
WRDA bill, H.R. 2557, that allows the Corps to recommend harbor 
and navigation improvement projects without the need to 
demonstrate that the project is justified by ``national 
economic development benefits'' if (1) the community served by 
the project is at least 70 miles from the nearest surface 
accessible commercial port with no direct rail or highway link 
to another serviceable community or it is located in Puerto 
Rico, Guam, the Northern Mariana Islands, or American Samoa; 
(2) the harbor is economically critical such that over 80 
percent of the goods transported would be consumed within the 
community served by the harbor and navigation improvement; and 
(3) the long term viability of the community is dependent upon 
the harbor, including access to resources and facilities 
designed to protect public health and safety. This provision 
would be beneficial to many communities in my State. The 
harbor-related needs of the small communities in my State are 
just as important as the needs of the ports of larger cities in 
our Nation, especially when one bears in mind that most 
critical cargo that is delivered to such communities is 
delivered by sea.
    There are two other sections of the bill of which I am 
supportive that I would like to discuss in further detail.
    The first is the provision concerning the streamlining of 
projects. This language authorizes the Corps to expedite the 
environmental review process by requiring the Corps to 
coordinate the actions of all appropriate governmental 
agencies--in all levels of government--including Indian tribes. 
The section mandates that the Corps draft a process whereby all 
relevant governmental agencies review and issue permits 
simultaneously, as much as is practically feasible. Such 
reviews and permitting would be completed within a timeframe 
determined by the Secretary of the Army in concert with other 
agencies. For far too long, Corps projects in Alaska have been 
delayed time and time again due to environmental reviews and 
permits. This is unacceptable. If we were residents of a small, 
remote community that needed to have its harbor dredged to 
allow larger vessels to enter its harbor to deliver such 
necessities as fuel and food and the dredging project was 
delayed due to environmental issues, then the problem would be 
self-evident.
    Another provision in the House WRDA bill of which I am 
supportive is the provision increasing the Federal cost-share 
responsibilities for construction--by 25 percent--and 
operations and maintenance--by 50 percent--for deep draft 
navigation projects between 45 and 53 feet deep. Many of the 
smaller communities in my State that need Corps projects also 
do not have the available funds to meet a high funding match 
threshold. Such local governments have limited abilities to 
collect taxes and fees and often turn to the State government 
for financial assistance. Unfortunately, the State government 
in Alaska is experiencing its own budget difficulties and is 
becoming less and less able to assist local communities with 
such projects. I know that many other State governments are 
also experiencing budget difficulties, as well.
    I have nothing further. Mr. Chairman, thank you once again 
for holding this hearing.
  Statement of Hon. Max Baucus, U.S. Senator from the State of Montana
    Thank you Mr. Chairman for calling this hearing today. I am pleased 
that the Committee is once again taking a close look at the mission and 
operations of the Corps of Engineers. There is widespread agreement 
that we should refine the Corps' mission and reform the way the Corps 
develops projects and how it implements them, to reduce costs and 
funnel resources where they are most needed or where they provide the 
greatest economic and environmental benefit to local communities and 
the Nation. Greater transparency and accountability are also important. 
That said, I have always been pleased and impressed with the work of 
Corps professionals on the ground in Montana. I look forward to hearing 
from the witnesses today, and working with our Chairman and Ranking 
Member, and my colleagues on this committee, as we consider a Water 
Resources and Development bill.
    Mr. Chairman, I will keep the remainder of my statement brief, but 
I'd like to touch on one particular issue that is of the greatest 
importance to my constituents in Montana--recreation. I read with great 
interest Mr. Woodley's testimony where he touched upon the core 
purposes of the Army Corps. Recreation barely received a mention in his 
statement, despite the fact that the Corps is one of the largest 
Federal providers of recreation, generating billions of dollars and 
thousands of jobs nationwide. I think the Corps' perspective needs to 
change, just as the communities and economies that depend on Corps 
projects have changed over the past 50-60 years.
    Recreation around Fort Peck Lake in Montana accounts for an 
enormous percentage of the local economy, close to 50 percent. The 
recreation economy takes on even greater significance when you consider 
the devastating effects of years of drought on the other major piece of 
the local economy agriculture. Record low lake levels at Fort Peck 
Lake--levels not seen since the project was created--have dramatically 
impacted this all important recreation economy. With water so low, 
people just don't come to fish or boat on the Lake. When people don't 
come, they don't spend their money at local businesses. This has a 
ripple effect in the entire area, as local businesses dependent on 
recreation don't spend as much money in their communities, or they lay 
off workers or don't hire.
    We're tired of watching water levels drop at Fort Peck. I won't go 
into Montana's disappointment in the Corps' release--finally--of a new 
Master Manual governing operations on the Missouri River. I know you 
have a very different view of that document, Mr. Chairman, but this 
issue is so important to us. It was incredibly disheartening to us that 
even minor concessions made to upper basin States like Montana in terms 
of better drought conservation measures for our reservoirs were 
weakened at the last moment to appease downstream interests. 
Regardless, we're so far into this drought cycle now, that the minor 
concessions on drought conservation are too little, too late.
    I firmly believe that one of the reasons Montana continues to take 
a back seat in management decisions on the Missouri River is the fact 
that the Corps does not consider recreation to be nearly as high a 
priority as more ``traditional'' uses of the River, for example 
navigation. While that may have been true 50 or 60 years ago, that is 
certainly not the case now. Recreation is a huge national industry, and 
it's vital to communities along the Missouri River, particularly to 
rural communities like those in central and eastern Montana.
    Mr. Chairman, I understand that during a drought there just isn't 
enough water to go around and everyone has to share in the pain. My 
concern is that Montana has suffered far more than its fair share of 
pain when it comes to bearing the burden of drought at Fort Peck Lake. 
The rules aren't working for us, so I think it's time to change the 
rules. That's only fair. I think it's time for Congress to make it 
clear to the Corps that recreation must be given a higher priority when 
the Corps makes management and other decisions impacting river and 
reservoir use. I believe we would only be restating the obvious, but it 
appears that the Corps needs clear congressional direction on this 
point. I will work hard in this WRDA bill to give it to them.
    One final point--I agree with my colleagues that the funding 
constraints the Administration and the Congress have put on the Corps 
are counter-productive. It impacts good and bad projects 
indiscriminately and has led to several projects in my State coming up 
short on funds, even after those funds were appropriated specifically 
for these projects. In the case of the Fort Peck Fish Hatchery, this 
funding shortfall has amounted to millions of dollars. This is hard on 
the local project sponsors, and it's often hard on the local 
communities and economies that depend on these projects. Over time, 
it's going to cost us more to complete these projects than if they had 
been adequately funded from the start. Finding a better way to manage 
and fund Corps projects is an important part of restoring some sanity 
to the civil works budget.
    Thank you again, Mr. Chairman for calling this hearing today. 
Again, I look forward to working with you as we explore a WRDA bill 
further.
                               __________
  Statement of Hon. Harry Reid, U.S. Senator from the State of Nevada
    I am pleased the Committee is holding this hearing to discuss the 
role of the U.S. Army Corps of Engineers in meeting our water resource 
needs. I am pleased at the work the Corps is doing in Nevada and 
nationwide, however, they need our help to continue.
    There are more projects than there is funding, so we need to work 
together to pass a Water Resources Development Act (WRDA) this year 
that increases project authorizations.
    Last year, the Corps received $4.57 billion for the Civil Work 
Program. The President's fiscal year 2005 budget request is for $4.22 
billion, however, there are several problems with the President's 
request. First, it circumvents public participation in Corps projects 
by dictating that all Corps project studies designed to identify 
technically feasible, environmentally--acceptable, and cost effective 
project alternatives go to the Office of Management and Budget before 
being presented for public comment. This is inconsistent with the NEPA 
statute. The appropriate process is for the Corps of Engineers to 
conduct a study, provide multiple alternatives for the public to 
review, collect public comments, and select an alternative based on 
that public process.
    Second, it forces the Corps to breach agreements with local 
sponsors by zeroing out projects where the Corps has undertaken a beach 
re-nourishment project with such a local sponsor and signed a project 
cooperation agreement, or PCA. Many ongoing projects hold signed PCAs 
and receive funding through congressional adds, however, the 
Administration plans to release a policy via letters to every 
individual community with a beach re-nourishment project explaining the 
Federal Government is pulling out of all existing PCAs to conduct 
periodic beach re-nourishment, thereby breaching all of those existing 
contracts.
    Additionally, it cancels 43 ongoing projects in several States, and 
would mean that projects that have already received fiscal year 2004 
funding would lose that funding. The Administration arbitrarily reduced 
the number of projects to be funded during the Project Engineering and 
Design (PED) phase from 47 to 22. This reduction breaks standing 
agreements with local sponsors who are contributing 50 percent of the 
funding for this phase of a project. In Fiscal Year 2004, 75 PED 
projects were funded.
    The President's Fiscal Year 2005 budget includes a policy that 
there will be no new contract awards for any projects other than 8 high 
priority projects selected by the Administration. There are currently 
1,000 ongoing construction projects, 992 of which will be stalled by 
this new policy. The funding for the Corps to study projects is 
drastically reduced from $117 million appropriated in 2004 to $90 
million requested by the Administration for fiscal year 2005.
    Last, $35 million is allocated in the President's Budget to the 
Assistant Secretary of the Army's office for use in ``emergencies.'' 
The Corps has existing emergency response responsibilities and 
capabilities that are funded through the normal process. This money 
could be better allocated elsewhere.
    While there is much work to be done, I am looking forward to 
working with all the Members of this Committee on an authorizing bill 
that meets the needs of the Corps. I am pleased that the Chairman has 
plans to move WRDA forward as quickly as possible so our projects can 
continue.
                               __________
 Statement of Hon. John Paul Woodley, Assistant Secretary of the Army 
                  (Civil Works) Army Corp of Engineers
    Mr. Chairman and Members of the committee: I am John Paul Woodley, 
Jr., Assistant Secretary of the Army for Civil Works. Accompanying me 
is Lieutenant General Robert B. Flowers, Chief of the Army Corps of 
Engineers. We are here today to discuss the role of the Corps of 
Engineers in meeting the Nation's water resources needs. We appreciate 
the opportunity to work with the Committee on this important topic.
                      history and mission overview
    I've learned a lot about the Corps and its civil works 
responsibilities in the 7 months I have been the Assistant Secretary. A 
piece of history that was interesting to me is how the Army got into 
civil works and water. After the War of 1812, both commercial 
development and national defense in the country required more reliable 
transportation arteries. Federal assistance, however, was slow in 
coming and was a ``product of contentious congressional factions'' and 
an Administration that did not want to meddle in the States' affairs. 
In the 1824 case of Gibbons vs. Ogden, however, the Supreme Court ruled 
that Federal authority covered interstate commerce including riverine 
navigation. Shortly thereafter, the General Survey Act authorized the 
President to conduct a survey of nationally important roads and canals 
from a commercial, military and mail transportation point of view. The 
President gave that responsibility to the Army Corps of Engineers. 
About a month later, a second act appropriated $75,000 for improving 
navigation along the Ohio and Mississippi Rivers by removing sandbars, 
snags and other obstacles. The Corps was also tasked with that work, 
and so began the Corps of Engineers' continuous involvement in civil 
works and our Nation's water resources.
    As areas along the Nation's rivers and deltas were developed for 
agriculture and commerce, flooding and associated flood damages became 
a major concern. The Mississippi River Commission was formed in 1879 
primarily to promote navigation, but also in acknowledgment of the need 
for flood control. Major floods in the Mississippi River basin in the 
early 1900's resulted in a new role for the Corps of Engineers--flood 
control. The Flood Control Act of 1936 led to numerous flood control 
projects such as dams, levees, and channels through the 1960's. Many of 
these projects, particularly the dams and their reservoirs, were 
multipurpose, providing flood control, hydropower, water supply, 
navigation, recreation, and fish and wildlife enhancement. The success 
of flood control projects resulted in extensive development in the 
floodplains, often placing more people and development at risk. In the 
1970's and 80's, as numerous floods exceeded the capacity of some flood 
control projects and caused extensive damage, it became apparent that 
better management of the floodplains and a comprehensive strategy for 
flood control reduction or mitigation was necessary. Today, the Corps 
now focuses its efforts on reducing flood damages and, where 
appropriate, moving people out of harm's way.
    More recently, the Corps has become involved in environmental 
protection and restoration. The National Environmental Policy Act of 
1969, which requires each Federal Agency to assess fully its actions 
affecting the environment, and the Federal Water Pollution Control Act 
of 1972, which gave the Corps responsibility for regulating the 
discharge of dredged or fill material into all of the Nation's waters, 
including wetlands, provide basic authority for our work in this area. 
In addition, specific authorizations for aquatic ecosystem restoration 
now account for a significant portion of our construction program.
    Since the early years of our country, the Corps has always been a 
dedicated servant of the American people. For 200 years, the Nation has 
relied on the Corps to help resolve some of our difficult problems. In 
addition to its water resources responsibilities, the Corps has 
supported our military forces in time of war. The Corps provided the 
technical expertise for the Manhattan Project. Army engineers oversaw 
the building of the Panama Canal. The Kennedy Space Center and the 
Johnson Manned Spacecraft Center in Houston are products of Corps 
efforts. When a disaster strikes, Corps personnel in red jackets are 
there to help.
    The distinguished history of the Army Corps of Engineers is the 
history of our Nation. As the Nation has changed its priorities and 
values, the Corps has also changed as it brought these priorities to 
reality.
    Given today's world affairs, I believe it's appropriate to say a 
few words about the Corps' role in the Global War on Terrorism. LTG 
Flowers will provide additional information about the support by the 
civilian employees of the Corps, as well as the military, to the fight 
against terrorism. I would like to acknowledge the important 
contributions of these fine professionals and their families. I can 
tell you with absolute certainty that the Administration recognizes the 
role of the Civil Works Program in winning the war against terrorism.
    I would like to discuss each of the three primary missions--
commercial navigation, flood damage and storm damage reduction, and 
aquatic ecosystem restoration--in more detail.
                         commercial navigation
    The commercial navigation mission of the Corps was established in 
the Survey Act of 1824. Since that time, the Corps has supported 
navigation needs through the construction and maintenance of ports and 
waterways across the Nation. The ports and waterways the Corps 
constructed and now maintains serve the people in 41 States. The system 
includes 926 coastal, Great Lakes and inland ports; nearly 12,000 miles 
of channels; and 240 lock chambers at 195 sites. In 2001, nearly 2.4 
billion tons of cargo moved through these ports and on the waterway 
systems. Many components of the waterways system are old, with 145 
locks in operation for more than 50 years. The two oldest that the 
Corps operates are on the Kentucky River, and were opened in 1839. We 
continue to study and research ways to set priorities, effectively and 
efficiently maintain, our key facilities, and implement further 
improvements that will provide a very high return to society relative 
to their cost.
    International trade is a growing part of the Nation's economy, and 
involves all elements of the Nation's intermodal transportation system. 
The Nation's ports and waterways can provide reliable and economic 
alternatives to address projected growth in international trade. Future 
economic growth in the United States depends on an efficient and 
effective integration of the various modes of surface transportation, 
and the Corps' role in these aspects of the Nation's economic 
development is significant.
    Today, our major focus is on protecting this system in terms of 
maintaining what we have, and investing in what we will need for the 
21st century, and also in terms of security from attack. America's 
ports and waterways are our link to world markets, conveying more than 
2 billion tons of commerce each year, and creating 13 million jobs. 
Increasingly, shippers are using larger vessels to lower costs. 
Consequently, we're now seeing containerships that require channel 
depths greater than 45 feet. As you know, only a few U.S. ports have 
such depths. We currently have about 30 harbor improvement projects 
underway throughout the Nation. Of these, some a proposed to involve 
construction to depths greater than 45 feet. Altogether they represent 
an investment of some $4 billion, funded jointly between the Federal 
Government and our project sponsors.
    We also operate 12,000 miles of inland and intercoastal waterway 
channel and about 200 locks. The inland and intracoastal waterways move 
over 600 million tons of cargo annually. Coal is the largest commodity 
by volume, with the waterways moving more than 20 percent of the coal 
destined for U.S. power plants. And nearly three quarters of all corn 
and soybean exports move by inland waterway. Unfortunately, much of our 
inland navigation infrastructure is aging and in need of repair. Over 
50 percent of Corps locks exceed their 50-year design lives. We are 
striving to maintain and improve this phenomenal system while we 
protect and restore habitat. This is the 21st Century challenge of 
smart growth we are committed to addressing this challenge responsibly 
and effectively.
                flood damage and storm damage reduction
    Flooding is the most destructive and costly natural disaster in the 
United States, accounting for 85 percent of all natural disasters that 
occur annually. Nearly 400 major reservoirs and 8,500 miles of levees 
and dikes are under the Corps' jurisdiction. The Corps estimates that, 
since 1950, this infrastructure has prevented nearly $500 billion in 
riverine and coastal flood damage.
    Despite its considerable success in flood and storm damage 
reduction, costs of floods (emergency assistance costs plus property 
losses) still average over $4 billion annually. This is due largely to 
continued development both to flood plains and in urbanizing, upland 
areas, as well as along our coasts. News coverage of recent flood 
disasters, including hurricane Isabel, have shown the enormous economic 
costs of flooding. Unquantifiable social costs include injury and loss 
of life in some cases, and stress on individuals and families caused by 
disruption, evacuation, and life in temporary quarters. It also 
includes loss of irreplaceable property, and destruction of entire 
communities.
                     aquatic ecosystem restoration
    Our Nation has more than 3.6 million miles of rivers and streams 
that comprise corridors of great economic, social, and environmental 
value. These corridors are complex ecosystems that perform vital 
environmental functions, including modulating stream flow, storing 
water, removing harmful materials from water, and providing habitat for 
aquatic and terrestrial plants and animals. The National Environmental 
Policy Act (NEPA) of 1969, as amended, prescribed integration of 
environmental protection and social goals with economic ones in the 
development of water and related land resource management projects. 
Environmental restoration and protection is the fastest growing portion 
of the Corps mission portfolio, particularly for riparian and tidal 
wetlands.
    The Corps is an active partner in environmental restoration and 
protection, and ecosystem restoration is a high priority purpose 
equivalent to the flood protection and navigation missions. Working 
with non-Federal sponsors, the Corps implements single purpose 
ecosystem restoration projects, multi-purpose projects with ecosystem 
restoration components, or projects for flood protection or navigation 
that incorporate environmental features as good engineering. The Corps 
has restored, created, and protected over 500,000 acres of wetland and 
other habitats since about 1988. In some cases, existing water 
resources projects are modified to achieve restoration benefits. 
Dredged material, which used to be considered ``spoil'', is now 
considered ``soil'', and used as a resource to construct or reconstruct 
aquatic habitats of various kinds. In the Florida Everglades, the 
Corps, in partnership with the Department of the Interior, the State, 
and two Indian Nations, will restore and protect over 2,700,000 acres 
of habitat over the next 30 years. Over 100,000 acres of habitat 
enhancement and restoration projects are being restored on the Upper 
Mississippi River System in partnership with five States and the U.S. 
Fish and Wildlife Service. These are just a few examples. Finally, the 
Corps has jurisdiction over 12 million acres of land and water 
resources at over 500 water resources projects across the country and 
environmental stewardship is a priority. A healthy environment 
contributes to our economic and national security.
                           regulatory program
    The Army's Regulatory Program administers permitting under the 
Rivers and Harbors (Section10) and Clean Water (Section 404) Acts.
    Sections 10/404 permitting, with 100,000 jurisdictional 
determinations and 86,000 written authorizations annually, and 
associated complex legal and policy issues (e.g., SWANCC, Tulloch 
Ditching, wind energy projects in the Northeast, shellfish aquaculture, 
mountaintop surface coal mining, and phosphate mining in the 
Everglades) constitutes the bulk of the Regulatory Program's work and 
is, in fact, its primary function. These permits, approving diverse 
activities such as construction of roads, ports, houses, schools, 
commercial development, energy pipelines, and coal/phosphate/peat/sand/
gravel mining, generally require mitigation to offset impacts to 
aquatic resources.
    A staff of about 1,200 people, distributed among 38 districts, 8 
divisions, and the Corps Headquarters, carries out this important work. 
Administering the permitting aspects of the program is labor intensive. 
Congress appropriated $139 million in fiscal year 2004 to support the 
administration of the section 404 program; $150 million has been 
requested in the President's budget for fiscal year 2005. These 
resources are required to process individual and general permit 
authorizations while protecting aquatic resources, accomplish 
jurisdictional determinations, conduct appeals of permit denials and 
jurisdictional determinations, perform compliance activities for 
mitigation projects, support watershed planning efforts in sensitive 
environmental areas in accordance with States and local communities, 
work on various national initiatives involving policy and consistency 
studies, including initiatives to improve program efficiency and data 
collection, and to develop proposed regulations and guidance concerning 
the Clean Water Act.
    priorities of the assistant secretary of the army (civil works)
    We face many challenges as we work with our stakeholders to 
accomplish the missions of the Corps of Engineers. To move forward, I 
am focusing my priorities in 3 areas during my tenure in this office. 
They are:
    1. Develop the Civil works budget and manage the program based on 
objective performance measures. This will greatly help us support goal 
setting and decisionmaking. I am a strong believer in performance 
measurement, and clear programmatic goals will allow us to refine the 
metrics we rely upon to make the best possible decisions regarding our 
infrastructure investments.
    2. Improve analytic tools to support water resource planning and 
decisionmaking. While analytic tools must have wide acceptance in the 
community to be persuasive, the Corps should strive to develop and use 
the most advanced analytics possible to model the environmental and 
economic effects of programs and projects.
    3. Improve effectiveness of aquatic resource protection and the 
efficiency of our wetland regulatory program. We need to make the 
permit reviews and decisionmaking of the regulatory process more 
efficient and predictable while maintaining the flexibility to deal 
effectively with different physical conditions throughout the Nation.
                      performance-based budgeting
    Performance-based budgeting is one of the President's Management 
Initiatives. For the Army Civil Works program, performance planning in 
preperation of the fiscal year 2005 Budget was built around eight 
program areas: Navigation (including inland waterway navigation and 
coastal channels and harbors); Flood and Storm Damage Reduction 
(including damage from riverine flooding and coastal storms); 
Environment (including aquatic ecosystem restoration, stewardship of 
natural resources at operating projects, and the Formerly Utilized 
Sites Remedial Action Program); Hydropower; Recreation; the Regulatory 
Program; Emergency Management; and Water Supply (storage at existing 
reservoirs).
    The first element in our performance planning is a strategic plan, 
which is required by the Government Performance and Results Act (GPRA). 
I am happy to announce that on March 22, 2004, I provided our strategic 
plan to the committees and subcommittees of Congress responsible for 
water development authorizations and appropriations, including this 
subcommittee and committee. The plan is a work in progress. We will 
continue to work with the Office of Management and Budget to establish 
program goals, objectives, and performance measures that provide a 
sound basis for setting performance targets and building future 
budgets.
    Another element in our performance planning is to develop the Civil 
Works budget and manage the program based on objective performance 
measures. The fiscal year 2005 budget for Army Civil Works focuses 
funding on the most productive investments. This is reflected, for 
instance, in the allocation of funding to the most productive design 
activities, construction projects, and maintenance activities. At the 
same time, I recognize that we can do a better job of performance-based 
budgeting, and one of my priorities is to improve our capabilities in 
this area. I have placed a priority on making significant progress on 
refining our program categories and subcategories in the development of 
sound performance measures for each of them, and on using the measures 
to build our fiscal year 2006 budget. A great deal of hard work is in 
store for us as we transition to this approach, but the advantages are 
enormous, and the Army is fully committed to this effort.
                    improving the corps of engineers
    Finally, Mr. Chairman, I would like to mention the issue of 
improving the functioning of the Corps of Engineers.
    The Administration looks forward to working with this Committee on 
authorizing activities of the Corps. We ask that you bear in mind five 
broad principles to guide future authorizations.
     The Corps should evaluate proposed water resources 
investments using analytically sound, modern methods, current data and, 
where appropriate, external review. The Corps should only pursue 
authorized Federal water projects that meet current economic and 
environmental standards and that address contemporary needs.
     Until the Federal Government has reduced the construction 
backlog substantially, the Federal Government should only proceed with 
those new projects that provide a very high net economic or 
environmental return to society relative to their cost.
     In each of its three main missions (flood and storm damage 
reduction, commercial navigation, and aquatic ecosystem restoration), 
the Corps should establish priorities across and within watersheds 
based on the comparative net economic or environmental return that a 
given level of further investment would bring to the Nation.
     In order to focus on the backlog of projects actively 
under construction in the three main mission areas, the Congress should 
adopt legislation to de-authorize or disallow funding for: (1) inactive 
projects automatically; (2) navigation projects for harbors and river 
segments that have extremely low commercial use; and (3) projects whose 
main purpose does not fall within the three main mission areas.
     The non-Federal cost-share should reflect the extent to 
which a water resources project economically benefits commercial 
interests, property owners, or other identifiable private parties.
    This Administration supports the goal of improving the manner in 
which the Corps plans, designs, implements, and operates and maintains 
projects and pursues its authorized program. We want to work with the 
Committee to focus on our three main missions, to pursue only those 
projects and programs that meet current economic and environmental 
standards and address contemporary needs, are justified and to improve 
the ways in which we implement and fund them. I therefore would propose 
that we focus our attention on the question that lies perhaps on a 
higher strategic plane: How should the Federal Government's role in 
water resources policy evolve as we begin a new century? Our continued 
understanding of this question is critical to setting the future 
direction of the Corps.
    The people of America increasingly understand that our Nation's 
water resources are finite. The debate over its use classically centers 
around this question: Where should we give priority to the development 
of water resources for social and economic benefit and where should we 
give priority to the restoration of these resources to their natural 
state? Sometimes we must choose one over the other. Sometimes we 
struggle to do both. As science and engineering evolve, we can enhance 
our opportunity to find more balance between these options and, working 
together, make the right choices for the Nation.
    We all agree that the Corps can and should modernize its approach 
to water resources. But modernization of the Corps needs to be in 
accordance with the future direction of our national policy.
    With your permission, I would like to give you my perspective on 
the water policy issue. Here are just a few of the facets of the issue. 
Our society is growing more complex. We have competing interests and 
disputes in many watersheds in the Everglades, along the Missouri 
River, the Mississippi River, the Columbia River, and many others. 
These interests and disputes are intensified when we experience drought 
conditions as severe as we have now over much of the country.
    As members of this important committee, you are more aware than 
most that many Corps navigation projects have extensive maintenance and 
repair backlogs.
    While advances in science and technology can move us toward a new 
paradigm of more environmentally sustainable projects and integrated 
water resources management, we must develop more effective public 
policies built on a new public consensus for building and constructing 
our projects.
    The concept of requiring a peer review is something that should be 
addressed. We are supportive of requiring outside independent peer 
review of certain Corps projects. Peer review, where appropriate, would 
be a very useful tool and add significant credibility to the Corps 
project analyses and to our ability to judge the merits of a project.
    In terms of our Nation's priorities, the war on terrorism is, and 
should be a primary focus. We must prioritize our resources to ensure 
that we win this war. We must also ensure that we are looking out for 
the Nation's long-term economic and environmental future. Corps 
investments have helped to make our country's economy strong. At the 
same time, we also need to protect and sustain our Nation's natural 
resources. Our financial resources are not unlimited. We therefore must 
address the following questions: What water resources investments do we 
most need to make now? To what extent should these be a Federal 
responsibility? To what extent should the Corps have this 
responsibility? Which investments should we not undertake until later? 
What can we do without? Can we afford to build all on-going projects 
simultaneously? Should we continue current cost sharing practices? If 
not, how should we revise current law? Should we continue to operate, 
maintain, and rehabilitate every investment that we have made in 
navigation?
    This Administration has insisted on strong coordination, 
collaboration, and cooperation among agencies within the executive 
branch and wants to work closely with you on the plans and policies we 
should put in place to address these long-term needs. The Corps 
professionals' body of knowledge on water resources is unparalleled. 
They stand ready, with that knowledge and associated skills, to ensure 
that the Federal Government can continue to meet the needs of its 
citizens.
                               conclusion
    I appreciate the opportunity you have given me to testify before 
this distinguished committee, recognizing that your knowledge of these 
subjects far exceeds what I have been able to learn in these past few 
months. I believe we have an opportunity, working together, to help 
shape the Nation's future. As you know better than I, these are serious 
times and it is often hard to concentrate on the long term when the 
more immediate becomes urgent. I pledge to work with you on these 
important issues to achieve a national water policy that serves the 
best interest of all our citizens.
    Mr. Chairman, this concludes my statement, and I would be pleased 
to address any questions that you or the committee may have.
                               __________
Responses by Hon. John Paul Woodley, Jr., to Additional Questions from 
                             Senator Inhofe
    Question 1. Do you think that there are some things that we could 
do in WRDA that could bring the talents of the Corps to bear on the 
some of these other needs of the Defense Department?
    Response. I believe that the Corps and DOD have all the authorities 
necessary to utilize their talents in a cooperative manner in this 
area, when requested. Continued support for the programs and projects 
within a WRDA will allow the Corps to continue to provide water 
resource services to the country while maintaining its expertise that 
can and is being used to support the war fighter on the ground today in 
Iraq and throughout the Department of Defense.

    Question 2. What sort of performance measures do you advocate to 
ensure that ecosystem restoration achieves measurable benefits?
    Response. We recently released the Civil Works Strategic Plan for 
Fiscal Years 2004-2009. One of the five strategic goals for the Civil 
Works program is to repair past environmental degradation and prevent 
future environmental losses. Pursuant to that goal, one objective is to 
``restore degraded, significant ecosystem structure, function, and 
process to a more natural condition.'' The associated performance 
measures included in the Strategic Plan are acres and/or river miles of 
habitat restoration completed and acres/river miles of nationally 
significant habitat restoration completed per dollar invested. We will 
continue to develop other performance measures, as we formulate the 
fiscal year 2006 budget and gain more experience in this complex area 
of analysis. In addition to cost effectiveness, other critical 
considerations include the quality of the habitat restored and its 
relation to other activities in the watershed and nation. The Corps 
staff have developed eight factors that will be used initially to 
address these issues: Special Status Species, Scarcity, Connectivity, 
Significance of Plan, Level of Contribution to the Plan, Additional 
Tangible Support, Reliability and relative Operation and Maintenance 
costs.

    Question 3. Do you anticipate that you will distribute guidance to 
Corps district offices in the near future to clarify the Corps' 
jurisdiction over navigable waters?
    Response. The Corps currently is in the process of identifying 
practices employed for making jurisdictional determinations across the 
Nation and will inventory, assess and determine any differences in 
practices due to regional and environmental factors. The findings may 
be used to develop and provide internal policy guidance to enhance 
consistency for making Clean Water Act jurisdictional determinations.
                                 ______
                                 
   Responses by Hon. John Paul Woodley, Jr., to Additional Questions 
                           from Senator Boxer
                               folsom dam
    Question 1. Please explain in detail what you have been instructed 
to do and who issued the instructions.
    Response. With respect to fiscal year 2004, we are using the funds 
appropriated for the project in accordance with the instructions in the 
committee reports accompanying the fiscal year 2004 appropriation 
bills. With respect to fiscal year 2005, 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. 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 this as pre-decisional, internal information.

    Question 2. With funds provided by Congress for fiscal year 2004, 
what actions are you currently taking to advance the Mini-Raise project 
and what specifically are you doing with those funds regarding the new 
bridge?
    Response. We have initiated environmental review, engineering and 
design for all elements of the project including design of a permanent 
bridge over the American River. Specifically in regard to the bridge, 
the Corps is working closely with local stakeholders to plan and 
coordinate engineering, design and construction of the bridge on an 
expedited schedule. The environmental evaluation process was initiated 
on February 6, 2004 and a scheduling workshop was held on February 9th. 
Additionally, three public meetings were held in early March to further 
develop an execution strategy for the bridge. Since the March public 
meetings, we have focused on getting the entire planning and design 
process underway. These efforts include the establishment of a Traffic 
Advisory Committee, to provide guidance on traffic studies needed as 
part of the permanent bridge planning process, topographic surveys 
necessary to start detailed design of the bridge, and initiation of the 
Architect/Engineer selection process to select the consultant that will 
design the bridge and roadway approaches. We plan to expedite the 
bridge element in parallel with other project elements, which will 
result in the bridge being the first designed and constructed project 
feature.

    Question 3. How much funding is the Corps capable of using for the 
overall Mini-Raise project in fiscal year 2005? Of that amount, how 
much could be used on the new bridge?
    Response. The maximum capability estimate for a study or project 
reflects the readiness of work for accomplishment. It is the most that 
the Army Corps of Engineers could obligate efficiently during the 
fiscal year for that study or project. Because each estimate is made 
without reference to the rest of the Army Civil Works program, these 
estimates are not cumulative. Civil Works studies and projects compete 
for funding and manpower. The President's fiscal year 2004 Budget for 
the Army Civil Works program proposes funding levels that reflect this 
Administration's assessment of national priorities in view of the many 
potential uses of Federal funds. Consequently, while the Corps could 
obligate additional funds on some studies and projects, offsetting 
reductions within the Army Civil Works program would be required to 
maintain overall budgetary objectives. Furthermore, the Budget 
allocates the funding available to the Army Civil Works Program in a 
manner that would enable the Corps to use funds effectively. Subject to 
the above qualifications, our fiscal year 2005 capability is 
$11,000,000 for the overall Mini-raise project. Of that amount, 
$7,000,000 could be used for design of a bridge.

    Question 4. For both the Mini-Raise project and the new bridge, 
when do you anticipate completing design? Executing a Project 
Cooperation Agreement? Initiating construction?
    Response. The fiscal year 2005 budget includes funding for design 
of flood control features, but not of a bridge. The completion date for 
preconstruction engineering and design (PED) is not scheduled at this 
time. However, should sufficient funding be provided, we could complete 
PED and execute a PCA in September 2005 and initiate construction in 
November 2005.

    Question 5. What is your schedule for having the new bridge open to 
traffic?
    Response. Design and construction of a new bridge are not 
scheduled. However, should sufficient funding to continue work on a 
bridge be provided, a bridge could be open by December 2007.

    Question 6. Please explain what efforts you are undertaking to make 
sure that local officials are full partners in the bridge project.
    Response. Over the past 5 months we have crafted a strong, open 
working relationship with our four bridge stakeholders and potential 
sponsors-the State of California Reclamation Board, the Sacramento Area 
Flood Control Agency, the city of Folsom, and the Bureau of 
Reclamation. Officials from these organizations have been active 
participants in bi-monthly Project Management Group (PMG) meetings and 
other special focus workshops and meetings.

    Question 7. What priority does the Mini-Raise project have within 
the Corps of Engineers?
    Response. The project is one of 23 preconstruction engineering and 
design projects included in the fiscal year 2005 budget. It has a high 
benefit-cost ratio and would increase flood protection to a large 
metropolitan area currently at risk.

    Question 8. What assurances can you give the Committee that the 
project, including the new bridge, will be expedited?
    Response. In accordance with Congressional direction for 
construction of the Mini-raise project including the bridge, we have 
dedicated separate but inter-working Project Development Teams (PDTs) 
to oversee the execution of all facets of these projects and to assure 
they are expedited. These teams will bring the appropriate resources 
from within the Corps, other Federal agencies, or the private sector to 
expedite execution. However, as stated, only design of flood control 
features is included in the fiscal year 2005 budget.

    Question 9. Are all parties, including the Bureau of Reclamation, 
fully cooperating to expedite this project?
    Response. Yes, all parties, including the Bureau of Reclamation, 
are fully cooperating to expedite this project in accordance with 
budget and appropriations decisions.
                              corps reform
    Question 10. Independent Review.--If independent review is to 
identify problems, ensure integrity in the information provided to 
Congress, and help restore public confidence in the Corp's planning 
process, shouldn't an entire project study be subject to review by an 
independent review panel, rather than just one component of a study?
    Response. Proposed studies that focus on a specific project or 
separable element of a project should be considered for independent 
review depending upon the complexity and controversial nature of the 
study. Those projects that are not viewed as complex or controversial 
may not warrant the extra time delays and cost to the taxpayer and the 
sponsor. For the most complex and controversial projects, we would want 
reviewers from outside the agency. The NRC report has an extensive 
discussion on this subject but recognizes that the agency must be 
included in all review to maintain communication. The report cautions 
that this communication must not compromise the review's independence. 
Also the agency must have its own internal review to determine if the 
proposed project meets policy requirements and to fulfill its 
responsibility of making a recommendation to the Administration and the 
Congress. The review and documentation that the independent reviewers 
and the internal policy review group provide is essential in securing 
OASA (CW) and OMB clearance that it meets Administration policy.
    For these reasons, I agree with the Chief that independent review 
should be limited to scientific and technical issues. Administration 
policy and management should be the agency's responsibility to account 
for along with documenting how independent review issues were resolved. 
Overall, the Corps must acknowledge the independent review panel's 
conclusions and recommendations. This would be accomplished through the 
agency's documentation of review findings and be a part of the public 
record on how all issues were resolved. It is the Corps responsibility 
to resolve all issues before a Chief's Report is signed. Each key point 
must be addressed and explained how it was incorporated into the 
decisionmaking process. Where necessary, issues would be rebutted with 
explanations as to why the agency does not agree. Any independent 
review program should complement both the existing technical and policy 
reviews conducted by the Corps and the reviews conducted by the 
stakeholders, the public and other agencies.

    Question 11. Do you believe that public confidence in Corps studies 
can be restored if the Corps defines the elements that are to be 
examined by an independent review panel?
    Response. In my view, the key to such a process would be a full and 
open public involvement initiated early in the study through the draft 
and final stages of the feasibility report, full disclosure of external 
and internal reviews, and documentation of review findings that would 
serve as the basis for the Chief of Engineers final report. A critical 
issue to the integrity of such a process is who picks the reviewers for 
an external, independent review so the agency can avoid bias or 
conflicts of interest. We would envision that a process would be 
established to draw upon reviewers that have been identified by an 
outside body, such as the National Research Council or other similar 
organization. A process that provides for review during the conduct of 
a study, will allow reviewers to address issues early in the planning 
process when changes are much easier to accommodate. Conducting review 
in such a fashion, we believe will minimize the delays and keep costs 
of review to a minimum. Through such a process, I believe public 
involvement would be ensured and public confidence restored.

    Question 12. Mitigation Requirements.--What steps have been taken 
to ensure that adequate mitigation is being proposed for new projects 
being recommended to Congress?
    Response. The Corps' policies, guidance and procedures require that 
we consider the impacts of alternatives as we develop solutions to 
water resources problems. Our guidance is extensive and includes 
requirements that we seek first to avoid significant impacts, then work 
to minimize such impacts so that developing appropriate, adequate and 
justified compensatory mitigation begins to occur only after other 
options have been evaluated. Therefore, the fact that only 31 percent 
of the projects that received appropriations from Congress required a 
fish and wildlife mitigation plan is a positive outcome. The GAO report 
was clear that the remaining proposals did not require a mitigation 
plan; thus, none was undertaken. We view the fact that 70 percent of 
the proposed projects presented to Congress for authorization and 
funding did not require compensatory mitigation as a demonstration that 
we avoided significant impacts by the development of suitable 
alternatives.
    All projects recommended to Congress for authorization and funding 
present the results of the detailed environmental and other analyses 
and in accordance with Section 906(d) of the Water Resources 
Development Act of 1986 any necessary compensatory mitigation. Our 
guidance is updated and revised as needed to reflect state-of-the-art 
and emerging methodologies for analysis. Nevertheless, our overall 
policies with regard to identifying needs for mitigation are sufficient 
to guide planning and project development so that any significant 
impacts are properly mitigated. Our Civil Works Strategic Plan and our 
own Environmental Operating Principles further demonstrate our 
commitment to protecting and restoring environmental resources, and to 
achieving environmental sustainability in the actions we undertake.
    On March 26, 2002, the Chief of Engineers reaffirmed the Corps of 
Engineers' commitment to the environment when he presented the 
Environmental Operating Principles as a guide for all of Corps works 
and an integral part to all its decisionmaking and programs. The Corps 
formalized the requirement and procedures for implementation and 
integration of ``Environmental Operating Principles'' in all Corps 
projects and programs in a recently published regulation. The EOP 
mandate proactive and comprehensive consideration of the effects of 
Corps actions on the air, water, and land resources of the environment 
and directs all Corps members to seek better ways of achieving 
environmentally sustainable solutions.

    Question 13. How can the Corps properly calculate the cost of a 
project if it does not have a detailed mitigation plan--outlining lands 
to be acquired, the specific work to be undertaken, and the monitoring 
to be carried out--when it is preparing its cost estimates?
    Response. Because our guidance and procedures do require that a 
detailed mitigation plan be developed if it is not possible to avoid 
environmental impacts, we do in fact have the information necessary to 
prepare detailed costs estimates. When we propose a project for 
Congressional authorization, we present that detailed cost estimate in 
the recommendation. Our analysis of the mitigation requirements is 
based on the best science and methodologies available to us, as well 
as, the recommendations of the Fish and Wildlife Service. Should 
subsequent information show the need to revisit the project design and 
modify it, we then recalculate the costs (for whatever reasons, 
including mitigation). As necessary to comply with the WRDA authority 
and limitations for cost increases, we would then report such cost (and 
design) changes to Congress. Any proposal forwarded to Congress without 
a detailed fish and wildlife mitigation plan is a proposal to implement 
a solution that requires no mitigation.

    Question 14. What steps is the Corps taking to ensure that it will 
meaningfully consider the comments of other Federal agencies, including 
any opposition to proceeding with specific Corps projects? Does this 
extend to revising recommended alternatives?
    Response. The Corps has very open and transparent planning and 
evaluation processes. Furthermore, the results of the formal review 
processes with other state and Federal agencies, many required by law 
(NEPA, ESA, FWCA, e.g.), are included in every report to Congress as 
part of the formal documentation. Our responses to all comments, 
including any dissenting comments or opposition to our conclusions, are 
presented in the final report. While there may be disagreements with 
the conclusions, the explanation and justification for the decision to 
accept or reject comments of others are always part of the record. Thus 
giving meaningful consideration to the comments of others, which is 
part of our procedures, does not mean that we always accept those 
comments and change the decision. We do provide our analysis to justify 
our decision to accept or reject comments, but those decisions are 
based on the scientific and technical evaluations we conduct.
    Almost all of our proposals have a cost-sharing partner, 
representing the local community, and working with us in seeking 
solutions to problems. Generally speaking, the process of identifying 
and evaluating solutions to water resources problems is an iterative 
one and ultimately consensus-driven by local decisionmakers. We take 
into account the views and comments of others, not only the partners, 
but also the coordinating agencies and the public. We respond to the 
comments received as part of the coordination process and at public 
meetings and workshops. Summaries of all those processes as well as the 
categories of comments are also part of the documentation presented 
when the proposal is ready for authorization or approval.
                                 ______
                                 
   Responses by Hon. John Paul Woodley, Jr., to Additional Questions 
                         from Senator Jeffords
    Question 1. There are surpluses in both the Harbor Maintenance and 
the Inland Waterways Trust Funds, trust funds that are paid into by the 
users of our ports and inland waters. Please explain why operation and 
maintenance needs are going unmet when the money intended to pay for 
the maintenance sits in the trust fund?
    Response. Senator, annual expenditures derived from both trust 
funds are limited by amounts appropriated for inland waterway projects 
in the Construction, General account, and for harbors in the Operation 
and Maintenance, General, account in our annual Energy and Water 
Development Appropriations Acts. Fifty percent of inland waterway 
construction costs and 100 percent of harbor maintenance costs are 
derived from the respective trust funds.

