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


 
    ENERGY AND WATER DEVELOPMENT APPROPRIATIONS FOR FISCAL YEAR 2009 

                              ----------                              


                        THURSDAY, APRIL 10, 2008

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.
    The subcommittee met at 9:30 a.m., in room SD-124, Dirksen 
Senate Office Building, Hon. Byron L. Dorgan (chairman) 
presiding.
    Present: Senators Dorgan, Murray, Johnson, Landrieu, Reed, 
Domenici, Bennett, Craig, and Bond.

                      DEPARTMENT OF DEFENSE--CIVIL

                         DEPARTMENT OF THE ARMY

                       Corps of Engineers--Civil

STATEMENT OF HON. JOHN PAUL WOODLEY, JR., ASSISTANT 
            SECRETARY OF THE ARMY FOR CIVIL WORKS

              OPENING STATEMENT OF SENATOR BYRON L. DORGAN

    Senator Dorgan. We'll call the hearing to order. This is a 
hearing of the Appropriations Subcommittee on Energy and Water 
Development. This is a hearing on the fiscal year 2009 budget 
request for the U.S. Army Corps of Engineers and the Bureau of 
Reclamation.
    I want to say to my colleagues and to the witnesses, as 
well, that we have three votes in the Senate starting--I 
believe--at 10:45, which means we would have to leave the room 
here about 5 till 11. My hope is that we can finish this 
hearing in about an hour and a half, otherwise we will need 
about a 40 to 45 minute recess during those votes.
    So, I'm going to truncate my opening remarks, and I only 
point that out--not to disadvantage anybody--but hope that 
perhaps we can complete the hearing in an hour and a half.
    Today the subcommittee will take testimony on the budget 
for 2009 for the U.S. Army Corps of Engineers and Department of 
Interior.
    Testifying for the Corps will be John Paul Woodley, the 
Assistant Secretary of the Army for Civil Works, as well as 
Lieutenant General Robert L. Van Antwerp, Chief of Engineers 
for the U.S. Army Corps of Engineers.
    Testifying for the Interior will be Kameron Onley, Deputy 
Assistant Secretary of the Department of the Interior, and 
Robert Johnson, Commissioner of the Bureau of Reclamation.
    General, this is your first opportunity to appear before 
the committee, I believe. And since assuming--at least, since 
assuming the command of the Corps of Engineers. We welcome you 
here, I look forward to working with you on many water resource 
problems that we have across this entire country, and in 
particular, I hope you'll familiarize yourself--I know you 
will--with the special water issues we have in North Dakota, 
the continuing flood in Devil's Lake that is causing a lot of 
difficulty and the management of the Missouri River System.
    You know, and I know that I've been highly critical of the 
management--or the mismanagement--of the Missouri River System, 
but you and I will talk about that at a later time.
    The President proposes a fiscal year 2009 budget for the 
Corps of Engineers of $4.74 billion, which is $851 million 
below the fiscal year 2007 enacted $5.59 billion. When you take 
a look at the Corps of Engineers and the Bureau of Reclamation 
sitting in front of us today, the proposal is to reduce funding 
by almost $1 billion.
    I must say, I don't think the committee is going to do 
that, I don't think that represents the country's urgent need, 
but I understand that you come here supporting the President's 
budget.
    I do think--I made the point yesterday when Senator 
Domenici was here, I remember that former Congressman Parker 
once came to the Congress. And apparently Senator Bond asked 
him the question, and Congressman Parker--in a moment of 
careless candor, said, ``Yes,'' he thought the budget was short 
of what is needed, and the next morning he was fired.
    So, I understand the four of you are here to support the 
budget sent to us by the President, but I do want to say--
investment in water resources is unbelievably important for 
this country. And we're doing, I think, 950 water projects in 
the country of Iraq, paid for by the American people, right 
now--950 water projects in Iraq--and we come to this table with 
the proposal that we should cut $1 billion from water project 
investment in this country. I personally think that's misplaced 
priorities.
    I will not go down the list, in total, I'm going to 
truncate my opening statement and put the entire statement in 
the record--I was going to talk some about the President's 
comments about earmarks. As you know, most of this 
subcommittee's earmarks are for ongoing projects, and if we 
didn't do them, they wouldn't get done.
    So, I will truncate, again, that comment, as well.
    I will just say to my colleagues who just arrived, that 
we're going to try to finish this hearing in an hour and a 
half, because we have three votes starting at about that period 
of time. If we could finish this hearing at that time, I'd 
appreciate it.
    Let me call on my colleagues for very brief opening 
statements, if I might.
    First, Senator Domenici.

             OPENING STATEMENT OF SENATOR PETE V. DOMENICI

    Senator Domenici. Yes, thank you, Mr. Chairman.
    I just wanted to indicate that this will be my last hearing 
of this type, and the--it has been a rather exciting experience 
working on this committee.
    You are the 11th Chief of Engineers, and Commissioner 
Johnson, you are the 15th Commissioner of Reclamation that I've 
had the pleasure of working with, so I think that makes me a--
probably, I hold a record that won't be broken for awhile.
    Senator Dorgan. Senator Domenici, does that reflect how 
long you've been here, or how much turnover there's been?
    Senator Domenici. A little bit of both. I've been here, and 
some other departments for 36 years, and they've only had one 
or two leaders, or three. So this--it's quite a bit of 
turnover.
    I have statements regarding both of your functions, and I 
have some statement here regarding the tax that was placed 
upon, in the Nusra Waterway, when I was a freshman Senator, 
believe it or not, that was my bill that put on the--that 
levied the tax.
    Senator, I beat all of the powerhouses then, you know, this 
bill ran against the grain of Russel Long, and on the House 
side, Dingell, everybody--and it passed, nonetheless, and the 
tax was put on. And now it seems like it's not working, and the 
administration says they're going to send something else up to 
take its place, I don't think you've seen what they plan to put 
in, nor have I.
    In my State, I want to say to you, General, you have made a 
commitment to join us there when we dedicate the Bosque in 
Albuquerque, we established quite a big park there among those 
beautiful cottonwood trees, and I certainly hope to see you 
there.
    And Commissioner, we have one big job left with you, we 
have a wonderful building that is to house research entities 
that want to look into water research, and they can go there 
and rent space in this rather visionary idea that you could 
establish a place where they could come and do their research 
and rent space in a well-equipped building. And I hope we can 
work out the management aspects of that, and the--who's going 
to run it. And perhaps within a couple of months you'll have 
that worked out.
    Senator Dorgan. Senator Murray.

                   STATEMENT OF SENATOR PATTY MURRAY

    Senator Murray. Thank you very much, Mr. Chairman, for 
calling this hearing.
    And thank you to all of the witnesses, I appreciate your 
attendance this morning to discuss these important topics.
    I do have to leave in just a few minutes to chair a hearing 
of Transportation and HUD Subcommittee, so I won't be able to 
probably make it back for questions. I wanted to take this 
opportunity to raise a few items with you now, and I will be 
submitting questions for the record.
    Secretary Woodley, and General Van Antwerp, I want to 
commend the three Army Corps of Engineers districts that 
directly work with Washington State, Seattle, Portland and 
Walla Walla Districts--they do great work for my State and the 
people who live there. The military and civilian staff both are 
responsive, and they've worked very well with my staff, and I 
appreciate that.
    While I do have a great working relationship with those 
offices, it's often very difficult to make progress without 
adequate budgets being sent from this administration. And I am 
deeply concerned by the $846 million in cuts to the budget from 
the fiscal year 2008 appropriated dollars. It seems to me this 
is just an annual game where the administration sends us short-
sighted budget requests, expects Congress to fill in these 
important budget items, we send them back to them, and they 
veto them. It's a game that is playing with lives, and 
important projects and I resent it.
    I want to comment, as well, on the newly proposed user fees 
for the navigation locks to fund the Inland Waterway Trust 
Fund. This would place a large burden on some river systems, 
more than others, and it makes no sense to me to abandon the 
established diesel tax and try to create this entire new 
bureaucracy. I don't understand why we don't work to update the 
current vehicle.
    You know, for years now, I've been working with this 
committee and with you and the administration to deepen the 
Columbia River Channel, so we can allow larger ships and barges 
to carry millions of tons of cargo to domestic and 
international markets. I am pleased with the inclusion of funds 
to continue this effort, as the Columbia and Snake River System 
is a very important economic engine, of great importance to our 
country.
    However, it seems really illogical to me that the Corps 
would invest so much in the river transportation system, and 
then try to implement a fee that could discourage those users 
away from the river system and back onto our roads and 
highways, which is a more expensive mode of transportation. So, 
I am deeply concerned about that.
    Turning back to the severe budget cuts, and the projects 
left off the President's request--I do want to talk to you 
about a project in Centralia, Washington. We have been working 
with the Corps for many years on an important flood control 
project along the Chehalis River. This is a project that has 
been studied, reported, and finally authorized in the Water 
Resources Development Act (WRDA) bill that was passed by 
Congress last year, over a Presidential veto.
    As I'm sure you are aware, there was a tremendous storm off 
the coast of Washington State, and in Oregon, last December. It 
caused tremendous flooding and damage--we haven't seen anything 
like that in my State for some time. The flooding shut down I-
5, which is the main north/south freeway from Washington State 
all the way to California, for 4 days. The flooding overwhelmed 
the Chehalis River, the entire river basin, damaged homes, 
killed thousands of farm animals, destroyed local 
transportation infrastructure and it cost us millions--
millions--in debris cleanup.
    We still have people in Centralia and the surrounding areas 
who are still trying to pick up the pieces of their homes, 
businesses, and lives that were destroyed. I have been down 
there many times, and visited with the people and the local 
officials, and they are all really eager to find a way to 
prevent this from ever happening again.
    I made a promise to those people to work here in Congress 
to get those funds--it's to an inexpensive project, it's 
authorized at $74 million on our side, $50 million on the 
State. But in the budget that we're discussing today, Mr. 
Chairman, there is zero dollars. We cannot continue to do this, 
and I'm--if I can't come back, I will submit questions about 
this. I would like to ask you to come to my office and work 
with me on this.
    But Mr. Chairman, I just reiterate--we can't keep having 
this administration send us budgets that don't adequately fund 
the projects that we've been working with them on.
    Senator Dorgan. Senator Murray, thank you.
    Senator Bond.

                STATEMENT OF SENATOR CHRISTOPHER S. BOND

    Senator Bond. Thank you very much, Mr. Chairman.
    I certainly agree with the words of the chairman, and 
Ranking Member Domenici, and my colleague from Washington on 
the inadequacy of the budget, and also the admonition that, if 
you can't agree with this openly, you'll get canned. But we 
want you to know, and we want everybody else to know, how bad 
we think this budget is. And it's totally inadequate, and it's 
a great disappointment.
    Just a few weeks ago, Missouri was hit with devastating 
floods that ruined homes, damaged farmland, took the lives of 
too many people. This disaster served as one more harsh 
reminder of the importance of our infrastructure, including 
flood control of our rivers. And a very special thank you to 
Chairman Dorgan, Senator Domenici, the subcommittee and the 
staff for their strong commitment to flood control. Let me give 
you one specific point.
    Earmarks that were added by this committee are responsible 
for the recently completed construction of the Valley Park 
Project outside of St. Louis. This project was constructed just 
in time to protect 1,000 people, and almost $100 million in 
property, under flood water. Surely, we can agree that the 
extra $5 million earmarked by Congress to accelerate completion 
by 1 to 2 years on a project that cost almost $50 million, was 
well worth the effort and didn't come a moment too soon.
    But again, this year OMB has put us in a funding 
predicament. I'm disappointed that the administration continues 
to frustrate and under fund our efforts to modernize our water 
infrastructure.
    Despite the overwhelming and bipartisan support in Congress 
for the Water Resources Development Act, the President's budget 
does not provide money to update our Depression-era locks and 
dams. This is the most energy-efficient, economical way to 
transport commodities--both inputs coming up the river to 
agricultural areas, and the vitally important agricultural 
exports that go to the world market, that give us significant 
favorable balance of trade.
    This budget, presented to us, does not address our 
crumbling infrastructure, and provides no means to fix it. We, 
as a committee, as a Senate, must work together to address our 
navigation channels, and flood control. We must invest in the 
structures to keep our citizens safe, and the river 
transportation networks working.
    Given the flooding, and the disaster's impacts, Missourians 
need serious help to recover from the storms that we are 
enduring already this spring. Unfortunately, Missouri is not 
out of the woods yet, we have lakes near overflowing and levies 
weakened, and I looked at the weather map today, and it showed 
a solid sheet of rain all over the Midwest.
    We're in a state of repair, and at the same time, we're 
still under severe storm watches. I look to this committee to 
aid in providing supplemental funds for repair from the storms 
we've already had, and flood protection for storms Missouri 
continues to endure.
    On a side note, I would express my appreciation to the 
Corps for their creativity that has spared Missouri an 
additional man-made flood in the spring rise. I realize that 
this year the Corps did their best to alleviate the insult to 
an already-flooded State and we're grateful.
    However, in case any new reason is needed next year, you 
may be interested to know that the U.S. Geological Survey has 
completed peer-reviewed studies that a spring rise has no 
benefit to the pallid sturgeon. I wish somebody would 
understand that.
    In any event, I regret that Senator Murray and I have 
another hearing, so I will not be able to join with the 
chairman in the discussion of the Missouri River policy, which 
is always an interesting subject. We have a couple of areas of 
agreement, and even those we can't get through.
    But I look forward to working with you, Mr. Chairman, the 
committee and your staff, and I appreciate the good efforts of 
our witnesses here today, and please don't agree with me, 
because we need to keep your jobs.
    Senator Domenici. But listen, Senator, if you can't stay 
and represent your interests, I'm just sorry for you.
    Senator Bond. Well, Senator Domenici, you've heard these 
arguments so long you can--I deputize you to be my 
representative in the Missouri River basin.
    Senator Domenici. I don't want that.
    Senator Dorgan. We'll fix the Missouri River Management 
System, as soon as Senator Bond has left the room.
    Senator Bond. That's right.
    Senator Dorgan. Senator Johnson.

                    STATEMENT OF SENATOR TIM JOHNSON

    Senator Johnson. Chairman Dorgan and Ranking Member 
Domenici, thank you for calling this meeting. I will truncate 
my remarks.
    I'm very disappointed that the administration recommended 
cutting the VOR's Water and Energy Management and Development 
Account by 40 percent. This account funds several, ongoing 
regional and rural drinking water supply projects in my State. 
The Lewis and Clark Regional Water System and Mni Wiconi Rural 
Water System are the two largest. Their priority should be in 
completing these systems.
    Failing to budget any Federal funds for the Lewis and Clark 
Project delays construction completion dates, and adds further 
costs as material prices continue double-digit annual 
increases.
    The Corps of Engineers budget request falls short in 
prioritizing funds for the construction program. The 
shortcoming that I am hopeful that this committee will reverse, 
by providing additional resources for flood control and several 
works construction projects.
    In reviewing the budget request, I do want to highlight a 
positive outcome. I'm pleased that the Corps continues to 
request funds for the Missouri River Recovery Program.
    Chairman Dorgan, I'll conclude my statement at this point.
    Senator Dorgan. Senator Johnson, Thank you very much.
    Senator Bennett.

                 STATEMENT OF SENATOR ROBERT F. BENNETT

    Senator Bennett. Thank you very much, Mr. Chairman. I won't 
add to the litany that has been cited here. I do thank the 
witnesses for their appearance here, and I thank Commissioner 
Johnson for bringing along Robert Wolf--pardon me, Reed Murray, 
the Program Manager for the Central Utah Project Completion 
Act. That's very important to my State, and I appreciate his 
highlighting that by bringing that particular official along.
    And, I too, have another hearing I have to go to, I 
apologize for that. But, I'm grateful to our witnesses for the 
great work that they've done in the State of Utah, and to you 
for calling this hearing.
    Senator Dorgan. Senator Bennett, Thank you very much.
    Senator Reed.

                     STATEMENT OF SENATOR JACK REED

    Senator Reed. Well, thank you very much, Mr. Chairman. I 
briefly just want to welcome the witnesses.
    And particularly, General Van Antwerp who was a 
contemporary at West Point, it's good to see you here, Bob. And 
if you could pass on my great regards to Colonel Kurt Talken 
and Bobby Burn in the First District, they do a superb job, 
both the General and the Secretary--you should know that.
    I will be going to other hearings, but I want to get back 
and talk about issues of the Fox Point Hurricane Dam, and also 
the Woonsocket Levy Project.
    Thank you very much, gentlemen.
    Thank you, Mr. Chairman.
    Senator Dorgan. Secretary Woodley, we will begin with you, 
and then we will hear from General Van Antwerp, and then go to 
the Interior Department Secretary.
    Secretary Woodley, your entire statement will be part of 
the full record, and you may summarize. You may proceed.

                STATEMENT OF HON. JOHN PAUL WOODLEY, JR.

    Mr. Woodley. Thank you, Mr. Chairman.
    The President's budget for fiscal year 2009 annual Civil 
Works Program is $4.74 billion. In addition, the request 
includes $5.762 billion in fiscal year 2009 emergency 
appropriations for the Federal share of the additional funds 
needed to reduce the risk to the Greater New Orleans, Louisiana 
area, from storm surges that have a 1 percent annual chance of 
recurring.
    The budget for the Annual Civil Works Program proposes 
performance criteria to allocate funds among construction 
projects. These criteria give priority for funding for the 
projects that yield the greatest returns to the Nation, based 
upon objective performance criteria.
    The fiscal year 2009 construction performance criteria 
mirror those of the fiscal year 2008, except that priority is 
also accorded to projects that can be completed in fiscal year 
2009.
    For operation and maintenance of civil works projects, the 
fiscal year 2009 budget provides nearly $2.6 billion for the 
operation and maintenance account, and $163 million for the 
Mississippi Rivers and Tributaries Account.
    As anticipated at this time last year, the fiscal year 2009 
budget is based on enactment of proposed legislation to 
establish a lockage-based barge user fee, and to phase out the 
existing fuel tax. The proposed legislation was transmitted to 
the President of the Senate and the Speaker of the House of 
Representatives last Friday, April 4. Prompt enactment of this 
legislation is needed to address the declining balance in the 
Inland Waterways Trust Fund, which otherwise will run out of 
funds around the end of the 2008 calendar year.
    The budget provides $185 million for the Corps of Engineers 
share of the South Florida Everglades Restoration Program, 
which is the most ever budgeted or appropriated for the Corps 
in 1 year for these activities.
    The budget also provides $180 million for the Corps 
regulatory program, to protect wetlands and other waters of the 
United States. This is the same amount as in the budget and 
appropriation for fiscal year 2008, and represents a $55 
million increase since 2001.
    I'd like to turn now to the proposed budget for the 
emergency appropriation. The fiscal year 2009 budget proposes 
to authorize the New Orleans Area Hurricane and Storm Damage 
and Risk Reduction System to be constructed with the State of 
Louisiana, as a single, non-Federal cost share sponsor, and 
subsequently maintained and operated by the State. Based on 
statutory language proposed in the budget, the non-Federal 
sponsor would provide $1.5 billion for the non-Federal share of 
this work. The New Orleans area system would not only be 
higher, but also stronger than the pre-Hurricane Katrina 
system.
    I'm pleased to announce, Mr. Chairman, that on March 31, 
2008, the Department of Defense Inspector General issued a 
qualified audit opinion on both the 2006 and 2007 Civil Works 
Financial Statements. This is very significant, as it marks the 
first time a major component of the Defense Department has 
received an audit opinion of any kind, qualified or not.
    This achievement by the Corps of Engineers demonstrates 
exceptional stewardship on behalf of the taxpayers, and non-
Federal sponsors dollars, and the Army is extremely proud of 
the Corps.
    In summary, at $4.74 billion, the fiscal year 2009 Army 
Civil Works budget does not do all of the good things that the 
Corps could accomplish in 2009. It does, however, provide 
resources for the Civil Works Program, to pursue investments 
that will yield very good returns for the Nation in the future.
    Mr. Chairman, members of the subcommittee, this is the last 
time that I will have the privilege of appearing before the 
subcommittee to present the Army's Civil Works budget on behalf 
of President Bush. It has been a great pleasure and privilege 
to work with you.

