[Senate Hearing 110-]
[From the U.S. Government Publishing Office]



 
     DEPARTMENT OF THE INTERIOR, ENVIRONMENT, AND RELATED AGENCIES 
                  APPROPRIATIONS FOR FISCAL YEAR 2008

                              ----------                              


                        TUESDAY, MARCH 20, 2007

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.
    The subcommittee met at 10:03 a.m., in room SD-124, Dirksen 
Senate Office Building. Hon. Dianne Feinstein (chairman) 
presiding.
    Present: Senators Feinstein, Reed, Nelson, Cochran, 
Domenici, Bennett, Craig, Allard, and Alexander.

                       DEPARTMENT OF THE INTERIOR

                        Office of the Secretary

STATEMENT OF HON. DIRK KEMPTHORNE, SECRETARY

             OPENING STATEMENT OF SENATOR DIANNE FEINSTEIN

    Senator Feinstein. Good morning, ladies and gentlemen.
    Let me begin by welcoming our former colleague, Dirk 
Kempthorne, Mr. Secretary, welcome. We're pleased to have you 
with us, and we look forward to hearing your perspective on the 
2008 budget request.
    I also want to welcome Tom Weimer, the Assistant Secretary 
for Policy, Management, and Budget, and Pam Haze, the Director 
of the Department's Budget Office. We very much appreciate your 
being here as well.
    Mr. Secretary, in the 10 months that you've been at the 
Department of the Interior, I suspect you've come to appreciate 
that you have one of the most diverse and difficult jobs in 
Washington.
    The Interior Department and its 73,000 employees, are 
responsible for managing--among other things--more than 500 
million acres of land, operating 390 National Parks, 547 
National Wildlife Refuges, and providing educational 
opportunities to 46,000 Native American children through 184 
Bureau of Indian Affairs schools. As my granddaughter might 
say--that's a lot of stuff.
    Obviously, the centerpiece of the Department's 2008 budget 
is the National Parks Centennial Initiative. The discretionary 
side of this proposal would provide an additional $219 million 
for base operations at our National Parks. I know that 
additional rangers, guides, and maintenance workers funded 
through this initiative will be really, a welcome addition. I'm 
particularly pleased to see that our Western parks will finally 
get the extra attention that they deserve.
    I also want to commend you, Mr. Secretary, for putting a 
halt to the recent practice of not fully funding fixed costs. 
Over the past 6 years, the Department has absorbed more than 
$450 million in fixed costs that were not budgeted for. As you 
know, the fact of the matter is, these costs do not go 
unfunded. Instead, they end up being nothing more than back-
door cuts to programs and services.
    So, I very much applaud your efforts on this front, and I'm 
glad to see that all of the $214 million in fixed costs were 
provided for in your budget.
    Now, unfortunately, the laws of budgeting are a lot like 
the law of nature. For every funding increase in one part of 
the budget, there's going to be a decrease in another. It 
appears that this budget is no exception.
    For example, the land acquisition accounts, for Federal and 
State conservation projects have been cut $58.5 million--that's 
a 58 percent reduction from the current enacted level. The 
construction budgets for the National Park Service, the Fish 
and Wildlife Service, and the Bureau of Land Management have 
been cut $123 million--that's a 35 percent cut, and the 
construction budget for the Bureau of Indian Affairs has been 
cut by $74 million, that's a 27 percent reduction. Most of it 
comes from the K-12 School Construction Program.
    The Payments in Lieu of Taxes program, which both Senator 
Craig and I are very much interested in, known as PILT, has 
been cut by $42.5 million, another 18 percent reduction. The 
Indian Land Consolidation Program, which helps alleviate trust 
management problems caused by fractionated Indian lands has 
been cut by $24 million, or 71 percent.
    I'm concerned, Mr. Secretary, that some of these proposals 
really don't make sense, and I believe some of my colleagues on 
this subcommittee have similar concerns. So, we really look 
forward to hearing from you, and then being able to ask some 
questions.
    Now, let me now turn to my friend from Idaho, the ranking 
member of the committee, Senator Craig, for any opening remarks 
he may wish to make, and then--unless others have statements, 
we'll go directly to the witnesses.
    We have a vote at 11 a.m., and I'm hoping to conclude this 
hearing, if it's agreeable to everybody, by that time.
    Senator Allard. Madam Chairman, I do have a statement, I'd 
just like to make it a part of the record.
    Senator Feinstein. All right.
    Senator Allard. Then----
    Senator Feinstein. Directly following the ranking member.
    Senator Allard. Yeah, that's correct, yeah.
    Senator Feinstein. The order is early bird, so we've got 
that list, thank you.

                OPENING STATEMENT OF SENATOR LARRY CRAIG

    Senator Craig. Well, Madam Chairman, thank you very much, 
for holding this hearing today on the budget for the Department 
of the Interior. It's also an extreme pleasure for me to have 
before us today, Boise's former mayor, one of my Senators, my 
Governor, and now our Secretary of the Interior, Dirk 
Kempthorne. Idaho is extremely proud, Secretary Kempthorne, to 
have you at the helm of the Department of the Interior and to 
be Idaho's second largest landlord. With that comes a local 
responsibility that I hope you won't forget.
    Having delivered that message----
    He wasn't your Governor.
    Senator Feinstein. It might be useful if he were.
    Senator Craig. But having said that, your Department 
administers over 570 million acres of land--that's roughly one-
fifth--of the land area of the United States. It's an extremely 
tough, and oftentimes controversial job, and I know that when 
our President chose you, I felt confident you would be able to 
handle it, and you're handling it very well.
    The total request for the Department is $9.7 billion, which 
is roughly $190 million less, or 2 percent below fiscal year 
2007's enacted level. Much of the decrease, the $130 million, 
is explained by the bulk of the abandoned mine lands programs 
shifted across from discretionary to mandatory--we understand 
that. The most significant aspect of the Interior budget, the 
chairman has already mentioned, the National Park Service 
Centennial Initiative, this proposal would add about $219 
million for operations to our National Parks, that would be the 
single-largest increase ever proposed by any administration.
    Part of the Centennial Initiative relies on authorizing 
legislation that would make available an additional $2 billion 
on a matching basis, over a 10-year period. I think Americans 
given an opportunity to work with our government, and share in 
that responsibility for the sustenance of our parks is going to 
contribute at that level. I think that breaks out at, what, 
$100 million a year to be matched, and that's going to be 
extremely important.
    The chairman has already mentioned PILT--as a former 
Governor working with county commissioners and local 
communities, I think, Mr. Secretary, you know all too well that 
over the last three decades, or more, as Americans have fallen 
in love with their public lands. Often times it's local units 
of government that have to pick up the cost. We see it go on 
day after day as a hiker is lost, or a mountain climber is 
lost--who picks up the bill? In the first instance, it's 
oftentimes, it's either local government, or it could be State 
government, if the National Guard is employed, and all of those 
kinds of resources are used, and to cut PILT doesn't make a lot 
of sense to me.
    Maybe it's OMB's way of looking at budgets and saying--as 
they often do--``Well, let's see, that's a program Congress 
really likes, so we know they'll fund it, so we can cut it.'' 
I've watched that go on year after year, I hope that isn't the 
case here, but it obviously appears to be the case, and that's 
frustrating.
    I also don't support the administration's decisions to 
eliminate the Range Improvement Fund of about $10 million. 
Ranching still remains a vital part of public land resource 
management, both in Idaho, and across the Western Range Lands, 
and I think this cut really shifts to States a responsibility 
that they can't be very good stewards of, simply because of the 
Federal responsibility, and so I think we have to take a look 
at that.
    Finally, we can also see from watching the nightly news 
over the last 2 weeks--the fire season has begun. Last year, a 
record season of 10 million acres of lands burned. That could 
well play out itself again this year. Moisture in our 
watersheds is at 50 to 60 percent of normal. We set a new heat 
record in Boise on Saturday--1 degree above a heat record in 
1952, so you know what's happening in the watersheds of Idaho--
snow is disappearing very, very rapidly, and as a result of 
that, the ability of the Forest Service, the BLM, the National 
Fire Center in Boise, to work cooperatively together will be, I 
suspect, stressed dramatically.
    Last, we've got a little problem that you've--by necessity, 
and I do not criticize it--had to recuse yourself of, and 
that's a little issue of wolves. At minimum count, there are 
now over 700 wolves roaming the hills of Idaho, and probably a 
considerable amount more. Wolves are showing up everywhere--
even in most of our small communities' backyards and 
neighborhoods.
    I have said, and said tragically, maybe we will get really 
excited about this when a life is taken--a human life. The 
wolves are marauding the back country, they're destroying our 
elk and our deer base, they're coming into our neighborhoods 
now, and taking dogs down, and cats--it is a problem that, I 
know, as Governor you started to deal with, I'm sorry that 
Secretary Scarlett is not with us today, I've been her kindest 
and loudest critic-friend on this issue, because this is an 
issue that deserves to be expedited.
    At the same time, I understand that those who love the 
wolves--but don't have to live with them--are probably going to 
sue us and take us through the walk, as we try to de-list the 
wolves for Idaho, and as we work on this issue to bring some 
balance, and allow our State Fish and Game Departments to once 
again, manage the wildlife in the public lands, instead of to 
allow Judges and the Endangered Species Act to do that.
    So, I know you're moving ahead on that, you have a friend 
in that issue, you also will have somebody who will be right 
behind you pushing, to make sure it happens as quickly as it 
possibly can.
    Thanks for being with us, it's great to see you again, Mr. 
Secretary.
    Thank you, Madam Chairman.
    Senator Feinstein. All right, thank you very much, Senator 
Craig. The order is, Senator Alexander, Allard, Cochran and 
Nelson.
    Senator Alexander.
    Senator Alexander. Thank you, Madam.
    Senator Feinstein. If you have a comment, otherwise we'll--
--
    Senator Alexander. No, I'd like to hear the testimony, and 
then I'll come----
    Senator Feinstein. All right, thank you, Senator Alexander. 
Excuse me, Senator Allard.
    Senator Allard. Madam Chairman, I just have my comments I'd 
like to have inserted in the record.
    Senator Feinstein. Thank you, so ordered.
    [The statement follows:]

               Prepared Statement of Senator Wayne Allard

    Madam Chairman, thank you for holding this hearing today. I am 
pleased to have a chance to discuss the projected budget for the 
Department of Interior. I would like to welcome Secretary Kempthorne to 
his first appearance before this Committee. This is at least his first 
appearance on that side of the dias.
    The Secretary states in his testimony that his department manages 
one in every five acres of land in this country, and the bulk of that 
land is in the West, so as a western Senator the budget for the 
Department of Interior is very important to me. There are many issues 
difficult issues that face the agencies under your purview. I won't 
address all of them, but I would like to touch on a few.
    First, one of the biggest problems that public land is facing right 
now in my state of Colorado is the bark beetle. I know that this is a 
problem that also exists in the home states of the Chair and Ranking 
Member, as possibly other members of this subcommittee. The state, 
quite simply, has become a danger zone with beetle infected areas 
growing larger and larger all the time. We have to get a handle on 
these insects before they ensure that the entirety of our forests is 
wiped out. This is of gravest concern when we consider that, as a 
headwaters state, the condition of Colorado's waters have the potential 
to be severely impacted by the continued degradation of our forests. 
This will mean a great deal to our neighboring states that receive 
water that flows out of Colorado.
    I would also like to touch briefly on the Endangered Species Act. 
As you are well aware there are a number of proposals before Congress 
to reform this Act and discussions on this issue will likely be 
ongoing. I firmly believe the best way to prevent extinction in species 
is not to place them on a list, but to work proactively up front to 
ensure that they never need to be listed. That said, compliance with 
the ESA costs landowners a great deal of money and time every year. The 
federal government needs to do more to help landowners comply with the 
ESA instead of simply forcing more mandates down their throats. I 
appreciate the work that the Department has done to this end thus far 
and look forward to hearing more about how the Department plans to 
continue these efforts.
    It is my understanding that Landsat 8 is a project being worked on 
jointly by USGS and NASA. It is also my understanding that Landsat 5 
and 7 have thermal infrared (TIR) sensing capability. This capability 
is very important to the state of Colorado. The state is using this 
technology to ensure it meets its interstate compact obligations on the 
Arkansas River. Other uses for this technology include surface and 
ground water management, interstate water use agreements, and dealing 
with drought and wildfire, and other emergency management and military 
applications.
    In this year's budget request USGS has requested funds to develop 
the land-based Landsat control system, to collect and disseminate the 
data, but no funds for the satellite or thermal sensor. NASA has not 
requested the funds for the thermal sensor either and I will have a 
question on this during that portion of this hearing.
    Finally I was interested to note in your testimony the request for 
Safe Indian Communities Initiative to combat methamphetamine--or meth--
in tribal communities. As you may be aware, earlier this year the 
Colorado Methamphetamine Task Force report cited Denver as a major 
distribution center for meth in the United States. This led me to 
introduce the Methamphetamine Trafficking Enforcement Act of 2007 to 
help curb the trafficking of meth both within and across the Nation's 
borders. This problem is one that will not be solved without many 
people coming at it from many different directions and I am pleased to 
see that the Department is working to curb the meth problem in Indian 
Country.
    I think that we are all aware that this is going to be another 
tough budget year. That is why hearings such as this one are so 
important. So I look forward to working with you, and the rest of the 
Committee, again this year, Madam Chairman, to see that worthy projects 
and programs continue to be funded in a responsible manner.

    Senator Feinstein. Senator Cochran. Thank you.
    Senator Cochran. I'll submit a statement for the record.
    Senator Feinstein. Thank you very much.
    [The statement follows:]

               Prepared Statement of Senator Thad Cochran

    Madam Chairman, I am pleased to join you in welcoming my friend, 
Secretary Dirk Kempthorne to the committee this morning. Mr. Secretary, 
as you know, Mississippi is still suffering the effects of Hurricanes 
Katrina and Rita. I want to thank you and your staff for helping with 
the recovery of the Gulf Coastregion. A year and half later, we are 
still working to restore our coast and coastal islands, as well as the 
schools, homes, and businesses, and transportation resources that were 
devastated by these horrible hurricanes.
    The Department of the Interior's budget is of great interest to me 
and the people of Mississippi. The National Parks and Wildlife Refuges 
in Mississippi receive thousands of visitors every year, and I am 
pleased to see that the fiscal year 2008 budget focuses on the 
importance of maintaining and protecting our natural treasures. I am 
interested in the new National Parks Centennial Challenge being 
proposed by the Department, and I am hopeful that Mississippi's Natchez 
Trace Parkway and the Gulf Islands National Seashore will have the 
opportunity to benefit from this initiative.
    Mr. Secretary, we appreciate your outstanding public service, and I 
look forward to hearing your testimony.

    Senator Feinstein. Senator Nelson.
    Senator Nelson. I may submit a statement for the record as 
well, thank you.
    Senator Feinstein. Thank you very much.
    Secretary Kempthorne, welcome.

                  SUMMARY STATEMENT OF DIRK KEMPTHORNE

    Secretary Kempthorne. Thank you.
    Chairman Feinstein, thank you very much for your opening 
statement, for the courtesy and the professionalism by which 
you conduct these hearings.
    Senator Craig, thank you for your comments, as well. To all 
members, the distinguished members of this committee, it's a 
great pleasure to be before you.
    As I looked at the membership of this committee, I had the 
honor of serving with 15 of the 17 sitting members of this 
committee, and those I did not, our gubernatorial routes 
intersected, so I appreciate this opportunity.
    I'm pleased to present our 2008 Budget Request for the 
Department of the Interior to this committee. In undertaking 
this task, I committed to ensure that the Department of the 
Interior and its agencies would maintain high levels of service 
to the American people, and reach even higher levels of 
excellence.
    I look forward to working with you, Chairman Feinstein, and 
other members of the subcommittee to achieve this goal, as we 
move forward in the budget process.
    I thank you for your efforts for securing a final 2007 
budget, after three continuing resolutions, and I appreciate 
the extra steps that you took to provide us a portion of the 
2007 pay costs, and funding increases for some of our most 
important programs. We have developed our operating plans for 
2007, and they have been submitted to you.

                          2008 BUDGET REQUEST

    The President's overall 2008 budget request for the 
Department of the Interior is $10.7 billion. This subcommittee 
has oversight responsibilities for most of our Department, 
excluding the Bureau of Reclamation and Central Utah Project. 
So, the 2008 budget for programs under the jurisdiction of this 
subcommittee, as you note, Senator Craig, is $9.7 billion.

                              FIXED COSTS

    Within this request, our budget includes an increase of 
$214 million to fully cover the fixed costs of the entire 
Department. Madam Chairman, I appreciate what you said about 
this, and the significance of the fixed costs. This was 
critical to the well-being of the Department. The success of 
our programs depends on the skills and the dedication of our 
73,000 employees.
    My formal testimony outlines many specific features of our 
budget. This morning, I'd like to focus on four initiatives--
our National Park Centennial Challenge, our Healthy Lands 
Initiative, our Safe Indian Communities, and our Improving 
Indian Education initiative.