    Question 2. The Corps is currently restudying a proposal to expand 
the locks and dams on the Upper Mississippi River. Two panels of the 
National Academy of Sciences have concluded that the Corps is using 
inflated estimates of project benefits, including unrealistic traffic 
forecasts and economic tools that underestimate the impact of rising 
barge costs on the decisions of shippers. Despite these findings, is 
the Corps going to recommend a lock and dam expansion on the 
Mississippi River?
    Response. The feasibility study is entering an important phase. 
Currently the Corps has produced a draft report, which is undergoing a 
public and agency review. The draft feasibility report includes the 
evaluation of a number of navigation and ecosystem restoration 
alternatives. Alternatives under consideration involve up to almost 
$2.5 billion in navigation and $5.3 billion in ecosystem restoration. 
While the feasibility report includes a tentatively selected plan, a 
recommendation would not be made until the public review period is 
complete.
    With regard to your concerns about the potential navigation 
improvements, I would like to expand on my position. The Corps has 
considered certain nonstructural and structural potential solutions. 
The nonstructural measures include the use of switchboats, congestion 
fees, and excess lockage fees; while the structural measures include 
additional mooring buoys, lock extensions, and new locks.
    To compare these navigation options, instead of identifying a 
single estimate or band of estimates of the likely future demand for 
waterbourne transportation, the study relies upon several scenarios of 
future demand without assigning relative probabilities to their 
occurrence. Likewise, the study calculates benefits using assumed 
elasticities of demand for the use of the waterway.
    In summary, the Corps has taken the suggestions and recommendations 
of the National Research Council (part of NAS) very seriously and has 
restructured the draft feasibility report. The Corps cannot make any 
final recommendation until the public review period is complete and any 
concerns or issues identified by the public have been fully considered 
in the decisionmaking process.

    Question 3. You have testified that you support independent review 
of costly or controversial Corps projects. Would you support the 
creation of an Office of Independent Review outside the Corps? What 
role, if any, should the National Academy of Sciences play in selection 
of reviewers? Should reviewers be permitted to determine the scope of 
review?
    Response. I would support independent review of complex or 
controversial projects. Because these proposed projects must result in 
a Report of the Chief of Engineers and a Secretary of the Army report 
to OMB and the Congress, I feel it is essential that the Chief's office 
and my office, must continue to provide the documentation of policy 
review but also to integrate the results and resolution of issues 
arising from any external independent review. The Chief's Report is the 
critical document that provides the policy and technical basis to 
recommend a Federal water resources project to OMB and the Congress. 
This report must present the results of all internal and external 
review that a particular study may have experienced. The Corps has the 
experience to accomplish this and capability to provide arm's length 
contracts for external review. I agree, a key role could be played by 
organizations such as NAS in facilitating the availability of outside 
independent experts to provide such external review. I believe the 
scope of work should be developed by the Corps to keep the study on 
track and used to secure technical external review through a number of 
external sources such as NAS.

    Question 4. Please explain why the Office of Management and Budget 
is taking such a hands-on approach to selecting engineering plans, 
changing cost-benefit numbers, and pre-selecting alternatives under the 
NEPA statute? In addition, are you at all concerned that your current 
process could be inconsistent with the requirements of NEPA?
    Response. Senator, I cannot agree with your characterization of the 
role of the OMB budget examiners. They and many others are involved in 
the management and allocation of scare resources, which requires 
involvement with agencies proposing commitment of Federal funds. That's 
what public policymaking is all about. With regard to compliance with 
the requirements of NEPA, I am confident that our current process is 
not only in compliance with NEPA, but the many other laws under which 
the Corps studies are developed and processed to Congress for 
authorization.

    Question 5. Thirty-five million dollars are allocated in the 
President's Budget to the Assistant Secretary of the Army's office for 
use in ``emergencies.'' This is an unauthorized program with no 
guidelines for distribution for funds. The Corps has a defined 
emergency response program in accordance with existing authorities. 
What is the $35 million for? Are you seeking authority from this 
Committee for this program, and how do you propose to spend these funds 
should Congress appropriate them?
    Response. The emergency reserve fund would consist of Operation and 
Maintenance funds set aside for high-priority, unexpected, and urgent 
needs for critical maintenance and repairs at key facilities. The 
intent is to ensure that scheduled high priority work can be 
accomplished without disruption in the event that additional, 
unexpected priority needs arise. The reserve fund would be the 
reprogramming source of last resort. Any reprogramming would be 
undertaken within existing authority. The Assistant Secretary's 
involvement is to ensure that the reserve fund would be used for the 
highest priority unexpected needs. Guidelines for the distribution of 
funds will be developed early in fiscal year 2005.

    Question 6. Local sponsors have repeatedly in the past, and most 
recently since the 2002 hurricane damages, brought to our attention the 
need for Federal funding of $467 million for the construction of the 
Morganza to the Gulf of Mexico Louisiana project. The project's total 
cost of $719 M is to be shared by the local sponsor in the amount of 
$252 million. This cost share arrangement, 65 percent Federal to 35 
percent Non-Federal, considering the project's benefits and compassion 
in protecting over 120,000 U.S. citizens and 1700 sq. mi of unique 
ecosystem, seems a sound investment. What assurances and guarantees 
does the Federal Government have from its potential local sponsor 
partners?
    Response. Letters of Intent to cost-share construction, design 
agreements, and a \1/4\ cent sales tax, which was adopted by a vote of 
the citizens of Terrebonne Parish.

    Question 7. Is there Non-Federal funding?
    Response. The state of Louisiana had dedicated $12M to Morganza to 
the Gulf through their Capital Outlay Program. In addition, the State 
has $4M available for Terrebonne Levee and Conservation District ( 
TLCD) to use in advancing the Morganza to the Gulf Project. LA DOTD has 
also requested (Dec 2003 letter) that USACE accept a $2M cost sharing 
advance for project design. TLCD generates approx. $4M annually from 
the Parish \1/4\ cent sales tax dedicated to the Morganza to the Gulf 
Project. TLCD has $6M of this tax collected, drawing interest and 
available for expenditure. TLCD is also advancing the non-Federal Work-
in-Kind efforts ahead of project authorization. They have acknowledged 
that this is at their own risk, but feel that advancing the project is 
vital to the community. They are hopeful that Congress will allow 
credits for all work integral to the project, once authorized.

    Question 8. If so, what amount, and is it dedicated?
    Response. See above. All non-Federal funds identified are dedicated 
to Morganza to the Gulf.

    Question 9. How does this project compare with other WRDA projects 
relative to availability of local funds?
    Response. This project will compare favorably based local funding 
support. We are not aware of any other projects in prior WRDAs or the 
draft WRDA in the project area that would be competing for these local 
funds.

    Question 10. Do other projects seeking construction authorization 
have dedicated Non-Federal Funds in place?
    Response. State funds are not typically dedicated prior to 
Construction Authorization. Early dedication of these funds to the 
Morganza Project indicates a high level of support by the Sate 
Legislature. In addition, the Terrebonne Parish sales tax will increase 
the level of State-wide support. Local communities that bring funds to 
the table as a voluntary contribution to the State's cost-share give 
their project a priority when competing for State funding.

                               __________

Statement of Lieutenant General Robert B. Flowers, Chief of Engineers, 
                        Army Corps of Engineers

    Mr. Chairman and Members of the subcommittee: I am honored to be 
testifying before the subcommittee today, along with the Assistant 
Secretary of the Army (Civil Works), the Honorable John Paul Woodley, 
Jr., on the role of the U.S. Army Corps of Engineers in meeting the 
nation's water resources needs.

                              INTRODUCTION

    The Army Corps of Engineers is prepared for the challenge of public 
service. Since 1775 the Army Corps of Engineers has honorably served 
the Army and the Nation. During the 20th Century the Army Corps of 
Engineers experienced both resounding success and dramatic controversy. 
Today in the 21st Century we are responding to the scrutiny of the 
public we serve. I welcome this challenge.
    The Army Corps of Engineers traces its origins to the construction 
of fortifications at Bunker Hill in 1775. For 229 years, the Corps has 
responded to the needs of the Army and the Nation.
    The mission of the Corps has evolved from that of ``builder'' to 
the roles of ``Developer/Manager'' and ``Protector'' of water 
resources.
    What began as a military engineering mission for Nation building in 
the 18th century expanded into a major peacetime mission in the 19th 
Century. The Corps helped a young Nation map the frontier and expand 
westward by surveying roads and canals. The Corps promoted economic 
development through a vast water resources infrastructure, contributed 
to development of the first national parks, tied an inland navigation 
system together to move commerce across states and opened ports and 
harbors critical for national defense and international trade. In the 
20th century Congress provided the Corps with additional water 
resources development and management authorities including flood 
control, hydropower, water supply, and recreation. More recently, 
Congress expanded Corps authorities to storm damage reduction, response 
to natural disasters and aquatic ecosystem restoration. Our Civil Works 
program has changed along with society's changing needs, values, and 
priorities for good water management. For example, the Water Resources 
Development Act of 1986 emphasized the national expectation that 
project partners be more involved in the formulation and financing of 
solutions to water resources problems. Nearly everyone believed that we 
could develop better projects more efficiently and effectively by 
recognizing that projects must meet national needs and work viably at 
the local level. The history of the last 15 years of the 20th Century 
demonstrates that we responded to this direction and the Nation's 
needs.
    Today, Mr. Chairman, under your oversight, the Corps is involved in 
the development, management, and protection of water and related land 
resources through its commercial navigation, flood and storm damage 
reduction, and aquatic ecosystem restoration projects. The Civil Works 
program not only provides stewardship of water resources under our 
jurisdiction and implements important regulatory authorities, but also 
is authorized to provide emergency services in response to natural 
disasters. It is my job, in concert with the Assistant Secretary of the 
Army (Civil Works), to provide advice to the executive branch and 
Congress on these matters. As we move forward in the Twenty-first 
Century I believe that the greatest water challenge facing our Nation 
is managing our water resources in a fully integrated manner to sustain 
both our environment and our economy. I'm proud to report that the 
Corps is prepared and ready for this role.
    Integrating the management our water resources poses some basic 
questions about how the Nation will use and protect water in the 
future, some of which may have implications for future Corps 
activities. For instance, to what extent will water be a mode of 
transportation? To what extent will it be open for recreation? Our 
future depends on the direction and focus of our priorities. This 
direction will also profoundly affect the way we do business in the 
Corps. Together we need to craft the 21st Century Corps of Engineers, 
an organization based on contemporary values and future needs. The 
needs that the Corps addresses--water resources and support to the war 
fighter--are as critical today as at any moment in history.
    Last year, I had the pleasure of testifying for the House Water 
Resources and Environment Subcommittee with Mayor Bob Young of Augusta, 
who was testifying as Co-Chairman of the Urban Council. In speaking of 
the Nation's water challenges, Mayor Young said, ``there is lack of 
recognition of the seriousness of the water supply problem; and, there 
is a lack of effective planning to use current water resources more 
efficiently and effectively. The Federal Government can play a lead 
role in the form of technical assistance to achieve the needed level of 
planning so that American cities and states, neighboring watersheds, 
and the network of rivers can be made to meet our economic and cultural 
needs.''
    The Corps water resources planning capability is evolving to the 
new challenges of integrated water management. I am committed to 
preserving and improving the reliability of our planning and my reports 
to you. We are proud of our disciplined water resources planning and 
the professionals who face the daunting challenges of solving real 
problems, balancing competing interests and forging consensus around 
solutions within the framework of current law and policy. They serve 
the public well and very often in the midst of controversy and intense 
scrutiny. Their difficulties make the discipline of the process of 
paramount importance. Today, we continue to apply the Principles and 
Guidelines (P&G) for Water and Related Land Resources. The P&G require 
a clear statement of and make possible a lucid and logical 
understanding of the tradeoffs among alternative uses of water. The P&G 
accommodate formulation of projects to meet multiple objectives such as 
ecosystem restoration and traditional flood damage reduction and 
navigation. This framework has empowered the formulation of projects as 
diverse as the Comprehensive Everglades Restoration Plan as well as 
improvement to the Ports of New York and New Jersey. As we face the new 
challenges of integrated water management, the tradeoffs will become 
even more complex. We must continue to strive for openness and 
inclusion within the P&G framework to achieve common understanding of 
the benefits and costs associated with alternative allocations of our 
Nation's water resources and foster better decisions among these 
allocations.

                         TRANSFORMING THE CORPS

    I'd like to talk about what I'm doing to transform the Corps into 
the 21st Century. There are three particular areas that I would like to 
discuss--reducing the backlog of projects, improving our internal 
processes and working toward watershed approaches.
Backlog
    Frankly, we have too many projects on the books, and some do not 
address solutions in a contemporary way. The backlog has been the 
center of discussions at previous hearings of this Committee.
    At the end of fiscal year 2005, completing the construction 
projects funded in the fiscal year 2005 Construction account is 
estimated to cost approximately $11 billion in non-inflated dollars. 
The estimated backlog represents a decrease from last year. The 
decrease partly reflects a decision to display the backlog in fiscal 
year 2005 dollars rather than applying projected inflation to the 
completion costs. The decrease is also the result of project 
completions and is based on the decision to not budget for periodic 
renourishment of shore protection projects.
    I also want to address the question of project deauthorization. For 
some authorized projects, considerable time may elapse after 
authorization without appropriation of construction funds. Over this 
time we may see scientific progress that could better address a problem 
and public policy may shift. We have many inactive projects that 
technically remain on our books whose designs won't solve the original 
problems or for which there is no longer support.
    There also are projects that would solve certain problems but are 
unpopular for any number of reasons. Most were authorized years ago but 
haven't been built. These projects show up on the hit lists of some of 
our most vocal critics. Sometimes the critics are right. In many cases, 
I believe that it would be helpful for a principals group of all 
interested Federal agencies, and in some cases for the Congress, to 
take a fresh look at these projects.

Internal process
    We have been working very hard internally to transform. We are 
making our processes more open and collaborative. We are working to 
revitalize our planning capabilities and to become more efficient.
    We are becoming a team of teams within the organization, focusing 
on eight regional business centers, which will move efficiently and 
deliver service to the public and the armed forces.
    We've taken other major steps:
     We have established the USACE Environmental Operating 
Principles as a clear commitment to accomplishing our work in 
environmentally sustainable ways and with the express purpose of 
instilling these principles as individual values in all members of the 
Corps team.
     As I indicated earlier and critically important in giving 
life to the Operating Principles, we have issued guidance supplementing 
application of the P&G that emphasizes the formulation of environmental 
and economic projects.
     We are continuing a rigorous training curriculum to 
improve our planning capability. This will ensure that the best science 
is applied in project development and that our planners integrate 
economics and ecology in developing Corps projects.
     We must ensure that our planning methods are founded on 
the best science to support recommendations for water resources 
projects. We are undertaking needed investments in improving economic 
models, methods, and tools for all our planning activities but in 
particular for navigation evaluations. We will update and improve 
specific models and address issues raised by the Corps and others.
     We have redoubled our efforts to engage Federal, state, 
and local agencies, stakeholders and the public in meaningful dialog. 
We have brought the major resource agencies to the table to assist in 
decisionmaking.
     We have allocated additional resources to strengthen our 
internal review capability. With restructuring under USACE 2012, we 
have just created an Office of Water Project Review in Headquarters 
effectively doubling the size of our policy compliance review staff. 
The goal is to have our economists, plan formulation specialists, and 
environmental reviewers focus on early involvement in study development 
to assure compliance with established policy as projects are being 
developed. Additionally, this new office is overseeing administration 
of external independent review on controversial and complex projects 
through contracts with outside experts.
     We have established 5 national planning centers of 
expertise that will be staffed with some of our best engineers, 
scientists and economists--a step that is essential for successfully 
addressing the issues that increasingly arise in planning a water 
resources project, especially those that are costly, complex, or 
controversial, or which otherwise require very specialized planning 
work. Our five national planning centers are designated to lead each of 
the following areas of expertise (1) inland navigation systems 
analysis, (2) coastal and deep draft navigation, (3) flood and storm 
damage reduction, (4) ecosystem restoration and (5) integrated water 
resources management.
     I have also revitalized the Environmental Advisory Board, 
a board of independent, external environmental advisers that will help 
us evaluate our process. They have advised us on our Upper Mississippi 
River Navigation study and will also be looking at peer review, cost 
sharing, breadth of authority and reviewing our work in the Everglades 
in the upcoming sessions.
    We're committed to open and transparent modernization of the Civil 
Works Program for the 21st Century. To this end, we're committed to 
continuing the dialog. Additionally, I have issued communication 
principles to ensure open, effective, and timely two-way communication 
with the entire community of water resources interests. We know well 
that we must continue to listen and communicate effectively in order to 
remain relevant.

Watershed Approach
    In many instances, we have reaped immense benefits from 
collaboration and partnership within the Federal Government and within 
our local project sponsors. These partnerships will serve us well as we 
move toward a watershed approach. Here are a few things I've done:
    On March 22, 2004, a new Civil Works Strategic Plan was provided to 
the committees and subcommittees of Congress responsible for water 
development authorizations and appropriations, including this 
subcommittee and committee. The plan emphasizes the sustainable 
development, management and protection of our Nation's water and 
related land resources. I believe that we need to do this through a 
holistic watershed approach. We have already established watershed 
principles and published watershed guidance for our field offices.
    Some recent watershed management efforts, such as the Comprehensive 
Everglades Restoration Plan, already promote active participation of 
all interested parties in planning and decisionmaking. A similar effort 
is Louisiana Costal Area ecosystem restoration project where a Regional 
Working Group has been formed to exchange ideas. Quite frankly though, 
we need to do more and we need the Congress's help if we are truly to 
take a watershed approach on more of our projects.
    Right now, existing laws and policies drive us to single focus, 
geographically limited projects. The current approach narrows our 
ability to look comprehensively and sets up intra-basin disputes. It 
also leads to projects that solve one problem but may inadvertently 
create others. Frequently we are choosing the economic solution over 
the environmental when we can actually have both. I believe the future 
is to look at watersheds first and then evaluate and design projects 
consistent with the more comprehensive approach. We know that will 
require collaboration early and continuously but we believe it will 
prevent problems later.
Conclusion
    Transformation of the Corps won't be easy, but we stand ready to 
work with you to address these issues. As our critics continue to offer 
constructive advice, I would ask that they work with us as well the 
Congress, the Administration, other interest groups and our partners 
and stakeholders, for the well being of the American people and the 
environment in which we live.

                    THE NATIONAL ECONOMY AND DEFENSE

    Water resources management infrastructure has improved the quality 
of our citizens' lives and supported the economic growth and 
development of this country. Our systems for navigation, flood and 
storm damage reduction projects, and efforts to restore aquatic 
ecosystems contribute to our national welfare. The stream of net 
benefits, realized as reduced transportation costs, avoided flood and 
storm damages, and improvements in environmental value can be 
considerable.
    Civil Works Program research and development provides the Nation 
with innovative engineering products, some of which can have 
applications in both civil and military infrastructure spheres. By 
creating products that improve the efficiency and competitiveness of 
the nation's engineering and construction industry and providing more 
cost-effective ways to operate and maintain infrastructure, Civil Works 
Program research and development contributes to the national economy.
    The Civil Works Program is a valuable asset in support of the 
National Security Strategy in that it provides a way to maintain a 
trained engineering work force, with world-class expertise, capable of 
responding to a variety of situations across the spectrum of national 
defenses. This force is familiar with the Army culture and responsive 
to the chain of command. Skills developed in managing large water and 
land resource management projects transfer to most tactical 
engineering-related operations. As a byproduct, Army Engineer officers 
assigned to the Civil Works Program receive valuable training, in 
contracting and managing large projects.
    Over the past year, about 1,000 Corps civilian volunteers have 
deployed to Iraq, Afghanistan, and elsewhere in support of our Nation's 
efforts in the war against terrorism. They are involved in every aspect 
of rebuilding these nations and establishing the conditions for 
democracy to flourish. The work is vitally important and, quite often, 
dangerous. In fact, several Corps civilians have been wounded and 
several of our contractor partners have been killed. Our Civil Works 
team has responded magnificently and is performing indispensable work. 
We're fortunate to have such talented and dedicated professionals to 
call upon and we're so grateful for their service.
    In Iraq, we have been deeply involved in the restoration of the 
Iraqi Oil industry. Our involvement has helped ensure that more than 
268 million barrels of crude oil have been exported, resulting in more 
than $7 billion being returned to the Iraqi economy. This income is 
forming the basis of the emerging national economy in Iraq, with much 
of the profit being reinvested in restoring Iraqi infrastructure. We 
are also assisting in the procurement of refined oil products in Iraq, 
which are essential to every day life in Iraq.
    The Corps is proud to have worked closely with the Coalition 
Provisional Authority (CPA), U.S. Agency for International Development, 
and the Iraqi Governing Council in restoring reliable electricity 
throughout Iraq. When it became obvious that years of neglect and 
sabotage had brought the Iraqi electrical power production and 
transmission to near collapse, the Corps, working with the CPA and 
USAID exercised its time-proven civil emergency response capabilities 
and provided a much-needed boost to electricity delivery across Iraq. 
We continue to assist the CPA and USAID in electrical power production 
and distribution, and today, the average Iraqi has greater access to 
electricity than he had before the war. No longer is access to 
electricity a measure of loyalty to the Iraqi regime.
    The Corps is also playing a major role in securing and making safe 
the more than 600,000 tons of former regime munitions spread cross Iraq 
through our Captured Enemy Ammunition mission. As of February 10, 2004, 
350,000 tons of captured enemy ammunition had been secured and 
protected from the hands of saboteurs and terrorists. Another 43,000 
tons has been destroyed. This mission is vital to the safety of our 
soldiers, coalition partners, and innocent citizens of Iraq, as it 
helps deny terrorists access to raw materials they need to make weapons 
and explosives.
    We are also contributing to the continuous improvement of the 
safety and quality of life for soldiers, sailors, airmen and marines in 
both Iraq and Afghanistan as we continue to construct and upgrade their 
living and working areas. In Afghanistan, we are also working with the 
USAID and the Ministry of Transportation as they restore the 
infrastructure necessary for a prosperous Nation.

                               CONCLUSION

    Throughout my career I have been privileged to work with the 
outstanding men and women who make up the Army Corps of Engineers. I am 
making the changes necessary to ensure the continued integrity of the 
Corps Civil Works program, so that the Corps can continue to fulfill 
its role in helping to address many of the water resources needs of 
this great Nation. I view our current situation as an opportunity. This 
is an opportunity for us to see ourselves anew and rededicate ourselves 
to our principles.
    Mr. Chairman, this completes my statement. I am prepared to answer 
your questions as well as those of other members of the Committee.

                               __________

    Responses by Lieutenant General Robert B. Flowers to Additional 
                      Questions from Senator Boxer

    Question 1a. What is your position on independent technical review?
    Response. My position is that independent review should be limited 
to scientific and technical issues and be utilized on only complex or 
controversial studies. Those projects that are not viewed as complex or 
controversial may not warrant the extra cost and delays to the taxpayer 
and the sponsor. Our experience with external, independent review thus 
far is that it can be very costly and involve a significant amount of 
time.

    Question 1b. Can this be accomplished in such a way as to avoid 
significant impacts to schedules and costs?
    Response. We would be concerned about delays and additional costs 
that could accrue to projects that may not be controversial or 
particularly complex. The NRC recognized that not all projects require 
extensive external, independent reviews and called for a tiered 
approach to assure soundness of decisionmaking without major disruption 
of the project development process.
    But, for complex and controversial projects, I can see the benefit 
of such input. The Chief of Engineers Report is the vehicle that Army 
and the Administration use in developing their position. It is critical 
that the review process provide early input to the Chief in the 
preparation of this important report. For those studies subject to 
external review, I believe that such independent review input should be 
given equal consideration and those issues identified would need to be 
fully addressed by the Corps. A process that provides for review during 
the conduct of a study, would allow reviewers to address issues early 
in the planning process when changes are much easier to accommodate. It 
must acknowledge the independent review panel's conclusions and 
recommendations. This would be accomplished through the agency's 
documentation of review findings and be a part of the public record on 
how all issues were resolved. Any independent peer review program 
should complement both the existing technical and policy reviews 
conducted by the Corps and the reviews conducted by the stakeholders, 
the public and other agencies.
    With experience and the development of improved procedures for 
establishing review panels, the cost can be reduced but they will still 
add to the overall study cost. For the most complex and controversial 
projects, we would want independent reviewers from outside the agency. 
Also the agency must have its own internal review to determine if the 
proposed project meets policy requirements and to fulfill its 
responsibility of making a recommendation to the Administration and the 
Congress. The review and documentation that the independent reviewers 
and the internal policy review group provide is essential in securing 
OASA (CW) and OMB clearance that it meets Administration policy.

    Question 2a. What is the ability of the Corps in offering data/
technical support and assistance to State and local governments?
    Response. There are a number of ways the Corps can provide data, 
technical support, and assistance to States and local governments. The 
Corps has a generic authority to provide Planning Assistance to States 
under Section 22 of WRDA 1974, as amended. This authority allows the 
Corps to provide technical assistance to support state, territories and 
tribal preparation of comprehensive water and related land resources 
development plans, including watershed and ecosystem planning. We can 
also assist in conducting individual studies supporting these plans.
    Assistance can be provided at the request of non-Federal entity and 
upon availability of Corps expertise. Special considerations include:

          a. Technical services, rather than grants, are provided 
        without charge or cost sharing.
          b. Nationwide annual funds may not exceed $10 million, with 
        not more than $500,000 in any 1 year on any non-Federal entity.
          c. The Corps can provide assistance to state and local 
        governments in disaster preparedness, response and recovery 
        efforts.
          d. Section 22 cannot be used to supplement other ongoing or 
        pending efforts, or to offset required state contributions to 
        Federal grant programs.

    As state and local water planning and implementation efforts 
expand, interest among state and local governments is also growing in 
more specific projects for technical assistance. Section 22 offers a 
broad authority that could be useful.

    Question 2b. Are there limitations to this?
    Response. The main limitation is a $500,000 per state limit. As 
states and local governments have begun to meet the challenges of 
sustainable water supplies through water planning, interest is growing 
in the technical assistance capabilities of the Corps. States like 
Texas have asked the Corps to be involved in their regional water 
planning groups and other states are following suit under similar, 
legislated water planning mandates. State and localities also foresee 
that Corps technical assistance will value to help them implement state 
water plans. Demand for this assistance will grow at two levels of 
need. The first level is for the Corps to be an active participant in 
state and local activities in preparing water management plans. The 
Corps makes every effort to be responsive to requests for our 
participation as advisors to water planning groups. These requests are 
growing and our capacity to assist in this manner will be limited by 
reasonable overhead charges. Meeting these demands could require 
consideration of authority to fund such activities.

    Question 3. Does the Corps have a strategic plan to address the 
ever-increasing water and water-resources related needs facing our 
Nation?
    Response. The Corps Civil Works Strategic Plan was released in 
April 2004. To develop the plan the Corps undertook an intensive effort 
to identify the nation's water resources challenges through extensive 
public interaction and expert involvement. A discussion of critical 
water resources challenges is provided in the plan. The Strategic Plan 
presents a bold initiative for the Corps to manage our Nation's public 
water resources in collaboration with others through a watershed 
approach. The watershed approach recognizes that physical, chemical, 
and biological processes are intertwined and must be managed in an 
integrated way. As we implement this plan, we will continue to support 
our primary Navigation, Flood Damage Reduction, and Ecosystem 
Restoration missions and will work to incorporate watershed principles 
in developing solutions to water resource needs in these programs to 
achieve more integrated sustainable solutions as appropriate and 
feasible. The plan is available at: http://www.usace.army.mil/inet/
functions/cw/hot--topics/cw--strat.htm.

                                 ______
                                 
    Responses by Lieutenant General Robert B. Flowers to Additional 
                     Questions from Senator Cornyn

    Question 1. A large percentage of surface water supply storage 
within the State of Texas is impounded behind existing Corps of 
Engineers reservoirs. Could you provide information on the potential 
for the Corps' existing infrastructure to help meet the State's 
projected 50-year needs?
    Response. Sir, over the past few years, the Corps has been working 
with the Texas Water Development Board to look at ways to leverage the 
Corps technical expertise to help identify opportunities for modifying 
the Corps existing reservoirs and infrastructure to aid the State in 
meeting its 50-year projected water needs that are both cost effective 
and environmentally sustainable. Preliminary analysis has highlighted 
the potential to modify existing use of available storage to meet as 
much as 10 percent of the State's projected needs.

    Question 2. The Texas Water Development Board supports an enhanced 
role for the Corps in helping to implement the Texas State Water Plan. 
What can the Corps do to help implement the Texas Water Plan?
    Response. Sir, due to our water management and development 
expertise, I believe the Corps could provide technical assistance to 
help the State implement the Texas State Water Plan. Examples of the 
type of technical assistance could include review of our existing 
reservoirs to ensure they meet current day needs; conducting instream 
flow analysis to ensure adequate water is available to meet 
environmental needs along the river, bays, and estuaries; and 
conducting system operation studies to identify methods to efficiently 
manage available water at Corps reservoirs within a river basin to 
better meet environmental, social, and economic needs. We also are 
working with the State and the Regional Planning Boards to highlight 
potential environmental concerns in the early stages of project 
implementation to minimize potential environmental impacts of the final 
recommended local plan. These are only a few examples of how the Corps 
existing expertise could help the State of Texas and the rest of the 
Nation meet its future water needs.

    Question 3a. At the last count, there are more than 1,800 
unincorporated communities, or Colonias, along the Texas--Mexico 
border. These Colonias are located in economically depressed areas, and 
do not have adequate water or wastewater infrastructure. Please explain 
how the Corps currently assists the State of Texas in addressing the 
basic water needs in Colonias?
    Response. Sir, currently under the authority of Section 219 of the 
WRDA 1992, as amended, the Corps has the authority to provide technical 
assistance for the Colonias along the Texas--Mexico border to help 
improve their water and wastewater infrastructure. We have been working 
closely with the Texas Secretary of State's office, as well as the 
Texas Water Development Board, and other Federal and local agencies 
within the region to leverage available funding to meet the needs of 
these communities. We are currently providing technical assistance to 
three separate Colonias in Cameron and Star Counties in Texas.

    Question 3b. Can the Corps do more to help?
    Response. The State of Texas and local communities have stated 
their interest in the Corps expanding its participation through 
construction assistance. However, without additional authority, we are 
unable to meet these needs.

    Question 4. The Texas Coast consists of more than 400 miles of some 
of the most unique and environmentally significant shorelines within 
the Nation. With the numerous hurricanes and major storms recently 
experienced, much of these vast shorelines and barrier islands have 
been eroded impacting both economic development along the coast as well 
as environmentally sensitive wetlands. Representatives from the Texas 
General Land Office have stated their interest in identifying ways to 
protect these significant resources. What is the Corps of Engineers 
doing to assist the State of Texas in addressing these needs?
    Response. Sir, the Corps is currently conducting a feasibility 
study for the 90-mile reach of the upper Texas Coast from the Louisiana 
border to San Luis Pass at the western end of Galveston Island. We are 
proposing to continue studying the potential for Federal involvement in 
protecting the Texas coast on a reach-by-reach basis. While this is a 
way to begin identifying potential solutions to the problem, it may not 
fully solve the problem due to the uniqueness of the Texas coast. We 
feel a comprehensive study of the entire Texas Coast is prudent to gain 
a better understanding of the coastal influences, and to establish 
overall parameters for use in proceeding with future incremental 
studies.

    Question 5. It's my understanding that the Corps has large volumes 
of data that would be useful to state and local governments and the 
public. I have been told that this data, collected for studies and 
under the wetlands program, are not easily accessible to the public. 
What could be done about this?
    Response. Sir, the Corps has a lot of existing data used to support 
environmental and project studies that could be a resource for the 
Nation. However, additional authority and funding would be required to 
allow us to make this data easily accessible to state and local 
governments.
                                 ______
                                 
    Responses by Lieutenant General Robert B. Flowers to Additional 
                    Questions from Senator Jeffords

    Question 1. Please describe how the Corps' project development 
process complies with environment statues and cost-benefit 
requirements, particularly the public participation and alternative 
selection processes in NEPA?
    Response. The Corps regulations (ER 1105-2-100, Planning Guidance 
Notebook and ER 200-2-2, Procedures for Implementation NEPA) contain 
provisions that address the requirements for cost-benefit analyses as 
required by the Principles and Guidelines (P&G). They also contain 
requirements for public participation and alternative analysis and 
selection as well as compliance with environmental statutes.
    Specifically, as the P&G directs, there are 6 steps in the planning 
process, which lead to recommendation and selection of a project for 
implementation. The District Commanders and project managers are in 
constant and close coordination with the non-Federal sponsor along with 
study and project stakeholders during the entire planning process. 
These steps are:
    1. Identifying problems and opportunities. This problem 
identification step is typically used to initiate the National 
Environmental Policy Act regulations (40 CFR Parts 1500-1508) requiring 
all Federal agencies involved in water resources planning to conduct 
the process termed ``scoping''.
    2. Inventorying and forecasting conditions. The second step of the 
planning process is to develop an inventory and forecast of critical 
resources (physical, demographic, economic, social, etc.) relevant to 
the problems and opportunities under consideration in the planning 
area.
    3. Formulating alternative plans. Alternative plans are formulated 
to identify specific ways to achieve planning objectives within 
constraints, so as to solve the problems and realize the opportunities 
that were identified.
    4. Evaluating alternative plans. The evaluation of effects is a 
comparison of the with-project and without-project conditions for each 
alternative. The evaluation assesses or measures the differences 
between each with- and without-project condition and appraises or 
weighs those differences.
    5. Comparing alternative plans. A comparison of the outputs of the 
various plans is made. Beneficial and adverse effects of each plan are 
compared. These include monetary and non-monetary benefits and costs. 
Identification and documentation of tradeoffs are accomplished to 
support the final recommendation.
    6. Selecting a plan. A single alternative plan is selected for 
recommendation from among all those that have been considered. The 
recommended plan must be shown to be preferable to taking no action (if 
no action is not recommended) or implementing any of the other 
alternatives considered during the planning process.
    This is an iterative process. As more information is acquired and 
developed, it is often necessary to reiterate some of the previous 
steps. This is often the result of changed Administration policies, new 
or amended legislation, new information affecting previous assumptions, 
or issues raised through our continual coordination with non-Federal 
sponsors and private and public individuals and agencies.

Public Involvement
    The Corps goal of public involvement and coordination is to open 
and maintain channels of communication with the public in order to give 
full consideration to public views and information in the planning 
process. The objectives of public involvement are (1) to provide 
information about proposed Corps activities to the public; (2) to make 
the public's desires, needs, and concerns known to decision-makers; (3) 
to provide for consultation with the public before decisions are 
reached; and, (4) to consider the public's views in reaching decisions. 
All this must occur, however, with the awareness that the Corps cannot 
relinquish its legislated decision-making responsibility. The outcome 
of any planning is subject to institutional constraints.
    The Administrative Procedures Act, (including Section 3, the 
Freedom of Information Act) and the National Environmental Policy Act 
(PL 91-190), are among the principal legislative acts requiring public 
involvement. Federal planning policies, Corps practice, and regulations 
have consistently required and encouraged open and effective public 
involvement. Generally, it is impossible to plan effectively for water 
resources development in accordance with Federal regulations and laws 
without open and effective public involvement. Public involvement is 
integral to all phases and activities of the planning process.
    District offices have the primary responsibility for conducting 
public involvement, coordination, collaboration, and consultation with 
the public. While local procedures may differ based on regional 
practices, nationwide requirements are designed to assure that the 
Corps conducts planning studies in an open atmosphere to attain public 
understanding, trust, and mutual cooperation, providing the public with 
opportunities to participate throughout the planning process. In 
addition, each district office is required to:
    Develop and implement an effective public involvement strategy as 
an integral part of the planning process for each study.
    With the cooperation of the non-Federal sponsor, develop and 
implement an effective management structure to insure that effective 
collaboration is an integral part of the feasibility study process.
    Discuss in the report how information gained from public and 
sponsor involvement has been used in and influenced the planning 
process.
    Solicit comments on the draft report and environmental document to 
appropriate Federal and State agencies, cooperating agencies and other 
members of the public.

    Question 2. The President's Budget drastically reduces study 
funding in the general investigations account. For states like Vermont 
that have a burgeoning cooperative relationship with the Army Corps of 
Engineers, this cut has a major impact. Please explain the reduction in 
the general investigations account. Is this an indication that the 
Administration is seeking to eliminate the Army Corps of Engineers?
    Response. Senator, first let me assure you that the reduction in 
the General Investigations account is in no way associated with the 
elimination of the Army Corps of Engineers. Having said that, please 
understand that difficult choices had to be made with this budget for 
the Corps. While I would like to have had more, and indeed could 
effectively execute more, I recognize that there are many competing 
needs throughout the country and will make the best use of the funds 
provided. The budget sets the right amount for the Civil Works program, 
with all things considered.
                                 ______
                                 
    Responses by Lieutenant General Robert B. Flowers to Additional 
                      Questions from Senator Wyden

    Question 1.  Can you explain the challenge you face in advancing 
projects under the Continuing Authorities program given current 
limitations? I understand there are important projects in Oregon that 
have been stopped by the Corps due to lack of funding.
    Response. There are several challenges to face in advancing 
projects under the Continuing Authorities Program (CAP). A large number 
of CAP projects have been halted or deferred this fiscal year (FY). 
This has occurred in all regions of the country, not just in Oregon. 
The funding appropriated was inadequate for the number and cost of 
projects to be worked on during the FY. The needs for projects named in 
the House, Senate and Conference reports were near or exceeded the fund 
amount appropriated.

    Question 2. What would be an appropriate level?
    Response. The national funding limits for most CAP sections, as 
well as limits for individual projects, are insufficient to a large 
extent for present day costs and requirements. Demand for projects in 
these programs has increased dramatically in recent years and today 
exceeds the funding limit of these programs. Furthermore, inflation, 
since the programs were authorized, has increased the average cost of 
the individual projects. Since the scope of today's projects is less 
than they were 10 to 15 years ago and each project represents a larger 
percentage of the program limit the result is fewer projects being 
built. Limits set during 1990's could be raised considerably, 
especially in light of the high demand for Section 14, 206 and 1135 
projects.

    Question 3. Are you familiar with the March 2003 report by the 
General Accounting Office (GAO) that concluded that restrictions on the 
use of the Corps' hopper dredge fleet have imposed costs on the Corps' 
dredging program, but, thus far have not resulted in proven benefits to 
the taxpayer?
    Response. Yes, I am familiar with the March 2003 General Accounting 
Office report regarding the restrictions on use of Corps hopper 
dredges. We are currently analyzing the last 10 years of data to 
determine the impacts of restrictions on the cost of the dredging 
program. Until this analysis is completed, it would be premature to 
propose any changes in the current operation of the Corps minimum fleet 
hopper dredges.

    Question 4. Given the findings by GAO, shouldn't the current 
restrictions on use of the ESSAYONS AND YAQUINA dredges be modified to 
ensure the taxpayer's dollars are used as wisely and cost effectively 
as possible?
    Response. Yes, I am familiar with the March 2003 General Accounting 
Office report regarding the restrictions on use of Corps hopper 
dredges. We are currently analyzing the last 10 years of data to 
determine the impacts of restrictions on the cost of the dredging 
program. Until this analysis is completed, it would be premature to 
propose any changes in the current operation of the Corps minimum fleet 
hopper dredges.

    Question 5. What training is the Corps undertaking to prepare for 
the pending retirements of what is expected to be more than 50 percent 
of the power grid and power generation operators nationwide? What is 
the estimated impact on national preparedness?
    Response. The Corps headquarters oversees the Power Plant Training 
Program to ensure that each region maintains a multi-year training 
regimen that is appropriate and consistent with our national 
regulations and guidance. Training methods include formal coursework, 
correspondence courses, computer based training, on-the-job training 
and use of powerhouse operator simulators. Each of our district offices 
ensures that we maintain capability in our work force to operate our 
power plants safely now and into the future. We do not anticipate any 
impact on our national preparedness.

    Question 6. With the Administration's proposed budget cut backs, 
what efforts are being made to increase efficiencies in training and 
educational programs?
    Response. A United States General Accounting Office (GAO) Report 
GAO-04-291, ``Human Capital, Selected Agencies' Experiences and Lessons 
Learned in Designing Training and Development Programs'' was completed 
in January 2004. The purpose of the study was to show that effective 
training and development programs are an integral part of a learning 
environment, helping improve Federal work force performance in 
achieving agency results. The Corps was one of five agencies studied by 
GAO. The Corps has taken the following actions to increase efficiencies 
in training and educational programs:
    The Corps Automated Training Management Program provides a web-
enabled integrated data base.--Implementation and use of the Automated 
Training Management Program (ATMP) has allowed managers to identify 
division-wide gaps in work force skills and competencies. Using this 
system (currently in five of eight Corps divisions) employees prepare 
an Individual Development Plan (IDP) assessing their knowledge, skills 
and abilities in relation to a series of mission essential tasks. The 
mission essential tasks begin at the agency level and cascade down 
through divisions to teams, and eventually to individual employees. 
This approach enables prioritization of training as it relates to 
mission accomplishment--and an end to supervisors approving training on 
an individual basis. With supervisory guidance, each task is identified 
as critical, important, or beneficial and the employee indicates 
whether they have received adequate, partial, or no training in that 
area. With this assessment as a guide, the supervisor and employee can 
consult the system's built-in course catalog to select internal or 
external training to enhance the employee's development. In addition, 
the system also has the capability of aggregating data. This capability 
provides a simple method for division managers to obtain a picture of 
the level of skills and competencies in their work force. This 
information informs decisionmakers on training priorities and helps 
managers determine the most efficient use of available resources.
    Implementation of ATMP provides our Professional Development 
Support Center (PDSC) the opportunity to receive technical and 
professional training requirements up to 5 years in advance based upon 
ATMP's 5-year IDP output. Given this knowledge, we can better place 
scheduled sessions of technical and professional training in the 
geographic locations where there is the greatest need and dramatically 
reduce travel and per diem costs.
    Mechanisms are in place to avoid unnecessary duplication or 
inconsistency within and across agency training efforts.
    The PDSC in partnership with the Army Environmental Center (AEC) 
participates in the Inter-Service Environmental Education Review Board 
(ISEERB). This body reviews environmental courses for duplication 
across the Department of Defense. A number of Corps Courses have been 
recognized by the ISEERB as the approved course for all agencies.
    To avoid duplication of training efforts our technical and 
professional training program is centrally managed and executed by our 
PDSC. By so doing, the overall cost of such training and development is 
minimized and the learning opportunities provided can best be linked to 
the strategic direction and goals of the Command. The intention is to 
ensure that training resources are controlled and that training, above 
the local level, is developed, administered and evaluated in accordance 
with accepted educational standards.
    The Corps relies on its Learning Advisory Board and Automated 
Training Management Program to effectively link planning efforts.--We 
rely chiefly on the coordination activities of our Learning Advisory 
Board (LAB) to ensure our work force planning efforts and training 
needs assessments are effectively linked. We formed the LAB, comprised 
of senior managers from across the Corps, in 2001, to review the 
adequacy of Corps training and development and ensure that training is 
properly aligned with the agency's missions, goals, and plans. In 
addition, the five divisions that use ATMP can also rely on data from 
that system to assess training needs. This system allows managers to 
compare information on individuals' skills and competencies with work 
force planning results from within the division and across the agency. 
This systematic comparison more closely links work force planning and 
training needs assessments to the essential mission-related operations.
    The Corps identifies online solutions to help enhance and integrate 
training efforts.--As a complement to the training and development 
programs we offer our employees, we recently entered into partnership 
with the Department of Labor to use their online training and knowledge 
management system called Workforce Connections. This system, which 
resulted from a memorandum of understanding promoting cooperative 
efforts between the Departments of Defense and Labor, will provide our 
work force with on-demand, online access to job aids, performance 
support materials, and course content 7 days a week, 24 hours daily. 
The system will feature development and maintenance of online 
communities of practice to support knowledge management (Knowledge 
management is an approach to capturing, understanding, and using the 
collective body of information and intellect within an organization to 
accomplish its mission.) on our Learning Network, which is our overall 
platform for delivering a wide variety of learning resources to agency 
employees. In addition to contributing to training efficiency, the 
Workforce Connections tool represents a partnership with the Department 
of Labor to provide a shared system for integration of training and 
knowledge management solutions. Another part of the Learning Network is 
our Virtual Campus, a distance-learning site that allows employees 
access to web-based courses and training events. The Learning Network 
also includes electronic performance support tools, such as job aids 
and other information resources. We consider the Learning Network a 
powerful tool that effectively integrates the agency's training 
efforts.
    While most of our courses occur in a conventional classroom 
setting, agency decisionmakers have focused on identifying courses (or 
modules of courses) to convert from classroom training to more 
economical modes of delivery, such as distance learning, computer-
assisted instruction, computer-based instruction, or a combination of 
such approaches. Many of our courses now incorporate CD ROM and 
Internet-based materials as pre-work assignments before attending 
classroom training and for reference during and after the training 
events.
    For additional information, see the GAO report referenced above, 
pages 13-14, 23 and 25.