                           PREPARED STATEMENT

    And it would be remiss of me not to mention, also, the 
privilege I've had in working with the excellent staff that 
serves the subcommittee. I don't believe that any subcommittee 
or any committee of any body anywhere in the world is better 
served than by the professional and capable staff--and 
extremely knowledgeable staff--that this subcommittee has the 
privilege of employing.
    [The statement follows:]
            Prepard Statement of Hon. John Paul Woodley, Jr.
    Mr. Chairman and distinguished members of the subcommittee, thank 
you for the opportunity to testify before the subcommittee, and to 
present the President's budget for the Civil Works program of the Army 
Corps of Engineers for fiscal year 2009.
                                overview
    The fiscal year 2009 budget for Army Civil Works provides funding 
for development and restoration of the Nation's water and related 
resources within the 3 main Civil Works program areas, namely, 
commercial navigation, flood and coastal storm damage reduction, and 
aquatic ecosystem restoration. The budget also supports hydropower, 
recreation, environmental stewardship, and water supply services at 
existing water resources projects owned or operated by the Corps. 
Finally, the budget provides for protection of the Nation's regulated 
waters and wetlands; cleanup of sites contaminated as a result of the 
Nation's early efforts to develop atomic weapons; and emergency 
preparedness. The budget does not fund work that should be the 
responsibility of non-Federal interests or other Federal agencies, such 
as wastewater treatment and municipal and industrial water treatment 
and distribution.
    Total discretionary funding for the fiscal year 2009 annual program 
is $4.741 billion. This is $130 million less than the fiscal year 2008 
budget and $846 million less than Energy and Water Development 
appropriations for fiscal year 2008. Within the total Civil Works 
budget, $2.475 billion is for activities funded in the operation and 
maintenance (O&M) account. This is slightly higher than the funding 
level for operation and maintenance proposed in the President's fiscal 
year 2008 budget, which in turn was a substantial increase over prior 
budget or appropriation levels for comparable O&M activities.
    The budget also provides $5.761 billion in an fiscal year 2009 
emergency appropriations request for the Federal share of the 
additional funds needed to reduce the risk of storm surge damage to the 
greater New Orleans, Louisiana area. Based on statutory language 
proposed in the budget, the non-Federal sponsor would provide $1.527 
billion for the non-Federal share of this work. This proposal is 
discussed further below.
    A budget Five Year Development Plan (FYDP) is under development and 
will be provided to the relevant committees of Congress.
    Enclosure 1 displays the current estimate for the distribution of 
new discretionary funding among eight appropriation accounts; eight 
program areas; supervision and general administration of the Civil 
Works program; policy direction and oversight by the Army Secretariat; 
and five funding sources, including the general fund of the Treasury 
and trust funds. Enclosure 2 is a crosscut between appropriation 
accounts and program areas.
                      performance-based budgeting
    The fiscal year 2009 budget reflects a continuing maturation of the 
Army's performance-based approach to budgeting. Competing investment 
opportunities for studies, design, construction, and operation and 
maintenance were evaluated using multiple metrics. Objective 
performance criteria guided the allocation of funds among construction 
projects (see below).
    The budget includes initiatives leading to the development of a 
more systematic, performance-based budget and improved asset 
management. For example, the budget allocates operation and maintenance 
funding among 54 geographic areas based on USGS sub-watersheds. This 
approach will improve the overall performance of Civil Works assets by 
enabling managers within each of these regional areas to focus on their 
key facilities and address emerging needs.
    The focus on Civil Works program performance has a number of 
foundations. First, the 2004-2009 Civil Works Strategic Plan provided 
goals, objectives, and performance measures that are specific to 
program areas as well as some that are crosscutting. A new Civil Works 
Strategic Plan is under development for 2009-2014. Second, each program 
area has been assessed using the Program Assessment Rating Tool (PART). 
Progress to improve the performance measures was made on several 
programs during the past year. Summaries of all completed civil works 
program assessments can be found on the administration's new website, 
www.ExpectMore.gov. The Civil Works Strategic Plan and the PART-based 
program evaluations are works in progress and will continue to be 
updated.
            highlights--water resources development accounts
Studies and Design
    The fiscal year 2008 budget provides $91 million for the 
Investigations account and $1 million for investigations in the 
Mississippi River and Tributaries account. The budget funds 65 studies 
and preconstruction engineering and design (PED) activities. We 
selected these for funding based on their likely performance. For 
instance, the projects funded for PED were those with benefit-to-cost 
ratios (BCRs) of 3.0 to 1 or higher.
    Within this $91 million, $10 million is for studies and PED under 
the Louisiana Coastal Area ecosystem restoration program and $10 
million more is for the science program that supports, and is an 
integral component of, this Corps effort to help protect and rebuild 
the ecosystem. In addition, $21 million is for other project-specific 
studies and design, $17 million is for research and development, and 
$33 million is for other coordination, data collection, and study 
activities.
    The administration urges the Congress to support the President's 
budget for the investigations program, which limits the number of 
proposed projects funded at the study or design stage. The Corps has a 
very large backlog of ongoing construction work. Adding to the number 
of projects heading for a construction start or to their funding will 
delay the completion of ongoing projects and realization of their 
benefits to the Nation. The enactment of the Water Resources 
Development Act of 2007 (WRDA 2007) has heightened this concern.
    The Civil Works budget includes $1 million to comply with the 
independent peer review requirements of section 2034 of WRDA 2007. This 
covers only the studies funded in the budget. If the Congress were to 
increase the number of studies or their funding, the Corps would likely 
need more than $1 million to comply with section 2034.
    Independent review previously was funded through individual study 
line items as study costs shared with the non-Federal sponsor. Under 
WRDA 2007, the costs of independent review are now fully Federal. In 
future budgets, we expect to include these costs under individual study 
line items after studies requiring section 2034 independent review are 
identified and accounting codes are set up to distinguish the fully 
Federal independent review costs from the other study costs, which the 
non-Federal sponsor will share.
    The fiscal year 2009 budget includes 2 new studies: The 
Investigations account includes $2 million for a high-priority study of 
the vulnerability of the United States to damage from flooding, 
including an assessment of the comparative risks faced by different 
regions of the United States. This study will provide background for a 
subsequent effort by policy officials to develop recommendations to 
improve existing Federal programs, authorities, and roles. The other 
new study is the Atchafalaya Basin Land Study in the Flood Control, 
Mississippi River and Tributaries account, for which the administration 
has repeatedly requested funding. I urge you to fund this study. It has 
a high priority because land acquisition is an important component of 
the overall flood damage reduction plan for this watershed. The fiscal 
year 2009 budget also specifically identifies $100,000 for Corps 
support to the efforts of the inter-agency committee on the Marine 
Transportation System, established by the President in the 2004 Ocean 
Action Plan. Costs to support the committee previously were included in 
the coordination with other agencies allocation in the investigations 
account.
Construction Program
    The budget provides $1.402 billion in the Construction account and 
$76 million for construction projects in the Mississippi River and 
Tributaries account.
    Many more construction projects have been authorized, initiated, 
and continued than can be constructed efficiently at any one time. The 
funding of projects with low economic and environmental returns and of 
projects that are not within Civil Works main mission areas has led to 
the postponement of benefits from the most worthy projects, and has 
significantly reduced overall program performance.
    To remedy this situation and to achieve greater value to the Nation 
from the Civil Works construction program, the budget again proposes 
performance guidelines to allocate funds among construction projects. 
The guidelines give priority for funding to the projects that yield the 
greatest returns to the Nation, based upon objective performance 
criteria. The fiscal year 2009 guidelines mirror those for fiscal year 
2008, except that priority also is accorded to projects that can be 
completed in fiscal year 2009.
    Under the guidelines, the budget allocates funds among construction 
projects based primarily on these criteria: BCRs; contribution to 
reducing significant risk to human safety or to dam safety assurance, 
seepage control, or static instability correction concerns; capability 
of high performing projects to be completed in fiscal year 2009 in 
order to bring significant benefits online; and the extent to which 
projects cost-effectively contribute to the restoration of nationally 
or regionally significant aquatic ecosystems that have become degraded 
as a result of Civil Works projects, or to a restoration effort for 
which the Corps is otherwise uniquely well-suited. The construction 
guidelines are provided in Enclosure 3.
    The 79 construction projects funded in the budget consist of: 11 
dam safety assurance, seepage control and static instability correction 
rehabilitation projects; 16 projects funded to address a significant 
risk to human safety (including 2 new deficiency correction projects); 
and 52 other projects (including 5 in the Mississippi River and 
Tributaries program).
Operation and Maintenance Program
    The fiscal year 2009 budget proposes $2.475 billion for the 
operation and maintenance account and $163 million for maintenance 
activities in the Mississippi River and tributaries account. The total 
amount is $16 million higher than the fiscal year 2008 budget for 
comparable activities.
    The budget emphasizes performance of existing projects by focusing 
on the maintenance of key commercial navigation, flood and storm damage 
reduction, hydropower, and other facilities. The proposed funding would 
enable the Army Corps of Engineers to carry out priority maintenance, 
repairs, and rehabilitations, and priority initiatives such as the 
development of asset management systems.
    As in the fiscal year 2007 and 2008 budgets, the operation and 
maintenance program includes four activities that are directly related 
to the operation and maintenance of Corps projects, but previously were 
funded in the Construction program--compliance with the Endangered 
Species Act at operating projects; rehabilitation of existing projects; 
replacement of sand due to the operation and maintenance of Federal 
navigation projects; and construction of facilities, projects, or 
features (including islands and wetlands) to use materials dredged 
during Federal navigation operation and maintenance activities. The 
budget transfers responsibility for these activities to improve 
investment decisions on project operation and maintenance and better 
provide accountability and oversight for those decisions. For the 
inland navigation rehabilitation projects budgeted in the operation and 
maintenance account, one-half of the project funding would be derived 
from the Inland Waterways Trust Fund. Construction, replacement, and 
expansion of inland waterways projects continue to be budgeted in the 
Construction account.
    Like the budgets for the past 2 years, the fiscal year 2009 budget 
proposes to allocate operation and maintenance funding on a regional 
basis. Last year, the budget proposed allocation of funding by 21 
watersheds identified by the U.S. Geological Survey's watershed and 
sub-watershed identification system. This year, in order to more 
clearly identify the systems among which funding is allocated, the 
budget proposes to allocate funding among 54 systems. Within these 54 
systems, the justification materials allocate funding for illustrative 
purposes to flood and coastal storm damage reduction, commercial 
navigation, hydropower, stewardship, recreation, and water supply 
program areas. Funding operation and maintenance using this framework 
will increase efficiency in the operation and maintenance of Civil 
Works projects. Managers in the field will be better able to properly 
maintain key infrastructure, adapt to uncertainties, and address 
emergencies, as well as other changed conditions over the course of the 
fiscal year, while complying with congressional direction for the 
appropriations.
                       highlights--program areas
    The Army Civil Works program includes eight program areas; 
commercial navigation, flood and coastal storm damage reduction, 
environment, recreation, hydropower, water supply, emergency 
management, and the regulatory program. The budget also funds the 
supervision and general administration of the Civil Works program in 
the Corps headquarters and the eight division offices; and the policy 
direction and oversight for the program by the Office of the Assistant 
Secretary of the Army (Civil Works). Budget proposals for all areas are 
discussed below.
Flood and Coastal Storm Damage Reduction, and Emergency Management
    The fiscal year 2009 budget provides $1.322 billion for flood and 
coastal storm damage reduction and $58 million for emergency 
management.
    Among the 79 construction projects funded in the fiscal year 2009 
budget, 50 are for flood and coastal storm damage reduction, including 
11 dam safety and seepage control and static instability correction 
rehabilitations, 2 deficiency correction projects at St. Louis Flood 
Protection, Missouri and Wood River Levee, Illinois; and 29 other 
projects that address a significant risk to human safety or were 
selected based on their benefit-to-cost ratios.
    The budget for the emergency management program includes $40 
million in the Flood Control and Coastal Emergencies account to fund 
preparedness for flood and coastal emergencies and other natural 
disasters. This funding is needed in fiscal year 2009 to maintain and 
improve the Corps of Engineers ability to respond to disasters. 
Specifically, this funding would cover review and updating of emergency 
response plans, periodic exercises to test and evaluate plans, 
training, procurement of critical supplies and equipment, and pre-
disaster coordination with State and local governments and other 
Federal agencies. The fiscal year 2009 budget reflects the strong 
belief of the Army in the importance of providing regular funding for 
emergency preparedness, rather than relying on supplemental 
appropriations to finance emergency preparedness. The emergency 
management program also includes $6 million for the National Emergency 
Preparedness Program and $12 million for facility protection, both of 
which are funded in the operation and maintenance account. We continue 
to fund facility protection as a remaining item in the operation and 
maintenance account. In the past, we allocated these costs among the 
eight program areas. This year, we included these costs instead under 
the emergency management program area.
    The budget includes $14 million in multiple accounts for Actions 
for Change--a set of actions identified by the Chief of Engineers to 
aggressively incorporate the lessons learned from Hurricanes Katrina 
and Rita into the way the Corps plans, designs, constructs, and 
maintains its infrastructure. The program is being executed by four 
national teams. All actions are interrelated, but each of the four 
teams has one of the following focus areas: comprehensive systems 
approaches; risk-informed decisionmaking; risk communications; and 
professional and technical expertise. A common theme throughout the 
program is increased accountability for public safety. The Corps is 
working toward the goal of making these changes self-sustaining.
    The fiscal year 2009 operation and maintenance account includes $10 
million for the National Levee Inventory/Inspection and Levee Safety 
Program. These funds will be used to continue the national levee 
inventory, assessment, and database development that were begun with 
emergency supplemental appropriations of $30 million in fiscal year 
2006. Funds also will be used for administrative and travel costs of 
the National Levee Safety Committee established pursuant to title IX of 
the Water Resources Development Act of 2007. Title IX broadened the 
authority under which the Corps conducts the levee inventory program 
and is being implemented under the ongoing levee inventory and 
inspection program. The national levee inventory is an interagency 
effort to improve management of the Nation's flood and storm damage 
reduction infrastructure. The results of the national project inventory 
and risk-based project assessments will be linked to the Federal 
Emergency Management Agency's ongoing flood mapping program, as well as 
to the Corps levee rehabilitation and inspection program.
    The budget provides funding for all work currently planned to 
remedy the most serious (Action Class I and II) dam safety, seepage, 
and static instability problems at Corps dams. The planning, design, 
and construction of these projects are funded at the maximum amount 
that the Corps estimates that it can use efficiently and effectively.
    The budget continues to support Federal participation in initial 
construction, but not in re-nourishment, at beach nourishment projects 
that provide storm damage reduction or ecosystem restoration outputs.
Commercial Navigation
    The fiscal year 2009 budget provides a total of $1.892 billion for 
the commercial navigation program area.
    The amount budgeted for inland waterway construction projects 
(construction, replacements, and expansions in the construction 
account, and rehabilitations in the operation and maintenance account) 
is about $326 million, which includes funding to continue 14 inland 
waterway projects; 3 seepage and static instability correction 
rehabilitation projects; completion of 5 projects; and continuation of 
construction on 5 other projects. Half of the funding for these inland 
waterways investments, about $167 million, would be derived from the 
Inland Waterways Trust Fund, reflecting both concurrent financing of 50 
percent of construction costs on most projects and rebalancing of the 
proportion where prior expenditures from the general fund of the 
Treasury exceeded 50 percent.
    The fiscal year 2009 budget is based on enactment of proposed 
legislation to establish a lockage-based barge user fee and to phase 
out the existing diesel fuel tax for the inland waterways. The prompt 
enactment of such legislation is needed to address the declining 
balance in the Inland Waterways Trust Fund, which otherwise will run 
out of funds around the end of the 2008 calendar year, and to support 
ongoing and future inland waterways projects. The funding in the Inland 
Waterways Trust Fund, which comes from the diesel fuel tax, will not be 
sufficient after fiscal year 2008 to support needed levels of 
investment in these waterways.
    Enactment of the administration's legislative proposal would ensure 
that the commercial users of the Corps locks continue to cover their 
share of project costs. The amount of the user fee would be tied to the 
level of spending for inland waterways construction, replacement, 
expansion and rehabilitation work. The proposed legislation will be 
transmitted to Congress shortly.
    The budget includes $170 million to construct channel and harbor 
projects.
    The budget focuses navigation operation and maintenance funding of 
$1.375 billion on those waterway segments and commercial harbors that 
support high volumes of commercial traffic, such as the heavily-used 
Mississippi and Ohio Rivers and the Illinois Waterway. The budget also 
funds maintenance of harbors that support significant commercial 
fishing, subsistence, safety, harbor of refuge, national security, or 
public transportation benefits.
    The Corps continues development of techniques to identify and 
compare the marginal impacts on the Nation's waterborne commerce of 
varying maintenance levels for coastal channels and harbors. The fiscal 
year 2009 budget provides for $729 million to be appropriated from the 
Harbor Maintenance Trust Fund for operation and maintenance. The growth 
of the trust fund balance and ways to address this balance are being 
discussed within the administration. We will continue to work within 
the administration to develop policies to effectively use the Harbor 
Maintenance Trust Fund.
    The budget continues the policy of funding beach replenishment, 
including periodic re-nourishment, where the operation and maintenance 
of Federal navigation projects is the reason for the sand loss on 
shorelines.
Environment
    The fiscal year 2008 budget provides $511 million for environmental 
activities overall, including $286 million for aquatic ecosystem 
restoration. The costs of compliance with Biological Opinions at 
existing projects are not included in the above figures. The budget 
includes these costs as part of the joint operation and maintenance 
costs of the affected projects and allocates these costs among the 
program areas served by the projects.
    Within the $286 million for aquatic ecosystem restoration, $185 
million is for the Corps of Engineers share of the South Florida 
Everglades Ecosystem Restoration Program, which is the most ever 
budgeted or appropriated for the Corps in 1 year for these activities. 
This level of funding for the Corps is an increase of $54 million, or 
41 percent, compared to the fiscal year 2008 enacted level. The 
increase reflects the program's priorities for 2009--which include more 
funding for the Modified Water Deliveries to Everglades National Park 
(Mod Waters) project, a key element of this effort that both the 
National Park Service and the Corps are funding (+$40 million); and 
funding to restore a 90 square mile area west of the Everglades known 
as Picayune Strand, which will provide habitat suitable for the 
endangered Florida panther and other species (+$24 million). The budget 
for this program also emphasizes continued construction of the 
Kissimmee River restoration effort; and studies and design work under 
the Comprehensive Everglades Restoration Plan, or CERP. Finally, the 
budget also continues construction of the Everglades and South Florida 
Ecosystem Restoration ``Critical Projects,'' and the South Dade County 
(C-111) and West Palm Beach Canal (C-51 & STA 1-E) Central and Southern 
Florida (C&SF) projects.
    The budget provides $20 million for the Upper Mississippi River 
System Environmental Management Program and $20 million for the 
Louisiana Coastal Area restoration effort, including $10 million for 
its important Science Program, which will assist the State and Federal 
managers of the LCA Ecosystem Restoration Program by providing science 
support aimed at improving implementation. The Science Program will 
inform and guide the program by reducing uncertainties and insuring 
that effective tools and processes are available for use by the project 
delivery team.
    The budget includes $95 million for environmental stewardship. The 
Corps administers lands and waters covering 11 million acres, an area 
equal in size to the States of Vermont and New Hampshire. Funded 
activities include shoreline management, protection of natural 
resources, support for endangered species, continuation of mitigation 
activities, and protection of cultural and historic resources.
    The budget provides $130 million for the Formerly Utilized Sites 
Remedial Action Program (FUSRAP) to clean up contamination at sites 
resulting largely from the early atomic weapons program. This funding 
will enable completion of remedial action at one site (Linde Air 
Products Soil operable unit) and support continued progress toward 
completion of remedial actions at a number of other FUSRAP sites.
Regulatory Program
    The fiscal year 2009 budget provides $180 million for the Corps 
Regulatory Program to protect wetlands and other waters of the United 
States. This is the same as the amount in both the budget and 
appropriations for fiscal year 2008, and represents a $55 million 
increase since 2001. The funding will be used for permit processing, 
enforcement and compliance actions, and jurisdictional determinations, 
including the significant additional field documentation, coordination 
and evaluation work associated with the Supreme Court's Carabell and 
Rapanos decisions.
    Investing in the Regulatory Program has a win-win result, since it 
protects valuable aquatic resources while enabling over $225 billion in 
economic development to proceed annually. The Corps will also use the 
requested funding to develop and implement improvements such as 
electronic permit applications and data sharing with other agencies and 
the public, consistent with sections 2017 and 2040 of WRDA 2007.
Recreation
    The fiscal year 2009 budget provides $270 million for recreation 
operations and related maintenance. The budget re-proposes the Corps of 
Engineers recreation modernization initiative, which first was 
developed as part of the fiscal year 2006 and fiscal year 2007 budgets. 
This initiative, which requires legislation to implement, would allow 
the Corps to upgrade and modernize its recreation facilities through an 
expansion of the current fee structure. It would also enable the Corps, 
working at the national, State, and local levels, to pursue voluntary 
public/private partnerships and other means to help finance the 
recreation program.
Hydropower
    Hydropower is a renewable source of energy. The Civil Works program 
is the Nation's largest producer of hydroelectric energy. The Corps 
provides one-quarter of the Nation's hydroelectric power generation 
capacity and satisfies 3 percent of the Nation's total energy needs.
    The fiscal year 2009 budget provides $319 million for hydropower. 
This investment will help to reduce the forced outage rate, which 
remains well above the industry average. In addition, the 4 ongoing 
replacement projects, once completed, will produce enough power to 
electrify 37,000 homes and reduce carbon dioxide emissions into the 
atmosphere by 190,000 metric tons.
Water Supply
    On average, Civil Works projects provide 4 billion gallons of water 
per day to meet the needs of municipal and commercial users across the 
country. The budget includes $6 million for this program under the 
operation and maintenance account. These costs can be broken into 5 
categories: costs to manage water supply contracts and to operate and 
maintain specific water supply facilities; ongoing water reallocation 
studies; the National Portfolio assessment of water reallocation 
possibilities; the allocated share of costs for compliance with the 
Endangered Species Act; and the allocated share of other project joint 
costs. The water supply program manages 307 water supply agreements 
that cover 7.2 million acre-feet of storage space in 136 of the Corps' 
multiple purpose reservoir projects. This storage space has an assigned 
repayment value of $9.8 billion. These costs are repaid directly to the 
U.S. Treasury by the water users. The opportunities that are being 
identified through the National Portfolio assessment to reallocate 
storage space in existing reservoirs can assist in addressing unmet 
demand for municipal and industrial water supply without building 
additional projects.
Management Expenses of the Army Corps of Engineers
    The fiscal year 2009 budget provides $177 million for the Expenses 
account to cover the costs of the Army Corps of Engineers Headquarters, 
Major Subordinate Commands or Divisions, and national support Corps 
offices such as the Humphreys Engineer Center Support Activity, the 
Institute for Water Resources, and the Finance Center.
Army Secretariat Policy Direction and Oversight
    The fiscal year 2009 budget includes $6 million for the Office of 
the Assistant Secretary of the Army (Civil Works). The Assistant 
Secretary of the Army (Civil Works) has oversight responsibility on 
behalf of the Secretary of the Army for all aspects of the Civil Works 
program of the Army Corps of Engineers; for the Army Cemeterial 
Expenses budget and program for Arlington National Cemetery and the 
Soldiers' and Airmen's Home National Cemetery; for reimbursable support 
by the Army Corps of Engineers for other domestic agencies; and for all 
international activities of the Army Corps of Engineers except those 
directly in support of U.S. forces overseas. This account finances the 
personnel and other direct costs of the Assistant Secretary's office in 
the energy and water development appropriation, consistent with 
recently enacted appropriations for this office.
            protection of the metropolitan new orleans area
    In addition to fiscal year 2009 regular appropriations for the 
Civil Works program, the fiscal year 2009 budget recommends enactment 
of fiscal year 2009 emergency appropriations of $5.761 billion for the 
remaining Federal share of the New Orleans Area Hurricane and Storm 
Damage and Risk Reduction System (HSDRRS), which is designed to reduce 
the risk to the greater New Orleans, Louisiana, area from storm surges 
that have a 1 percent annual chance of occurring and to improve 
internal drainage; to restore and complete construction of hurricane 
and storm damage reduction features in surrounding areas to previously 
authorized levels of protection; and to incorporate certain non-Federal 
levees into the Federal system. The fiscal year 2009 budget also 
proposes to authorize the HSDRRS to be constructed with the State of 
Louisiana as the single non-Federal cost-sharing partner and 
subsequently maintained and operated by the State. Pre-Katrina, the 
HSDRRS was built as a collection of separately authorized projects, 
designed with differing standards, subject to differing requirements 
for non-Federal cost-sharing, and managed by different local entities.
    The new HSDRRS system will be not only higher, but also stronger 
than the pre-Hurricane Katrina system. Armoring of critical elements 
will improve resilience during storm events. New pump stations, water 
control structures, and floodgates will add perimeter protection to 
reduce the threat of storm surges from outfall canals and navigation 
channels. Completing the Southeast Louisiana urban drainage project 
within the geographic perimeter of the Lake Pontchartrain and Vicinity 
and West Bank and Vicinity projects will enhance the effectiveness of 
interior drainage systems.
    Based on the proposed statutory language included in the 
President's budget, local entities would be responsible for 35 percent 
of the cost of the Southeast Louisiana project located within the 
geographic perimeter of the Lake Pontchartrain and Vicinity and West 
Bank and Vicinity projects, and for 35 percent of the increment of 
levee raises and other enhancements needed to the Lake Pontchartrain 
and Vicinity and West Bank and Vicinity projects above currently 
authorized levels to reduce the risk to the greater New Orleans area 
from storm surges that have a 1 percent annual chance of occurring. 
Local entities would also be responsible for 100 percent of the 
operation, maintenance, repair, replacement, and rehabilitation cost.
                        other budget highlights
General Provisions
    The budget includes proposed statutory language to authorize 
continuation of limits on reprogramming with certain proposed changes; 
to replace the continuing contract authority of the Corps with multi-
year contracting authority patterned after the authority available to 
other Federal agencies; and to prohibit committing funds for ongoing 
and new contracts beyond the appropriated amounts available, including 
reprogramming.
Improved Cost Estimating
    With my full support, the Chief of Engineers is undertaking several 
initiatives to strengthen the Corps performance in project cost 
estimating. The Chief will discuss these initiatives in detail in his 
statement.
                water resources development act of 2007
    Upon passage of WRDA 2007 on November 7, 2007, the Chief of 
Engineers and I established a joint team to oversee the implementation 
of this lengthy, complex, and costly act. We have designated a senior 
Corps policy analyst to lead our joint efforts. I meet at least bi-
weekly with the joint WRDA implementation team to review and approve 
guidance for major policy and project provisions of WRDA.
    The purpose of implementation guidance is to ensure a common 
understanding of the policies and procedures that will be used to meet 
the requirements of the law. Provisions that require development of 
implementation guidance are being identified and prioritized, and the 
writing of the guidance is underway. Implementation guidance for those 
provisions directly affecting work within the Divisions and Districts 
is being developed in consultation with the appropriate District, 
Division, and Headquarters Regional Integration Team. Due to the large 
number of provisions in the law, it will take time to issue guidance on 
each of the provisions. Priority for implementation guidance is being 
given to national policy provisions (mostly in title II) and to those 
project and program provisions where funds are currently appropriated.
    Following are some examples of WRDA provisions receiving priority 
for implementation guidance:
  --Section 2003--Written Agreements for water resources projects.
  --Section 2027--Fiscal Transparency Report.
  --Section 2031--Water Resources principles and guidelines.
  --Section 2032--Water Resources Priorities Report.
  --Section 2033--Planning.
  --Section 2034--Independent Peer Review.
  --Section 2035--Safety Assurance Review.
  --Section 2036--Mitigation for fish and wildlife and wetlands losses.
  --Title VI--Florida Everglades.
  --Title VII--Louisiana Coastal Area.
  --Title IX--National Levee Safety Program.
    Working through the joint implementation team, we are making 
excellent progress in implementation strategies for the significant 
policy provisions and numerous individual project provisions.
                     president's management agenda
    The Army Civil Works program is pursuing 5 Government-wide 
management initiatives, as are other Federal agencies, plus a sixth 
initiative on real property asset management. ``Scorecards'' for the 
Army Corps of Engineers and other Federal agencies can be found at the 
following website: http://www.whitehouse.gov/results/agenda/
scorecard.html.
    For the first quarter of the 2008 fiscal year, the scorecard rates 
the Corps status as red on one initiative, yellow on four, and green on 
one. I am pleased that the Corps is rated green on progress on all six 
initiatives. The Corps has worked diligently to achieve these ratings, 
and I am proud of their efforts. The Army is hopeful that the Corps of 
Engineers will receive an audit opinion in the very near future from 
the Inspector General of the Department of Defense for its fiscal year 
2006 and 2007 Civil Works financial statements. This would be the first 
time ever that a major component of the Defense Department has received 
an audit opinion. The opinion is expected to be qualified, and it is 
anticipated that the auditors will recommend a number of areas that 
need improvement. With a qualified opinion in hand and this guidance 
from the DOD Inspector General, the Army has every expectation that the 
Corps can achieve an unqualified audit opinion on its fiscal year 2008 
financial statements.
                               conclusion
    In developing this budget, the administration made explicit choices 
based on performance. The sustained level of O&M funding, transfer of 
activities from construction to O&M, emphasis on construction projects 
based on their returns, and focus on preparedness for flood, hurricane, 
and other natural disasters, for example, all reflect a performance-
based approach.
    At $4.741 billion, the fiscal year 2009 Army Civil Works annual 
budget provides the resources for the Civil Works program to pursue 
investments that will yield good returns for the Nation in the future. 
With the proposed $5.761 billion in fiscal year 2009 emergency 
appropriations, the Corps can also complete the Federal share of work 
necessary to significantly reduce the risk of storm surge damage to the 
greater New Orleans area.
    This budget represents the wise use of funding to advance worthy, 
mission-based objectives. I am proud to present it.
    Thank you, Mr. Chairman and members of the subcommittee, for this 
opportunity to testify on the President's fiscal year 2009 budget for 
the Civil Works program of the Army Corps of Engineers. This is the 
last time I will appear before this subcommittee to present the Civil 
Works budget on behalf of President Bush. It has been my pleasure 
working with this subcommittee.

  ENCLOSURE 1.--DEPARTMENT OF THE ARMY, CORPS OF ENGINEERS--CIVIL WORKS
                 ANNUAL BUDGET, FISCAL YEAR 2009 SUMMARY
------------------------------------------------------------------------
                                                              Amount
------------------------------------------------------------------------
Requested New Appropriations for Annual Program by
 Account:
    Investigations.....................................     $91,000,000
    Construction.......................................   1,402,000,000
    Operation and Maintenance..........................   2,475,000,000
    Regulatory Program.................................     180,000,000
    Flood Control, Mississippi River and Tributaries...     240,000,000
    Expenses...........................................     177,000,000
    Office of the Assistant Secretary of the Army             6,000,000
     (Civil Works).....................................
    Flood Control and Coastal Emergencies..............      40,000,000
    Formerly Utilized Sites Remedial Action Program....     130,000,000
                                                        ----------------
      TOTAL............................................   4,741,000,000
                                                        ================
Requested New Appropriations by Program Area:
    Commercial Navigation..............................   1,892,000,000
        (Inland and Intracoastal Waterways)............    (931,000,000)
        (Channels and Harbors).........................    (961,000,000)
    Flood and Coastal Storm Damage Reduction...........   1,322,000,000
        (Flood Damage Reduction).......................  (1,295,000,000)
        (Coastal Storm Damage Reduction)...............     (27,000,000)
    Environment........................................     511,000,000
        (Aquatic Ecosystem Restoration)................    (286,000,000)
        (FUSRAP).......................................    (130,000,000)
        (Stewardship)..................................     (95,000,000)
    Hydropower.........................................     319,000,000
    Recreation.........................................     270,000,000
    Water Supply.......................................       6,000,000
    Emergency Management...............................      58,000,000
        (Flood Control and Coastal Emergencies)........     (40,000,000)
        (National Emergency Preparedness)..............      (6,000,000)
        (Remaining Items Operation and Maintenance)....     (12,000,000)
    Regulatory Program.................................     180,000,000
    Oversight and Management...........................     183,000,000
                                                        ----------------
      TOTAL............................................   4,741,000,000
                                                        ================
Sources of New Appropriations:
    General Fund.......................................   3,844,000,000
    Harbor Maintenance Trust Fund......................     729,000,000
    Inland Waterways Trust Fund........................     167,000,000
    Disposal Facilities User Fees......................       1,000,000
                                                        ----------------
      TOTAL............................................   4,741,000,000
                                                        ================
Additional New Resources:
    Rivers and Harbors Contributed Funds...............     400,000,000
    Coastal Wetlands Restoration Trust Fund............      84,000,000
    Permanent Appropriations...........................      17,000,000
                                                        ----------------
      TOTAL............................................     501,000,000
------------------------------------------------------------------------


                                              ENCLOSURE 2.--DEPARTMENT OF THE ARMY, CORPS OF ENGINEERS--CIVIL WORKS ANNUAL BUDGET, FISCAL YEAR 2009
                                                                   [Crosscut Between Appropriation Accounts and Program Areas]
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                               Aq. Ec.                                              Water        Emerg.       Regul.
                                       Navigation  Flood/Storm   Recreation    Restor.    Stewardship    FUS-RAP     Hydropower     Supply       Mgmt.        Prog.     Ovrsgt/Mgmt     TOTAL
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Investigations......................           20           36  ...........           35  ...........  ...........  ...........  ...........  ...........  ...........  ...........           91
Construction........................          487          627  ...........          245  ...........  ...........           43  ...........  ...........  ...........  ...........        1,402
Operation & Maint...................        1,346          482          255            2           90  ...........          276            6           18  ...........  ...........        2,475
MR&T-I..............................  ...........            1  ...........  ...........  ...........  ...........  ...........  ...........  ...........  ...........  ...........            1
MR&T-C..............................           10           62  ...........            4  ...........  ...........  ...........  ...........  ...........  ...........  ...........           76
MR&T--O&M...........................           29          114           15  ...........            5  ...........  ...........  ...........  ...........  ...........  ...........          163
FUSRAP..............................  ...........  ...........  ...........  ...........  ...........          130  ...........  ...........  ...........  ...........  ...........          130
FC&CE...............................  ...........  ...........  ...........  ...........  ...........  ...........  ...........  ...........           40  ...........  ...........           40
Regulatory..........................  ...........  ...........  ...........  ...........  ...........  ...........  ...........  ...........  ...........          180  ...........          180
Expenses............................  ...........  ...........  ...........  ...........  ...........  ...........  ...........  ...........  ...........  ...........          177          177
Office of the ASA(CW)...............  ...........  ...........  ...........  ...........  ...........  ...........  ...........  ...........  ...........  ...........            6            6
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
      TOTAL.........................        1,892        1,322          270          286           95          130          319            6           58          180          183        4,741
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

 enclosure 3.--department of the army, corps of engineers--civil works 
      budget fiscal year 2009 construction performance guidelines
    Project Rankings.--All ongoing specifically authorized construction 
projects, including projects funded in the Mississippi River and 
Tributaries account, will be assigned based upon their primary purpose 
to one of the main mission areas of the Corps (flood and storm damage 
reduction; commercial navigation; aquatic ecosystem restoration) or to 
hydropower. Flood and storm damage reduction, commercial navigation, 
and hydropower projects will be ranked by their total benefits divided 
by their total costs (BCR), calculated at a 7 percent real discount 
rate. Aquatic ecosystem restoration projects will be ranked by the 
extent to which they cost-effectively contribute to the restoration of 
a nationally or regionally significant aquatic ecosystem that has 
become degraded as a result of a civil works project, or to a 
restoration effort for which the Corps is otherwise uniquely well-
suited (e.g., because the solution requires complex alterations to the 
hydrology and hydraulics of a river system).
    Projects Funded on the Basis of Their Economic and Environmental 
Returns.--Ongoing flood and storm damage reduction, commercial 
navigation, and hydropower construction projects with a BCR of 1.5 or 
higher and ongoing aquatic ecosystem restoration construction projects 
that are cost-effective in contributing to the restoration of a 
nationally or regionally significant aquatic ecosystem that has become 
degraded as a result of a civil works project or to a restoration 
effort for which the Corps is otherwise uniquely well-suited will 
receive at least the amount needed to pay estimated contractor earnings 
required under ongoing contracts and related costs. In allocating funds 
among these projects, priority will be given to those with the highest 
economic and environmental returns and to projects where the Corps can 
complete physical construction of the project and/or related 
administrative activities in the budget year.
    Projects Funded to Address Significant Risk to Human Safety.--Flood 
and storm damage reduction projects that are funded to address 
significant risk to human safety will receive sufficient funding to 
support an uninterrupted effort during the budget year.
    Projects With Low Economic and Environmental Returns.--Ongoing 
flood and storm damage reduction, commercial navigation, and hydropower 
construction projects with a BCR below 1.5 will be considered for 
deferral, except for flood and storm damage reduction projects that are 
funded to address significant risk to human safety. Likewise, ongoing 
aquatic ecosystem restoration construction projects that do not cost-
effectively contribute to the restoration of a nationally or regionally 
significant aquatic ecosystem that has become degraded as a result of a 
civil works project, and do not cost-effectively address a problem for 
which the Corps is otherwise uniquely well-suited, will be considered 
for deferral.
    New Starts and Resumptions.--The budget could include funds to 
start up new construction projects, or to resume work on ongoing 
construction projects on which the Corps has not performed any physical 
work under a construction contract during the past 3 consecutive fiscal 
years, only if the project would be ranked that year in the top 20 
percent of the ongoing construction projects in its mission area. The 
term ``physical work under a construction contract'' does not include 
activities related to project planning, engineering and design, 
relocation, or the acquisition of lands, easements, or rights-of-way. 
For non-structural flood damage reduction projects, construction begins 
in the first fiscal year in which the Corps acquires lands, easements, 
or rights-of-way primarily to relocate structures, or performs physical 
work under a construction contract for non-structural project-related 
measures. For aquatic ecosystem restoration projects, construction 
begins in the first fiscal year in which the Corps acquires lands, 
easements, or rights-of-way primarily to facilitate the restoration of 
degraded aquatic ecosystems including wetlands, riparian areas, and 
adjacent floodplains, or performs physical work under a construction 
contract to modify existing project facilities primarily to restore the 
aquatic ecosystem. For all other projects, construction begins in the 
first fiscal year in which the Corps performs physical work under a 
construction contract.
    Other Cases.--Projects will receive the amount needed to ensure 
that they comply with treaties and with biological opinions pursuant to 
the Endangered Species Act, and meet authorized mitigation 
requirements. Dam safety assurance, seepage control, and static 
instability correction projects that are funded in the construction 
program will receive the maximum level of funding that the Corps can 
efficiently and effectively spend in each year.