                   NATIONAL PARK CENTENNIAL CHALLENGE

    Our first initiative, the National Park Centennial 
Challenge, will foster a decade-long partnership with the 
American people to renew and to revitalize our National Parks 
system for its 100th anniversary in the year 2016. To 
inaugurate this effort, we propose a record $2.4 billion budget 
for the National Park Service. This amount includes $2.1 
billion for park operations, $219 million above the 2007 
enacted level.
    As part of the Park operating budget, we propose a 
Centennial Commitment of $100 million, to upgrade both our park 
infrastructure and the experiences of people visiting our 
parks. This funding will allow us to hire 3,000 more seasonal 
National Park rangers, guides, and maintenance workers. It will 
enable us to repair buildings, to improve landscapes, and 
enroll more children in the Junior Ranger Program.
    We believe our Centennial Challenge will inspire another 
generation of Americans to walk along the Appalachian Trail, to 
climb Mt. Rainier and marvel at the vibrant marine life at Dry 
Tortugas. Linking children to nature will help keep them 
physically fit, so that they can fully enjoy the world around 
them. It will also lay the foundation for this next century of 
conservation.
    We're also requesting $100 million in mandatory spending 
under the Centennial Challenge, to match contributions for 
signature sites and projects. We anticipate that with this 
incentive, Americans will provide $100 million in contributions 
for projects that will improve our parks, and open the way for 
better visitor experiences.
    Our budget request anticipates that Centennial Challenge 
funding will continue at this level for the next 10 years, 
providing at least an additional $3 billion over the next 
decade to support our parks.
    I look forward to joining with all Americans, in the 
historic celebration of our national parks in the year 2016.

                        HEALTHY LANDS INITIATIVE

    Our second initiative, the Healthy Lands Initiative, will 
restore nearly half a million acres of Federal land in six 
targeted areas of the West through cooperative conservation. 
These six areas face growing challenges in maintaining wildlife 
habitat, while providing opportunities for energy production, 
recreation, and other uses.
    We have requested $22 million to partner with local 
communities and companies, and conservation groups, to 
rehabilitate and protect working landscapes. We anticipate our 
partners will provide an additional $10 million, in voluntary 
contributions. Using these funds, we will transform land 
management from the current parcel by parcel approach, to 
landscape-scale management. Through our Healthy Lands 
Initiative, we will preserve habitat corridors and sites that 
benefit species such as sage grouse and pronghorn antelope.

                        SAFE INDIAN COMMUNITIES

    Our final two initiatives will help ensure a brighter 
future in Indian country, especially for Native American 
children. A scourge of methamphetamine has devastated 
communities and families across our country in recent years, 
but few places have seen more devastation than Indian country. 
Tribal leaders I've met with describe a methamphetamine crisis, 
with a potential to destroy an entire generation, if left 
unattended. They call this the second small pox epidemic.
    One of the challenges we face, is lack of adequate law 
enforcement on many tribal lands. As a result, organized crime 
and drug cartels have targeted Indian reservations as a hub for 
the distribution and the transportation of methamphetamine. 
We're requesting $16 million in new investments for a Safe 
Indian Communities Initiative to empower tribes to shut down 
these peddlers of poison. With these funds, we will help tribes 
hire additional officers, and provide specialized drug 
enforcement training that they need to protect their 
communities.
    For example, our budget will increase the number of 
officers that are certified drug enforcement activity officers 
from 11, currently, to 111--a 10-fold increase.

                       IMPROVING INDIAN EDUCATION

    This is more than a budget issue--it's a moral issue. We 
must end this scourge. It's not enough to protect Indian 
children, however, we must also provide them a brighter future 
through better educational opportunities. We're requesting $15 
million in new funding, under our Improving Indian Education 
Initiative, to do just that. Using this funding, we will 
provide educational program enhancements and tools for lower-
performing schools, in the school system which, Madam Chairman, 
you have identified.

                           PREPARED STATEMENT

    Every child in America deserves a safe environment. Every 
child in America deserves a chance to succeed. Our initiatives 
will help Indian country achieve these goals.
    Madam Chairman, I'd be pleased to respond to the questions 
which members of the committee would have, concerning the 
budget.
    [The statement follows:]

                 Prepared Statement of Dirk Kempthorne

    It is a pleasure to appear before you today to discuss the 
President's fiscal year 2008 budget for the Department of the Interior. 
This is my first appearance before this subcommittee. During my time in 
the Senate, I had the pleasure of serving with fifteen of the current 
members of this subcommittee. I hope to work with all of you as we 
chart the future course for what I consider to be one of the most 
interesting and important cabinet agencies: the Department of the 
Interior.
    Since becoming Secretary, I have traveled extensively in order to 
see Interior at work and to talk with Interior employees. I have 
addressed thousands of Interior employees. I have been impressed by the 
dedication and experience of the talented and dedicated Interior 
workforce. Every day, a Bureau of Indian Education teacher, a park 
ranger, a biologist, geologist, naturalist, or land manager is making a 
difference to help Interior fulfill its responsibilities.
    Developing a budget for the Department of the Interior is an 
extraordinary exercise. We have an extensive mandate that rivals just 
about any governmental agency in its breadth and diversity--and its 
importance to the everyday lives of our citizens. Our 73,000 employees 
live and work in communities across America and its territories. We 
have 2,400 field offices. We manage 145,000 assets--second only to the 
Department of Defense. Our work stretches from pole to pole, from 
wildlife refuges in the Arctic to scientific research at the South 
Pole.
    Managing one in every five acres in the United States, we oversee 
land and resources that stretch across 12 time zones from the Caribbean 
to the Pacific Rim. The sun literally never sets on the Department of 
the Interior. We have the third largest contingent of Federal law 
enforcement officers, with 3,400 officers and agents. Interior-managed 
lands and water generate one-third of the Nation's domestic energy 
supply. The Department serves American Indians, including 561 federally 
recognized Tribes, Alaska Natives, and our Nation's affiliated island 
communities. We undertake research and provide information to 
understand the Earth and to assist us in the management of the Nation's 
water, biological and mineral resources, and monitor all manner of 
natural hazards including volcanoes, earthquakes, and landslides. We 
also work with States to restore abandoned mine land sites and protect 
communities.
    Our overall 2008 request for the Department of the Interior is 
$10.7 billion. Included within that is $9.7 billion for programs that 
this subcommittee oversees. Taking into account the shift of funding 
for the Abandoned Mine Land program from discretionary to mandatory, 
the budget is $35.4 million below the 2007 Joint Resolution, enacted on 
February 15, 2007.
    The 2008 budget was carefully crafted within the President's 
commitment to continue to fund the nation's highest priorities while 
eliminating the deficit in five years. The administration is on track 
to achieve this goal.
    At the heart of our budget are four major initiatives:
  --The National Parks Centennial Initiative to enhance National Parks 
        as we approach their 100th anniversary in 2016;
  --The Healthy Lands Initiative, which will allow access to public 
        lands for a number of uses and provide for energy for the 
        nation while also protecting critical lands and habitat;
  --The Safe Indian Communities Initiative to combat the 
        methamphetamine crisis on Indian lands; and
  --The Improving Indian Education Initiative that will enable Indian 
        children to grow up in an environment that allows them to 
        achieve their dreams.

                THE NATIONAL PARKS CENTENNIAL INITIATIVE

    The President's 2008 parks budget totals a historic $2.4 billion. 
The park operating budget, at $2.1 billion, the largest budget for park 
operations ever, an increase of $219 million over the level funded in 
the Joint Resolution. This is $258.3 million over the 2006 level.
    Last August, in honor of the 90th Anniversary of the National Park 
Service, and with an eye on the upcoming centennial in 2016, President 
Bush directed me to establish specific performance goals to help 
prepare the national parks for another century of conservation, 
preservation and enjoyment. In addition, the President asked that I 
identify signature projects and programs consistent with these goals 
and that continue the NPS legacy of leveraging philanthropic, 
partnership, and government investments for the benefit of the national 
parks and their visitors.
    The President's budget for fiscal year 2008 sets the stage for the 
next 100 years of our national parks. It includes the National Parks 
Centennial Initiative, one of my highest priorities. This Initiative 
proposes up to $3 billion in new funds for the national park system 
over the next ten years.
    Within our operating budget increase, we propose a $100 million 
Centennial Commitment over 10 years, for a total of $1 billion 
dedicated to park operations. Our Centennial Initiative will also 
inspire philanthropic organizations and partners to donate $100 million 
per year over 10 years to the National Park Service. The Centennial 
Challenge Federal Fund will match all private donations up to an amount 
of $100 million. These Federal mandatory matching funds and 
philanthropic contributions, together with the $100 million annual 
Centennial Commitment in discretionary funds for park operations, would 
infuse up to $3 billion into the park system over the next decade.
    During the last five years, the NPS has built a strong foundation 
of improving parks, with more than 6,600 park improvements completed or 
underway. The Centennial Initiative funds are in addition to the nearly 
$1 billion in the President's budget for National Park maintenance and 
construction programs. The proposed fiscal year 2008 budget will 
further improve our national parks during the next decade leading up to 
the 2016 centennial celebration.
    The 2008 budget and the National Parks Centennial Initiative 
emphasize three key goals:
  --To engage all Americans in preserving our heritage, history and 
        natural resources through philanthropy and partnerships, with a 
        special emphasis on linking children to nature. An increase of 
        $100 million is proposed for these programs, plus another $100 
        million in mandatory funds to match donations.
  --To reconnect people with their parks through enhanced technology 
        and the seamless network of the trails system.
  --To build capacity for critical park operations to sustain these 
        efforts over the next century.
    Our Centennial Challenge offers an outstanding opportunity to 
engage this Nation's youth with the outdoors. Our initiative will link 
children with nature through an expanded Junior Ranger program, 
increased visitor services, an improved trail system, and relevant 
interpretive programs for our young people. The Parks Centennial will 
help ensure that our parks offer improved physical activity, play and 
recreation, and opportunities for learning and social interaction.
    Each year, the NPS welcomes more than 270 million visitors as they 
discover America the beautiful, the historical, the cultural. Our 
national parks preserve majestic natural wonders. They keep watch over 
battlefields hallowed by red badges of courage. They keep culture alive 
at sites dedicated to the performing arts, poetry, and music. Parks 
offer recreation and discovery through spectacular backcountry hiking 
and climbing. They honor great leaders like Thomas Jefferson, Abraham 
Lincoln, Frederick Douglass, Chief Joseph, John Muir, Eleanor Roosevelt 
and Martin Luther King, Jr. As havens of enjoyment, recreation, 
learning and personal renewal, national parks must endure. Our budget 
sets the stage for a new century of park excellence.

                        HEALTHY LANDS INITIATIVE

    Another priority for me is my Healthy Lands Initiative, which will 
ensure continued access to public lands for traditional uses and 
recreation, while maintaining strong environmental protections for 
wildlife and habitat. This Initiative builds on the Department's strong 
track record in cooperative conservation to undertake landscape-scale 
conservation efforts and focus on the needs of species that cross 
jurisdictional boundaries.
    As activities on public land increase, we are seeing growing 
conflicts among recreation users, energy developers, hunters, ranchers, 
and others all competing to protect, access, and use these public 
lands. BLM will join with the U.S. Geological Survey and the Fish and 
Wildlife Service to identify, restore, and mitigate the potential 
impacts of increased energy production in wildlife-energy interface 
areas and potentially prevent the listing of certain species such as 
sage grouse.
    The potential listing of sage grouse as an endangered species could 
severely constrain public land use, particularly for current and future 
energy production. The habitat of the sage grouse covers over 100 
million acres. Our Healthy Lands Initiative of $22.0 million will 
implement a strategic vision to protect and restore sage grouse 
habitat, maintain migratory corridors for other species, and assure 
continued access to energy. These investments will support new land use 
planning techniques and new policy tools that will complement current 
activities and enable us to work with non-Federal partners to restore 
and conserve habitat and maintain access for energy and other uses.
    Focused on six strategic areas, these funds will transform land 
management from the current parcel by parcel approach to landscape-
scale decision making, drawing upon partnerships and new policy tools 
to help BLM provide increased access for energy and other uses, while 
simultaneously preserving important habitat corridors and sites for the 
benefit of species. In 2008, including this increase, over 400,000 
acres will be restored in partnership with Federal leaseholders, 
private landowners, state, local, and tribal governments--to benefit 
wildlife. The Healthy Lands Initiative includes $15.0 million for BLM 
to conduct landscape-scale conservation, $2.0 million for FWS, and $5.0 
million for USGS.

              THE METHAMPHETAMINE CRISIS IN INDIAN COUNTRY

    I would like to highlight two other 2008 priorities, our Safe 
Indian Countries and Indian Education Initiatives. While I recognize 
that the Senate Indian Affairs Committee has jurisdiction over these 
matters, I also know many of you represent States and Tribes that are 
struggling with the impacts associated with methamphetamine.
    Methamphetamine is a highly addictive synthetic stimulant that 
creates intense euphoric highs for periods up to 24 hours. It is 
inexpensive and, unfortunately, has rapidly become the drug of choice 
for an increasing number of Americans. Organized drug cartels have 
targeted reservations to establish methamphetamine operations.
    The President of the National Congress of American Indians has 
stated, ``Meth is killing our children, affecting our cultures and 
ravaging our communities.'' Many tribal leaders have told us 
methamphetamine is destroying lives in Indian country. Some leaders 
believe that on their reservations a whole generation of young people 
may soon be lost to this one drug.
    The social effects of methamphetamine use are tragic. Addicted 
mothers are giving birth to drug-addicted babies. The drug is fueling 
homicides, aggravated assaults, rape, child abuse, and other violent 
crimes. Violent crime in Indian Country is reaching crises levels at 
twice the national average.
    Our budget includes $16 million for a Safe Indian Communities 
initiative that reconfigures and tailors our focus to combat organized 
crime, break up drug trafficking, and interrupt the drug supply.

                       IMPROVING INDIAN EDUCATION

    Improving Indian education is also a priority. One of only two 
school systems operated by the Federal government, the Bureau of Indian 
Education should oversee schools that are models of performance for the 
No Child Left Behind Act. Yet only 30 percent of the schools in the 
Bureau of Indian Education system are meeting NCLB goals.
    In recent years, we have improved school facilities by replacing 32 
schools and renovating another 39 schools. It is now time to focus on 
the classroom. Our 2008 budget proposes to invest $15.0 million to 
improve the performance of students in Indian schools. Additional 
funding will provide educational program enhancements and tools for 
lower performing schools and educational specialists to guide Indian 
schools in achieving academic success. The request also provides 
additional funding for transportation to reduce the redirection of 
education dollars to pay for buses and fuel.

                  SUPPORTING THE DEPARTMENT'S MISSION

    The 2008 budget aligns resources to achieve these and other high-
priority goals guided by the Department's integrated strategic plan. 
Recently revised for 2007-2012, the Department's strategic plan links 
the Departments diverse activities into four common mission areas: 
Resource Protection, Resource Use, Recreation, and Serving Communities. 
A fifth area, Management Excellence, provides the framework for 
improved business practices, processes, and tools and a highly skilled 
and trained workforce.
    Using our strategic plan as the blueprint for improved performance 
and accountability, since 2001, the Department has:
  --Increased access to meet the Nation's energy needs and enhanced 
        energy security by more than doubling the approval of 
        applications for permits to drill; provided greater 
        opportunities for development of alternative energy, including 
        wind energy; advanced oil shale and methane hydrates for 
        potential future domestic use; and significantly expanded 
        environmental protections with inspection and monitoring 
        programs.
  --Collected $56.4 billion in revenues from offshore and onshore 
        mineral leases that provided income for Indian communities, 
        funded State infrastructure, and helped to finance Federal 
        programs.
  --Expanded relationships with partners to restore, improve, and 
        protect three million acres of wetlands and other habitat for 
        migratory birds, anadromous fish, and threatened and endangered 
        species.
  --Reduced risks to communities from the threat of fire, conducting 
        over 6.7 million acres of fuels treatments through the 
        President's Healthy Forests Initiative.
  --Improved park facilities for visitors by undertaking more than 
        6,600 projects at national parks and earned a 95 percent 
        satisfaction rate from park visitors.
  --Completed condition assessments and performance measures for all 
        park facilities and nearly all Interior facilities.
  --Improved the educational environment for Indian children by funding 
        32 new Bureau of Indian Education replacement schools and 39 
        major school repair projects.
    Looking to the future, the Department of the Interior is committed 
to achieving the goals of our four initiatives and other priorities. 
Our budget will:
  --Prepare the national park system for another century of 
        conservation, preservation and enjoyment through the 
        President's National Park Centennial Initiative.
  --Encourage increased donations for signature projects and programs 
        in our national parks with up to $100.0 million a year in 
        matching funds through the National Parks Centennial Challenge.
  --Increase energy security for the Nation through a new Outer 
        Continental Shelf five-year plan (2007-2012).
  --Launch a Healthy Lands Initiative to help meet the Nation's needs 
        for access to public lands for energy and other uses while 
        protecting wildlife and habitat in the West.
  --Leverage Federal funds through partnerships and cooperative 
        conservation to restore 800,000 acres and 734 stream/shoreline 
        miles. These efforts will support the President's government-
        wide goal of increasing the Nation's wetlands by three million 
        acres by 2009.
  --Improve educational programs and meet the requirements of the No 
        Child Left Behind Act by completing educational reforms in the 
        Bureau of Indian Education.
  --Help Indian Country reduce methamphetamine crime and the 
        afflictions it has brought to many Tribes through a new Safe 
        Indian Communities Initiative.
  --Manage a network of parks, sanctuaries, reserves, and refuges to 
        protect ocean and coastal resources as envisioned in the 
        President's Ocean Action Plan.