    Question 7. Have you made any effort to leverage dollars with key 
partnerships like the National Guard and local community colleges to 
conduct any training programs? Can you provide some examples?
    Response. Key relationships between the Corps and universities 
facilitate training and education development and delivery across the 
organization. Numerous partnerships exist across the organization and 
others are proposed. The Corps continues to establish partnerships 
primarily with 4-year institutions and graduate schools for scientists 
and engineers. Although we have not entered into any formal 
partnerships with the National Guard for training, our hydropower 
training programs utilize local community colleges for course work that 
meets or exceeds our national technical training requirements.
    Recruitment and Student Assistance. Informal partnerships across 
the Corps currently provide for recruitment of technical staff members. 
Additionally, the Corps operates a Student Cooperative Education 
Program (SCEP). SCEP agreements are in place with 10 colleges and 
universities through a partnership with Advancing Minorities Interest 
in Engineering (AMIE). The SCEP program also benefits the Corps by 
preparing students for responsible positions with minimal resource 
allocation.
    Specialized Technical Development. Several successful partnerships 
have been established for development of specialized technical 
expertise in such areas as Hazardous, Toxic, and Radiological Waste 
mission; Aeration System design; Water Resource Engineering; Civil 
Engineering; Computer Science. In addition, we have established 
Communities of Practice to further enhance specialized technical 
expertise. The most significant agreement is between the Engineering 
Research and Development Center (ERDC) and Mississippi State, Louisiana 
State, and Texas A&M Universities. This agreement serves the advanced 
educational needs of our employees and the organization and improves 
the technical competence and professional development of Corps 
employees. While ERDC provides funds for building maintenance, 
equipment, and a portion of an employee's salary, the University pays 
the faculty salary for teaching the courses and associated 
administrative cost. The agreement is highly cost effective.
    In cooperation with the Universities Council on Water Resources, 
the Corps is managing the Masters Degree in Water Resources Planning 
and Development. The program has just finished its first full year 
involving five separate universities. As it grows we plan to include 
other universities and aggressively involve other Federal, state, and 
local participants.
    Leadership Development. Within the Corps, there are a number of 
partnerships in place, which support leadership development programs 
throughout our organization. These partnerships are locally managed and 
executed to provide maximum benefit to our employees for minimal cost. 
However, while these partnerships most frequently occur with 4 year 
institutions and graduate schools because the majority of our employees 
are highly educated scientists and engineers, we will continue to seek 
opportunities to partner with local community colleges where their 
courses offerings meet the needs of our non-degreed work force.
    Professional Partnerships. Our training center offers courses 
needed to obtain certification for certain professional requirements. 
Several thousand professional degree-holding employees require 
continuous education credits for professional certification. In support 
of this need, the PDSC has current partnerships with the International 
Association for Continuing Education and Training (IACET), the National 
Society for Professional Engineers (NSPE), the American Institute for 
Architects (AIA) and the Project Management Institute (PMI) for 
provision of continuing education and professional development hour 
credits for approximately 100 courses in the current inventory. Through 
these job related programs, the Corps Professional Engineers and 
Architects have the opportunity to earn the credits required to 
maintain their professional standing.

    Question 8. I understand that the Corps uses Powerhouse Simulators 
in Tennessee and in Colorado for training powerhouse operators in power 
grid operations at a cost of $15,000--$20,000 per trainee. Given this 
high cost, wouldn't it make sense for the Corps to conduct training 
programs in partnership with other entities if comparable training 
could be conducted at less expense? Wouldn't there be value in having 
operator training capabilities located in the Columbia Gorge where over 
33 percent of the West Coast Power is generated within 100 miles of the 
Dalles Dam (for example)? What are your current plans to address this 
strategic concern?
    Response. The Corps does make use of the Western Area Power 
Administration's Power Operator Training Facility in Denver, Colorado. 
The cost of the training is about $3,000 per student plus travel and 
per diem costs for a 2-week stay adding another $3,500, for a total of 
$6,500 per student. The cost is not that prohibitive and makes use of 
an excellent Government training facility that includes extremely 
valuable training for emergency situations. Although the largest share 
of generation capacity exists in the Pacific Northwest, 54 of our 75 
plants nation-wide are located east of the Rocky Mountains. Given the 
reasonable cost, excellent training regimen and central location of 
Denver, we plan to continue to make use of this excellent training 
facility.

    Question 9. If you agree that there would be value in having 
partnerships to conduct training for powerhouse operators, why did the 
Corps put on hold a partnership effort with Columbia Gorge Community 
College after the College pursued the development of this program to 
the point of setting aside space, and making a trip with the Corps to 
Connecticut to spec out the simulator?
    Response. Our Portland District office's coordination with the 
Columbia Gorge Community College and their efforts to address concerns 
with the Portland District about adequate future training facilities 
has been greatly appreciated. In the final analysis of the Portland 
District, the correct course of action is to continue making use of the 
Western Area Power Administration training facilities in Denver, 
Colorado. The Portland District does, however hope to continue a 
partnering relationship with the Columbia Gorge Community College for 
many other training needs we have in maintaining an educated, 
experienced, and talented Hydropower Plant work force in the Pacific 
Northwest.
                                 ______
                                 
    Responses by Lieutenant General Robert B. Flowers to Additional 
                     Questions from Senator Allard

    Question 1. The Corps of Engineers and the Bureau of Reclamation 
have undertaken similar projects over the years. Many deal with water 
supply infrastructure. How would you differentiate your [role] with 
that of the Bureau of Reclamation, or do you see them as very similar?
    Response. Principally, the Corps and the Bureau of Reclamation have 
had two distinctly different missions relating to serving this 
country's water supply needs. Traditionally, the Bureau of Reclamation 
has been the Federal agency that dealt with water supply issues in the 
western states. The Corps main focus has been on flood control and 
navigation projects nationwide. However, there is a strong overlap of 
interests, especially regarding our reservoir project operations where 
multiple objectives need to be analyzed, weighed, and balanced within 
the river systems of the Western United States.
    The Bureau provides water and distribution whereas the Corps has, 
in the past, only provided storage space for water and no distribution 
facilities.
    Established in 1902, the Bureau of Reclamation is best known for 
the irrigation dams, related powerplants, and irrigation canals it 
constructed in the 17 western states to serve western farmers. 
Additionally, the Bureau of Reclamation had assisted Tribes with water 
system infrastructure improvements on reservations.
    With recent water management challenges in the West, the Bureau, 
along with the Corps and other Federal and state agencies, tribal 
governments, and local communities, has been developing strategies to 
use irrigation water more than once, satisfying multiple entities 
(irrigators, municipalities, power users, and environmental interests).
    Secretary of the Interior Gale A. Norton has made Water 2025: 
Preventing Conflict and Crises in the West a key focus for the 
Department of the Interior and the Bureau of Reclamation. Using that as 
a springboard, the Corps and the Bureau are developing a Memorandum of 
Understanding to coordinate the implementation of existing programs in 
order to maximize the benefits of available resources in preventing 
conflict and crises over water in the West. Both agencies will use 
their complementary expertise in water rights, state water law, 
construction and engineering and their different programs to 
collaboratively minimize the impacts of water supply shortage 
conditions in the West.
    The Corps, through specific congressional authorizations, has long 
served communities and governments with Municipal and Industrial (M&I) 
water system improvements all across the Nation as well as 
internationally. These mission assignments extend back to the 1850's 
with construction of the Washington aqueduct and associated water 
treatment plants and water purification plants. More recent 
authorizations include both specific and regional authorities for the 
planning, design and construction of water supply, wastewater 
collection and treatment systems and recently, wastewater management. 
Specifics are addressed under the response to questions 4.
    Under current guidance, Section 301 of the Water Supply Act of 
1958, 43 U.S.C. 390b, the Corps may only include water storage for 
present or future municipal or industrial water supply as an added 
feature to a project, which has other outputs, such as a flood control 
project. The Corps currently does not have general authority vested in 
the Secretary to carry out a single purpose water quality and municipal 
water supply project.

    Question 2. I mentioned in my statement the Arkansas Valley 
Conduit, which is a pipeline that will deliver safe, clean and 
affordable water to the citizens of Southeastern Colorado. Would you 
care sharing with me some other examples of water supply projects that 
the Corps is working on that may be similar to the conduit, and that 
are either authorized or currently under construction? (Senator Allard: 
You mention the Washington, DC, aqueduct in your opening statement. 
There is also a pipeline in Oklahoma that has been authorized and may 
be under construction.)
    Response. The administration has consistently held the position 
that water supply is a local responsibility and as such is not viewed 
as a high priority output. However, in limited instances across the 
country, studies under various authorities (such as Planning Assistance 
to States) have resulted in plans for local interests to implement for 
water supply purposes. For example, Butler County Water Supply in 
Kansas, El Dorado Water Supply in Kansas, Parsons Water Supply Study in 
Kansas, River Basin Water Supply Strategies in Kansas and Dennison & 
Pottsboro Water Supply in Texas. Direct congressional language would 
provide funding and construction authority for the projects. Similar 
work such as this is also being implemented under the various 
Environmental Infrastructure programs the Corps is executing in various 
parts of the country.

    Question 3. I am interested to learn more about the working 
relationship between the Corps of Engineers and the Bureau of 
Reclamation. Would you please site examples of projects where the 
Bureau and the Corps have worked together? How has the relationship 
been structured so that management of the Bureau and Corps projects are 
coordinated?
    Response. As described in an earlier response, the Corps and the 
Bureau are developing an agreement that will provide a mechanism to 
promote water basin level staff coordination and collaboration, 
together and with the States and Tribes to anticipate and meet water 
supply related challenges in the Western United States.
    Section 7 of the 1944 Flood Control Act directed the Corps to work 
with the Bureau of Reclamation to insure consistency in flood control 
operations between the Corps and the Bureau reservoir projects. This 
law requires that if a reservoir project has flood control storage 
space and the project was built in whole or in part with Federal funds, 
then the Corps is the agency that specifies how the project will 
regulate that flood control storage and the resulting flood control 
releases from the dam. As a result, we have coordinated the flood 
control operations at Hoover Dam, New Roosevelt Dam in Arizona and 
other dams built and owned by the Bureau. The Corps and the Bureau 
coordinated their water control operations on river systems so that the 
water supply and flood control benefits intended by authorizing 
legislation are realized.
    As stated above, the Corps and the Bureau continually work with 
other Federal and state agencies, tribal government, and local 
communities to find better ways to manage the water resources 
challenges in the West.
    As an example, a Letter of Understanding was executed in 1978 
defining each Agency's responsibilities in operating Pueblo Reservoir 
in Colorado. Also, a Memorandum of Agreement for the Bureau of 
Reclamation's Southern Delivery System, a Colorado project, was signed 
on April 26, 2004. This agreement defines the Corps role as a 
cooperating agency with the Bureau in the preparation of the 
Environment Impact Statement for the project.
    There have been cases where the Corps has constructed a project and 
the Bureau is the owner and operator. The Folsom Dam project is 
undergoing Corps studies involving raising the dam and increasing the 
outlet capacity. The Bureau is intimately involved in the Corps study 
team as part of the Project Management Business Process of the Corps. 
The Corps and Bureau are partnering together to design modifications to 
the Folsom Dam on the American River in order to provide flood 
protection to the Sacramento area. In the Pacific Northwest, the Corps 
constructed Ririe Dam in eastern Idaho and the Bureau operates the Dam.
    Matilija Dam was built and is owned by Ventura County Watershed 
Protection District (VCWPD) (At that time, the Ventura County Flood 
Control Protection District). For the current feasibility study, VCWPD 
is providing in-kind services for the Hydrology, Hydraulics and 
Sediment Transport Studies effort, and has contracted this work to the 
Bureau. The Corps is providing the Quality Assurance role for this 
product.
    For the regulation of the Bureau projects where the Corps has the 
flood control authority, coordination is required between agencies for 
any deviations from the congressionally approved water control plan. 
Deviation protocol is established through both Federal law and further 
defined in Corps Division regulations. For example, the 1983 flooding 
on the Colorado River required extensive coordination for use of the 
flood space at Hoover Dam, as both agencies worked at minimizing the 
flood damages to life and property. Any planned deviations require 
approval from the Corps Division Commander.
    In the Pacific Northwest, the Corps continues to collaborate with 
the Bureau on a wide array of issues such as water management, flood 
control and Endangered Species Act issues for Federal Columbia River 
Power System and related Biological Opinion. Under existing mutual 
assistance agreements, the Corps provides engineering and technical 
assistance to the Bureau for flood damage studies, hydropower support 
and bridge structural condition assessments.
    As part of the coordination efforts for the Corps Section 595 
Environmental Water and Wastewater Infrastructure program, described in 
the response to question 4, the Corps along with all other Federal and 
state resource providers will insure that the capabilities offered are 
a wise and effective use of available Federal resources. This 
coordination includes participation with interest groups involved with 
rural economic development and interests, and coordination with 
associations of cities, Federal congressional liaison and ad hoc focus 
groups throughout the respective states. The Bureau of Reclamation does 
not have an authority similar to the Corps Section 595 for Nevada, 
Montana and Idaho. Where we might see further similarities in missions 
between the two agencies and the need for partnering is with the newly 
authorized, but not appropriated, Section 595 rural Utah program and 
other future work in Utah under the Section 219 program.

    Question 4. It is my understanding that the Corps has authority in 
several states, including the state of New Mexico, to assist with the 
design and construction of publicly owned water related infrastructure 
and resource development and protection projects. The assistance is for 
such projects as wastewater treatment and related facility water 
supply, conservation and related facilities, storm water retention and 
remediation, environmental restoration, and surface water resources 
protection and development. Would you mind explaining a little more 
about this program and the successes you have had with it?
    Response. The Corps has authority in several states, including the 
state of New Mexico, to assist with the design of publicly owned water-
related infrastructure and resources development and protection 
projects. Public Law 106-53, the Water Resources Development Act of 
1999, includes Section 593, which applies to projects in three counties 
located in central New Mexico, and Section 595, as amended, which 
applies to projects in rural Nevada, Montana, Idaho, rural Utah, and 
New Mexico. Section 593 authorizes the Corps to provide design and 
construction assistance for water-related environmental infrastructure 
and resource protection and development projects in central New Mexico, 
including projects for wastewater treatment and related facilities, 
water supply, conservation, and related facilities, storm water 
retention and remediation, environmental restoration, and surface water 
resource protection and development. Three projects have been completed 
under the Section 593 program, Perizitte, Jude Court, and the Pajarito 
Vacuum Pump Station. The Double Eagle II construction contract is 
underway and several other projects are being designed.
    Section 595 authorizes the Corps to provide design and construction 
assistance for water-related environmental infrastructure and resource 
protection and development projects, including projects for wastewater 
treatment and related facilities, water supply and related facilities, 
environmental restoration, and surface water resource protection and 
development. Section 595 was originally enacted in 1999 for rural 
Nevada and Montana, and was amended in 2003 by Section 126 of P.L. 108-
7 to add Idaho and again by Section 117 of P.L. 108-137 to add New 
Mexico and rural Utah.
    Section 219 of the Water Resources Development Act of 1992, P.L. 
102-580, as amended, authorizes the Secretary of the Army to provide 
assistance to non-Federal interests for carrying out water-related 
environmental infrastructure and resource protection and development 
projects including wastewater treatment and related facilities and 
water supply, storage, treatment, and distribution facilities. The 
authority under Section 219 is divided into:
    Section 219(c)--Technical and planning and design assistance for 
certain defined projects and locations with a total nationwide 
authorization specified in Section 219(d).
    Section 219(e)--Construction assistance for certain defined 
projects and locations already mentioned in Section 219(c) with 
specific amounts authorized for each location.
    Section 219(f)--Technical, planning and design, and construction 
assistance for defined projects and locations with specific amounts 
authorized for each location.
    For example, the largest project of this type is the Los Angeles 
District Harbor/South Bay Water Recycling, CA project, Section 
219(f)(43). In the San Francisco Bay area, the San Ramon Wastewater 
Recycling is a successful wastewater treatment and water supply project 
under Section 219 (f)(42).
    Other examples include: In Idaho: The FY04 budget included 
appropriations for the Corps to assist the communities of Horseshoe 
Bend, Burley, Upper St. Joe, Emmett, Coolin, and Spirit Lake. All of 
these communities are facing critical treatment or supply challenges 
due to aging infrastructure. Even though program funding was only 
received in January 2004, construction of the Horseshoe Bend Wastewater 
Treatment Lagoon #2 is already underway. Total project cost for this 
work is $420,000 and all work is scheduled to be completed this fiscal 
year. This project is an integral part of the City's effort to correct 
numerous operational problems at their wastewater treatment facilities.
    The success of these environmental infrastructure programs of the 
Corps partially lies in the expertise available to actually perform the 
design. We have worked with our many military customers to design and 
construct water supply delivery, and sewerage facilities at military 
bases throughout the West. In our civil works program, we have both the 
planning and the design capabilities at a number of our district 
offices, skills that can be leveraged to any location in the Nation 
because of our regional business center concepts.

                               __________

 Statement of Hon. John T. Myers, on behalf of the National Waterways 
                      Conference, Punta Gorda, FL

    Mr. Chairman and Members of the subcommittee: My name is John T. 
Myers of Covington, Indiana. For 30 years, it was my honor to represent 
the Seventh District of Indiana in the U.S. Congress. I appear before 
you today as an advocate of enlightened but prudent national waterways 
policies and programs, particularly those affecting inland waterways. 
As you begin your deliberations on the next Water Resources Development 
Act (WRDA), I would suggest that this is not just about the role of the 
U.S. Army Corps of Engineers in managing our waterway system, but also 
the value of our waterway system, itself, to the Nation. While we 
believe that the Army Corps is doing an admirable job in managing our 
navigation system to the best of their ability, with minimal Federal 
funds, I'd like to call your attention to several matters that I 
believe are worthy of your consideration:
    I. Inland navigation is vital to U.S. economic and environmental 
well-being. America is fortunate to have such an extensive system of 
navigable rivers and waterways serving the vast mid-continent--from the 
coal mines of West Virginia and Pennsylvania and the corn fields of 
Minnesota and Nebraska to the chemical plants and oil refineries of 
Louisiana and Texas. Barges are ideal for moving large quantities of 
farm crops, fuels, chemicals, raw materials and other bulk commodities 
that support our basic industries. What's more, water transportation is 
economical, fuel-efficient, safe and environ-mentally friendly.
    To be specific, the inland waterway system totals some 25,000 miles 
in length. Included are 171 lock sites with 215 individual locks. 
Overall, our investment in navigation infrastructure is valued at $125 
billion-plus. Every year, this system handles more than 700 million 
tons of commerce or 16 percent of all intercity freight for 2 percent 
of the cost. According to the latest Tennessee Valley Authority 
figures, barge transportation saved shippers an average of $10.67 per 
ton of cargo.
    Intense competition among water carriers insures that such 
transportation cost savings are shared by farmers, miners and other 
producers; by manufacturers and processors, and ultimately by 
consumers. Thus, inland waterways stimulate the Nation's trade and 
commerce, the economic vitality of many interior regions, and the 
competitiveness of exports such as grain and soybeans, supporting tens 
of thousands of U.S. jobs and incomes.
    II. Lack of adequate investment in the navigation infrastructure 
threatens U.S. industrial and agricultural productivity. Locks and dams 
are getting older every day, and while the Corps is diligently 
attempting to maintain system reliability, there are currently not 
enough funds to keep them in good working order. Their design life is 
50 years, and a majority of our navigation structures are now over that 
threshold. In fact, 58 locks are over 60 years old and 35 locks are 
over 70. And when not properly maintained, these facilities break down. 
Typically, navigation locks are out of service annually for a total of 
about 120,000 hours, a figure that has doubled in the last decade. Most 
is scheduled maintenance but larger and larger percentages of down time 
are unscheduled. For instance, a major lock gate failure at John Day 
L&D on the Columbia-Snake River system in 2002 took months to repair. 
And last year, Greenup L&D on the Ohio River experienced a sudden 
failure, forcing barges to use a small auxiliary lock, resulting in an 
average tow delay of 38.4 hours and an increase in transport costs of 
$10-$15 million.
    Some locks are not only old but outmoded. Traffic at 24 critical 
locks encounters delays of up to 12 hours, costing the industry more 
than $155 million annually. Barge users deserve a reliable water 
transportation system. What's needed is sufficient Federal investment 
in new infrastructure--and in the timely maintenance of existing 
facilities--to assure a first-class navigation system, one able to keep 
pace with the transportation demands of a growing U.S. economy.
    After a hiatus of almost a decade, the authorization of navigation 
projects was resumed following enactment of major cost-sharing reforms 
in the Water Resources Development Act of 1986. That act specified that 
waterway users would pay a fuel tax of 20 cents per gallon, with the 
proceeds used to pay one-half of the cost of lock-and-dam replacements 
and major rehabilitation. Sadly, the Inland Waterways Trust Fund has 
run up a large surplus, now totaling about $400 million, while 
navigation construction and rehabilitation waits and the benefits of 
new projects, delayed by funding shortfalls, are foregone. One of the 
major waterway modernization projects that I hope can be included in 
the next WRDA is the authorization of long-delayed and much needed 
improvements on the congested and outmoded Upper Mississippi and 
Illinois Waterways system. We support immediate authorization for 
construction of at least seven new 1200-foot locks at L&D 20, 21, 22, 
24 and 25 on the Upper Mississippi and at LaGrange and Peoria Locks on 
the Illinois Waterway.
    The Upper Mississippi is a prime example of the challenges the U.S. 
Army Corps of Engineers faces, now and in the future, in managing our 
inland system. The lock system, built for steamboats in the 1930's, is 
obsolete and inefficient, and has lost 10 percent of its capacity each 
year over the last 10 years due to unplanned closures. Where once we 
had a vibrant ``3d Coast'' for the Midwest with the attendant reduction 
of transportation costs, we now have a gradual loss of global 
competitive advantage in grain exports, jobs and quality of life, due 
to inaction.
    Several independent studies conducted by the National Corn Growers 
Association and other agricultural groups confirm grave consequences if 
the Upper Mississippi needs are not addressed in a timely fashion. By 
2020, without at least seven new locks in place, the U.S. will lose 
30,000 jobs and almost 80 million bushels of grain and soybean exports. 
This will reduce farmer income by over $500 million per year, widen the 
trade deficit and increase the Federal budget deficit by $1.5 billion 
per year.
    By finally moving aggressively on construction authorization for at 
least these seven locks, where congestion currently exists, you will 
create over 3-5,000 new construction jobs per year and yield 
transportation efficiencies that will reduce freight movement costs, 
which in turn, will help support the existing jobs base in the region. 
At the same time, congestion on roads and railroads and within our 
communities will be reduced. There will also be the added value of 
keeping income in rural communities and fostering a sense of hope for 
hundreds of thousands of Americans.
    III. In the next WRDA, Congress needs to address how the water 
resources program is being implemented. Since 1824, the Army Corps of 
Engineers has been charged with administering our civil works program, 
which started with navigation but later embraced flood protection, 
environmental restoration and other missions. World-wide, the Corps of 
Engineers is viewed as a premier engineering organization, but its 
ranks have expanded in recent years to include many disciplines besides 
engineers, including ecologists, biologists, chemists, geographers, 
economists, etc. This is a Federal agency which has a tough job, unlike 
that of any other agency with which I am familiar, in balancing 
competing national objectives, particularly economic and environmental 
goals. I happen to believe that we can have both a robust economy and a 
healthy environment.
    When WRDA was under consideration last year in the other body, the 
legislation was amended to include several policy reforms. The most 
sweeping provision calls for peer reviews of project studies, a 
procedure that was described as a means of improving projects, not 
derailing them. I agree. Project reviews should look only at scientific 
and technical matters without getting into policy issues. Outside 
counsel is bound to be helpful to the Corps and, ultimately, the water 
resources program.
    The Army Corps of Engineers has been criticized in the past for 
various reasons. One appears to be that some mistakenly assume that the 
``true value'' of waterway projects is reflected in the benefit-cost 
ratios developed for the economic projects of the Corps. In actuality, 
those ratios only reflect a range of national economic benefits of a 
project. To correct that misperception, it would be helpful if, in the 
future, the Corps were directed to include an additional analysis of 
the full economic and environmental impacts of a project on a national, 
regional and local basis. To insure that there is no question that the 
entire Corps program is valuable to the Nation, it would also be 
beneficial for all Corps projects to undergo a benefit-cost analysis. 
Of course, any policy changes should serve to enhance the formulation 
of civil works projects in their order of importance or national 
priority and to restore the credibility and polish the public image of 
the Army Corps of Engineers.
    IV. Public policy should favor the waterways mode. Because of the 
buoyancy of water, barges require less energy per ton of cargo and thus 
consume less fuel and emit fewer pollutants into the air. Towboats are 
quiet and out of sight most of the time, skirting cities and towns. 
There are no loud horns, squealing tires or annoying vibrations. Most 
importantly, water transportation takes traffic off overland modes, 
relieving congestion on major corridors. A single, 15-barge tow hauls 
as much commerce as 870 trucks, which would stretch 11\1/2\ miles 
bumper to bumper.
    Both railroads and highways are already crowded, and experts are 
predicting that highway traffic will grow from 11 billion tons to 19 
billion tons a year by 2020 while rail traffic is expected to increase 
from 2 billion tons to 3.7 billion tons in the same period. But except 
for a few congested locks, waterways have a lot of capacity. This is 
true in our country--and in Europe as well. European governments, in 
fact, have instituted policies to shift cargo from roads to water, 
alleviating congestion and in the process making roads safer, too. 
Perhaps surprising for many, the Europeans view this traffic shift as 
beneficial not only for social and safety reasons but also for the 
environment, which is highly valued there as here. We would support a 
policy wherein the Corps of Engineers is directed to expand their 
benefit-cost analyses by including those social, environmental and 
safety factors now utilized by the Europeans.
    V. U.S. policy should also encourage innovations that increase the 
usefulness of water transportation. For instance, container-on-barge 
service is still in its infancy on our waterways. Moving containers by 
barge has been practiced for the last decade on the Columbia-Snake 
Waterway, connecting Idaho and eastern Washington with the Port of 
Portland. And ocean-going deck barges have been used for years to 
shuttle containers between coastal ports. Just recently, a container-
on-barge service between New Orleans and Baton Rouge was launched, and 
plans were recently announced for such a service between Memphis and 
Louisville. But in Europe, barges carrying containers are quite common 
and their use is officially encouraged to take containers off busy 
highways, helping to relieve traffic congestion and hold down road 
accidents, noise and pollution.
    Another water transport system, commonplace in Europe, is the 
river-ocean vessel capable of navigating rivers and waterways as well 
as the open seas. Short-sea shipping, as it is some-times called, adds 
another dimension to water transportation by eliminating the need for 
cargo transfers at coastal terminals. One such vessel operates in the 
United States, carrying rocket motors from a Boeing plant in north 
Alabama, down the Tennessee-Tombigbee Waterway to the Gulf of Mexico 
and finally to destinations in Florida or California. Same-vessel 
service between Central America and Mississippi River points has been 
tried a couple of times in the past, but the trials failed to meet 
expectations.
    Nevertheless, short-sea shipping has been rather successful in 
Europe and elsewhere, and I believe it has a future here, too. We must 
not pass up any opportunity to improve the productivity of our 
transportation system and, at the same time, enrich our national 
economy and help our environment. Policymakers should take another look 
at coastal shipping opportunities, too, such as ships moving containers 
or even trucks themselves in a roll-on roll-off service paralleling 
busy Interstate 95 on the Atlantic Coast and Interstate 10 along the 
Gulf Coast. We encourage the Committee to do everything possible to 
promote opportunities for expansion of services onto our waterways so 
that our intermodal transportation system will be enhanced.
    IV. Conflicting Federal policies threaten navigation. Last, Mr. 
Chairman, the U.S. Army Corps of Engineers is tasked with implementing 
and managing waterway projects according to the project purposes 
outlined by Congress as well as adhering to the various Federal laws 
that impact the waterways. But, more and more, our transportation 
network is being jeopardized by interpretations of what Federal 
policies and purposes take precedence. In particular, the application 
of the Endangered Species Act has had grave consequences. It has 
recently come to our attention that there have been questions over 
whether some of the species the U.S. Fish and Wildlife Service presumes 
to protect are really ``distinct'' from other species in the same 
locations. In an effort to clarify matters and ensure that ``sound 
science'' is maintained, we would suggest that the Army Corps of 
Engineers be directed to request a judgment from the National Academy 
of Sciences on the degree of genetic variation required to define a 
``distinct'' species.
    Thank you, Mr. Chairman and members of the Committee, for your 
courtesy in hearing my statement. We appreciate your interest in 
America's navigation infrastructure and your efforts over the years to 
strengthen the inland waterways system. I urge the Committee to 
consider the public value of waterway transportation and its vital 
importance to the American economy with relatively few environmental 
impacts. With the leadership of the U.S. Army Corps of Engineers and 
continued lock-and-dam improvements, the inland waterways system will 
provide significant benefits to our Nation, our coastal and interior 
regions, and our people.

                               __________
        Responses by Hon. John T. Myers to Additional Questions 
                         from Senator Jeffords

    Question 1. You suggest that in the future, the Corps should 
undertake a full economic and environmental impact analysis for all 
projects. What does Congress need to do to make this happen, and, if we 
were to provide this direction, can you describe any impediments and 
solutions to executing this change?
    Response. The Flood Control Act of 1936 directed that navigation 
and flood control projects be subject to benefit cost analyses. Prior 
to 1983, the guidance for those analyses was contained in the 
Principles and Standards, which provided for recognizing benefits in 
four accounts: National Economic Development benefits, Regional 
Economic benefits, Social Well-Being benefits and Environmental 
Quality. It was reasonable to assume that the Administration and 
Congress could then make funding decisions based upon the full range of 
economic and environmental benefits of a project.
    During the Reagan years, the Principles and Standards were replaced 
by the Principles and Guidelines which mandated that only National 
Economic Development benefits be used in cost-benefit analyses, often 
short-changing projects that provide multiple benefits. Especially 
during times of limited funding, it is vital that Congress be able to 
compare ``apples to apples,'' and have a complete picture of the broad 
spectrum of direct and indirect project benefits in order to ascertain 
whether a project provides a meaningful return on investment.
    It is interesting to note that the European Parliament has 
implemented a strategy that gives preference to waterway funding. Their 
rationale takes into account environmental benefits of waterway 
transportation such as reduced air pollution, congestion mitigation, 
reduced noise pollution and accidents prevented--none of which are 
included in our current cost-benefit analyses.
    Congress can address this lack in two basic ways. The first is to 
amend the Water Resources Development Act of 1986 to provide that all 
Corps projects be subject to the benefit cost criteria contained in the 
Flood Control Act of 1936. Then, Congress should direct the Corps to 
include such benefits as regional economic development, social well-
being and environmental quality in their cost-benefit analyses. Should 
Congress decide not to extend the cost-benefit guidelines, these 
benefits can still be captured through language directing the Corps to 
include a supplemental analysis outlining the broad range of direct and 
indirect benefits of a project.
    There are few if any impediments to making this policy change. The 
Corps of Engineers currently has the ability to calculate a broad range 
of benefits not normally included in NED analysis. We estimate that 
cost-benefit analyses for environmental restoration projects could be 
available within the next year as work is proceeding on this effort.

    Question 2. You have stated that there are millions of dollars in 
surplus in the Inland Waterways and Harbor Maintenance Trust Funds, yet 
rehabilitation and operation and maintenance needs are going unmet. 
What do you think the reason is for this? What should be done to reduce 
these surpluses?
    Response. The Inland Waterways Trust Fund is used to pay one-half 
of the cost of lock-and-dam replacements and other shallow-draft 
navigation-related construction and also the major rehabilitation of 
inland navigation facilities. All are located on some 12,000 miles of 
27 specified, shallow-draft waterways subject to the inland waterways 
fuel tax, now 20 cents per gallon. Proceeds from this tax finance the 
trust fund. At present, the Inland Waterways Trust Fund has a surplus 
of approximately $400 million.
    The Harbor Maintenance Trust Fund pays 100 percent of the cost of 
dredging to maintain authorized depths of deep-draft harbor access 
channels on the Atlantic, Gulf and Pacific Coasts as well as the Great 
Lakes. The trust fund is also utilized to pay the cost of shallow-draft 
channel maintenance on non-fuel-taxed waterways. The trust fund is 
financed by an ad valorem tax of 0.125 percent of cargo value and it is 
levied on imports and domestic cargo at deep-draft ports. The trust 
fund has a surplus of about $1.8 billion, which OMB projects to grow to 
$2.6 billion by the end of fiscal year 2005.
    Both trust funds were authorized in the Water Resources Development 
Act of 1986 (Public Law 99-662), which provided that the moneys in each 
of the trust funds ``shall be available, as provided by appropriations 
Acts,'' for the purposes for which the funds were established. They 
were also intended as a supplement to amounts appropriated by Congress 
so that direly needed construction, major rehabilitation and operation 
and maintenance could go forward in a timely manner. At the time, it 
was anticipated that the Inland Waterways Trust Fund would be broke 
within 10 years because of so many pending navigation projects. But 
that never happened, because the Administration did not request and 
Congress did not approve spending at optimum construction levels. 
Funding was stretched out for various reasons. As a result, the surplus 
has slowly grown over the years.
    The Harbor Maintenance Trust Fund is a different story. When 
enacted in 1986, it consisted of an ad valorem tax of 0.40 percent of 
cargo value, with the proceeds intended to pay no more than 40 percent 
of maintenance dredging costs. But in 1991, the tax was tripled, to 
0.125 percent of cargo value. As a result, the harbor maintenance tax 
has generated far more money each year than channel maintenance has 
required, and the surplus is grown by leaps and bounds.
    What should be done to reduce these surpluses? In the case of the 
Inland Waterways Trust Fund, the obvious answer is for the 
Administration to request and the Congress to appropriate more money 
for inland navigation projects--in the range of $150 million annually 
rather than the current $100 to $115 million. There also needs to be 
recognition that these funds are a matching user contribution--intended 
to hasten the construction schedules, not be substituted for regularly 
appropriated funds. Increased spending for these projects would save 
money on construction contracts and also allow the Nation to realize 
the benefits of these projects sooner. In the case of the Harbor 
Maintenance Trust Fund, consideration should be given to reducing the 
current ad valorem tax to a level that is more in line with actual 
maintenance needs.

                               __________

Statement of Derrick Crandall, President, American Recreation Coalition

    Mr. Chairman and Distinguished Members, the American Recreation 
Coalition (ARC) appreciates the opportunity to appear before this body 
today to discuss an extraordinarily important issue: the future of 
recreation opportunities on the lands and waters managed by the U.S. 
Army Corps of Engineers (USACOE).
    I am Derrick Crandall and I am appearing on behalf of the members 
of the American Recreation Coalition (ARC)--more than 100 national 
organizations, representing virtually every segment of the nation's 
$400 billion outdoor recreation industry, and tens of millions of 
outdoor recreation enthusiasts. A listing of our members is attached to 
this testimony. I am joined today by Curt Cornelssen, a member of ARC's 
Board of Directors and chairman of ARC's Task Force on USACOE 
Recreation Program Opportunities. Curt is the Director of Hospitality 
and Leisure Consulting at PricewaterhouseCoopers.
    Our organization has played an active role in Federal recreation 
policy since its creation in 1979. We were centrally involved in the 
creation and operations of the President's Commission on Americans 
Outdoors in the mid-1980's and the National Recreation Lakes Study 
Commission, which submitted its report in 1999 to the Congress and the 
President. Both spoke directly to the topic before this body today. We 
also were actively involved in the creation of the National Recreation 
Fee Demonstration Program and have enjoyed opportunities to work 
closely with this committee on such diverse programs as the National 
Scenic Byways Program, the Recreational Trails Program, the Wallop-
Breaux program aiding fishing and boating, and programs to provide 
access to and safe transit across our public lands. We thank the 
Chairman and members of this body for the continuing interest shown in 
these important issues.
    Outdoor recreation is a vital and positive force in our Nation 
today. Nine in ten Americans participate in outdoor recreation today, 
and a major catalyst for this involvement is the marvelous shared 
legacy of our Great Outdoors--one in three acres of the surface of the 
Nation managed by Federal agencies and hosting well in excess of a 
billion recreation visits annually. ARC monitors participation in 
outdoor recreation closely through annual national surveys. A summary 
sheet on participation is attached.
    The benefits accruing from recreation participation are 
significant, and the appreciation for these benefits is growing. The 
economic significance of outdoor recreation is obvious in communities 
across the Nation, and especially those communities proximate to 
federally managed lands and waters. From boat dealers to campground 
operators, from RV manufacturers to ski rental shops, from retailers 
selling outdoors goods to guides and outfitters, tens of thousands of 
businesses and millions of Americans are supported by $400 billion in 
annual expenditures on recreation by American families. And 
increasingly, America's recreational opportunities are a key factor in 
luring international visitors to enjoy the world's best systems of 
parks and forests, refuges and other public sites.
    But the public recognizes that recreation contributes far more 
significantly to our Nation in ways beyond jobs. Recreation is 
understood as a valuable means to encourage the physical activity we 
need to maintain our health. With two in three Americans failing to get 
the minimum level of physical activity recommended by the Surgeon 
General--just 30 minutes daily of moderate movement like walking--and 
obesity now responsible for medical costs greater than those linked to 
tobacco, opportunities to combine exercise with fun are an obvious 
priority. And in fact, the President has now issued an Executive Order 
directing Federal land managing agencies including the USACOE to assist 
in elevating the level of physical activity in our Nation. Studies are 
now imminent which will document that increasing recreation 
participation can be among the most cost effective strategies for 
reducing public health costs.
    And the benefits arising from recreation don't stop there. 
Recreation can be a very effective means for increasing parent-child 
communications as well as a tool to deter violent crime and substance 
abuse. Outdoor settings and recreational activities have proven 
valuable as alternative educational programs, especially for disruptive 
youth and those with learning styles poorly suited to traditional 
classrooms.

         RECREATION AND THE LANDS AND WATERS MANAGED BY USACOE

    The President's Commission on Americans Outdoors helped the Nation 
recognize several important trends. First, it noted the dramatic 
increase in recreation demand and predicted continuing, high growth in 
participation for several decades. Second, it noted the lure of water 
for recreational activities--including activities like camping and 
trail sports that are land-based. The Commission estimated that 75 
percent of all recreation in America takes place within a quarter mile 
of the land/water boundaries of our oceans, lakes and rivers. The 
Commission also emphasized the need for support facilities for 
recreation experiences--from trails to marinas, campgrounds to ski 
areas and more. The Commission called upon Congress and Federal 
agencies to assemble funding needed to build and maintain these 
facilities under innovative partnerships. The Commission also addressed 
paying for recreation services and facilities, urging Federal policy to 
move toward a much greater reliance upon fees paid by those who visit 
Federal lands and benefit from Federal investments and spending. And it 
applauded the concept of special, earmarked funding sources such as the 
Wallop-Breaux fund, which imposes Federal taxes on fishing equipment 
and then returns the collected taxes as user fees to programs aiding 
boating and fishing.
    The Commission's recommendations have produced important policy 
changes, and in fact stimulated the development of the National 
Recreation Fee Demonstration Program and new authorities for the 
National Park Service, the Forest Service, the Bureau of Land 
Management and the Fish and Wildlife Service which now provide some 
$200 million annually in supplemental funding for these agencies.
    Ten years later, the National Recreation Lakes Study Commission 
added important information to the public policy debate regarding 
USACOE's recreation program--and a new sense of urgency. The 
Commission's report, ``Reservoirs of Opportunity,'' was submitted to 
the President and the Congress in June 1999. It offered the following 
conclusions:
     Federal lake recreation is a significant national resource 
and a public benefit of Federal water projects, making an important 
contribution to local, state and national economies. These lakes host 
900 million visits annually, generating $44 billion in recreation-
related spending;
     Recreation at Federal lakes has not been treated as a 
priority, or often even as an equal with other reservoir uses, despite 
its status as an authorized purpose;
     Recreation management at Federal lakes lacks policy 
direction and leadership as well as sufficient interagency and 
intergovernmental planning and coordination;
     Recreation facilities at most Federal lakes are 
inadequately maintained, with a $1 billion maintenance backlog, and are 
insufficient for today's levels of public use;
     Current recreation user fee practices are not particularly 
successful as a revenue generator; the recreation fee demonstration 
program offers a model for more successful revenue generation;
     Better management will be necessary to meet current and 
future recreation demand, with or without increased appropriations;
     Partnerships with state and local governments and with 
private businesses need to be expanded and improved;
     Concessioner policies at Federal lakes are inconsistent 
and a disservice to the public, which benefits when concessioners are 
able to operate under conditions that allow them to succeed;
     Federal agency policies limiting cost sharing with state 
and local government partners are unwise;
     Reservoir water management, including draw-downs and flow 
levels, can and should serve recreation and environmental purposes as 
well;
     Clean water is critical to lake recreation as well as lake 
health; and
     The concept of a national recreation lakes system has 
merit and should be tested through a demonstration program.
    The Commission report also offered five major recommendations:
     Recreation should be made a higher priority at Federal 
lakes;
     Federal recreation lake leadership should be energized and 
focused through the establishment of a Federal Lakes Recreation 
Leadership Council;
     Federal lake recreation should be advanced through 
innovation and revised policies;
     An environment for Federal lake recreation management 
success should be created; and
     The gap between recreation needs and services should be 
identified and closed.
    The Commission confirmed that the USACOE is far and away the 
greatest host of recreational visitors to public waters. The 
Commission's work documented that recreation facilities at Corps sites 
were largely at or beyond their original design lives and that there 
were virtually no planned capital investments in recreational 
facilities, despite a pattern of growing demand.