    Senator Dorgan. Secretary Woodley, thank you very much for 
your testimony.
    Next we will hear from Lieutenant General Van Antwerp. 
General.
STATEMENT OF LIEUTENANT GENERAL ROBERT VAN ANTWERP, 
            CHIEF OF ENGINEERS
    General Van Antwerp. Thank you, Mr. Chairman, distinguished 
members of the committee.
    Senator Dorgan. Is that turned on, by the way?
    General Van Antwerp. I didn't push it hard enough, there I 
am. I'm with you.
    Thank you, Mr. Chairman, distinguished members of the 
subcommittee.
    I'm the 52d Chief of Engineers, I guess if you were there 
for all of us, you'd be over 200 years old, and you're still a 
young man. You've worked with 11 Chiefs, I'm proud to be the 
11th or 12th, here.
    Senator Domenici. Young man?
    General Van Antwerp. The President's budget is a 
performance-based budget. It reflects a focus on projects and 
activities that provide the highest returns--economic, 
environmental, and address significant contributions to safety.
    It allocates funding for 79 projects overall, it includes 
11 dam safety projects, 16 life safety, and it completes 12 
projects in fiscal year 2009.
    The greatest part of the budget, as expected, supports the 
Nation's navigation network. We are an expeditionary Corps, we 
have about 800 people deployed today, we have 4 districts in-
theater, Gulf Region Division, with the north, central and the 
south districts, and a district in Afghanistan. So, we covet 
your prayers for our folks deployed, and who are doing the 
heavy lifting every day overseas.

                           PREPARED STATEMENT

    We have a commitment to being good stewards of what you 
give us for continuous improvement, and I would just like to 
thank you for the opportunity to appear before you today, and I 
look forward to your questions.
    Thank you, sir.
    [The statement follows:]
      Prepared Statement of Lieutenant General Robert Van Antwerp
    Mr. Chairman and distinguished members of the subcommittee: I am 
honored to be testifying before your subcommittee today, along with the 
Assistant Secretary of the Army (Civil Works), the Honorable John Paul 
Woodley, Jr., on the President's fiscal year 2009 budget for the United 
States Army Corps of Engineers' Civil Works Program.
    My statement covers the following 4 topics:
  --Summary of fiscal year 2009 Program budget;
  --Construction Program;
  --Cost Engineering Improvements; and
  --Value of the Civil Works Program to the Nation's Economy, and to 
        the Nation's Defense.
               summary of fiscal year 2009 program budget
Introduction
    The fiscal year 2009 Civil Works budget is a performance-based 
budget, which reflects a focus on the projects and activities that 
provide the highest net economic and environmental returns on the 
Nation's investment or address significant risk to human safety. Direct 
Program funding totals $5.242 billion, consisting of discretionary 
funding of $4.741 billion and mandatory funding of $501 million. The 
Reimbursed Program funding is projected to involve an additional $2 
billion to $3 billion. In addition, the budget requests $5.761 billion 
of emergency funding for continuing efforts to improve storm protection 
for the greater New Orleans area.
Direct Program
    The budget reflects the administration's commitment to continued 
sound development and management of the Nation's water and related land 
resources. It proposes to give the Corps program managers more 
flexibility to properly maintain our key facilities. The budget 
incorporates objective performance-based metrics for the construction 
program, funds the continued operation of commercial navigation and 
other water resource infrastructure, provides significant funding for 
the regulatory program to protect the Nation's waters and wetlands, and 
supports restoration of nationally and regionally significant aquatic 
ecosystems, with emphasis on the Florida Everglades and the Upper 
Mississippi River. It also would improve the quality of recreation 
services through an expanded fee structure and stronger partnerships, 
in support of modernization. Additionally, it emphasizes the basic need 
to fund emergency preparedness activities for the Corps as part of the 
regular budget process.
Reimbursed Program
    Through the Interagency and Intergovernmental Services Program we 
help non-DOD Federal agencies, State, local, and tribal governments, 
and other countries with timely, cost-effective implementation of their 
programs. Rather than develop their own internal workforce to oversee 
large design and construction projects, these agencies rely on Corps of 
Engineers capabilities. Such intergovernmental cooperation is effective 
for agencies and the taxpayer by using the skills and talents that we 
bring to our Civil Works and Military Program missions. The work is 
principally technical oversight and management of engineering, 
environmental, and construction contracts performed by private sector 
firms, and is totally financed by the Agencies we service.
    Currently, we provide reimbursable support for about 70 other 
Federal agencies and several State and local governments. Total 
reimbursement for such work in fiscal year 2009 is projected to be $2.0 
billion to $3.0 billion. The exact amount will depend on assignments 
received from the agencies.
                          construction program
    The goal of the construction program is to produce as much value as 
possible for the Nation from available funds. Our fiscal year 2009 
budget of $1.478 billion (including $76 million under the Mississippi 
River and Tributaries program) furthers this objective by giving 
priority to the continued construction and completion of those water 
resources projects that will provide the best net returns on the 
Nation's investment for each dollar invested (Federal plus non-Federal) 
in the Corps primary mission areas. The budget also gives priority to 
projects that address a significant risk to human safety, 
notwithstanding their economic performance. Under these guidelines, the 
Corps allocated funding to 79 construction projects, including 11 other 
dam safety assurance, seepage control, and static instability 
correction projects, 16 projects that address a significant risk to 
human safety, and 52 other projects.
    The budget uses objective performance measures to establish 
priorities among projects and, through a proposed statutory change in 
Corps contracting practices, would also increase control over future 
costs. The performance measures used include the benefit-to-cost ratios 
for projects with economic outputs; and, for aquatic ecosystem 
restoration projects, the extent to which the project cost-effectively 
contributes to the restoration of a nationally or regionally 
significant aquatic ecosystem that has become degraded as a result of a 
Civil Works project or to an aquatic ecosystem restoration effort for 
which the Corps is otherwise uniquely well-suited. The selection 
process also gives priority to dam safety assurance, seepage control, 
static instability correction, and to projects that address a 
significant risk to human safety. Under each of these criterions, 
resources are allocated based on performance. This approach 
significantly improves the realization of benefits to the Nation from 
the Civil Works construction program and will improve overall program 
performance by allowing the Nation to realize the benefits of the 
projects with the best net returns (per dollar invested) sooner.
Maintenance Program
    The facilities owned and operated by, or on behalf of, the Corps of 
Engineers are aging. As stewards of this infrastructure, we are working 
to ensure that its key features continue to provide an appropriate 
level of service to the Nation. Sustaining such service poses a 
technical challenge in some cases, and proper maintenance is becoming 
more expensive as this infrastructure ages.
    The operation and maintenance (O&M) program for the fiscal year 
2009 budget includes $2.638 billion (including $163 million under the 
Mississippi River and Tributaries program), with a focus on the 
maintenance of key commercial navigation, flood and storm damage 
reduction, hydropower, and other facilities. Specifically, the 
operation and maintenance program supports completed works owned or 
operated by the Corps of Engineers, including administrative buildings 
and laboratories. This program includes, for example, significant 
funding for our efforts in the Columbia River Basin and Missouri River 
Basin to support the continued operation of Corps of Engineers multi-
purpose projects by meeting the requirements of the Endangered Species 
Act. Other work to be accomplished includes dredging, repair, aquatic 
plant control, removal of sunken vessels, monitoring of completed 
coastal projects, and operation of structures and other facilities, as 
authorized in the various River and Harbor, Flood Control, and Water 
Resources Development Acts.
                     cost engineering improvements
    The Corps has implemented some cost engineering improvements in an 
effort to ensure the development of quality project estimates in 
support of our Civil Works customers and partners for the successful 
accomplishment of projects. Three initiatives have been implemented 
that will provide more reliable project recommendations at the 
feasibility phase of the project by developing project cost 
contingencies using a standard cost risk analysis program. Cost risk 
analysis is the process of identifying and measuring the cost impact of 
project uncertainties and risks on the estimated total project cost.
    The first initiative mandates that the National Planning Centers of 
Expertise coordinate with the Cost Engineering Directory of Expertise 
at the Walla Walla District for independent review of cost estimates, 
and include contingencies in all decision documents requiring 
Congressional authorization. This approach will provide consistency in 
business practices and in the use of cost engineering tools.
    The second initiative, which went in effect on October 1, 2007, 
requires that Corps project delivery teams conduct a cost risk analysis 
to develop contingencies for Civil Works total project cost estimates 
of all decision documents requiring Congressional authorization for 
projects exceeding $40 million.
    The third initiative requires that project managers and their 
project delivery teams use project risk management principles and 
methods in developing a project risk management plan that includes a 
risk assessment and analysis and a risk response plan to support the 
cost risk analysis. Together the project risk management plan along 
with the cost risk analysis will produce a defensible assessment of the 
Civil Works total project cost estimate. This gives the management team 
an effective tool to assist in managing the planning study and will 
assist decisionmakers in making project recommendations.
    The Corps will be incorporating lessons learned into its cost 
estimating practices on an ongoing basis. Our goal is to improve the 
accuracy of our cost estimates much earlier in the development of a 
proposed project--at the project formulation stage--in order to provide 
greater assurance in determining whether the alternatives that we are 
exploring are highly cost-effective.
  value of the civil works program to the nation's economy and defense
    We are privileged to be part of an organization that directly 
supports the President's priorities of winning the global war on 
terror, securing the homeland and contributing to the economy.
The National Welfare
    The way in which we manage our water resources can improve the 
quality of our citizens' lives. It has affected where and how people 
live and influenced the development of this country. The country today 
seeks economic development as well as the protection of environmental 
values.
    Domestically, Corps of Engineers personnel from across the Nation 
continue to respond to the call to help re-construct and improve the 
hurricane and storm damage reduction system for southeast Louisiana. 
The critical work they are doing will reduce the risk of damage from 
future storms to people and communities.
    The budget also includes a 2009 Emergency Appropriation in the 
amount of $5.761 billion for the Federal Share of additional funds 
needed to provide risk reduction from hurricane and storm surges for 
the greater New Orleans, Louisiana, area. These funds will be used to 
restore and complete construction of hurricane and storm damage risk 
reduction features into the Federal System. The budget also proposes 
that the existing systems be authorized as a single, integrated 
project, and that cost-shares of this re-authorized project be made 
consistent with cost-shares that are applied nationally.
Research and Development
    Civil Works Program research and development provides the Nation 
with innovative engineering products, some of which can have 
applications in both civil and military infrastructure spheres. By 
creating products that improve the efficiency and competitiveness of 
the Nation's engineering and construction industry and providing more 
cost-effective ways to operate and maintain infrastructure, Civil Works 
program research and development contributes to the national economy.
The National Defense
    Internationally, the U.S. Army Corps of Engineers continues to 
support the mission to help Iraq and Afghanistan build foundations for 
democracy, freedom and prosperity.
    I also want to recognize the many Corps of Engineers civilians--
each of whom is a volunteer--and Soldiers who are providing engineering 
expertise, quality construction management, and program and project 
management in other nations. The often unsung efforts of these 
patriotic men and women contribute daily toward this Nation's goals of 
restoring the economy, security and quality of life for all Iraqis and 
Afghans.
    In Iraq, the Gulf Region Division has overseen the initiation of 
more than 4,300 reconstruction projects valued in excess of $6.5 
billion. More than 500 projects valued at $2.6 billion are ongoing. 
These projects provide employment and hope for the Iraqi people.
    In Afghanistan, the Corps is spearheading a comprehensive 
infrastructure program for the Afghan national army, and is also aiding 
in important public infrastructure projects.
                               conclusion
    The Corps of Engineers is committed to staying at the leading edge 
of service to the Nation. We're committed to change that ensures an 
open, transparent, and performance-based Civil Works Program.
    Thank you, Mr. Chairman and members of the subcommittee. This 
concludes my statement.

    Senator Dorgan. General, thank you very much, we appreciate 
your testimony as well.

                       DEPARTMENT OF THE INTERIOR

                         Bureau of Reclamation

STATEMENT OF KAMERAN ONLEY, ACTING ASSISTANT SECRETARY 
            FOR WATER AND SCIENCE
ACCOMPANIED BY:
        ROBERT W. JOHNSON, COMMISSIONER
        REED MURRAY, DIRECTOR, CENTRAL UTAH PROJECT COMPLETION ACT 
            OFFICE
        ROBERT W. WOLF, DIRECTOR, PROGRAM AND BUDGET, BUREAU OF 
            RECLAMATION
    Senator Dorgan. Secretary Onley.
    Ms. Onley. Mr. Chairman and Mr. Domenici and members of the 
subcommittee, thank you for the opportunity to appear before 
you in support of the President's fiscal year 2009 budget 
request for the Bureau of Reclamation and the Central Utah 
Project Completion Act.
    With me today is Bob Johnson, the Commissioner of the 
Bureau of Reclamation, and we also have Reed Murray, the 
Director of the Central Utah Project Completion Act Office with 
us here, if you have any questions on that program.
    I've submitted written testimony which presents a detailed 
summary of the Department's appropriation request. Today I'd 
like to highlight the 2009 Water for America initiative, and 
touch briefly on Reclamation and the Central Utah Project 
request before turning to Commissioner Johnson for more 
detailed discussion on the Reclamation request.
    The Department of the Interior's mission is complex and 
multi-faceted. Our program and mission stretch from the North 
Pole to the South Pole, and across 12 time zones, from the 
Caribbean to the Pacific Rim. Nearly every American lives 
within a 1 hour drive of lands or waters managed by the 
Interior Department.
    Our 2009 budget of $10.76 billion, benefits every American 
each day, in some way. The 2009 budget continues investments 
that Congress provided in 2008 for our top priorities. The 2009 
budget also addresses other nationally significant issues 
within a budget that maintains the President's commitment to 
fiscal restraint.
    The 2009 budget builds on our 2008 budget, which charted a 
course for excellence for our national parks, broadened our 
planning horizons to achieve healthy lands while securing 
energy for the Nation, and puts the needs of Indian country 
center stage. We continue these commitments, and are also 
proposing four new initiatives in 2009, to address water 
crisis, managing our oceans, reverse the dramatic decline in 
wild birds, and protect our borders. These initiatives have 
addressed some of the most critical issues facing this Nation.
    The Water for America initiative would ensure that 
communities have a reliable water supply for the 21st century. 
Last year, the National Science and Technology Council reported 
that abundant supplies of clean, fresh water can no longer be 
taken for granted.
    Our water scarcity is not just a problem for the West; it 
is a problem for the Nation. We are seeing prolonged droughts 
and water conflicts in such areas as the Southeast, where 
people are used to having unlimited water.
    Through this initiative, the Bureau of Reclamation and the 
U.S. Geological Survey will help communities secure reliable 
water supplies through information, technologies and 
partnerships.
    With regard to the programs under the jurisdiction of this 
subcommittee, the 2009 request for the Bureau of Reclamation 
and the Central Utah Project Completion Act is $961.3 million. 
I will defer to Commissioner Johnson to discuss the details of 
the Reclamation request, but note that the 2009 proposal of 
$919.3 million supports managing, developing and protecting 
water and related resources in an environmentally and 
economically sound manner.
    Reclamation continues to strive for the highest levels of 
service to the American people, and for the highest levels of 
management excellence.
    The request for the implementation of the Central Utah 
Project Protection Completion Act is $42 million. The majority 
of the fiscal year 2009 funding will continue to continue 
construction of the Utah Lakes System, the last component of 
the Central Utah Project which, when complete, will provide 
much-needed water for Salt Lake and Utah counties.
    The Central Utah Project anticipates ongoing construction 
of the Spanish Fork Canyon Pipeline, the return of two more of 
the high lakes in the Uinta Mountains, and natural conditions, 
and implementation of the East Juab Water Efficiency Project, 
to conjunctively use ground water and surface water.
    While here, I would be remiss if I did not mention, the 
Department strongly supports the President's $50 million 
request that is pending before this subcommittee for the Army 
Corps of Engineers work to implement the modified waters 
delivery to Everglades National Park, which Congress authorized 
in 1989. Mod waters is intended to restore the natural flow of 
water to Everglades National Park and thereby restores park 
habitat which has been adversely affected by the operations of 
the last 5 decades of Army Corps Central and Southern Florida 
Project.
    The funds for the Army Corps, when combined with the funds 
requested for the National Park Service, will allow to continue 
the work on this project and bring it closer to completion. We 
have just completed--with the Corps of Engineers--an evaluation 
of a key component related to bridging in the Tamiami Trail, 
U.S. Highway 41, which serves as the barrier to restore flow. 
We appreciate your favorable support for this project, which is 
supported by the State of Florida, and is a necessary 
prerequisite for the Everglades restoration work.
    In summary, the Department's 2009 budget will continue 
efforts to improve our national parks, protect our wildlife in 
its habitat, and make investments in Indian country for safe 
communities and Indian education. In addition, we will help 
communities address water and supply needs, conserve wild birds 
and ocean resources, improve the safety of public lands along 
the border for employees and visitors, and continue to address 
other ongoing mission priorities.