                            BUDGET OVERVIEW

    The 2008 budget request for current appropriations is $10.7 
billion. Permanent funding that becomes available as a result of 
existing legislation without further action by the Congress will 
provide an additional $5.1 billion, for a total 2008 Interior Budget of 
$15.8 billion.
    The 2008 request includes $9.7 billion for programs funded within 
the Interior, Environment and Related Agencies Appropriations Act.
    The 2008 budget reflects the changes made in financing for the 
Abandoned Mine Land Reclamation Fund in the Office of Surface Mining 
that were required by the Surface Mining Control and Reclamation Act 
Amendments of 2006. Funding for State and tribal AML grants are no 
longer subject to appropriation and are funded as a mandatory 
appropriation. Federal AML components continue to be subject to 
appropriation.
    The change results in a reduction of $134.2 million in 
discretionary budget authority in 2008. After taking into account the 
AML shift of funding from discretionary to mandatory funding, the 2008 
budget request reflects a decrease of $35.4 million, or four-tenths of 
one percent below the 2007 Joint Resolution and $68.7 million below the 
2006 enacted level.
    With enactment of the Joint Resolution, we now have a full year 
appropriation for 2007 of $9.7 billion. Based on direction in the Joint 
Resolution, we have prepared detailed operating plans for each bureau 
for 2007. Based on these plans, we are preparing comparisons at the 
program level with the 2008 budget request, which will be available to 
the subcommittee very soon. The comparisons in our 2008 budget are with 
the third 2007 continuing resolution, which was in effect through 
February 15. Except where noted, comparisons throughout this testimony 
are on that basis.
    In 2008, Interior will continue an exemplary record of producing 
revenue for the Treasury. Estimated receipts collected by the 
Department in 2008 will be $15.6 billion, a record level of collections 
that offsets Interior's discretionary budget by nearly 1.5 to one.
    The 2008 budget assumes enactment of a number of proposals for 
which legislation has been or will be transmitted to the Congress. The 
Centennial Challenge would provide up to $100 million a year for ten 
years in mandatory funds to match private donations for signature 
projects and programs. These projects and programs will be identified 
in the Secretary's report to the President this May, after a number of 
public listening sessions and recommendations from park professionals. 
The costs for this proposal, contained in a legislative proposal 
transmitted to Congress, are offset within the President's 2008 budget.
    The budget also assumes enactment of proposals to change the manner 
in which bonus bids for coal sales are received consistent with oil and 
gas programs, institute a net receipt sharing provision to return to a 
more equitable Federal-State distribution of onshore mineral revenues, 
and repeal deep gas and deep water OCS incentives that were included in 
the Energy Policy Act of 2005.
    The 2008 budget also contains proposals that were assumed in the 
2007 President's budget. Included are proposals to discontinue 
mandatory appropriations from the Range Improvement Fund and amend the 
Federal Land Transaction Facilitation Act to update the public lands 
available for disposal, authorize the use of receipts for restoration 
projects, and change the distribution of revenue. As in 2007, the 2008 
budget proposes repeal of authorizations provided in the Energy Policy 
Act of 2005. Repeal of Section 365 would redirect rental receipts to 
the General Fund and authorize BLM to promulgate regulations to phase 
in cost recovery for energy permits, repeal of Sections 224 and 234 
would restore the historical formula for distribution of geothermal 
energy receipts.
    The budget also proposes leasing in the 1002 area of the Alaska 
National Wildlife Refuge, which significantly increases anticipated 
revenues in 2009 and later years. These proposals, in conjunction with 
the revenue enhancements described above, will increase revenues by 
$136.3 million in 2008 and a total of 5.0 billion through 2012.

                       MAINTAINING CORE PROGRAMS

    Department of the Interior programs encompass 390 parks and 547 
wildlife refuges; 261 million acres of multiple use public land; 12 
regional offices, 83 Indian agencies locations, and 184 elementary and 
secondary schools in Indian Country; and numerous laboratories, field 
research facilities, and other offices.
    At each of these sites, the Department's 73,000 employees maintain 
facilities and resources and provide services to those who use or rely 
on them: park visitors, wildlife watchers and hunters, stockmen and 
miners, Tribes and individual Indians, farmers and electric power 
users. In my travels, Interior's managers have told me that funding for 
fixed costs is their highest priority need.
    Pay and benefits for the Department's workforce are a significant 
cost component of Interior's core programs, comprising 58 percent of 
operating budgets. The proportion of Interior's budget committed to 
personnel costs places it among the top three Federal agencies. Only 
the Departments of Justice and Commerce have a higher proportion of 
salary and benefit costs to total budget. Maintaining this dedicated 
cadre of professionals is essential for the uninterrupted delivery of 
programs and services.
    The Department's 2008 budget request includes $214.2 million to 
fully fund increases for pay and other fixed costs. Of this amount, 
nearly 85 percent, or $184.4 million, supports increases in employee 
compensation, including scheduled 2008 pay raises; two additional paid 
days; and projected increases in health benefits. The budget assumes a 
three percent pay raise in January 2008. The request also funds 
increases in workers' and unemployment compensation; rental payments 
for leased space; and centralized administrative and business systems, 
services and programs financed through the Working Capital Fund.

                        OTHER BUDGET PRIORITIES

    In addition to the four key initiatives I have already highlighted, 
the budget includes the funding for key goals and objectives.
    Achieving Energy Security.--In his State of the Union address, 
President Bush underscored that America must enhance energy security. 
The Department of the Interior plays a key role in advancing this goal. 
Nearly one-third of the energy produced in the United States each year 
comes from public lands and waters managed by Interior. To carry out 
the goals of the Energy Policy Act and enhance the availability of 
affordable oil, gas, and alternative energy sources, the 2008 budget 
for Interior programs includes $481.3 million for energy programs. With 
these resources, the Department will enhance energy security through 
increased production, protect the environment, promote conservation, 
and expand the use of new technologies and renewable energy sources.
    The BLM 2008 budget request for energy is $142.9 million. Included 
in the BLM request is an increase of $3.1 million for inspection and 
monitoring to ensure environmentally responsible energy development on 
public lands and proper reporting of production. The additional funds 
will provide BLM with the capacity to conduct an additional 1,572 
inspections by 2009, with 522 additional inspections occurring in 2008. 
Also included is an increase of $2.0 million for the Mining Law 
Administration program. This increase is expected to be fully offset by 
anticipated mining claim maintenance fees.
    In 2008, BLM will implement fees for processing drilling permit 
applications to fully replace rental revenue currently available for 
processing oil and gas use authorizations, thereby maintaining BLM's 
capacity for timely permit processing. A legislative proposal will be 
transmitted to the Congress that proposes to repeal Section 365 of the 
Energy Policy Act. Section 365 redirected rental revenue deposits to 
the Treasury to fund BLM pilot offices. Estimated collections of permit 
processing fees in 2008 is $21.0 million.
    The MMS 2008 budget request for energy is $290.8 million, $16.7 
million above 2007. The budget includes increases to facilitate OCS 
development and deepwater activities by implementing the 2007-2012 
Five-Year OCS Oil and Gas Leasing program and completing environmental 
analyses necessary for newly available areas where data are old and for 
future OCS lease sales.
    The Gulf of Mexico Energy Security Act of 2006, signed into law on 
December 20, 2006, significantly enhances OCS oil and gas leasing 
activities and production potential in the Gulf of Mexico. The Act 
opens up 8.3 million acres in the GOM for leasing, including 5.8 
million acres previously withdrawn under Congressional and Presidential 
moratoria. The Act also shares revenues with Gulf-producing States and 
with the Land and Water Conservation Fund, with the first distribution 
estimated to take place in 2009.
    The budget assumes an increase in the royalty rate for new offshore 
Federal oil and gas leases. The Department will begin implementing the 
royalty rate increase in the upcoming 2007 lease sale in the Western 
GOM planning area (Sale 204) scheduled for August 2007. The new rate is 
expected to increase royalty revenues by $4.5 billion over the next 20 
years, and substantially more after that.
    The President's National Energy Policy aims to improve America's 
energy security by increasing domestic production of fossil fuels, 
promoting increased energy conservation, and stimulating the 
development of alternative fuels. The coastal plain in the Arctic 
National Wildlife Refuge is the Nation's single greatest onshore 
prospect for future oil. The 2008 budget assumes enactment of 
legislation opening the Section 1002 area of the coastal plain in ANWR 
to energy exploration and development, with a first lease sale 
occurring in 2009 that would generate $7.0 billion in bonus receipts. 
The budget estimates a total of $8 billion in revenue would be 
generated through 2012. These receipts would be split 50:50 between the 
U.S. Treasury and the State of Alaska.
    Cooperative Conservation.--Through partnerships, Interior works 
with landowners and others to achieve conservation goals across the 
Nation and to benefit America's national parks, wildlife refuges, and 
other public lands. The 2008 budget includes $324.0 million for the 
Department's cooperative conservation programs, $34.6 million over 
2007. These programs leverage Federal funding, typically providing a 
non-Federal match of 50 percent or more. They provide a foundation for 
cooperative efforts to protect endangered and at-risk species; engage 
local communities, organizations, and citizens in conservation; foster 
innovation; and achieve conservation goals while maintaining working 
landscapes.
    The 2008 cooperative conservation budget includes $21.0 million of 
the Department's Healthy Lands Initiative. Also new to the suite of 
cooperative conservation programs highlighted in 2008 are the multi-
agency Open Rivers Initiative and the National Fish Habitat Action 
Plan. These fisheries conservation programs will leverage $16.2 million 
in Federal resources with State, Tribal, local, nonprofit and private 
groups to protect, enhance, and restore aquatic habitats. A program 
increase of $6.0 million for the Open Rivers Initiative will allow FWS 
to enhance its fish passage program by eliminating an additional 190 
obsolete stream barriers such as small dams and open an additional 
1,300 stream miles. The 2008 budget includes an additional $2.3 million 
to implement the National Fish Habitat Action Plan, which will leverage 
resources provided by State, tribal, local, private, nonprofit, and 
private groups to protect, enhance, and restore aquatic habitats.
    The 2008 budget continues funding for high-priority cooperative 
conservation activities, including $13.3 million for the FWS Coastal 
Program, $69.5 million for State and Tribal Wildlife Grants, $4.0 
million for Neotropical Migratory Birds, and $80.0 million for the 
Cooperative Endangered Species Conservation Fund. The 2008 budget 
request for the North American Wetlands Conservation Fund is $42.6 
million, an increase of $6.0 million above 2007. Funding for the 
Partners for Fish and Wildlife program is $48.4 million, a net increase 
of $5.7 million over 2007. These programs provide an effective, 
cooperative approach to conservation and leverage Federal funds. In 
2008, these programs will attract over $274 million in non-Federal 
matches and restore over 800,000 acres of habitat for species at-risk 
and migratory birds.
    In 2008, Interior does not request funding for the Landowner 
Incentive and Private Stewardship Grant programs, in order to 
concentrate conservation funding in a smaller number of high-performing 
programs. This results in a $22.0 million reduction from the 2007 
level. The conservation of at-risk species would benefit from shifting 
resources from these two programs to other programs that can 
demonstrate increased results, such as the Partners for Fish and 
Wildlife and North American Wetlands Conservation Act programs. The 
Landowner Incentive and Private Stewardship grant programs will 
continue to allocate and administer grants from funds appropriated in 
prior years.
    Refuge Operations and Species Protection.--Targeted increases for 
the National Wildlife Refuge System and other FWS species conservation 
programs will focus new resources on conserving and restoring the 
habitat necessary to sustain endangered, threatened, and at-risk 
species and prevent additional species from being listed under the 
Endangered Species Act. A program increase of $4.7 million for refuge 
wildlife and habitat management will allow the refuge system to 
increase the number of recovery plan actions completed in 2008 by 111; 
protect or restore an additional 57,983 acres; and fill three new 
positions to manage the new Northwestern Hawaii Marine National 
Monument. The 2008 budget also includes $2.2 million in programmatic 
increases for the recovery of the gray wolf and the Yellowstone grizzly 
bear.
    Healthy Forests Initiative.--The 2008 budget for the Healthy 
Forests Initiative, a total of $307.3 million, supports the 
Department's efforts to reduce the threat of catastrophic wildfire and 
improve forest and rangeland health. The 2008 budget request funds the 
Hazardous Fuels Reduction program at $202.8 million, an increase of 
$3.0 million for fixed costs over the 2007 level. An additional $1.8 
million in the hazardous fuels program will be shifted from program 
support activities to on-the-ground fuel reduction to help treat high-
priority acres.
    Wildland Fire Management.--The 2008 budget proposes $801.8 million 
to support fire preparedness, suppression, fuels reduction, and burned 
area rehabilitation. This amount represents a net increase of $32.6 
million above 2007, including an increase of $37.4 million for 
suppression operations. This budget will fully fund the expected costs 
of fire suppression in 2008 at $294.4 million, based on the ten-year 
average. The 2008 Preparedness program is funded at $268.3 million, a 
net reduction of $6.5 million from the 2007 level. A significant 
portion of this reduction will be achieved by eliminating management 
and support positions and lower-priority activities. The 2008 Wildland 
Fire Management program will realign its preparedness base resources to 
better support initial attack capability, which will include the 
addition of over 250 firefighters. These actions will help maintain 
initial attack success.
    Oceans Conservation.--Interior bureaus conduct ocean and coastal 
conservation activities that significantly advance understanding of the 
processes and status of ocean and coastal resources. The 2008 
President's budget includes $929.5 million to support the President's 
Ocean Action Plan. This funding will allow Interior bureaus to continue 
their high-priority work within the U.S. Ocean Action Plan and includes 
an increase of $3.0 million for USGS. In 2008, USGS will begin to 
implement the Oceans Research Priorities Plan and Implementation 
Strategy by conducting observations, research, seafloor mapping, and 
forecast models. USGS will also begin to implement an interagency 
national water quality monitoring network. Also included is $600,000 
for three new positions to support management of the new Northwestern 
Hawaiian Islands Marine National Monument.
    Indian Trust.--The 2008 request for Indian Trust programs is $489.9 
million, $17.6 million above 2007. The Indian Land Consolidation 
program is funded at $10.0 million, $20.7 million below 2007. The 2008 
budget also includes $4.6 million in reductions to reflect efficiencies 
and improvements in services to beneficiaries, the completion of trust 
reform tasks, the completion of project task efforts, and management 
efficiencies. The budget includes a $3.6 million increase for the 
Office of Historical Accounting to assist with the increased workload 
associated with additional tribal trust lawsuits.
    The Office of the Special Trustee for American Indians is 
responsible for financial management of the funds held in trust for 
tribal and individual Indian beneficiaries. Currently, the sum of all 
positive Individual Indian Monies account balances is approximately 
$6.0 million less than the sum of all financial assets currently 
invested by OST on behalf of the IIM beneficiaries. To address this 
imbalance the Department will transmit legislation to balance the 
accounts that would authorize up to $6.0 million be made available to 
credit the investment pool.
    Payments in Lieu of Taxes.--PILT payments are made to local 
governments in lieu of tax payments on Federal lands within their 
boundaries and to supplement other Federal land receipts shared with 
local governments. The 2008 budget proposes $190.0 million for these 
payments. The 2008 request is a reduction of $8 million from the 2007 
level. This level of funding is significantly above the historical 
funding level for PILT. From the program's inception in 1977 through 
2001, the program was funded in the range of $96-$134 million.

                               CONCLUSION

    I believe that our 2008 budget will--in its entirety--make a 
dramatic difference for the American people. We will better conserve 
our public lands. We will improve our national parks. We will protect 
our wildlife and its habitat. We will help craft a better future for 
Indian country and particularly for Indian children. And we will 
produce the energy that America needs to heat our homes and run our 
businesses. This concludes my overview of the 2008 budget proposal for 
the Department of the Interior and my written statement. I will be 
happy to answer any questions that you may have.

    Senator Feinstein. Thank you very much, Mr. Secretary, for 
those comments.
    Let me begin the 5-minute rounds, again, the early bird.

                            1998/1999 LEASES

    In February, our subcommittee held a hearing on the 
problems the Interior Department is having with the collection 
of royalties from energy companies who operate in the deep 
waters of the Gulf of Mexico. The taxpayers stand to lose, as 
you know, some $10 billion, because of the Department's failure 
to include price thresholds for leases signed in 1998 and 1999.
    Your Assistant Secretary Allred testified that you had been 
able to persuade six of the companies who hold leases without 
price thresholds, to voluntarily begin paying their fair share. 
That's a good start.
    My first question is, how many companies have now 
voluntarily started paying royalties, and how many are still 
holding out?
    Secretary Kempthorne. Madam Chairman, thank you. This is a 
critical issue. As you have identified, it occurred in 1998 and 
1999. We believe that's the only time that that omission 
occurred. We believe that there was a decision for that, but we 
don't know what the motivation was.
    Since then, those price thresholds have been in place. One 
of the actions I've taken, Madam Chairman, is a secretarial 
directive to our Solicitor, so that all future leases--a 
solicitor will sit there with the representative from Minerals 
Management Service, reviewing the entire document, so that it 
would not occur again. Six companies have currently stepped 
forward and have volunteered to pay that share.
    Senator Feinstein. But it is my understanding that the 40 
companies which are responsible for 80 percent of the 
production from these specific lease sales are not paying 
royalties--is that correct?
    Secretary Kempthorne. I believe that number is accurate.
    Senator Feinstein. Okay. We asked Mr. Allred to work with 
us--we have not had success in doing that. The idea is 
extending the 1998 and 1999 leases for those companies that 
agree to pay royalties. What is your opinion of that? In other 
words, to provide some incentive for the payment? Not that we--
we shouldn't have to be required to provide incentive--every 
one of these companies has made record profits, and they 
haven't, you know, paid for the right to drill oil on what is, 
essentially, public waterways.
    Secretary Kempthorne. Madam Chairman, I appreciate what 
you're saying.
    I believe that those companies are waiting to see if, in 
fact, there's going to be action taken by Congress. Therefore, 
I don't believe, at this time--even though discussions 
continue--that we're seeing any further movement beyond those 
six.
    Senator Feinstein. Well, it would be my intent, then, to 
draft the legislation along the lines that I've suggested, 
which would be, you know, that we would extend leases in return 
for these payments, and if Senator Craig would be interested in 
working with me, I would be very appreciative of that.
    Secretary Kempthorne. Madam Chairman, I know you're looking 
at it, and the Energy Authorizing Committee is looking at it. I 
think to give companies an opportunity to step forward by the 
initiative you're talking about makes a lot of sense.
    I also understand everybody's frustration, at the same 
time. In searching for what might have been--but nobody knows, 
a violation or an intent--these are valid contracts, and valid 
relationships. Contract law is sacred, and that's what we're 
all struggling with here. Do you step in and break a contract? 
No, you don't do that.
    So, I think it's going to take the kind of initiative 
you're talking about, and it is my observation that there's a 
wait-and-see situation here, until Congress finally solidifies 
where they want to be on this issue, but we're talking a lot of 
money.
    Senator Feinstein. I understand. Thank you very much, 
Senator.