                         MEETING THE CHALLENGE

    The U.S. Army Corps of Engineers (USACOE) is the leading Federal 
provider of recreation opportunities in America today. Recreational 
activities on the lands and waters it manages are varied and diverse, 
from fishing and camping to sailing and picnicking, from hiking and 
biking to waterskiing and windsurfing, canoeing to trailriding with 
horses and ATVs, swimming to diving--and dozens of other activities. 
Corps projects include highly developed sites as well as remote, 
pristine zones. What is consistent is the lure of the land-water 
intersection and its magnetic nature for leisure times.
    Yet all is not well at too many USACOE recreationsites. In some 
instances, recreation demand is relatively recent, posing challenges to 
a mix of management missions and coming after most investments at the 
projects had been completed. In other instances, recreation facilities 
show the double impacts of normal aging and inadequate maintenance 
budgets. In some cases, the USACOE faces the threat of ``turn-backs''--
recreation facilities constructed in partnership with state and local 
governments that need substantial new capital spending, and the local 
partners flatly refuse to assume this burden alone, or perhaps at all. 
Changing recreation equipment demands changes in campgrounds, marinas 
and trails--in some instances changes that could generate additional 
recreation fees, but investments are a prerequisite.
    It is time for action to enable the Corps recreation program to 
address national needs for recreation.
    Some will fear that steps to meet recreation needs at sites managed 
by the U.S. Army Corps of Engineers will result in significant new 
costs to the Federal budget. Although ARC will argue strongly that 
recreation program expenditures are legitimate and beneficial, we 
believe that improved recreation opportunities can be achieved without 
large increases in general funding for USACOE recreation facilities and 
programs.
    What is needed are new strategies and new tools supplementing, but 
not replacing, proven and traditional operating and investment 
practices. In some instances, these new tools are adaptations of tools 
already in use by other Federal natural resource agencies with 
recreation missions. In other instances, the tools are employed 
elsewhere within the Department of Defense.
    Perfecting the tools and learning to use them wisely will require 
senior USACOE involvement, recruitment of top outside assistance and 
empowerment of a small number of carefully selected USACOE project 
staffers. Then and only then can the skills and tools be transferred 
for more universal application at USACOE projects nationwide.
    We ask this body to provide the USACOE recreation program with new 
authorities and new directions. We recommend the following actions:
    (1) All USACOE sites should be given the authority to charge and 
retain recreation fees under an authority resembling that provided to 
four other Federal recreation-providing agencies under the National 
Recreation Fee Demonstration Program. We applaud the Administration's 
call for this authority in the President's fiscal year 2005 budget 
proposal, although we disagree strongly with any provision that would 
limit the retention of fees to those exceeding the high point of 
recreation fee collections of $37 million annually. Such a threshold 
would have significant and adverse consequences. It would discourage 
alternative management strategies, including increased reliance on 
concessioners, at present fee sites--even if such alternatives would 
reduce overall USACOE operating costs. The threshold could also prove 
significant if forces such as storms, fires and other major events 
reduced fee collections at current collectionsites and thus prevented 
planned retention of fees at new sites--and thus risks antagonizing 
visitors paying the new fees in expectation of enhanced services and 
facilities.
    The details of the Corps new fee program are complicated by current 
revenue-sharing provisions with state and local governments. The 
problems are not insolvable, however. One alternative is to allow 
retention by the Corps of 75 percent of all ``new'' fees unless local 
government agrees to provide appropriate and offsetting services, 
including law enforcement and maintenance, in a project-specific 
agreement with the Corps.
    Finally, and unlike under the fee demo program, the USACOE should 
retain at the project level 75 percent or more of the fees paid by 
recreation permitees and concessioners.
    (2) In another national policy change, the Corps should be 
encouraged to manage recreation at its sites, not be a direct provider 
wherever possible. This would parallel the role of the Forest Service 
with ski areas and campgrounds as well as the role now played by 
hundreds of state parks operating on USACOE lands;
    (3) The Corps should be given the authority to establish NAFI (Non-
Appropriated Funding Instrumentalities) operations at all USACOE 
projects, paralleling the authority recently provided to the Department 
of Veterans Affairs;
    (4) A USACOE Recreation Demonstration Program should be authorized. 
This project to improve the USACOE recreation program should be based 
on a small number of carefully selected sites--no more than eight for 
fiscal year 2005 and 2006. Efforts at these sites should be assisted 
and guided by several principles and authorities, including:
    (1) continuation of base-level recreation program funding at these 
sites;
    (2) continuation of all current missions for the involved projects;
    (3) demonstrated local support and interest;
    (4) maintenance of resource quality, and especially water quality;
    (5) retention of all new revenues generated through fees, permits, 
concessions agreements and other mechanisms linked to recreation 
activities and facilities;
    (6) coordinated development of new recreation facilities and 
opportunities;
    (7) full use of available discretionary funding for wildlife, 
fisheries, boating, trails, roads and more available through state and 
local governments; and
    (8) substitution of non-Federal funding for facility construction 
and maintenance where practical.
    To aid in the pilot effort at the selected sites, the USACOE needs 
specific legislative authorities exclusive to these sites:
    (1) the ability to issue permits and concessions which justify 
private investments in campgrounds, marinas, lodges and other public 
recreationsites. This authority should be parallel to that now 
available to the Forest Service and applying to ski area permits, 
utilizing terms of up to 40 years. Presently, some 60 percent of the 
nation's skiing occurs on national forests at privately developed ski 
areas;
    (2) the ability to competitively award long-term leases for 
development of publicly available recreation facilities, an authority 
modeled after the Southern Nevada Public Land Management Act. Proceeds 
from any such sales would be restricted to use at the involved project 
and for specific purposes, including construction and operation of 
other public recreationsites, utilities and environmental stewardship;
    (3) the authority to enter into LIP (Lake Improvement District) 
agreements with local governments under which real estate surcharges 
would be levied on private lands and privately owned investments on 
USACOE lands enhanced in value by recreation improvements linked to 
lake access, and where the LIP receipts would be earmarked for public 
recreation enhancements, utilities and environmental stewardship; and
    (4) an expedited permit review and decisionmaking process.
    Selection of the pilot effort sites should be made by a Lakes 
Initiative Advisory Board comprised of five persons. The panel could be 
chaired by the Assistant Secretary of the Army for Civil Works and 
include a Member of Congress with demonstrated interest in the USACOE 
program, two USACOE executives and a knowledgeable recreation industry 
executive. The panel should also provide oversight of the experimental 
efforts and, by February 2006, should submit a report to the President 
and the Congress recommending any new authorities and directions 
appropriate to assure the USACOE recreation program contributes to 
national, regional and local needs. To enable this panel to operate and 
retain needed expertise, a total of $350,000 per annum should be 
provided.

                       THE POWER OF PARTNERSHIPS

    I close my testimony with an example of how the public can be well 
served through creative partnerships. The example comes from the 
lakeshore in Chicago.
    By the mid-1990's, Chicago's lakeshore had become a financial 
challenge to the city. Despite high demand for boat slip rentals and 
the lure of the lakeshore for other activities, the lakeshore 
operations had become a significant economic burden to the city--and a 
source of complaints from boat owners and others. Poor business 
practices allowed slips to go unrented despite long waiting lists and 
poor maintenance resulted in city payments for. The city turned over 
lakeshore responsibilities to an experienced marina operating firm, and 
an immediate turn-around occurred. Within 2 years, the firm presented 
the city with a proposal to redevelop the entire lakeshore, including 
8,000 rental slips, restaurants, the lakeshore walk and more. The 
improvements would be made with revenues from city-issued bonds which 
would be repaid by the increased revenues from lakeshore operations. 
The operating firm acted as general contractor for the project, 
overseeing $52 million in investments on time and under budget. As a 
result, lakeshore recreation receipts have surged by more than $11 
million annually--which allows full funding of operations, repayment of 
the bonds and $6 million annually in subsidies for city recreational 
programs ranging from ice skating rinks to a sailing program for 
handicapped youth.
    Thank you for your interest and actions to produce a bright future 
for recreation on the lands and waters managed by USACOE.

                               __________

                 AMERICAN RECREATION COALITION MEMBERS

                               SUSTAINING

America Outdoors
American Association for Nude Recreation
American Council of Snowmobile Associations
 Dometic Sales Corporation
Family Campers and RVers
Family Motor Coach Association
Good Sam Club
International Snowmobile Manufacturers Association
Jayco, Inc.
Kampgrounds of America
National Association of RV Parks and Campgrounds
National Forest Recreation Association
National Marine Manufacturers Association
National Park Hospitality Association
Pennsylvania Recreation Vehicle & Camping Association
PriceWaterhouseCoopers
Professional Paddlesports Association
Recreation Vehicle Dealers Association
Recreation Vehicle Industry Association
ReserveAmerica
Sporting Goods Manufacturers Association
The Coleman Company, Inc.
The Walt Disney Company

                                GENERAL

Academy of Aeronautics
American Association for Leisure and Recreation
American Association for Nude Recreation-Western Region
American Bus Association
American Forests
American Horse Council
American Hotel and Lodging Association
American Motorcyclist Association
American Power Boat Association
American Resort and Residential Development Association
American Sportfishing Association
American Suzuki Motor Corporation
American Trails
Bicycle Manufacturers Association of America
Boating Trades Association of Texas
BoatU.S.
Bombardier Recreational Products
Carefree of Colorado
Champion Fleet Owners Association
Clean Beaches Council
Coachman Industries, Inc.
Coast to Coast
Colorado Agency for Campgrounds, Cabins & Lodges
Cross Country Ski Areas Association
Employee Services Management Association
Experimental Aircraft Association
Florida International University
Florida RV Trade Association
International Association for Amusement Parks and Attractions
International Association of Snowmobile Administrators
International Family Recreation Association
International Jet Sports Boating Association
International Kart Foundation
Kampground Owners Association
Kawasaki Motors Corp., U.S.A.
Kilgore Ranch Company
Leisure Systems, Inc.
Marina Operators Association of America
Marine Retailers Association of America
Maryland Association of Campgrounds
Michigan Association of Recreational Vehicles and Campgrounds
Michigan Boating Industries Association
Montana Department of Fish, Wildlife and Parks
Motorcycle Industry Council
Mountain Outdoor Recreation Alliance of Western North Carolina
National Alliance of Gateway Communities
National Association of Intercollegiate Athletics
National Association of Trailer Manufacturers
National Boating Federation
National Club Association
National Hot Rod Association
National Off-Road Bicycle Association
National Ski Areas Association
National Sporting Goods Association
National Tour Association
Northern California Marine Association
Outdoor Industry Association
Personal Watercraft Industry Association
Recreation Vehicle Indiana Council
Recreational Park Trailer Industry Association
Recreational Vehicle Aftermarket Association
Resort and Commercial Recreation Association
SAMPO, Inc.
Seaway Trail, Inc.
Southern California Marine Association
Special Recreation for disABLED International
Specialty Equipment Market Association
Specialty Vehicle Institute of America
States Organization for Boating Access
Texas Recreational Vehicle Association
Thor Industries, Inc.
United Four Wheel Drive Associations
United Mobile Sportfishermen, Inc.
United Motorcoach Association
USA Water Ski
Wally Byam Caravan Club International
Warren Jones
Western States Tourism Policy Council
Yamaha Motor Corporation, USA
                               __________

                       Outdoor Recreation Activities Participated In Past Year: Trend Data
                 [Percentage of who have participated in during past year; ranked by 2003 data]
----------------------------------------------------------------------------------------------------------------
                                   1994     1995     1996     1997     1998     1999     2000     2001     2003
----------------------------------------------------------------------------------------------------------------
Walking for fitness/recreation.      NA       45       39       42       47       42       57       49       46
Driving for pleasure...........      40       36       33       34       39       35       41       36       43
Swimming.......................      35       31       28       31       33       40       39       40       41
Picnicking.....................      33       29       24       26       30       32       36       36       38
Fishing........................      26       24       22       20       22       28       26       28       28
Bicycling......................      21       20       16       19       19       22       23       23       22
Running/jogging................      19       16       13       12       16       16       18       21       19
Campground camping.............      16       16       12       12       15       21       17       18       18
Hiking.........................      18       18       12       15       17       15       19       22       18
Outdoor photography............      15       15       10       13       15       12       17       17       17
Bird watching..................      14       11        8       11       10       11       16       18       16
Wildlife viewing...............      18       15       10       14       16       15       16       20       16
Visiting cultural sites........      NA       NA       12       14       18       16       16       17       15
Golf...........................      11       12       11       11       12       12       13       12       13
Motor boating..................      10        9        5        8        9       11        9       12       10
Back packing...................      13       12        8        7       10       10        9       10        9
Canoeing/kayaking..............       6        5        4        5        5        7        5        7        8
Hunting........................       8        7        7        5        7        8        8        8        8
RV camping.....................       8        8        6        7        7        9        9        9        8
Wilderness camping.............      NA       NA       NA       NA       NA       NA        8        8        7
Horseback riding...............       6        5        5        4        4        6        5        6        6
Motorcycling...................       7        5        6        4        4        6        5        6        6
Off road vehicle driving.......       5        5        5        5        7        7        7        7        6
Target shooting................       8        6        5        4        5        7        6        6        6
Tennis.........................       9        9        7        8        5        6        8        8        6
Mountain biking................       5        5        4        4        4        6        5        5        5
Personal water craft (e.g. jet       NA       NA       NA        3        5        5        5        6        5
 skis).........................
Downhill skiing................       6        6        5        5        5        4        4        5        4
Water-skiing...................       6        6        3        4        4        6        4        6        4
In-line skating................      NA        4        4        5        6        5        5        6        3
Rock climbing..................       4        4        3        3        4        3        4        4        3
Rowing.........................       3        2        1        2        1        1        2        2        3
Sailing........................       4        3        3        3        2        3        2        4        3
Snorkeling/Scuba diving........       4        3        3        3        3        4        3        4        3
Cross-country skiing...........       2        3        2        2        2        1        2        2        2
Snowboarding...................      NA       NA       NA       NA        1        3        2        3        2
Snowmobiling...................       2        3        2        1        2        2        2        2        2
----------------------------------------------------------------------------------------------------------------
(NA) denotes not asked

         Responses by Derrick Crandall to Additional Questions
                          from Senator Inhofe

    Question 1. Mr. Crandall, in your testimony you make it clear that 
there is greater demand for recreation than what the Corps is currently 
providing. Has your organization, or anyone else tried to quantify that 
unmet demand.
    Response. The American Recreation Coalition does track recreation 
participation and demand through annual surveys of the public. Attached 
is a chart showing participation for 37 key activities which show that 
participation rates have trended upward for activities most common at 
Corps recreation sites at the same time that the total US population 
has grown by approximately 1.5 percent annually--suggesting an increase 
of approximately 20 percent in a decade if the percentage of the public 
participating in an activity remains constant. We are also including a 
chart showing recreational boat registrations over the past twenty 
years. This chart clearly demonstrates a growth in demand for a key 
water-based activity. At the same time, growth in Corps-managed 
recreation sites has been minimal.
    We feel certain that these statistics actually understate demand 
for several reasons. First, population has been strong in many of the 
geographic regions of the Nation where the Corps' recreation role is 
strongest, including the southeast. Second, surveys of boaters by 
various entities have shown concerns about increases in waiting time at 
launch ramps. And finally, there has been a clear and significant 
growth in demand for expanded services not contemplated 30 years ago. 
Recreation patterns have changed, away from weekends-and-two-weeks-in-
the-summer to more frequent, multi-day recreation periods at 
destinations offering a variety of activities, accommodations, shopping 
and dining. Lake Powell, in full operation for just over thirty years, 
has emerged as the Federal recreation site with the greatest number of 
overnight stays--despite its distance from population centers.

    Question 2. One of your recommendations is to give the Corps the 
authority to establish Non-Appropriated Funding Instrumentalities, 
similar to the authority provided to the Department of Veterans 
Affairs; could you explain what that is and how that would benefit 
recreation?
    Response. NAFIs facilitate the collections and retention of 
receipts at local sites to support a level of services and facilities 
sought by the public. Widely used on military bases for decades in 
connection with recreation sites, food services and more, it allows 
effective response to changes in customer desires and provides 
increased revenues to pay for meeting increased demand. The Department 
of Veterans Affairs was recently given NAFI authority for its hospitals 
and covering shops, food services, pharmacies, medical supply sales and 
rentals and more. Under a NAFI, an agency is not forced to wait through 
an appropriations cycle or longer to respond to marketplace changes.
    For the Corps, NAFIs could allow retention of fees at Corps-
operated recreation facilities, such as campground, and thus extend 
campground operations into shoulder seasons if demand warranted or add 
parking at popular boat launches without reliance on appropriations. In 
addition, a NAFI could permit a Corps recreation site to allow a 
private operator to invest in a recreation facility and pay a fixed 
lease payment or a payment based upon income to the site--with the 
payments retained by the Corps to pay for its other recreation 
operations at the project.

    Question 3. In your opinion, what are some of the specific items 
that discourage the maximization of recreation benefits at Corps sites?
    Response. We believe the lack of any economic incentives to the 
agency--including the inability to retain fees or lease payments--is 
the primary, but not sole, discouragement. Another discouragement is 
the decentralized ``voice'' of recreation/tourism interests, in 
contrast to other key Corps constituencies including navigation and 
hydropower interests. A third discouragement is the inadequate and 
inconsistent assessment of the benefits of recreation in Corps 
operations decisionmaking. And finally, we have seen that both 
internally and within the Federal budget process, there has been 
resistance to elevating recreation to an equal status with other Corps 
primary missions, including flood control, navigation and environmental 
protection.

    Question 4. Because of these distorting incentives within the 
Corps, do you think that the type of recreation provided at Corps 
facilities is also distorted?
    Response. The inability of the Corps to retain recreation program 
receipts, including fees and concessions payments) has prompted the 
Corps to rely heavily upon state and local governments as partners, 
rather than the private sector. It has also prompted a recreation 
program that centered on geographical areas where political support, 
chiefly in the Congressional appropriations process, allowed expansion 
and full operations. In general, Corps recreation operations have 
favored high quantity over high quality sites.
    Question 5. Do you think that the Corps, if given the proper 
incentives, could significantly expand recreational opportunities at 
Corps facilities?
    Response. Absolutely. Most Corps lakes are underutilized, either 
because of limited access and/or inadequate support facilities ranging 
from modern marinas to well-designed and well-maintained boat launch 
facilities, from campgrounds to resorts. Because the Corps owns and 
manages most of the lakeshore at its projects, private sector efforts 
to meet public demand cannot be done except in partnership with the 
Corps. As referenced in my testimony before the Committee, such 
partnerships can be extraordinarily successful, as in Chicago. Such 
partnerships can eliminate the need for major Federal capital 
investments and can also generate revenues to underwrite the USACE's 
recreation program operating expenses.
                               __________

 Statement of Steve Levy, County Executive, Suffolk County, Hauppauge, 
                                   NY

    Chairman Bond and Senator Clinton, thank you for the opportunity to 
appear before you and other distinguished members of this committee to 
discuss an issue of vital importance to my county and to our state. My 
name is Steve Levy and I am the County Executive of Suffolk County, New 
York.
    I am here today in the hope that this committee will not only 
reject the Administration's proposed policy initiatives, but will 
restore Federal funding and put forward legislative language that will 
encourage the regional management of America's coastal resources and 
assure that the Federal Government lives up to its statutory 
obligations.
    Suffolk has a population of about 1.4 million residents and covers 
the eastern half of Long Island, which extends eastward 120 miles from 
New York City. We are a coastal county with about 1,000 miles of 
coastline.
    Early last month, in my first report on the State of the County, I 
said that our coast is both our defining natural resource and a 
critically important economic asset. Our beaches must be managed 
intelligently. And, we can't do it alone.
    Our beaches are world famous and have been consistently ranked 
among the best in the Nation. Our beautiful south shore bays contain 
valuable habitats that support commercial and recreational fisheries 
and other related activities. However, this complex array of barrier 
islands, bays, wetlands, mainland coast and associated floodplains 
suffer the ravages of storm winds, waves, and tides that cause 
shoreline erosion and flooding hazards. It must be protected and 
enhanced, not only for its natural value and the enjoyment of future 
generations, but because it is an essential component of Long Island's 
tourism/recreation economy, which had an estimated value of $4.2 
billion in 2003.
    According to a May 2003 report prepared by the Suffolk County 
Legislature Budget Review Office, the value of spending associated with 
Suffolk County's Atlantic Ocean beaches generated regional economic 
benefits valued at $173.4 million in 2003. It was estimated that over 
11 million people visit these beaches each year with boating also being 
an important activity in the south shore bays and ocean. According to 
the New York Sea Grant Institute, over 120,000 motorboats were 
registered in Nassau and Suffolk Counties in 2002.
    Over my many years in public service, I have come to respect the 
dedicated men and women of the United States Army Corps of Engineers. 
These people have served courageously not only on Long Island, but in 
Manhattan after September 11th and in Iraq today, as America invests in 
rebuilding that country's infrastructure.
    One of the Corps' functions, which has been authorized by Congress, 
is to develop a 50-year storm damage reduction plan for the coast along 
the south shore of Suffolk County from Fire Island inlet to Montauk 
Point. This, the Fire Island to Montauk Point Reformulation Study 
(FIMP), will result in a regional plan for reducing risks to life and 
property from flooding and erosion hazards along 83 miles of coastal 
property in ways that help to restore and maintain ecosystem processes.
    The FIMP Study area encompasses 126 square miles in the 100-year 
storm floodplain. Nearly 160,000 people reside in the 73,000 homes 
located in the study area. This study, undertaken through The Water 
Resources Development Act, is especially critical to America's coastal 
infrastructure. In Suffolk County it means that we need Congress to 
fund the completion of the FIMP Study.
    Started in 1980, FIMP represents an investment of over $30 million 
to define the environmental and engineering steps that the communities 
of Long Island must take to restore and preserve our south shore 
coastal resources.
    Unfortunately, the Administration wants to cut out all funding for 
this study just as we are approaching completion and readying to move 
toward the complex and costly implementation phase. The Federal 
Government should not walk away from its responsibilities in this area 
after two decades of work and the expenditure of millions of dollars. 
This program has been and must remain a Federal, State, and local 
partnership.
    This project has proceeded under a partnership formed to share not 
only money, but also ideas and information. The Corps, working in 
partnership with the U.S. Department of the Interior (National Parks 
Service and U.S. Fish and Wildlife Service), National Marine Fisheries 
Service, New York State, local governments and stakeholder 
organizations, is aggressively evaluating the effectiveness of a full 
range of structural and non-structural alternatives for mitigating 
erosion and flooding-related problems thereby creating a model of 
environmentally sound sustainable coastal management.
    From a coastal management perspective, this Study is among the most 
important regional environmental, economic, and public safety 
initiative. It involves the entire south shore of Suffolk County. The 
Corps has initiated a novel approach of incorporating environmental 
principles in this process, which is driving the analysis of future 
actions.
    I am committed to fighting for the completion of the study and 
implementation of the vision it lays out for the coastal communities of 
Long Island. I am also equally committed to opposing any effort to 
undermine the sound partnership program to restore and preserve our 
nation's coastal resources that was set out in The Water Resources 
Development Act.
    If we are to successfully attain coastal floodplain protection, 
shoreline stabilization, safe inlet navigation, and habitat 
restoration, we require enlightened intervention at a scale large 
enough to necessitate a continued Federal financial commitment to 
enable the Corps to complete the study. My partners in New York State 
and local governments do not have this coastal engineering expertise. 
The Corps alone is the national expert in this field.
    Suffolk's beautiful, but fragile and vulnerable shoreline, which 
means so much to our local economy and our quality of life, must not be 
placed on the backburner of Federal priorities.
    Suffolk County is also doing its part to assist in the 
implementation of non-structural measures to protect our south shore 
floodplains. It has been a leader in open space preservation over the 
past fifty years and has acquired over 50,000 acres of parkland and 
protected farmlands.
    In the south shore study area alone, the County has acquired about 
7,000 acres of property. These lands include important parcels located 
on the Atlantic Ocean shoreline along barrier islands and the mainland 
coast; on the shores of Great South, Moriches and Shinnecock Bays; and 
along numerous streams that flow into these bays. All are located 
within the south shore floodplain that is targeted by the Study. Some 
of these properties are used for active park and recreation purposes, 
but many have been managed to preserve wetlands and natural habitats 
and to protect water quality. In fact, Suffolk County is currently 
actively pursuing additional acquisitions in the study area that total 
about 500 acres of shoreline land.
    Suffolk County's open space program has direct relevance to the 
FIMP Study, since it has precluded development in sensitive areas. As 
such, the County is playing a major role in the use of non-structural 
measures to reduce potential storm damages in floodplain areas.
    I pledge to you today that the County will continue to work with 
the Corps of Engineers, its cooperating agencies, and stakeholders to 
assure successful completion of the FIMP Study and implementation of 
its recommendations. For this to occur, funding must be restored in the 
Federal Fiscal Year 2005 budget.
    The Administration's failure to recommend funding for the 
Reformulation Study is directly related to the 180-degree policy about 
face announced in the President's Fiscal Year 2005 budget 
recommendations. Of course, the budget reflects the fiscal problems 
facing us today. But it seems these constraints have been used as an 
excuse to eliminate the Federal Government's role in restoring and 
preserving our beaches--an invaluable national environmental and 
economic asset.
    Not only has the Administration announced that it will not support 
the periodic renourishment of beach projects, it has also refused to 
support ongoing environmental restoration projects (i.e., ``Mud Creek 
Restoration Project;'' which has become victim of the $25 million 
nationwide limit that is available for restoration projects through the 
``Section 206 Continuing Authorities Program'') and programs that 
mitigate the damage to our shorelines caused by Federal navigation 
projects. The ramifications associated with this policy would mean that 
our Reformulation Study goes by the boards while people try to turn the 
clock back 50 years. But a Federal-state local partnership has helped 
maintain the Long Island coastline since the 1930's. I will do 
everything I can to work with you to provide necessary funding and to 
reject categorically the Administration's coastal policy initiatives.
    In 1996, this Committee helped to pass The Shore Protection Act-
Section 227 of The Water Resources Development Act. It makes a clear 
statement of congressional policy that the Corps will do studies of 
beach erosion and recommend specific projects to Congress for 
authorization as part of WRDA bills. It also gives preference to 
regional studies and projects, of which the Reformulation Study is a 
prime example. Working with local communities and all affected 
interests in those communities, the Corps has been developing a 
regional approach to viewing the Long Island coastline. Individual 
projects may well come out of this study, but each will be a part of a 
broader regional vision. Section 227 also gave preference to projects 
that responded to damage caused by various Federal actions along the 
coast. Where the Federal Government has, for example, funded the 
construction of a channel or the erection of structures, such as inlet 
jetties, that promote navigation, it is obligated under long-standing 
Federal law to mitigate for any damage those actions might cause when 
they interrupt the natural flow of sand to shorelines.
    Once again to repeat as I began, I hope this Committee will not 
only reject the Administration's proposed policy initiatives, but will 
restore Federal funding and put forward legislative language that will 
encourage the regional management of America's coastal resources and 
assure that the Federal Government lives up to its statutory 
obligations.
    Finally, let me say a word about periodic beach renourishment and 
ongoing environmental restoration and flood damage mitigation projects. 
I urge this Committee to use The Water Resources Development Act of 
2004 to remind the Administration that those ongoing components are 
part of congressionally authorized projects. They are part and parcel 
of legally binding ``Project Cooperation Agreements.''
    We at the county and local levels of government make our plans to 
raise the non-Federal share of studies and projects based on 
commitments made by the Federal Government. We understand that there 
may be lean Federal fiscal years, just as we may encounter fiscal 
difficulties that delay studies and projects. But we cannot simply walk 
away from our commitments. And neither should the Federal Government.
    In closing, Mr. Chairman, it is notable that only one Suffolk 
County beach will continue to be nourished with Federal help if the 
President's budget is accepted. That is the beach at Westhampton Dunes, 
which is the subject of a court order. While I am glad this beach at 
least will continue to be cared for, I do not think judges should bear 
the responsibility for setting America's coastal policy. That is a job 
for Congress and for state and local governments, working together.
    Thank you.
                                 ______
                                 
 Responses by Steve Levy to Additional Questions from Senator Jeffords

    Question 1. The Administration is backing out of ongoing legal 
commitments to local communities for beach renourishment projects. In 
your discussions with your colleagues in New York and in other coastal 
states, can you describe for me the level of concern that people appear 
to have with the proposals made in the President's Budget? You are 
asking this Committee to use WRDA 2004 to remind the Corps that 
periodic beach renourishment is part and parcel of legally binding 
Project Cooperation Agreements. Could you elaborate on this situation 
and tell us why a legislative solution is needed?
    Response. Your questions highlight the overarching concern of local 
government officials regarding whether our Federal partner will 
continue the longstanding commitment of financial and other resources 
for assisting local governments protect the nation's coastline. While 
my colleagues in local government are ready, willing, and able to 
assist in this important policy arena, we cannot afford to bear the 
burden alone. The technical and financial resources required are beyond 
those available to local governments.
    Our concern over the Administration's commitment is evidenced by 
its budget proposal. Shore protection funding proposed by the President 
for Fiscal Year 2006 is $46,787,000. This figure is 32.3 percent lower 
than the President proposed for fisal year 2005 and 60 percent lower 
than the $112.2 million enacted into law by Congress for fiscal year 
1905 (excluding $61.6 million for periodic renourishment in Florida and 
South Carolina in response to hurricanes in 2004). This concern is 
further heightened as the White House Office of Management and Budget 
once again proposed that periodic beach renourishment be a 100 percent 
local responsibility.
    Since I testified before the Senate Environment and Public Works 
Subcommittee on Transportation and Infrastructure last year, the level 
of local concern of all coastal communities has been amplified by the 
devastating effects of Hurricanes Katrina and Rita on the Gulf coast. 
Locally, these events have once again highlighted the need for 
completion and implementation of the Fire Island to Montauk Point 
Reformulation Study in order to protect 83 miles of Long Island's south 
shore communities. When completed, it is anticipated that the study 
will provide the basis for developing coastal protection plans for 
other areas, locally and nationally. The Federal Government must not 
delay any longer and must provide the financial, technical, and staff 
resources necessary to complete this long-term hurricane and erosion 
control project, which the Army Corps of Engineers has been developing 
on-and-off since the 1980's.
    As important as completion of the FIMP is to the region, there is 
an immediate--intermediate--need to address the severe damage that has 
been inflicted on the south shore of Long Island. Earlier this year, 
County and Town of Southampton officials met with State and Federal 
officials in an attempt to comprehensively address specific areas of 
the coast that were the subject of ``emergency declarations.'' Measures 
of a short-term temporary nature had to be taken and were paid for by 
the town and county. These areas have been further impacted--as have 
additional discrete areas along the coast--by the intense weather that 
has pounded the northeast region over the past months. The combination 
of extensive rain and winds has exacerbated erosion, and we are now 
entering the winter weather season with beaches and portions of our 
coast already severely eroded and compromised. I have enclosed a letter 
to Mr. James Tuffey, Director of the New York State Emergency 
Management Office that provides a snapshot of the damage inflicted 
along the Suffolk County coast.
    Protection of the barrier islands, ocean dune systems and marshes 
is a key component needed to minimize the impacts of storm surge and 
wave action on low lying south shore communities. I joined with my 
counterpart from Nassau in meetings with congressional and Senate 
delegations on September 20th to seek adequate funding for disaster 
preparedness, and I urged that the FIMP should be considered a related 
and integral part of such planning to prevent avoidable consequences 
from storm driven flooding and beach erosion on mainland communities.
                                 ______
                                 
                                         County of Suffolk,
                                     Yaphank, NY, October 27, 2005.
Mr. James Tuffey, Director,
New York State Emergency Management Office
Building No. 22, Suite 101
1220 Washington Avenue
Albany, NY.
    Dear Director Tuffey: On behalf of Suffolk County, we would like to 
advise you of the severity of the beach erosion that our outlying 
coastal areas have sustained as a result of the severe weather 
conditions during the week of October 17.
    The following section describes the details of the extent of damage 
in the coastal areas of Suffolk County:
    Smith Point County Park. The park, located on the Atlantic Ocean, 
is approximately six miles long, stretching from just west of the 
terminus of the William Floyd Parkway eastward to the Moriches Inlet.
    Approximately 2 miles of primary dune had been impacted by erosion 
removing about 30'-50' of dune that had been on the average 10 feet 
high. That loss could equal up to 500,000 cubic yards of sand. Majority 
of the six miles of beach dropped in elevation between 3-6 feet making 
the dune line more vulnerable than it was.
    In two places, the toe of the dune is now less than 30' from Burma 
Road, a sand road used by fisherman and others to reach the west side 
of the Moriches Inlet. Previously the road was well behind the dune 
line except in the area of last winter's washover.
    The beach appears to narrow dramatically looking west from Smith 
Point toward the Fire Island National Seashore.
    Cupsogue. This park is located on the Atlantic Ocean at the western 
end of Dune Road, west of the Village of West Hampton Dunes and east of 
the Moriches Inlet.
    There has been significant erosion that occurred in the beach. 
Minimum dune erosion has occurred. Sand lost is estimated at 60,000 
cubic yards.
    Meschutt. This park is located on the northeast corner of the 
Shinnecock Canal on the Great Peconic Bay.
    General erosion of the beach produced a cut line directly in front 
of the main pavilion, dropping the elevation of the beach about 3 feet.
    Theodore Roosevelt County Park. Located in Montauk, its outer beach 
on the Block Island Sound is popular with fishermen, campers and day 
trippers.
    Shagwong Point suffered significant bluff erosion, as it has in 
most severe storms over the last decade. There are 2.5 miles of beach 
from East Lake Drive to Shagwong Point were reduced in width by half 
the normal 120' width.
    Indian Island County Park. Located in Riverhead at the outflow of 
the Peconic River into Flanders Bay.
    Bluffs at the easternmost tip of the park were severely eroded in 
two locations. Approximately 40' of the 120-foot high bluffs were 
eroded over a distance of 150 yards.
    The park road and the picnic area, along with a scenic overlook are 
immediately threatened. Remediation work is needed. The area is 
extremely vulnerable to damage from a minor northeast storm.
    Shinnecock East. Located on the Atlantic Ocean at the western end 
of Dune Road/Beach Road in Southampton on the east side of the 
Shinnecock Canal.
    No discernable damage observed.
    The following reports from the townships reporting the extent of 
erosion:
    Town of Babylon. There has been moderate erosion along the beach 
coastline with the heaviest damage in the area of Gilgo Beach.
    Town of Brookhaven. There has been light to moderate beach erosion 
at the Great Gun Beach, extreme erosion in Davis Park, and moderate to 
heavy erosion in the beaches of Mount Sinai to Port Jefferson. The 
south shore of the Brookhaven township suffered light to moderate 
erosion in certain areas of the beaches.
    Town of East Hampton. There has been heavy erosion all around the 
Montauk coastline. Beaches in downtown Montauk are wiped out. Sand had 
to be placed in some alleyways that led to the beach between buildings 
to keep water from spilling into the streets. There has been 
significant damage to the whole area.
    Hog Creek experienced a collapsed steel bulkhead. It is shoaling 
and is close to being closed. There is shoaling in many channels around 
the area. Sand that was previously cleared out of the Accobonac Harbor 
filled back in and needs to be removed again.
    Town of Huntington. There has been heavy erosion in the following 
beaches: Hobart Beach, Crescent Beach, Centerport Beach, West Neck 
Beach, Crab Meadow Beach, and the Makanaian Beach. The $33,000 worth of 
sand that was installed along the coast to repair winter erosion has 
been totally washed away and needs to be replaced.
    Town of Islip. The Fire Island beaches have suffered major erosion. 
On a high tide, the water now reaches the snow fence and the base of 
the dunes. Atlantique suffered a washover but did not totally destroy 
the main dune. Officials expect washover again in the future at 
Cornielle, which is Ocean Beach and Atlantique. A lot of the lower 
beach has been washed away. The beach is very fragile at this time and 
some houses may be at risk.
    Town of Riverhead. The whole North Shore experienced very heavy 
erosion and lost several feet of sand. Creek Road eroded to the 
bulkhead.
    Shelter Island. There has been heavy erosion by Ram Island and 
Shell Beach Road was broken up during the past storm. Moderate erosion 
occurred on the west side of the island, moderate erosion on the north 
side, and the south side is expected to experience flooding from the 
bays.
    Town of Smithtown. There has been moderate to heavy erosion on 
Bluff Overlook and Callahan Beach.
    Town of Southampton. There has been moderate to heavy erosion on 
the eastern part of the town. Tiana Beach area has suffered moderate 
erosion. Westhampton Beach lost significant amounts of sand. Several 
houses may be in jeopardy in future storms.
    Town of Southold. Greenport area suffered some washout around the 
bluffs. There has also been some minor erosion around both shorelines.
    Fishers Island. There has been minimal damage to the beach area 
during the storm of October 17.
    Based on the above reports, Suffolk County would like to officially 
inform you that we have a grave concern that future storms would put 
these already vulnerable beach areas in more peril and severe damage. 
We strongly urge that you contact the New York State Department of 
Environmental Conservation and have the NYSDEC send their erosion 
experts to inspect and document our already battered beaches.
    Thank you.
            Sincerely,
                                        Joseph F. Williams,
                                                      Commissioner.
                               __________

   Statement of Michael A. Leone, Chairman, American Association of 
                            Port Authorities

                              INTRODUCTION

    Good afternoon. I am Michael A. Leone, Chairman of the American 
Association of Port Authorities (AAPA) and Port Director of the 
Massachusetts Port Authority. Founded in 1912, AAPA represents 
virtually every U.S. public port agency, as well as the major port 
agencies in Canada, Latin America, and the Caribbean. AAPA members are 
public entities mandated by law to serve public purposes, primarily the 
facilitation of waterborne commerce and the generation of local and 
regional economic growth. I am testifying today on behalf of the 82 
U.S. public port members of the American Association of Port 
Authorities.
    AAPA commends you, Mr. Chairman, for calling this hearing to 
address the role of the U.S. Army Corps of Engineers (Corps) in meeting 
the nation's water resources needs. This Nation has been served well by 
regular authorizations of the Water Resources Development Act (WRDA), 
and returning this legislation to its biennial cycle will be of great 
value to the Corps, U.S. public ports, shippers and carriers and our 
trade partners throughout the world.
    Today, I plan to highlight the role of ports in the U.S. economy; 
the status of our nation's navigation system; the historic role of the 
U.S. Army Corps of Engineers in meeting the needs of U.S. ports; the 
need for enactment of a Water Resources Development Act of 2004; and 
ways to improve the nation's deep-draft navigation system through more 
seamless partnerships between public port authorities and the Corps of 
Engineers.

                     ROLE OF PORTS IN U.S. ECONOMY

    America's port system comprises more than 100 public port 
authorities located along the Atlantic, Pacific, Gulf and Great Lakes 
coasts, as well as in Alaska, Hawaii, Puerto Rico, Guam and the U.S. 
Virgin Islands. This committee undoubtedly knows the value of ports and 
waterborne commerce to the nation's economy. U.S. public ports provide 
the vital link for getting goods to the nation's consumers and 
transporting exports overseas. Deep-draft ports, which accommodate 
oceangoing vessels, move more than 95 percent of U.S. overseas trade by 
volume and 75 percent of U.S. overseas trade by value.
    Every community in this Nation is served by U.S. ports, as they 
provide gateways for a variety of exported commodities, including 
forest products, coal, corn and soybeans, iron, petroleum, steel, 
machinery and manufactured goods. In addition to linking U.S. products 
to the world community, ports enable U.S. consumers to enjoy a wide 
selection of imported products, such as automobiles, toys, athletic 
shoes and winter fruit. This flow of goods extends well across state 
lines, as each state relies on between 13 to 15 ports on average to 
handle 95 percent of its imports and exports.
    This constant commerce has a major impact on the communities ports 
serve. Public ports are considerable contributors to the national 
economy, as well as state and local economies. Ports provide 13 million 
direct and indirect jobs, accounting for nearly $500 billion in 
personal income. U.S. ports contribute $743 billion to the Gross 
Domestic Product, as trade has increased over the past 30 years from 13 
percent to 30 percent of U.S. GDP.
    In addition to this positive effect on the national economy, ports 
generate significant amounts of revenue for Federal, state and local 
governments. Ports and port users contribute approximately $200 billion 
in Federal, state and local taxes. Of this amount, $16 billion is 
generated directly from U.S. Customs duty revenues on imported goods.
    Ports also play an important role in economic development. The 
fast-growing cruise industry, for example, is enjoying robust demand 
for cruise vacations as nearly 8 million North Americans cruised in 
2003, a 6.9 percent increase over 2002. Cruise lines now depart from 24 
port cities and call on 48 ports in North America.
    While maritime functions are certainly the most visible and 
traditional activities associated with ports, port authority activities 
may also include airports, bridges, tunnels, commuter rail systems, 
inland river or shallow-draft barge terminals, industrial parks, 
Foreign Trade Zones, world trade centers, terminal or shortline 
railroads, shipyards, dredging, marinas, and various public 
recreational facilities. Public ports also play a critical role in our 
national security, peacekeeping and humanitarian efforts around the 
world. In particular, ports support the mobilization, deployment and 
resupply of U.S. military forces.
    Public port authorities also make substantial investments in the 
nation's port and harbor infrastructure. In 2002, AAPA member port 
authorities invested more than $1.7 billion in capital improvement 
projects. Next year, port authorities will invest nearly twice as much 
as they did in 1995 ($2.2 billion vs. $1.2 billion), a rate of increase 
that closely matches the growth rate for containers moving through 
ports (see Figure 1). While state and local authorities have 
historically been responsible for land-side development, in the Water 
Resources Development Act of 1986 (WRDA 1986), Congress enacted 
significant cost-sharing requirements for Federal navigation projects. 
Significantly, these require public port authorities to provide, among 
other things, half of the cost of feasibility studies and between 35 
and 60 percent of the cost of construction for congressionally 
authorized harbor navigation projects. WRDA 1986 also permits non-
Federal sponsors to undertake feasibility studies at full non-Federal 
expense or to contribute in-kind services in lieu of cash on Department 
of the Army-led projects. The full cost of Federal maintenance of 
harbor projects is funded by port and harbor users.

[GRAPHIC] [TIFF OMITTED] T4601.001


    To keep goods and people moving through U.S. ports, the nation's 
deep-draft navigation system needs to be well-maintained, and the 
system needs to be able to grow to keep pace with changes in the global 
shipping industry. The U.S. Marine Transportation System (MTS) is 
facing a number of constraints that hamper the system's effectiveness, 
and, if not addressed, threaten U.S. economic and national security.
               status of the marine transportation system
    Demand on the MTS is growing. As I mentioned, 95 percent of U.S. 
overseas trade moves through U.S. ports. While total trade is expected 
to double over the next 20 years, the growth in container movements 
through U.S. ports is doubling every 10 years. Figure 1 illustrates 
that the number of containers moving through U.S. ports next year will 
be nearly twice the number in 1995 (21 million vs. 11.4 million). The 
exploding demand for containerized transportation is not only driving 
the doubling of investment in land-side infrastructure by port 
authorities, but ocean carriers are also responding to the increased 
demand for their services by building larger and larger vessels.
    Currently, there are about 60 post-Panamax ships in service, and 
several worldwide shipping industry consulting firms are reporting that 
more ocean carriers are placing orders for ships that exceed this size. 
For example, Drewry Shipping Consultants, Ltd., reports that there are 
15 vessels of 8,000 TEU capacity that will enter the global shipping 
fleet this year, with an additional 20 more to follow in 2005. The 
construction of post-Panamax size container ships reflects the dramatic 
increase in total industry capacity, which will grow by approximately 
60 percent per year to 1.1 million TEUs by 2007. The average draft of 
current post-Panamax ships is 42.9 feet. The largest ships have drafts 
of about 45.5 feet, which require channels that are at least 50 feet 
deep. The growth of these container vessels will require deeper 
navigation channels, which will require significant contributions from 
both the Federal Government and local project sponsors.
    Port expansion to handle the exploding trade is straining the 
capacity of port communities. Congestion at freight terminals is 
growing, as motor carriers and rail companies are struggling to keep up 
with the cargo moving through ports on increasingly larger vessels. 
Port authorities and the Corps of Engineers are finding it increasingly 
difficult to plan, construct and maintain needed improvement projects. 
Port authorities understand their responsibility to develop sustainable 
projects, and a substantial cost of all port and harbor projects is for 
environmental mitigation or enhancement. AAPA encourages the 
development of multi-objective port and harbor projects consistent with 
congressional cost-sharing authorities.
    Dealing with the physical pressures and financial constraints on 
the nation's transportation system is the challenge this committee is 
called to address. Our nation's deep-draft navigational system is at a 
crossroads, and its future has the potential to be bright or to be 
bleak. The Corps has a key role to play in this process, and the 
direction the Corps is given by Congress in WRDA legislation will be 
critical to the future of the MTS.