                           PREPARED STATEMENT

    I appreciate the strong support from this committee has 
given to both the Department--to the Department, and in 
particular, the Bureau of Reclamation, and to the Central Utah 
Project, and I look forward to working with you to advance the 
goals of these programs.
    Thank you.
    [The statement follows:]
                  Prepared Statement of Kameran Onley
    Mr. Chairman, Senator Domenici, and members of this subcommittee, 
it is a pleasure to appear before this subcommittee today to discuss 
the President's 2009 budget for the Department of the Interior and to 
update you on our progress in implementing our 2008 programs.
    The Department of the Interior's mission is complex and 
multifaceted. Our programs and mission stretch from the North Pole to 
the South Pole and across 12 time zones, from the Caribbean to the 
Pacific Rim. Our extensive mandate rivals any Government agency in its 
breadth and diversity--and its importance to the everyday lives of 
Americans. In a recent poll of Federal agencies, the Department of the 
Interior received the highest rating for its public service.
    Nearly every American lives within a 1 hour drive of lands or 
waters managed by the Interior Department. With 165,000 facilities at 
2,400 locations, Interior is second only to the Department of Defense 
in managed assets. The Department's law enforcement agents, over 4,000, 
comprise the third largest civilian law enforcement presence in the 
Federal Government.
    Approximately 31 million people in the West rely on drinking water 
provided through water systems managed by the Department. Interior 
irrigation systems deliver water to farmers who generate over half of 
the Nation's produce.
    The lands and waters we manage generate one-third of the Nation's 
domestic energy production. Managing these areas, Interior generates 
$18 billion annually in revenues that exceeds Interior's $10.7 billion 
appropriated budget.
    Interior fulfills special responsibilities to Native Americans as 
the manager of one of the largest land trusts in the world--over 10 
million acres owned by individual Indians and 46 million acres held in 
trust for Indian Tribes. In addition to lands managed in trust, the 
Department manages over $3.3 billion of funds held in over 1,800 trust 
accounts for approximately 250 Indian tribes and over 370,000 open 
Individual Indian Money accounts. Interior also operates one of only 
two school systems in the Federal Government, the Bureau of Indian 
Education school system. The Department of Defense operates the other.
                      overview of the 2009 budget
    The 2009 budget request for current appropriations is $10.7 
billion, $388.5 million or 3.5 percent below the level enacted by 
Congress for 2008, excluding fire supplemental funding, but $59 million 
above the amount requested in the 2008 President's budget. Permanent 
funding that becomes available as a result of existing legislation 
without further action by the Congress will provide an additional $6 
billion, for a total 2009 Interior budget of $16.7 billion. Including 
permanent funding and excluding 2008 fire supplemental funding, the 
2009 budget for Interior is slightly above 2008 amounts.
    The 2009 request includes $9.8 billion for programs funded within 
the Interior, Environment and Related Agencies Appropriation Act. 
Excluding fire supplemental funding, this is a decrease of $198.9 
million, or 2 percent, below the level enacted for 2008. The 2009 
request for the Bureau of Reclamation and the Central Utah Project 
Completion Act, funded in the Energy and Water Development 
Appropriations Act, is $961.3 million, $189.6 million below the level 
enacted for 2008.
                          the challenges ahead
    Interior's responsibilities are expanding as the Nation looks to 
its public lands for energy, water, wildlife protection, and 
recreation. Since 2001, the Nation has created 13 new parks and 15 
wildlife refuges. Population has grown dramatically near once-rural or 
remote public lands, increasing access to public lands and complicating 
land management. In the last 10 years, 60 percent of the new houses 
built in America were located in the wildland-urban interface. Changing 
land conditions, including the effects of a changing climate, have 
heightened threats from fire and other natural hazards, complicating 
land management.
    The Department is improving program efficiency, setting priorities, 
and leveraging Federal funds through partnerships and cooperative 
conservation to meet these challenges. Interior's accomplishments have 
been many and varied, with noteworthy advances in management 
excellence.
    Interior has made progress on all dimensions of the President's 
management agenda--a result achieved despite decades-long challenges in 
Indian trust management, a highly decentralized organization structure, 
and a highly dispersed workforce. In 2001, Interior had 17 material 
weaknesses reported in the annual financial and performance audit. With 
the annual audit just completed for 2007, we have eliminated all 
material weaknesses. Despite these successes, as public lands become 
increasingly important to the economy, national security, and the 
public, continued success will require a strategic focus of resources 
to address emerging challenges, achieve key priorities, and maintain 
current levels of success.
                       interior's accomplishments
    The Department's accomplishments exemplify Interior's core values: 
Stewardship for America with Integrity and Excellence. Our 
achievements, in combination with an outstanding workforce, create a 
strong foundation for continued stewardship of the Nation's resources. 
Since 2001, the Department has:
  --Restored or enhanced more than 5 million acres and 5,000 stream and 
        shoreline miles through cooperative conservation.
  --Restored, improved, and protected wetlands to help achieve the 
        President's goal to protect, enhance, and restore 3 million 
        acres by 2009.
  --Improved park facilities for visitors by undertaking over 6,600 
        projects at national parks and earning a 96 percent 
        satisfaction rate from park visitors.
  --Reduced risks to communities from the threat of catastrophic fire, 
        conducting over 8 million acres of fuels treatments on Interior 
        lands through the Healthy Forests Initiative.
  --Enhanced energy security by more than doubling the processing of 
        applications for permits to drill and increased the production 
        of renewable energy with new wind, solar, and geothermal 
        projects.
  --Awarded $9.8 million to 140 Preserve America projects involving 
        public-private partnerships that serve as nationwide models for 
        heritage tourism, historic preservation, education, and other 
        Federal programs.
  --Leveraged a four-to-one investment through a water conservation 
        challenge grant program, generating more than $96 million for 
        122 water delivery system improvements and conserving over 
        400,000 acre-feet of water to help meet the water needs of 
        people across the West.
  --Completed planned lease sales and generated a new 5-year plan for 
        2007-2012 that opens up an additional 48 million acres to 
        leasing and has the potential to produce 10 billion barrels of 
        oil and 45 trillion cubic feet of natural gas over the next 40 
        years, enough to heat 47 million homes for 40 years. The 
        October 2007 Central Gulf of Mexico OCS lease sale generated 
        $2.9 billion, $1.6 billion more than originally estimated.
  --Removed the American bald eagle from the endangered species list 
        and put in place a set of management guidelines to secure the 
        future of our Nation's symbol.
  --Advanced protection of the Papahanaumokuakea Marine National 
        Monument in Hawaii, the largest marine protected area in the 
        world, with the publication of regulations codifying management 
        measures.
  --Hosted over 464 million visitors to parks, refuges, public lands, 
        and Bureau of Reclamation sites and increased the number of 
        fishing programs on refuges by 24 and the number of hunting 
        programs on refuges by 34.
  --Established a new Recreation Reservation Service, a unified pass to 
        public lands, and clarified entrance and recreation fees, in 
        coordination with other agencies.
  --Distributed over $79 million to individual Indian money account 
        holders whose whereabouts were previously unknown and archived 
        400 million pages of trust documents in a state-of-the-art 
        facility.
    Our 2009 budget continues investments the Congress provided in 2008 
for our top priorities. We continue our Centennial Initiative with 
record funding levels for park operations. We propose to augment 
funding for our landscape-scale Healthy Lands Initiative to protect 
wildlife and assure access to energy resources on public lands. We 
propose to sustain funding increases in 2008 to combat the 
methamphetamine scourge in Indian country and improve education 
programs for students in Indian schools.
    Fulfilling the President's commitment to cooperative conservation, 
since 2001, the Department has provided $2.5 billion in conservation 
grants to achieve on-the-ground protection, restoration, and 
enhancement of lands and waters with partners. This commitment 
continues with $321.7 million requested in 2009 for challenge cost 
share and partnership programs that leverage Federal funding, typically 
more than doubling the Federal investments with matching funds.
    We also propose four new initiatives. We will advance efforts to 
improve the status of birds, including migratory birds, and avert 
further declines in bird populations with an increase of $9.0 million 
for a Birds Forever initiative. The budget continues the $35.9 million 
refuge funding increase provided by the Congress in 2008, which will 
restore 200,000 acres of bird habitat. The 2009 budget seeks an 
increase of $7.9 million to collect data that is needed to define U.S. 
jurisdiction of the extended continental shelf under the Law of the 
Sea, protect wildlife and habitat in ocean environments from marine 
debris, and conduct high priority research to support coastal 
restoration. The 2009 budget includes $8.2 million to increase the 
protection of employees, visitors, lands and resources that are 
increasingly at risk from illegal activities at parks, refuges, public 
lands, and Indian lands along the border with Mexico. Of particular 
interest to this subcommittee, we request an increase of $21.3 million 
for the Water for America initiative that will enhance knowledge of 
water resources and improve the capacity of water managers to avert 
crises caused by water supply issues and better manage water resources 
to assist in endangered species recovery.
                           water for america
    In 2007, the National Science and Technology Council reported that 
``abundant supplies of clean, fresh water can no longer be taken for 
granted.'' The Council of State Governments echoed this concern, 
concluding that ``water, which used to be considered a ubiquitous 
resource, is now scarce in some parts of the country and not just in 
the West . . . The water wars have spread to the Midwest, East, and 
South, as well.''
    Competition for water is increasing because of rapid population 
growth and growing environmental and energy needs. These water needs 
are escalating at a time of chronic drought and changes in water 
availability resulting from a changing climate.
    In 2009, our budget includes an increase of $21.3 million for a 
Water for America initiative to help communities secure reliable water 
supplies through information, technologies, and partnerships. This 
collaborative effort, which involves the Bureau of Reclamation and the 
U.S. Geological Survey, will help address the water needs of the 
Nation.
    Knowing how much water is available--and how much we consume--lies 
at the foundation of good water management. Yet this Nation has not 
completed a water census in over 3 decades. Our Water for America 
initiative will fill this void. The U.S. Geological Survey request 
includes an additional $8.2 million to begin funding the first water 
census in 30 years. USGS will begin a nationwide assessment of water 
availability, water quality, and human and environmental water use. The 
census, planned for completion by 2019, will generate information to 
assist others in managing water in a context of competing demands. The 
census will provide a national groundwater information system, new 
technology that integrates surface and groundwater information, and 
better measurements that result in better management of water 
resources.
    For more than 100 years, USGS has collected, managed and 
disseminated data on stream behavior. The USGS operates its 
streamgaging network of 7,000 gages in cooperation with State, local, 
municipal, and tribal partners. The 2009 budget will modernize 350 
gages and re-establish 50 gages discontinued in the past 2 decades to 
improve capability to ensure a consistent, historical record of 
streamflow.
    The Bureau of Reclamation will recast its water conservation 
programs and will merge Water 2025 and the Water Conservation Field 
Services program to stimulate water conservation and improved water 
management through an integrated approach that addresses urban, rural, 
and agricultural uses of water throughout the West. Through the use of 
West-wide criteria to competitively award grants, this new water 
conservation challenge grant program will stretch water supplies 
through water conservation, technology, reuse and recycling, and new or 
improved infrastructure development. This program will leverage $15.0 
million in Federal dollars with State and local funds. We will also 
protect endangered species and their habitats while protecting water 
for traditional purposes with an increase of $8.9 million. Funding will 
be used to acquire water to increase flows in the Platte River; improve 
tributary habitats for spawning on the Columbia and Snake Rivers; 
restore habitats on the Yakima River basin, the Middle Rio Grande 
River, and the Klamath basin, and improve endangered species conditions 
in the California Bay-Delta.
    The Bureau of Reclamation's 2009 budget request of $919.3 million 
is offset by $48.3 million in funds from the Central Valley Project 
Restoration Fund Offset. This request supports Reclamation's mission of 
managing, developing, and protecting water and related resources in an 
environmentally and economically sound manner in the interest of the 
American people. The budget emphasizes reliable water delivery and 
power generation by requesting more than $396 million to fund 
operation, maintenance, and rehabilitation activities at Reclamation 
facilities.
    To address important infrastructure funding needs, the budget 
includes an increase of $15.5 million for the Bureau of Reclamation's 
Safety of Dams program. This will allow the Bureau to address 
correction actions at Folsom Dam and other high priority projects.
    Reclamation is currently developing programmatic criteria for a 
Rural Water Program as required under the Reclamation Rural Water 
Supply Act of 2006. Reclamation expects to begin appraisal level 
studies in 2009. The 2009 budget includes $39.0 million for two ongoing 
authorized rural water projects: $24 million supports the 
administration's commitment to complete construction of ongoing rural 
water projects including ongoing municipal, rural and industrial 
systems for the Pick Sloan-Missouri Basin Program--Garrison Diversion 
Unit in North Dakota and the Mni Wiconi Project in South Dakota. The 
first priority for funding rural water projects is the required 
operations and maintenance component, which is $15.0 million for 2009. 
For the construction component, Reclamation allocated funding based on 
objective criteria that gave priority to projects nearest to completion 
and projects that serve tribal needs.
    The $50.0 million budget for Animas-La Plata funds the completion 
of major project components including the Ridges Basin Dam, Durango 
Pumping Plant, and Ridges Basin Inlet Conduit; enables the Bureau to 
begin filling Lake Nighthorse; and begins construction of the Navajo 
Nation Municipal Pipeline.
    The Bureau will complete removal of the Savage Rapids Dam in 2009. 
The budget includes $22.7 million for the Middle Rio Grande project to 
continue to focus on the protection and recovery of the silvery minnow 
and southwestern willow flycatcher.
    The budget request for CALFED is $32.0 million, continuing 
implementation of priority activities that will resolve water conflicts 
in the Bay-Delta of California. Funds will be used for the 
environmental water account, storage feasibility studies, conveyance 
feasibility studies, science, implementation of projects to improve 
water quality, and overall program administration.
                  supporting the department's mission
    The 2009 budget aligns resources to achieve these and other high-
priority goals guided by the Department's integrated strategic plan. 
The Department's strategic plan links the Department's 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.
    Interior continues to utilize the services of over 200,000 
volunteers and extensive seasonal employees. However, the workforce 
capacity of the Department's programs is an essential ingredient for 
the uninterrupted delivery of programs and services to the American 
public.
                        other budget priorities
    Financial and Business Management System.--The Financial and 
Business Management System, an enterprise-level, integrated, 
administrative management system, is replacing the Interior 
Department's existing legacy systems. When fully implemented, the 
project will support the business requirements of all Interior bureaus 
and offices including core accounting, acquisition, personal property 
and fleet, travel, real property, financial assistance, budget 
formulation, and enterprise management information.
                         legislative proposals
    The 2009 budget is accompanied by legislative proposals that will 
affect receipt or spending levels in 2009 or in future years. These 
proposals will be transmitted to the Congress for consideration by this 
committee and other authorizing committees of jurisdiction.
    Many of these legislative changes were presented in the 2008 
President's budget, including proposals for reallocation of the 
repayment of capital costs for the Pick-Sloan Missouri Basin Program, 
and authorization for the San Joaquin River Restoration settlement.
                               conclusion
    Our 2009 budget will--in its entirety--make a dramatic difference 
for the American people. We will continue efforts to improve our 
national parks, protect our wildlife and its habitat, and make 
investments in Indian Country for safe communities and Indian 
education. In addition, we will help communities address water supply 
needs, conserve wild birds and ocean resources, improve the safety of 
public lands along the border for employees and visitors, and continue 
to address other ongoing mission priorities. This concludes my overview 
of the 2009 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 Dorgan. Secretary Onley, thank you very much.
    Commissioner Johnson, you may proceed.

                     STATEMENT OF ROBERT W. JOHNSON

    Mr. Johnson. Thank you, Mr. Chairman, it's a pleasure for 
me to be here, also, and it's an honor to be in front of the 
members of the committee here, as well.
    I have Mr. Robert Wolf with me today, he is the head of our 
Program and Budget Group with the Bureau of Reclamation, and 
he'll be assisting me with details if I need some help.
    I would like to truncate my oral remarks, and very quickly 
hit on three broad categories of the Reclamation budget, and 
then just spend a minute talking about our Water for America 
initiative that's included in the 2009 request.
    Reclamation's budget breaks down into three really broad 
categories. Our first priority is the operation and maintenance 
of our facilities. We deliver water to 10 million acres of 
irrigated farmland, we deliver water to 31 million people, and 
we produce 44 billion kilowatt hours of energy annually.
    We have 58 power plants, 350 high dams--450 dams, if you 
count the lower dams--and maintaining that infrastructure, 
which largely is 50 years old, or older, is the first priority 
of the Bureau of Reclamation. And when we look at our budget, 
we have about $400 million associated with insuring that we're 
able to maintain that infrastructure and continue to deliver 
those water and power supplies like we have in the past.
    The second component of our program that I like to 
generalize about is what I would call River Restoration 
Programs. The Endangered Species Act, the National 
Environmental Policy Act, and the Clean Water Act have really 
established a new set of public values that Reclamation has to 
deal with, and the Corps, as well. And we found ourselves--in 
complying with those acts--being heavily involved in restoring 
river basins--river basins where we've had heavy involvement in 
developing water supply systems. We found that in order to be 
able to deliver, or continue to deliver, the benefits of our 
projects--that we have to be very active in managing those 
river basins to maintain the ecosystems and protect the species 
that live there.
    We have about $150 million in our budget for those kinds of 
activities--the Rio Grande, the Colorado, the Snake, the 
Columbia, the Platte, the Sacramento and San Joaquin, the 
Trinity River--all have major river basin restoration programs, 
the Klamath, I don't want to leave out the Klamath--certainly 
an important river basin--and we are putting a lot of our 
resources into meeting those requirements on those river 
basins.
    The third is, Reclamation continues to be involved in the 
development of new water supplies. We're still constructing 
water projects, we're heavily into the Animas La Plata Project 
in Colorado and New Mexico, we have an active Rural Water 
Program, that I know you all have a great interest in. We have 
a Water Reuse Program, funding additional water reuse. We have 
Indian programs to develop facilities to deliver water to 
Indian tribes. And that component of our program is also 
approximately $150 million.
    So, that in a very broad framework is the crux of the 
Reclamation program, and what our 2009 budget represents.
    Quickly, I would like to touch on Water for America, a new 
initiative. An initiative that I am very excited about, I think 
it's going to help Reclamation continue to be a key player in 
dealing with some of the critical water supply issues that 
we're facing in the Western United States. Chronic drought, 
changing climate, rapid population growth, and increased 
environmental and energy needs has created water conflicts 
leading to growing interstate and intrastate competition for 
water resources.
    In fiscal year 2009 Reclamation will partner with the U.S. 
Geological Survey to implement a Water for America initiative 
aimed at addressing 21st century water challenges. The 2009 
budget request for Water for America is $31.9 million. Of this, 
$19 million appears as the Water for America line item in our 
budget. The remaining $12.9 million is included in specific 
projects for enhanced endangered species recovery activities, 
which is about $8.9 million, and investigation programs, which 
is about $4 million.
    The goal of the Water for America initiative is to address 
the impending confluence of three factors, threatening to 
overwhelm our current ability to provide water to the arid 
West--increased water demands, aging infrastructure and 
decreased, or altered, availability of water supplies.
    Reclamation's part in Water for America will focus on two 
strategies. First, Reclamation will conduct several 
comprehensive basin-wide water supply and demand studies, in 
conjunction with willing partners in areas where high levels of 
anticipated water and supply/demand imbalances exist.
    Each study will include three main elements, state of the 
art projections of future water supply and demand for the river 
basin, analysis of the basin's existing water and power 
infrastructure performance in face of changing water realities, 
and finally, recommendations for adaptation and optimizing 
current operations and activities; or by changing or 
supplementing existing infrastructure and operations and 
adopting new technologies. These activities will be carried out 
in concert with Reclamation's existing planning programs.

                           PREPARED STATEMENT

    Second, we will look at expanding, protecting and 
conserving our Nation's water resources through a broad-based 
Challenge Grant Program, building on the existing Water 2025 
Challenge Grant Program that we've had over the last 4 or 5 
years. Our intent is to broaden that program to include 
Challenge Grants that would advance water technology, water 
treatment technology, and support proactive efforts to address 
endangered species problems, as well as the traditional grants 
to encourage water conservation in areas where there is 
potential conflict in water resource use.
    Thank you, Mr. Chairman, that concludes my oral remarks.
    [The statement follows:]
                Prepared Statement of Robert W. Johnson
    Thank you, Mr. Chairman, Senator Domenici and members of the 
subcommittee, for the opportunity to appear before you in support of 
the President's fiscal year 2009 budget request for the Bureau of 
Reclamation. With me today is Robert W. Wolf, Director of Program and 
Budget. Additionally, we have Reed Murray, Program Manager for the 
Central Utah Project Completion Act should you have any questions on 
that program.
    I appreciate the time and consideration this subcommittee gives to 
reviewing and understanding Reclamation's budget and its support for 
the program. Reclamation works hard to prioritize and define our 
program in a manner that serves the best interest of the public and 
those who rely on Reclamation for their water and power.
    Our fiscal year 2009 request has been designed to support 
Reclamation's core activities to deliver water and generate hydropower, 
consistent with applicable State and Federal law, in an environmentally 
responsible and cost-efficient manner while meeting the President's 
goal of balancing the budget by 2012.
    The proposed funding will allocate funds to projects and programs 
based on objective and performance-based criteria to most effectively 
implement Reclamation's programs and its management responsibilities 
for the water and power infrastructure in the West. The President's 
budget request emphasizes the following principle: enhancing management 
of our water infrastructure and programs in the West by eliminating 
program redundancies, leveraging partnerships with our western 
stakeholders and maximizing opportunities for competitive processes.
    The fiscal year 2009 request for Reclamation totals $919.3 million 
in gross budget authority. This takes into consideration the effects of 
the proposed legislation for fiscal year 2009 that will redirect $7.5 
million for Friant surcharges from the Central Valley Project 
Restoration Fund to the San Joaquin River Restoration Fund. The request 
also is partially offset by discretionary receipts in the Central 
Valley Project Restoration Fund of $48.3 million.
                      water and related resources
    The fiscal year 2009 request for Water and Related Resources is 
$779.3 million. The request for Water and Related Resources includes a 
total of $383.0 million for water and energy, land, and fish and 
wildlife resource management activities (which provides for 
construction and management of Reclamation lands, and actions to 
address the impacts of Reclamation projects on fish and wildlife). The 
request also includes $396.3 million for facility operations, 
maintenance, and rehabilitation activities which is used to ensure 
sound and safe ongoing operations.
    Adequate funding for facility operations, maintenance, and 
rehabilitation continues to be one of Reclamation's highest priorities. 
Reclamation continues to work closely with water users and other 
stakeholders to ensure that available funds are used effectively. These 
funds are used to allow the timely and effective delivery of project 
benefits; ensure the reliability and operational readiness of 
Reclamation's dams, reservoirs, power plants, and distribution systems; 
and identify, plan, and implement dam safety corrective actions and 
site security improvements.
Highlights of the Fiscal Year 2009 Request for Water and Related 
        Resources
    I would like to share with the committee several highlights of the 
Reclamation budget, including one of the most significant and exciting 
elements of our 2009 request, the Water for America Initiative. In 
fiscal year 2009, Reclamation will partner with the U.S. Geological 
Survey to implement the Water for America initiative aimed at 
addressing 21st century water challenges and ensuring secure water 
supplies for future generations.
    Water for America ($31.9 million).--Of this amount, $19.0 million 
appears as the Water for America Initiative line item. While the 
remaining $12.9 million is funded in specific projects for enhanced 
endangered species recovery activities ($8.9 million) and displayed as 
individual investigation programs ($4.0 million) in the budget request, 
collectively the $31.9 million supports the cohesive Water for America 
initiative. Reclamation's efforts focus on two of the Initiative's 
three strategies: Plan for Our Nation's Water Future; and Expand, 
Protect, and Conserve Our Nation's Water Resources. The third 
component, Enhance our Nation's Water Knowledge is funded with the 
USGS.
    As part of the Plan for Our Nation's Water Future component of the 
Initiative, Reclamation will incorporate the existing investigations 
programs with a new basinwide studies program, thus initiating 
comprehensive water supply and demand studies to assess the impact of 
increased water demands on finite water sources. The Expand, Protect, 
and Conserve Our Nation's Water Resources component merges the most 
successful elements of two existing water conservation programs, Water 
2025 and the Water Conservation Field Services Program. Competitive 
grants will be awarded based upon West-wide criteria to address 
emerging challenges and prevent future conflicts.
  --Plan for Our Nation's Water Future ($8.0 million).--In planning for 
        our Nation's water future, Reclamation will conduct 
        comprehensive water supply and demand studies. The studies, to 
        be done in conjunction with willing partners, will occur in 
        areas where high levels of anticipated water supply/demand 
        imbalances exist. Each study will include three main elements: 
        state-of-the-art projections of future supply and demand by 
        river basin; analyses of how the basin's existing water and 
        power infrastructure will perform in the face of changing water 
        realities; and recommendations for satisfying future water 
        needs through adapting and optimizing current operations and 
        activities, or by changing or supplementing existing 
        infrastructure and operations and adopting new technologies. 
        Additionally, Reclamation`s investigation programs will 
        complement the comprehensive basin studies and will place an 
        additional emphasis on resolving 21st century challenges.
  --Expand, Protect, and Conserve Our Nation's Water Resources ($23.9 
        million).--The Expand, Protect, and Conserve Our Nation's Water 
        Resources effort will use a broad-based challenge grant program 
        (building upon and recasting the existing Water 2025 Challenge 
        Grant program and the Water Conservation Field Services 
        Program) to accelerate the implementation of cost-effective 
        actions that will conserve water by improving efficiency; 
        recycle and desalt water to create new supplies; and support 
        proactive efforts to avoid the decline of sensitive species.
    Another component of this strategy is accelerating endangered 
species activities in order to maintain and improve existing resident 
populations and/or localized critical habitat for various species 
impacted by Reclamation projects, thereby safeguarding the water 
supplies associated with these projects. Activities will include 
acquiring land for habitat development and improvement projects, 
recovery activities for listed species, improvements to stream flow, 
removal of barriers to spawning grounds, restoration of critical 
habitat and other related actions.
    Other significant programs and highlights include:
    Klamath Project in Oregon and California ($25.0 million).--The 
fiscal year 2009 President's budget request will continue funding for 
Reclamation to collaborate with other Federal and State agencies, 
tribes and the public to develop a basin-wide recovery plan that 
addresses water supply, water quality, fish habitat, and fish 
populations.
    Lower Colorado River Operations Program in California, Arizona and 
Nevada ($16.4 million).--The fiscal year 2009 President's budget 
request will provide funds for the work necessary to carry out the 
Secretary's responsibilities as water master of the lower Colorado 
River. The fiscal year 2009 request funds measures under the multi-
species conservation program to provide long-term Endangered Species 
Act compliance for lower Colorado River operations for both Federal and 
non-Federal purposes.
    Middle Rio Grande in New Mexico ($22.7 million).--The fiscal year 
2009 President's budget request will continue funding for endangered 
species activities and Reclamation's participation in the Middle Rio 
Grande Endangered Species Act Collaborative Program as well as repair 
of priority river maintenance sites.
    Animas-La Plata in Colorado and New Mexico ($50.0 million).--The 
fiscal year 2009 President's budget request will continue construction 
of the project's major features, Ridges Basin Dam and Durango Pumping 
Plant and the Ridges Basin Inlet Conduit. It will allow for initiation 
of testing on the Durango Pumping Plant and Ridges Basin Inlet Conduit, 
thereby enabling the initial filling of Lake Nighthorse. With this 
level of funding Reclamation will start constructing components of the 
Navajo Nation Municipal Pipeline. In addition to construction funding, 
this request includes funding for continued operation and maintenance 
of improvements for wetland and wildlife mitigation lands associated 
with the project.
    Savage Rapids in Oregon ($3.0 million).--The fiscal year 2009 
President's budget request will provide funds for continuing 
construction of the pumping facilities. Removal of this irrigation 
diversion dam and the installation of pumping facilities will allow the 
local farming community to continue irrigated agriculture and remove a 
migration barrier for the threatened Southern Oregon and Northern 
California coho salmon.
    Columbia/Snake River Salmon Recovery in Idaho, Oregon, Montana, and 
Washington ($18.0 million).--The fiscal year 2009 President's budget 
request will address the requirements in the biological opinions issues 
in December 2000 by the U.S. Fish and Wildlife Service and in November 
2004 by the National Oceanic and Atmospheric Administration Fisheries 
(NOAA Fisheries). The 2004 biological opinion has been remanded to NOAA 
Fisheries and a new biological opinion is due in May 2008. During the 
remand, the 2004 biological opinion remains in place as Reclamation 
continues to implement actions identified in the 2004 updated proposed 
action.
    Platte River Endangered Species Recovery Program ($11.5 million).--
The President's fiscal year 2009 budget request for the Platte River 
Recovery Implementation Program is $11.5 million. The agreement for the 
program was signed by Secretary Kempthorne and the Governors of 
Nebraska, Colorado and Wyoming in late 2006. Platte River habitat is 
essential to the recovery of the whooping crane, interior least tern, 
piping plover, and pallid sturgeon (all threatened or endangered 
species). Legislation was introduced in the 110th Congress to authorize 
the Secretary of the Interior, through the Bureau of Reclamation, and 
in partnership with the States of Wyoming, Nebraska, and Colorado, 
other Federal agencies, and other non-Federal entities to participate 
in the implementation the Platte River Recovery Implementation Program 
for Endangered Species in the central and lower Platte River Basin and 
to modify the Pathfinder Dam and Reservoir.
    Site Security ($29.0 million).--The President's 2009 budget request 
for site security helps to ensure the safety and security of the 
public, Reclamation's employees and key facilities. The funds will 
support ongoing security activities, including physical security, 
personnel security, information security, law enforcement and research 
activities to maintain an effective and reliable security program and 
allow Reclamation to conduct security-related studies and reviews. The 
request also includes appropriated funds for guards, patrols, and law 
enforcement, including coordination, execution, and maintenance of law 
enforcement agreements with agencies outside Reclamation. In fiscal 
year 2008, 2009, and in future years, Reclamation plans to collect all 
reimbursable costs, including guards and patrols, as well as operation 
and maintenance of facility fortifications. Reclamation will continue 
to treat facility fortification, studies, and anti-terrorism 
management-related expenditures as non-reimbursable.
    Safety of Dams ($91.3 million).--The President's budget allows 
Reclamation to ensure that safety and reliability of Reclamation dams 
is one of the Bureau's highest priorities. The Dam Safety Program is 
critical to effectively manage risks to the downstream public, 
property, project, and natural resources. Of the budget request of 
$91.3 million, $71.5 million is for modifications at several facilities 
including Folsom Dam.
    Rural Water Program Development ($1.0 million).--The fiscal year 
2009 President's budget request of $1.0 million will allow Reclamation 
to begin implementation of the program on a pilot basis. Reclamation is 
currently working on meeting the requirements of title I of the Rural 
Water Act in order to implement the program. First, Reclamation is 
undertaking a rulemaking process, to develop programmatic criteria. 
Second, as required by the Act, Reclamation will complete an assessment 
of the status of authorized rural water supply projects and of other 
Federal programs that address rural water supply issues. This study 
will enable Federal agencies to maximize coordination in order to 
promote efficiency in those Federal activities targeting rural water 
supply needs in the West.
    Science and Technology (S&T) ($9.0 million).--The fiscal year 2009 
President's budget request includes funding for the development of new 
solutions and technologies which respond to Reclamation's mission-
related needs. Reclamation's S&T work will contribute to the innovative 
management, development, and protection of water and related resources. 
This does not include the $2.0 million for the Desalination and Water 
Purification Research program.
                      ongoing rural water projects
    This request includes $39.0 million for two ongoing authorized 
rural water projects: The first priority for funding rural water 
projects is the required operations and maintenance component, which is 
$15.0 million for 2009. The budget includes $24 million to support the 
administration's commitment to complete construction of ongoing rural 
water projects including ongoing municipal, rural and industrial 
systems for the Pick Sloan-Missouri Basin Program--Garrison Diversion 
Unit in North Dakota and the Mni Wiconi Project in South Dakota. For 
the construction component, Reclamation allocated funding based on 
objective criteria that gave priority to projects nearest to completion 
and projects that serve tribal needs.
                               title xvi
    The request includes $7.0 million to support ongoing title XVI 
construction projects, title XVI research activities, and the title XVI 
feasibility study review process developed in 2007. The title XVI 
projects develop and supplement urban and irrigation water supplies. 
Reclamation will continue to place priority on funding projects that: 
(1) are economically justified and environmentally acceptable in a 
watershed context; (2) are not eligible for funding under another 
Federal program; and (3) directly address administration priorities for 
the Reclamation program such as providing instream flows for Federally 
endangered or threatened species, meeting the needs of Native American 
communities, and meeting international commitments.
                       policy and administration
    The $59.4 million request in fiscal year 2009 funds the 
development, evaluation, and implementation of Reclamation-wide policy, 
rules, and regulations, including actions under the Government 
Performance and Results Act, and implement the President's Management 
Agenda. These funds are also used for management and performance 
functions that are not chargeable to specific projects and required for 
ongoing Commissioner's activities.
                central valley project restoration fund
    This fund was established by the Central Valley Project Improvement 
Act, title XXXIV of Public Law 102-575, October 30, 1992. The request 
of $48.6 million is expected to be offset by discretionary receipts 
totaling $48.3 million, which is the maximum amount that can be 
collected from project beneficiaries under provisions of section 
3407(d) of the act. The discretionary receipts are adjusted on an 
annual basis to maintain payments totaling $30.0 million (October 1992 
price levels) on a 3 year rolling average basis.
    The CVPRF request is a net of $48.6 million. This includes a 
redirection of $7.5 million collected from the Central Valley Project 
Friant Division water users to the new San Joaquin River Restoration 
Fund for fiscal year 2009. Previously, these funds went into the CVPRF 
as outlined in the Reclamation Projects Authorization and Adjustments 
Act of 1992, title XXXIV of Public Law 102-575, section 3406(c)(1). 
Under the Settlement, the legislation proposes to redirect 
approximately $17.3 million per year of payments from the Central 
Valley Project, Friant Division water users into the Fund which would 
be available without further appropriations to implement the provisions 
of the settlement. These funds will be used for habitat restoration, 
improvement and acquisition, and other fish and wildlife restoration 
activities in the Central Valley Project area of California.
        san joaquin river restoration fund proposed legislation
    Funding in fiscal year 2009 will be used to continue planning, 
engineering, environmental compliance, fisheries management, water 
operations, and public involvement activities related to the 
Restoration and Water Management goals in the settlement. The 
administration will again support passage of authorizing legislation, 
the San Joaquin River Restoration Settlement Act, which includes a 
provision to establish the San Joaquin River Restoration Fund.
             california bay-delta restoration fund (calfed)
    Title I of Public Law 108-361, titled the Calfed Bay-Delta 
Authorization Act, was signed by the President on October 25, 2004. The 
act authorized $389 million in Federal appropriations over the period 
of fiscal year 2005 through fiscal year 2010. For fiscal year 2009, 
$32.0 million is requested to enable Reclamation to continue to advance 
its commitments under the CALFED Record of Decision and with a focus 
toward implementation of priority activities included in the Calfed 
Bay-Delta Authorization Act that will contribute to resolving water 
resource conflicts in the CALFED solution area. Funds will specifically 
be used for the environmental water account, feasibility studies of 
projects to increase surface storage and improve water conveyance in 
the Delta, conduct critical science activities, implementation of 
projects to improve Delta water quality, ecosystem enhancements, and 
program planning and management activities.
                  fiscal year 2009 planned activities
    Reclamation's fiscal year 2009 priority goals are directly related 
to fulfilling contractual requests to deliver water and power, while 
balancing a range of competing water demands. Reclamation will continue 
to deliver water consistent with applicable State and Federal law, in 
an environmentally responsible and cost-efficient manner. Reclamation 
will deliver 28 million acre-feet of water to meet contractual 
obligations while addressing other resource needs (for example, fish 
and wildlife habitat, environmental enhancement, recreation, and Native 
American trust responsibilities).
    Reclamation will maintain dams and associated facilities in good 
condition to ensure the reliable delivery of water. Reclamation will 
continue to meet or beat the industry forced outage average to ensure 
reliable delivery of power. Reclamation will reduce salinity by 
preventing an additional 13,500 tons of salt from entering the water 
ways.
    Moreover, the fiscal year 2009 budget request demonstrates 
Reclamation's commitment in meeting the water and power needs of the 
West in a fiscally responsible manner. This budget continues 
Reclamation's emphasis on managing those valuable public resources. 
Reclamation is committed to working with its customers, States, tribes, 
and other stakeholders to find ways to balance and provide for the mix 
of water resource needs in 2009 and beyond.
                        managing for excellence
    Reclamation continues to make significant advancements in its quest 
for management excellence. Reclamation's Managing for Excellence Action 
Plan reflects specific actions to realize the underlying principles of 
the President's Management Agenda. The National Academy of Sciences, at 
Reclamation's request, completed and published its study in 2006 to 
assist Reclamation in determining the appropriate organizational, 
management, and resource configurations to meet its construction and 
related infrastructure management responsibilities associated with 
fulfilling its core mission of delivering water and power for the 21st 
century.
    The Managing for Excellence action plan, developed in response to 
the Academy's report, outlines a process and timeframe for identifying 
and addressing the specific actions that can be taken to increase 
transparency, efficiency, and accountability within Reclamation. To 
date, Reclamation has completed 38 out of 41 activities. The balance 
will be completed by the end of February 2008.
                               conclusion
    Mr. Chairman, please allow me to express my sincere appreciation 
for the continued support that this subcommittee has provided 
Reclamation. This completes my statement. I would be happy to answer 
any questions that you may have at this time.