                         DRUGS ON FEDERAL LANDS

    Second question--drugs on Federal lands--big problem. The 
Mexican drug cartels have stopped running drugs over the 
border, and have now simply moved their operations onto Federal 
lands.
    I've seen reports which say that in 2006, Federal 
authorities seized some 3 million marijuana plants, worth 
between $10 billion and $15 billion, and I'm told that half of 
that came from public lands in California.
    What I'd like to know is this--what are the National Park 
Service and the Bureau of Land Management doing to address this 
problem? How much money is in the Department's 2008 budget 
request for this?
    Secretary Kempthorne. Madam Chairman, you've identified a 
very important, and a very serious problem. You are correct--
the drug cartels, the organized crime have found that it is now 
more efficient and effective for them to locate their assets on 
the public lands, such as the National Parks, to grow the 
marijuana plants, and harvest and then sell them here in this 
country, rather than growing them in Mexico and bringing them 
across the border.
    I will note, however, Madam Chairman, the crossing of the 
border is a significant problem, which at some point we may 
discuss today as well.
    These plots where they are growing the marijuana, it is not 
unusual to find that they are being operated by heavily armed 
individuals. Individuals who have been told--in no uncertain 
terms by the drug cartels--you are to defend this product with 
your life. Because, anything less than that, and there may be 
repercussions with your family members back in Mexico. That is 
the leverage which they're using. It is truly significant what 
is taking place.
    Now the Department itself, our 2008 budget includes $680 
million for law enforcement activities. That's an increase of 
$48 million. I will tell you that, we are also now moving into 
flexible funds within the Park Service so that we can use these 
funds. We have three different teams of law enforcement 
entities with the Park Service, that we use for this specific 
use of interdiction of the drugs.
    In Sequoia, for example, in 2004, we increased the budget 
there $450 million, we have maintained that, and will see an 
additional increase in that area in the 2008 budget, as well. 
We've seen significant progress. But I will tell you, Madam 
Chairman, if you look at a chart at the amount of production 
that is taking place in the United States, it would be a steady 
increase, and then suddenly this spike, which is happening. 
Because, as you have identified, they have now determined it is 
better to grow it in the United States than to try to smuggle 
it across the border.
    Senator Feinstein. Thank you, Mr. Secretary, my time is 
expired.
    Senator Craig.

                            METHAMPHETAMINE

    Senator Craig. Mr. Secretary, would you continue that 
theme, but talk to us about obviously the initiative you have 
on, in Indian country with meth. We're talking, marijuana grown 
on public lands, but we're talking meth brewed in Mexico.
    Secretary Kempthorne. Yes.
    Senator Craig. Now, in large part, meth labs being brought 
down in this country are fewer and fewer simply because of the 
tightening up of the ingredients, and State efforts, along with 
the Feds.
    You found something startling, and related to me in a 
conversation earlier, would you tell the Committee your 
experience on our southern border? Because you have a 
responsibility for a lot of mileage of border down there. The 
meth movement across that border today, and what Homeland 
Security is--and is not--doing about it.
    Secretary Kempthorne. Yes. Senator Craig, I appreciate your 
interest in this issue.
    The Department of the Interior has jurisdiction for 40 
percent of the U.S.-Mexico border--that includes our parks, our 
wildlife refuges, Indian country, et cetera. That's 755 miles. 
After the first of the year, when I went down there for the 
first time to see what the situation was, my impression was 
that I would see a great deal of illegal immigration. I will 
tell you that this is truly organized crime, and it is the drug 
cartels.
    We anticipate, for example, in one Park, Organ Pipe Cactus 
National Park that daily there is as much as $3 million in 
illegal drugs going through that Park. That is one area of the 
Southern border that has the vehicle barrier fence that's in 
place, which was put in shortly after the shooting death of 
Kris Eggle, a National Park Ranger who was shot down and 
killed, because of drugs.
    They've learned to breach that fence. So, they're crossing. 
We now have a situation, Senator, where in certain areas along 
the border, we do not allow employees, park employees, for 
example, to go perform their normal duties, without being 
escorted by two armed officers. The drug cartels have issued 
the message that they will shoot park rangers on sight, they 
will shoot border patrol officers, they will shoot the 
helicopters from the sky.
    This is huge business for the drug cartels. This is 
organized crime, and so it takes an organized effort. We're 
working with the Department of Homeland Security, we're working 
with DEA and the Office of Drug Control. But I have great 
concerns, because we're seeing, perhaps, upwards of 50 percent 
of our budgets for parks and refuges down in that area, that is 
now moving more and more toward law enforcement, instead of 
what the original intended purpose was.
    Senator Craig. Well, thank you very much.
    Madam Chairman, a couple of weeks ago, I was holding a town 
meeting in Meridian, Idaho, and a man stood up in the back of 
the room and said he was a retired Boisean who'd been to Organ 
Pipe as a photographer, and he was told by the Park Service, 
there were areas of that preserve or reserve that he ought not 
enter for his own security and his own life.

                           FIRE PREPAREDNESS

    Let me talk briefly about fire preparedness, the Budget 
Request for fire preparedness for fiscal 2008 is lower than 
that enacted in 2007, yet the proposed budget claims to be 
maintaining an initial attack success rate of 95 percent. How 
can you maintain this success rate with less money? That would 
be one question.
    One of the efficiencies you plan to employ is the 
elimination of 78 management and support positions--are these 
anticipated to be employees with direct fire support 
experience? I mean, those are some of the concerns we have, 
obviously, with the anticipated fire season coming off of last 
season.
    Secretary Kempthorne. Yes, Senator first, like you, I'd 
like to acknowledge the firefighters themselves, these men and 
women and what they do day in and day out fighting these fires 
for us. As you've noted, the National Inter-agency Fire 
Center--an outstanding resource for the Federal Government.
    In 2008, the fire budget is $801 million. That's $43 
million above the 2007 budget. It includes $37 million for 
suppression. So, while the budget is up, Senator, in the areas 
such as the Wildland-Urban Interface, that's been very 
effective, the Healthy Forest Initiative, that has been very 
effective--we continue that. Because we believe that prevention 
is the best step that you can take.
    We also have made a shift in strategy, based on the input 
from fire professionals and management, to the initial 
response. So, rather than waiting until the fire has gotten to 
the point that it is hundreds of thousands of acres, as we have 
experienced in Idaho, it's to move resources from that effort 
to the initial attack, and to hit them faster, and more 
aggressively. To try to knock them down before they take off 
and reach such large magnitudes, where the only way to 
effectively, then, finally put them out, is when the snow 
begins to fall.
    So, the total fire budget is actually up, but you are 
seeing--in that area of suppression--a shift.
    Senator Craig. Thank you, Madam Chair.
    Senator Feinstein. Thank you.
    I'm going to alternate sides, and so I'll give you the 
order now, it will be Senator Nelson, Senator Alexander, 
Senator Reed, Allard, Cochran, Bennett, and Domenici.
    Senator Nelson?

                  PLATTE RIVER RECOVERY IMPLEMENTATION

    Senator Nelson. Well, thank you, Madam Chairman.
    Mr. Secretary, I want to thank you for your efforts, 
particularly on the efforts of your Department, regarding the 
Platte River Recovery Implementation Program. I'm glad to see a 
$6.4 million increase for the Great Plains Region, to implement 
the program in your proposed budget.
    I was proud to have signed that cooperative agreement back 
when I was Governor of Nebraska in 1997, and I'm equally proud 
to be a co-sponsor of the Senate bill, together with Senator 
Allard and others. This bill, when enacted, will authorize your 
continued participation in this very important program.
    I look forward to working with the Senate Energy and 
Natural Resources Committee, so we can get that bill moving and 
we can further the basin-wide effort between the Department and 
the States of Nebraska, Colorado and Wyoming, to help recover 
species in the basin. I look forward to working with my 
colleagues in this committee to ensure the appropriate funding.
    I know your efforts to date have been very, very 
significant, and the funding requested would be recognized, the 
importance. I hope that we can continue to have that a priority 
for Interior.

                              STREAMGAGES

    I have a question regarding streamgage activities. At the 
time when the Plains States are suffering from an historic 
drought, all of the components of the Department seem to be 
cutting back on the streamgage programs and other projects that 
monitor water levels, stream flows, and similar programs. I 
wonder if you have an explanation for this. It doesn't appear 
that streamgage activities and programs are a priority, and I'm 
perplexed by that, and I wonder if you might help clarify that, 
if you can.
    Secretary Kempthorne. Yes, Senator Nelson--the 2008 request 
with regard to the streamgages is held level with 2007. Now, we 
will look at that, and I will get information back to you, but 
at least it is being held level.
    [Information follows:]

                   Increased Funding for Streamgages

    In 2007, USGS increased funding for streamgages. The 2007 operating 
plan includes $16.6 million for the National Streamflow Information 
Program, which includes an increase of $2.3 million for the streamgages 
operating network. In the 2008 President's budget, USGS has requested 
an additional $1.65 million, including $250,000 that would enable 
installation of three new streamgages in southern California and 
deployment of storm surge monitors in support of the bureau's ongoing 
hazards program.

    Senator Nelson. Yeah, I'm not suggesting it is being cut 
back, I'm just suggesting that it doesn't seem to be picking up 
any support for the future because of the increasing need and 
importance of having streamgauge activities, given the drought 
conditions. Unfortunately, they haven't gone away, they 
continue.

                            INVASIVE SPECIES

    One other question--does the Department give any priority 
or preference to States or regions of the country where 
invasive species are choking rivers, and consuming scarce water 
supplies in drought-stricken areas of the country, especially 
considering the concerns in the Republican Platte River Basins. 
Are you taking into account water problems that come about 
because of the invasive species? Red cedar and other species 
that are invasive?
    Secretary Kempthorne. Senator, we do, and I'm very familiar 
with invasive species. It's something that, as a Governor, I 
dealt with, and that we always included in our State budget. 
It's something, ironically, Senator, that I served on the 
National Invasive Species Commission. I remember attending one 
of the early meetings, and they didn't think I would show up, 
because they didn't think I would understand what the issue 
was, but we lived that issue. We do prioritize. Invasive 
species are a critical, critical issue.
    Also, Senator, going back to Senator Craig's comments about 
the forest fires. It's not unusual to see the devastation of 
the entire loss of a forest, it doesn't necessarily mean that 
the forest will come back, because with invasive species, you 
might get a monoculture of something you don't want.
    Senator Nelson. That's right.
    Secretary Kempthorne. I was down in New Mexico, Senator 
Domenici's State and saw the creosote plant that is now an 
invasive species, and what it's doing. We do prioritize, and 
it's something that we do put a great deal of emphasis on.
    Senator Nelson. Well, I hope that you would take a 
particular look at the Platte and Republican River basins, 
because the influx of invasive species there, due to the 
drought, similar situation to a forest fire, the removal of 
water, or the removal of timber can result in an even greater 
invasion.
    Secretary Kempthorne. Senator, I'd be glad to do that. I 
appreciate your work on the Platte River, and I signed that 
Memorandum of Understanding late last year, and again, thank 
you for leadership that has been there for the years. I've 
signed it now with the Governors of Nebraska, Wyoming, and 
Colorado. Senator, may I just take a moment and acknowledge--
this is a little bit like deja vu, in that when I was a Member 
of the Senate, and you were the Governor of Nebraska, and I 
brought forward with Senator Glenn our efforts to stop unfunded 
Federal mandates, you sat at the witness table, and I was up 
there, so, you did a great job.
    Senator Nelson. Well, sometimes roles are reversed.
    Secretary Kempthorne. Yes, they are.
    Senator Nelson. Thank you, Madam Chairman.
    Senator Feinstein. Thank you, Senator.
    Senator Alexander.
    Senator Alexander. Thanks, Madam Chairman.
    Secretary Kempthorne, thank you for coming.
    If I were authorized to give out report cards--which I'm 
not--I'd give some A pluses in your direction, and I'd give the 
President an A plus for the Centennial Challenge, I'd give you 
one for being bold enough to suggest it at a time of fiscal 
tightness. I would give you an A plus for your decision on the 
management policies, to preserve conservation as the primary 
part of the National Park's mission, and I'd give you at least 
a pat on the back for your picking the Great Smoky Mountains 
National Park as your first visit----
    Secretary Kempthorne. Yes.
    Senator Alexander [continuing]. On your listening tour.
    I would suggest something that would seem to some listeners 
as counter-intuitive--I think quietly, the administration is 
building up a conservation and environmental record that's 
under-appreciated. I mean, if you added those things together--
the law that the extension of conservation easements by the 
last Congress, which is the fastest growing conservation 
movement, the EPA rules on sulfur and nitrogen, the low-sulfur 
diesel rules that President Clinton started, and President Bush 
put in place, the passage of Lease 181 for the expanded 
drilling in the Gulf of Mexico, to put in what, we sometimes 
call the Domenici one-eighth, which took $1 out of every $8 
from that expanded drilling and made it a conservation easement 
to go into the Land and Water Conservation Fund. So, that's an 
under-appreciated record, I think.

                  GREAT SMOKY MOUNTAINS NATIONAL PARK

    I have three questions to go along with my A pluses. One 
is--as much as we appreciate the extra funds for the Great 
Smokies, and the other Tennessee national parks--when I looked 
in the report in USAToday, Yosemite, Yellowstone, Grand Canyon 
were all receiving more than the Great Smokies, both in 
amounts, and by percentage increase, which surprises me, since 
the Smokies have 10 million visitors a year, which is two or 
three times more visitors a year than any other park.
    I wonder if you would take a look at that, and help me--not 
today--but, if later, you could help me understand why the 
percentage increases for other parks are higher, it would 
appear, than the percentage increases for the Smokies?
    Secretary Kempthorne. Senator, I'd be glad to get back to 
you, and work with you on that, and certainly note that the 
chairman would probably be watching what we do with those 
numbers.
    [The information follows:]

                  Great Smoky Mountains National Park

    The fiscal year 2008 funding level of $18,690,000 includes an 
increase for Great Smoky Mountains National Park of $1,459,000 over the 
fiscal year 2007 enacted level of $17,231,000. The park has experienced 
49 percent growth in base funding over the last 10 years, which is 
equal to the average growth for all parks in the system, and exceeds 
the growth rate at large park units such as Yosemite National Park, 
Yellowstone National Park, Grand Canyon National Park, Gateway NRA, and 
the National Mall. The fiscal year 2008 budget growth rate for Great 
Smoky Mountains National Park likewise exceeds that of many of its peer 
parks, including Yellowstone National Park, Grand Canyon National Park, 
Independence NHP, and the National Mall.
    The fiscal year 2008 increase for Great Smoky Mountains National 
Park of $1,459,000 includes +$676,000 to cover planned pay and cost of 
living increases and projected cost increases for health benefits; 
+$316,000 to fund 26 maintenance seasonals during the peak visitation 
season; +$214,000 to fund 17 interpretation seasonal rangers during the 
peak visitation season; +$157,000 to fund 12 visitor and resource 
protection seasonals during the peak visitation season; and +$96,000 to 
provide a volunteer coordinator, improving the training and 
certification of volunteers, and providing additional funds for 
housing, and recruiting materials.

    Senator Alexander. I respect that as well.

                    LAND AND WATER CONSERVATION FUND

    The second is, the Land and Water Conservation Fund hasn't 
fared too well over the last few years, it's authorized for 
$450 million a year in the Federal account, and in the State 
account, the President's not asked for much if, or nothing.
    You and Senator Nelson were talking about role reversals--I 
remember when I was testifying as Governor 20 years ago, and 
suggested that the Great Smokies, which is managed, basically, 
as a wilderness area, ought to be declared a wilderness area, 
and the whole western side of the Energy Committee nearly went 
into cardiac arrest at the thought of another wilderness area.
    But, there are big differences in the West and the East. I 
mean, we're not like Idaho, we're not mostly owned by the 
Federal Government, we are a rapidly growing State as well, and 
we have very little park space. As you found when you were down 
there in a very highly Republican, conservative area, we like 
the Smokies managed as a wilderness area, and around it we need 
more park space. For example, Alcoa, and the Nature Conservancy 
and others have arranged for 10,000 acres between the Cherokee 
National Forest and the Great Smokies, to be purchased. So we 
need the extra money for open space. My question is--you have 
the authority this year to take some of the funding that 
Congress gave you, and put it in the Land and Water 
Conservation Fund State account or Federal account--do you plan 
to do so?
    Secretary Kempthorne. Senator, as you know from 
conversations you and I have had, I'm a great advocate for the 
State side accounts. I'm dealing in a world of limited 
resources right now, and that's one of the problems. One of the 
things I would like to do and would hope that we would be able 
to do, is work with you to identify new funding sources in the 
future, so that we can properly put the funds into that 
account.
    Senator Alexander. Well, I appreciate that, and I hope that 
we can work together as we expand drilling for oil and gas in 
the Gulf of Mexico or other appropriate places, that we can 
continue this idea that the last Congress passed of the 
Domenici one-eighth, the idea of a conservation royalty, to 
begin to build up funding for the Land and Water Conservation 
Fund, at least the State side, where there's very little 
controversy about it.
    Secretary Kempthorne. Senator, I agree with that. I would 
look forward to working with you, and too, may I say that we 
did have our first listening session in the Great Smokies, 
which is the number one visited National Park in our system, in 
the Nation. Dale Ditmansen and the team down there--he is your 
superintendent, of course, but it was very apparent, too, that 
they recognize that you are the great champion of parks. That 
is all across the country, as well, so we appreciate your 
leadership.
    Senator Alexander. Thank you, Mr. Secretary.
    Thank you, Madam Chairman.
    Senator Feinstein. Thank you very much, Senator.
    Senator Reed?
    Senator Reed. Thank you, Madam Chairman.