                     ROLE OF THE CORPS OF ENGINEERS

    Throughout its 200-plus year history, the Corps has been charged 
with providing quality, responsive engineering services to the Army and 
the Nation. Since 1802, the Corps has focused on managing the nation's 
water resources effectively. Traditional work done by the Corps has 
focused on navigation, flood control and irrigation. Creating channels 
for shipping and transportation, as well as maintaining those channels, 
has been an activity for the Corps throughout its history.
    Since the 1970's, the Corps' mission has expanded to include 
environmental restoration and protection, recreation, and water supply. 
While these new missions are also served by other Federal agencies, 
only the Corps of Engineers is charged with designing, building, and 
maintaining the nation's navigation system. Even while the Corps' 
mission areas have increased, funding for the Corps' Civil Works 
Program has decreased by 50 percent in the last 30 years and now stands 
at roughly the same level it was around 1960. The Corps' primary 
responsibility to the Nation must be to keep navigation channels open 
and navigable for the transportation of people, goods and military 
needs. As funding for the Corps continues to be restrained, AAPA urges 
this committee to ensure the Corps' navigation mission receives your 
highest priority in this year's WRDA bill.
    Construction and maintenance needs of the nation's deep-draft 
navigation system are not being met. Ongoing, budgeted construction 
projects have not been completed, due to the low funding levels being 
allocated for Corps' civil functions. The President's proposed fiscal 
year 2005 budget would reduce deep-draft project construction funding 
by more than $40 million compared to the fiscal year 2004 enacted 
level. AAPA estimates that deep-draft projects need approximately $500 
million for construction in fiscal year 2005, more than double the 
President's proposed funding level. As shown in Figure 1, spending by 
the Corps of Engineers on deep-draft navigation is barely higher than 
10 years ago ($929 million vs. $755 million), and clearly not meeting 
the challenge of a doubling in container volumes during that period or 
keeping pace with the investment of public port authorities.
    Operations and maintenance (O&M) funding is also struggling to keep 
pace with the navigation system's needs. For fiscal year 2005, the 
Administration has proposed $600 million for O&M, well short of the 
$735 million needed to address the needs of the nation's deep-draft 
navigation system. This shortfall in funding is especially frustrating 
to ports, as there is a dedicated source of O&M funding that is not 
being used to its full potential.
    The Harbor Maintenance Trust Fund (HMTF) is a repository for funds 
collected by the Harbor Maintenance Tax. Funds in the HMTF are 
dedicated toward funding the Federal share of O&M costs associated with 
maintaining the nation's deep-draft navigation channels. However, the 
use of the tax for other purposes is increasing at an alarming rate. 
The Administration's recent budget request estimates that the surplus 
in the HMTF will grow to more than $2.6 billion in fiscal year 2005, 
more than four times the level in 1995 ($626 million). At the rate of 
spending outlined in the Administration's request, the HMTF surplus 
will likely reach $5 billion by the end of the decade (see Figure 1).

                           ENACTING WRDA 2004

    There is a critical need for Congress to move forward on WRDA this 
year. As I stated earlier, local port agencies rely on the 
authorization of studies and construction to make needed improvements 
to the nation's deep-draft navigation system. AAPA urges the Senate to 
pass WRDA in 2004 to allow our Nation to reap the economic benefits of 
increased trade. Attached is a letter of support for quick action on 
WRDA signed by 33 port directors.
    Since the passage of WRDA 1986, Congress has worked to reauthorize 
this legislation on a biennial basis. Its regular reauthorization is 
critical in enabling U.S. port authorities to plan needed studies of, 
and improvements to, the nation's deep-draft navigation system. The 
last WRDA was enacted in 2000, and on behalf of AAPA, I urge this 
Committee to move forward on reauthorization of this law expeditiously. 
Further delay in authorizing vital navigation projects will increase 
the cost of navigation projects, create uncertainty for U.S. ports in 
business planning, and negatively impact the flow of commerce through 
port communities all across the Nation.
    With WRDA 2004, this Committee can significantly refocus water 
resources policy in this Nation, making this legislation as important 
to water policy and the work of the Corps as WRDA 1986 was and 
continues to be. To that end, AAPA has a number of specific 
recommendations regarding water resources policy and Corps 
modernization that I urge this Committee to consider as it moves 
forward on WRDA.
    I would first ask this Committee to address the growing surplus in 
the Harbor Maintenance Trust Fund (HMTF). The Harbor Maintenance Tax, 
levied on imports and domestic cargo, contributes a significant amount 
of revenue to the HMTF each year, and as trade continues to increase, 
the contributions to the HMTF are growing. While these funds are 
dedicated toward maintenance of Federal navigation of channels--
specifically through dredging--their utilization has not kept pace with 
their collection or with the maintenance dredging needs at ports.
    Operations and maintenance needs on the deep-draft navigation 
system are not being met. Rather that allowing the HMTF surplus to 
continue to grow unchecked, AAPA urges Congress to better utilize these 
funds for their intended purpose. Specifically, I urge this Committee 
to authorize guaranteed funding of the HMTF, ensuring that the funds 
collected are spent, similar to the treatment of the Highway Trust 
Fund.
    Additionally, AAPA believes that local sponsors are providing a 
greater share of the cost of navigation channel deepening projects than 
Congress expected when it mandated cost sharing in 1986. AAPA 
recommends that Section 101 of WRDA 1986 be amended to revise the 
definition of deep-draft harbor and the cost-sharing formula to reflect 
the changes that have occurred in the general cargo fleet.
    AAPA also urges this Committee to consider seven proposals to 
modernize the Corps of Engineers, improve its relationship with local 
sponsors of deep-draft improvement projects and more efficiently manage 
the water resources of this Nation:
     Partnership Agreements. AAPA believes there are 
fundamental disparities in the partnership relationship between the 
Corps of Engineers and local sponsors that should be corrected. AAPA 
recommends that WRDA 1986 be amended to reference partnership 
agreements and that the process of negotiating and implementing 
agreements be improved.
     Credit for In-Kind Work During Construction. AAPA 
recommends adoption of a provision allowing local sponsors credit for 
in-kind services during construction of a project.
     Port and Harbor Dues. AAPA believes that ports should have 
broad authority to levy fees for raising the local share of Federal 
dredging projects. AAPA believes common law and precedent provide this 
authority, but that Section 208 of WRDA 1986 severely limits this 
ability. AAPA recommends that all of Section 208 be replaced by a 
general authority restating the common law principle that ports can 
assess fees to recoup the cost of their services.
     Utility Relocation. AAPA believes that the Corps should 
exercise its authority under Section 10 of the Rivers and Harbors Act 
and/or its navigation servitude powers to direct the removal and/or 
relocation of utilities within navigation channels. AAPA recommends 
that Section 101(a)(4) of WRDA 1986 be deleted, and that report 
language should express Congress' view that the Corps should exercise 
its existing authority to direct the removal and/or relocation of 
utilities within navigation channels at 100 percent owner expense.
     Indemnification. Because many ports are prohibited by 
state anti-deficiency laws from providing indemnification to the 
Federal Government, AAPA recommends that Section 101(e)(2) of WRDA 1986 
be deleted. AAPA could support alternative language that would allow 
for the purchase of indemnification insurance for both the Federal 
Government and the local sponsor as an allowable project cost.
     Local Sponsor-Initiated Projects. AAPA believes the 
procedures for local sponsor-initiated projects should be streamlined. 
AAPA recommends that Sections 204 and 205 of WRDA 1986 be amended to 
allow for: (1) the reimbursement of projects which are constructed by 
the local sponsor without prior approval by the Chief of Engineers and 
authorization by Congress; and, (2) the assumption of maintenance by 
the Corps for such projects.
     Corps Dredge Fleet. AAPA urges Congress to enact policies 
that will ensure adequate capacity and the availability of dredging 
equipment to meet dredging needs. Specifically, AAPA urges Congress to 
direct the Corps of Engineers to analyze the costs and benefits of 
existing and proposed restrictions on the use of the Corps' hopper 
dredge fleet. Congress should allow the Corps fleet to operate 
unconstrained by statutory and administrative restrictions for a 
specified period of time so an accurate assessment of the fleet's true 
costs can be determined.
    The U.S. House of Representatives passed a WRDA bill, H.R. 2557, on 
September 26, 2003, which included a number of the recommendations 
discussed above as well as several Corps ``reform'' provisions. We 
believe that the House's Herculean effort last year strikes an 
appropriate balance on these Corps reform issues, and we urge the 
Senate to not reopen these issues as it considers WRDA this year. AAPA 
believes that if included in a WRDA bill, these policy recommendations 
will significantly improve the efficiency and effectiveness of the 
Corps and of the U.S. deep-draft navigation system. Further delays in 
authorizing projects and in clarifying important Corps of Engineers 
policies will add unnecessarily to the cost of projects and defer much-
needed transportation cost savings, job creation and economic 
development in communities across the country.

         BEYOND LEGISLATION: SEAMLESS FEDERAL-PORT PARTNERSHIPS

    While AAPA believes that legislation is necessary to make important 
changes to the way that the Corps works with its local water resources 
partners, we are also working in other ways to improve our industry's 
partnership with the Federal Government. Specifically, AAPA has 
recently launched a Quality Partnership Initiative (QPI) to positively 
affect the dialog between U.S. public port authorities and the Corps. 
The QPI involves several major elements, including seeking the 
legislative changes discussed above, developing a project performance 
evaluation system, the development of a best practices data base, and 
focused training and technical and policy support.
    Last week, at AAPA's Spring Conference, I signed a Memorandum of 
Understanding (MOU) with Assistant Secretary of the Army for Civil 
Works John Paul Woodley. This document sets forth a series of shared 
principles of our two organizations, and it dedicates both parties 
toward increased communication on formal and informal projects that 
move these principles forward. Specifically, AAPA and the Secretary's 
office recognize the unique nature of being cost-sharing partners, the 
common mission to facilitate commerce through ports and harbors and the 
importance of developing cooperative projects, resolving disputes 
early, and finding innovative and mutually beneficial solutions to 
problems.
    As part of AAPA's upcoming Harbors, Navigation and Environment 
Committee Seminar this May in New Orleans, we will hold three half-day 
workshops on several critical QPI-related topics, including project 
cooperation agreements and project coordination teams, performance 
measures for Corps of Engineers projects, and strategies for assessing, 
remediating, and reusing contaminated properties and waterways. The 
public port industry recognizes that critical challenges face us, and 
we are ready to offer our services to find solutions.

                               CONCLUSION

    In conclusion, Mr. Chairman, there is a significant opportunity for 
this Committee to refocus the water resources policy of this Nation 
with passage of WRDA 2004. AAPA looks forward to working with this 
Committee to modernize the Corps of Engineers and address funding 
shortfalls for the development and maintenance of the deep-draft 
navigation system. The benefits of our cooperation and dedication will 
be increased trade, meaningful economic impact on communities all 
across the country and more jobs for hard-working Americans. AAPA 
appreciates your leadership on behalf of the U.S. port community. This 
concludes my testimony.
                                 ______
                                 
 Response by Michael Leone to Additional Question from Senator Jeffords
    Question. You have stated that there are millions of dollars of 
surplus in the Inland Waterways and Harbor Maintenance Trust Funds, yet 
rehabilitation, operation and maintenance needs are going unmet. What 
should be done to reduce these surpluses?
    Response. I will speak specifically to the Harbor Maintenance Trust 
Fund or HMTF which impacts the port industry directly. I believe the 
principle reason these surpluses have grown while needs go unmet is 
lack of sufficient budget authority for the Corps of Engineers to spend 
adequately and then draw reimbursement from the fund. The Water 
Resources Development Act of 1986 created the concept of non-Federal 
navigation interests paying for channel maintenance and established the 
ad-valorum tax on cargoes for both imports and exports with the tax 
receipts deposited in the HMTF. The intent of Congress was to insure 
that adequate funds would be available to keep the Nation's ports and 
harbors dredged to authorized depths. Subsequently the Supreme Court 
declared the export tax to be unconstitutional. However, even with just 
import taxes collected now, the HMTF has developed a surplus of over 
$2.5 billion. We find that to be unacceptable given the lack of 
adequate maintenance at many of the Nation's ports. For ports and 
harbors maintenance dredging the Corps expends funds from the general 
treasury in accordance with appropriations or budget authority from the 
Congress with 100 percent reimbursement to the Treasury from the HMTF. 
In effect there is a 100 percent offset to appropriated general 
treasury funds paid for by non-Federal interests, specifically shippers 
who rely on the availability of authorized channel dimensions at ports 
and harbors covered by the HMTF. The existence of the large surplus 
suggests that not only are needs going unmet but that the required 
dredging is in fact pre-paid well into the future.
    I mentioned an increase of the Corps budget authority as a possible 
solution. Another possible solution would be to amend legislation 
pertaining to the HMTF to allow annual spending for maintenance 
dredging to be no less than the previous years' collection. Right now, 
collection of the tax amounts to about $700 million annually while the 
Corps, after subtracting certain administrative and other charges, will 
spend less than $600 million for maintenance of channels. Spending the 
revenue received would result in around an additional $100 million 
annually. We recommend that alternative solutions like the ones I just 
described be fully evaluated as potential solutions to this growing 
problem.

                               __________

Statement of William G. Howland, Basin Program Manager, Lake Champlain 
                     Basin Program, Grand Isle, VT

    Chairman Inhofe, Ranking Member Jeffords, Subcommittee Chair Bond 
and Ranking Member Reid, and distinguished members of the committee, 
thank you for inviting me here today to testify about the role of the 
U.S. Army Corps of Engineers in meeting the nation's water resources 
needs.
    I would like to speak today about the tremendously important role 
presently played by the Army Corps in addressing the most fundamental 
needs of American citizens: clean water to drink and a healthy place to 
live.
    Before taking up my position managing the Lake Champlain Basin 
Program nearly 5 years ago, I had been a staff scientist in an 
environmental engineering firm, a member of the research faculty at 
McGill University specializing in military geosciences with a doctorate 
in biophysical remote sensing, and later on the faculty at the 
University of Vermont and at Middlebury College. I have an 
understanding of the main water quality challenges facing large lakes 
across the Nation. And I appreciate the pressing need for Federal 
leadership in repairing and restoring ecosystems that have been 
impaired through the development of our American society.
    The Lake Champlain Basin Program, which I manage, is a bi-state and 
international partnership to restore water quality and improve the 
economy of the Lake Champlain Basin. Our partnership involves the 
states of Vermont and New York, the Province of Quebec, and numerous 
Federal agencies, including the USEPA, the USDA, USDI, and the USACE. 
This partnership is highly effective and through our work to restore 
the lake ecosystem, we also are ensuring an economic future for 
citizens in our region. This work is of vital importance to the 
regional economy, including the tourism and recreation economy for 
which we are well known, and which depends so fundamentally upon this 
great and wonderful lake.
    One of the great discoveries in my work with the Lake Champlain 
Basin Program's Federal agency partners is the good faith and 
dedication that they bring to the task of cleaning up and restoring 
America's waterways. I have great admiration and appreciation for all 
of our Federal partners. Today, my testimony will focus on the 
essential work of the U.S. Army Corps of Engineers, and particularly 
their role in Environmental Restoration projects.
    Cleaning up pollution in a lake is exceedingly difficult and 
costly. And it always includes interrupting the flow of pollutants into 
the drainage system to prevent further contamination. Pollution 
prevention requires changing the way things work in the landscape that 
drains into the lake. In Lake Champlain, as in the Great Lakes and 
other parts of the Nation, ecosystem restoration efforts often require 
advanced engineering design expertise and leadership that communities 
and states simply cannot provide.
    The competence and engineering expertise of the U.S. Army Corps of 
Engineers is a vital resource for planning, designing and executing 
restoration plans. The stature of the Corps, its track record with 
large projects and its quality control protocols provide the leadership 
that is essential to maintain and improve the water quality of our 
rivers and lakes.
    The U.S. Army Corps is currently facilitating several restoration 
projects in the Lake Champlain watershed. With the Corp's support, an 
infestation of water chestnut, an invasive aquatic plant that has 
dominated the entire southern part of the lake for years is now nearly 
under control. This program, run in partnership with the states of 
Vermont and New York, has lead us out of an almost hopeless situation 
and we are seeing a return to public enjoyment of shoreline areas in 
the southern part of Lake Champlain.
    This summer we expect to begin work on projects to intercept storm 
water runoff into Lake George, part of the Lake Champlain ecosystem, 
and to stabilize eroding streambanks in the Missisquoi watershed, with 
expertise, oversight and funding by the U.S. Army Corps. Without their 
leadership and support, this vital work could not happen.
    The role of the U.S. Army Corp's Environmental Restoration 
authority is a vital nationwide asset; getting projects done--and done 
professionally--all across America. Dam removal projects, wetland 
restoration, fish passages and streambank stabilization projects 
restore degraded ecosystems, improve American lives, strengthen our 
nation's economy and ensure that we will be able to provide clean 
drinking water to ourselves, our children and their children.
    Lake St. Clair, and the St. Clair River, located between Lake Huron 
and Lake Erie, faces massive problems of nutrient loading, invasive 
species and the challenges of a busy waterway. It is in desperate need 
of pollution prevention and ecosystem restoration action. The U.S. Army 
Corps of Engineers has taken the lead role in drawing together Federal 
agencies and communities in the U.S. and Canada to address this 
international challenge. The stature and expertise of the Corps, and 
its mandate to develop a management plan, under Section 246 of WRDA 
1999, placed it in the logical lead in this important effort.
    One of the greatest restoration programs in the history of our 
Nation is underway in the Everglades and South Florida Ecosystem, with 
U.S. Army Corps leadership. The Comprehensive Everglades Restoration 
Plan approved by Congress in WRDA 2000 is the key to the future of the 
huge everglades ecosystem and the vitality of a significant sector of 
the Florida economy. Coordination of the work of eight Federal agencies 
and more than a hundred local stakeholder governments, regional 
councils and state agencies, could only be managed by an agency with 
the engineering capacity, traditions and commitment of the U.S. Army 
Corps.
    From Texas to Mississippi in the Louisiana Coastal Area Ecosystem, 
wetlands are disappearing at the rate of nearly 22,000 acres per year. 
The U.S. Army Corps is a partner with the State of Louisiana on a 
feasibility study that will enable us to better understand this 
problem, and how to mitigate and minimize losses, to restore a future 
for this region. Similar case histories, of projects large and small, 
could be cited from across the Nation, with the accolades and gratitude 
of millions of American citizens.
    America today faces unprecedented challenges of ecosystem damage 
and resultant declines in water quality, contaminated and weed-infested 
waterways, and polluted lakes and estuaries across the Nation. These 
problems have compromised drinking water supplies for millions of 
Americans, caused desperate struggles for survival in the tourism and 
recreation industries, and created an alarming trend toward more and 
greater problems in the near future.
    The U.S. Army Corps of Engineers is a vital part of our military 
service that works directly in the homeland to meet these challenges 
with the world's best professional expertise. Its stature and 
traditions of service to America have turned to environmental 
restoration projects that require engineering solutions. The Corps 
brings the best tools in the Nation to guide the engineering problem-
solving that these special ecosystems require.
    I would like to direct your attention to the challenges we face 
regarding the Corp's Continuing Authorities programs and Sections 206 
and 1135. The existing program limits of $25 million for each have 
simply not kept pace with current needs, and are now a fraction of what 
America needs them to be. In the Lake Champlain watershed, this means 
that several ongoing projects are being suspended due to a national 
shortfall.
    Suspending good projects partway through their implementation, 
whether in Lake Champlain or elsewhere across the Nation, neither saves 
money nor avoids expense. The problems in each case will get far more 
costly, not less costly. The opportunities to prevent or contain 
pollution will be lost if a shortfall like this persists. The most 
cost-effective solution to large ecosystem problems is to invest 
adequately in their restoration at the earliest possible date. Any 
alternative is likely to be a false economy in the short term and 
result a burgeoning burden of additional accrued contamination and 
sharply increased costs of restoration in the long term.
    Finally, the work of the U.S. Army Corps on environmental 
restoration is not only about conservation philosophy or environmental 
ethics. It is also about our nation's economic engines. As we know so 
well in the northeast, it is about the vitality of the tourism economy 
and the quality of life that keeps the recreation businesses in 
business. It is about trucks on the highway, the pulse of commerce and 
trade. It is about reducing bankruptcies and maintaining jobs. It is 
about smell of the tap water in the cities and towns across the Nation; 
it is about the health of our own human habitat throughout this Nation 
that is our future.
    In the final analysis, ecosystem restoration and water quality is 
about insuring the quality of life for citizens across America, and the 
health of our children and their children for generations to come.
    I hope the members of this Committee will continue to recognize, 
appreciate and support the vital role of the U.S. Army Corps of 
Engineers in service to the American homeland and, in particular, will 
fully support their Environmental Restoration programs.
    Thank you for the invitation to testify before you today. I look 
forward to answering your questions.

                               __________

   Statement of Michael Cameron, Truckee River Project Director, The 
                           Nature Conservancy

    Mr. Chairman and members of the Subcommittee, thank you for the 
opportunity to testify on the Water Resources Development Act (WRDA). I 
am Michael Cameron, Truckee River Project Director for The Nature 
Conservancy in Nevada. I am here before you today to provide the 
Subcommittee specific recommendations on enhancing the Army Corps of 
Engineers (Corps) non-structural flood control and environmental 
restoration programs to better serve the needs of local communities in 
protecting and managing key water resources. These recommendations 
include:
    (1) Allow credit for ecosystem restoration work that is related to 
a flood control project and is locally implemented prior to project 
authorization,
    (2) Permit pre-Project Cooperation Agreement (PCA) credit in the 
Section 206 and 1135 programs for necessary project elements performed 
by the non-Federal sponsor,
    (3) Raise the programmatic ceilings for Corps' Sections 1135 and 
206 Continuing Authority Programs (CAP) from $25 million to $100 
million, and raise individual project ceilings under these authorities 
from $5 million to $10 million, and
    (4) Correct the problem of unlimited liability responsibility all 
accruing to the non-Federal sponsor for Continuing Authority Projects 
(CAP).
    Most importantly, I would like to offer The Nature Conservancy's 
support for passage of WRDA this year.
    The Nature Conservancy is dedicated to preserving 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 one million individual members and over 1900 
corporate sponsors worldwide, and currently has programs in all 50 
states and in 27 other nations. To date, our organization has protected 
more than 15 million acres in the United States, and has helped local 
partners protect approximately 102 million acres around the globe. Our 
conservation work is grounded in strong science, strong partnerships 
with other landowners, and tangible results at local places.
    The Conservancy has been active in Nevada for 20 years, helping to 
protect treasures such as Ash Meadows, Red Rock Canyon, Stillwater 
Marsh, and Pyramid Lake. Nevada's arid Great Basin and Mojave Desert 
ecoregions rank fourth in the Nation for biodiversity, with hundreds of 
endemic species found nowhere else on the planet. Regarding rivers, 
Nevada is an arid state that has lost an estimated two-thirds of its 
floodplains and wetlands, even while 75 percent of plants and animals 
rely on these rivers at some point of the year or their life cycle. The 
Conservancy has worked for more than a decade to protect the Truckee 
River, which is Nevada's largest. Flowing 110 miles from its source at 
Lake Tahoe to its terminus at Pyramid Lake, the Truckee River is home 
to critical species such as the Lahontan cutthroat trout, cui ui fish, 
hundreds of nesting and migrating birds, and amphibians such as the 
northern leopard frog.
    Over the last few years, the Conservancy has embraced the Corps as 
an important conservation partner. Our expanding partnership is 
reflected in our Sustainable Rivers Project, a joint effort focusing on 
dam reoperations on 10 ecologically significant river systems across 
the country. At another 19 sites we are collaborating with the Corps 
under CAP Sections 1135 and 206, and other Corps authorities, to 
protect and restore areas of critical ecological concern. While the 
Corps is an excellent and willing partner, policy and legislative 
constraints have often limited or prevented them from working 
successfully with local communities to achieve mutually agreed upon 
flood control and ecosystem restoration goals.
    It is important to note that the Federal Government plays a 
critical role in flood control and ecosystem restoration. The past 
century has witnessed a serious decline in the ecological health of 
many of our nation's rivers. Much of this decline is the unintended 
consequence of Federal water development projects designed to provide 
public benefits such as flood control, electricity and irrigation. As 
communities recognize the importance of healthy rivers to their 
economic and social viability, and their needs and uses of their rivers 
evolve, it is important for the Federal Government to recognize and 
mitigate its mistakes while responding to, and helping to provide for, 
these changing needs. The Truckee River in Nevada is one such place, 
and serves as an excellent example of the willingness of the Corps to 
implement a local community's flood control and ecosystem restoration 
vision, while demonstrating the problems that limit the Corps' ability 
to achieve that vision.
    The McCarran Ranch 1135 Project, for which the Conservancy is the 
non-Federal sponsor, will restore a 5 mile reach of the lower Truckee 
River, downstream of the Truckee Meadows Flood Control Project. In 
addition to receiving flood waters, the project will dramatically 
improve riparian and wetland habitats and water quality, and is serving 
as the model for the floodplain restoration strategies proposed in the 
Truckee Meadows Flood Control Project. The Conservancy, in expectation 
of the initiation of the 1135 project in late summer, has already 
restored one mile of the Truckee River on its own at a cost of over $1 
million, using funds from a variety of private and public sources.
    From the community's perspective, these two projects are strongly 
interdependent, and the community is eager to see the McCarran Ranch 
1135 project and complementary floodplain restoration work proposed 
upstream under the community preferred alternative for the Truckee 
Meadows Flood Control Project initiated and completed.
    But, as of today, neither project is moving forward as intended, 
which brings me to the Conservancy's specific recommendations and the 
reasons we believe WRDA needs to be passed this year.
    1. Permit credit for ecosystem restoration work that is related to 
a flood control project and is locally implemented prior to project 
authorization. Presently, the Corps may credit non-Federal sponsors for 
early implementation of flood walls, levees or other features that 
reduce flood damages if built to Corps standards and ultimately 
included in the authorized project. However, no similar authority 
exists for early implementation of floodplain or ecosystem restoration. 
For example, restoration of 60 miles of river downstream from Reno will 
likely be an integral part of the forthcoming Truckee Meadows Flood 
Project. Because downstream restoration will effectively mitigate the 
higher flows from upstream, the Corps and non-Federal sponsors agree in 
principle that floodplain restoration elements need to be among the 
first implemented. Most of the flood protection benefits for Reno and 
Sparks will not be initiated until after implementation of the 
restoration elements.
    The local sponsors of the Truckee Meadows Flood Control Project 
have both the land and the local funds needed to start ecosystem 
restoration now. However, they are inhibited because there is no 
mechanism for the Corps to credit the work. Allowing early restoration 
means implementation can proceed more quickly, perhaps accelerating the 
schedule by years. From the Conservancy's standpoint, this means that 
the ecological degradation of the Truckee can be halted sooner rather 
than later, firmly establishing the floodplain and riparian areas long 
before they receive significant flood waters.
    2. Permit pre-Project Cooperation Agreement (PCA) credit in the 
Section 206 and 1135 programs for necessary project elements performed 
by the non-Federal sponsor. The PCA occurs after all of the Corps 
studies, planning, and designs are completed and the non-Federal 
project sponsor commits to the non-Federal share of the project. All of 
the Corps costs prior to signing the PCA are included in the cost of 
the project, while any work the non-Federal sponsor does prior to the 
PCA is not included or credited. The Conservancy proposes the local 
Corps District be permitted to give cost-share credit for work 
undertaken by the non-Federal partner within 5 years prior to signing 
the PCA and after the initial letter of intent. This credit could 
include such activities as pre-project monitoring and restoration 
activities. Credit will not be recognized beyond the non-Federal 
sponsor's cost share requirement and the Corps will not be liable for 
funds if the PCA is not ultimately signed.
    3. Raise the programmatic funding ceilings for Continuing Authority 
Programs (CAP) Sections 206 and 1135 from $25 million to $100 million 
per year nationally, and the per project ceilings from $5 million to 
$10 million. The CAP 1135 and 206 projects are producing success 
stories, and demand nationally far exceeds available resources. There 
are distinct advantages both for the Corps and project sponsors to the 
relatively small CAP projects. Principally, the scope and cost of the 
work is more manageable, which expedites on-the-ground progress and 
participation of the local sponsor. Yet, the typical costs associated 
with ecosystem restoration such as re-vegetation or channel 
reconstruction can easily eclipse the Federal limit of $5 million per 
project. The Conservancy is presently the non-Federal sponsor for 12 
CAP projects around the country.
    The McCarran Ranch 1135 Project, with an earmark from Congress in 
fiscal year 04, was on pace to meet its scheduled construction start 
this fiscal year; however, work has stopped due to the Corps' discovery 
that they have more projects than funding. Demand that now exceeds even 
the annual autorized limits for these programs. The Corps' 
decisionmaking and project management for the McCarran Ranch project 
has been exemplary, but those efficiencies are rendered meaningless 
when work stops due to lack of funds. Because the McCarran Ranch1135 
project is seen as a precursor to the much larger Truckee Meadows Flood 
Control Project, missing the implementation schedule will be an ominous 
sign to the community, and will have a corrosive effect on the 
remarkable local consensus that exists today.
    4. Correct unlimited liability for non-Federal sponsor in Project 
Cooperation Agreements (PCA). Presently, PCAs permit either party to 
stop a project if it exceeds agreed project costs. The unlimited 
liability problem is a clause in the PCA that permits the District 
Engineer to require a project to be completed at statutorily required 
cost share for the purposes of public health and safety and if the 
project exceeds the statutorily determined cap for Federal share then 
all additional costs become the responsibility of the non-Federal 
partner. The Conservancy proposes that in the event that the District 
Engineer determines a project needs to be continued for the purpose of 
public health and safety, the non-Federal sponsor will be responsible 
for increased project costs up to 20 percent over the original 
estimated project cost at the statutorily determined cost share. The 
Corps will assume all costs exceeding the 20 percent of the original 
estimated project cost, notwithstanding the statutorily determined 
Federal share cap.
    In conclusion, the Truckee River experience suggests that the Corps 
is developing remarkable projects that achieve significant economic and 
environmental gains, and are highly responsive to local interests. 
Passage of WRDA this year will allow these successes to continue and 
increase, and we strongly urge the Subommittee to take action and pass 
WRDA during this congressional session. I would like to thank the 
Chairman, Senator Reid, and the entire Subcommittee for the opportunity 
to share this testimony with you today.

[GRAPHIC] [TIFF OMITTED] T4601.002

[GRAPHIC] [TIFF OMITTED] T4601.003

     Statement of Dominic Izzo, American Society of Civil Engineers
    Mr. Chairman and Members of the subcommittee: Good afternoon. My 
name is Dominic Izzo. As you may know, I had the honor to serve as 
Principal Deputy Assistant Secretary of the Army for Civil Works from 
July 2001 until November 2002. I could not have done my job without the 
strong support of this Committee and its distinguished Members.
    It's a great privilege for me to appear before this Committee today 
as a private citizen to testify on behalf of the American Society of 
Civil Engineers (ASCE) to present the Society's views on certain issues 
relating to the reauthorization of the Water Resources Development Act 
and the long-term future of the U.S. Army Corps of Engineers.*
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    * ASCE was founded in 1852 and is the country's oldest national 
civil engineering organization. It represents more than 130,000 civil 
engineers individually in private practice, government, industry and 
academia who are dedicated to the advancement of the science and 
profession of civil engineering. ASCE is a non-profit educational and 
professional society organized under Part 1.501(c)(3) of the Internal 
Revenue Service rules.
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                          I. CORPS ``REFORM''

    The U.S. Army Corps of Engineers has been subjected to a great deal 
of scrutiny in Congress and by the news media in recent years. That has 
led to widespread public criticism of the Corps and its programs. Some 
of that criticism is deserved; much of it is not. Regardless of one's 
view, we are again hearing an old Washington refrain it's time to 
``reform'' the Corps of Engineers.
    Let me state at the outset one important principle: the Corps of 
Engineers does not need major overhaul. Naturally, like any 
institution, it can work better. Of course this is as true of Congress 
and other large government agencies as it is of the Corps.
    But I think the larger point needs to be made at the outset--this 
Nation needs the Corps of Engineers. It is uniquely situated to deal 
with large water resource projects having a distinct national or 
regional impact. No short-term process reforms, no matter how well 
intentioned or necessary, should be allowed to deflect the Corps from 
its mission of providing the comprehensive infrastructure and 
environmental protection this Nation needs to remain competitive and 
healthy.

                       II. AREAS FOR IMPROVEMENT

    Certainly the Corps can improve the economic analysis of major 
construction projects. Better mathematical models may provide better 
projections. In the end, however, these are just estimates based on 
many assumptions and, like all estimates, they can change. The 
analytical process must include improved uncertainty analysis to ensure 
that decisionmakers are fully aware of the quality of the data on which 
they are relying to make judgments. This should not discourage Congress 
or the executive branch from accepting prudent risks, but it should 
lead them to emphasize projects with less uncertainty in their 
projections.
    An important aspect of improving economic analysis and avoiding 
decisionmaking gridlock in Federal projects is establishing the 
economic value of environmental costs and benefits. Of course 
monetizing environmental costs and benefits is an extremely challenging 
task.\1\ Done properly, it will facilitate determining appropriate 
mitigation for major economic projects, like channel deepening or 
terminal construction, and it will also support prioritization of those 
projects. Water resources interests would do well to support this 
effort because it will make environmental decisions more rational. This 
will require a revision of the venerated Principles and Guidelines.\2\ 
The Administration would do well to pursue this overdue revision 
aggressively in coordination with the environmental community and 
industry.
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    \1\ Economists have developed a number of highly imperfect 
analytical tools to aid policymakers in determining the right balance 
between economic efficiency and environmental protection. At the center 
of the modern debate over investment projects and their impacts on the 
environment is ``benefit-cost analysis'' (BCA). BCA, which is founded 
on the need for tradeoffs among competing societal needs and wants, 
merely aggregates all preferences to determine a society's willingness 
to pay for a non-marketable good. In the United States, the Corps of 
Engineers had standardized the practice as early as the 1920's.
    \2\ U.S. Army Corps of Engineers, Economic and Environmental 
Principles and Guidelines for Water and Related Land Resources 
Implementation Studies (1983) (hereinafter Principles and Guidelines). 
The 1983 P&G replaced the P&S of 1980 (non 1973), which were a CFR-
codified modification of the 1973 P&S with expanded guidance on 
environmental quality. The 1980 date is important to those 
knowledgeable about the P&G, because it represents the carter 
Administration's decision to issue the P&S as CFR regulations that 
arguably were third-party enforceable. That action, late in the term, 
was what generated the vehement opposition to the P&S early in the 
Reagan Administration, especially from Secretary Watt. Had Mr. Carter 
not issued the 1980 version as regulations, we might never have changed 
them in 1983.
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    Most importantly, the justification of large projects for 
investment by the Federal Government is a political decision. The 
principle that the benefits of the project must exceed the cost is a 
good one. But more than pure economic benefits and construction costs 
are at stake. There are political, economic, and environmental costs 
and benefits, and these must all be weighed carefully. To the extent 
that you in Congress and executive branch officials agree on 
assumptions and objectives in advance, technicians can clarify economic 
and environmental factors so that there will be meaningful public 
discussion as part of the political decisionmaking process. Setting 
priorities for government spending unquestionably requires a political 
decision. No mathematical or economic modeling can change this. It can 
only provide a better framework for making an informed decision.
    Project sponsors must predict or estimate the benefits of economic 
development and the cost of construction as the basis for a Federal 
navigation and flood-control projects. They should also strive to 
identify the risks and assumptions inherent in those predictions. They 
should work together with other stakeholders, particularly 
conservationists, to establish environmental costs and benefits in 
economic terms that will justify appropriate mitigation when 
environmental damage is unavoidable. Such a methodology will produce a 
public record that should garner the political support necessary not 
just for a project authorization but also for a solid appropriation to 
build the project. Appropriations, after all, build projects while 
authorizations are just paper that may languish for years. Revising the 
Principles and Guidelines to emphasize uncertainty analysis and the 
economic value of environmental cost and benefits may result in fewer 
authorizations and longer studies but it should lead to more and better 
projects being built.
    As the Corps of Engineers prepares projects and programs and 
presents them to Congress for approval, it is essential that the Corps 
be able to demonstrate unequivocally that the plans are the result of 
the best analysis that modern engineering, economics, and environmental 
science can provide. This Committee can play a key role in assisting 
the Corps in improving its planning and methods of analysis to achieve 
excellence in this effort. The planning process starts with the 
Principles and Guidelines that underlie this work. President Reagan 
established the current Principles by Executive Order in 1983, 
replacing the 1980 Principles and Standards. These Principles and 
Guidelines have served the Nation well. Using them, the Corps was able 
to evolve from unilateral initiatives and projects, to joint 
undertakings and partnering with non-Federal entities as spelled out in 
the Water Resources Development Act of 1986. The Corps was also able to 
refocus its Civil Works mission from mainly commercial navigation and 
flood control to an increasing emphasis on environmental restoration 
and stewardship now 19 percent of the Civil Works budget. Indeed, 
because the Principles and Guidelines mandates that projects contribute 
to economic development while protecting the environment, they have 
provided a key impetus to this change in focus. Under the Principles 
and Guidelines, the entire Corps project development process is subject 
to an extremely high level of executive branch and congressional 
oversight. Through the annual appropriations process, the 
Administration and the Congress have the opportunity to review projects 
at every stage of development. Indeed, the Corps only constructs 16 of 
100 potential water resource projects that begin the project 
development process; that is testament to the efficacy of the 
oversight. The Principles are intended to ensure proper, consistent 
planning by Federal agencies in water resource studies. They state: 
``[T]he Federal objective of water and related land resources planning 
is to contribute to national economic development consistent with 
protecting the nation's environment, pursuant to national environmental 
statutes, applicable executive orders and other Federal planning 
requirements.'' This is actually a practical definition of sustainable 
development and I do not believe it needs to change.

                 III. MONETIZING ENVIRONMENTAL BENEFITS

    The Principles and Guidelines do allow some flexibility. Although 
plans that maximize economic benefits generally have been the focus, 
the Principles and Guidelines does not require an agency to select a 
course of action based on that criterion alone. The Secretary of the 
Army may also grant exceptions to the economic criterion under specific 
circumstances. The Corps also develops plans that maximize 
environmental restoration, as well as plans with ``combined National 
Economic Development/National Economic Restoration'' benefits. It is 
with these combined NED/NER plans that the economics get complex. It's 
one thing to calculate, forecast, and say ``This project will prevent X 
dollars in flood damage in the event of a storm of size Y,'' or ``This 
navigation project will save shippers X dollars over the cost of 
shipping by another mode, and these savings will be passed on to 
consumers.'' It's entirely more complicated to calculate and forecast 
``passive value'' and say, ``It's worth X dollars to protect or restore 
Y acres of habitat.'' Therein lies a major opportunity for improvement. 
The Corps is attempting to determine, and develop tools to evaluate, 
``willingness to pay'' or benefit-cost ratios for projects where there 
are no direct monetary benefits.\3\ Some environmental economists have 
argued that ``an intact ecosystem is worth 82 percent more, on average, 
than the same parcel clear-cut, drained, paved or otherwise developed 
in a non-sustainable way.'' Such an economic valuation could seriously 
affect the BCR of Corps projects. Recent environmental restoration 
efforts reinforce this idea. In 2002, the Corps has recently estimated, 
albeit roughly, that it would cost $10,000 an acre to create the 
remaining 130,000 acres of Missouri River Fish and Wildlife Mitigation 
authorized by the Congress. That includes about $1,500 per acre for 
acquisition of agricultural land and the balance to convert that land 
back into natural wetlands or riparian habitat. If that is what we are 
willing to pay, does that not argue that we now value a natural 
ecosystem at least six times the value of agricultural land?
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    \3\ The benefit-cost ratio (BCR) is not the same as a benefit-cost 
analysis (BCA). The BCR is a first rough estimate of the desirability 
of a project. One divides the estimated benefits (in dollars) of a 
project by its total costs to get the ratio. A positive ratio of 1.5-
to-1 or greater is frequently deemed acceptable. Willingness-to-pay 
(WTP) estimates are an attempt to establish the hypothetical dollar 
value for environmental amenities that have no readily identifiable 
market, i.e., clean air or species conservation.
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    Finally, and not to belabor the point on monetizing benefits, but 
Civil Works projects often do not take credit for reducing the risk of 
environmental or health damages. The EPA often justifies actions on the 
basis of lives saved. I believe they recently have even claimed $4.8 
million for each ``statistical life'' that a regulation may save, for 
example by toughening standards for pollutants. Should not the Corps' 
benefit-cost analysis do the same? When an inland navigation project 
keeps thousands of trucks off the road, statistically there are fewer 
accidents and fewer deaths annually. This very real benefit should 
accrue to a navigation project.

                         IV. WATERSHED APPROACH

    Another significant area to address is how projects affect other 
water resources needs and other projects within a watershed. As I said 
earlier, the Corps is uniquely able to carry out public works projects 
that adopt a regional perspective. Often, demands to balance these 
needs will require integration of multiple Corps programs and projects 
with each other and with the programs and activities of states and 
other agencies. In this regard, I would like to point out the excellent 
work of the Association of State Floodplain Managers. The Association 
espouses some common sense ideas about floodplain management. One that 
appeals to me is the notion that no floodplain development should be 
allowed to cause an adverse effect on someone else's property in the 
floodplain. In other words, we should preclude the transfer of flooding 
problems from one property to another property or community. That 
simple idea is what watershed planning is about, and it ought to be a 
part of the Principles and Guidelines. It also requires someone to 
referee disputes between upstream and downstream interests, for 
example. Who could do this better than the Corps?
    To institute a true watershed approach for planning and execution, 
the Corps may need authorization from Congress. Existing laws and 
policies encourage an individual project focus, and geographically 
limited projects, in which sponsors share the cost of the study. The 
current approach limits the Corps' ability to look comprehensively, and 
it fosters an atmosphere that may lead to inter-basin disputes. It also 
increases the risk that projects that solve one problem may 
inadvertently create others, even though the Principles and Guidelines 
and Corps guidance say the agency is supposed to avoid this. Too 
frequently the economic solution is selected over the environmental, 
when, in fact, an option must exist to have both. I believe the future 
is to look at watersheds first; then design projects consistent with 
the more comprehensive approach. This comprehensive approach is a 
reform, but a reform of the national water policy and the Principles 
and Guidelines to better meet the future environmental and economic 
needs of the Nation.