    Senator Dorgan. Commissioner Johnson, thank you very much.
    I have a number of questions, but I want to start. I 
mentioned in the statement as I introduced you all that I was 
looking at the Special Inspector General for Iraq 
Reconstruction report and he was reporting on the number of 
water projects that we're doing in Iraq. He noted that we're 
paying for 967 water projects we're finding in Iraq including a 
water treatment plant in Sadr City, water treatment plant al-
Wathba, water treatment plant Shark Dijla, water treatment 
plant al-Wahda, design/construct Euphrates Main Water Supply 
Project, Baldaruse Water Supply Project, Phase II Water Supply 
Project, Meshkab, and I could go on and on. And then you come 
before our committee on behalf of a budget that says, ``By the 
way, let's cut funding for water projects in the United States 
by $1 billion.''
    And I know you prepared a budget. And you probably won't 
tell us what you prepared, because the way our game is played, 
you have to send it up and it goes through the Office of 
Management and Budget strainer, then over to the White House. 
If you would come here and tell us that you didn't get as much 
as you think you need, you'll lose your job. So, that's the way 
this dance occurs yearly.
    We don't blame you for it, but I think it's very hard for 
you to come and support a proposition that we should spend $1 
billion less on water investment projects in this country in 
the coming year than we did last year.
    And frankly, I think it's very hard to make the case that 
we can do hundreds and hundreds of water projects funded by the 
United States in Iraq, but we can't afford water projects that 
are needed here. And so, we do. We paid for those. That's a 
Special Inspector General report of all of the funding that 
we're doing in Iraq.
    Let me ask the Bureau of Reclamation, since we're in the 
ninth year of a drought in western and central North Dakota, do 
you have predictions for what might happen in the future in our 
area?
    Mr. Johnson. That's part of our Water for America 
initiative. We are going to be looking at a number of basins 
West-wide, and we haven't specifically identified those basins 
yet. We're going to be going through a public process to 
identify them.
    Certainly we're aware of what's going on in the Great 
Plains Region, and there certainly has been--over the last 8 or 
9 years--significant drought that's occurred up there. We're 
aware of the reservoirs decline. In fact, I'm sure the Corps is 
probably more aware of it than us, since it's their reservoirs 
that have declined the most, but yes, we're very aware of that, 
Senator.
    Senator Dorgan. Let me ask a question about the Law of 
Armed Conflict Rural Water Project. That's been funded for the 
previous 4 years, even in 2007 when the administration prepared 
a spending plan under the continuing resolution, and yet you 
send us a request that says we shouldn't fund that project this 
year. Tell me how you came to that conclusion?
    Mr. Johnson. I think what it comes down to is the balancing 
of the priorities within the President's budget and also 
meeting the goal of achieving a balanced budget by 2012.
    Senator Dorgan. But that's not responsive. My question is 
about this project. We've funded it 4 years, and so has the 
President's budget, and all of a sudden you say, ``Don't 
continue.''?
    Mr. Johnson. Within the Rural Water Program, for the funds 
that we had, we used two primary criteria to fund the projects 
that we did. One, we tried to focus on projects that served 
Indian tribes, and two, we tried to focus on those projects 
that were farthest along, where we could put money and make the 
most progress. And that was the primary criteria that we used 
to come up with the funding that we've presented in our budget.
    Senator Dorgan. Okay. Again, you've got a tough job, and 
that's an artful answer, but you have a tough job.
    General, the President's proposed a $5.7, $5.8 billion in 
emergency Federal funding to be matched by $1.5 billion in 
local funding to complete the Hurricane Protection System. The 
President said that he committed that he was going to finish 
that in time for the 2011 hurricane season.
    Now, the funding was proposed as a part of the regular 2009 
Appropriations bill, rather than the supplemental, which means 
this will be done later than the supplemental. My understanding 
is these funds are needed by October 1, or the construction 
schedule can't be maintained, number one. And number two, my 
understanding is that it may well be the case that there's not 
$1.5 billion locally to meet the local share on this. Tell me 
about that?
    General Van Antwerp. First, a good portion of that money 
needs to be available on October 1, to award some of the 
contracts. So, that is an emergency, but not under a 
supplemental. So, we have to deal with that. And a day slipped 
will be a day slipped in the project, and the 2011 date will be 
in jeopardy if that funding isn't available on October 1.
    Senator Dorgan. But why would it not have been requested in 
a supplemental? Last year, we had veto threats against, I 
think, 10 appropriations bills, and so the result was what they 
wanted. The appropriations bills weren't done in October, but 
rather much later. And that may be the case this year. If 
that's the case, what happens, these--you can't meet these 
construction schedules? Is that what's going to happen?
    General Van Antwerp. Ultimately, if the funding isn't 
there, there will be slippage in the construction schedules, 
that's true.
    I think the second part of your question, very quickly, is 
in the cost-sharing--is that there is a provision where we can 
allow the sponsor to have additional time, up to a year, but we 
are counting on the sponsor coming up with their portion of 
this, and that's being worked very hard right now.
    Senator Dorgan. But WRDA 86 allows the non-Federal share to 
be repaid over 30 years, which would probably have been a less 
risky proposition for you to recommend.
    I have a good number of questions about the Missouri River, 
and also Devil's Lake, and I want to defer those to allow my 
colleagues to ask questions.
    Senator Domenici.
    Senator Domenici. Is it still a lake?
    Senator Dorgan. It's still flooding.
    Well, the fact is, it's overflowed, and it's now filled a 
second lake next to it, so there's no additional capacity left, 
I mean we've got real problems.
    Senator Domenici. Well, I've worked on it a couple of 
times, maybe this will be--do something this year might be my 
last time.
    In any event, let me say I'm willing to help.
    Let me put--Corps of Engineers Secretary Woodley, and your 
testimony before the subcommittee told us that there's a 
looming problem on the Inland Waterway Trust Fund, that needed 
to be addressed. However, we never received a proposal to 
mitigate the pending disaster.
    The President in 2009 budget proposal announced that 
legislation would be forthcoming. Finally, last week, the 
administration proposal was submitted to Congress, is that 
correct?
    Mr. Woodley. That is correct.
    Senator Domenici. And why did it take a year to prepare the 
legislation, and preparing it--this brand-new policy, which is 
indeed that, brand-new, and going to be very difficult to get 
through here--did you consult with relevant authorizing and 
appropriations committees? Or was that not you job?
    Mr. Woodley. Yes, sir, we consulted very heavily with a 
very wide variety of people in the community, throughout the 
administration and received views from a very large cross-
section of the people that were affected by it. I don't know 
that we would be entitled to receive formal views from the 
committee, but----
    Senator Domenici. I don't think you submitted it to us, but 
that's--that's all right.
    This legislation, from what I can tell, will be tough to 
get enacted in any year, much less this year. It took me 
several years before I was able to finally get the legislation 
establishing the Inland Water Trust Fund, I don't think you 
were here then, when that happened.
    Mr. Woodley. Very likely not, Senator.
    Senator Domenici. You probably still had hair on your head 
when that occurred.
    Mr. Woodley. Very likely so, Senator.
    Senator Domenici. A long time ago. And now you want us to 
complete this change--fundamental mechanism change in the next 
6 months, I really don't think that's going to happen, and 
nonetheless I look with interest on your proposal and look to 
learn about it, as much as I can, Senator.
    Secretary Woodley, in your press release, you state that 
the budget represents the prudent use of available funding to 
advance important mission objectives. Unfortunately, this 
budget is implemented--if it is--the Corps will be forced to 
stop construction on 75 percent construction projects. Is it 
prudent to provide no funding for projects that have been under 
construction for a year, 2 years, or, in fact, years? What are 
we supposed to tell the project's sponsors that are sharing the 
costs of these projects? How much do you estimate the Corps 
will pay in termination fees, if any? Could you just talk to me 
about this problem that we're going to have?
    Mr. Woodley. Yes sir, our effort has been to concentrate 
the very limited funding that we have on the projects that have 
the greatest potential for return. And as I say, there is no 
question that this budget does not provide all of the resources 
for all of the good things that the Corps of Engineers could 
accomplish in fiscal year 2009. I do not represent that it 
does, and I will not represent that it does. We leave a lot of 
good work on the table.
    Senator Domenici. Secretary Woodley, could you, Secretary, 
only explain the President's Executive order on earmarks, and 
based on what you know, how do you believe it will be 
implemented?
    Either of you?
    Mr. Woodley. Secretary, our view that we have taken is that 
it is something that leaves a lot of questions unanswered, and 
that will have to be answered in the course of implementation. 
And I certainly hope that we're able to work with the Office of 
Management and Budget and the Appropriations Committees to come 
to a clear understanding of exactly how it's to be implemented.
    Senator Domenici. Okay, well, I don't need anything 
further. What you're really saying is that it leaves much to be 
desired, and a lot of--there are a lot of questions about the 
earmark policy, how it would be done. And there's some holes in 
it that have to be filled, and the like, is that right?
    Mr. Woodley. Well, certainly as an Executive order, it is a 
expression of the policy of the executive branch and we will be 
implementing it as we understand it, fully and rightly. And we 
support it in every way.
    Shall I say that again?
    Senator Domenici. No, that's fine.
    Mr. Woodley. Thank you.
    Senator Domenici. Let me talk to the Commissioner a minute?
    In your quest for more water projects, and water 
activities, water action--I didn't hear you mention de-sal, or 
water purification. Are those included in your process as you 
think of getting involved more, and more effectively in water 
needs?
    Mr. Johnson. Yes, they are. We have--as part of our 
research program--have included research activities for water 
desalinization, and water technology development. In fact, we 
have O&M dollars for the Tularosa Plant that you referenced 
earlier. Our research facility there. And we do have some 
research dollars, as well, to help fund initial research 
activities at that facility.
    Senator Domenici. Well, I just want to say, you know, 
desalinization and water clean up technology is just on the 
cutting edge, I mean, we're just close to making some giant 
breakthroughs. And in States like mine which are very dry, we 
have huge amounts of inland water, and then water that's salty, 
that we could use, and which has changed the future of our 
State.
    And I hope you will continue to emphasize it, and not be 
concerned to make it something that you will be out front in, 
because you can do that.
    My last comments and observations go to you, General.
    The Corps has been doing an outstanding job for the last 10 
years on the Rio Grande River basin, with reference to the huge 
greenbelt that exists because of cottonwood trees. We have just 
about changed that area to something absolutely beautiful from 
an area that was fragile, frail, burned down anytime--two or 
three times a year, the big, big fires. It's going to be used 
by the people, and there are marshes in it for ducks and geese 
and other kinds of activities, and now a park is going to be 
constructed right in the middle of that basin, centering in 
Albuquerque. That's been authorized by Congress, and I 
understand the Corps intends to show that you know how to do a 
real water-land park with green trees in it, in an arid State. 
And I hope you will be there when we dedicate the project, 
because I think it's going to be a real credit to the Corps, 
what is going to be there, in this park, in Albuquerque, New 
Mexico.
    Senator Domenici. Thank you, Mr. Chairman.
    Senator Dorgan. Senator Johnson.
    Senator Johnson. Commissioner Johnson, it occurs to me that 
we Johnsons ought to stick together. In your testimony, we're 
getting the budget for BOR water projects, you indicate that 
the Bureau prioritized funding for operation and maintenance 
costs, and then construction funding for ongoing rural water 
systems nearest to completion, to serve populations.
    Using those criteria, the Bureau provided no funding for 
several other ongoing regional water system projects. In making 
this decision, did the Bureau examine the fact on how delaying 
funding for these projects will add to the total cost to 
complete? Do you agree that deferring construction on ongoing 
drinking water projects will contribute to an even greater 
future funding crisis at the Bureau?
    Mr. Johnson. Senator, certainly to the extent that we're 
not funding projects, they do continue to have cost increases, 
there's just no denying that. That's a very correct 
observation.
    Senator Johnson. My second question is about the effect on 
the specific projects and the view of some in the Congress that 
the Senators and House Members should have no ability to direct 
funds to specific initiatives.
    Commissioner Johnson, is there any other Federal agency 
that is funding the Lewis and Clark Regional Water System?
    Mr. Johnson. Not that I'm aware of, sir.
    Senator Johnson. Since the Bureau is proposing no Federal 
funding for the Lewis and Clark Regional Water System in fiscal 
year 2009, the only way for this project to receive Federal 
funding next fiscal year, is for the Congress to appropriate 
funding, is that correct?
    Mr. Johnson. The--you're getting back to the question on 
earmarks, I suppose.
    Senator Johnson. Yes.
    Mr. Johnson. And, you know, I think that that's--there's a 
lot of detail in that that has to be worked out, certainly 
Reclamation will follow the Executive order, as I'm sure the 
Corps will, but there's a lot of details there that are yet to 
be defined. And we'll certainly be working to--with the 
Department and with OMB, you know, on the Reclamation program 
and where that has an effect, and where it doesn't.
    Senator Johnson. Mr. Chairman, I will submit my additional 
questions to the Corps of Engineers and the BOR for a written 
response.
    Thank you.
    Senator Dorgan. Senator Johnson, thank you very much.
    Senator Craig.
    Senator Craig. Thank you very much, Mr. Chairman.
    I guess there's another way of--another perspective of 
looking at earmarks. Now that we have heard your earmarks, 
isn't that a reality? Have we not heard the priorities of the 
agencies of the executive, and therefore heard the President's 
earmarks? But, how dare we even consider those, or think of 
them in that context?
    I'm just--I guess I get a little constitutional when I 
think of who has the priorities and the responsibilities of 
budgeting under the Constitution, and not under the statute. 
And if that were the case, then I think what I just said, Mr. 
Chairman, would be constitutionally accurate--we have now heard 
the President's earmarks.
    Having said that, though, let me turn to you, Secretary 
Woodley, and thank you for at least a few earmarks that you 
have established, and one of those that I think is something, 
Mr. Chairman, we've got to take a very close look at. This 
happens to be specific to the Pacific Northwest, and to the 
Columbia Snake River Transportation System, and I'm speaking 
now to, of course, the dredging of the Lower Columbia River, 
and the budget you've put there, That certainly helps us get to 
the near completion of that project, which is critical to all 
locks and barge systems up river. Why does the Senator from 
Idaho focus on that? Because the last sea port in that system 
is in the State of Idaho.
    And, Mr. Chairman, something that I think we will 
increasingly focus on as it relates to the responsibility of 
the Army Corps of Engineers and Secretary Woodley in days to 
come will be the value of water transportation as surface road 
transportation goes up dramatically and costs of fuel, and the 
ability to move large, heavy loads through the system.
    Now, our canal and water systems in the United States are 
becoming increasingly important by the day, as we see fuel 
costs go up to $4 plus for diesel, $1,100 to fuel a big 18-
wheeler truck, versus the ability of our barge and waterway 
systems to move a large freight.
    So, therefore, completing the dredging below Portland and 
the Lower Columbia is critical to the whole of the system.
    Let me also commend you for your response to the incident 
at the John Day navigation locks. That was very important, too, 
General, as we--and you moved promptly and timely in doing 
that.
    Now, interestingly enough, I was there when Animas La Plata 
was simply an idea in the eye of a Congressman from that 
district, and few interested groups. Ray Kagosic was the 
Congressman at that time, and I was a freshman on the Interior 
Committee in the House--28 years ago, Commissioner. Does it 
take a long time to do anything around here? It sure does. But 
I understand we're about ready to cut the ribbon on Animas La 
Plata.
    So, I guess my advice to you, Mr. Chairman, is with Devil's 
Lake--just simply hang in there. It takes a long time to get 
these things done, even if we define them as an emergency.
    But, let me also say--and this is simply not a request for 
resource, because I think while I don't agree with all of your 
earmarks this year, I think they are priorities that represent 
a lot of our needs.
    In the northern tier, especially north Idaho, in a time of 
global warming, has received an unprecedented amount of 
snowfall this year. In fact, we now have historic record levels 
of snow on the ground, in the panhandle and the areas of north 
Idaho, and parts of Montana, eastern Washington and others. And 
we're hoping above hope that it leaves us slowly, and 
gradually, this spring.
    But if it doesn't, I'm quite confident the Army Corps of 
Engineers will be there. This is simply a head's up--watch 
closely as our record snow falls melt into the system. I 
believe the Snake Columbia system is at a near 30 year high in 
potential runoff, so--it is difficult to talk drought or to 
talk climate change in this particular environment. All I am 
saying to you, General, and certainly to you, Secretary, is--
stay ready. Depending on how this valuable moisture leaves us.
    Thank you, Mr. Chairman.
    Senator Dorgan. Senator Reed.
    Senator Reed. Thank you very much, Mr. Chairman.
    And again, gentlemen, thank you for joining us.
    Secretary Woodley, the Fox Point Hurricane Barrier became 
the responsibility of the Corps of Engineers in October 2008, 
and the Woonsocket Levy project will become the Corps 
responsibility in January 2009. How do you propose to meet 
those obligations under the law?
    Mr. Woodley. Authorization has been provided, Senator, so 
far we have not been able to identify the funding within our 
system to undertake that, but I can assure you, we are very 
much aware of the obligation, and intend to do everything we 
can to discharge it.
    Senator Reed. Do you have a timeline where you're going to 
identify the funds? And do you have a work plan at least, even 
though the funds might not be evident or tangible at the 
moment?
    Mr. Woodley. Yes, sir. We have estimates as to how much 
would be called for, and we are actively seeking the ability to 
do that.
    But, you know, it's certainly--when you, when an obligation 
is established or authorization is established, it is something 
that we would like to have the opportunity to budget for or 
program for, anyway, before it takes place. But in this case, 
we're just going to have to manage it as best we can.
    Senator Reed. Well, I appreciate that, Mr. Secretary, and I 
just want to make it clear, again, I think you understand this, 
that this is something I feel is very, very important, that it 
has to be done, and I obviously will work with you and General 
Van Antwerp and your colleagues, but I will return again, and 
again, to make sure that this is successfully completed. And 
I--anything you think we could do, let us know. But I expect it 
to get done.
    Mr. Woodley. Yes, sir. We understand very well your views 
on the matter.
    Senator Reed. Thank you.
    Thank you, Mr. Chairman.
    Senator Dorgan. General and Mr. Secretary, coming back to 
Devil's Lake, it's easy for us to wait, but it's not easy for 
the lake to wait. This is one of, I think, only a couple of 
examples in America where there is lake flooding, which is 
different than river flooding.
    River flooding comes and goes, it courses down, takes cars 
and homes with it, and then all of a sudden a couple of days 
later, everything looks calm.
    This lake flooding is in a closed basin, like the Great 
Salt Lake, the Devil's Lake basin has an upper area that's 
close to the size of the State of Massachusetts, and it all 
funnels down into this area at the bottom called Devil's Lake. 
And it's up 25 feet and stays up, and it's now been running off 
into Stump Lake. Stump Lake is up 15 feet in the last 2 years, 
because there's no place else for it to run, and it appears to 
me that the USGS says there's a 70 percent chance that the wet 
cycle will continue for at least another decade, and a 40 
percent chance the wet cycle there will continue for another 
three decades.
    So, in terms of protect not only the community of Devil's 
Lake, but the roads and the infrastructure in that region, the 
Corps has to be involved now in planning an increase in the 
levees and dikes and a range of other things. Can you tell me, 
is the Corps actively involved in this area, General?
    General Van Antwerp. Yes, sir, we definitely are. By the 
way, the lake elevation is 1,447 feet this morning. In these 
two lakes, as you're well aware, they do operate together, and 
we're considering in the reevaluation, how do they work 
together and what do we have to do for the levees that are 
supporting this?
    So, we are very much on top of this, we are very much 
interested in getting this fixed now, with the predictions for 
the next decade.
    Senator Dorgan. The reason I'm sensitive to the fact that 
you may not find the local sheriff $1.5 billion down in the 
gulf, is the local share that will be required for Devil's Lake 
for a levee increase. Those folks don't have the money, and 
they've been fighting a lake flood that came and stayed now for 
many, many years. So, we--let me say this about the Corps.
    I admire the Corps in the way it fights floods. I mean, 
I've watched the Corps stand on the dikes of the Red River, and 
saw the dikes breach, and saw an entire town of 50,000 people 
evacuated--I admire what the Corps does to fight floods, you do 
a good job.
    I really have great problems with what the Corps does to 
manage the Missouri River, so that's a different subject. In 
Devil's Lake and our region, we really need your help, we need 
you to be way out in front of what we need done here in terms 
of policy choices, and we need to protect people and property 
and try to manage a very difficult flood. Lake flooding is not 
something you're accustomed to, and our laws don't even comport 
to lake flooding. Most of the way we write laws have to do with 
river flooding.
    But with respect to the river, I might say, the management 
of the Missouri River is a continuing serious problem. You're 
continuing to remove water from the upper main stem dams in the 
Missouri River, North Dakota, South Dakota, Montana, and so on, 
in order to support a barge industry which apparently was 
intended to be a whale, but has now become a minnow.
    There are times when there's one barge, one barge on the 
Lower Missouri River, and for that one barge, you are releasing 
water, instead of storing it in the upper reservoirs. That's 
not in anybody's interest. That's not in Senator Bond's 
interest, because he should want that water stored so that, at 
some point whether it's the lower Missouri, or especially the 
substantial amount of barging on the Mississippi, that we would 
save that water to be using it when they need it.
    You know, it's of interest to me that when there's too much 
water down south, then they want some help with those of us up 
north, but otherwise, they want to manage the river for their 
one barge.
    Does it seem strange to you that you're releasing water, a 
pretty substantial amount of water to float one barge? And the 
reason I mention one barge, I can show you the reports, the 
weekly reports, in which there's one barge floating in the 
lower Missouri, and we have scarce water in the upper 
reservoirs and you're releasing water to float this little cork 
down there someplace, I mean, does that bother you? Tell me 
yes.
    Mr. Woodley. Yes, Senator, that is very troubling. The 
original project, of course, was authorized many years ago, 
with navigation as an authorized project purpose. I believe 
that the people that are served by the navigation channel see a 
value in continuing that navigation support, and I think that 
we have made some substantial improvements in the management 
scheme when we implemented the new Master Manual in 2004, but 
certainly at times of--particularly in times of drought--that 
is a very difficult balancing that has to take place.
    Senator Dorgan. My point is that now that river system 
would now have about 54 million acre feet in it, instead of 
that, it's roughly a 34 million, 35 million acre feet. And yet 
it still doesn't trigger drought emergency measures. And so, 
we're moving water out of these upstream reservoirs in which we 
should store it, to float one barge.
    And so, if the market system were such that the barges were 
determined to be very valuable, you'd think you'd have barge 
traffic down there. But that's not the case, there's not any 
significant barge traffic. A fair amount of what's going on 
down there, to the extent that there's any barging at all, is 
sand and gravel, and I intend to hold a hearing of this 
subcommittee, just on this issue, and it will be held a little 
later this year, as soon as we're through the appropriations 
process.
    But we're going to explore this in great, great depth. 
That's why, General Antwerp, I'm so pleased that you've joined 
us, and you and Secretary Woodley are going to be witnesses at 
that hearing, because we need to talk through this and fix it. 
The upstream industry that has developed is 10 times the barge 
industry--10 times. And yet, we are managing the river for the 
minnow, and ignoring the whale. It makes no sense to me at all, 
I've been at this for about 10 years, and I haven't been able 
to really get any satisfaction--well, once in a great while 
somebody throws us a small bone, but the management of that 
river is, in my judgment, not competent, and not at all with 
any kind of reservoir of common sense.
    So, we're going to have a hearing, I will ask you back for 
that hearing, but I did want to raise it today, because it 
really bothers those of us--Senator Johnson, myself, and 
others--who live upstream and know that there's a much 
different way to manage that for the benefit of all States--the 
States in the up-river and down-river areas.
    I have a large number of questions that--with your 
indulgence, I'm going to submit to--because we won't have a 
chance to ask all of them today, but I do want to ask a series 
of questions and as I call on my colleagues for additional 
questions--the hearing has just been changed to 11 o'clock--or, 
excuse me, the votes have just been changed to start at 11 
o'clock, so we have a few more minutes.
    I want to mention what my colleagues, Senator Domenici and 
Senator Craig had mentioned on this issue of earmarks. I don't 
understand and I think it's perhaps unworkable, these 
suggestions the President has made. I think what he has made, 
and Senator Craig was suggesting it--what he is saying is, 
``I'm going to send my earmarks to Congress, it's what I think 
we should invest in, in this country, and then if you add 
anything to it, we're going to consider those special interest, 
congressional pork, earmarks,'' or whatever lexicon you might 
want to use. That is a--that's a curious way to engage with the 
legislature.
    The Congress--certainly the President has priorities, has 
every right, and we would expect that he would pursue those 
priorities. He should, as a matter of respect, understand there 
are priorities in the Congress, as well. And perhaps a merging 
of the best of which both have to offer, rather than the worst 
of each, would be in the best public interest of this country.
    So, I raise that only because my colleagues did. I think 
the President's suggestion--especially in this subcommittee, 
more than perhaps any other, is completely unworkable. Most of 
what we do represents earmarks by the President, and in many 
cases by us, and approved by us, and that's the way this 
committee almost has to work, in terms of choosing what kind of 
investments in water policy we want to engage in around the 
country.
    Senator Craig.
    Senator Craig. I do have one additional question and I 
think Senator Domenici engaged you, Secretary Woodley, briefly 
as it relates to the proposals for the Inland Water Trust Fund, 
and what that will mean.
    And we might, for just a moment, get some of your insight 
as to what we could expect. So, I want to set this scenario up. 
Keeping in mind that a commercial vessel must pass through 
eight navigation locks from Portland to the Port of Lewiston, 
it's my understanding that this fee would be imposed on 
commercial barges using locks operated by the U.S. Army Corps 
of Engineers, the fee would be phased in, beginning October 1, 
2008, with increases each year through 2012, adjusted 
thereafter based on the total net assets of the Inland Waterway 
Trust Fund.
    It's also my understanding that this Trust Fund is used to 
pay half of the cost of new capital construction projects and 
major rehabilitation. None of us dispute the need, certainly, 
for rehabilitation.
    What would this cost? In that scenario of eight locks--how 
much will it cost, per lock? What would be the net gain in fees 
collected, using a lock versus a gas tax that is currently 
used? And how will this affect the Columbia River Navigation 
System? Can you give us some insight into that proposal?
    Mr. Woodley. Yes, sir. The net cost would have to be 
calculated by netting out the elimination or phasing out, over 
time, of the 20 cent per gallon fuel tax that exists----
    Senator Craig. Right.
    Mr. Woodley. That is to be eliminated.
    The amount will go, per barge, per lockage, from a $50 
charge, to an $80 charge by 2012, and then will, because if I'm 
not mistaken, all of the locks on their system are 600 feet or 
larger.
    And so----
    Senator Craig. I think that's right.
    Mr. Woodley. So, we are making a special provision for the 
smaller locks so that they would pay at a lower rate.
    Senator Craig. You say smaller locks, you mean smaller 
vessels?
    Mr. Woodley. No, sir, I mean smaller locks in the upper 
reaches of the system, the less than 600 foot long lock.
    Senator Craig. Oh, yes.
    Mr. Woodley. We would charge a smaller fee in order to 
provide for a more equitable distribution between the large 
locks and the smaller locks.
    The--I would expect that it would--so there's a net I can't 
figure out, the rest is a pretty straightforward calculation, 
but essentially we are projecting a need in the Fund of an 
additional $100 million a year in revenue, from whatever 
source, that it can come from indefinitely into the future as 
we continue to make the important improvements that we've made.
    We are, to some degree, a victim of our own success here, 
Senator, we have been able to budget--and the committee has 
supported--a very strong level of investment in the Inland 
Waterway System, in both new construction and in rehabilitation 
efforts. And that has--there was a time some years ago before I 
took office that the balances in the Inland Waterway Trust Fund 
had actually been allowed to accumulate, and increase. And we 
have invested those balances, but the needs for investment have 
outstripped the revenue that we're receiving from the tax.
    So, one thing that was surprising to me, in recent years, 
in spite of increases in traffic, the tax amounts, of 
collections, have actually in some--in one fiscal year--
declined. And that was a good thing, I guess, because----
    Senator Domenici. Why is that?
    Mr. Woodley. I believe that the reason is that the 
increases in fuel--in the cost of fuel--had encouraged the 
barge tow boat operators to repower their boats with more 
efficient diesel engines. Which is, of course, a good thing, 
unless you're counting on revenue from----
    Senator Craig. Sure.
    Mr. Woodley [continuing]. Them buying gallons of diesel 
fuel.
    So, this is certainly not something on which reasonable 
minds could not differ.
    Senator Craig. As this develops, we'll take a look at it.
    Last question, tied to that--non-commercial traffic, 
recreational traffic using the locks--?
    Mr. Woodley. Would not be charged any fee whatsoever, as is 
the case today.
    Senator Craig. As the current case.
    Senator Domenici. They don't pay now.
    Senator Craig. They don't pay now, no, and that's why I was 
saying----
    Mr. Woodley. On the other hand, the general revenue, the 
general fund pays 50 percent of the cost of rehabilitation, and 
all of the recreational people are, at least, we expect them to 
be taxpayers in some form or another.
    Senator Craig. Uniquely enough, but in the Snake Columbia 
System, a sizable amount and a growing traffic is in cruise 
boats, that literally make it all the way up to Lewiston, 
Idaho, Clarkston, Washington--sizable cruise boats. Are they 
considered commercial traffic in this sense, that they would 
pay a fee?
    Mr. Woodley. No, sir, I believe not. I believe that this is 
specifically for cargo-carrying barges.
    Senator Craig. Thank you, Mr. Chairman.
    Thank you, Mr. Secretary, General, Secretary.
    Senator Dorgan. The Senator from Louisiana?
    Senator Domenici, do you have an additional question?
    Senator Domenici. Yes, Mr. Chairman.
    I just wanted to close this up and talk to Secretary 
Woodley about this inland fee, waterway fee.
    You know, that was a--believe it or not, I was a freshman 
Senator when somehow or another I was challenged to do 
something about this, and passed a bill to tax the commercial 
barges. It was totally unexpected that it could be done, but we 
were aided and abetted by the Washington Post which took on the 
task of helping to pass this, by choosing the bill that would 
impose this tax to be their choice of a bill to educate their 
readers on how a bill is passed, how a law is made. And they 
logo-ized the bill, S. 789, and anytime anything was done, they 
put it on the front page, and editorially commented what phase 
this was of moving a bill.
    And of course, they played the Domenici--David against 
Goliath--and one afternoon we had a vote and we won by 12 votes 
in the United States Senate against Russell Long, my good 
friend from Louisiana. That's right.
    But let me tell you to close the record, because things are 
different now. But I won that hearing here and in the House, 
and then I was home campaigning for reelection, and I was told 
that somebody was going to open the issue while I was gone 
campaigning, and kill the tax. And my staff said, ``Abandon 
your campaign and come back,'' and I said, ``No, I can't do 
that. Can't you talk to somebody around there?''
    Well, the word got to Russell Long who had lost, I had beat 
him, that somebody threatened to do this. And he put in a phone 
call to me, and said, ``Don't you come back,''--he was a 
Democrat, I was a Republican--``You do your campaigning. I was 
beaten by you, fair game, and I'll see to it that nobody does 
that to your bill,'' himself. And, of course, I felt totally 
confident that he could do better than I, why should I return?
    And sure enough, the person--I know who it was, it was the 
Senator from the State with the lock that we were then 
building--and he saw better than to take on Russell Long, and 
the tax remained. It's been a long time, and I wish you well, 
in trying to pass a better one. And a better one would be what 
you're talking about. But don't think it will be easy, because 
people have to understand what's happening to them, and all 
kind of stories get told about what's happening to them, you 
know, until it gets down the facts. It takes a long time.
    Thank you, Mr. Chairman.
    Senator Dorgan. Thank you.
    Senator Landrieu.
    Senator Landrieu. Thank you, Mr. Chairman.
    And let me begin, I'm sorry that I was delayed in getting 
here, I had another markup in the Homeland Security Committee 
and had several bills pending, and so I apologize to the 
panelists for being late because this is a very, very important 
subject, as you know, for our State.
    But I'd like to begin, I'm going to submit my opening 
statement, Mr. Chairman, for the record. But, I'd like to begin 
by showing the expenditure chart, that is very concerning, and 
I don't think I have to explain this to the members of the 
committee who have been working on this issue long before I 
took a seat here.
    But, this is the civil works and capital investment, as a 
percentage of GDP, Mr. Chairman, and if I could just have you 
look up for just a second, at this chart, up here, it's really 
rather frightening to me.
    This is since 19--Alan, is it 1940? Since 1929. The civil 
works and capital investment is a percentage of the Gross 
Domestic Product, of which this budget sits within. I think 
this is frightening to our country. I don't think our country 
sustains its economic strength on a budget like this. We're 
going to have this chart updated, General, we're working on 
that now, it goes through 2001, but we're going to extend it 
out to the present.
    But, this brings me to my first question--that is, how are 
we justifying a Presidential budget of $800 million less than 
you used last year, when the needs are substantially greater, 
and the trend lines are extremely troubling. And I would like 
to hear from you, General, about what your comments have been 
about this, what speeches do you give about your ability to do 
your job that you have to do to protect people and to promote 
commerce with trend lines like this, and a budget that's $800 
million less than we had last year?
    General Van Antwerp. Well, ma'am, I think one thing that we 
looked at was the American Society of Civil Engineers scorecard 
that said the backlog in this particular area is about $1.6 
trillion. So, there's no question there is a huge need in the 
country to do this. What we did was, as best we were able, to 
put together a performance-based budget, based on the dollars 
that we have, to do the right things, and first things first. 
And so it was based on, there are health and safety, there are 
11 dam safety projects in there that we have to get at.
    There are a number of other projects we wanted to 
complete--we looked at cost/benefit ratios. So, basically we're 
taking a limited amount of money, and with some performance 
criteria that we could lay out for you, we racked and stacked 
those projects.
    But there is no question there is a huge backlog of 
infrastructure needs in the country.
    Senator Landrieu. Well, are you prepared to testify this 
morning, and if you would, suggest what percentage of those 
trillion dollar projects does not have a significant 
consequence for not completing them? Would you say that 10 
percent of them, or 20 percent of them, or 30 percent of them 
are actually completely without any merit? Or with such limited 
merit that we shouldn't, you know, shouldn't try to address 
them? Do you have any sort of handle on those projects?
    I understand that you've listed the trillion plus that you 
don't have money for, in some sort of rank order. I think that 
would be, actually, very easily said but very difficult to do.
    So, my question is, what percentage of that do you think we 
could potentially eliminate, and not suffer, really, a grave 
consequence? Whether it's flooding, or commerce, or et cetera?
    General Van Antwerp. Well, I guess I would approach it that 
the $1.6 trillion needs to be done over time, but some things 
are more urgent and compelling. For instance, when we look at 
the dams of the country--and there are over 3,500 significant 
ones--and then there are a lot of smaller agriculture and 
privately owned dams in this country, even.
    But, we look at those in categories one to six. And the 
most--the number 1, of which we are doing 11 of those right 
now, they are what we call ``urgent and compelling,'' we know 
that there is either seepage or piping, which is the material 
actually flowing with the water through the dam. Those need to 
be fixed now. Those are in the budget.
    We are studying Tier 2 but we're not getting at a lot of 
Tier 2. So, it goes like that. And Tier 6--that would be a 
dream for many, many years down.
    So, we're trying to really look at the life and health 
safety----
    Senator Landrieu. Where are the levees in that--levees not 
just for the Mississippi, but for the other major rivers?
    And, if Alan, you'd put up the next chart?
    General Van Antwerp. Well, we have 12,000 miles of levees 
in this country, one-third of the levees that are in harm's way 
are really in the Sacramento area, and then, of course, the 
levees in New Orleans and a lot of crucial levees across the 
country, we do have an inventory of them, we did a very 
extensive levee inventory, we know the risks and we're trying 
to get at those sections of levees first, that need to be done 
first.
    Senator Landrieu. Mr. Chairman, I think this chart is 
instructive. I asked my staff to basically show a chart of the 
major waterways, navigation waterways in the country.
    And as you can see, it's heavily weighted to the east 
coast, because the great river systems are in the east coast, 
and the channels along the southern part--which you can see 
from Texas all the way to Florida--is the intercoastal canal. 
There's also an intercoastal canal going up the eastern 
seaboard, which bears basically the predominant burden, if you 
will, and responsibility for the commerce of the Nation.
    And so, when people continue to say to me, well, ``Senator, 
Louisiana gets a very high portion of the Water bill,'' my 
simple response is, ``We have an inordinate proportion of the 
water.'' And the Water bill isn't a Desert Resources bill; it's 
a Water Resources bill. And basically, wherever the water is, 
that's where the resources need to go.
    So, I make no apologies for the 17 percent of the 
authorizations in that Water bill, and intend to see all of 
them built and--planned and built over time. But you can see 
why Louisiana, and to some degree Mississippi--because we share 
the mouth of the river, Mr. Chairman. But this drainage system 
impacts our Corps of Engineer district, I would suggest, unlike 
any in the country.
    Now, it is really telling to me, to understand the water 
battles in the West. I now understand them after looking at 
this chart, because they simply don't have enough. And what 
they do have, they're trying to use some for power and some for 
irrigation, I'm not certain they have, really, for either one.
    And at great expense to the Nation, to try to help them 
figure out their situation which I'm very sympathetic for. But 
our situation is the opposite. Today, I understand--did the 
spillway open today? Did you order the spillway opened, or did 
your Director?
    General Van Antwerp. Ma'am, I did, at 10 o'clock this 
morning, so----
    Senator Landrieu. The spillway was open. Today, because the 
river is so high, at 10 o'clock this morning, which is----
    General Van Antwerp. I think if I could correct myself, I 
think the announcement was going to be made, but I don't 
believe it's going to be open until probably tomorrow.
    Senator Landrieu. Okay, but today at 10 o'clock, Mr. 
Chairman----
    General Van Antwerp. The announcement.
    Senator Landrieu. The spillway, which is a great, sort of, 
flood prevention mechanism, if you will, is being opened for 
the first time since 1997. Because the river, the Mississippi 
River is so high, as we've all been following now for, 
actually, weeks, and the Corps has made a decision. The good 
thing about that decision, it will prevent flooding. The bad 
news about that decision, is moving water from the river into a 
fresh-water lake system has other consequences that we have to 
deal with.
    But, this is a constant battle where--in the State that I 
represent--trying to manage this water. And let me just say, 
Mr. Chairman, we can not manage it on the budget we have.
    We will have another major floods--this last one cost 
upwards of $200 billion to the Federal Government, that's going 
to be the cost of Katrina/Rita when all is said and done. And 
the primary--the primary reason of that number is not the 
hurricanes that could not be avoided, it's the collapse of the 
infrastructure system that should have held, and didn't.
    So, I know that I'm going on past my time, and I do have a 
few questions if the chairman would give me just a few more 
minutes.
    Senator Dorgan. Let me observe, the vote has just started, 
I believe, in the Senate.
    Senator Landrieu. Okay.
    Senator Dorgan. So, we'll have a very brief period, and 
then we're going to have to go back to the Senate to vote.
    Senator Landrieu. Does Senator Murray have a question? 
Okay, let me then just ask one question, but I'll wrap this up 
by saying, we cannot sustain this budget either in the State of 
Louisiana or in the country.
    Just real quickly--are you considering the drainage to the 
river proposal to the metropolitan area of New Orleans? In 
other words, the pump to the river, as opposed to the pump to 
the lake proposal? And just a very brief answer, is it even on 
your radar screen? Because it's a very important project for us 
to consider, as a better way to fix our system so it doesn't 
break again?
    General Van Antwerp. Yes, ma'am, we are. We're considering 
that as an alternative.
    Senator Landrieu. Okay, and second the Morganza to the gulf 
project, which you all have temporarily put on hold, when was 
the last time you used section 902, if you know, to prohibit 
the advancement of a project that's been authorized by this 
Congress? Do you know?
    Mr. Woodley. Senator, our practice is when we believe that 
a project is going to exceed the amount authorized by Congress, 
our practice is to return to Congress and to achieve--to make 
that known--and to seek additional authorization, and I believe 
that that is a longstanding practice, and that that is indeed 
by far the most appropriate thing for the agency to do under 
the circumstances.
    Senator Landrieu. Well, I'd like to know the last time, and 
my final word on this, it took us 25 years, Mr. Chairman, to 
get this project authorized. The Corps is the one that gives us 
the estimates. So this game--which I call it a game--they give 
you a low estimate, you can't get a higher estimate in the bill 
if their estimate is low--so they give you a low estimate, you 
finally get it authorized after you get it authorized, they 
tell you, then, it's too little and we can't--you know, we 
can't go forward.
    So, we're going to be visiting this again, this issue of 
Morganza to the gulf.
    Senator Dorgan. Senator Landrieu, Thank you very much, 
Senator Murray?
    Senator Murray. Thank you, Mr. Chairman, I know a vote's 
been called, but I want to ask just two critical questions and 
one is on the Centralia Flood Project. This is the first budget 
request since the passage of WRDA, and the Centralia Flood 
Control Project was included in that bill, it's a much needed 
project to prevent further damage from the Chehalis River 
rising over its banks.
    Now, I understand there are many projects that need funds, 
but it is really shortsighted to pass up an opportunity to get 
moving on this levy project. Can you share with me why this was 
not included in the President's proposed budget?
    Mr. Woodley. Yes, Senator. The authorization came, I 
believe, in November. By that time, our budget is very much in 
place, and very few changes are made--I was only able to make a 
very few changes to respond to matters that were included in 
the authorization. We will be working on that project for 
future fiscal years----
    Senator Murray. So, you do expect it to be in the next 
request?
    Mr. Woodley. I will say that unless--I have not seen how it 
competes in that process, it will be in a position to compete, 
I believe, in that process----
    Senator Murray. To compete in that process--that doesn't 
sound very promising.
    Mr. Woodley. No, it doesn't sound very promising, Senator, 
I will say that we have not----
    Senator Murray. Well, I mean this is my frustration in my--
go ahead.
    Mr. Woodley. We have not funded new starts in our budget, 
generally speaking, for some time.
    Senator Murray. Well, my understanding is----
    Mr. Woodley. That is a new start.
    Senator Murray. Yes, the capacity of this is $1.2 million.
    Mr. Chairman, these are what we have to do because the 
administration doesn't send us the adequate requests that we 
have passed in our authorization bills. We end up having to--
and this project, I think, is about $1.2 million that is needed 
this year--have to do it as an earmark, and then we hear, 
``Well, all the bills are going to be vetoed that have 
earmarks,'' well, that's irresponsible. We have to start 
figuring out the honesty of this budget process, and realize 
that the reason that we have to go back and do these earmarks 
is because we have an administration that is not following 
through and giving us what we need in authorized projects.
    And quickly, on the Chehalis River Basin Study, same idea. 
This is a project that is sitting out there, can you tell me 
why that was left off the table?
    Mr. Woodley. Pardon?
    We don't have the details on the Chehalis, so if you pardon 
me one second, I may be able to get you----
    Senator I apologize, I will have to answer that for the 
record.
    Senator Murray. I would appreciate that, and appreciate the 
opportunity, Mr. Chairman, to come back and ask those 
questions. I think my State is seeing what a lot of States are, 
we're losing homes, and it's costing us millions of dollars in 
damage, because we're not doing an adequate job of fulfilling 
our responsibilities as a country.
    Thank you, Mr. Chairman.
    Senator Dorgan. There's about 6 or 7 minutes left on this 
vote. Senator Landrieu, I should mention to you that I asked 
questions about the request that has been made with respect to 
the gulf, and especially the $1.5 billion anticipated local 
share which should be paid in a short period of time. I asked 
questions about how they expected that region to pay a local 
share, when WRDA would have anticipated that to the extent that 
local share existed, they might have up to 30 years. So, I 
asked that series of questions on the record, I wanted you to 
know.
    Senator Murray. Thank you.
    Senator Landrieu. And may I just say, for the record, I 
thank the Chair, because that is something I'd like to work out 
a longer time to pay, but Washington power permits, Port of 
Iberia, category five report and the ongoing cooperative 
arrangements with the Dutch were other things I wanted to ask. 
I'll submit those questions to the record, and I really thank 
the chairman for asking some of the questions about the cost 
share that's very important for us to tackle, thank you.