                       WEAVER'S COVE LNG PROJECT

    Welcome, Mr. Secretary. Last October I joined Senator Kerry 
and Senator Kennedy writing to you about the Weaver's Cove LNG 
project up in Massachusetts, but it also affects the Taunton 
River and the Narragansett Bay Estuary, which is a large part 
of my State. I wonder if you might give us an update on that 
project--there are some concerns, in fact, I think reflected by 
the Department of the Interior scientists, that the dredging 
for the project could harm the natural resources and fisheries 
of both the Taunton River, and the Narragansett Bay Estuary.
    Secretary Kempthorne. Senator, I don't believe I can give 
you great details, I will just tell you that----
    Senator Reed. Could you follow up?
    Secretary Kempthorne. Yes. The Fish and Wildlife Service 
and the National Park Service are working in conjunction on 
this issue. So, I would be glad to follow up, though, and give 
you----
    Senator Reed. I wish you would, Mr. Secretary. This is--as 
you can imagine--a very important issue in our way, Taunton is 
in, and Fall River is in Massachusetts, but the transit of 
these ships and the impact is all through--mostly through Rhode 
Island, as they transit from Narragansett Bay up into Fall 
River.
    The real issue here is making sure that scientific and 
legal procedures are followed, particularly, if the best 
science of your Department is used.
    Secretary Kempthorne. Right.
    Senator Reed. I would urge you to take all of those steps 
necessary to make that happen.
    Secretary Kempthorne. Very good. I appreciate that.
    Senator Reed. Thank you. I would also appreciate any 
information you could follow up with in to my office.
    Secretary Kempthorne. Absolutely.
    [The information follows:]

             Weaver's Cove Liquid Natural Gas (LNG) Project

    The Weaver's Cove LNG Facility planned for Fall River, 
Massachusetts on the lower Taunton River called for 2.5 million cubic 
yards of dredge, resulting in 11 acres of permanent intertidal/subtidal 
habitat loss. The Department of the Interior has been coordinating the 
development and review of potential permit conditions based on 
scientific review by National Park Service and U.S. Fish and Wildlife 
Service staff. In particular, FWS has provided technical assistance 
regarding impacts of dredging on anadromous fish species, which use the 
Taunton for migration and spawning habitat. The issue is the number of 
months the company can dredge the river and avoid potential adverse 
effects to anadromous fish species using the river.
    The U.S. Coast Guard issued a preliminary finding in May 2007 that 
the most recent Weaver's Cove proposal did not sufficiently address 
potential navigational and security challenges, that the Federal Energy 
Regulatory Commission (FERC) Environmental Impact Statement (EIS) is 
deficient in analyzing safety and environmental issues, and that a 
supplemental EIS or separate National Environmental Policy Act (NEPA) 
review (Environmental Assessment or EIS) is needed. As of July 12, 
2007, this additional NEPA review had not been initiated.
    The Massachusetts Department of Environmental Protection issued a 
letter in June 2007 to Weaver's Cove Energy (WCE) advising that the 
Department had stopped processing the required 401 Water Quality 
Certificate for the proposed LNG development, and will resume only when 
the Coast Guard issues have been addressed. The Army Corps of Engineers 
confirmed to the National Park Service that they will not proceed with 
processing of its permit for the LNG facility until both the Coast 
Guard and State 401 issues have been settled. Movement on these permits 
is not anticipated until the additional NEPA analysis cited above has 
been completed and the Coast Guard has finalized their position 
relative to navigational safety and environmental concerns.

                   ENDANGERED SPECIES ACT REGULATIONS

    Senator Reed. I also understand that your Department is 
working on regulations for the Endangered Species Act. Can you 
give us an update on those regulations?
    Secretary Kempthorne. Senator, I can't tell you that 
there's anything that's been defined, or any conclusion 
reached, I will tell you that, in meeting with the President 
who has stressed during his entire term, cooperative 
conservation, we held 25 different cooperative conservation 
listening sessions across the United States. Some 2,000 
different speakers came forward, we had over 30,000 written 
comments, based on these listening sessions.
    The number one topic--in fact it was the number one topic 
by a 6-to-1 ratio--was the Endangered Species Act. People, as 
you can well imagine, the full spectrum from, ``The Act is 
doing what it's supposed to do, do not touch it,'' to those who 
think that it should be rescinded.
    But, the bulk of the comments were, we believe that the 
intent of the act is proper, but that improvements could be 
made in how it is administered. So, those are some of the 
things that we're looking at.
    Senator Reed. But, will that be reflected in regulations 
that you propose in the near future? Do you have a work plan to 
revise the regulations?
    Secretary Kempthorne. Senator, at this point, I can't tell 
you there's any conclusion. It's just--it is all part of the 
discussion at the current time.
    Senator Reed. Do you have any notion, Mr. Secretary, when 
you might, sort of, reach a conclusion? At least begin 
proposing regulations? Or is this still in morphs, that you 
don't have any idea?
    Secretary Kempthorne. I'll just tell you that it's very 
much in the discussion phase, and I'd be happy to sit down with 
you, if you'd like, as we get closer to it.
    Senator Reed. Well, thank you.

                        SAVE AMERICA'S TREASURES

    There's one other program that's been very helpful to my 
State, that's the Save America's Treasures program, it's very 
important for historic preservation, it's done a lot, actually, 
for the economic well-being of Providence. It's a city that's 
really coming back, a renaissance. When we've used this 
program, very effectively, to leverage private contributions 
and private development, and I understand that the budget 
request would cut funding below the amount of the last several 
years. I think this is a program that works, and I wonder what 
the justification is for cutting it.
    Secretary Kempthorne. Senator, I can't argue with you on 
all of the positive attributes that you've said. Save America's 
Treasures speaks for itself. Again, in tight budget restraints, 
yes, there is a reduction. I wish it were otherwise, but in the 
total scheme of looking at the budget, and trying to make 
things work, that was one area that had a reduction.
    Senator Reed. Thank you, Mr. Secretary. I appreciate your 
effort, and I wish you well, and we will stay in communication, 
on Weaver's Cove, and Endangered Species and historic 
treasures.
    Secretary Kempthorne. Very good. Thank you very much.
    Senator Reed. Thank you.
    Senator Feinstein. Thank you, Senator.
    Senator Allard.
    Senator Allard. Madam Chairman, thank you very much, and 
welcome, Secretary Kempthorne.
    Secretary Kempthorne. Thank you, Senator.

                 GOVERNMENT PERFORMANCE AND RESULTS ACT

    Senator Allard. Over a decade ago, the Congress passed an 
act called the Government Performance and Results Act, I think 
you're familiar with that, where it directed the agencies to 
set up objectives that are measurable, and then those results 
get reported. Both the Clinton administration and now the Bush 
administration have been working on this program, we have some 
agencies that are rated, as being ineffective, by OMB--they are 
the ones that sort of help manage this and I'm sure that you 
talk to your agencies. I have introduced an amendment in the 
Budget Committee that said that we're looking at those programs 
that are ineffective, and saying, ``Well, we need a 25 percent 
reduction in that group of programs.''
    You know, to me it's hard to explain why we would let taxes 
increase, and the debt increase when we have taxpayer dollars 
going to these ineffective programs. I think even more 
egregious than agencies who have attempted to measure their 
results and failed, are those programs that absolutely have not 
put together any plan at all in how they're going to do it.
    You have a number of those programs that are listed in the 
Department of the Interior. We have about seven of them in the 
Bureau of Indian Affairs, for example. By the way, some of 
these programs, I support because of their benefits. But, on 
the other hand, we want to see taxpayer dollars spent 
effectively, we want accountability on how they're spent.
    The land-use planning section of the Bureau of Land 
Management is one of those that aren't doing anything to try 
and measure their results. Also there's a mining law provision, 
Southern Nevada Land Sales, rural water, Colorado water 
management projects, and planning construction, land and water 
conservation and farmland acquisition which, you said, ``Well, 
you need more resources there,'' but how do you know that the 
dollars are going to be well spent if you're not doing anything 
to measure performance and how the taxpayer dollars are coming?
    So, I hope that you, in the Department of the Interior will 
look at these lists--there's about 21 altogether--you will look 
closely at these, and tell them at the least there's one Member 
in the Senate who's concerned, and I think I'm joined by a lot 
of other Members, who want to see our taxpayer dollars spent in 
a responsible way, and hope that they can report.
    Now, I understand that in some cases, you maybe do need to 
give them more money to be more effective, and get their job 
done. On the other hand, if they absolutely refuse to measure 
their performance, I think that sends the wrong message back to 
Congress on what we're expecting of the agencies.
    I'm wondering if you might comment a little bit about your 
efforts on the PART Program of the President, and what you're 
doing, and what you're going to do about these programs that 
refuse to even demonstrate, and do anything that even 
demonstrates any results.
    Secretary Kempthorne. Right. Senator, the fact that you 
flagged it, I think is significant.
    Senator Allard. I hope so.
    Secretary Kempthorne. It is, indeed.
    Senator Allard. Yeah.
    Secretary Kempthorne. I will tell you that we have been 
working with the Inspector General in our Department, in going 
through and looking at these different entities which you've 
identified. Some have been completed, some are nearing 
completion, but we need to do this. It was prescribed to us, 
and we need to do so. We've been working with OMB. I cannot 
tell you what the final conclusion will be. I can tell you, 
Senator, that this is one of the measures. Approximately 1 or 2 
months ago, there was another measure that was given to us by 
the Office of Personnel Management. It has been used for the 
past few years, and my point to the Assistant Secretaries, to 
the Bureau Directors is, in fact, that, that is a measurement--
what are we going to do about it? We need to use these 
measuring tools. If the tools need to be fine-tuned, then we 
ought to step forward and suggest any changes to that.
    I believe, part of my role in the months that I have 
remaining, is to do what I can to ensure that we have an 
effective, efficient Department.
    Now, I'm very proud to be at the Department of the 
Interior--it's a great Department, outstanding individuals. I 
believe we can continue to make improvements, however.
    Senator Allard. Well, thank you. I'm sure when you were 
Governor of Idaho that you used the management objectives to 
kind of bring accountability to your programs, or under your 
administration. I have all of the confidence in the world, and 
I'll bring up the question next year and see how well things 
are going.

                            LANDSAT SENSORS

    Secretary Kempthorne. I appreciate that, Senator.
    Senator Allard. There's a program on thermal sensing 
technology, this money for this program goes, is funded jointly 
by the USGS as well as NASA. The technology is used to measure 
water flows, among other things. The State of Colorado uses it 
to meet its interstate compact obligation--you know, we're kind 
of at the top of the heap, we have some seven drainage systems 
that come out, and a lot of them are downstream, but it's 
particularly useful in the Arkansas River, where we've had some 
lawsuits because Kansas wanted to make sure they had enough 
water going down there.
    I see that neither USGS or NASA has provided the dollars 
for that program, and I'm concerned that maybe we've got a tug-
of-war between the two agencies, and this is not being taken 
care of like it should.
    I wonder if you have a response for us on that, if you 
don't, some kind of written response would be helpful.
    Secretary Kempthorne. Senator, I believe Assistant 
Secretary Weimer can comment on that.
    Mr. Weimer. Yes, I believe, Senator, you're referring to 
the Landsat sensors----
    Senator Allard. Yes, that's it.
    Mr. Weimer [continuing]. On the new Landsat satellite.
    Senator Allard. Yes, that's it.
    Mr. Weimer. Yes, conversations are continuing with NASA, I 
believe, between USGS Director Myers, looking at the need for 
that new sensor. I'm not sure exactly where those conversations 
are now, so we'll have to get back to you on that.
    [The information follows:]

         Thermal Sensor for the Landsat Data Continuity Mission

    Landsat data continuity, which is the collection of data to 
continue a long-term record, includes the acquisition of thermal data. 
Landsats 5 and 7 both have thermal sensors and have been collecting 
thermal data to add to the USGS data set of 35 years. These data are 
increasingly important to States, water districts, and others, for the 
management of western water resources, particularly agricultural water 
use.
    NASA and the Department are partners in Landsat Program Management. 
NASA built and launched Landsats 5 and 7, which are now owned and 
operated by USGS. The USGS also manages the Nation's Landsat data 
archive and distributes products to a wide variety of domestic and 
international customers.
    Both USGS and NASA have clearly defined roles for the development 
and operation of the upcoming Landsat Data Continuity Mission, or 
Landsat 8, due for launch in 2011:
  --NASA will develop and procure the LDCM spacecraft, sensor(s), 
        mission operations element (flight software), and launch 
        vehicle. NASA is also responsible for end-toend mission 
        integration, in consultation with USGS. To date, NASA has not 
        included a thermal sensor in its design of Landsat 8. USGS is 
        working closely with NASA to influence this issue.
  --The USGS will develop and procure the LDCM ground data processing 
        and archive systems plus a flight operations facility, in 
        consultation with NASA. The USGS will also own and operate the 
        spacecraft after launch, and manage and distribute the LDCM 
        data.

    Senator Allard. Well, it's really important for our ranch 
management, I happen to use the Arkansas River, because right 
now it's got everybody's attention, but I think on these 
interstate compacts, it's important to know what's happening on 
water flows and this is an important program in that regard, 
and I hope you're serious about your discussions.
    Senator Craig [presiding]. The chairman has given me the 
gavel, Mr. Secretary. What else would you like in your budget?
    Having said that, let me turn to Senator Cochran.
    Senator Cochran. Mr. Chairman, thank you very much.
    Mr. Secretary, I wanted to congratulate you for the 
leadership you're showing on a wide range of subject fronts, 
and as Secretary of the Interior, I specifically appreciate the 
leadership and the off-shore gulf coast area planning and 
supporting legislation to make it possible to invigorate the 
production of natural resources, energy products from that 
region, sharing royalties with the gulf coast States, that's 
really a breakthrough in my view, and it's going to mean a lot, 
not only to helping satisfy our energy needs, but to 
environmental protection and restoration of those offshore 
islands, which were so devastated by Hurricanes Rita and 
Katrina. The leadership you're providing in that area is to be 
commended, I thank you for that.
    Secretary Kempthorne. Thank you, sir.