               V. REVISING THE PRINCIPLES AND GUIDELINES

    At present there is no statutory requirement to revise the 
Principles and Guidelines. Under the current Principles and Guidelines, 
the Nation has developed good projects that promote economic 
development and benefit the environment, such as the Comprehensive 
Everglades Restoration Project, the Upper Saint John's River Basin 
Flood Control Project, and the Houston Ship Channel deepening. The Army 
and the Corps can work with other agencies to improve the way the Corps 
does water resources planning under the current Principles and 
Guidelines. Updating some Corps regulations alone might improve the 
process. However, while the Principles are acceptable as they are, I 
believe that revising the Guidelines in the Principles and Guidelines 
could lead to improvements. Fine-tuning the Principles and Guidelines 
could include revisions that would:
     Update the ``willingness-to-pay'' methods used to 
calculate such nonmonetized existence values as recreation and 
environmental benefits.
     Specify more clearly the acceptable assumptions and 
conditions for not undertaking the project. The Corps' current benefit-
cost analysis compares the benefit of doing ``a'' project against the 
cost of not doing it. There is too much ambiguity in the analysis of 
the cost of not doing the project, and the Corps needs to deal with 
that ambiguity.
     Formalize the methods for scenario-based planning 
(charrettes), which the Corps has used successfully on its Upper 
Mississippi Navigation Study.
     Update the assumptions used to calculate nonstructural 
flood-damage-reduction benefits. The Corps has pursued nonstructural 
flood control for decades, but it needs better economic tools to 
monetize the benefits of this practice.
     Reconsider the use (or nonuse) of Regional Economic 
Development benefits.
     Develop improved methods for risk and uncertainty 
analyses.
     Redirect the planning process to provide more benefit to 
the environment, perhaps by providing better guidance on mitigation.
     Accelerate the use of collaborative planning processes.
     Jump-start the use of other proven planning methods.
     Apply the Principles and Guidelines to the water planning 
of other Federal agencies, such as the Federal Emergency Management 
Agency, the Department of the Interior, and the Environmental 
Protection Agency.
    I think you can see that a revised Principles and Guidelines can 
add value to the Corps' planning process.

                         VI. OTHER CORPS ISSUES

    Two other basic issues Congress and the Corps need to address are 
reducing the backlog of ``authorized'' projects and improving the 
Corps' internal processes.
A. Project Backlogs
    Let me first address the backlog. The Corps has about $5 billion 
worth of inactive projects, whose designs probably won't solve the 
original problems they were intended to solve or for which there is no 
longer support. The creation of this ``historical'' backlog began 
somewhat accidentally. After authorizing no new projects for 16 years, 
Congress in 1986 included well over 200 projects in the Water Resources 
Development Act that year. Considerable time may elapse between when a 
problem is identified and studied, and when the project to address the 
problem is constructed. During that time lapse there may be scientific 
progress that could better address the problem, or there may even be 
shifts in public policy. Then there are projects that could have direct 
and immediate positive impacts, solve real problems, but are 
controversial for any variety of reasons. Congress authorized most of 
these inactive projects years ago, but the Corps never built them. Some 
of these show up on the ``hit lists'' of critics, and sometimes the 
critics are right. The challenge is how to determine whether or not we 
will still pursue these projects. Clearly, the congressional sponsors 
of these projects could withdraw their support or even introduce 
language to de-authorize them in a future WRDA. Sometimes this is too 
difficult politically. It would be helpful for an interagency task 
force to take a fresh look at them, perhaps in the same way the BRAC 
Committees decide on which military installations to close.
B. Internal Processes
    As for the Corps' internal processes, at your direction in the 
Water Resources Development Act of 2000, senior officials recently have 
focused on planning and review capability, reemphasizing such basics as 
environmental science, economics, public involvement, and internal 
review. The Corps also reviewed the best way to consolidate its 
planning and review capability for high-priority, low-volume 
activities, so that it could assign the best people to the most complex 
projects. One congressional requirement was an independent review by 
the National Academy of Sciences. The first part of the review was 
completed in 2002, and we understand that the remainder will be 
released within a few weeks. In this regard, I believe that General 
Flowers and his staff have made excellent progress, and I commend his 
good work to this Committee.
    The 2002 study findings supported independent review for major 
Corps projects. The Corps has been implementing this recommendation. By 
the time I left, the Corps' preference was to incorporate it in the 
Chief of Engineers Report process so as not to increase the time from 
initiation of a study to authorization of construction. One possibility 
might be the kind of review provided by the old Board of Engineers for 
Rivers and Harbors,\4\ but with external technical experts as well as 
Corps division commanders and employees. In the interim the Corps is 
using various new forms of review, internal and external, to improve 
and validate their studies and projects. The Corps is taking advantage 
of its value engineering expertise, its cross-district review 
capability, and outside experts to evaluate and validate its findings. 
Today I do not believe that there are any other projects, private or 
public, that receive the degree of review of Army Civil Works projects.
---------------------------------------------------------------------------
    \4\ This Board was established in 1902 and continued in operation 
until the early 1990's, when Congress disbanded it.
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                            VII. CONCLUSION

    Finally, I would submit that we must address the question of how 
the Corps goes about developing and recommending projects on a higher 
strategic plane: Where is our national policy for water resources 
heading next? Where should the Corps give priority to development of 
water resources for social and economic benefit and where should we 
restore them to their natural state? There will and must be times when 
the Nation must choose one over the other. As science and engineering 
evolve, we can find more balance between these options, and working 
together, make the right choices.
    We must also ask what water resource investments does the Nation 
most need to make now. To what extent should these be a Federal 
responsibility? To what extent should the Corps have this 
responsibility? Which investments should we defer until later? What can 
we do without? Should we continue all ongoing construction projects? 
Can we afford to build them all simultaneously? All these questions 
will require answers in the coming months and years.
    Let me emphasize again: The Army Corps of Engineers, more than any 
other Agency, is uniquely qualified to evaluate multiple and competing 
options objectively and assess the best course of action.
    In conclusion, I can offer these three points as a personal vision 
for the future of the Corps of Engineers:
    1. The Army Corps of Engineers must be the nation's water resources 
leader for sustainable watershed development and environmental 
restoration. The Corps' effort in stopping wetland loss and restoring 
riparian habitat and wetlands in the past decade is a dramatic example 
of what they can do when they get the mission. Congress should reaffirm 
this role in the next WRDA.
    2. The Corps is the world's pre-eminent public construction agency. 
No other agency can take better care of our nation's water resource 
infrastructure than it does. The Corps is uniquely qualified to lead 
the protection and development of our water resources based on its 200+ 
years of experience on our rivers, ports and coastlines.
    3. The Army Civil Works program must focus on local concerns while 
coordinating national resources in an open, collaborative 
decisionmaking process. The Corps cannot take sides or dictate 
solutions. Instead the goal is to build consensus. Based on my 
experience that is how the Corps is working today.
    To the degree that this committee can help improve planning and 
methods of analysis, you will do the Corps and the Nation a great 
service.
    Thank you for inviting me to be with you today. I would be happy to 
answer any questions you may have.
                                 ______
                                 
 Responses by Dominic Izzo to Additional Questions from Senator Inhofe

    Question 1. Some have argued that the civil works program belongs 
in the DOT or another civilian agency. Do you believe that the corps 
has an essential mission in the area of national security? And would 
this mission be compromised by making it a civilian agency?
    Response. The U.S. Army Corps of Engineers' Civil Works program has 
an essential national security mission supplementing the uniformed 
services in times of war. The Army Civil Works program employs about 
25,000 civilian employees, funded during peacetime by non-DOD 
appropriations. This represents a ready pool of skilled, experienced 
government employees that can be used in support of the Armed Forces in 
times of crisis, as in Afghanistan and Iraq today. The only alternative 
to this would be more uniformed military engineers because most of the 
functions that these Corps of Engineers employees are called on to 
perform are inherently governmental. Detailed knowledge of Army 
procedures and familiarity with the organization is required.
    In my opinion, this National Security mission would be seriously 
compromised by giving the Civil Works mission to a civilian agency like 
the Department of Transportation. First of all, there would be an 
inevitable blurring of the priorities of the peacetime and wartime 
mission. I don't think that is the case now. Second, the necessary 
coordination to ensure that the Civil Works staff can seamlessly blend 
into the military organization would be almost impossible to achieve. 
We know the current system works when we need it to. It can also be 
argued that other Agencies that have tried to perform the engineering 
and construction mission, USAID for example, have failed to meet the 
same standards of the Corps of Engineers. In fact, the Committee may 
want to pursue a comparison of the effectiveness of the Corps of 
Engineers with USAID and CPA efforts in Iraq as part of a Lessons 
Learned.
    A more important issue is whether we can improve the current Army 
Civil Works structure to improve both the National Security Mission and 
the peacetime mission. I have serious concerns that over the many years 
of peace that we have enjoyed, the organization of the Corps has been 
unnecessarily weakened in two key areas.
    First, Army Engineer Officers are not required to be professional 
engineers or even to have an engineering degree. The argument is that 
they are managers and leaders, not technical people. This is a grave 
error in my view, both for the national security mission and the Civil 
Works mission.
    Second, our policies have forced the Corps to focus on non-core 
tasks. Hence, an analysis of the skills of the 25,000 employees in the 
Civil Works program will show that there are over a thousand 
biologists, hundreds of economists, and other non-engineering skills. 
This, in my opinion, is the result of Congress' asking the Corps to 
answer questions about economic and environmental issues that have 
nothing to do with the basic engineering and construction mission of 
the Corps and have everything to do with the political process in 
Washington. Whether this is necessary or not bears further study.
    General Gerry Galloway, formerly Dean of the Military Academy and a 
District Engineer, wrote an excellent paper some years ago elaborating 
on this subject.\1\
---------------------------------------------------------------------------
    \1\ Gerald E. Galloway, Civil Works in the Army? (1974) (copy on 
file with ASCE).

    Question 2. In your testimony, you emphasize a need to improve the 
uncertainty analysis in the development of projects. Knowing that one 
of the most common complaints from Local Sponsors and Congress is the 
length of time it takes to plan and develop a Corps of Engineers 
project, what impact would changing the uncertainty analysis have on 
the process and would this increased time be worthwhile? Also, is the 
current uncertainty or level of risk allowing less beneficial or even 
the wrong projects to be supported in the current process?
    Response. Uncertainty analysis should not delay project development 
nor should it cost more money. Uncertainty analysis should be included 
as an integral part of any study being conducted. Procedures should be 
changed to require that every report include an uncertainty analysis in 
a standard format so that decisionmakers can see how good the 
information is and make comparisons on the quality of the information 
behind different projects.

    Question 3. In your testimony you highlight the low number of 
potential projects that actually make it to construction. However, many 
of these projects are still carried on the Corps backlog. You recommend 
an interagency task force to review the backlog and make 
recommendations. Would you please elaborate on this?
    Response. When I reviewed the Civil Works project backlog in 2001 
and 2002, it was clear that many of the projects would never be funded 
for construction. However, the Corps continued to keep these projects 
active because it was concerned about Members of Congress who continued 
to sponsor the projects even though there was no chance of ever getting 
funds appropriated. The congressional sponsors, in turn, were under 
political pressure to pursue these projects for their constituencies. 
The situation is directly analogous to the political problems that 
ensue when DOD tries to close a military base. The BRAC process seems 
to have worked well in identifying bases for closure. It is my belief 
that a similar process for de-authorizing Civil Works projects would 
work well.

    Question 4. In your testimony you highlight how other Federal 
agencies monetize environmental or health benefits as a potential way 
to calculate benefits associated with removing trucks from roads and 
transporting the same cargo on inland waterways. Do you believe that 
there can be a meaningful economic value assigned to environmental 
costs and benefits and who should be involved in developing those 
guidelines?
    Response. I do believe that a meaningful economic value can be 
assigned to environmental costs and benefits and that this is the best 
way of using our free market to enhance the environment. I also happen 
to believe that the process of agreeing these guidelines can provide a 
mechanism for achieving a national consensus on how to reconcile the 
differences between necessary economic development and environmental 
protection. I would suggest that the Chairman of the President's 
Council on Environmental Quality (CEQ) and the Chairman of the 
President's Council of Economic Advisers (CEA) jointly chair a Task 
Force to establish these guidelines. CEQ and CEA should organize a Task 
Force with key players in this debate, including EPA and the Department 
of the Interior, but also other players such as Commerce and Energy. 
They should certainly entertain input from industry and the 
environmental community, as well as state and local governments.

    Question 5. The corps does $500 million worth of dredging annually. 
Most of the dredged material is disposed of offshore because their 
mandate is to manage the material in the least costly way. Would 
changes to Corps policy allow us to use this material in a more 
environmentally beneficial way?
    Response. This is an environmental enhancement to Civil Works 
dredging programs that the Corps has been trying to implement for some 
time. The problem has more to do with the Corps' budget than internal 
Corps' policy. Everyone agrees to the beneficial use of dredged 
material in principle. However, it generally costs more money. The 
Corps has been reluctant to move forward aggressively on its own 
because of a concern that the requirement will be to implement this 
policy change without a corresponding increase in the budget. The only 
solution within the Civil Works Program then would be to dredge less.
    A possible solution would be for the local sponsors or other 
agencies, like the Department of Interior or EPA, to provide the 
increase in funds for this environmental enhancement to the Civil Works 
dredging program. While the Corps has used some funds to encourage the 
program, and some local sponsors have come forward to help, not enough 
has been done.

    Question 6. You emphasize a need for the Corps to focus on local 
concerns as well as national interests through consensus building. Is 
the Corps capable of continuing this evolution and what tools do they 
need to continue this evolution?
    Response. In my opinion, the Corps does a good job of consensus-
building now for individual issues or projects. It needs to continue 
the good things in terms of taking in public comments, holding public 
meetings, and basically having a transparent decisionmaking process. 
However, the Corps does a poor job of publicizing the decisions and 
successes of the Civil Works program and educating the public and local 
governments on the program. There appears to be a reluctance to reach 
out with information unless it is part of a prescribed project 
procedure. While the Corps Web site helps alleviate this somewhat, it 
needs to do more. I believe it would be helpful if Congress were to 
mandate, outside the normal project development process, that the Corps 
report to the American people annually on its stewardship of our Water 
Resources. This should be more than a paper to Congress. I would 
suggest an annual video report that can be broadcast on C-SPAN and 
through other media.
                                 ______
                                 
 Response by Dominic Izzo to Additional Question from Senator Jeffords

    Question 1. In your testimony, you mentioned the importance of 
environmental protection in Corps projects. Can you comment on the 
Society's views on the Corps mission of ecosystem restoration? And what 
would the effects be if the Corps no longer accepted ecosystem 
restoration as a key mission?
    Response. First of all, environmental protection is a part of every 
large civil engineering project undertaken today. Even in Iraq and 
Afghanistan, where priorities may be different, environmental 
protection is still a consideration.
    Large-scale ecosystem restoration almost always entails large civil 
engineering works. For example, the great majority of actual work done 
in the Comprehensive Everglades Restoration Program (CERP) will be 
civil engineering. Building channels and levees to ensure a water 
supply to revitalize the Everglades is not very different from building 
channels and levees for flood control. This is not to imply that the 
biological and ecological sciences are not important or key players; 
they are. What it does say is that the actual work is traditional civil 
engineering. Moreover, it is worth noting that environmental 
engineering is an offshoot of classical civil engineering. The bottom 
line is that ecosystem restoration is a natural mission for the Army 
Civil Works Program.
    If the Corps no longer accepted ecosystem restoration as a key 
mission, other agencies would have to do more. Such a situation might 
well argue for EPA or the Department of the Interior to develop their 
own ``ecosystem restoration engineering divisions.'' I do not think 
this would be wise or efficient. Certainly, EPA and Interior should 
establish the biological and ecological criteria for success in 
ecosystem restoration projects; that's what they do the best. However, 
once the biologists and ecologists have established what the end-state 
should be, it seems most efficient to let engineering and constructions 
specialists execute the project.

                               __________

            Statement of Gregory A. Zlotnick, Board Member, 
                   Santa Clara Valley Water District

    Good afternoon, Mr. Chairman, members of the Subcommittee and 
staff. My name is Greg Zlotnick and I am a member of the Board of 
Directors of the Santa Clara Valley Water District. I want to thank you 
for holding this hearing on the role for the U.S. Army Corps of 
Engineers in meeting the nation's water resources needs.
    Mr. Chairman, the agency that would become the Santa Clara Valley 
Water District was formed in 1929. At that time, the population of 
Santa Clara County was 145,000 and agriculture was the leading industry 
in what was known as ``the valley of hearts delight.'' The area 
suffered from repeated flooding of the Guadalupe and other rivers and 
streams in the region. Today, the population of the county is 1.7 
million and the District manages flood protection and water supply 
resources for the entire County, including the center of high 
technology innovation--the fabled Silicon Valley. And although many 
people are now protected from flooding, the Guadalupe and other rivers 
and streams still have the potential to cause millions of dollars in 
flood related damages.
    Over the past 7 years, the District has gone through an evolution 
from a dual purpose flood protection and water supply agency to a 
progressive, proactive, multi-purpose focused organization. This change 
has come about by policy changes by the District Board of Directors, 
enabling legislation at the state level, passage of a tax measure by 
voters that promised Clean, Safe Creeks and Natural Flood Protection, 
International Standards Organization certification for Capital, 
Watershed, and Environmental Management Programs, and pursuit of 
``Green Business'' certification. We see the need for change and 
evolution of the Corps as similar to the District's; we have made a lot 
of progress but still have a long way to go.
    We have a long history working with the Corps of Engineers and the 
Bureau of Reclamation to find solutions to our water resources 
problems. Even though our agency has significant capabilities in water 
resources development, our varied needs and the costs of projects, 
mitigation, and appropriate public processes far outstrip our ability 
to pay for them on our own. Therefore, on those projects critical to 
maintaining the economic vitality of our region, an engine of the 
national economy, we turn to the Corps as a partner. We have been 
pleased in our working relationship, providing multi-purpose projects 
that my constituents demand, and which reflect the leading edge of a 
national trend. The District was local sponsor to a $62 million Corps 
flood protection on Coyote Creek that now prevents an estimated $250 
million in flood damages during a 100-year event. Currently, we are the 
local sponsor or a participant in ten active and on-going Corps of 
Engineers projects in every stage of the development process, including 
the completion of the flood protection elements of our ground-breaking 
$250 million Guadalupe River Project. We believe that we now have an 
extremely productive relationship with the Corps, and that we and the 
Corps are partners in the truest sense of the word.
    However, getting to this point in our relationship with the Corps 
has not been easy, and we have to work hard to maintain the 
partnership, even if that means that we sometimes have to tell the 
Corps ``no'' when they make a proposal that we don't think is in the 
best interests of our citizens. Our area around the San Francisco Bay 
is certainly one of the most environmentally conscious regions of the 
country, and the old style Corps of Engineers flood control consisting 
of concrete flood walls through the middle of town, although originally 
offered, just won't work in our area. To its credit, the Corps has 
shown responsiveness and creativity in working with us to develop 
alternatives more consistent with community expectations.
    As I indicated earlier, a primary source of flooding in our area 
has been the Guadalupe River, which runs through downtown San Jose and 
the heart of the Silicon Valley. Protecting our citizens and businesses 
from that flooding has been a focus of our agency, and I'm happy to 
report that the flood protection features of the portion of the project 
that runs through downtown San Jose will be completed later this year. 
And while flood protection has been a key focus, what we are most proud 
of is that, working with the Corps, we have developed a number of 
projects which adopt a watershed approach that balances flood 
protection needs with water quality, habitat enhancement and 
restoration, and recreational opportunities. In fact, the District 
feels so strongly about environmental restoration, that in 2001 the 
Water District sought and sponsored state legislation that added 
environmental stewardship as an explicit third chartered mission, along 
with water supply and flood protection to its authorities.
    This multi-purpose project, known as the Guadalupe River Project, 
is a great example of what can happen when the Corps of Engineers and 
local interests work together as true partners, and this project has 
become a model for what the Corps hopes to be able to achieve 
throughout the country. The best example of this partnership occurred 
in 1996, when the project had already been under construction for 4 
years. At that point, construction was stopped due to concerns 
regarding the adequacy of mitigation, new listing of endangered 
species, and the receipt of a notice of intent to sue from four 
environmental organizations. In the past, I believe that these 
circumstances could have resulted in the termination of the project. 
Instead, our District initiated a collaborative process with the Corps, 
the City, Federal and state resource agencies, and the environmental 
community to resolve the mitigation disputes. The result was a modified 
project allowing for a bypass channel and the inclusion of shaded 
riverine habitat to cool the river for the listed species and to 
preserve a significant riverine corridor. The modified project was 
approved in November of 2001. In a June 24, 2002, editorial the San 
Jose Mercury News said, ``At a time when government-bashing is an 
overplayed sport, the Guadalupe flood-control, river-restoration 
project is a great example of how government can get it right.''
    The not so good news is that it has taken a very long time for us 
to get to this point. The reconnaissance report for this project was 
initiated in 1975, almost 30 years ago. It took 10 years for just the 
feasibility study to be completed. In the meantime, our citizens 
continued to be subject to the devastating effects of flooding, and 
costs for us and the Federal taxpayers have increased significantly. It 
is also true, however, that because of the time it takes for a project 
to move through the Corps process, and in this case, the change in 
conditions which forced a redesign of the project, we have a much 
better project than we would otherwise have had. So, I believe that the 
key issue that the Corps, and we, as local sponsors, must address is 
how can we move projects through the process faster, but still get them 
``right'' the first time.
    Another more recent example of how we as partners can overcome 
historic differences to bring forward innovative, environmentally 
sensitive projects through positive experience and developing flexible, 
new arrangements is occurring now in our area around the San Francisco 
Bay. In the 1980's, the Corps conducted a study of the need for flood 
protection in the low-lying areas around the southern end of San 
Francisco Bay. At that time, the Corps concluded that the potential for 
flooding damages was low and, therefore, the study was suspended. Since 
the completion of that study, the area, particularly Silicon Valley, 
has undergone significant development and in July of 2002, the Corps 
was authorized to review the previous study to determine the Federal 
interest in tidal and fluvial flooding flood damage reduction and 
environmental restoration in Santa Clara, San Mateo and Alameda 
Counties. The fiscal year 2004 Energy and Water Development 
Appropriations Act included $100,000 for the Corps to initiate the 
reconnaissance phase of that study, the South San Francisco Bay 
Shoreline Study.
    One of the reasons why the earlier Corps study ended with a ``no 
action'' recommendation was that the existing levees associated with 
maintenance of the active salt ponds owned by the Cargill Company, 
while not designed for flood protection, did provide a measure of flood 
protection. In March of 2003, however, the salt ponds were acquired by 
the State of California, Federal Government, and private foundations 
with the goal of restoring them to wetlands. This restoration effort, 
if flood protection activities are not incorporated simultaneously, 
would have a significant impact on the threat of tidal flooding 
problems faced by residents of the counties surrounding the bay. Also 
at risk is the golden triangle of Silicon Valley in north San Jose, an 
area that lies below sea level.
    Based on our positive experiences working with the Corps of 
Engineers to develop flood protection measures that also included 
significant environmental restoration components, we saw this situation 
as an opportunity to develop an integrated, multi-objective watershed 
project, using the authority of the South San Francisco Bay Shoreline 
Study, that would address both tidal flood protection, which was our 
primary interest, and restoration of the salt ponds, as well as public 
access, and recreation opportunities for the broader interests in the 
state and which are consistent with our watershed management approach. 
The challenge was how to get the Federal and state agencies involved in 
the flood protection and wetlands restoration projects working 
together. This challenge was all the more difficult because, quite 
frankly, the agency the state placed in charge of the salt ponds 
restoration effort, initially wanted nothing to do with the Corps of 
Engineers. Their view of the Corps was of the ``old'' Corps--an agency 
that did what it wanted, not what the community wanted--to the 
detriment of the environment. We knew, however, that through our 
positive experience that the Corps did not have to operate that way and 
we worked closely with the state agency over a number of years in 
collaboration to educate, advise and show the agency our Corps-
partnered initiatives.
    Recently, we helped arrange a meeting between officials of the 
agency and the Corps here in Washington. At the meeting, the agency 
explained its vision of how the project should proceed, which was that 
it, my agency, and other local interests would lead the study effort, 
with technical input from the Corps, rather than the traditional model 
of the Corps conducting the study with input from the community. 
Perhaps to the state agency's surprise, the Corps embraced this 
concept, and we are now working with the agency and this Committee to 
develop the necessary legislation to make this concept work. I believe 
that this is a good example of how adding flexibility to the Corps 
study process can prove beneficial to all parties. Perhaps if we make 
the necessary improvements to the Corps system as we outline here and 
below, these type of flexible and expertise-based arrangements can be 
handled seamlessly through more tailored feasibility study agreements.
    Some recent developments have helped us move in the direction of 
timely progress and getting it ``right'' the first time. The change to 
a streamlined reconnaissance study process a few years ago to quickly 
determine if there is a Federal interest in solving a problem has been 
a big help. Another more significant development has been the gradual 
but accelerating cultural change that the Corps is undergoing where 
local sponsors are now partners, deserving of service and 
collaboration, rather than merely the local receptacle of Corps 
``wisdom'' along the lines of ``we're from the government and we're 
here to help.'' This culture change is still evolving and the message 
doesn't always get down to the District level, but it is critical, in 
our view, to a successful and revitalized civil works program as the 
Nation struggles to maintain aging water resource infrastructure while 
meeting water supply, water quality, and flood management challenges of 
the future. While you can't legislate a change in attitude, there are 
things you can do to encourage it. The partnering provisions contained 
in H.R. 2557, the House-passed Water Resources Development Act of 2003, 
are a step in the right direction.
    From the perspective of a local sponsor, what can be extremely 
time-consuming and frustrating is having to deal with a take it or 
leave it contract for construction, that is the project cooperation 
agreement, which dictates the partners' roles. Typically, it must then 
be moved up the Corps' chain of command only to be reviewed yet again 
at the Assistant Secretary of the Army's office, where the lawyers 
review what has already been reviewed many times below them producing 
delay and inefficiencies. In our view, the partnership must start at 
the field level and the Corps' district commanders must be empowered to 
honor and use the abilities of its local partners. In fact, this true 
partnering effort should start at the feasibility cost sharing 
agreement stage and flow through design and the project cooperation 
agreement level. A Corps district commander should, under general 
principles from Headquarters, be able to tailor each agreement, be that 
feasibility study or partnering agreement, to the capabilities and 
needs of the sponsor. If, for example, the sponsor has the capability 
and experience to lead the feasibility study and this provides 
efficiencies to the system, both partners, and for the project, then 
they should be allowed to proceed without the need for special 
legislation or additional agreements. Further, if, for example, due to 
local conditions, perhaps a significant flood or environmental threat, 
the experienced and motivated local sponsor must proceed with advance 
construction work to provide early benefits and this is in the Federal 
interest to reduce the threat and reduce damages and total project 
costs, then the sponsor should be able to proceed without developing 
additional agreements which can drag on for months and sometimes years.
    The partnering principle could also be expanded to include the 
process for selecting a recommended project. Currently, the Corps 
recommends the NED plan. If the community prefers a different plan, it 
must pay any cost differential between the NED plan and that plan, even 
if the community's plan is also economically justified. Because the 
taxpayer's money is involved, it is important that the Corps continue 
to examine the benefits and costs of each plan being considered. 
However, the Corps should be given the flexibility to deviate from the 
NED plan in order to meet the real needs of the community as long the 
solution preferred by the community is also economically justified.
    Another possibility along these lines is to allow a local sponsor 
to carry out the necessary work of a reconnaissance level 
investigation, with the Corps monitoring rather than doing the work, 
that would then put the Corps in a position to make a determination of 
whether there's a Federal interest in moving forward with a project or 
not, but not having to hold up that preliminary determination to the 
Congress authorizing a potential new start. Congress would still have 
to authorize the new start, but it would do so knowing whether a 
Federal interest had been determined or not. The traditional route of 
having the Federal Government pay for the reconnaissance investigation 
after getting a new start authorization for it would still be an 
option, but for agencies with the wherewithal and a local sense of 
urgency, this would allow the process to start in the Congress one step 
further down the path to a project.
    It must be noted that communities, ours included, are taking the 
initiative in difficult budget times to raise revenue dedicated to 
water resources infrastructure as well as environmental restoration and 
recreation. In our case, our community strongly signaled their trust in 
the Water District as its watershed steward and flood manager in 
November 2000, when more than two-thirds of the county's voters agreed 
to tax themselves to the tune of $25 million a year to provide funding 
to the Water District for a 15-year effort to reduce flood hazards, as 
well as protect and restore hundreds of miles of waterways in Santa 
Clara County. Over the course of the Clean, Safe Creeks and Natural 
Flood Protection Program, the District will construct nine new flood 
protection projects to safeguard 13,600 homes, 1,040 businesses and 43 
schools and public facilities in the county from flooding. Over half of 
the flood protection projects funded by the Program are Corps partnered 
projects.
    In addition to flood protection, the Clean, Safe Creeks program is 
also protecting, enhancing and restoring creek ecosystems, improving 
water quality, helping keep neighborhood creeks free from trash and 
developing 70 miles of trails, parks and open space along the creeks in 
the county. The second annual report by an external and independent 
monitoring committee has, as in its first year, verified progress to 
date and provides assurance to the community the District is fulfilling 
its promises.
    Another recommendation for efficiency in the Corps system flows 
from the idea of building accountability into the feasibility and 
design stages. From a local sponsor's perspective, it is not acceptable 
to watch years go by on a study with no discernable progress toward 
solving the problem already identified as in the Federal interest to 
resolve, and no accountability. Feasibility studies, as well as 
detailed design and preconstruction activities should be completed on a 
date certain basis, with past due efforts and all costs associated with 
and attributable to Federal delay shifting to 100 percent Federal 
responsibility.
    Mr. Chairman, the Santa Clara Valley Water District has a long and 
storied history with the Corps, not always smooth, but now very 
positive, progressive and always improving to meet the needs of the 
community. As the Committee considers how to improve the Corps' process 
and reaffirm Congress' commitment to a stronger and more efficient 
program, we hope you will consider the recommendations identified here 
for true partnering, empowering the field officers and local 
governments to build flexibility and innovation into the system, as 
well as allowing for local dollars to flow early to save lives, 
economically develop our communities and allow sponsors and the Corps 
to meet the challenge most efficiently.
    Thank you, Mr. Chairman, for your time and consideration and I 
stand ready to answer any questions you may have.

                               __________

            Responses by Gregory A. Zlotnick to Additional 
                     Questions from Senator Inhofe

    Question 1. In your opinion, can the Corps change its way of doing 
business to accept efficiencies and innovations or is the Corps and its 
program incapable of change.
    Response. I believe that the Corps can change its way of doing 
business because it has, in fact, done so in certain circumstances. 
However, at least until this point, I do not believe that the Corps has 
taken all the steps necessary for it to become the efficient and 
innovative agency that it needs to be during these times of scarce 
resources at the Federal, state, and local levels. The ``old'' model 
for the way the Corps did, and unfortunately too often still does, its 
business is one where the Corps presents to local interests, in a take 
it or leave it fashion, a solution to a water resources problem without 
any meaningful input from the community. The solution developed by the 
Corps would probably solve the problem, but it might not even remotely 
be what the community wants or can afford. The only thing the Corps 
asked of the local sponsor was that it provide its share of the project 
costs. That is hardly a model that will bring about efficiencies and 
innovation. I applaud the steps the Corps has taken on a national level 
to try to change its ways and be more responsive to the needs of local 
sponsors. Even something as simple as referring to sponsors as 
``partners'' rather than ``customers'' is a step in the right 
direction. I don't think, however, that these changes have become 
ingrained in the culture of the Corps the way they need to be. Our 
experience is that the only way to get to Corps to move away from the 
old model that I described above is for the local sponsor to be very 
aggressive and insist that the Corps really listen to strategies 
developed by the community for solving the problem. If the Corps 
refuses to listen, the sponsor then has to be willing to ``fire'' the 
Corps. That will get their attention, because without sponsors there 
are no projects and without projects there is no Corps of Engineers. 
Unfortunately, not all sponsors have the experience and the 
capabilities needed to force the Corps to be a real partner. They 
literally do have to ``take it or leave it''. While real change in the 
way the Corps does business has to come from within, I do think there 
are things the Congress can do to help bring this change about. By 
moving decisionmaking within the Corps down the chain of command, you 
can improve the chances that decisions will more reflect the desires of 
the community. You can also enact legislation that would empower local 
sponsors to take a more active role in the actual planning and design 
of projects. These types of changes, I believe, will result in a much 
more efficient Civil Works program and one in which innovative 
solutions to problems are more likely to be identified.
    For the Committee's consideration, I am including a package of 
process improvements for the Corps' program for possible inclusion in 
the Water Resources Development Act. These refinements are based on the 
District's long and positive experience with the Corps and we believe 
will improve the partnership, the projects and will reduce project 
costs.

    Question 2. How would a partnering agreement work to the benefit of 
the Federal Government and the local communities? Will this undermine 
the national program?
    Response. The major benefits that would result from true partnering 
agreements between the Corps of Engineers and local sponsors are that 
Federal funds will be utilized more efficiently, costs to the Federal 
Government and local communities would be reduced, and, perhaps most 
importantly, the projects that would result from those partnering 
agreements would be ones that meet all the needs of the community. In a 
true partnering arrangement, the Corps would make full use of the 
capabilities of the local sponsor at all stages of project development. 
If the Corps really knows what the desires of the sponsor are, it won't 
waste time and money going down roads that are dead ends. On one of our 
projects, the Corps was prepared to recommend 50-year level of flood 
protection for an urban area. That was nothing more than a pure waste 
of time because with 50-year protection, they would have no support in 
our community for the project and, in fact, there would not have been a 
project. In true partnering agreements, the Corps would also have the 
authority to make use of the work performed by the sponsor to reduce 
the costs of planning, design, and even construction in some 
circumstances. Obviously, not all sponsors have those capabilities; the 
Corps must be able to put them to good use.
    Rather than undermining the Corps' national program, I believe that 
partnering agreements are essential for its continuation. 
Notwithstanding all of our best intentions and efforts, there will 
always be a shortage of funds in the Corps' Civil Works program because 
the needs are so great. Accordingly, the funds that are available need 
to spent more efficiently. And I believe the way for the Corps to be 
more efficient is for it to make better use of the capabilities of 
sponsors and avoid wasting money on dead ends like the one I described 
above.

    Question 3. Why do Corps feasibility studies and follow-on pre-
construction activities take so long and can accountability be brought 
to the system?
    Response. There are a variety of reasons why feasibility studies 
and other pre-construction activities take so long. For feasibility 
studies, I think the primary reason is that there is no real incentive 
for the Corps to complete them in a timely manner. As you know, local 
sponsors are required to provide one-half of the cost of the 
feasibility study. As long as a feasibility study is underway, the 
local sponsor is paying one-half of the salaries of the Corps planning 
staff. That is not much of an incentive for the Corps to complete the 
study. I think that a way to bring more accountability into the 
feasibility study process is for the non-Federal share of the cost of 
the study to be limited to the amount set forth in the feasibility 
study cost sharing agreement except for additions required by changes 
in Federal law or requested by the sponsor. You could also 
legislatively set a time limit on feasibility studies recognizing that 
there would need to be exceptions for large, regional projects. Another 
reason feasibility studies take so long is that there seems to be a 
desire by the Corps to make them perfect documents. Benefits and costs 
are studied and restudied down to the last penny when perhaps all that 
is needed is for the Corps to provide you with a range of benefits and 
costs so you can make the judgment as to whether or not the project 
should be authorized for construction. For pre-construction activities 
after the feasibility phase, I think the biggest problem is that Corps 
often, during engineering and design, redoes the things it looks at 
during the feasibility phase by once again computing benefits and 
costs. It seems to me that once those things are computed in the 
feasibility phase and Congress has authorized the project for 
construction, we should stop the seemingly never ending analysis of 
benefits and costs.

    Question 4. What would independent peer review add to the process? 
What is the most efficient way to provide for this? Is this peer review 
process happening already, in another guise?
    Response. Contrary to what some may believe, I think there already 
is independent review of the Corps program. That is one the roles, 
perhaps the primary role, of the local sponsor. It is our job to keep 
the Corps focused on the job at hand and to make sure it doesn't gold 
plate projects, waste money, and do things that would harm the 
environment in the communities where we live. For the vast majority of 
the projects the Corps undertakes, I believe that another level of 
review would do nothing more than slow the process down and add to 
project costs. There may be some very large and controversial projects 
where it would be appropriate, but I don't think it would add anything 
of value to the process for most projects. I have seen proposals that 
would require independent review for any project costing over $25 
million. I don't think that's a good idea. Our Guadalupe River project 
has a total cost of about $234 million. We worked hard with the Corps 
to make it a project that meets the needs of our community and that 
also meets all the Corps' requirements. I fail to see how a panel of 
outside expert reviewers without knowledge of our community would have 
helped get us a better project.

    Question 5. Taxpayers in Santa Clara County decided to tax 
themselves in order to address the water infrastructure and 
environmental needs in their area. What is your view for allowing local 
sponsors to advance both planning and construction activities to reduce 
project costs and delays? Can you give us an example, in your own 
agency's experience, how much the government might save?
    Response. I do believe there is room in the system for sponsors to 
advance planning and construction. I am very much aware that the Corps 
believes that it is important to maintain its capabilities in the areas 
of planning, design, and construction management and does not want to 
become an agency that simply writes checks to local sponsors who have 
done the work themselves. I agree with the Corps in that regard. The 
Corps is a valuable asset to the Nation and we do not want to see lose 
its technical capabilities. Having said that, however, I believe the 
program is large enough that there are cases where the Corps should 
take advantage of the capabilities of local sponsors to advance work. 
If we can do a particular task more quickly and/or at less cost than 
the Corps, we should be permitted to do so. In fact, I believe that all 
the cost sharing agreements that we, as local sponsors, sign with the 
Corps of Engineers should permit us to advance work. That would avoid 
the delays associated with receiving approval for such work from the 
Secretary of the Army's office or the Congress.
                                 ______
                                 
                    Summary of WRDA Process Reforms

                          FEASIBILITY STUDIES

Amendments to 33 USC 2215 (Sec. 105 of WRDA 1986, as amended)
          change the current Feasibility Cost Sharing Agreement 
        from a ``contract'' to a ``partnering agreement.''
          limit the non-Federal share of a feasibility study to 
        50 percent of the total estimated cost included in the 
        feasibility study partnering agreement plus 50 percent of 
        excess cost over the estimate is the excess results from a 
        change in Federal law or a change in scope requested by the 
        non-Federal sponsor.
          permit the Secretary to use planning and design 
        documents prepared by the non-Federal sponsor as the basis for 
        recommendations to Congress for authorization of a water 
        resources project. The non-Federal sponsor would receive credit 
        for the non-Federal share of the cost of the feasibility study 
        and be reimbursed for the Federal share of the cost of the 
        study.
          authorize the Secretary to credit toward the non-
        Federal share of the cost of the study work integral to the 
        study performed by the sponsor prior to the date of the 
        feasibility study partnering agreement.
Amendments to 33 USC 2282 (Sec. 905 of WRDA 1986, as amended)
          generally limit the duration of feasibility studies 
        to 2 years, but in no case more than 3 years unless the 
        Secretary makes a determination, in writing, that additional 
        time is required.

                    WRITTEN AGREEMENTS FOR PROJECTS

Amendments to 42 USC (Sec. 221 of Flood Control Act of 1970, as 
        amended)
          change the current Project Cooperation Agreement from 
        ``contract'' to a ``partnering agreement.''
          include in each partnering agreement a provision 
        permitting the non-Federal sponsor to complete the project or a 
        usable element of the project and allowing the non-Federal 
        sponsor to receive credit and reimbursement for such work, 
        subject to appropriation of funds.

                      ADOPTION OF RECOMMENDED PLAN

Amendments to Sec. 903 of WRDA 1986
          provide that the Secretary may recommend a plan other 
        than the one which maximizes national economic development 
        (NED) benefits if the NED benefits of the plan recommended 
        exceed its costs.
          provide that the Secretary may include features that 
        do not produce NED benefits that exceed costs if the NED 
        benefits of the project exceed the project costs.

                          APPROVAL OF REPORTS

          provide for the automatic approval of certain reports 
        by the Assistant Secretary of the Army (Civil Works) unless the 
        Secretary notifies the Congress of his/her disapproval of such 
        reports.

   REIMBURSEMENT FOR ENGINEERING, DESIGN, AND CONSTRUCTION BY LOCAL 
                               INTERESTS

          provide authority for the Secretary to provide credit 
        for the non-Federal share and reimbursement of the Federal 
        share of planning, engineering, design, and construction of 
        work undertaken by the non-Federal sponsor on authorized flood 
        control and ecosystem restoration projects.

                            33 USC SEC. 2215
               TITLE 33--NAVIGATION AND NAVIGABLE WATERS
                CHAPTER 36--WATER RESOURCES DEVELOPMENT
                       SUBCHAPTER I--COST SHARING

          Sec. 2215. Feasibility studies; planning, engineering, and 
        design
          (a) Feasibility studies
          (1) [Cost sharing] Partnering Agreement

    [(A) In general]
      The Secretary shall not initiate any feasibility study for a 
water resources project after November 17, 1986, until the appropriate 
non-Federal interest[s] [agree, by contract, to contribute 50 percent 
of the cost of the study] has entered into a written agreement with the 
Secretary under which each party agrees to carry out its 
responsibilities and requirements for completing the feasibility study. 
The agreement shall contain an estimate of the total estimated cost of 
the feasibility study and a schedule for completion of the study.
    (2) Cost Sharing
    The non-Federal interest shall be responsible for 50 percent of the 
total estimated cost of the feasibility study contained in the 
partnering agreement plus 50 percent of any excess cost over the 
estimate if the excess results from a change in Federal law or a change 
in the scope of the study requested by the non-Federal interest The 
non-Federal share required under this paragraph may be satisfied by the 
provision of services, materials, supplies, or other in-kind services 
necessary to prepare the feasibility report.
    (3) Completion of Study by Non-Federal Interests
    In carrying out a feasibility study for a water resources 
development project, the Secretary may utilize planning and design 
documents prepared by the non-Federal interest as the basis for 
recommendations to the Congress for authorization of the project. The 
Secretary shall credit toward the non-Federal share of the cost of the 
feasibility study, and reimburse the non-Federal interest for the 
Federal share of the cost of the study, costs are incurred by the non-
Federal interest during the development of the feasibility study if the 
Secretary determines that the work performed by the non-Federal 
interest is integral to the feasibility study.
    (4) Credit and Reimbursement for Work Performed Prior to Partnering 
Agreement
    The Secretary shall credit toward the non-Federal share of the cost 
of the feasibility study, and reimburse the non-Federal interest for 
the Federal share of the cost of the study, costs that are incurred by 
the non-Federal interests prior to the date of the feasibility study 
partnering agreement if the Secretary determines that the work 
performed by the non-Federal interest is integral to the feasibility 
study.
    [(B) Payment of cost share during period of study
    During the period of the study, the non-Federal share of the cost 
of the study payable under subparagraph (A) shall be 50percent of the 
sum of----
    (i) the cost estimate for the study as contained in the feasibility 
cost-sharing agreement; and
    (ii) any excess of the cost of the study over the cost estimate if 
the excess results from----

          (I) a change in Federal law; or
          (II) a change in the scope of the study requested by the non-
        Federal interests.]

    [(C) Payment of cost share on authorization of project or 
termination of study

          (i) Project timely authorized

    Except as otherwise agreed to by the Secretary and the non-Federal 
interests and subject to clause (ii), the non-Federal share of any 
excess of the cost of the study over the cost estimate (excluding any 
excess cost described in subparagraph (B)(ii)) shall be payable on the 
date on which the Secretary and the non-Federal interests enter into an 
agreement pursuant to section 2211(e) or 2213(j) of this title with 
respect to the project.
    (ii) Project not timely authorized
    If the project that is the subject of the study is not authorized 
by the date that is 5 years after the completion of the final report of 
the Chief of Engineers concerning the study or the date that is 2 years 
after the termination of the study, the non-Federal share of any excess 
of the cost of the study over the cost estimate (excluding any excess 
cost described in subparagraph (B)(ii)) shall be payable to the United 
States on that date.]
    [(D)](6) Amendment of cost estimate
    The cost estimate referred to in subparagraph (a)(1) may be amended 
only by agreement of the Secretary and the non-Federal interests.
    [(E) In-kind contributions
    The non-Federal share required under this paragraph may be 
satisfied by the provision of services, materials, supplies, or other 
in-kind services necessary to prepare the feasibility report.]
    [(2)](5) Applicability
    This subsection shall not apply to any water resources study 
primarily designed for the purposes of navigational improvements in the 
nature of dams, locks, and channels on the Nation's system of inland 
waterways.
    (b) Planning and engineering
    The Secretary shall not initiate any planning or engineering 
authorized by this Act for a water resources project until appropriate 
non-Federal interests agree, by contract, to contribute 50 percent of 
the cost of the planning and engineering during the period of the 
planning and engineering. Costs of planning and engineering of projects 
for which non-Federal interests contributed 50 percent of the cost of 
the feasibility study shall be treated as costs of construction.
    (c) Design
    Costs of design of a water resources project shall be shared in the 
same percentage as the purposes of such project.