                     ADDITIONAL COMMITTEE QUESTIONS

    Senator Dorgan. Let me thank all of the witnesses who've 
appeared today, I apologize that we've had a vote intervene, 
but I think we have at least exhausted many of the inquiries 
that we wanted to make, and there--we will submit a list of 
written questions, and we appreciate your being at this 
hearing.
    [The following questions were not asked at the hearing, but 
were submitted to the Department for response subsequent to the 
hearing:]
           Questions Submitted to Hon. John Paul Woodley, Jr.
            Questions Submitted by Senator Pete V. Domenici
                       inland waterway trust fund
    Question. Secretary Woodley, In your testimony before this 
subcommittee last year you told us that there was a looming problem 
with the Inland Waterways Trust Fund that needed to be addressed. 
However, we never received a proposal. The President's fiscal year 2009 
budget proposal announced that legislation would be forthcoming to 
address the shortfall in the Inland Waterway Trust Fund. Finally, last 
week the administration proposal was submitted to Congress. What took 
so long to get us this legislation?
    Answer. Coordination within the administration took longer than we 
originally anticipated.
    Question. The fiscal year 2009 budget submittal states that the 
President's request utilizes all balances in the Trust Fund as well as 
all receipts expected to be generated in 2009. This is about $167 
million. How much have we been funding on average for Inland Waterways 
over the last several years?
    Answer. Annual funding from the Inland Waterways Trust Fund 
increased from $102 million in fiscal year 2003, to $203 million in 
fiscal year 2007 for an average of $149 million for the period fiscal 
year 2003-2007.
    Question. How much does the current Inland Waterways Trust Fund 
generate in annual receipts?
    Answer. The existing $0.20 per gallon diesel fuel tax generates 
about $90 million per year.
    Question. Then you have known for a number of years that this day 
of reckoning was coming and you waited until now, halfway through the 
fiscal year, to make this type of proposal?
    Answer. The balance in the Trust Fund has been adequate until the 
last 2 years when it became clear that project costs were increasing 
dramatically and the number of construction and major rehabilitation 
projects were increasing, while revenues were generally declining.
    Question. This will be tough legislation to get enacted in any 
year, much less this year. It took me several years before I was able 
to finally get the initial legislation establishing the Inland Waterway 
Trust Fund enacted in 1978. And now, you want us to completely change 
the funding mechanism in the next 6 months?
    Answer. Due to the continuing decline in the Trust Fund balance we 
urge Congress to take action at its earliest convenience.
    Question. What has been the navigation industry's reaction to your 
proposal to phase out the fuel tax and replace it with a lock user fee?
    Answer. The navigation industry in general does not support the 
imposition of any additional costs on the industry to increase revenues 
to the Trust Fund, through either lock user fees or increased taxes. 
The industry supports increased Federal expenditures and reduced Inland 
Waterways Trust Fund contributions by changing the cost-sharing 
percentages from 50 percent Federal and 50 percent Trust Fund to 75 
percent Federal and 25 percent Trust Fund.
    Question. The fuel tax has been 20 cents per gallon for more than 
10 years. Was any thought given to a proposal to raise the fuel tax? 
Why was that idea rejected?
    Answer. Yes, consideration was given to raising the fuel tax. 
However, the user fee more appropriately aligns the costs and revenues 
by financing the Trust Fund's 50 percent share of the capital costs 
from revenues paid by the users who most directly benefit from reduced 
lock outages, improved safety, reductions in the time per lockage, and 
other benefits associated with the expenditures for new locks, lock 
replacements and expansions, and rehabilitations. The existing fuel tax 
is paid by towboat operators purchasing fuel on the 27 inland and 
intracoastal waterways listed in 33 U.S.C. 1804. Operators do not pay a 
fuel tax on the 40 waterways segments that are not listed, even when 
they use a lock, while operators on the extensive open water reaches of 
the system (such as on the Lower Mississippi River) are paying a 
substantial portion of the overall fuel tax where there are no locks 
and dams. Therefore, many system users receive little direct benefit 
from the investments that are being funded with the fuel tax, while 
others are receiving these benefits but not paying for them.
    Question. It appears that the proposed lock user fee will fluctuate 
depending on the balances in the Trust Fund? Do you believe the 
industry will support a user fee that could change up or down annually?
    Answer. We believe that a fee schedule that provides sufficient 
funding to construct, replace, or rehabilitate the infrastructure 
desired by the industry, while not creating a large surplus or 
depleting the balance in the Trust Fund, could be supported since it is 
in the overall interest of the industry.
                             budget request
    Question. Secretary Woodley, in your press release on the fiscal 
year 2009 budget you state that ``The budget represents the prudent use 
of available funding to advance important, mission-based objectives. I 
am proud to present it.''
    What exactly are you proud of? Is it the decrease of $79 million 
over what you proposed in fiscal year 2008, or is it the $851 million 
decrease from what we provided in the fiscal year 2008 Omnibus?
    Answer. We are keenly aware that the nation has many competing 
needs, and this budget reflects the President's priorities for the 
Civil Works program. The Army Corps of Engineers must execute the 
budgetary resources it is provided as efficiently and effectively as 
possible. The budget provides a continued high level of funding for 
operation and maintenance of key infrastructure, with a $16 million 
increase over last year's budget. The budget also focuses resources on 
completing the highest-return construction projects, in order to 
realize their economic and environmental benefits sooner, giving 
priority to 79 high performing projects and will result in 12 project 
completions in fiscal year 2009, bringing significant benefits on line.
    Question. Is it prudent to provide no funding for projects that 
have been under construction for years?
    Answer. The fiscal year 2009 budget uses objective performance 
measures to establish priorities among projects and, through a proposed 
statutory change in Corps contracting practices, would also increase 
control over future costs. The performance measures used include the 
benefit-to-cost ratios for projects with economic outputs; and, for 
aquatic ecosystem restoration projects, the extent to which the project 
cost-effectively contributes to the restoration of a nationally or 
regionally significant aquatic ecosystem that has become degraded as a 
result of a Civil Works project or to an aquatic ecosystem restoration 
effort for which the Corps is otherwise uniquely well-suited. The 
selection process also gives priority to dam safety assurance, seepage 
control, static instability correction, and to projects that address a 
significant risk to human safety. Under each of these criteria, 
resources are allocated based on performance. This approach 
significantly improves the realization of benefits to the Nation from 
the Civil Works construction program and will improve overall program 
performance by allowing the Nation to realize the benefits of the 
projects with the best net returns (per dollar invested) sooner.
    Question. What are we supposed to tell the project sponsors that 
are sharing in the costs of these projects?
    Answer. The President's fiscal year 2009 budget for the Army Civil 
Works program is based on performance. All funds available for Civil 
Works are allocated in the budget based on the outputs and outcomes 
they would produce, and no funds are explicitly requested for paybacks. 
Likewise, the Corps capabilities to perform additional work are 
formulated based on the prospective work that could be performed, not 
based on prior reprogrammings and other transactions.
    Question. It will cost them more. It will cost us more. Again, how 
is this prudent?
    Answer. This budget is based on the administration's desire to 
produce a performance based budget focusing on completing investment 
opportunities that will yield good returns for the Nation in the 
future. It also provides the highest level of funding ever requested 
for the Civil Works program in the President's budget.
                                earmarks
    Question. Secretary Woodley, Could you explain the President's 
Executive order on earmarks?
    Answer. Executive Order No. 13457, entitled ``Protecting American 
Taxpayers from Government Spending on Wasteful Earmarks'', is intended 
to ensure that Federal funds are spent in accordance with laws, 
regulations, and merit-based decisionmaking. The recent performance-
based budgets for the Civil Works program are examples of the 
application of merit-based decisionmaking.
    Question. Based on what you know, how do you believe it will be 
implemented?
    Answer. Implementation guidance has not yet been developed. The 
Executive order is prospective and does not apply to previously enacted 
appropriations for fiscal year 2008, so as yet we have no experience 
implementing it. The Executive order supports this administration's 
strong emphasis on performance-based decisionmaking, as reflected in 
the President's Management Agenda and recent Civil Works budgets.
    Question. Secretary Woodley, do you believe that in a project based 
budget such as yours, that all of the projects in the statement of 
managers will be considered as earmarks that are advisory under this 
Executive order?
    Answer. Thoughtful consideration needs to be applied to the 
question of the designation ``earmark'' in programs, like the Army 
Civil Works program, that historically have been line-item funded for 
individual programs, projects, and activities. I believe the Executive 
order should be applied in a way that furthers the intent of 
encouraging performance based decisionmaking.
    Question. If I understand you correctly, the Intent of Congress is 
irrelevant under this Executive order. Is that correct?
    Answer. The Comptroller General established years ago that 
committee reports accompanying Acts of Congress are advisory, but are 
to be afforded great deference. Moreover, the Comptroller General 
advised that if the executive branch intends to act contrary to the 
statement of managers as laid out in such a report, an explanation is 
owed to the committee or committees that issued the guidance. Also, the 
statement of managers and other committee reports are part of the 
legislative history of the respective appropriations acts.
    Question. Have you considered how you will manage a program if all 
of these projects are contained in legislative language? You have 
always had some flexibility to allow proper management of your 
respective programs. This Executive order seems to be hurting you, more 
than it is restraining Congress. Won't your jobs be harder?
    Answer. Certainly, having allocations to each program, project and 
activity laid out in statutory language would change current management 
practices to some extent and would require greater attention and 
accuracy in the development of cost estimates. Such legislation also 
could include provisions authorizing reprogrammings or transfers among 
the line items within specified limits, which would give the program 
managers some flexibility.
    Question. How will you deal with emergency situations if all 
funding is earmarked in legislative language?
    I can assure you that Congress is not going to provide you a lump 
sum appropriation and trust that you will do the right thing. That 
would be irresponsible of us and an abdication of our constitutional 
duties. Additionally, it would also impede our ability to undertake 
proper oversight over your execution of these programs.
    Answer. If Congress were to itemize funding allocations in 
statutory language, either directly or by referencing the statement of 
managers, it would be critically important for Congress to also provide 
a mechanism to ensure that agencies have sufficient discretion to 
respond to emergencies. This could be done by statutory establishment 
of reprogramming or transfer process and conditions and/or by providing 
a line item allotment of funding to be used for emergency purposes. An 
example would be the emergency transfer authority provided to the 
Secretary of the Army in Public Law 84-99. I would note that in fiscal 
year 2007, while operating under a year-long continuing resolution, my 
staff worked closely with the Army Corps of Engineers Headquarters to 
first establish objective, transparent criteria and then to apply those 
criteria in allocating the fiscal year 2007 appropriations for the 
Civil Works program. If the executive branch were to be allowed great 
discretion in allocating Civil Works appropriations, then advance 
consultation on transparent, merit-based criteria and periodic 
reporting to Congress on program execution certainly would be 
appropriate to ensure Congress has sufficient information to carry out 
its oversight role.
                                 ______
                                 