                        NPS CENTENNIAL CHALLENGE

    Senator Cochran. One other area I think deserves mention, 
too, and that's the Centennial Challenge which you have 
developed to help spur the protection and resource conservation 
in the national parks. This is something that's definitely 
needed--I wondered, in the area of the mandatory match that you 
foresee coming from private contributions, what is your 
assessment of the reception to that proposal--are there any 
early indications that this is really going to be something 
that will achieve the results you anticipate?
    Secretary Kempthorne. Senator Cochran, I appreciate you 
focusing on that.
    The response has been extremely positive. I've met with 
many members of the friends organizations that support our 
national parks. There's 144 different entities, each of which 
supports a different Park. They had told me early on, as did 
NPCA--the National Park Conservation Association, different 
foundations and the private sector--they are willing to step up 
and be the margin of excellence, but they do not want to be the 
margin of survival for the Parks. They said, ``We need to see 
the Federal Government step up and to do its part.''
    The NPCA, for example, had said, ``We'd like to see you 
really reach, and using 2006 as a benchmark, if you could 
increase your operating budget by $250 million,'' they knew 
that was a real stretch for us, but the President came in with 
$258 million. So, they're very supportive.
    Now, we turn to that part about the local matches--the 
philanthropy is part of the heritage of national parks. The 
Great Smoky Mountains that Senator Alexander referenced, the 
Rockefeller family stepped forward initially, and said they 
would put forward $10 million in a match if the private sector 
would come forward, that's what was accomplished. I think 
something like 30 of our parks are the result of families or 
foundations that have stepped forward. Historically, we have 
raised approximately $20 million per year from the private 
sector. We believe now, that with this incentive, that we can 
achieve $100 million.
    A recent example would be in Philadelphia when we announced 
this, Rebecca Rimel who is the Director of the Pew Foundation 
said that the Pew Foundation would bring forward $6 million for 
the renovation and restoration of the Ben Franklin Museum in 
Philadelphia. She'd spoken to Governor Rendell where the State 
and private entities would match that $6 million if the Federal 
Government would use its $6 million as a match. So, there's $18 
million that's real, that shows you the response that we get 
from the foundations and the private sector.
    Senator Cochran. Well, that's very encouraging, and again, 
I think it points to the effectiveness of your personal 
involvement and hard work in this area. We are hopeful that 
some of this will spill over into our State and be helpful to 
us as we try to develop tourist-friendly sites along the 
Natchez Trace Parkway for visitors who choose to use that 
scenic parkway as a way of transportation and an educational 
experience, traveling all the way from Nashville to Natchez, 
Mississippi, the Merriweather-Lewis Area where that famous 
person died. There's an initiative underway to enhance that 
particular area for education benefits, for those who are 
interested in early-American history.
    We're also urging the Department to look carefully at 
developing the Chickasaw and Choctaw Native American historical 
areas of interest. Those were the civilizations that were quite 
prominent in the State of Mississippi, but the Cherokee Nation 
in Tennessee is another example of early history, early-
American history that is very interesting, and these National 
resources can be used as a way to make us all more familiar and 
appreciate the contributions to our country that these Native 
American tribes have made.
    So, your support for initiatives that we're trying to 
develop for that Parkway would be appreciated, as well.
    Secretary Kempthorne. Senator Cochran I appreciate what you 
have said, and one of the areas that we are emphasizing with 
the National Parks Centennial, are the trails, so that we can 
link these magnificent entities to one another, and continue to 
have the tourism be very much a part of this.
    It resonates very strongly with me when you talked about 
the revenue-sharing that we're doing with offshore oil and gas. 
I agree in revenue-sharing, I believe in incentives. I think 
this is a very effective tool that's there, and it can 
certainly help with Coastal restoration. I commend you for your 
leadership, post-Katrina, in helping Mississippi to rebuild, 
and the great progress which you're making there.
    Senator Craig. Thank you very much, Senator Cochran.
    Now, let me turn to Senator Pete Domenici. Pete.
    Senator Domenici. Well, thank you very much, Mr. Chairman. 
It's my privilege to be here today. I had to attend an earlier 
hearing on appropriations, and I'm glad that----

                            1998/1999 LEASES

    Senator Craig. Senator, thank you. Before you arrived, both 
the Secretary and the chairman and I dialogued for a moment 
about the lease issue in the gulf, and the chairman had talked 
about using an extension of lease--I know it's something you've 
looked at seriously--to bring those companies into compliance. 
The Secretary was observant, I think, to that conversation, and 
offered to get something done.
    Senator Domenici. Yeah, well the 1998, 1999 leasehold, I'm 
not going to take much time, other than to tell you that it 
will be my proposal that we extend those leases 3 years, the 
first opportunity I have, whichever is first, this committee, 
or the other Committee on Appropriations, or Senator Bingaman's 
Committee on Natural Resources is just authorizing, I will 
offer that, and indicate that that's going to be made available 
to those who were part of that bid process, that time, and I 
think there's an awful lot of them that are willing to sign on, 
in exchange for which they will receive, under my proposal that 
you all have been referring to, they'll receive the extension 
of their leasehold.
    Thank you for bringing that to my attention so I would not 
waste time.

                    INDIAN WATER RIGHTS SETTLEMENTS

    The other matters that are, obviously very, very important, 
I'm sorry the Senator isn't here, but let's put them on the 
table--Indian water rights settlements. I say, Mr. Secretary, 
this year, this Congress, we have three big ones, that are New 
Mexico in origin, and we have been sort of waiting around, 
wondering when the government would be ready, and it looks to 
me like we can't do that, we have to be a bit more active, than 
just being observant, waiting around to see when they will do 
something.
    We will not--we will be much more proactive, we will tell 
the Secretary, and we start today, so that it's totally clear, 
and we are looking for the money that the settlements envision 
and that we are not, we're not going to just say, just run away 
when somebody from your Department, Mr. Secretary, says, 
``Well, where is the money?'' You know, that's kind of a two-
way street. The money's going to be--we're going to ask you all 
where the money is, too, not just you ask us to go to the 
appropriators to find the money.
    The government is going to get stuck with these because 
we're going to be passing the bills, and passing them along, 
and I can't imagine the President of the United States, 
literally, wanting to veto a bill compensating the three Indian 
tribes in New Mexico for 40-year old water rights, 40-year old 
suit, one's 40, one's 30, one's 28--that's how long we've been 
in court--and in one instance, there's been some real give, a 
big kind give, and we've got to get around to the Federal 
Government understanding that with that, you've got to proceed.

                                 ENERGY

    We've got a BLM, present, has indicated $141 million in 
energy and minerals management, a 31 percent increase, we think 
that's, that's much-needed, and we salute him for putting it 
up, and we want to see if we can get the best possible use for 
that.
    The Department of Energy estimates that technically, in 
recoverable oil--shale in the United States is roughly 
equivalent to three times Saudi Arabia reserves. Section 369 of 
the Energy Policy Act directs the Secretary of the Interior, 
that's you, sir--and it directs you to move ahead and I'm very 
pleased that you included $4 million in your, to add to your 
ongoing oil shale activity.
    You will be feeling in your Department, the vitality of 
that investment as the year goes by. You don't have $4 million 
invested out there in shale not to find some real action. 
Between Shell Oil and a couple of others, and the others and 
the activity in shale development this year, will be a big, big 
item. I don't think we ought to hide it from the rest of the 
world, Mr. Secretary. I believe you ought to flaunt it, and 
make sure that the Arab countries know we have it, and it's 
usable, and it's big, big amounts. If done properly, within a 
decade, you might have a very large shale production on the 
continent side of the United States that will be ours.
    Now, that doesn't satisfy some in America, who think we 
need to just not use oil, and this is oil, but to me, it 
satisfies us in the if we get it working, we don't need to go 
down in the gulf and get it, we use our own, and we'll be able 
to use our own. That's something which I think is vitally 
important. I hope you feel the same way.
    If we pursue it with vigor, it wouldn't hurt you, would it, 
Mr. Secretary?
    Secretary Kempthorne. Senator, it would not. I share your 
enthusiasm. I think it's one of those areas where we need to 
look at the innovation. I will tell you that this summer, we 
will be coming forward with a programmatic EIS that allows us 
to do so. So, again, I appreciate--and may I, if I may just 
reference your comments concerning Indian water rights?
    Senator Domenici. Yes.

                          INDIAN WATER RIGHTS

    Secretary Kempthorne. I know how important that is to you. 
It's important to the tribes. Senator Craig and I know from our 
own experience of water rights settlements, and how critical--
especially with water, it's this finite resource. The leader of 
my team within the Department who is charged with that 
responsibility just returned from New Mexico, that was his 
second trip down there, meeting with----
    Senator Domenici. Who was that?
    Secretary Kempthorne. Michael Bogert.
    Senator Domenici. Yes.
    Secretary Kempthorne. He'll be meeting with your staff as 
well, and Senator Bingaman, because we know of your intention, 
and we want to work with you on that.
    Senator Domenici. Thank you very much.
    Secretary Kempthorne. Thank you.
    Senator Domenici. Thank you, Mr. Chairman.

                            1998/1999 LEASES

    Senator Craig. Well, thank you very much, Senator Domenici, 
and I'm anxious to sign on with you, this initiative to try to 
extend those leases. I think that your leadership there solves 
potentially a very big problem that needs to get solved, sooner 
rather than later, and that seems to be a reasonable way to 
approach it.
    I believe this morning she expressed support for that 
approach of the extension. Yeah.
    Senator Domenici. We will have a nice bipartisan group on 
the committee taking it out of here to the full committee, I 
think we'll be on top of it. Some will complain that it doesn't 
pick up everybody, but nothing picks up everybody.
    Senator Craig. No.
    Senator Domenici. I think ours picks up the most. That's 
good. We don't have to, then, do anything to other people that 
is damaging to their rights and privileges as citizens, 
citizen-entities in the United States, we hope that's the case.
    Senator Craig. Thank you.

                        HEALTHY LANDS INITIATIVE

    Mr. Secretary, one last question of you before we let you 
go--the Department's budget includes $22 million for the 
Healthy Lands Initiative split between U.S. Geological Survey, 
U.S. Fish and Wildlife Service, and BLM for large-scale land 
management approaches. Can you describe how healthy, how the 
Healthy Lands Initiative is different than the approaches the 
Agency is currently employing?
    Secretary Kempthorne. Yes, Senator, this will be a joint 
effort between the Bureau of Land Management, Fish and Wildlife 
Service, and USGS. Again, historically there have been efforts 
dealing with parcel by parcel, or where there is energy 
development, wellhead to wellhead, instead of looking at the 
large landscape. This is now to change the emphasis, so that 
we're looking at the entire landscape.
    I'll give you a specific approach to this, which we're 
seeing in New Mexico. I mentioned the creosote plant. It is 
now, what traditionally had been taking up something 10 to 15 
percent of the landscape, is now approaching 80 percent. And 
nothing grows where the creosote plant is. So, what happened? 
What was past practices? Or what was the past practice? It was 
the Chisholm Trail.
    Senator Craig. Yeah.
    Secretary Kempthorne. Now we're using aerial application by 
helicopter with pellets that are specific to the plant and with 
the rains, it is the demise of that plant. The natural grass 
seeds are already there. So we're now seeing a return of the 
historic grasses.
    When we talk about this, Wyoming, for example, you have 
significant wildlife corridors that have been there for 
centuries, and they need to be there for centuries. So we need 
to look at the total landscape so that we don't get down to 
such fine detail that we inadvertently, somehow, squeeze those 
landscapes. We need to ensure that energy development and 
world-class habitat are not mutually exclusive. We're now to 
the point that, with technology, instead of 10 acres per 
wellhead, we're down to a footprint of a half an acre. That's 
part of what this effort is, is to be sensitive to the world-
class environment we have, knowing that we need to have energy 
development for the well-being of the country.
    Senator Craig. Well, I appreciate that explanation. When 
you were talking creosote, I was hoping maybe we could apply 
that in relation to the Juniper, in part, in Eastern Oregon, 
Southwestern Idaho, which has become an invasive species, 
literally wiping out tens of thousands of acres of rangeland, 
upland game bird habitat, as you know. Like creosote, Juniper 
takes over, controls, robs the land of moisture, and obviously 
other vitalities.
    Secretary Kempthorne. Yes, and Senator, in this Healthy 
Lands Initiative, there's six targeted areas, one of which 
includes Idaho, because of the sage grouse.
    Senator Craig. Good.
    Secretary Kempthorne. Because of the critical nature, we 
want to get ahead of the herd, ahead of the curve, with regard 
to the Sage Grouse so that we don't have difficulties that 
could inadvertently cause us to look at the energy development.
    Senator Craig. Well, thank you very much, on behalf of the 
Chairman and myself, let me thank you for your presence here 
today, we'll look forward to working with you as we shape these 
budgets and get them ready. Well, we're in the debate over the 
budget this week, and that will then allow us, this 
subcommittee, to move forward with your budget and the 
appropriating process.
    Secretary Kempthorne. Senator, I appreciate again, number 
one, your friendship, and your years of service to the State of 
Idaho and to the Nation. You're one of our leaders. It's so 
sorely tempting with you as the Chair, and myself sitting here, 
unanimous consent for something.
    Senator Craig. Okay. Thank you very much.

               SENATOR BENNETT'S STATEMENT FOR THE RECORD

    Senator Bennett has submitted a statement that will be made 
part of the hearing record at this time.
    [The statement follows:]
            Prepared Statement of Senator Robert F. Bennett
    Madam Chairman, thank you for holding this hearing today to examine 
the Department of the Interior's fiscal year 2008 budget proposal. I am 
pleased to see my friend, Secretary and former Senator Kempthorne, this 
morning, and look forward to working with him during this year's 
appropriations process.
    I am sure that Secretary Kempthorne has heard from a lot of people 
regarding the department's oil and gas program in my state. Let me give 
you the senator from Utah's perspective on this program.
    Utah is a public land State. Nearly two-thirds of the State is 
managed by a federal agency. The Department of the Interior, through 
the Bureau of Land Management, oversees the management of approximately 
23 million acres of surface area and an additional 10 million acres of 
subsurface rights in Utah. This represents around 44 percent of my 
State.
    I am pleased at the progress the BLM's oil and gas program has 
made, not only in terms of production but also in terms of conservation 
and efficiency. For example, compare these numbers: in 1984, the BLM 
leased almost 20 million acres for oil and gas resources in Utah. 
Today, that number is only around 4.5 million acres.
    Another interesting fact is that the surface disturbance from an 
average well is only about one-quarter of the acreage that it was 30 
years ago. Opponents of this program often fail to acknowledge that in 
Utah, only approximately 30,000 acres experience actual surface 
disturbance from oil and gas operations--that's less than 1 percent of 
BLM managed land in Utah.
    I am also pleased to see your Healthy Lands Initiative included in 
the president's budget. This will help to mitigate oil and gas leasing 
activities, including secondary impacts, and to benefit endangered 
species, such as the sage grouse. We have funded a similar program in 
the Agriculture Appropriations Bill that has been very successful in 
Utah. I also understand that the State has appropriated funds that will 
be used in conjunction with federal funds for this program. This 
program represents real progress, and I am excited at its future 
prospects.
    These successes notwithstanding, we will continue to hear from the 
alarmists that claim that BLM is not properly managing our natural 
resources. I would urge the department to not overreact to such claims. 
I believe that under Secretary Kempthorne's watch, the department has 
taken positive steps to balance responsible development with 
conservation, and has used the appropriate discretion. I would 
encourage you, Mr. Secretary, to continue your course of action, and 
not be dissuaded by the ill-informed.
    Thank you again for the opportunity to discuss the department's 
budget, and I look forward to productive discussions about this 
appropriations bill.

                     ADDITIONAL COMMITTEE QUESTIONS

    Senator Craig. There will be some additional questions 
which will be submitted for your response in the record.
    [The following questions were not asked at the hearing, but 
were submitted to the Department for response subsequent to the 
hearing:]
            Questions Submitted by Senator Dianne Feinstein

                     SAN FRANCISCO BAY RESTORATION

    Question. I would like to direct your attention to a matter of 
critical concern to me and hundreds of thousands of people who live and 
work near the San Francisco Bay. A few years ago I brokered a transfer 
of land for the Fish and Wildlife Service from the Cargill Corporation. 
Cargill conveyed the land in the south bay for salt production so that 
it could be restored to its natural state--tidal flats and marshland 
perfectly suited for wildlife habitat. In exchange for its generosity 
to the United States, the responsibility for restoring the salt ponds 
fell to the new owners, the Fish and Wildlife Service.
    The earthen water control structures at the salt ponds also serve 
as the flood protection for the communities and businesses along the 
south bay. Unfortunately, this presents a serious threat because the 
levees and dikes are made of clay and sand and sit near a fault line. 
The Corps of Engineers acknowledges that the earthworks are inadequate. 
An earthquake or major flood could turn the levees to mush. If this 
happens, we could face a Hurricane Katrina-type catastrophe because 
much of the occupied land near the south bay is 25 feet below sea 
level. Salt water would inundate the valley, causing untold loss of 
life, property, and agriculture.
    What can the Department of the Interior do to address the public 
safety and ecological problems facing the San Francisco Bay?
    Answer. The Fish and Wildlife Service, in partnership with the many 
State, Federal and local agencies, is working on a long-term 
restoration plan for the salt ponds. The final plan and environmental 
documents are expected to be completed by the end of 2007. Phase I of 
the South Bay Salt Pond Project is expected to begin in fiscal year 
2008. Interim steps have already been taken that have increased fish 
and wildlife populations in the area. The South Bay Salt Pond Project 
will restore and enhance a mosaic of tidal marshes and managed ponds. 
Restored tidal marshes will provide critical habitat for the endangered 
California clapper rail and the salt marsh harvest mouse. Large marsh 
areas with extensive channel systems will also provide habitat for fish 
and other aquatic life as well as areas for harbor seals. In addition, 
the restored tidal marshes will help filter and eliminate pollutants. 
Many of the ponds will continue to be managed ponds, while enhancing to 
maximize feeding and resting habitat for migratory shorebirds and 
waterfowl traveling the Pacific Flyway.
    When the Fish and Wildlife Service acquired the salt ponds, the 
Service agreed to maintain the levees in a manner similar to how 
Cargill had done in the past. In fiscal year 2004, the Service 
reprogrammed $2.5 million in construction funds that has been used for 
levee maintenance at the salt ponds. In the fiscal year 2007 Continuing 
Resolution budget, the Service is allocating $1 million in construction 
funds to maintain the levees.
    The salt pond levees in question were never constructed to provide 
flood control for neighboring communities. Rather, Cargill Salt and its 
predecessors constructed and maintained the levees to provide for 
commercial salt production (i.e., the levees were not designed or 
engineered to meet flood control standards). However, with the land 
subsidence that has occurred in the South Bay, these salt pond levees 
have been providing de facto flood protection. Since the Service is not 
a flood control agency, it is cooperating with the Army Corps of 
Engineers, Santa Clara Valley Water District, and Alameda Country Flood 
Control agency, to complete a Shoreline Study that will provide a long-
term flood protection strategy for the South Bay.
      inspector general report on interior department contracting
    Question. The Department's Inspector General reported this January 
that Interior's franchise fund, GovWorks, and its working capital fund 
have repeatedly and routinely violated Federal appropriations law and 
contracting regulations. The most damaging finding was that there was a 
continuing pattern of abuse of the Antideficiency Act by Departments of 
Defense and Interior. DOD purchasers routinely used Interior revolving 
funds as places to ``park'' or ``bank'' funds that were to expire soon 
for later use. Interior ``placed contracts for DOD customers using 
funds from expired funds, thereby circumventing DOD appropriations 
law.'' Approximately $400 million was identified that should have been 
returned to Treasury. Instead, Interior converted these expiring funds 
into multiyear funds.
    The IG points out that the GovWorks retains 4 percent of the DOD 
money it parks to pay for Interior priorities. This certainly gives the 
appearance of profiting from illegal or irregular contracting. I do not 
think running a profitable business center is one of the authorized 
missions of the Department of the Interior. How much money has GovWorks 
retained?
    Answer. Specifically the OIG recommended that certain transactions 
be reviewed to evaluate the potential use of expired funds and to 
research possible non-compliance with contracting regulations related 
to the bona-fide needs rule. NBC has worked diligently with DOI and DOD 
officials to implement operational improvements and much progress has 
been made.
  --Reviews of compliance with fiscal law have been completed for $577 
        million of interagency agreements. As a result of these 
        reviews, GovWorks identified $200 million in funds that were 
        not expired, referred $119 million to the DOD Comptroller for 
        review and determination of compliance with the agency's rules 
        and interagency agreements, and deobligated approximately $235 
        million, which was returned to the respective client agency.
  --Additional controls have been implemented to ensure that 
        acquisition requisitions provided by the requesting agency 
        identify a bona fide need before the purchase request is 
        accepted and prior to any contract action being taken.
  --Since DOD has implemented policies that are more restrictive than 
        the applicable legislation, the DOD and DOI have jointly 
        developed and approved a Memorandum of Agreement that further 
        defines the roles and responsibilities of the respective 
        organizations and includes additional improvement actions to be 
        completed.
    GovWorks provides acquisition services to Interior bureaus and 
offices, as well as other Federal agencies, under authority of the 
Government Management Reform Act of 1994 and the 1997 Interior and 
Related Agencies Appropriations Act, which established the Interior 
Franchise Fund in 1997.
    From its inception over 10 years ago, GovWorks has evolved into a 
major provider of cost competitive acquisition services for Interior 
bureaus and offices and other Federal agencies. We believe that much of 
the acquisition work provides value added to Interior by contributing 
knowledge and skills to core service areas for Interior, but we are 
currently reviewing the scope of our acquisition services to see if 
further changes are merited.
    Of the $1.4 billion in contract funding received from customers in 
2006, GovWorks retained $47 million or 3.2 percent. This funding 
supported GovWorks acquisition services including development, 
administration and close out of the contracts. Funding used supports 
the acquisition staff and support costs, maintenance of reserves for 
annual leave, depreciation, and potential shut-down costs and for 
capital improvements. The majority of the retained earnings support the 
122 Federal employees and 76 contract employees that perform the 
acquisition services.
    In prior years GovWorks had retained earned amounts each year as 
follows:

                        [In millions of dollars]
------------------------------------------------------------------------
                            Year                                Amount
------------------------------------------------------------------------
2001.......................................................          4.6
2002.......................................................         10.9
2003.......................................................         30.5
2004.......................................................         40.2
2005.......................................................         44.0
2006.......................................................         47.4
                                                            ------------
      Total................................................        177.6
------------------------------------------------------------------------

    The overall percent of fee earned for this period was 3.1 percent 
of contract dollars awarded.
    Question. What did your Department do with these funds?
    Answer. Funding retained was used for operation of GovWorks as well 
as for reserves and investments in equipment and financial management 
improvements. Of the total $177.6 million retained through 2006, $126.9 
million was used to support operations of GovWorks, $1.8 million was 
retained for reserves for accrued annual leave and depreciation, and 
$42.5 million was used for investments. These investments include 
funding for the Financial and Business Management Information System, 
Enterprise Services Network and Information Technology Security 
improvements. These investments provide or will provide enhanced 
information technology and financial services and systems to Interior 
and its customers. For example, GovWorks Interior and other 
governmental customers will benefit from the modernized acquisition 
module of the Financial and Business Management System that is being 
deployed.
    Question. Please explain why this committee should not close this 
enterprise down.
    Answer. The acquisition organizations in DOI are operating in 
compliance with legislation specific to the Department and/or under 
legislation applicable to all Federal agencies as a Federal service 
provider.
    GovWorks provides high quality acquisition services at competitive 
prices. By offering acquisition services that are related to Interior's 
mission, GovWorks can provide specialized, unique services to Interior 
bureaus that may not be available in-house. For example, GovWorks 
manages the Department's contracts for major information technology 
investments--these projects are on a scale and complexity that requires 
skills and capacity that may not available through in-house acquisition 
staffs. GovWorks also has staff that can focus on areas of expertise, 
hiring experts and providing specialized training to create centers of 
excellence. Interior and other customers benefit directly from these 
services by spreading costs over a larger client base resulting in 
lower operational costs resulting from economies of scale and 
efficiencies.
    Further, GovWorks has able to attract and retain the highly 
technical and professional employees who perform these services and are 
thereby able to provide improved expertise and timely support and at 
the same time assure compliance with the complex laws and regulations 
that surround Federal financial and administrative programs.
    Finally, the ability to utilize earning reserves for equipment and 
financial improvement allows the lines of business to have funds to 
invest in improvements and enhanced services that benefit all 
customers. An example, GovWorks' Business Information System provides 
customers with an automated system to track acquisition requests and 
the status of their acquisitions throughout the process from inception 
to close-out.
    Interior has and will continue to implement improvements based on 
the OIG recommendations to strengthen oversight and management of 
GovWorks and the Franchise Fund in order to address the Subcommittee's 
concerns. The following highlights some of the actions that we have 
taken:
  --Established and filled an SES leadership position for the 
        acquisition program.
  --Developed and implemented new policies and enhanced procedures and 
        guidance to ensure funds and contracts are administered in 
        compliance with applicable laws, policies, and regulations. 
        This has included additional requirements regarding the 
        determination of price reasonableness, enhanced file 
        documentation, strengthened procedures for producing the 
        independent government cost estimates, and use of checklists to 
        ensure that all required procurement actions are taken and 
        adequately document.
  --Broadened training requirements for procurement professionals to 
        ensure compliance with FAR and Appropriations Law provisions.
  --Established a new internal review team tasked with conducting 
        independent quality reviews of randomly selected procurement 
        actions to ensure that acquisition procedures are being 
        followed and appropriately documented.
  --Enhanced DOI legal reviews for both solicitation and award. All 
        contracts valued at over $500,000 are reviewed by the Office of 
        the Solicitor.
  --Establishing a formal review program conducted annually and 
        performed by an independent organization/entity (consistent 
        with Department risk assessment program) using sampling 
        techniques to review compliance with FAR, Department/NBC 
        acquisition policies, documentation requirements, etc.

                         WILDLAND FIREFIGHTING

    Question. Interior's wildland fire management budget request 
includes a proposal to decommission six Type-1 firefighting crews. 
These are the ``hotshot'' crews who lead the frontline fight against 
major wildfires. Why are you shutting down 6 of your top crews when the 
trend has been for more and more severe fires?
    Where are these six crews headquartered--are any in California?
    Answers. While the request notes the reduction in the number of 
hotshot crews, it also provides for an increase in the number of 
initial attack firefighters.
    The Budget proposes reconfiguring approximately 6 hotshot crews, 
which are typically mobilized on long-duration fires, into initial 
attack resources. Individuals would retain their Type-1 credentials, 
and these highly skilled firefighters would be used to build efficient, 
effective and mobile initial attack forces to respond to high-priority 
new fire starts. Critical fire expertise would be retained, but their 
focus would be on keeping fires small. These reconfigured crews would 
be positioned according to where our Predictive Services group believes 
significant fire activity is most likely to occur.
    We are continuing to assess options that would allow us to maintain 
the best possible fire response organization; however, no decisions 
have yet been made regarding which crews, in which locations, would be 
affected.
    Question. The request also zeroes out wildfire assistance grants to 
rural fire departments--the same fire departments that respond and put 
out thousands of wildfires every year. I must tell you that this 
proposal is penny-wise and pound-foolish. These fire departments 
provide an indispensable first response for only $10 million per year. 
I believe these small fire departments, most of them volunteers, save 
the Federal Government many times that amount in fires they suppress 
before they become Federal responsibilities. What incentives do you 
plan to offer rural fire departments in exchange for taking on the 
costs and risks for responding to wildfires?
    Answer. Rural and community fire departments are indeed an integral 
and important component of the nation's wildland fire community. Their 
first-response capabilities are crucial to keeping many wildland fires 
small and manageable, and we agree their services result in tremendous 
cost savings to taxpayers.
    Although Rural fire assistance was a highly successful program from 
2001-2006, it had achieved the primary goal of updating the equipment 
and prevention programs in rural fire departments across the country. 
The program is also duplicative of other Federal fire assistance grant 
programs administered by the Forest Service and the Department of 
Homeland Security.
    We have turned our focus and funding to the Ready Reserve program, 
which provides training to rural departments to enhance their expertise 
and capability in responding to and managing wildland fires. The Ready 
Reserve program is available to the same departments served by the 
Rural Fire Assistance program and is designed to provide critical 
training that meets the needs and schedules of those departments and 
firefighters. This training is available on-line or in packages 
specifically designed to be presented in classrooms and within 
timeframes that meet the needs of rural and community fire departments.
    The goal of the Ready Reserve program is to develop fully trained 
local response units and teams capable of managing a wildfire incident 
within their jurisdiction. More than $1.8 million was allocated to the 
Ready Reserve program in 2006, and an additional $1.8 million is 
targeted for the program in 2007. The 2008 Preparedness budget request 
includes $1.3 million for the Ready Reserve program. The reduction 
reflects completion of the Ready Reserve training package re-write.
    Question. How much funding will rural fire departments in 
California lose because of this proposal?
    Answer. During the life of the Rural Fire Assistance program, 
annual funding to California ranged from $350,000-$390,000. If the 
program had continued, we would expect the amount of RFA grants to 
decline as departments achieved upgrades in their equipment and 
prevention programs. We still offer training to these same departments 
through the Ready Reserve program.
    Also, through the California Department of Fire and a high number 
of full-time, professional departments at the local level, we note the 
State has a first class fire community. We are pleased our 
contributions have contributed to their capability.

                              POLAR BEARS

    Question. According to recent accounts in the Washington Post and 
the New York Times, the Director of the Fish and Wildlife Service has 
forbidden his agency's premier polar bear scientists from discussing 
climate change, polar bears and sea ice at international conferences. 
This gives the appearance that he is trying to prevent the truth about 
the seriousness of the threat to polar bears from getting out. Of 
course all the attendees at these conferences are very knowledgeable 
about global warming and the threats to polar bears. Is it now Interior 
Department policy for scientists to be forbidden to publicly discuss 
their areas of expertise?
    Answer. Long-standing Departmental policy requires employees who 
are traveling to foreign countries to make an official foreign travel 
request through our International Affairs office, which forwards these 
requests through the Director's Office to the Assistant Secretary. 
These requests must include the purpose of the travel and the subjects 
expected to be discussed. This policy is intended to ensure that all 
foreign travel is focused on achieving a clear purpose, is cost-
effective and conducted in accordance with Federal laws and policies. 
This policy has been in place for at least two decades within the 
Service. The Service does not, however, limit the ability of our 
scientists to engage in open dialogue with international colleagues on 
climate change, polar bears, sea ice reduction or any other issue 
clearly within their professional discipline while on foreign travel. 
We do, however, specifically assign responsibility for various topics 
among our scientists and manage foreign diplomatic meetings to 
designate which scientists are responsible for various issues.

                           VOLUNTEER PROGRAMS

    Question. The President's budget request includes reductions to 
volunteer programs in several agencies. Volunteers provide the agency 
with hundreds of thousands, perhaps millions, of hours of labor to 
national parks, scenic trails, and wildlife refuges. While their labor 
is donated, volunteers require training, tools, supplies, and travel 
money to do their great work.
    Please provide for the record a table showing 2006 enacted 
appropriations, 2007 funding, and 2008 requests for all of the 
Department's volunteer programs.

                     FUNDING FOR VOLUNTEER PROGRAMS
                        [In thousands of dollars]
------------------------------------------------------------------------
                                       2006         2007         2008
              Bureau                 enacted      enacted      request
------------------------------------------------------------------------
BLM..............................        1,278        1,300        1,300
OSM..............................           60           35           35
USGS.............................           30           30           30
BOR..............................           10           10           10
FWS..............................          735          735          735
NPS..............................        1,831        1,832        5,232
Take Pride.......................          493          495          513
                                  --------------------------------------
      Total......................        4,437        4,437        7,855
------------------------------------------------------------------------

                        HEALTHY LANDS INITIATIVE

    Question. The President's request includes a $22 million increase 
for a healthy lands initiative to improve wildlife habitat while 
allowing recreation and energy production. These seem to be mutually 
exclusive activities. Would you give us some examples of how this would 
work?
    Answer. Improving wildlife habitat and allowing for recreation, 
energy development and other uses are not mutually exclusive when 
approached on a broad scale. For example, the Green River Basin in 
southwest Wyoming contains tremendous energy resources and world-class 
wildlife, including moose, deer, elk, pronghorn and sage-grouse. The 
Healthy Lands Initiative proposes to focus habitat restoration dollars 
on the most important wildlife habitat areas while energy development 
occurs in the most energy-rich areas. The Healthy Lands Initiative is 
not a substitute for onsite mitigation required of energy developers. 
It is designed to complement it. The 2008 BLM Budget Request includes 
$15.0 million for the Healthy Lands Initiative for habitat restoration 
work in six BLM project areas: New Mexico ($3.5 million), Wyoming ($4.5 
million), Utah ($2.0 million), Oregon/Idaho/Nevada ($1.9 million), 
southern Idaho ($1.8 million) and Colorado ($1.3 million). An 
additional $8.2 million in existing funding from various BLM 
subactivities complements the $15 million in new HLI funding for a 
total of $23.2 million available for restoration activities in the six 
emphasis areas of the Initiative. The 2008 Healthy Lands Initiative 
includes additional funding for USGS ($5.0 million) and FWS ($2.0 
million) to support and complement BLM's habitat restoration and 
conservation efforts in the Green River Basin area of Wyoming.
    These project areas were selected because partnerships were already 
in place and NEPA compliance had already been completed. The $23.2 
million in BLM funding will be augmented by private and State 
contributions to achieve immediate results on the ground. BLM estimates 
that its $23.2 million will allow the agency to treat 317,000 acres of 
important wildlife habitat through such means as treating weeds, 
establishing native plants, treating pinyon juniper encroachment and 
improving riparian areas by installing erosion control structures, 
planting willows and cottonwoods, and fencing. The BLM further 
estimates that partner funding will support the treatment of an 
additional 90,000 acres, including 56,000 acres of BLM land and 34,000 
acres of non-BLM land.
    The energy industry is already engaged in projects to support the 
Healthy Lands Initiative. In Utah, for example, energy companies, 
including Questar, Enduring Resources, and the Bill Barrett 
Corporation, are collectively providing $180,000 for projects that 
support Utah's statewide Initiative. In New Mexico, the industry 
contributed $365,000 last year to reclaim roads and pads from orphaned 
wells. The industry also worked with BLM and used their own equipment 
to remove the hard clay soils that were impeding plant growth.
    The Healthy Lands Initiative will also improve habitat in areas not 
affected by energy development, but impacted by other pressures such as 
weed invasions and drought. That is the goal for projects in Nevada, 
southeast Oregon and southwest Idaho, where sage-grouse habitat is 
slated for improvement. Once the six proposed projects prove 
successful, BLM would look to expand the initiative to other key areas 
where Federal and partner investments could reap the greatest return 
for the habitat.
    Question. The budget justification claims that $10 million is 
anticipated from partner contributions. Why would you expect such a 
large amount in contributions? What is the basis for this estimate?
    Answer. This estimate is based on recent experience with the BLM in 
New Mexico and Utah and their completion of vegetation enhancement work 
at the landscape level and success in working with partners. In 
particular, Utah partners committed more than $8.0 million in 2005 to 
restore more than 120,000 acres of public and private land within 22 
counties. The Utah State Legislature contributed $2.0 million of the 
total $8.0 million to support the State's ongoing watershed 
conservation program in 2005 and followed that up with a similar 
appropriation in 2006. Utah energy industry/commercial oil and gas 
exploration and development companies, including Questar, Enduring 
Resources, and the Bill Barrett Corporation, have provided $180,000 in 
funding for habitat management project work. This has included funding 
for archeological surveys, a 1,000 acre pinyon-juniper lop and scatter 
project, a 4,000 acre pinyon-juniper chaining project, and an agreement 
to manage a recently acquired 5,000 acre block of private land for the 
benefit of wildlife.
    In New Mexico, the energy industry contributed $365,000 in 2006 to 
reclaim roads and pads from orphaned wells and provide other 
reclamation work, such as reseeding.
    Question. Over $4.2 million of the Healthy Lands request is offset 
by a reduction in the wild horse and burro budget. What impacts will 
there be to wild horse and burro populations from this 12 percent 
budget cut?
    Answer. By December 2007, the wild horse and burro program is 
expected to be near the Appropriate Management Level for wild horses 
and burro populations, which is the closest the program has ever come. 
We do not expect to conduct any BLM gathers; however, we will conduct 
gathers for the Forest Service which they pay for under an interagency 
agreement. The BLM's focus will be on caring for the animals off the 
range and promoting the adoption and sale of animals in both short-term 
and long-term holding facilities in order to reduce holding costs in 
future years. As of February 2007, there were approximately 28,900 
animals on the range and 29,000 in holding facilities. The population 
on the range by the end of fiscal year 2007 will be approximately 
31,000 with approximately 31,000 animals in holding facilities. The BLM 
will continue to search for ways to decrease costs of long-term holding 
and increase adoption rates. If cost savings are found, BLM gathers 
will be conducted with the funds saved.