                            33 USC Sec. 2282
               TITLE 33--NAVIGATION AND NAVIGABLE WATERS
                CHAPTER 36--WATER RESOURCES DEVELOPMENT
                    SUBCHAPTER V--GENERAL PROVISIONS

                     SEC. 2282. FEASIBILITY REPORTS

    (a) Report authority; contents; views of other agencies In the case 
of any water resources project-related study authorized to be 
undertaken by the Secretary, the Secretary shall prepare a feasibility 
report, subject to section 2215 of this title. Such feasibility report 
shall describe, with reasonable certainty, the economic, environmental, 
and social benefits and detriments of the recommended plan and 
alternative plans considered by the Secretary and the engineering 
features (including hydrologic and geologic information), the public 
acceptability, and the purposes, scope, and scale of the recommended 
plan. The feasibility report shall also include the views of other 
Federal agencies and non-Federal agencies with regard to the 
recommended plan, a description of a nonstructural alternative to the 
recommended plan when such plan does not have significant nonstructural 
features, and a description of the Federal and non-Federal 
participation in such plan, and shall demonstrate that States, other 
non-Federal interests, and Federal agencies have been consulted in the 
development of the recommended plan. This subsection shall not apply to 
(1) any study with respect to which a report has been submitted to 
Congress before November 17, 1986, (2) any study for a project, which 
project is authorized for construction by this Act and is not subject 
to section 903(b), (3) any study for a project which is authorized 
under any of the following sections: section 205 of the Flood Control 
Act of 1948 (33 U.S.C. 701s), section 2 of the Flood Control Act of 
August 28, 1946 (33 U.S.C. 701r), (FOOTNOTE 1) section 107 of the River 
and Harbor Act of 1960 (33 U.S.C. 577), section 3 of the Act entitled'' 
An Act authorizing Federal participation in the cost of protecting the 
shores of publicly owned property'', approved August 13, 1946 (33 
U.S.C. 426g), and section 111 of the River and Harbor Act of 1968 (33 
U.S.C. 426i), and (4) general studies not intended to lead to 
recommendation of a specific water resources project.
    The duration of a feasibility study shall normally be no more than 
Two years, but in all cases is to be limited to 3 years unless the 
Secretary makes a determination, in writing, that additional time is 
required due to the complex, regional nature of the water resources 
problems being addressed in the study.
    (b) Reconnaissance studies
    Before initiating any feasibility study under subsection (a) of 
this section after November 17, 1986, the Secretary shall first 
perform, at Federal expense, a reconnaissance study of the water 
resources problem in order to identify potential solutions to such 
problem in sufficient detail to enable the Secretary to determine 
whether or not planning to develop a project should proceed to the 
preparation of a feasibility report. Such reconnaissance study shall 
include a preliminary analysis of the Federal interest, costs, 
benefits, and environmental impacts of such project, and an estimate of 
the costs of preparing the feasibility report. The duration of a 
reconnaissance study shall normally be no more than twelve months, but 
in all cases is to be limited to eighteen months.
       sec. 2006. written agreement for water resources projects
    (a) PARTNERSHIP AGREEMENTS--Section 221 of the Flood Control Act of 
1970 (42 U.S.C. 1962d-5b) is amended----
          (1) in subsection (a)----

                  (A) by striking `under the provisions' and all that 
                follows through `under any other' and inserting `under 
                any';
                  (B) by striking `to furnish its required cooperation 
                for' and inserting `under which each party agrees to 
                carry out its responsibilities and requirements for 
                implementation or construction of'; and
                  (C) by inserting after `$25,000.' the following: 
                `Such agreement may include a provision for damages in 
                the event of a failure of one or more parties to 
                perform.';

          (2) by redesignating subsection (e) as subsection [(f)] (g); 
        and
          (3) by inserting after subsection (d) the following:

    `(e) LIMITATION--Nothing in subsection (a) shall be construed as 
limiting the authority of the Secretary to ensure that a agreement 
under this section meets all requirements of law and policies of the 
Secretary in effect on the date of entry into the agreement.
    `(f) COMPLETION OF PROJECT BY NON-FEDERAL INTERESTS--Every 
agreement entered into pursuant to this section shall include a 
provision which permits the non-Federal interest to complete the 
project or a usable element of the project. In such cases, the 
agreement shall provide that the non-Federal interest shall receive 
shall receive credit for the non-Federal share of project costs, and be 
reimbursed for the Federal share of project costs, subject to the 
appropriation of funds by the Congress.'.
    (b) LOCAL COOPERATION--Section 912(b) of the Water Resources 
Development Act of 1986 (101 Stat. 4190) is amended----

          (1) in paragraph (2)----

                  (A) by striking `shall' the first place it appears 
                and inserting `may' ; and
                  (B) by striking the last sentence; and

          (2) in paragraph (4)----

                  (A) by inserting after `injunction, for' the 
                following: `payment of damages or, for';
                  (B) by striking `to collect a civil penalty imposed 
                under this section,'; and
                  (C) by striking `any civil penalty imposed under this 
                section,' and inserting `any liquidated damages,'.

    (c) APPLICABILITY--The amendments made by subsections (a) and (b) 
only apply to partnership agreements entered into after the date of 
enactment of this Act; except that at the request of a non-Federal 
interest for a project the district engineer for the district in which 
the project is located may amend a project partnership agreement 
entered into on or before such date and under which construction on the 
project has not been initiated as of such date of enactment for the 
purpose of incorporating such amendments.
    (d) PARTNERSHIP AND COOPERATIVE ARRANGEMENTS----

          (1) IN GENERAL--Agreements entered into under section 221 of 
        the Flood Control Act of 1970 (42 U.S.C. 1962d-5(b)) shall 
        further partnership and cooperative arrangements with non-
        Federal interests and shall be referred to as `partnership 
        agreements'.
          (2) REFERENCES TO COOPERATION AGREEMENTS--Any reference in a 
        law, regulation, document, or other paper of the United States 
        to a cooperation agreement or project cooperation agreement 
        shall be treated to be a reference to a partnership agreement 
        or a project partnership agreement, respectively.
          (3) REFERENCES TO PARTNERSHIP AGREEMENTS--Any reference to a 
        partnership agreement or project partnership agreement in this 
        Act (other than this section) shall be treated as a reference 
        to a cooperation agreement or a project cooperation agreement, 
        respectively.

    (e) ENTRY OF AGREEMENT WITH DISTRICT ENGINEER--After January 1, 
2005, the agreement required to be entered into under section 221(a) of 
the Flood Control Act of 1970 (42 U.S.C. 1962d-5b(a) shall be entered 
into with the district engineer for the district in which the project 
will be carried out, unless, before that date, the Secretary issues 
policies and guidelines for partnership agreements and delegates to the 
district engineers, at a minimum----

          (1) the authority to approve any policy in a partnership 
        agreement that has appeared in an agreement previously approved 
        by the Secretary;
          (2) the authority to approve any policy in a partnership 
        agreement the specific terms of which are dictated by law, or 
        by a final feasibility study, final environmental impact 
        statement, or other final decision document for a water 
        resources development project;
          (3) the authority to approve any partnership agreement that 
        complies with the policies and guidelines issued by the 
        Secretary; and
          (4) the authority to sign any partnership agreement for any 
        water resources development project unless, within 30 days of 
        the date of authorization of the project, the Secretary 
        notifies the district engineer in which the project will be 
        carried out that the Secretary wishes to retain the prerogative 
        to sign the partnership agreement for that project.

    (f) PUBLIC AVAILABILITY--Not later than the 120th day following the 
date of enactment of this Act, the Chief of Engineers shall ensure that 
each district engineer has made available on the Internet all 
partnership agreements entered into under section 221 of the Flood 
Control Act of 1970 (42 U.S.C. 1962d-5(b)) within the preceding 10 
years and all partnership agreements for water resources development 
projects currently being carried out in that district and shall make 
any partnership agreements entered into after such date of enactment 
available on the Internet within 7 days of the date on which such 
agreement is entered into.

                        Section 903 of PL 99-662

    (c) [Benefit-Cost Ratio Waiver] Selection of Recommended Plan.--
[(1)] In his recommendations for authorization of any project, or 
separable element, for flood control, the Secretary may----
    (1) recommend a plan other than the one which maximizes national 
economic development benefits if the national economic development 
benefits of the recommended plan exceed its costs; and
    (2) include features that would not produce national economic 
development benefits greater than cost, if [the non-Federal interests 
enter into a binding agreement requiring the non-Federal interests to 
pay during construction of the project or separable element an amount 
sufficient to make the remaining costs of that project or separable 
element equal to the estimated value of the national economic 
development benefits of that project or separable element] the national 
economic development benefits of the project or separable element 
exceed the total cost of the project or separable element.
    [(2) Non-Federal payments pursuant to paragraph (1) shall be in 
addition to payments required under section 103 of this Act which are 
applicable to the remaining costs of the project.]

                                SEC. XXX

    Notwithstanding any other provision of law, the Chief of Engineers 
shall transmit directly to the Congress any Chief of Engineers Report, 
General Reevaluation Report, Limited Reevaluation Report, and any other 
report the Corps of Engineers is required to complete at the direction 
of the Congress at the same time such documents are transmitted to the 
office of the Assistant Secretary of the Army (Civil Works) for its 
review. If the Secretary does not advise the Congress of his/her 
disapproval of any such report within 90 days after the date the report 
was transmitted to the Assistant Secretary by the Corps of Engineers, 
such report shall be considered to have been approved by the Secretary.

                                SEC. XXX

    The Secretary shall credit toward the non-Federal share of the cost 
of an authorized flood control or ecosystem restoration project, and, 
subject to appropriations acts, reimburse the non-Federal interest for 
the Federal share of the cost of the project, costs for planning, 
engineering, design, and construction that are incurred by the non-
Federal interest during planning, design, and construction of the 
project if the Secretary determines that the work performed by the non-
Federal interest is consistent with and integral to the authorized 
project.
                               __________

             Statement of Ray Poupore, Executive Director,
                   National Heavy & Highway Alliance

    Mr. Chairman, thank you and ranking member, Senator Reid, for the 
opportunity to testify. I am testifying today as Executive Director of 
the National Heavy & Highway Alliance, in support of Water Resource 
Development Legislation. The National Heavy & Highway Alliance is 
comprised of the key building and construction trade unions which 
represent over one million highly skilled construction workers who 
build America's infrastructure. On behalf of our constituent 
organizations: The Laborers, Carpenters, Operating Engineers, Iron 
Workers, Cement Masons, Bricklayers, and the Teamsters, we urge this 
committee and the U.S. Senate to authorize the programs and projects 
necessary to meet America's inland and coastal water needs, and to 
reaffirm the critical role which the Corps of Engineers plays in that 
process.
    Mr. Chairman before I get into the specifics of my testimony today, 
I want to digress for a minute to commend this entire committee for the 
tremendous job which you recently performed in passing a robust and 
strong highway reauthorization bill. Given the anemic numbers in the 
legislation which the House is likely to pass today, we strongly urge 
this committee to maintain its investment levels in any conference with 
the House. America needs the Senate's higher investment levels in order 
to meet the tremendous backlog of surface transportation projects.
    Turning to the topic at hand, the construction unions which I 
represent today want to go on record in strong support of the 
authorization for the Corps of Engineer's Upper Mississippi River, and 
Illinois River waterway construction program. Other panels today will 
give detailed testimony concerning the various economic and other 
reasons to upgrade the current 600 ft. locks to more modern and 
efficient 1200 ft. locks which would allow barge tows to more 
efficiently utilize the Illinois and Upper Mississippi lock and dam 
system. We associate ourselves with those remarks. A number of these 
locks and dams are 60 to 70 years old and simply cannot support the 
needs of a modern inland waterway transportation system.
    River transportation has a long and proud history as a key 
component of America's economic growth. At critical junctures in that 
history, however, forces of nature have been tamed in order to provide 
for a more efficient and more productive use of our country's inland 
water resources. The Corps of Engineers has played a crucial role in 
this economic development. As much of the testimony from other 
panelists today will demonstrate, now is the appropriate time for 
Congress to authorize the Corps of Engineers to begin the planning and 
construction process for at least seven (7) new 1200 feet locks at 
Dam's: 20, 21, 22, 24 and 25 on the Upper Mississippi River, and at the 
La Grange and Peoria locks on the Illinois River. Additional capacity 
may be needed on other locks and dams in future years. Given the 
necessary planning process, we urge Congress to begin the authorization 
process at this time. While the Inland Waterway Trust Fund is available 
to pay a significant part of the projected construction costs, Congress 
will need to appropriate other funds to complete this multi-billion 
dollar program. Beginning the authorization process at this time will, 
in our view, enhance overall prospects for completion in a more cost-
effective manner.
    Almost every school child in America recognizes that the area 
served by the Upper Mississippi and Illinois Rivers is the breadbasket 
of the Nation. In a global economy, American farmers need a modern lock 
and dam system to effectively compete in world markets. We share their 
concern that unnecessary bottlenecks exist at this critical junction in 
our inland waterway system.
    As construction craft unions, however, we will largely defer to the 
expertise of others in respect to the agricultural, environmental, and 
social benefits of an improved lock and dam system. Our institutional 
bias is to build America's many infrastructure projects in conjunction 
with our contractors. We constantly train our members in order to 
improve their skill levels which, in turn, provides the most cost 
effective and productive work force in America. But without paychecks, 
this highly skilled work force simply won't be fulfilling its 
productive potential. Our members feed their families, pay their 
mortgages and support the overall economy with their paychecks earned 
from actual project activity. That is how the construction industry 
works. In light of the continuing jobless economic recovery, we support 
an Upper Mississippi river lock and dam construction program which will 
provide thousands of good-paying jobs for our members throughout that 
region. While this lock modernization program will likely extend over 
the next 15-20 years, thousands of jobs would be created each year 
during the construction phase of this effort.
    Based on our projections, over 45 million man-hours of labor could 
reasonably be anticipated in the construction of the 1200 ft locks. 
These are jobs that are American jobs and cannot be outsourced to 
foreign countries. Because of Davis-Bacon prevailing wage protections, 
these will also be good-paying jobs which will clearly maintain the 
living standards for construction workers and their families, whether 
carpenters, pile drivers, heavy equipment operators, laborers or iron 
workers throughout the region. Clearly these are the types of jobs 
which will provide economic growth for the entire regional economy. In 
short, this lock and dam reconstruction program is a significant job-
creation effort which, hopefully, should be an important consideration 
for the Committee as it assesses the authorization of our country's 
water resource priorities.
    We stand shoulder to shoulder with the Midwest Area River Coalition 
(MARC 2000) in advocating congressional authorization of this vital 
section of our inland waterway transportation network. In addition, we 
also recognize the beneficial environmental aspects of these proposed 
lock expansions. On a per capita basis, our trade unions probably have 
a higher percentage of hunters and fishermen than most other groups in 
society. We work outdoors and constantly work with ``Mother Nature'' in 
her various aspects. We respect clean air and clean water issues in our 
various communities. Accordingly, we are strong advocates of sensible 
environmental approaches when it comes to major construction projects. 
We believe that the new 1200 ft locks will improve the river ecosystem 
by allowing additional backwater restoration, riverbank stabilization 
and island reconstruction. It is important to note that this proposal 
is not a rebuilding of the entire system of locks and dams. Rather, a 
targeted approach to build additional lock capacity is at the heart of 
this proposal, which includes over $150 million in beneficial 
environmental mitigation. The Corps of Engineers approach to developing 
additional 1200 ft locks, in our judgment, strikes the appropriate 
balance between more efficient commercial enterprise and prudent 
environmental stewardship.
    In closing, I reiterate that we as the key building trade 
construction unions strongly support the modernization of the Upper 
Mississippi and Illinois River lock system. These proposed upgrades 
will help ensure a more competitive economy, a sounder environment, and 
the creation of many skilled, good-paying jobs.
    Thank you for the opportunity to be here today, Mr. Chairman, and 
I'll be glad to answer any questions that the committee may have now.

         Response by Raymond J. Poupore to Additional Question 
                         from Senator Jeffords

    Question 1. Our Committee understands that building infrastructure 
is building jobs. The Administration seems to disagree. According to 
your testimony, Corps projects likely boost the local economies around 
the construction and engineering activities. Aside from the project you 
specifically mentioned, how important to the skilled labor industries 
are other Corps projects in other parts of the country?
    Response. Extremely important. Construction projects, no matter how 
large or how small they may be, create jobs. And not just in the 
construction field. They generate a myriad of jobs in the local 
economies where the project is being built in other fields as well, be 
it clerical, janitorial, security, transportation, food services, 
accounting/record keeping, etc. In fact, the Federal Highway 
Administration (FHWA) estimates that for every $1 billion spent on 
highway construction a corresponding 47,500 jobs are created.
    Therefore, it is easy to translate those estimates into 
infrastructure construction. By nature, U.S. Army Corps of Engineers 
projects are, on the average, much larger in terms of scope of work and 
dollar volume of construction then your standard highway project. Our 
job-tracking data system (which keeps track only of those projects that 
are estimated prior to bid at over $10 million) shows that there are 
currently 148 Army Corps projects being constructed in thirty-six (36) 
states totaling over $4.8 billion worth of construction (see enclosed).
    By conservatively using the FHWA numbers by lowering its estimate 
to say that $1 billion worth of infrastructure construction produces 
only 40,000 jobs, then right now in this country ongoing Corps projects 
have created almost 200,000 jobs. And, keep in mind, these projects are 
spread out over 148 job sites; i.e., 148 local communities and local 
economies.
    Furthermore, our job-tracking system also reveals that there are 
currently ninety-nine (99) Corps projects in the planning stages 
covering twenty-eight (28) states and the District of Columbia totaling 
another $4.8 billion worth of construction (see enclosed). 
Subsequently, these ninety-nine projects will be coming out for bid and 
will be under construction in the very near future. Again, 
conservatively using the FHWA estimates, another 200,000 jobs will be 
created. These are numbers that cannot be taken lightly in the current 
jobless recovery.
    For further proof that construction projects are an economic 
stimulus to local communities, a few years ago the Construction Labor 
Research Council (CLRC, an employer-funded independent non-partisan 
organization) produced a study entitled ``Highway Labor Costs and 
Government Revenues.'' This study not only clearly proved that building 
our nation's infrastructure is a sound economic investment, but that it 
reduced unemployment costs and returned to the Federal and state 
governments a return for every construction dollar spent.
    The CLRC study found that for every dollar spent on highway 
construction for labor an average of $2.40 in other economic activity, 
such as spending for basic needs like housing, food, etc., was 
generated. This $2.40 is known as the ``multiplier.'' The bottom line 
is that if a state or anyone else were told that it could get a fifty 
to sixty percent return on an investment, would it put up the money? 
The true question should be, who wouldn't?
    There should be no argument whatsoever that investment in 
infrastructure is good for the economy. It provides onsite and offsite 
construction jobs whose workers then generate other jobs by spending 
their hard-earned money for goods and services. It provides revenue to 
the Federal and state governments in the form of taxes and a reduction 
of unemployment and social programs costs'.
    Once the economics of infrastructure funding and spending are 
really and truly understood, opposition will largely disappear. 
Building our infrastructure is building jobs.
                                 ______
                                 

                    Army Corps of Engineers Projects
------------------------------------------------------------------------
              State               Under Construction        Planned
------------------------------------------------------------------------
New Jersey......................  8 projects--$175.0  5 projects--$137.5
                                   million             million
Massachusetts...................  6 projects--$177.7  1 project--$15.0
                                   million             million
Pennsylvania....................  2 projects--$32.0   3 projects--$550.0
                                   million             million
Hawaii..........................                      2 projects--$22.3
                                                       million
Rhode Island....................  1 project--$15.0
                                   million
Georgia.........................  10 projects--       4 million--$66.0
                                   $266.9 million      million
Washington, DC..................                      1 project--$37.5
                                                       million
North Carolina..................  5 million--$153.2   4 projects--$91.1
                                   million             million
New Mexico......................  1 project--$12.7
                                   million
Alabama.........................  6 projects--$158.2  2 projects--$100.0
                                   million             million
Iowa............................                      2 projects--$38.0
                                                       million
Florida.........................  17 projects--       31 projects--$1.7
                                   $453.8 million      billion
Mississippi.....................  2 projects--$44.9   2 projects--$118.3
                                   million             million
Texas...........................  8 projects--$310.3  4 projects--$61.4
                                   million             million
Illinois........................  7 projects--$747.7
                                   million
Indiana.........................  3 projects--$129.8  2 projects--$30.0
                                   million             million
Kentucky........................  4 projects--$267.7  4 projects--$430.0
                                   million             million
Ohio............................  2 projects--$33.5
                                   million
Louisiana.......................  5 projects--$93.6   4 projects--$81.0
                                   million             million
New York........................  10 projects--       2 projects--$122.5
                                   $324.8 million      million
California......................  11 projects--       2 projects--$44.9
                                   $369.6 million      million
Kansas..........................                      2 projects--$86.0
                                                       million
Oklahoma........................  2 projects--$40.0
                                   million
Delaware........................  1 projects--$66.3   4 projects--$102.0
                                   million             million
Missouri........................  3 projects--$59.7
                                   million
South Carolina..................                      1 projects--$15.0
                                                       million
Maryland........................  2 projects--$38.3
                                   million
Nevada..........................  4 projects--$52.2
                                   million
Arkansas........................  1 project--$10.0    2 projects--$315.0
                                   million             million
Tennessee.......................  1 project--$13.9    1 project--$14.0
                                   million             million
Minnesota.......................  1 project--$20.6    2 projects--$30.0
                                   million             million
Montana.........................  1 project--$14.0
                                   million
North Dakota....................  6 projects--$99.7   1 project--$70.0
                                   million             million
Nebraska........................  1 project--$15.0
                                   million
South Dakota....................  1 project--$50.0
                                   million
Virginia........................  5 projects--$105.7  1 project $20.0
                                   million             million
Washington......................  1 project--$15.0
                                   million
Wisconsin.......................  1 project--$11.2
                                   million
Wyoming.........................  2 projects--$247.6  1 project--$15.0
                                   million             million
Alaska..........................  5 projects--$114.6  6 projects--$240.0
                                   million             million
Michigan........................                      1 project--$100.0
                                                       million
Idaho...........................  2 projects--$65.2
                                   million
Oregon..........................                      2 projects--$186.0
                                                       million
                                 ---------------------------------------
  Total.........................  148 projects--$4.8  99 projects--$4.8
                                   billion             billion
------------------------------------------------------------------------
(May 7, 2004)

                               __________
         Statement of Scott Faber, Water Resources Specialist,
                         Environmental Defense

    Thank you for the opportunity to testify. My name is Scott Faber 
and I am a water resources specialist for Environmental Defense.
    Environmental Defense supports reforms that would ensure that 
future civil works projects constructed by the U.S. Army Corps of 
Engineers are economically sound, and that the environmental impacts of 
future projects are fully mitigated. We strongly support S. 2188, 
introduced last month by Senators McCain, Feingold and Daschle, and 
will not support a Water Resources Development Act of 2004 that does 
not include long overdue reforms. Today, I would like to focus on three 
reforms: peer review, modern planning principles, and mitigation.
    The Corps of Engineers has a critical role to play in the 
development, management, protection and restoration of America's 
rivers, lakes, bays and coastlines. Many Corps projects have provided 
significant economic benefits to the Nation by protecting our cities 
from floods and hurricanes, providing reliable waterborne commerce, and 
by providing sufficiently deep ports to promote trade. Unfortunately, 
too many projects have failed to provide as many benefits as predicted.
    In the last 3 years, the General Accounting Office, the Army's own 
Inspector General, the National Academy of Sciences, and independent 
experts have found that proposed projects with costs totaling more than 
$3 billion are based on inflated estimates of benefits, underestimates 
of costs and environmental impacts, or both. In one case, the GAO found 
that the benefits of a river deepening project had been overestimated 
by 300 percent.\1\ In a second case, the GAO found that the Corps had 
overestimated the number of commercial vessels that would use an 
inlet.\2\ Most recently, the GAO found that the Corps overestimated the 
number of homes that would be protected by a California flood control 
project, and dramatically underestimated project costs.\3\ In addition, 
the Army's own Inspector General concluded that Corps officials 
intentionally exaggerated the benefits of longer locks on the 
Mississippi and Illinois rivers.\4\ An independent expert concluded 
that the Corps' proposal to build the Yazoo Backwater Pumping Plant 
overestimated agricultural benefits by $144 million\5\ and would, 
according to EPA, drain and damage almost 10 times as many wetlands as 
were estimated by the Corps.\6\
---------------------------------------------------------------------------
    \1\ General Accounting Office, Delaware River Deepening Project 
Comprehensive Reanalysis Needed, GAO-02-604, June 2002 at 5.
    \2\ General Accounting Office, Oregon Inlet Jetty Project: 
Environmental and Economic Concerns Still Need to Be Resolved, GAO-02-
803, September 2002.
    \3\ General Accounting Office, Improved Analysis of Costs and 
Benefits Needed for Sacramento Flood Protection Project, GAO-04-30, 
October 2003.
    \4\ U.S. Army Inspector General, Report of Investigation, Case 00-
019, 2000, at 8.
    \5\ Leonard Shabman & Laura Zepp, ``An Approach for Evaluating 
Nonstructural Actions with Application to the Yazoo River (Mississippi) 
Backwater Area''; February 7, 2000 (Prepared in cooperation with the 
U.S. Environmental Protection Agency, Region 4);
    \6\ U.S. Environmental Protection Agency, Technical Review Of The 
Draft Reformulation Report And Draft Supplement No. 1 To The 1982 Yazoo 
Area Pump Project Final Environmental Impact Statement (DEIS) (November 
2, 2000), available at http://www.epa.gov/region4/water/
specialprojects/yazoo/
---------------------------------------------------------------------------
    These miscalculations and mistakes have significant costs beyond 
their impact on the Corps' reputation and credibility.
    First, billions of dollars have been spent on civil works projects 
that have failed to provide the promised return on investment. Only two 
of 14 waterway projects constructed since World War II for which data 
is available have attracted as much commercial traffic as predicted. 
For example, the Corps predicted in 1982 that 123.2 million tons of 
commercial traffic would flow through Lock and Dam 26 on the 
Mississippi River by 1998.\7\ Actual traffic flows were 73.7 million 
tons, or 60 percent of the Corps' prediction.\8\ The Corps predicted in 
1978 that traffic on the Gulf Intracoastal Waterway would reach 82.7 
million tons when the agency recommended replacement of Vermillion 
Lock. Actual traffic, including non-commercial traffic, was only 37.6 
million tons in 1998, or 46 percent of the Corps' prediction.
---------------------------------------------------------------------------
    \7\ National Research Council, Inland Navigation System Planning. 
National Academy Process (2001), at 46.
    \8\ id.
---------------------------------------------------------------------------
    Second, waterways with little or no traffic consume a 
disproportionate and growing share of waterway maintenance funds. While 
successful waterways like the Mississippi and Ohio face growing 
maintenance backlogs, 29 percent of annual maintenance spending is used 
to maintain waterways that host little more than 2 percent of 
commercial waterway traffic. For example, the Corps spends about $5 
million annually to operate and maintain the Apalachicola-
Chattahoochee-Flint waterway even though barges on the waterway carry 
only about 20,000 tons of commercial traffic. By contrast, barges on 
the Ohio River annually carry 57.5 million tons of commercial traffic.
    Third, civil works projects destroy the islands, wetlands, side 
channels, and other habitats that aquatic life need to survive, 
resulting in the extinction of some species and the decline of many 
more species, including commercially important species like salmon. 
But, the environmental impacts of these projects are rarely mitigated. 
The Corps has proposed mitigation for only 31 percent of the projects 
authorized for construction since 1986, according to the GAO.\9\ Even 
when mitigation is completed, the Corps frequently replaces wetlands, 
floodplain forests and other valuable habitats with fewer acres of less 
valuable habitat. For example, a Corps plan to dredge over 100 miles of 
the Big Sunflower River will damage 3,631 acres of wetlands. But, 
proposed mitigation is limited to planting tree seedlings on only 1,912 
acres of agricultural lands.\10\
---------------------------------------------------------------------------
    \9\ General Accounting Office, Scientific Panel's Assessment of 
Fish and Wildlife Mitigation Guidance, GAO-02-574, May 2002.
    \10\ Final Project Report and Supplement No. 2 to the Final 
Environmental Impact Statement, Flood Control, Mississippi River and 
Tributaries, Yazoo Basin, Mississippi, Big Sunflower River Maintenance 
Project, Volume I, Project Report, Supplemental Environmental Impact 
Statement, and Appendices A-C, July 1996, at Appendix B, U.S. Fish & 
Wildlife Coordination Act Report at i.
---------------------------------------------------------------------------
    These problems are well documented, and have invited criticism from 
a wide array of interests, ranging from the National Taxpayers Union to 
the New York Times. The Army's IG and four separate panels of the 
National Academy of Sciences have now called for reforms, including 
independent peer review. Even the Corps' leadership, in testimony to 
Congress and elsewhere, recognizes that the agency's ability to 
evaluate the benefits and costs of future projects must be 
improved.\11\
---------------------------------------------------------------------------
    \11\General Robert Griffin, former director of civil works, noted 
in an e-mail to Corps employees, ``we have seen clear signs that our 
planning expertise and capability have declined to a point where 
specific action is required by USACE leaders to reverse this 
unacceptable trend. While pockets of excellence no doubt remain, this 
overall decline is beginning to have unacceptable consequences to the 
very foundation of the civil works program--the basis of our investment 
recommendations.'' Gen. Griffin added that some plans developed by 
Corps districts ``cannot withstand national level scrutiny.''
---------------------------------------------------------------------------
    Environmental Defense believes that the reforms included in S. 2188 
will ensure that future studies are based on sound science and 
economics. We also believe that these reforms will restore trust in 
Corps feasibility studies by ensuring that credible economic tools are 
used to evaluate proposed projects, that studies proposing 
controversial projects or costly projects are peer reviewed, and by 
ensuring that the environmental impacts of proposed projects are fully 
mitigated. We further believe that the Corps should accelerate efforts 
to repair the historic damage done to America's great rivers, lakes and 
bays by dams, levees and other civil works projects that were not 
subject to modern mitigation requirements.
    In particular, we believe peer review provides significant 
benefits. As the National Academy of Sciences noted in 1999, ``peer 
review can improve both the technical quality of projects . . . and the 
credibility of the decisionmaking process.''\12\ Reviews would also 
identify or deter mistakes that could ultimately add to the cost and 
time of feasibility studies.
---------------------------------------------------------------------------
    \12\ National Research Council, Peer Review in Environmental 
Technology Development Programs, National Academy Press (1999) at 29 
(emphasis in original).
---------------------------------------------------------------------------
    To be successful, peer reviews must have four features.
    First, peer reviews must be truly independent. In particular, the 
office that appoints reviewers must be located outside the Corps, 
reviewers must have no financial relationship with the Corps, and 
reviewers must determine the scope of review. According to the National 
Academy of Sciences, the ``independence of peer reviewers makes them 
more effective than internal reviewers because experts who are newly 
exposed to a project often can recognize technical strengths and 
weaknesses, and can suggest ways to improve the project that may have 
been overlooked by those close to it.''\13\ In addition, external 
experts ``often can be more open, frank, and challenging to the status 
quo than internal reviewers, who may feel constrained by organizational 
concerns.''\14\
---------------------------------------------------------------------------
    \13\ Id. at 30
    \14\ Id.
---------------------------------------------------------------------------
    Second, peer reviews must not delay Corps studies. We propose that 
peer review overlap with public review, and propose that reviewers 
assess the same draft feasibility studies, reevaluation reports, and 
environmental impact statements that are subject to public review. 
Reviews of feasibility studies that have already begun should be 
subject to peer review if a draft study or report has not been issued 
on the date of enactment.
    Third, the threshold for peer review must be predictable. As the 
NAS noted, ``peer review program managers must have a systemic and 
credible approach for selecting which projects . . . are reviewed by 
the peer review program.''\15\ Accordingly, we urge the committee to 
adopt four triggers for review: projects that cost more than $25 
million; a request for review by the Governor of an affected state; a 
request for review by the head of a Federal agency charged with 
reviewing the project; and, a determination by the Secretary of the 
Army that there is a significant public dispute concerning scope, 
impact, or cost-benefit analysis of the project.
---------------------------------------------------------------------------
    \15\ National Research Council, Peer Review in Environmental 
Technology Development Program, National Academy Press (1999) at 31.
---------------------------------------------------------------------------
    Finally, we believe the Corps should be required to respond the 
report of a peer review panel, and provide a written response providing 
a rationale for any panel recommendations that have not been adopted.
    We also believe that the Corps must employ economic tools that 
fairly assess the benefits and costs of proposed projects.
    As a recent panel of the NAS noted, the Corps continues to use 
economic tools that overestimate future river traffic, and that 
overestimate how many shippers will use waterways when the cost of 
shipping by barge increases.\16\ The Corps also continues to ignore or 
improperly evaluate less costly alternatives to large civil works 
projects. A recent NAS panel urged the Corps to consider alternatives 
to longer locks on the Mississippi and Illinois rivers,\17\ including 
traffic scheduling and helper boats, which could reduce a 90-minute 
lockage by 20 minutes or more and which would cost less than $50 
million annually to operate. But, the Corps has largely ignored 
alternatives to the $2.3 billion lock expansion project even though 
river traffic has been flat since 1980 and has actually declined in 
recent years.
---------------------------------------------------------------------------
    \16\ National Research Council, Review of the U.S. Army Corps of 
Engineers Upper Mississippi River-Illinois Water Naigation Study: An 
Interim Report, December 2003.
    \17\ Id.
---------------------------------------------------------------------------
    In combination, peer review and the use of credible economic tools 
will ensure that future projects will return significant benefits to 
the public.
    This is especially important in light of the $41 billion backlog of 
active civil works projects already authorized for construction. In 
recent years, Congress has appropriated less than $2 billion annually 
for the construction of new projects. Authorizing questionable new 
construction projects would delay the construction of more urgently 
needed projects. For example, building seven new locks and extending 
the length of five existing locks on the Mississippi and Illinois 
rivers would cost approximately $191 million annually, and would not be 
completed until 2035.\18\ Rather than adding questionable projects to 
the growing backlog of authorized projects, Congress should instead 
reduce the backlog of authorized projects, as proposed in S. 2188.
---------------------------------------------------------------------------
    \18\ U.S. Army Corps of Engineers, Alternative Formulation Briefing 
Pre-Conference Report for the UMR-IWW System Navigation Feasibility 
Study, February 2004, at 110.
---------------------------------------------------------------------------
    When a project is clearly necessary and cost-justified, the Corps 
should fully mitigate the environmental impacts of a project.
    We believe successful mitigation has four features.
    First, mitigation projects should replace each acre of habitat with 
an equivalent or superior acre of habitat. Second, mitigation projects 
should not only restore each acre of habitat, but should also restore 
the hydrologic processes that have been impacted by project 
construction. Third, mitigation plans should have specific ecological 
success criteria, a detailed mitigation plan, and a detailed 
description of the lands to be acquired. Fourth, mitigation should be 
completed concurrently unless that is physically impossible. In those 
rare cases when concurrent mitigation is physically impossible, the 
Corps should complete mitigation by the end of the subsequent fiscal 
year. A mitigation tracking system should be established to ensure that 
mitigation is completed and is successful.
    Finally, we strongly support efforts to ensure that working rivers 
like the Mississippi remain living rivers as well. Building dams and 
levees destroyed millions of acres of wetlands and other habitats and 
robbed rivers like the Mississippi of the ability to build new side 
channels and wetlands. Far more than fish and wildlife is at stake. 
Millions of Americans depend upon the health of resources like the 
Mississippi, Columbia, and the Chesapeake for their economic 
livelihood. For example, recreation on the Mississippi River generates 
more than $1 billion in annual spending which supports more than 30,000 
jobs.
    Although the Fish and Wildlife Coordination Act of 1958 directed 
the U.S. Fish and Wildlife Service to propose mitigation for civil 
works projects, mitigation was not required until passage of the Water 
Resources Development Act of 1986. Consequently, the environmental 
impacts caused by the construction and operation of the vast majority 
of civil works projects have not been mitigated. If we do nothing to 
reverse the decline of degraded resources like the Mississippi, 
millions of jobs will be lost and scores of species will face 
extinction. In many cases, the Corps is the only Federal agency with 
the jurisdiction and expertise needed to restore lost habitats.
    As the Committee develops the Water Resources Development Act of 
2004, we urge you to include reforms that will ensure that future civil 
works projects are economically sound, and that the impacts of future 
projects are fully mitigated. We further urge you to accelerate Corps 
efforts to reverse the decline of America's great rivers, lakes and 
bays.
    Thank you for the opportunity to testify.

 Statement of George C. Grugett, Executive Vice President, Mississippi 
                        Valley Flood Association

    Mr. Chairman and Members of the Subcommittee, my name is George 
Grugett and I wish to thank each of you for the kind invitation to 
address the Subcommittee today and speak on the role for the United 
States Army Corps of Engineers in meeting the water resources needs of 
the Nation.
    I do not appear here today as an expert but only one that has a 
number of years of experience in Flood Control, Navigation and Major 
Drainage. I retired from the United States Corps of Engineers in 1980 
with 35 years of Federal Service and immediately accepted the position 
that I hold today. This is my 24th year as Executive Vice President of 
the Mississippi Valley Flood Control Association and when you add those 
two numbers together it's easy to see that I'm fast approaching 60 
years of experience in water resources. I fought my first flood on the 
Mississippi River in 1950 and on the Missouri River in 1952 and on the 
Kuskokwim River in Alaska in 1957.
    My years of experience in Water Resources pale next to the United 
States Army Corps of Engineers, which will soon celebrate its 230th 
year. It was 180 years ago that the Congress in its wisdom gave the 
Corps of Engineers the responsibility for the Improvements of the 
Nation's Rivers and Harbors. Some of the Levee Boards located along the 
Lower Mississippi River have been in continuous existence and serving 
the millions of people in the alluvial valley for 140 years. The 
Mississippi River Commission was authorized by the Congress in June of 
1879 and this June will celebrate its 125th Anniversary. Next year the 
Mississippi Valley Flood Control Association, which I'm privileged to 
serve, will have 70 years of providing the Agency for all the people of 
the Mississippi River Valley to speak and act jointly on all water 
resources needs.
    Over these many, many years the Partnership of Corps of Engineers, 
the U.S. Congress and the Local People has worked like a well designed 
and well oiled machine that has played a major role in making the 
United States the greatest industrial and commercial Nation on this 
planet. With our improved natural resources and productive capability 
we have saved the World in War and sustained it through many years of 
troubled peace.
    Today this Congress and we are faced with the almost unbelievable 
fact that there are some that would eliminate the United States Corps 
of Engineers Civil Works Mission in this country. These individuals 
and/or groups are either driven by some ulterior motive or they are 
completely devoid of common sense or lack the ability to reason.
    Today, I believe this Subcommittee is meeting not only to hear 
about the Corps of Engineers role in meeting the Nation's Water 
Resources needs but also to consider a Water Resources Development Act 
that will, when passed, authorize new and additional projects and 
studies but will also be a wonderful opportunity for the Congress to 
reject all attempts by the executive branch to dictate policy matters 
pertaining to water resources.
    We have addressed to our Senators some of the items the local 
people would like to see in the Water Resources Development Act and I 
shall mention only a few of these.
    We would desire that the Bill contain proper wording to extend for 
no less than 10 years the Authorization of Projects that will be de-
authorized because no funds have been allocated in a period of years as 
specified in the WRDA of 1986.
    Provide proper wording that would raise the Limitation on the 
Amount of Funds that can be expended on Continuing Authority Projects 
and Small Projects Not Specifically Authorized by the Congress in order 
to better express present day conditions. As a suggestion, these 
Limitations should be at least doubled.
    Omit the words in the House Version (H.R. 2557) under Sec. 2033, 
Independent Peer Review, (B) Discretionary.
    I would like to return to the role of the U.S. Army Corps of 
Engineers in meeting the nation's water resources needs. That role of 
course, was given to the Corps of Engineers by the Congress of the 
United States. I mentioned earlier that in 1824 the Congress gave to 
the Corps the authority and the responsibility to improve the Nation's 
Rivers and Harbors. That, in general, took care of the Navigation 
Mission for the Corps. The first authorization for Federal Flood 
Control took place in 1917 and the landmark Act of 1928 made Flood 
Control in the Lower Mississippi Valley a Federal Responsibility. In 
1936, two Flood Control Acts were passed. The so-called Overton Act 
expanded Flood Control in the Lower Mississippi Valley and the Copeland 
Act covered the remainder of the Nation. In 1986 a third mission was 
added to the Corps' responsibilities, that of Protection and 
Restoration of the Natural Environment. The Corps has performed these 
three missions in an exemplary fashion over these many years and 
because of them our Inland Waterways, our Flood Control and our Natural 
Environment are the envy of the rest of the World.
    Mr. Chairman, I would again like to express my appreciation for the 
opportunity to make this Statement a part of the printed record.