      Questions Submitted to Lieutenant General Robert Van Antwerp
             Questions Submitted by Senator Byron L. Dorgan
                      collective bargaining rights
    Question. What impact, if any, will implementation of the HPO have 
on collective bargaining rights and the way in which Corps employees 
are represented by Federal employee unions during and after the 
implementation of the HPO? What impact, if any, will implementation of 
the HPO have on existing bargaining units within the agency, the rights 
of employees to collectively bargain within the agency and on the 
ability of various unions to continue to represent employees in the 
agency after collective bargaining agreements expire and are 
renegotiated? Will any positions within existing bargaining units be 
moved to new bargaining units? Will any positions within existing 
bargaining units be moved outside bargaining units? Why will this HPO 
be different from the logistics HPO which cast 400 employees out of 
collective bargaining arrangements for no apparent reason, given that 
their work and their worksites have not changed?
    Answer. We do not expect any change in bargaining rights. Unlike 
the Logistics High Performing Organization (HPO), the NavLocks study is 
not proposing to create a new organizational entity, therefore, local 
labor relations agreements will continue as negotiated locally.
        negotiating over appropriate arrangements and procedures
    Question. Many of the employees affected by the HPO will be 
represented by unions, both during and after implementation. Does the 
Corps acknowledge unreservedly that all represented Federal employees 
would be able to negotiate at the local level appropriate arrangements 
and procedures of the HPO and if necessary pursue appeals to Federal 
labor authorities including but not limited to the Federal Labor 
Relations Authority and Merit Systems Protection Board? What 
differences if any would there be in terms of negotiating over impact 
and implementation at the local level under the HPO and if the HPO were 
instead being separately implemented by several Corps districts 
simultaneously as several distinct reorganizations?
    Answer. There will not be any changes in bargaining rights. The 
study is not proposing a new organizational entity, therefore, local 
labor relations agreements will continue as negotiated locally. No 
Corps district reorganization is recommended in this study.
                               workforce
    Question. Will there be fewer Federal employee jobs in the locks & 
dams, district offices, and fleet maintenance crews during 
implementation and the first 5 years after implementation than there 
were on the first day of the HPO's development? If so, please provide 
an explanation that includes estimates for the Federal employee jobs 
lost for each of the three categories (locks & dams, fleet maintenance, 
and district offices). If there will be fewer jobs, how will these 
reductions be achieved in each of the three categories? What role will 
attrition play in reducing the workforce? If attrition will be used, 
when and to what extent will it be used in each of the three 
categories? Corps management has said that no employee would 
involuntarily lose his job because of the HPO--is this still the case? 
What, if any, job losses will there be through re-engineering of jobs, 
i.e., retaining the jobs but changing the types of positions, thus 
leaving current employees unqualified? In which if any of the three 
categories [locks & dams, district offices, and fleet maintenance 
crews] do you anticipate adding Federal employee jobs, and by how many? 
If so, what efforts will the Corps undertake to ensure that it has the 
funding necessary to hire the additional employees? If the HPO 
recommends an increase in the number of Federal employees, will OMB 
allow for such an increase?
    Answer. We cannot predict future funding levels and events that are 
beyond the control of the Corps and that may impact staffing levels 
throughout the organization. However, given sufficient funding for 
operating and maintaining the locks and dams, there would be no net 
loss of jobs as a result of this study. The study is not going to 
propose any new organizational entity to operate and maintain the locks 
and dams in the inland waterway system. The study will be recommending 
a series of business process improvements that are intended to provide 
consistency in O&M procedures across the Corps, while working within 
the long-range strategy of applying resources to the most critical 
projects based on risk and reliability within a watershed (or division) 
boundaries.
    If the study should recommend increases in staffing, the funds to 
support those positions would be considered through the normal budget 
process.
                            contracting out
    Question. Corps employees were told by the agency's management that 
the HPO would obviate the need for any contracting out. What 
contracting out of work either performed by Federal employees or last 
performed by Federal employees (e.g., employees who are lost through 
attrition) would occur as part of the HPO? If contracting out of work 
currently performed or last performed by Federal employees is part of 
the HPO, in which of the three categories of affected work would this 
contracting out occur, the work of how many Federal employees would be 
affected for each category, and through what procurement process would 
this contracting out occur? Would Federal employees, either already on 
the agency's staff or to be added later, be given opportunities to 
perform new work and work currently outsourced? If so, in which 
categories would this insourcing occur, the work of how many Federal 
employees would be insourced, and through what process would this 
insourcing occur?
    Answer. No contracting out of work performed by Federal employees 
will occur as part of or as a result of the study. Additionally, work 
previously outsourced may be considered for insourcing through an 
appropriate process allowed under the prevailing legislation. We do not 
have any estimate of number of positions that may be considered for 
insourcing, pending additional analysis after the completion of this 
study and as existing contracts are up for renewal.
                          terms of employment
    Question. Employees who were involved in the logistics HPO and the 
information management A-76 were forced to reapply for their jobs. Will 
any of the employees covered by the HPO be required to reapply for 
their jobs? If so, which ones? Will any of the employees covered by the 
HPO be involuntarily required to take downgrades? If so, which ones? 
Will any of the permanent employees covered by the HPO be involuntarily 
required to take seasonal employment? If so, which ones? Will the HPO 
change the pay structure of locks and dams operations and maintenance 
personnel based on where they live? Will district office personnel be 
expected to move to another district office? Please provide estimates 
by district on the numbers of district employees to be shifted to other 
districts. What adverse impacts will the HPO have for fleet maintenance 
personnel? Will fleet maintenance personnel be expected to move to 
other districts? Please provide estimates by district on the numbers of 
affected fleet maintenance employees to be shifted to new districts. 
Would fleet maintenance personnel be expected to work more outside of 
their home districts? If so, for how many more days per year?
    Answer. No employee will be required to reapply for his/her job, 
take a downgrade, or to change status from permanent to seasonal. The 
study does not recommend changes to the existing Corps chain-of-
command, organizational structure, or a decrease in the staffing 
levels.
    The NavLocks study will not require that employees in a district 
office move to another district office.
    The NavLocks study will not recommend that employees in one 
district's maintenance fleet permanently move to another district's 
maintenance fleet. However, on a short term basis, as is the current 
practice, we envision using personnel from several districts' 
maintenance fleets to assists other districts to more rapidly restore 
functionality/operating capability to a lock. As we try to manage work 
and perform the most critical tasks in a river system, on a short term 
basis, we envision making teams of service personnel from maintenance 
fleets to increase capability to quickly perform tasks to minimize 
system downtime. We realize that working away from home is inconvenient 
to employees and we will try to minimize the adverse impacts to the 
extent possible.
                             hpo structure
    Question. To what extent is the HPO different from reorganizations 
that Corps districts could accomplish on their own? What additional 
legislative authority will the Corps be seeking in order to carry out 
the HPO? Will districts continue to decide, within the parameters set 
by the Congress, how money is spent on locks and dams projects--or will 
such decisions be made by another entity, perhaps one created by the 
implementation of the HPO? Will districts continue to negotiate and 
administer contracts for locks and dams--or will such arrangements be 
determined by another entity, perhaps one created by the implementation 
of the HPO?
    Answer. The study is conducted Corps-wide for improving reliability 
and availability of the entire inland navigation system through better 
business processes. The study is not being conducted for the purpose of 
reorganizing districts; therefore, it should not be confused with 
``reorganizations'' that could be done by individual districts, based 
on their workload and/or mission changes. Regarding how money is spent 
on locks and dams projects, there will be no new organization as a 
result of the HPO and districts will continue to carry out their 
current role with regard to determining how funding is to be spent. No 
change is anticipated to the current budget development and program 
execution processes.
                                 ______
                                 
            Questions Submitted by Senator Pete V. Domenici
                          civil works program
    Question. General Van Antwerp, in your role as the Chief of 
Engineers, what do you see as the major water resource challenges 
facing this Country in the future?
    Answer. The facilities owned and operated by, or on behalf of, the 
Corps of Engineers are aging and may not have undergone a recent major 
rehabilitation. As stewards of this infrastructure, we are working to 
ensure that its key features continue to provide an appropriate level 
of service to the Nation. Sustaining such service poses a technical 
challenge in some cases, and proper maintenance is becoming more 
expensive as this infrastructure ages.
    Question. What level of funding would be necessary to maintain the 
progress realized in the Civil Works Program through the enacted 
appropriations levels for the past couple of years?
    Answer. Sir, while I cannot give you an exact number at this time, 
I believe that approximately $6 billion should be sufficient to 
maintain and continue the funding level appropriated over the last 
couple of years.
    Question. If the administration's budget proposal is enacted, what 
will be the impact on meeting the Army Corps' O&M backlog? The 
construction backlog?
    Answer. The budget of the President is viewed as the appropriate 
mix of construction and O&M funding as well as the appropriate level 
for those respective activities. The operations and maintenance backlog 
and the construction backlog do not represent a prioritization of work 
either within the two accounts or between different accounts in the 
Corps. For instance, some work in the backlog is higher priority, 
whereas other work may be a lower priority relative to funding needs in 
other Corps areas. The proposed fiscal year 2009 funding for O&M and 
construction does not significantly reduce the O&M and construction 
backlogs.
    Question. What is the percentage of the Nation's commerce that come 
into or leaves this country that goes through a Corps built and 
maintained harbor?
    Answer. Sir, we estimate that 95 percent of our Nation's foreign 
commerce goes through our Federally maintained harbors and channels.
    Question. Could you characterize the proportion of the 
discretionary budget of the Federal Government that is directed toward 
building and maintaining this Country's water infrastructure today 
versus 30 years ago?
    Answer. One way is to compare absolute budget amounts over time. 
For example, the discretionary budget of the United States is five 
times larger today than it was 30 years ago while the Corps' 
discretionary budget has doubled in size over the past 30 years. 
Another comparison is a relative comparison over time. Thirty years 
ago, slightly more than 1 percent of the discretionary budget of the 
Federal Government was designated to the Corps of Engineers to build 
and maintain the country's infrastructure. Today less than one-half of 
1 percent of the Federal Government's discretionary budget is proposed 
for the Corps of Engineers to build and maintain the country's 
infrastructure.
    In 1978 the Corps of Engineers' budget relative to the total 
discretionary budget allowance = $2.778 billion/$259.940 billion = 
.0106 or 1.06 percent. In 2008, the Corps of Engineers' budget relative 
to the total discretionary budget of the Nation = $5.586 billion/
$1,153.798 billion = .0048 or 0.48 percent.
    Question. Could you provide a historical perspective on the value 
of the Nation's inland waterways for National security and economic 
security?
    Answer. The Corps navigation services play an essential role in 
ensuring that commercial goods move smoothly along the Nation's ports 
and waterways distribution chain. A smooth, well-functioning navigation 
system is crucial to the Nation's economy. Inland and intracoastal 
waterways directly serve 38 states throughout the Nation's heartland as 
well as the States on the Atlantic seaboard, the gulf coast and the 
Pacific Northwest. The shippers and consumers in these States depend on 
the inland waterways to move about 630 million tons of cargo valued at 
over $73 billion annually. States on the gulf coast and throughout the 
Midwest and Ohio Valley especially depend on the inland and 
intracoastal waterways. Texas and Louisiana each ship over $10 billion 
worth of cargo annually, while Illinois, Pennsylvania, West Virginia, 
Kentucky, Mississippi, Alabama, and Washington State each ship between 
$2 billion and $10 billion annually. Another eight States ship at least 
$1 billion annually. According to research by the Tennessee Valley 
Authority, this cargo moves at an average transportation savings of 
$10.67 per ton compared to other modes of transportation. The unit cost 
to transport commodities over inland waterways is two to three times 
lower than other forms of transportation. Corps navigation projects 
also help limit air pollution emissions by enabling tows with many 
barges to move cargo long distances on considerably less fuel than 
trains or trucks would need to move the same amount of cargo the same 
distance.
    The inland waterways have played a key role in National defense and 
military strategy. During World War II, large quantities of strategic 
commodities were moved on the inland and intracoastal waterways. During 
the war period, the total annual ton-mileage more than doubled the 
record peacetime movements on the Mississippi, Ohio, and Illinois 
Rivers. The Gulf Intracoastal Waterway played a crucial role in moving 
strategic commodities, particularly crude and refined petroleum, and in 
1944 carried five times as much freight as in 1939. Barges were 
credited with transporting over 1.7 billion barrels of petroleum and 
petroleum products, equal to more than 7 million tank car loads, or 
73,000 trains of 100 cars each. The Gulf and Atlantic Intracoastal 
Waterways provided a protected route for the daily delivery of some 1.3 
million barrels of petroleum, in contrast with oceangoing tankers that 
were vulnerable to submarine attack. The waterways also served the 
shipbuilding and repair industries. During World War II the number of 
inland shipbuilding and repair facilities increased from 85 to 140. At 
the end of the war the Army also shipped grain down the Mississippi as 
part of the European civilian relief program.
    The waterways continue to move strategic cargo destined for 
military facilities, especially petroleum products such as gasoline, 
distillate and jet fuels, military cargo and equipment. Moving military 
vehicles and equipment by barge has provided increased security and 
simplified loading and unloading compared to rail, and has saved fuel 
and wear-and-tear compared to over-the-road moves.
    Another key role of the waterways today is for the movement of 
oversized cargo that would be difficult or impossible to move by road 
or rail. Waterways are used to move industrial plant components, 
including nuclear reactors and other power plant equipment, offshore 
oil platforms, as well as automobile factory presses and even rocket 
boosters from assembly plants to Cape Canaveral.
    Question. How much unobligated funding did the Corps carry over 
from fiscal year 2008 to fiscal year 2009?
    Answer. Mr. Chairman., our total carryover of unobligated 
appropriated Civil Works funds from fiscal year 2007 to fiscal year 
2008 was $7.4 billion. Our estimated carryover into fiscal year 2009 is 
estimated to be $5.2 billion, including supplemental funding.
    Question. To what do you attribute this large carryover?
    Answer. In brief, the carryover is attributable to a surge in 
supplemental funding and changes in internal processes. Of the total 
projected carryover of $5.2 billion, about $3.5 billion is Flood 
Control and Coastal Emergencies and Construction funds that were 
appropriated for reconstruction of New Orleans area protection and that 
will be obligated through fiscal year 2011. Another $600 million is 
other supplemental funds that were appropriated for the rehabilitation 
of projects damaged in the numerous storm and hurricane events in the 
past few years, but that cannot be obligated through fiscal year 2008. 
Finally, $1.1 billion is regularly appropriated funds. Carryover of 
regular funds is projected to grow from around $300 to $400 million in 
the years preceding fiscal year 2006 to the $1.1 billion figure due to 
changes in contracting and reprogramming processes in response to the 
guidance in the fiscal year 2006 conference report and fiscal year 2008 
statement of managers. These changes emphasize carrying over funds 
where necessary to fully fund contracts, and limiting the reprogramming 
of funds. The Corps plans to reduce carryover in the future by 
improving its scheduling and estimating practices prior to projects 
receiving funds, and by focusing on project execution, such as metrics 
for obligations and milestones, once funds are received.
    Question. What tools could we give you to help manage the program 
better?
    Answer. Mr. Chairman, I believe recent Congressional direction has 
improved Corps business practices with regard to the management of 
appropriations. Our goal is to plan well and to execute funds as 
planned, rather than to simply maximize expenditures. In the interest 
of administrative efficiency, we would welcome greater flexibility in 
allocating funds among operation and maintenance activities, and we 
would like to explore the possibility of reducing prior notification 
requirements for reprogramming, while remaining focused on executing as 
planned. This would involve giving clear guidance to the field on when 
and when not to reprogram, and then freeing them to operate within the 
framework of that guidance. This also would involve continuing to 
provide periodic reports to Congress on reprogramming, to ensure the 
necessary oversight.
    Question. General Van Antwerp, the fiscal year 2008 Omnibus 
required you to submit a report by May 1, 2008 concerning the positive 
and negative impacts of the revised policy on continuing contracts to 
the execution of the Civil Works Program. Can you give us a preview of 
this report?
    Answer. This report will discuss changes in Corps processes that 
were incorporated into execution plans and acquisition strategies to 
ensure that implementation of programs, projects, and activities (PPAs) 
complies with Congressional guidance. It will discuss impacts of the 
changes and offer recommendations.
                                 ______
                                 
                Questions Submitted to Robert W. Johnson
             Questions Submitted by Senator Byron L. Dorgan
                                drought
    Question. What is the prediction for the drought situation across 
the West in fiscal year 2009? We are entering our 9th year of the 
drought in western North Dakota.
    Answer. As a general rule, for every year of drought as many years 
of above-normal precipitation is needed to counter the effects of 
drought. Without significant snow pack or substantial rainfall, current 
drought conditions are expected to continue. Precipitation outlooks are 
generally unreliable beyond 3 months. Reclamation itself does not 
forecast weather or drought conditions. Reclamation tracks current 
drought conditions based on information provided by other agencies 
focused on weather, including the National Oceanic and Atmospheric 
Administration's Climate Prediction Center (http://www.cpc.noaa.gov/), 
and the Drought Monitor, managed by the National Drought Mitigation 
Center (http://www.drought.unl.edu/dm/monitor.html).
                          energy and water act
    Question. There are a number of projects in the fiscal year 2008 
Energy and Water Act that were not included in the President's fiscal 
year 2009 budget request. Can you provide us the capability amounts 
needed for those projects?
    Answer. The projects are California Bay-Delta Restoration and 
Central Valley Project Restoration Fund. The capability statements are 
below:
    Project Name in Hill Request.--California Bay-Delta Ecosystem 
Restoration (CA)
    Bureau Project.--California Bay-Delta Restoration (CA)
    Appropriation.--California Bay-Delta Restoration
    Authorization.--The Reclamation Act of 1902, as amended and 
supplemented, June 17, 1902; Public Law 89-561, Feasibility Studies, 
September 7, 1965; Public Law 96-375, Feasibility Studies, October 3, 
1980; Reclamation Projects Authorization and Adjustments Act of 1992, 
title XXXIV of Public Law 102-575, October 30, 1992; and Public Law 
104-333, the Omnibus Parks and Public Lands Management Act of 1996, 
title XI, California Bay-Delta Environmental Enhancement Act, November 
12, 1996; Public Law 107-66, Energy and Water Development 
Appropriations Act, 2002, November 21, 2001; Public Law 108-7, 
Consolidated Appropriations Resolution, 2003, February 20, 2003; Public 
Law 108-137, Energy & Water Development Appropriations Act, 2004, 
December 1, 2003; and Public Law 108-361, Calfed Bay-Delta 
Authorization Act, October 25, 2004.

                                            CALFED BAY-DELTA PROGRAM
                                           [Summarized Financial Data]
----------------------------------------------------------------------------------------------------------------
                                                                      Federal       Non-Federal        Total
----------------------------------------------------------------------------------------------------------------
Total Estimated Cost............................................         ( \1\ )         ( \1\ )         ( \1\ )
Allocations through fiscal year 2007 \2\........................    $292,778,000  ..............    $292,778,000
Approved by Congress fiscal year 2008...........................      40,098,000  ..............      40,098,000
Budget Request for fiscal year 2009.............................      32,000,000  ..............      32,000,000
Balance to Complete after fiscal year 2009......................         ( \1\ )         ( \1\ )         ( \1\ )
Amount Requested by Member (H)..................................      40,000,000  ..............      40,000,000
Amount Requested by Member (S)..................................      42,000,000  ..............      42,000,000
Additional Capability for fiscal year 2009......................      10,000,000  ..............      10,000,000
----------------------------------------------------------------------------------------------------------------
\1\ Unknown.
\2\ The $292.7 million reflects funds appropriated to the California Bay-Delta Restoration Account in fiscal
  year 1998 through fiscal year 2000 and fiscal year 2006 thru fiscal year 2007. Does not include funds provided
  in the fiscal year 2002, fiscal year 2003, fiscal year 2004 and fiscal year 2005 Water and Related Resources
  Appropriation, Central Valley Project.

    Location and Description.--CALFED is a collaborative effort among 
25 State and Federal agencies and representatives of California's 
environmental, urban, and agricultural communities to improve water 
quality, fish and wildlife habitat, and water supply reliability in the 
San Francisco Bay/Sacramento-San Joaquin River Delta (Bay-Delta), the 
hub of the State's water distribution system. The Bay-Delta is 
California's principal source of drinking water for more than 22 
million Californians, supplying irrigation water for the State's $27 
billion agricultural industry, and is the largest wetland habitat and 
estuary in the West supporting 750 plant and animal species. 
Ultimately, California's trillion-dollar economy is at risk if 
environmental and water management problems to restore the ecosystem 
are not resolved.
    The California Bay-Delta Environmental Enhancement Act (Bay-Delta 
Act), enacted in late 1996, authorized a total of $430 million over 3 
years (fiscal year 1998 to fiscal year 2000) for ecosystem restoration 
activities in the Bay-Delta region. From fiscal year 1998 to fiscal 
year 2000 a total of $190 million was provided through this account to 
support ecosystem restoration, as well as $30 million for other than 
ecological Bay-Delta activities. Existing agency authorities and 
appropriation language in 2002 and 2003 allowed Federal agencies to 
continue Program implementation after the Bay-Delta Act sunseted the 
end of 2000, until such time as the new authorization was enacted in 
2004.
    Project Status.--Lead CALFED agencies released the Final 
Programmatic Environmental Impact Statement/Environmental Impact Report 
and Preferred Alternative on July 21, 2000. Stage 1 of Phase III 
implementation activities (the first 7 years of a 30-year program) 
began with the signing of the Record of Decision (ROD) on August 28, 
2000, formally approving a long-term plan for restoring the Bay-Delta 
ecosystem and improving water management. Program components include 
ecosystem restoration, watershed management, water supply reliability, 
storage, conveyance, an environmental water account, water use 
efficiency (conservation and recycling), water quality, water 
transfers, levees, and science. All aspects of the Program are 
interrelated/interdependent and will incorporate a high level of 
stakeholder participation and science-based adaptive management during 
implementation.
    On October 25, 2004, the President signed the CALFED Bay-Delta 
Authorization Act, Public Law 108-361, authorizing the Secretary of the 
Interior to implement water supply technology and infrastructure 
programs aimed at increasing and diversifying domestic water resources. 
The Act provided Federal authorization through fiscal year 2010 for 
four new and expanded authorities--Environmental Water Account (EWA), 
the Levee Stability Program, specific conveyance projects, and 
oversight activities identified in sec. 103(f)(1) thru (f)(4). The Act 
authorized up to $389 million to be appropriated for these four 
activities, and it requires a number of reporting requirements, 
including annual updates to Congress.
    Additional Capability for Fiscal Year 2009.--The additional $10 
million would be used to support the CALFED Bay-Delta Program to 
provide improved water supply and water quality in the Bay-Delta. The 
full capability presented here represents the specific projects and 
programs that were recommended for implementation in the budget 
request. Reclamation has the capability to use the additional funds 
requested under existing and new authority to support the following 
programs:
    Storage Program.--Reclamation, in coordination with the State of 
California, is continuing feasibility investigations and environmental 
documentation for four proposed CALFED storage projects: Shasta 
Enlargement, Upper San Joaquin River Basin, Los Vaqueros Enlargement, 
and North of Delta Offstream Storage (NODOS; aka Sites Reservoir). 
Planning studies will focus on refinement and evaluation of alternative 
plans, benefit/cost analysis, and environmental compliance. Draft 
Feasibility Reports and NEPA documentation are due for completion in 
2008 and Final Feasibility Reports and environmental documents are due 
for completion and submittal to the Department of the Interior in 2010.
    Conveyance.--Reclamation is continuing feasibility studies for: (1) 
increased capacity of the intertie between the State Water Project 
California Aqueduct and the Central Valley Project Delta Mendota Canal, 
(2) San Luis Reservoir Lowpoint Improvement Project, (3) actions at 
Franks Tract to improve water quality in the Delta, evaluation of a 
screened through Delta facility on the Sacramento River, coordinating 
actions for relocating drinking water intake facilities for in-Delta 
water users, including assessing the feasibility of the project and 
developing a finance plan, and evaluating the environmental benefits of 
re-operating the Delta Cross Channel; and (4) recirculation of export 
water to reduce salinity and improve dissolved oxygen in the San 
Joaquin River.
    Additional funds would be used to support alternative conveyance 
options under the Bay-Delta Conservation Plan (BDCP) and the Delta 
Vision Strategic Plan in coordination with the State of California.
    Water Quality.--Reclamation is continuing implementation of 
activities that will help meet water quality standards and objectives 
for which the Central Valley Project has responsibility. Projects will 
include those within the preferred alternative proposed by the San 
Joaquin River Water Quality Management Group, of which Reclamation is a 
participant. The approach focuses on managing salt loading in the San 
Joaquin River in areas where the highest salt loads originate and 
incorporates an element of real-time management, to manage salt loading 
into the San Joaquin River, while not redirecting impacts to the Delta. 
Specific activities include continued implementation of the Westside 
Regional Drainage Plan, water quality monitoring, wetlands management, 
and other actions identified in the program to meet water quality 
standards and objectives in the lower San Joaquin River. Additional 
funds would be used for implementation of activities that reduce salt 
discharges into the San Joaquin River that are consistent with the 
Westside Regional Drainage Plan.
    Ecosystem Restoration.--Under Ecosystem Restoration Reclamation is 
participating as the Federal co-lead agency for NEPA in the BDCP. The 
BDCP contributes to the objectives of CALFED's Ecosystem Restoration 
Program. BDCP supports planning for projects that improve and increase 
aquatic and terrestrial habitats and improve ecological functions in 
the Bay-Delta system to support sustainable populations of diverse and 
valuable plant and animal species. Additional funds would be used to 
support the environmental documents for alternative conveyance under 
BDCP and in support of implementation of the Delta Vision Strategic 
Plan toward broad restoration of the Delta.
    Science.--Reclamation is continuing to participate as a key agency, 
in coordination with the Interagency Ecological Program (IEP) agencies 
and the CALFED Science Program, with investigations to determine causes 
for the decline in the Delta of pelagic organisms. Reclamation is also 
participating with expert evaluations and scientific assessments of 
Program elements and assisting the CALFED agencies with the 
establishment of performance measures, and monitoring and evaluating 
the performance of all Program elements. Additional funds will 
contribute to Reclamation's participation in both the IEP and the 
Pelagic Organism Decline studies.
    Environmental Water Account.--Reclamation is continuing as the lead 
Federal agency in this cooperative water and operations management 
program whose purpose is to provide protection to the fish of the Bay-
Delta estuary through environmentally beneficial changes in the 
operations of the State Water Project (SWP) and the Central Valley 
Project (CVP), at no uncompensated water cost to the Projects water 
users. The future of an EWA through 2011 is being discussed; a ROD will 
be signed in the next few months at which time the agencies will 
determine the future of an EWA.
    Water Use Efficiency (WUE).--Reclamation does not have the 
authority for a grant program for WUE grants. Any funding would need to 
come with authority to manage such a program.
    Planning and Management Activities.--Reclamation is continuing to 
support administration of storage, conveyance, water use efficiency, 
environmental water account, ecosystem restoration, science and water 
transfer consistent with our CALFED appropriation. Consistent with 
Public Law 108-361, activities also include: (1) Program support, (2) 
Program-wide tracking of schedules, finances, and performance, (3) 
multi-agency oversight and coordination of Program activities to ensure 
Program balance and integration, (4) development of interagency cross-
cut budgets and a comprehensive finance plan to allocate costs in 
accordance with the beneficiary pays provisions of the Record of 
Decision, and (5) coordination of public outreach and involvement, 
including tribal, environmental justice, and public advisory activities 
in accordance with the Federal Advisory Committee Act (5 U.S.C. App.), 
and (6) development of Annual Reports.