                    OIL AND GAS LEGISLATIVE PROPOSAL

    Question. The budget request includes proposed legislation that 
would undo provisions of the recently enacted Energy Policy Act. 
Specifically, oil and gas leasing rental receipts would be redirected 
to the general Treasury, and BLM would be able to impose processing 
fees for approving applications for permits to drill (APD). I 
understand why the agency would want to offset some of its costs for 
APD approval, but why are you proposing to give up lease rental 
receipts? How much in lease rentals would BLM return to the Treasury?
    Answer. The BLM believes that the objectives of Section 365 of the 
Energy Policy Act, which called for improved cooperation with other 
Federal and State agencies, can be implemented using cost recoveries as 
the funding source for these important initiatives, rather than 
diverting rental revenue that is needed for other national priorities. 
The BLM would return an estimated $21 million in annual mineral lease 
rental receipts to the Treasury, if the administration's proposal is 
adopted. BLM expects to fully offset the foregone leasing rental 
revenues with cost recoveries.
                                 ______
                                 
            Questions Submitted by Senator Pete V. Domenici

  U.S. GEOLOGICAL SURVEY--NATIONAL STREAM GAGING NETWORK MODERNIZATION

    Question. The national network of stream gages provides an 
invaluable tool to water managers across this country in planning for 
water programs, regulating flows, meeting federally mandated compacts 
between States, measuring legal requirements in treaties with our 
neighboring countries of Mexico and Canada, anticipating and reacting 
to flood conditions and many other purposes. The stream gage network 
receives its funding through two USGS programs--the National Streamflow 
Information Program (NSIP) and the State Cooperative Water Program. The 
President's fiscal year 2008 budget provides an increase of $2 million 
for NSIP but no increase for the Cooperative Water Program. The 
increase for NSIP will barely cover the increase in costs and will do 
little to address the backlog of maintenance and other problems left in 
the system by Katrina and other floods. Additionally, this increase 
does not provide for the expansion of the system essential to improving 
our understanding of the nation's water resources.
    What is the size of the existing backlog of maintenance and repairs 
for stream gages nationwide? What is the size of the backlog for stream 
gages in New Mexico?
    Answer. There is a maintenance backlog for streamgages in New 
Mexico as there is for streamgages nationwide. The President's fiscal 
year 2008 Budget Request includes an increase of $1.4 million to fund 
fixed costs of Federally-funded streamgages in the national 
streamgaging network, which includes maintenance. This funding will 
support continued operation and maintenance of currently active 
streamgages that are part of the NSIP national network and funded in 
cooperation with others, in cases where partners are no longer able to 
provide adequate funds. The use of these funds will help keep the 
network more stable and reduce the loss of streamgages in the future, 
including New Mexico streamgages.
    Question. How does the administration plan to address this backlog 
and make a sufficient investment in the national river monitoring 
network to ensure that it continues to fulfill its many crucial 
functions?
    Answer. Because of the cooperative way most USGS streamgages are 
funded, funding shortfalls could be from partners, the USGS, or both. 
This is the instability in the network that the NSIP ``backbone'' 
Federal goal streamgaging network is designed to lessen or eliminate 
for priority streamgages. The goal of NSIP is to provide a unified 
network to meet National needs of streamflow information while ensuring 
that local needs continue to be met. The President's fiscal year 2008 
Budget Request includes a $1.4 million increase for NSIP, over and 
above the $2.325 millon increase in the fiscal year 2007 President's 
Budget request which is reflected in the fiscal year 2007 operating 
plan. These increases will keep the network more stable and reduce the 
loss of streamgages in the future. They will fund currently active 
streamgages in the national network, to reactivate recently 
discontinued NSIP Federal-goal streamgages, or to supplement funding 
for operation and maintenance of NSIP Federal-goal streamgages that are 
currently active but funded through partnerships. The exact allocation 
of funds from this increase will be determined when partner 
contributions to network operations for 2008 are better known.

  U.S. GEOLOGICAL SURVEY--WATER RESOURCES RESEARCH INSTITUTES FUNDING

    Question. The National Water Resources Research Act Program 
provides a strong partnership between the Federal geological research 
in the USGS and that partially funded by 54 State research institutes. 
However, the President's budget again does not provide any funding for 
this program.
    Why has the USGS again eliminated funding for the Water Resources 
Research Institutes?
    Answer. The State Water Resources Research Institutes have been 
highly successful in leveraging the USGS grants under the Water 
Resources Research Act Program with other Federal and non-Federal 
funding. The Department considers this program a success, as the 
initial grants from the Department were considered implementation 
funding for the Institutes. Today, the Department anticipates that the 
majority of these Institutes will be able to continue operations 
without Federal grant funding, due to the successful partnerships that 
the Institutes have been able to make with others.
    Question. What funding will be provided to the Water Resources 
Research Institutes out of the fiscal year 2007 funding available to 
the USGS?
    Answer. The USGS operating plan for 2007 includes $5,404,000 for 
the Water Resources Research Act Program, a decrease of $1,000,000 from 
the 2006 funding level. Each of the Institutes will receive a base 
grant in the same amount as last year's, and only the competitive 
grants program will be affected by this reduction.

   U.S GEOLOGICAL SURVEY: UNITED STATES-MEXICO TRANSBOUNDARY AQUIFER 
                               ASSESSMENT

    Question. Congress passed the United States-Mexico Transboundary 
Aquifer Assessment Act of 2005 (Public Law 109-448) at the end of the 
109th Congress. This law authorizes the USGS to undertake 
characterization of the aquifers underlying the U.S.-Mexico border. 
This specific region has significant importance to meeting treaty 
obligations with Mexico and for managing two of the most important 
river systems in the western part of the nation--the Rio Grande and the 
Colorado.
    While this new program was not authorized during the time that the 
President's fiscal year 2008 budget was being developed, it is 
essential that the program be initiated given the continued drought 
that afflicts much of the Western United States and growing population 
demands on these water systems.
    What financial and human resources can the USGS dedicate from the 
fiscal year 2007 and fiscal year 2008 budgets to initiate this program?
    Answer. The 2007 and 2008 budgets include no funding for projects 
specifically for the U.S.-Mexico Transboundary Aquifer Act. The USGS 
has begun discussions with the International Boundary and Water 
Commission, representatives from Mexico, and representatives from the 
three State Water Resource Research Institutes who would be partners in 
this program. Mexico has been very receptive to the idea of this work 
and to the concept of cost-sharing that is stipulated in the Act.

                            1998/1999 LEASES

    Question. Mr. Secretary, one of the ideas that I have been thinking 
of--and I know Senator Feinstein has been looking at this as well--is 
by statute giving the Department of Interior the authority to extend 
the 1998/1999 leases for an additional three years in exchange for the 
lessees agreement to apply price thresholds on the 1998/1999 leases. 
What assurance can you give, if any, based on your preliminary 
discussions with these companies, that they would in fact agree to such 
an arrangement? In other words, what percentage of the full amount of 
the $10 billion over 25 years that has been lost as a result of the 
failure of the Clinton Administration to put thresholds on the leases, 
would you expect to recover from such a provision?
    Answer. We estimate that had the 1998 and 1999 leases included 
price thresholds, the government would have received between $6 and $10 
billion in royalties over the life of the leases that produced or that 
are expected to produce. If the leases had included the price 
thresholds, we estimated that nearly $1 billion in royalties would have 
been paid on resources that have already been produced.
    On December 14, 2006, six companies signed agreements with the 
Department of the Interior to establish price thresholds for deep water 
royalty relief in connection with the leases each company holds from 
sales held in 1998 and 1999.
    While we have had discussions with the companies that have not yet 
signed agreements, it is difficult to predict how many companies would 
be willing to sign agreements if Congress extended the lease terms by 3 
years. Extending the lease terms is one option that was suggested by 
one of the companies during our discussions. We cannot say whether this 
option would encourage the remaining companies to sign agreements. 
However, whatever the motivation of individual companies to 
renegotiate, if all of the remaining holders of interests in 1998 and 
1999 deepwater leases that are expected to produce were to sign 
agreements, we estimate that an additional $4.6 to $7.7 billion in 
royalties could be paid on future production over the life of these 
leases.
    In order to solve this problem, the administration and the Congress 
must work together to ensure that we have the authority to reach an 
appropriate resolution. We appreciate Congress' efforts to encourage 
companies to come to the negotiating table.
    Question. Please comment on your thoughts of Congress setting up an 
independent panel or a special master, or giving you the authority to 
appoint such a person to settle this price threshold issue created by 
the Deepwater Royalty Relief Act of 1995 and the failure of the 
previous administration to implement it properly?
    Answer. In the present circumstances, we do not see a particular 
advantage in establishing a panel or granting authority to appoint a 
special master. Special masters ordinarily are appointed in the context 
of adjudications involving highly complex factual situations. Our 
efforts to resolve the problems with the 1998 and 1999 deep water 
leases involve neither complex facts nor adjudication.
    Question. In your judgment, would Congress create a cause of action 
for the 1998/1999 lessees with a reasonable likelihood of success on 
the merits if it mandated that the Secretary apply a different royalty 
rate going forward for those 1998/1999 lessees who agree to apply price 
thresholds to their leases and those who do not? Potentially, what 
specific impact would an injunction on lease sales in such an instance 
have on our domestic production of oil and gas?
    Answer. We appreciate Congress's efforts to encourage companies to 
come to the negotiating table. However, we must be mindful of potential 
unintended consequences. Were Congress to mandate a different royalty 
rate on future leases only for lessees who own interests in 1998 or 
1999 deep water leases who have not entered into agreements to apply 
price thresholds, we believe that it is very likely that the Department 
would become embroiled in litigation challenging such a law or seeking 
to enjoin a future lease sale in which such a law would be applied, or 
both. If a judge were to enjoin future lease issuance for a period of 
time, the resulting impacts would be significant. Litigation could take 
years to resolve. The MMS has attempted to project the potential loss 
of production, revenue and royalties if lease sales were delayed for a 
3-year period. 



    Attached Figure C shows for example MMS' estimate that, for a 3-
year delay, production over 10 years could be reduced by 1.6 billion 
barrels of oil equivalent (boe).




    Attached Figure D shows for example, the potential cumulative 
revenue decline over a 10 year period of $13 billion for a 3-year 
delay.
    I believe we would all agree this would not be in the Nation's best 
interest. The Outer Continental Shelf (OCS) is a significant supplier 
of our nation's oil and gas. We cannot afford major delays in offshore 
energy production due to unintended consequences.
    Question. Based upon all that you know about the 1998/1999 lease 
issue, do you believe that the failure to include price thresholds on 
those leases during the Clinton administration amounts to the legal 
definition of ``mistake''?
    Answer. It is my understanding that lawyers for both the Department 
of the Interior and the Department of Justice have been closely 
examining the legal definition of ``mistake'' in the context of the 
1998 and 1999 deep water leases and are still in deliberation.
    Question. Hypothetically, if Congress mandated that you issue 
regulations within a year that resulted in recovering the full amount 
lost as a result of the failure to include price thresholds on the 
1998/1999 leases, how do you think you would achieve that objective?
    Answer. It is not clear what type of regulations this question 
contemplates. MMS cannot unilaterally add price threshold terms to 
leases that do not include them by promulgating a regulation 
(particularly if the rule effectively constituted a retroactive 
change). MMS also cannot by regulation require lessees to pay the 
equivalent of royalty on production that under the terms of their 
leases is exempt from royalty. If the question contemplates seeking to 
recover the equivalent of the royalty amount from parties other than 
the lessees of the 1998 and 1999 deep water leases who owned interests 
at the time of production, it is not apparent how MMS could do this by 
rule.
                                 ______
                                 
              Questions Submitted by Senator Wayne Allard

    Question. Mr. Secretary, can you tell me what--if anything--the 
agencies within the Department of Interior are doing to address the 
bark beetle problems on public lands throughout the Rocky Mountain 
Area?
    Answer. The BLM has been diligently working on bark beetle problems 
in the Rocky Mountain States for many years. In fiscal year 2006, the 
BLM allocated approximately $900,000 from the Public Domain Forest 
Management program to projects that help address bark beetle problems 
in the Rocky Mountain region. This allocation was repeated in fiscal 
year 2007 and is expected in 2008 as well. In addition, in fiscal year 
2007, the BLM will allocate $1,860,000 to the same Rocky Mountain 
region from the Forest Ecosystem Health Recovery Fund for forest health 
and restoration treatments, including insect and disease treatments.
    The BLM's commitment at the State level can be demonstrated by its 
active participation in the Northern Colorado Bark Beetle Cooperative. 
The main objectives of the Cooperative are to address urgent concerns 
about forest health and wildfire risk to communities and watersheds, 
the loss of key wildlife habitat, and the impacts to local economies. 
This Cooperative works to treat infested areas with salvage efforts and 
fuels reduction programs.
    The North Park Stewardship Project, located in Jackson County, 
Colorado, is an example of the project work being planned and initiated 
under this Cooperative. In fiscal year 2006, the BLM sent an additional 
$200,000 to the Colorado BLM State office to plan this large scale 
stewardship contract to respond to the bark beetle infestation in north 
central Colorado. The BLM expects to implement the stewardship project 
in 2007 with the signing and execution of the North Park Stewardship 
Agreement with Jackson County and the addition of $50,000 of Public 
Domain Forestry funding. The BLM is anticipating that in the first year 
of implementing the Operating Plan, 1,000 acres of beetle infested 
trees could be removed as salvage timber or through fuels reduction 
projects. The project has the potential to treat up to 15,000 acres of 
beetle infested BLM managed public lands over the 10 year span of the 
project.
    Question. Please tell me a little more about the Safe Indian 
Communities Initiative and how this initiative will work with tribal 
communities to work toward the elimination of meth in those 
communities?
    Answer. The $16 million Safe Indian Communities Initiative in the 
2008 budget is the first of a multi-year investment to address the 
methamphetamine crisis in Indian country.
    Indian country is faced with the ever increasing threat of drug 
trafficking. In many cases, international drug cartels from Mexico and 
Canada have targeted Indian country as a production and distribution 
point for methamphetamine. This is because of the lack of specialized 
training and law enforcement presence to combat organized crime's 
efforts on Indian lands. Currently BIA has only eleven certified drug 
enforcement officers to service all of Indian country. The budget 
increase will combat the highly visible drug crisis by developing and 
providing specialized drug enforcement training for one hundred 
additional BIA and tribal officers. As a result, more officers on 
patrol will have the essential knowledge and tools to break up drug 
trafficking, disrupt the activities of organized crime groups and 
international cartels, and seize illegal substances. This reduction in 
trafficking and drug supply will have residual positive impacts in 
communities surrounding Indian lands, as well. Increased Federal tribal 
law enforcement activity combined with local city and county law 
enforcement will allow for better coordination between tribal and non-
tribal law enforcement agencies.
    Additionally, these funds will allow for a more robust 
methamphetamine public awareness campaign to educate the at-risk 
American Indians about the dangers of methamphetamine and its affects 
on both physical and mental health. The education campaign will utilize 
the highly successful ``mobile meth labs'' to alert communities to the 
warning signs of clandestine drug labs and the environmental dangers 
associated with these toxic environments. Additionally, the public 
awareness campaign will leverage existing partnerships between the 
Bureau of Indian Affairs, the Office of National Drug Control Policy, 
the Department of Health and Human Services, the National Congress of 
American Indians, and the Partnership for a Drug Free America that are 
currently working to develop an Indian country specific methamphetamine 
public awareness campaign. By increasing the number of officers with 
specialized methamphetamine interdiction training, and by educating the 
public about the dangers of methamphetamine, BIA will take further 
steps toward battling methamphetamine and other drugs in Indian country 
in order to ensure safe and healthy Indian communities.
    With the dramatic increase in violent crimes resulting from 
methamphetamine and the significant shortage of law enforcement 
officers, BIA and tribal law enforcement agencies are often forced to 
make difficult staffing decisions that place their officers and the 
community at risk. This funding will also be used to address this 
shortage by adding fifty one additional officers and enable targeted 
agencies to more directly combat the methamphetamine crisis in Indian 
country.
    Question. How do you plan to work with Congress to provide States 
with more control over the implementation of laws and regulations, for 
example the ESA?
    Answer. The Department continues to work with Congress to ensure 
that laws and regulations pertinent to the mission and programs of the 
Department of the Interior are carried out as effectively as possible. 
The Department also continues to strive to find collaborative efforts 
and partnerships that enhance opportunities to foster a culture of 
responsibility in implementing legislation.
    Interior agencies also continually strive to improve regulations 
and policies to ensure that they are explicit, well defined, and 
consistent with current laws. Program Assessment Rating Tool review of 
the Endangered Species program found that FWS can make improvements in 
endangered species-related regulations and polices. This may include 
revising the definition of adverse modification, issuing critical 
habitat guidance, and explicitly characterizing the benefits of 
critical habitat designations. FWS is currently working on these 
improvements as well as developing a process for regularly scheduled 
independent evaluations of the program.
    The Department is also focusing resources on cooperative 
conservation programs, such as the Private Stewardship Grant, Landowner 
Incentive, and Partners for Fish and Wildlife programs, that foster a 
non-regulatory approach to solving conservation problems at the local 
and State level.

                          SUBCOMMITTEE RECESS

    Senator Craig. Okay. Thank you all very much. The 
subcommittee will stand in recess to reconvene at 10 a.m., 
Tuesday, May 22. At that time we will hear testimony from the 
Honorable Mark Rey, Under Secretary for Natural Resources and 
Environment, Department of Agriculture and Abigail R. Kimbell, 
Chief, U.S. Forest Service.
    [Whereupon, at 11:20 a.m., Tuesday, March 20, the 
subcommittee was recessed, to reconvene at 10 a.m., Tuesday, 
May 22.]