                               __________

           Statement of Hon. Bob Young, Mayor of Augusta, GA

    On behalf of the U.S. Conference of Mayors I thank the Committee 
for allowing me to provide a written statement on the ``Water Resources 
Development Act of 2004''.
    My purpose today is to provide the Committee with perspectives I 
have gathered as Co-Chairman of the Urban Water Council and chairman of 
the Environment Committee, from meetings formal and informal with other 
Mayors around the Nation for the last few years. Undoubtedly, water 
supply issues have surged to the forefront of urban problems. The 
variety of types of water supply problems, as well as their severity, 
is striking.
    I have attached my testimony in two hearings last year before the 
House Subcommittee on the Environment and Water Resources. These 
statements share some important examples of water problems facing our 
cities. In this statement I will address some ways that cities and the 
Federal Government, particularly the Corps of Engineers, can work 
together to improve management of our water resources.
    Much is at Stake. Recent droughts and water shortages have made us 
aware that we cannot take water for granted. The stakes are high. We 
must meet water challenges if we are to support economic growth in an 
environmentally sustainable way and assure the quality of life of our 
people.
    A Need for Better Information is a Common Thread. We need to better 
understand water problems both nationally and in individual watersheds. 
At the national level, I would like to commend to your attention H.R. 
135, the ``Twenty First Century Water Commission Act of 2003.'' 
Representative John Linder and the bi-partisan leadership of the House 
have demonstrated great foresight in passing this bill last year. I 
sincerely ask you to help us pass H.R. 135 in the Senate during this 
session. This legislation will give us the national information we need 
to begin crafting our Twenty First Century water management strategy.
    One thing in common for all of the cases I have seen during my 
involvement with the Urban Water Council is a lack of recognition of 
the seriousness of water resources problems; and, a lack of effective 
planning to use current water resources more efficiently and 
effectively. The Federal Government can play a lead role in the form of 
technical assistance to achieve the needed level of planning so that 
American cities and states, neighboring watersheds, and the network of 
rivers can be made to meet our economic and cultural needs. Data, 
technical expertise and analysis to support good water planning are 
essential to success. In an era of fiscal restraint across all levels 
of government, investment in good water planning has even greater 
payoffs. All levels of government can benefit in more holistic 
management and shared savings in resources.
    Federal leadership in planning is critically important in 
watersheds that involve more than one state. We've seen how independent 
planning by one state can penalize another. And, we've seen how 
compacts are not the cure-all. Using the technical assistance, body of 
research and leadership of the Corps and other Federal agencies, states 
and local jurisdictions can be guided toward rational and beneficial 
use of shared water resources, thus precluding the intervention of the 
courts.
    The states of Georgia and South Carolina have been working with the 
Corps for a couple of years on a comprehensive study of the Savannah 
River Basin. This historic report will provide the baseline to guide 
state and local governments through the important process of planning 
for the future use of shared resources. Funding from Georgia and South 
Carolina is supplementing the Corps' financial participation.
    I am aware that several states are responding to water management 
challenges within their borders. In my own state, the legislature is 
considering a bill to direct preparation of a state water plan. Georgia 
would join Texas and Pennsylvania as recent examples of the willingness 
of states to shoulder responsibility for integrated management our 
precious water resources. These state-led water planning efforts have a 
very important thing in common: They are collaboratively built with 
bottom up participation of cities and water districts and emphasize 
regional solutions to water problems. The Federal Government must 
encourage this approach across the Nation.
    The Corps of Engineers Can Bring Valuable Assistance to States, 
Tribes and Local Governments. The Corps of Engineers is uniquely 
situated to states, tribal and local government leadership in 
integrated water planning. We need the Corps' data, technical 
assistance and their internationally recognized water models to help us 
in making better decisions.
    In Augusta, we have previously partnered with the Corps of 
Engineers for improvements in the Oats Creek basin to abate repetitive 
flooding problems in low-income residential areas. We are currently 
working with the Corps on development of similar modeling for the Raes 
Creek and Rocky Creek Basins, the historic Augusta Canal National 
Heritage Area and Phinizy Swamp. Without the expertise and financial 
resources of the Corps of Engineers, the city of Augusta would never 
have been able to undertake this work.
    I should add that we have been able to leverage additional dollars 
through FEMA's Flood Hazard Mitigation program to accomplish some of 
the projects identified in the Corps' reports.
    As you consider the Water Resources Development Act of 2004, I urge 
the Committee to consider expanding the Corps mission to include 
supporting state, tribal and local governments as well as interstate 
water organizations in planning and designing responses to our nation's 
water challenges. The House Water Resources bill, H.R. 2557, has two 
provisions that contribute to the Corps ability to help state and local 
governments. These are Section 2019, Watershed and River Basin 
Assessments and Section 2025, Technical Assistance. I ask you to 
consider these and other proposals that may be made to increase the 
Corps support to cities across the country.
    I want to thank the Committee again for permitting me to share 
these views. Anything we can do to emphasize the importance of water 
resources in an era of scarcity is important. Water is a valuable 
public resource and we need to treat it as such. We need to better 
understand the nation's water situation in order to make good public 
policy decisions. It is vitally important to have a point of reference 
for the status of water in the Nation in order to determine short and 
long-term plans regarding water usage, conservation, as well as 
potential new sources of usable water. On behalf of the Conference of 
Mayor and its Urban Water Council, I look forward to working with you 
on this important legislation.

                               __________

 Statement of E.G. Rod Pittman, Chairman, Texas Water Development Board

    I am pleased to provide remarks to the Committee on the Water 
Resources Development Act of 2004. The Committee's leadership on this 
issue ensures that the nation's water resources are managed 
responsibly. My remarks will focus on the magnitude of water supply 
needs in Texas and how the U.S. Army Corps of Engineers can play a role 
in meeting the challenges of ensuring adequate water supplies to meet 
the needs of the State's people, economy and environment.

                     TEXAS WATER DEVELOPMENT BOARD

    The Texas Water Development Board's (Board) mission is to provide 
leadership, planning, financial assistance, information, and education 
for the conservation and responsible development of water for Texas. To 
accomplish its goals of planning for the state's water resources and 
for providing affordable water and wastewater services, the Board 
provides water planning, data collection and dissemination, financial 
assistance and technical assistance services to the citizens of Texas.
    In 1998, the Board initiated a regional water planning process to 
document the water supply needs in the State, and to develop water 
management strategies for meeting those needs. To ensure a bottom-up 
approach to planning, the State was divided into 16 regional water 
planning groups. These planning groups are the foundation for 
developing strategies for meeting water needs across Texas.

                            STATE WATER PLAN

    The State Water Plan, Water for Texas--2002, is a grass roots 
approach to ensure future water supplies for almost all identified 
water needs in Texas for the next 50 years. The plan is based on 
extensive public participation and local and regional decisionmaking. 
Over the initial 3-year planning process, more than 450 voting and 
nonvoting community and interest group leaders representing the 16 
regional water planning groups held more than 900 public meetings 
across the state to develop strategies for meeting water needs over the 
50-year horizon.
    According to the State Water Plan, the population of Texas is 
expected to grow from nearly 21 million in 2000 to about 40 million in 
2050. Total projected demand for water is expected to increase by 18 
percent, from nearly 17 million acre-feet per year in 2000 to 20 
million acre-feet per year in 2050. In contrast, water supplies over 
that same time period are expected to decrease by 19 percent, from 17.8 
million acre-feet per year in 2000 to 14.5 million acre-feet per year 
in 2050.
    When comparing future water demands with supplies from existing 
sources, the regional water planning groups identified 883 water user 
groups that will need additional water supplies within the next 50 
years. Water user groups included municipal, manufacturing, steam-
electric power, mining, irrigation, and livestock. After identifying 
the needs, the regional water planning groups evaluated and recommended 
a variety of different water management strategies to meet the needs. 
The Texas Water Development Board recognizes that some of these needs 
are immediate. While the State Water Plan covers a 50-year period, the 
need to implement strategies in the next five to 10 years is a crucial 
step for the present and future of water in Texas and the United 
States. The total capital cost of implementing all of the water 
management strategies in the State Water Plan is approximately $18 
billion. Please keep in mind that the estimated $18 billion cost is for 
water supply capital only and does not include infrastructure, 
wastewater treatment or flood control. Obviously, the magnitude of 
water supply needs is enormous. The State and local communities will 
need to leverage resources in order to make any progress toward 
implementing the water management strategies laid out in the State 
Water Plan. Again, a significant portion of the resources is needed 
over the next 5 years to avoid a costly backlog of implementation 
strategies and projects.

                      U.S. ARMY CORPS OF ENGINEERS

    The Corps of Engineers possesses valuable resources that could be 
immediately brought to bear in assisting State and local governments in 
integrated water resources planning. Speaking from the perspective of 
my home state, Texas could benefit greatly from Corps data, technical 
expertise and project assistance. Recently, Board staff has been 
working more closely with the Corps, and the benefits from this 
enhanced relationship confirms that the payoff for even more 
collaboration is considerable. As you consider the Water Resources 
Development Act of 2004, I strongly encourage the Committee to consider 
expanding the Corps' authority to provide for technical and project 
assistance to State and local governments in addressing water supply 
issues.
    The importance of an increased Corps role in water supply cannot be 
understated. While many States, particularly Texas, have invested 
significant resources to plan for future needs, the ability to address 
such needs now and in the future will require a leveraging of resources 
from Federal, state and local entities. The Corps provides valuable 
data, and technical and project expertise that should be directed where 
leveraging results in the greatest national benefit--water supply for 
our people, economy and environment.
    Thank you for the opportunity to provide a State perspective on the 
integrated management of our water resources. Board staff stands ready 
to assist the Committee as it takes up this important piece of 
legislation.

                               __________

            Ellen Posivach, City Manager, Tarpon Springs, FL

    I am Ellen Posivach, the City Manager of Tarpon Springs, Florida. 
Thank you for allowing me to provide testimony on this very important 
topic.
    Tarpon Springs is located along the west coast of Florida within 
the Tampa Bay Region. The Tampa Bay Region along the west coast of the 
State of Florida is home to nearly 3 million residents. In addition, 
approximately 5 million tourists visit the area annually to enjoy the 
gulf coast area. The Tampa Bay region is growing rapidly, which places 
a stress upon our natural resources, particularly our water supply.
    Inland freshwater wellfields have provided the historical water 
supply for the region. Over time, the concentrated pumping from these 
freshwater wellfields has produced measurable environmental damage, 
including dried up lakes and wetlands. In response to this problem, the 
regional water management district, the Southwest Florida Water 
Management District (SWFWMD), has placed limits on the withdrawals from 
11 overstressed regional facilities.
    The Tampa Bay region now uses an average of 247 million gallons of 
drinking water every day (mgd). Of this, our regional water supplier 
Tampa Bay Water supplies 158 mgd to its members, all of this from 
groundwater. As part of the regulatory limits, fresh groundwater 
pumping is required to be cut to 121 mgd by 2003 and 90 mgd by 2008. 
The only way we can do this is by developing an alternative system of 
water supply that is dispersed and separated from current areas of 
withdrawal.
    Current water and sewer rates in the Tampa Bay Region are as high 
as twice the national average for a typical single-family household 
usage of 7,000 gallons per month.
    The city of Tarpon Springs has developed an Alternative Water 
Supply Plan based on the study of available water resources with a 
cost-effective approach to achieve a sustainable quality water supply. 
A key component of this plan is the utilization of state-of-the-art 
membrane treatment to convert unusable brackish groundwater to drinking 
water. Through a number of dispersed, moderate capacity wells located 
near the gulf coast, needed water supply can be produced locally in a 
sustainable fashion while enhancing the recovery of previously 
overpumped inland wellfields.
    The initial proposed water supply facility will produce 5.0 mgd of 
finished water with the capability of future expansion. The City has 
completed a preliminary cost estimating, site review, and discussions 
with the public for the proposed project. The public has provided 
positive input on the need to develop alternatives to freshwater 
pumping. The preliminary cost estimate for the complete 5.0 mgd project 
is $37 million.
    As the next step, the City is reviewing a test well program to 
confirm the suitability of groundwater in this area. The completion of 
the facility would supply sufficient water for the City's needs, and 
additional water available for other water suppliers in the region. 
This project is anticipated to accommodate future capacity expansion of 
at least 3.0 mgd to further meet the needs of the region.
    The proposed Alternative Water Supply Plan will allow previously 
over-pumped areas to recover so that the environment can be sustained 
and protected.
    Alternative Water Supply projects like this are consistent with the 
U.S. Army Corps of Engineers (USACE) ``Environmental Operating 
Principals'' which include striving to achieve environmental 
sustainability, seeking a balance and synergy among human development 
and natural systems through the design of economic and environmental 
solutions, and finding win-win solutions to the nation's problems that 
also protect and enhance the environment.
    We believe alternative water supply projects such as this can only 
be achieved with the combined efforts of Federal agencies, state and 
local governments, and the private sector. We have initiated partnering 
with each of these groups and we ask for your support in allowing 
Federal programs of this type to remain sufficiently funded. By working 
together to develop sustainable regional water supply sources, we can 
protect our environment today and for future generations. We look 
forward to working with the USACE in seeing this initiative to success.
    Further technical information is available from the following of 
the city of Tarpon Springs: Paul Smith, Public Services Administrator 
(727) 942-5610; City Manager Ellen Posivach (727) 938-3711.
    Further policy related information is available from the following 
of the city of Tarpon Springs: Mayor Beverley Billiris (727) 938-3711.
    On behalf of the citizens of Tarpon Springs, Florida, and millions 
of Florida west coast residents who must rely on the area's surface and 
groundwaters, we ask the Committee to consider this testimony in 
prioritizing authorizations for additional USACF projects to assist in 
developing alternative water supplies in areas of great need. These 
project authorizations will allow projects to he completed for 
environmentally sustainable supply while maintaining affordability for 
our citizens.

                               __________

     Statement of the National Association of Flood and Stormwater 
                          Management Agencies

    The National Association of Flood and Stormwater Management 
Agencies (NAFSMA), which represents more than 100 local and state flood 
control and stormwater management agencies serving a total of more than 
76 million citizens, is pleased to submit comments addressing the need 
for a Water Resources Development Act of 2004. NAFSMA supports language 
in WRDA 2004 to expand U.S. Army Corps of Engineers technical 
assistance to State and local agencies for local water planning. The 
association also supports the authorization of adequate funding to 
carry out this activity.
    NAFSMA also supports the policy changes approved by the House of 
Representatives in Title II of the House-approved WRDA bill, H.R. 2557. 
In particular, NAFSMA urges the Senate to include similar provisions in 
the Senate bill to move the establishment of a new partnership 
agreement with local sponsors and provisions to allow the District 
Engineer to sign those agreements with local sponsors.
    NAFSMA's members are public agencies whose function is the 
protection of lives, property and economic activity from the adverse 
impacts of storm and flood waters. NAFSMA member activities are also 
focused on the improvement of the health and quality of our nation's 
waters.
    The mission of the association is to advocate public policy, 
encourage technologies and conduct education programs to facilitate and 
enhance the achievement of the public service functions of its members. 
Many of NAFSMA's members are currently involved in ongoing water 
resources projects with the Corps of Engineers, including flood 
management and environmental restoration projects.
    Since the organization was formed in 1979, NAFSMA has worked 
closely with the U.S. Army Corps of Engineers and other Federal 
agencies, including the U.S. Environmental Protection Agency and the 
Federal Emergency Management Agency. Many of our members are local 
sponsors on Corps-partnered flood control and environmental restoration 
projects with the Corps.
    NAFSMA members are on the front line protecting their communities 
from loss of life and property and therefore the organization is keenly 
aware that flood management measures are a necessary investment 
required to prevent loss of life and damages to people's homes and 
businesses. Flood management has proven to be a wise investment that 
pays for itself by preserving life and property and reducing the 
probability of repeatedly asking the Federal Government for disaster 
assistance. The Corps of Engineers has played a vital and necessary 
role in meeting the nation's flood management needs.
    We appreciate your efforts to adopt a WRDA this year and offer our 
assistance in your work to achieve this goal. Please call Executive 
Director Susan Gilson at 202-218-4133 if you have questions.

                               __________

          Statement of the Interstate Council on Water Policy

    The Interstate Council on Water Policy (ICWP), a national 
organization representing state, interstate and regional water 
resources management agencies, appreciates the opportunity to submit 
this statement for inclusion in the record of the March hearing on the 
U.S. Army Corps of Engineers Role in the Nation's Water Resource Needs 
in the 21s Century.
    ICWP in particular, would like to address its comments to the need 
for a Water Resources Development Act of 2004. We appreciate the 
committee's efforts to move a WRDA bill this congressional session and 
support the inclusion of language in this legislation to expand U.S. 
Army Corps of Engineers technical assistance to State, interstate and 
local water resource management agencies for local water planning. ICWP 
also supports the authorization of adequate funding to carry out this 
activity.

                  INCREASED STATE PLANNING ASSISTANCE

    ICWP encourages an increase in planning assistance provided to 
states under Section 22 of Public Law 93-251 (42 U.S.C. 1962d-16).

  SUPPORT FOR REGIONAL ENVIRONMENTAL RESTORATION APPROACHES/SEDIMENT 
                               MANAGEMENT

    ICWP feels the Corps' capabilities are critical to the area of 
environmental restoration dealing with sediment management. ICWP urges 
the Corps to work with non-Federal sponsors to address regional 
sediment issues.

                  DEVELOPMENT OF PARTNERSHIP AGREEMENT

    ICWP also supports legislative efforts to develop a new partnership 
agreement for flood control projects that reflects the Federal 
partnership with local sponsors in carrying out these critical 
activities. ICWP also supports moving approval and signing of this 
agreement to the District level.

                   CLARIFICATION OF MODEL AGREEMENTS

    Some states have expressed concerns about the lack of uniformity 
and flexibility involving model feasibility, project cost share and 
planning assistance to the states agreements, primarily related to 
state anti-deficiency constitution and laws that prevent state or local 
governments from unconditionally committing future funds. Federal law 
relating to such model agreements should be amended to clarify that 
model agreements developed by the Secretary shall contain provisions to 
recognize limitations imposed by States' anti-deficiency laws.
    We appreciate your efforts to adopt a WRDA this year and offer our 
assistance in your work to achieve this goal. Please feel free to have 
your staff call ICWP Executive Director Susan Gilson at 202-218-4133 if 
you have any questions. As an organization with members who partner 
with the Corps in various capacities, we very much appreciate this 
commitment. Since 1986, Congress has worked hard to keep with this 2-
year renewal process and we as sponsors applaud this effort.

                               __________

     Statement of American Shore and Beach Preservation Association

    Mr. Chairman and Members of the Subcommittee, the American Shore 
and Beach Preservation Association strongly supports passage of a Water 
Resources Development Act in 2004. We are deeply concerned that the 
totality of America's water infrastructure is in serious, if not 
critical, disrepair. While this cannot be solved with the passage of 
this WRDA bill--or even a single year's infusion of massive amounts of 
funding--the passage of WRDA 2004 sends a signal to all concerned that 
Congress places a high priority on America's water resources 
infrastructure.

             SUPPORT THE FEDERAL BEACH NOURISHMENT PROGRAM

    For the past several years, the White House Office of Management 
and Budget has produced an annual attack on the Federal Beach 
Nourishment Program. This year's attack is far more serious than any of 
its predecessors. Within the context of the President's Budget 
Recommendations for Fiscal 2005, OMB is attempting to overturn clear 
policies set by Congress. OMB has made a ``determination'' that the 
periodic renourishment of beaches is a ``maintenance'' function despite 
the fact that every single beach nourishment project authorized by 
Congress in WRDA bills enacted into law over the past four decades has 
stated quite specifically that periodic renourishment is an integral 
part of the authorized construction project. OMB has made a 
``determination'' that budgeting for periodic renourishment will not be 
supported despite the fact that Congress has said otherwise as recently 
as WRDA 1996 (Section 227). OMB has made a ``determination'' that the 
ongoing portions of environmental restoration projects will no longer 
be supported despite policy to the contrary set by Congress in WRDA 
1992 and WRDA 1996. Equally objectionable is OMB's ``determination'' 
that the funding of ongoing projects to mitigate for shoreline damage 
caused by navigation projects will no longer be supported. Their 
position ignores the clear meaning of Section 111 of WRDA 1986.
    We urge this Subcommittee to send a clear message to the White 
House Office of Management and Budget that its efforts to undermine the 
Federal Beach Nourishment Program are rejected categorically. That can 
be done by adopting WRDA bill language reaffirming and strengthening 
that program. ASBPA recommends the inclusion of the language contained 
in S. 2105, the Coastal Restoration Act, to accomplish that objective. 
We also have attached to this statement language to strengthen the 
mitigation responsibilities of the Federal Government for damages 
caused to shorelines by federally-maintained channels. Taken together, 
these two legislative provisions will demonstrate to coastal 
communities, Employees of the Corps of Engineers, and--most of all--the 
Administration that Congress is not wavering in its support for the 
Federal Beach Nourishment Program.
    Mr. Chairman, it is impossible for coastal communities to feel that 
they have a reliable partnership with the Federal Government when, 
despite the fact that they have a project authorization from Congress 
that includes Federal cost-share participation in periodic 
renourishment for a period of up to 50 years, and despite the fact that 
they have signed contracts (Project Cooperation Agreements) with the 
Federal Government that also include commitments for periodic 
renourishment, they nevertheless get letters on government stationery 
from the Assistant Secretary of the Army telling them that the 
Administration will not honor those agreements. Dozens of local and 
state government officials have made fiscal plans to meet their share 
of those commitments, only to be told that the Administration has 
``determined'' it will renege on those commitments--not just this 
coming fiscal year but forever more.
    We urge this Subcommittee to continue congressional support for a 
program that produces at a minimum $2.50 in benefits for every tax 
dollar spent.

      EXTEND AND MODIFY THE ``SECTION 227'' SHORELINE TECHNOLOGY 
                         DEMONSTRATION PROGRAM

    ASBPA urges this Subcommittee to include in WRDA 2004 bill language 
which extends the authorization of the program established in Section 
227 of WRDA 1996 to test new technologies that offer the hope of 
restoring shorelines in ways that may be cheaper and more effective. 
Due to funding constraints, this program got a late start. However, it 
is well underway and deserves to be extended. We also recommend 
language that will enable the Federal Government to pay for at least a 
portion of the cost of removing technology that has not proven to be 
effective. Having paid for its installation, the Federal Government and 
not local governments should pay for any demonstration projects that 
may fail. Adding this provision will remove an obstacle to getting 
local governments to participate in the Section 227 program.

         AUTHORIZE A CORPS REGIONAL SEDIMENT MANAGEMENT PROGRAM

    Regional sediment management is a concept that involves a holistic 
approach to coastal water resources planning and project formulation. 
Constructing a beach project in one county affects the shoreline of the 
next county to the south. Deepening a port channel can affect nearby 
shores. Sand that is dredged from a channel can be placed offshore or 
it can be kept within the sand system by placing onshore or nearshore. 
Sand that is taken from a channel can be used to create new coastal 
wildlife habitat. These are but a few of the examples of what can be 
done if the Corps of Engineers is given authority to plan ongoing 
projects that take account of all the essential resource components of 
the region. The use of regional sediment management (or RSM) is good 
for the environment and for water infrastructure. It also will save 
taxpayer dollars at the Federal, State, and local levels through the 
combined planning of projects that are currently most likely to be 
planned and constructed individually.ASBPA supports the RSM 
programmatic language requested by Senator Hillary Rodham Clinton.

                INCREASE THE SECTION 103 PROGRAM LIMITS

    The Section 103 program is a Continuing Authorities Program that 
enables small shoreline protection projects to be constructed. However, 
the $3 million statutory project limit does not permit the program to 
be used to place sand on beaches where periodic renourishment is 
required. At this out-dated dollar limit, the program is more useful 
for constructing seawalls and other hard structures. We urge this 
Subcommittee to raise the Section 103 per-project limit to at least $20 
million and to make a similar adjustment to the total annual amount 
authorized for the program.

   GIVE THE ECONOMIC BENEFITS OF RECREATION THE SAME WEIGHT AS STORM 
                       DAMAGE REDUCTION BENEFITS

    Beach projects provide significant storm damage reduction benefits. 
For homes near the coast, the best protection against wave surges is a 
healthy beach with a sound dune structure. However, the statutory 
language authorizing the Federal beach nourishment program provides two 
purposes for that program (33. U.S.C. 426(e)): First, to prevent 
erosion; Second, to promote public recreation. Beginning with WRDA 
1986, however, a change was instituted which downgraded the importance 
that Congress had attached to the recreational benefits of beach 
nourishment projects. Prior to 1986, the Federal Government could 
participate in beach projects whose primary benefit was to promote 
public recreation. That is no longer the case.
    Beaches nourished with Federal financial participation must be 
fully accessible to the public. The history of the Federal program is 
replete with examples of the Corps of Engineers enforcing its 
requirements to provide adequate public access and parking spaces. 
Public access means public use and public use means economic benefits, 
not only for the local region but for the state and nation, as well. 
People spend money on food, lodging and other items. That spending 
creates jobs with taxable incomes and supports businesses with taxable 
profits. Two-thirds of those tax benefits go to the Federal Treasury. 
Yet, the Corps does not count these economic development benefits. They 
do give some weight to their definition of recreation benefits. This is 
often expressed through the Unit Day Value method of recreational 
benefit calculation. How much would an individual value his or her 
beach experience for a day? And how many visits are made by people over 
a beach season? Those benefits--which we contend are not a sufficient 
measure of the recreational value of beaches--currently cannot exceed 
more than 50 percent of the total benefits of a proposed beach project.
    We urge this Subcommittee to adopt language in WRDA 2004 similar to 
that proposed by Senator Inouye (S. 1653) to require that the economic 
benefits of beach recreation be given equal weight with storm damage 
and environmental restoration in determining the national (NED 
benefits) of beach projects.

         STRENGTHEN AND MODIFY SECTION 111 MITIGATION AUTHORITY

    Section 111 of WRDA 1986 provided authority for the Corps to 
investigate, plan and implement measures that would mitigate for shore 
damages caused by Federal navigation projects. The Administration has 
``determined'' that it will not budget for any ongoing components of a 
mitigation project. I have attached to this statement proposed language 
with clarifies that ongoing work is an integral part of Section 111 
projects, where the Corps determines that such work is appropriate, and 
which makes other clarifying changes in that provision of law.
    Mr. Chairman, we appreciate the support both the Subcommittee and 
the full Committee have given to America's water resources needs. We 
also appreciate the attention you have given to the process by which 
those needs are met. We hope that you will adopt the suggestions we 
have made as part of your WRDA 2004 bill and offer to work with you in 
any way that will help to get that bill enacted into law this year.

                                 ______
                                 
ATTACHMENT A

                  The Coastal Restoration Act--S. 2105

    Since 1995, the Federal beach nourishment program has been a 
regular target of the White House Office of Management and Budget. 
Under two different administrations, one Democrat and the other 
Republican, there have been at least five efforts to radically change 
or terminate the program.
    In 1996, Congress passed the Shore Protection Act as Section 227 of 
the Water Resources Development Act of 1996. That legislation was the 
first statement by Congress since 1946 of its intent that there be an 
ongoing Federal beach nourishment program. Unfortunately, that has not 
stopped OMB from trying to changing Federal policies by making budget 
proposals that would cripple the program.
    The Coastal Restoration Act raises the stakes for OMB. It restates 
the congressional intent regarding the vitality of the Federal beach 
nourishment program. However, it goes far beyond. The CRA makes it 
clear that changes in administration policy will not prevent 
feasibility and other types of studies from being processed through the 
Corps and sent to Congress. The legislation emphasizes the role of 
Congress in determining which beach nourishment projects should be 
authorized for constructed. It also re-states and strengthens existing 
law that periodic renourishment is an integral part of the ongoing 
construction of a beach nourishment project.

                       SECTION-BY-SECTION SUMMARY

    Declaration of Policy: This section makes it clear that what is 
commonly referred to as the Federal beach nourishment program includes 
the restoration of beaches which may have been damaged by erosion or 
other factors. It states that Congress recognizes the need to restore 
eroded beaches and maintain them. The phrase ``or other coastal 
infrastructure'' is added to emphasize that, under current law, studies 
and projects can encompass wetlands, estuaries, and other features of 
the coast. In carrying out the program, Congress states its intent that 
preference be given to areas (1) where there has been a previous 
investment of Federal funds, such as the initial construction of a 
beach nourishment project; (2) where regional sediment management plans 
have been adopted to integrate coastal beach nourishment, navigation, 
and environmental projects; (3) where there is a need to prevent or 
mitigate damage to shores, beaches, and other coastal infrastructure 
where that damage is caused at least in part by Federal navigation 
projects or other Federal activities; or (4) where the project promotes 
human health and safety as well as the quality of life for individuals 
and families. This last preference recognizes that a primary purpose 
for establishing the Federal beach nourishment program in 1946 was the 
promotion of public recreation.
    Federal Contribution; maximum amount; exceptions: The Federal cost-
share for the construction of beach projects is shared with non-Federal 
interests. The amount of that cost-share is governed by provisions of 
the Water Resources Development Act of 1986, as amended. In general, 
that cost-share is 65 percent Federal/35 percent non-Federal for the 
initial construction of beach projects. Depending upon the year the 
project was authorized, the periodic renourishment cost-share is either 
65/35 or 50/50. The provision changes the cost-sharing for separable 
costs for recreation purposes to make that costsharing consistent with 
the cost sharing for other beach nourishment purposes and assures that 
all national benefits will be considered equally in formulating and 
recommending a Federal project. Currently, when Federal funds are spent 
for recreation purposes the costsharing is 50/50. In addition, 
recreational benefits are considered incidental and are given less 
weight in identifying the Federal project than storm damage reduction 
and environmental restoration benefits. This paragraph changes the 
lower priority accorded to recreational benefits (which are also 
national economic development benefits) by giving equal consideration 
to all national project purposes without regard to budgetary policy or 
priority. It also establishes the cost share for beach nourishment 
projects whose primary net benefit is recreational at the same level of 
Federal cost share participation as applies to storm damage and 
environmental restoration beach nourishment projects, The Secretary of 
the Army is required to identify the project that maximizes net 
benefits for all national benefit purposes and report the findings to 
Congress. The Secretary is also required to report the findings of 
studies as they pertain to all such benefits so that Congress has the 
prerogative to authorize the project and appropriate funds based on the 
Corps' report findings.
    Periodic beach nourishment; ``construction'' defined: The provision 
increases the emphasis of current law that the periodic renourishment 
of beach projects shall be part of the ongoing construction of those 
projects as authorized by Congress.
    Authorization of projects: In order for the Federal Government to 
participate in the construction of a beach nourishment project, it must 
be authorized by Congress. Such authorization must be preceded by 
studies to determine whether there is a Federal interest in 
participating in the project, a willing non-Federal cost share partner, 
and a project that meets the Corps' economic, engineering, and 
environmental standards. The provision requires the Secretary of the 
Army to report the results of all studies that have been requested by 
Congress to the appropriate committees of Congress and to recommend to 
Congress the authorization of projects that have been approved by the 
Chief of Engineers. Should the Chief not approve a project, the 
Secretary is nevertheless required to report to Congress the results of 
any potential project that was studied by the Corps.
    Coordination of projects: The Secretary is required to coordinate 
all water resource projects conducted by the Corps which may affect an 
individual beach nourishment project, as well as to coordinate the 
efforts of other Federal agencies which may have an impact on a beach 
nourishment project. This provision is intended to ensure that projects 
which have an impact on each other are coordinated.
    Beach nourishment projects: This provision requires the Secretary 
of the Army to construct any beach nourishment project for which funds 
have been appropriated by Congress. Prior to construction, the 
Secretary will enter into a written agreement with the non-Federal 
sponsor which states the obligations of the Federal and non-Federal 
interests for a term that covers the period for that project that has 
been authorized by Congress. The intent of this provision is to 
emphasize current law that the Federal Government and its non-Federal 
partner make binding commitments to each other, subject to the 
availability of funding.
    Extension of the Period of Federal Participation: The provision 
also enables the period for Federal participation to be extended if a 
new study shows the project remains justified and if the extension is 
authorized by Congress.
    Special Considerations: Construction of beach nourishment projects 
cannot be done when to do so would endanger a variety of species. In 
some instances the date of the approval for funding for a Federal 
fiscal year and the environmental ``windows'' for beach nourishment 
projects are in conflict with each other. For example, in years when 
Corps Districts do not get their allocations of funds until late 
January or thereafter, it may well be impossible to prepare a project 
for construction and to complete that construction within the 
environmental window. Therefore, this provision permits funds to be 
carried over into the following fiscal year. Current policy generally 
prohibits the carry over of appropriated funds from 1 year to another.
                                 ______
                                 
ATTACHMENT B

          National Shoreline Erosion Control Development and 
                         Demonstration Program

    (a) EXTENSION OF PROGRAM.--Section 5(a) of the Act entitled ``An 
Act authorizing Federal participation in the cost of protecting the 
shores of publicly owned property'', approved August 13, 1946 (33 
U.S.C. 426h(a)), is amended by striking ``6 years'' and inserting `` 10 
years''.
    (b) EXTENSION OF PLANNING, DESIGN, AND CONSTRUCTION PHASE.--Section 
5(b)(1)(A) of such Act (33 U.S.C. 426h(b)(1)(A)) is amended by striking 
``3 years' 'and inserting ``6 years''.
    (c) COST-SHARING; REMOVAL OF PROJECTS.--Section 5(b) of such Act 
(33 U.S.C. 426h(b)) is amended----
    (1) by redesignating paragraphs (3) and (4) as paragraphs (5) and 
(6), respectively; and (2) by inserting after paragraph (2) the 
following:
    ``(3) COST SHARING.--The Secretary may enter into a cost-sharing 
agreement with a non-Federal interest to carry out a project, or a 
phase of a project, under the erosion control program in cooperation 
with the non-Federal interest.
    ``(4) REMOVAL OF PROJECTS.--The Secretary may pay all or a portion 
of the costs of removing a project, or an element of a project, 
constructed under the erosion control program if the Secretary 
determines during the term of the program that the project or element 
is detrimental to the environment, private property, or public 
safety.''. (d) AUTHORIZATION OF APPROPRIATIONS.--Section 5(e)(2) of 
such Act (33 U.S.C. 426h(e)(2)) is amended by striking ``$21,000,000'' 
and inserting ``$31,000,000''.
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ATTACHMENT C-1
                 Regional Sediment Management Proposal
    SEC.----. REGIONAL PROGRAMS TO CONSERVE BEACH QUALITY SAND AND SAVE 
TAXPAYER DOLLARS.
    (a) In General.--Section 204 of the Water Resources Development Act 
of 1992 (33 U.S.C. 2326) is amended by striking subsections (c) through 
(g) and inserting the following:
    ``(c) Regional Sediment Management Planning.--In consultation and 
cooperation with appropriate regional, State and Federal agencies, the 
Secretary, acting through the Chief of Engineers, shall investigate and 
develop, at Federal expense, plans and demonstration projects for 
regional management of sediment in conjunction with the construction, 
operation, or maintenance of navigation, flood control, recreation, 
environmental protection and restoration, and hurricane and storm 
damage reduction projects, as well as projects for water and power 
infrastructure which impede the flow of sand.
    ``(d) Regional Sediment Placement.--The Secretary, acting through 
the Chief of Engineers, shall carry out projects to transport and place 
sediment obtained in connection with the construction, operation, or 
maintenance of an authorized navigation, flood control, recreation, 
environmental protection and restoration, and hurricane and storm 
damage reduction projects, as well as projects for water and power 
infrastructure which impede the flow of sand.
    ``(e) Cooperative Agreement.--Any project undertaken pursuant to 
subsection (d) shall be initiated only after non-Federal interests have 
entered into a cost-sharing agreement with the Secretary in which the 
non-Federal interests agree to pay up to 35 percent of the incremental 
costs of such project.
    ``(f) Determination of Incremental Costs.--Incremental costs 
associated with implementation of a project under subsection (d) shall 
be limited solely to the costs that are in excess of the costs 
necessary to dispose of sediments for construction, operation, or 
maintenance of the authorized navigation or flood control project under 
the least cost option, consistent with economic, engineering, and 
environmental criteria.
    ``(g) Effect on Other Projects.--The Secretary, to the greatest 
extent practicable, shall ensure that scheduled operations and 
maintenance of Federal navigation projects will not be delayed due to 
alternative disposal options authorized by subsection (d).
    ``(h) State and Regional Plans.--The Secretary may----
    ``(1) cooperate with any State in the preparation of a 
comprehensive State or regional coastal sediment management plan within 
the boundaries of the State;
    ``(2) encourage State participation in the implementation of the 
plan; and
    ``(3) submit to Congress reports and recommendations with respect 
to appropriate Federal participation in carrying out the plan.''.
    `` (i) Coordination of Projects.--In conducting studies and 
carrying out projects for regional sediment management, the Secretary 
shall----
    ``(1) determine whether there is any other project being carried 
out by the Secretary or the head of another Federal agency that may 
affect the regional sediment management project; and
    ``(2) if there is such a project, describe the efforts that will be 
made to coordinate the projects.
    ``(j) Authorization of Appropriations.--There is authorized to be 
appropriated to carry out this section $35,000,000 annually. Such sums 
shall remain available until expended.
    ``(k) Nonprofit Entities.--Notwithstanding section 221 of the Flood 
Control Act of 1970 (42 U.S.C. 24 1962d-5b), for any project carried 
out under this section, a non-Federal interest may include a nonprofit 
entity, with the consent of the affected local government.''.
    (b) Repeal.----
    (1) In general.--Section 145 of the Water Resources Development Act 
of 1976 (33 U.S.C. 21 426j) is repealed.
    (2) Hold harmless.--The repeal made by paragraph (1) shall not 
affect the authority of the Secretary to complete any project being 
carried out under such section 145 on the day before the date of 
enactment of this Act.

[A Section-by-Section Comparison with a Similar provision in the House 
passed version of WRDA is available by email 
ASBPA.Monitor(@netlobby.com]
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ATTACHMENT C-2

       The Sand Conservation and Taxpayer Savings Act--Fact Sheet
         a regional program to conserve beach quality sand and 
                         save taxpayer dollars

    No initiative has received more attention within the Army Corps 
over the last 5 years than taking a new, holistic approach to planning 
and implementing water projects. Regional planning, regional sediment 
management, or watershed management are phrases designed to reflect an 
integrated approach to water resources planning. That planning approach 
reflects the integrated relationship of the resources themselves. The 
dredging of a channel, for example, inevitably has an impact on the 
shoreline adjacent to that channel. The Army Corps of Engineers has 
released a report (Watershed Perspectives for the Civil Works Program) 
that emphasizes coordinated planning and management of water resources. 
Currently, there is no statutory authority that offers sufficient 
congressional direction for the Corps to engage ongoing regional 
sediment planning and programs.
    This proposal modifies Section 204 of the Water Resources 
Development Act. Its language takes a critical first step toward the 
planning and implementation of water resource projects on a regional 
basis. Currently, Section 204 provides authority for the beneficial use 
of sand for the protection, restoration, or creation of aquatic and 
ecologically related habitats. The language of this proposal expands 
that authority to include projects to place beach quality sand obtained 
from navigation or flood control projects on beaches or in nearshore 
disposal areas. The disposal areas must be selected by a local sponsor 
and must be for the purpose of maintaining shoreline (i.e., preventing 
erosion), or providing for recreation, storm damage reduction, or 
environmental protection and remediation. This authority is intended to 
be broader than the current policy limitations that apply to the 
justification of ``shore protection'' projects. Thus, for example, 
sufficient justification for meeting the requisite benefit-cost ration 
of at least 1:1 can be derived from a project where the placement of 
sand provides more recreation benefits than storm damage reduction 
benefits.
    Plans for regional sediment management under this proposal are to 
be developed at Federal expense. The implementation of any project 
developed from those plans is under a 35 percent cost-share requirement 
for the non-Federal sponsor. The congressional appropriations 
committees have funded the existing Section 204 program through the 
Corps' Construction, General Account. Nothing in this language is 
intended to alter this funding account.
    Language has been provided to assure that the initiation or 
implementation of a regional sediment management plan under Section 204 
will not interfere with the operation or maintenance of existing 
Federal navigation projects. Thus, if Port A is scheduled to be dredged 
in fiscal year 2005 and the planning or funding for a regional project 
intended to be carried out in connection with the dredging project is 
delayed for any reason, the dredging project for Port A will not be 
delayed even if it means that the implementation of the regional 
sediment management project is put off until the next dredging of Port 
A.
    This proposal also repeals Section 145 of the Water Resources 
Development Act of 1976, which provides authority for what is popularly 
known as the Section 933 program. Section 933 programs are a form of 
regional sediment management which has limitations that are not 
contained in this new program. The primary limitation of Section 933 
programs is that they are one-time projects and not ongoing regional 
sediment management programs.
                                 ______
                                 
ATTACHMENT D

            Increase the Section 103 Project/Program Limits

    SECTION----. SMALL SHORE AND BEACH RESTORATION AND PROTECTION 
PROJECTS.
    Section 3 of the Act of August 13, 1946 (33 U.S.C. 426g), is 
amended----
    (1) by striking ``$30,000,000'' and inserting ``$100,000,000''; and
    (2) by striking ``$3,000,000'' and inserting ``$20,000,000''.
                               fact sheet
    Section 103 of the Continuing Authorities Program was adopted by 
Congress under the River and Harbor Act of 1962. The purpose of this 
authority is to allow for the construction of small storm damage 
protection projects at the discretion of the Chief of Engineers, U.S. 
Army Corps of Engineers. Currently, the statutory Federal cost 
limitation per project is $3,000,000. Unfortunately, the limit set by 
Congress under this authority no longer realistically reflects current 
cost requirements for implementation of the full array of possible 
small projects for beach restoration and shoreline protection. As a 
result, the Corps of Engineers when undertaking small shore protection 
studies under the Section 103 authority typically defaults to 
recommending hard structures to solve shoreline erosion problems as 
small beach fill projects with periodic renourishment typically exceeds 
the congressionally established $3,000,000 Federal funding limit per 
project.
    Over the past several years, particularly in the state of 
California, the legislative and regulatory climates have vigorously 
migrated to minimize the hardening of our shorelines. For the Corps of 
Engineers to be consistent with this new climate under the Section 103 
program, the Chief of Engineers needs to seriously consider beach fill 
alternatives for small shoreline protection projects. Serious 
consideration of beach fill plans by the Corps of Engineers for solving 
shoreline erosion problems will only occur if the per project Section 
103 cost ceiling is congressionally modified.
    The proposed legislation raises the Section 103 statutory Federal 
cost limitation per project from $3,000,000 to $20,000,000.
    The proposed legislation also modifies the Section 103 total annual 
program from $30,000,000 to $100,000,000, to account for the proposed 
increase of the Section 103 project cost limit.
    Both increases are justifiable in terms of the need to promote sand 
nourishment as a tool for use in small shoreline protection projects.
                                 ______
                                 
ATTACHMENT E

      S. 1653: National Beach Recreation and Economic Benefits Act

                        SECTION 1. SHORT TITLE.

    This Act may be cited as the ``National Beach Recreation and 
Economic Benefits Act''.
    SEC. 2. GOALS TO BE ADDRESSED IN PLANNING OF WATER RESOURCE 
PROJECTS.
    Section 904 of the Water Resources Development Act of 1986 (33 
U.S.C. 2281) is amended to read as follows:
    ``SEC. 904. GOALS TO BE ADDRESSED IN PLANNING OF WATER RESOURCE 
PROJECTS.
    ``(a) IN GENERAL.--Each of the goals of enhancing national economic 
development, the quality of the total environment, the well-being of 
the people of the United States, the prevention of loss of life, and 
the preservation of cultural and historical values shall be addressed 
in the formulation and evaluation of water resources projects to be 
carried out by the Secretary.
    ``(b) DISPLAY OF ASSOCIATED BENEFITS AND COSTS.--The quantifiable 
and unquantifiable costs and benefits associated with the goals 
relating to water resources projects described in subsection (a) shall 
be displayed in any analysis of the costs and benefits of those 14 
projects.''.
    SEC. 3. GIVING RECREATIONAL BENEFITS THE SAME STATUS AS OTHER BEACH 
RESTORATION BENEFITS.
    Subsection (e)(2)(B) of the first section of the Act of August 13, 
1946 (33 U.S.C. 426e(e)(2)(B)), is amended by striking clause (ii) and 
inserting the following:
    ``(ii) CONSIDERATIONS; PROCEDURES.--In making recommendations 
relating to shore protection projects under clause (i), the Secretary 
shall'' (I) consider the economic and ecological benefits of the shore 
protection projects; and
    ``(II) develop and implement procedures for the determination of 
national economic benefits that treat benefits provided for recreation, 
hurricane and storm damage reduction, and environmental restoration 
equally.''
                                 ______
                                 
ATTACHMENT F

             Proposed Modification of Section 111 Authority

    Section 111 of the River and Harbor Act of 1968 (82 Stat. 735, 33 
U.S.C. 426i) is amended to read as follows:
    ``Sec. 111. The Secretary of the Army is authorized to investigate, 
study,
    plan, and implement structural and nonstructural measures for the 
prevention or mitigation of shore damages attributable to Federal 
navigation works and shore damage attributable to the AIWW and GIWW, if 
a non-Federal public body agrees to operate and maintain such measures, 
and, in the case of interests in real property acquired in conjunction 
with nonstructural measures, including sand nourishment and periodic 
renourishment, to operate and maintain the property for public purposes 
in accordance with regulations prescribed by the Secretary. The costs 
of implementing measures under this section shall be cost shared in the 
same proportion as the cost sharing provisions applicable to the 
project causing the shore damage. No such project shall be initiated 
without specific authorization by Congress if the Federal first cost 
exceeds $5,000,000.''.
  

                                  
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