               ADDITIONAL CAPABILITY FOR FISCAL YEAR 2009
------------------------------------------------------------------------
                                                President's   Additional
                    Program                       Request     Capability
------------------------------------------------------------------------
Storage Program...............................   $6,450,000  ...........
Conveyance....................................    7,050,000   $4,000,000
Water Quality.................................    5,000,000    3,000,000
Ecosystem Restoration.........................    1,500,000    2,000,000
Science.......................................    3,000,000    1,000,000
Environmental Water Account...................    7,000,000  ...........
Water Use Efficiency (WUE)....................  ...........  ...........
Planning and Management Activities............    2,000,000  ...........
                                               -------------------------
      Total...................................   32,000,000   10,000,000
------------------------------------------------------------------------

    Submission of this capability statement does not reflect 
departmental support. The Department does not support the addition of 
funds for any program or project that would result in the reduction of 
funding for other programs or projects in the President's budget.
    Problem Areas.--These additional capabilities are for Reclamation 
activities only. There are other Federal agencies responsible for 
implementing critical aspects of the Program. For example, funding for 
levee improvement projects in the Delta, which is an important 
component of the CALFED program, is not within Reclamation's authority 
to implement and not part of these additional capabilities.
    Congressional Location and Representation.--State of California
    Congressional Districts.--Statewide
    Senators.--Dianne Feinstein (D), Barbara Boxer (D)
    Congressional Members Requesting Additional Funding.--Senator 
Dianne Feinstein
    Project Name in Hill Request.--Trinity River Restoration (CA)
    Bureau Project.--Central Valley Project Improvement Act/Central 
Valley Project, Trinity River Division (CA)
    Appropriation.--Central Valley Project Restoration Fund
    Authorization.--Public Law 98-541, To Provide for the Restoration 
of the Fish and Wildlife in the Trinity River Basin, California, and 
for Other Purposes, October 24, 1984; Public Law 104-143, Trinity River 
Basin Fish and Wildlife Management Reauthorization Act of 1995, May 15, 
1996; Central Valley Project Improvement Act, Title XXXIV, Public Law 
102-575

                             WATER AND RELATED RESOURCES CVP--TRINITY RIVER DIVISION
                                         [Summarized Financial Data \1\]
----------------------------------------------------------------------------------------------------------------
                                                                      Federal       Non-Federal        Total
----------------------------------------------------------------------------------------------------------------
Approved by Congress 2008.......................................     $10,295,000      $3,039,000     $13,334,000
Budget Request for fiscal year 2009                                   10,317,000       3,133,000      13,450,000
----------------------------------------------------------------------------------------------------------------
\1\ Includes Water and Related Resources only, does not include Restoration funds.


                                    CENTRAL VALLEY PROJECT--RESTORATION FUND
                                         [Summarized Financial Data \1\]
----------------------------------------------------------------------------------------------------------------
                                                                      Federal       Non-Federal        Total
----------------------------------------------------------------------------------------------------------------
Approved by Congress 2008.......................................     $59,122,000  ..............     $59,122,000
Budget Request for fiscal year 2009                                   48,579,000  ..............      48,579,000
----------------------------------------------------------------------------------------------------------------
\1\ The summarized financial data is based on the Central Valley Project Restoration Fund.


                           TRINITY RIVER DIVISION WATER & RELATED AND RESTORATION FUND
                                           [Summarized Financial Data]
----------------------------------------------------------------------------------------------------------------
                                                                        CVP
                                                      Federal       Restoration     Non-Federal        Total
                                                                       Fund
----------------------------------------------------------------------------------------------------------------
Total Estimated Cost \1\........................    $166,432,952         ( \2\ )  ..............    $166,432,952
Allocations through fiscal year 2007 \1\........     107,921,637      $7,126,498  ..............     115,048,135
Approved by Congress 2008.......................       6,938,000       4,000,000  ..............      10,938,000
Budget Request for fiscal year 2009.............       7,140,000       1,000,000  ..............       8,140,000
Balance to Complete after fiscal year 2009......      44,433,315         ( \2\ )  ..............      44,433,315
Amount Requested by Member (S)..................  ..............       4,000,000  ..............       4,000,000
Additional Capability for fiscal year 2009        ..............         600,000  ..............         600,000
----------------------------------------------------------------------------------------------------------------
\1\ Does not include Grass Valley Creek (Buckhorn Debris Dam).
\2\ N/A.

    Location and Description.--The Trinity River Division is located in 
Trinity County in northwestern California. The Trinity River 
Restoration Program was initiated in 1984 to restore and maintain the 
fish and wildlife stocks of the Trinity River Basin to levels that 
existed just prior to construction of the Trinity River Division. The 
Central Valley Project Improvement Act of 1992 further supported 
restoration objectives, acknowledged the Federal Government's trust 
responsibilities, specified minimum releases of 340,000 acre feet per 
year, and established completion dates for a Flow Evaluation Study. The 
current phase of the program resulted from the Trinity River Mainstem 
Fishery Restoration Environmental Impact Statement and Record of 
Decision (ROD) signed on December 19, 2000. It calls for establishment 
of a strong science program, significant physical/mechanical 
restoration actions in the mainstem, as well as increased releases to 
the river from the historical 25 percent up to 48 percent of the 
average annual inflow to Trinity Reservoir.
    Project Status.--Significant progress has been made in many aspects 
of the program, with four bridge modifications completed and open to 
traffic (April 2005), one house acquired and relocated (March 2006), 
and all floodplain infrastructure modifications completed to allow for 
peak releases of up to 11,000 cubic feet per second (cfs) depending on 
water year type (April 2007). The largest release for fishery 
restoration purposes since completion of the dams in 1963, 7,000 cfs, 
was made on May 10, 2005, followed by an even larger release of 10,200 
cfs in May 2006. Construction of the first major channel rehabilitation 
project (over 1 mile in length) was completed in November 2005. Four 
sites were constructed in 2006, and three more in 2007. Eight channel 
rehabilitation sites will be constructed in the summer and fall of 
2008, with an additional eight sites planned for 2009. The remaining 23 
rehabilitation sites are in the initial planning stages and scheduled 
for construction at the rate of 6-8 per year during the period of 2010 
to 2012. Fisheries and related studies have been funded at $4.0 to $4.5 
million per year with the objective of monitoring long term progress 
toward juvenile salmonid production goals, habitat creation, returning 
adult spawners, and harvest.
    Additional Capability for fiscal year 2009.--Reclamation has the 
capability to use an additional $600,000 in fiscal year 2009 funds to 
fully obligate the channel rehabilitation construction contracts 
planned for the summer of fiscal year 2009, resulting in important new 
fishery habitat. Planning, design, and environmental compliance 
activities for the next set of channel rehabilitation projects 
scheduled for fiscal year 2010-2012, and related monitoring activities 
in fiscal year 2009 are adequately funded.
    Submission of this capability statement does not reflect 
departmental support. The Department does not support the addition of 
funds for any program or project that would result in the reduction of 
funding for other programs or projects in the President's budget.
    Problem Areas.--Earmarking of funds in the Restoration Fund could 
impact other programs and projects. Funding priorities of the 
Restoration Fund are established through a deliberative process, 
including stakeholder input that assesses the relative benefits and 
urgency of restoration and infrastructure projects that are competing 
for funds.
    Congressional Location and Representation.--State of California
    1st Congressional District.--Mike Thompson (D)
    2nd Congressional District.--Wally Herger (R)
    Senators.--Dianne Feinstein (D), Barbara Boxer (D)
    Congressional Members Requesting Additional Funding.--Senator 
Dianne Feinstein
                              rural water
    Question. You funded only two rural water projects in your budget. 
Can you explain the rational for this?
    Answer. The fiscal year 2009 President's budget balances several 
priorities. This includes funding for ongoing construction projects 
such as rural water, while maintaining existing infrastructure and 
other ongoing priorities, all within the established budget targets. 
The President's budget includes $39 million for rural water projects; 
$26.2 million is allocated to the Mni Wiconi rural water system and 
$12.76 million is allocated to the Garrison rural water supply system.
    The criteria used for funding rural water projects give first 
priority to operation and maintenance of rural water systems. This 
priority is consistent with previously enacted Federal legislation and 
for the protection of the Federal investment. Once operation and 
maintenance needs are met, funds are allocated for rural water 
construction. For rural water construction, the criteria and number of 
considerations consist of two factors: (1) Percent of ongoing projects 
completed, and (2) projects serving tribal communities. These 
evaluation factors allow Reclamation to finish some of the ongoing 
rural water projects within the constrained budget in the near future.
    Question. Don't the Fort Peck/Dry Prairie and the Rocky Boys 
projects in Montana also have a Tribal component? What would it take to 
get them funded?
    Answer. Yes, both projects have tribal components. The Assiniboine 
and Sioux Tribes of the Fort Peck Reservation sponsor for the Fort Peck 
Reservation/Dry Prairie Rural Water System in northeast Montana. The 
Chippewa Cree Tribe of the Rocky Boys Reservation sponsors the Rocky 
Boys/North Central Regional Water System in north-central Montana.
    The outstanding costs for construction of the Fort Peck 
Reservation/Dry Prairie and the Rocky Boys/North Central projects are 
approximately $247 million and $314 million, respectively.
    Within the funding available, Reclamation focused on funding 
projects with greater percentage completion.
    Question. If I am understanding you correctly, these ongoing 
projects need to continue to have Congress add funds to them so that 
maybe they might eventually be far enough along that you might budget 
for them. Correct?
    Answer. The fiscal year 2009 President's budget balances several 
priorities including funding for ongoing construction projects such as 
rural water, while maintaining existing infrastructure and other 
ongoing priorities. Additionally, all projects are within the budget 
targets that have been established. There is no correlation between 
projects included in the President's budget and Congressional write-
ins.
    Question. The Lewis and Clark rural water project has been funded 
for the previous 4 years, even in fiscal year 2007, when the 
administration prepared a spending plan under the continuing 
resolution. Why was this project not funded for fiscal year 2009? It 
certainly makes one wonder if there could have been a hint of politics 
in your decisionmaking process since Senator Johnson is up for 
reelection this year. I realize that this may just be a coincidence, 
but it does make one question the prevailing belief by some folks that 
all recommendations by the administration are merit-based or 
competitive allocations of funding but anything that Congress provides 
is self serving or tainted by political considerations.
    Answer. Given the need to work within the framework of today's 
budget realities, as well as the need to be attentive to priorities 
associated with existing water and power infrastructure throughout the 
West, Reclamation is unable to fund the needs of all of the ongoing 
rural water projects.
    Question. Will the MR&I funding amount that you proposed for the 
Garrison Diversion Unit provide for a useable increment of work on 
either the tribal or non-tribal systems?
    Answer. The funding amount would provide for some increment of work 
for both the State and tribal programs, particularly on smaller 
contract items. Sponsors of larger projects such as the Northwest Area 
Water Supply System, the Southwest Pipeline, and the Standing Rock 
Sioux Tribe's new intake and water treatment plant would likely have to 
find other sources of funding to cost-share construction.
    Question. How long would it take to complete the project at this 
funding rate?
    Answer. The State and the Tribal Municipal, Rural, and Industrial 
grant programs are programs rather than singular projects. Therefore, 
completion is equal to reaching the construction ceilings established 
in the Dakota Water Resources Act.
    Question. How much higher will the cost of the Garrison MR&I 
project be due to this drawn out schedule?
    Answer. The Garrison Tribal and State MR&I are grant programs 
consisting of numerous projects. It is difficult to predict the 
ultimate cost of each project since cost is a function of both funding 
levels and inflation of construction costs. We agree and fully 
understand that total construction costs increase as schedules are 
extended. As an example, the Dakota Water Resources Act increased the 
State MR&I grant program by $200 million in the year 2000. That indexed 
amount is now approximately $260 million.
                           water for america
    Question. We have had to carry language annually for the last 
several years for the granting program that was an integral part of 
Water 2025. Will we be required to carry similar language for the Water 
for America initiative?
    Answer. The Water for America Initiative is largely being 
undertaken within Reclamation's existing authority. Additional 
authority is only needed to provide grants under the Challenge Grant 
Program and the Water Conservation Field Services Program. Reclamation 
transmitted a legislative proposal to the Congress in August 2008. As 
an interim measure, the inclusion of annual authority in the fiscal 
year 2009 appropriations act to issue grants and cooperative agreements 
may be necessary.
                           san joaquin valley
    Question. If the San Joaquin River Restoration Fund legislation is 
not enacted in fiscal year 2009, how will those receipts be allocated 
within the Central Valley Project Restoration Fund?
    Answer. If the $7,500,000 in Friant surcharge receipts are included 
in the Central Valley Project Improvement Act Restoration Fund fiscal 
year 2009 appropriations, the Department would propose that Reclamation 
use the funds to continue on going San Joaquin River Settlement 
activities, within existing authorities.
                               title xvi
    Question. The administration consistently says it is unable to 
support title XVI projects because of funding constraints. How do you 
justify this position on authorized programs and at the same time seek 
funding for unauthorized?
    Answer. Although Reclamation supports efforts to increase local 
water supplies through increased recycled water use, title XVI projects 
must compete with other needs within Reclamation for funding priority 
in the President's budget request. The budget request for $7 million in 
fiscal year 2009 for title XVI reflects a balance of competing 
priorities.
    Question. How much of a backlog currently exists in the title XVI 
Program?
    Answer. Of the 43 title XVI projects specifically authorized and 2 
demonstration projects undertaken through the general authority, 21 
projects are actively being pursued and 4 are complete. The Federal 
cost share for the active projects, after fiscal year 2008, is nearly 
$400 million. The Federal cost share for the 12 projects currently not 
being pursued is estimated at $260 million.
    Question. Of this program backlog, how much water could be 
generated if projects were constructed and operational?
    Answer. The maximum treatment and delivery capacity for the 21 
active title XVI projects is estimated at 640,000 acre-feet per year.
                        research and development
    Question. Do you believe that research and technology 
demonstrations are important to solve our water supply needs?
    Answer. For many years, the Bureau of Reclamation has funded 
internal and external collaborative research focused on improving our 
ability to provide water and power to the American public in a cost-
effective and environmentally sound manner.
    This research has produced great returns on the investment by: 
reducing costs of maintaining Reclamation facilities; improving water 
management and delivery; making new supplies available and affordable; 
reducing water losses; increasing power generation; reducing 
environmental impacts; and increasing the safety of workers.
    Demonstrations are an important factor in gaining confidence in new 
tools and solutions. Water users and stakeholders often employ research 
and technology as a result of a successful demonstration. The Science 
and Technology Program have funded numerous successful demonstrations 
of research products, including: innovative coatings to prevent 
corrosion on spillway gates; new water supply prediction models; 
biocontrol of salt cedar; new methods to prevent fish entrainment; use 
of ballast filters to keep invasive mussels out of water supply 
systems; application of flow deflectors to prevent stilling-basin 
erosion; and biocontrol of aquatic weeds.
    The Desalination and Water Purification Research program has funded 
external research on advanced water treatment technologies for several 
years. Reclamation provides priorities for the research and technical 
review of research proposals. More than 140 research projects and 
reports have been completed and are available to the public, covering a 
wide range of research and technology development for treatment of 
saline and brackish waters.
    Some of these research studies have been expanded into 
demonstration projects that are of sufficient size to develop more 
accurate estimates of full-scale costs. This has been especially 
helpful when the technologies being demonstrated have been studied only 
in the laboratory or have had limited ``real-world'' testing. This 
demonstration testing has also provided time to identify potential 
institutional, economic, environmental, and social issues.
    Question. Should there be cost sharing requirements these R&D 
projects?
    Answer. Nearly all of the research that Reclamation funds involve 
cost-sharing or contributions from outside partners.
    The Science and Technology Program have partnership contributions 
totaling nearly $5.6 million for fiscal year 2008. This is almost a 
one-to-one match in funding. While cost sharing is encouraged for this 
research, it is not a requirement. This enables us to fund highly 
innovative and high risk research, a special focus of Federal research 
investment.
    Both the Desalination and Water Purification Research program 
(DWPR) and the title XVI program require cost sharing. These are 
programs that provide funding to external non-Reclamation organizations 
to carry out research. The cost share helps to show the commitment of 
the recipient and provides a higher probability that the recipient will 
apply the results. One important exemption is that the DWPR program 
exempts a yearly programmatic limit of $1,000,000 from cost share for 
universities. Without this exemption, it is very difficult for 
universities to find cost share either as cash or in-kind services.
    Question. Where do you think research should be focused?
    Answer. The S&T Program focuses on the challenge that face 21st 
century water managers, specifically issues that other agencies or the 
private sector are not already researching. These include problems 
related to water supply, water delivery, infrastructure maintenance, 
hydropower production, and decision support. Some research funding is 
reserved for emerging, high-priority issues, such as climate change and 
the spread of invasive mussels into western water systems.
Desalination Research--National Academy of Science Review
    The National Academy of Science has released their report, 
``Desalination: A National Perspective''. The 2 year study was funded 
by Reclamation's Research and Development Office and the Policy Program 
Services Office, along with the U.S. Environmental Protection Agency, 
to examine the state-of-the-art in advanced water treatment 
technologies and recommend priorities for Federal research.
    The review panel recommended that Federal research be focused upon 
the following:
  --Assess environmental impacts of desalination intake and concentrate 
        on management approaches.
  --Develop improved intake methods at coastal facilities to minimize 
        impingement of larger organisms and entrainment of smaller 
        ones.
  --Assess the quantity and distribution of brackish water resources 
        nationwide.
  --Analyze the human health impacts of boron while considering other 
        sources of boron exposure, to expedite water-quality guidance 
        for desalination process design.
  --Research configurations and applications for desalination to 
        utilize waste heat.
  --Understand the impact of energy pricing on desalination technology 
        over time.
    These recommendations are being used to prioritize future 
Reclamation investment in desalination research.
    Research at the new Brackish Groundwater National Desalination 
Research Facility is focused on solutions for concentrate management, 
renewable energy/desalination hybrids, development of small-scale 
desalination systems for rural communities, and technologies for 
treatment of produced waters.
    Desalination and water reuse research being carried out in 
partnership with the WateReuse Foundation is focused on the following 
priority areas: policy, social sciences, and institutional issues; 
microbiology and disinfection; chemistry and toxicology; and treatment 
technologies for water reuse and desalination.
                              desalination
    Question. Can you update us on the status of National Brackish 
Groundwater National Desalination Research Facility? Have any research 
activities been initiated at the facility?
    Answer. The testing and shakedown of systems at the new Brackish 
Groundwater National Desalination Research Facility (BGNDRF) has been 
completed and research activities have begun. Studies are being carried 
out by Sandia National Laboratory on zero discharge desalination. 
Reclamation has been developing a test system and will soon begin 
testing on a new high flux membrane developed under an Office of Naval 
Research Grant. New Mexico State University is developing an improved 
electrodialysis process that will be moved to the BGNDRF for testing. 
The Bureau of Reclamation has been in contact with several 
organizations to discuss ideas for testing.
    A cooperative agreement has been developed with New Mexico State 
University to carry out desalination research at the facility, 
beginning at the start of fiscal year 2009. This provides $1,100,000 to 
carry out research at the BGNDRF, as well as, $2,200,000 for research, 
education, and training/outreach/technology transfer.
                           middle rio grande
    Question. We made changes to the collaborative program in the 
fiscal year 2008 Energy and Water Act, to provide for all of the 
organizations involved in the Middle Rio Grande to more effectively 
work together. Are these changes working as intended? Is there anything 
that can be done to make this program work more effectively?
    Answer. The fiscal year 2008 Energy and Water Act did several 
things for the collaborative program. While all of these changes were 
intended to benefit the program, the long term benefit to the program 
is not yet known. The Act officially established the Executive 
Committee. While lack of permanent authority has not hampered 
Reclamations ability to carry out program activities, explicit 
permanent authority would provide long term stability to the program.
    The Army Corps of Engineers also received their own funding stream 
in fiscal year 2008 for implementing the 2003 Biological opinion and 
the collaborative program long term plan. They still requested program 
support funding from the collaborative program in fiscal year 2008.
    The 15 percent cap on Reclamation's administrative expenses has 
been adhered to in a transparent manner. This no longer appears to be a 
divisive issue for non-Federal program members. The hiring of a new 
program manager and a renewed program focus on fiscal responsibility 
seems to have addressed this situation for the time being.
                            executive order
    Question. I am sure you have looked at the President's Executive 
order (EO) on earmarks. Have you made any determination as to how you 
will comply with this in fiscal year 2009?
    Answer. The Department has made a determination as to how it will 
comply with the Executive order, which is based on direction issued by 
the Office of Management and Budget. OMB guidance provides direction 
relative to operations under the Continuing Resolution for 2009 that we 
are complying with.
    Question. The Executive order indicates that any funding directed 
by Congress is an earmark, but by definition, the President can propose 
the exact same thing and it is not. This is absurd. If we provide 
funding for an authorized project and the administration proposes 
funding for an authorized project, how are the two different?
    Answer. The Executive order identifies the difference in the 
following definition: earmarks are funds provided by the Congress for 
projects, programs, or grants where the congressional direction 
circumvents otherwise applicable merit-based or competitive allocation 
processes, or specifies the location or recipient, or otherwise 
curtails the ability of the executive branch to manage its 
responsibilities pertaining to the funds allocation process. The U.S. 
Supreme Court has made it clear that committee reports and other 
legislative history materials do not bind executive agencies.
    Question. The Executive order appears to have a major impact on how 
we appropriate funding to your agency. If we have to put all of the 
projects in bill language in order to ensure that you comply with 
congressional direction, we will. How will that impact the way you 
execute your fiscal year 2009 program?
    Answer. Based on the Executive order, earmarks that are in law can 
be funded. Earmarks that are not in statute may not be funded unless 
the decision to fund them is based on authorized, transparent, 
statutory criteria and merit-based decisionmaking and to the extent 
consistent with applicable law.
    Question. Can you describe the merit-based or competitive 
allocation process that you use to determine which projects are 
proposed for funding in the budget request?
    Answer. Our process begins at the regional level with a merit-
based, competitive evaluation of projects for funding. The bureau sets 
priorities among the regional requests in order to submit a budget 
request to the Department. At the Department, the bureau's request 
competes with and is prioritized along with the other bureau budgets 
for development of a request that is submitted to the Office of 
Management and Budget. OMB conducts an evaluation and prioritization 
across the Government that leads to the development of the President's 
budget.
    Question. This is somewhat rhetorical, but why is this process 
anymore transparent than how the Congress prepares an appropriation 
bill? Is there public input into your decisions?
    Answer. As part of its Managing for Excellence initiative, the 
Bureau of Reclamation has established a policy on collaboration with 
customers and stakeholders to identify and provide opportunities for 
effective participation, where appropriate, to meet its mission. 
Reclamation meets with customers and stakeholders to develop and foster 
a participative relationship and to provide quality service. The degree 
of collaboration is largely dependent upon the complexity of the issue 
being addressed. Reclamation initiates collaboration at the earliest 
stage possible; and shares information with customers and stakeholders 
prior to key decisions being made.
                            animas-la plata
    Question. What is the status of the Animas-La Plata project? When 
do you anticipate construction to be complete?
    Answer. As of June 2008, the overall project was 62 percent 
complete. Construction work on 3 of the project's primary features; 
Ridges Basin Dam, Durango Pumping Plant, and Ridges Basin Inlet 
Conduit, is progressing well and is approximately 96 percent complete. 
Work is proceeding according to schedule with the mitigation area 
lands, including improvements being transferred into operation and 
maintenance status in October 2008. Progress on the Navajo Municipal 
Pipeline includes award of the first construction contract for 
Horizontal Directional Drilling, achieving a preliminary settlement on 
the construction of the first 7 out of 29 miles of pipeline, and 
nearing design completion on the city of Farmington Reach. Construction 
is expected to be completed in 2012.
                          yuma desalting plant
    Question. We have provided direction for the last several years 
that the Yuma Desalting Plant should be maintained and demonstrated to 
be operated at one-third capacity. What is the status of the plant? 
Will we be able to get to one-third capacity this year?
    Answer. To date, the United States has met salinity requirements, 
established in Minute 242 of the 1944 U.S.-Mexico Water Treaty of 1944 
(Treaty) with Mexico, through bypassing 108,000 acre-feet of saline 
agricultural return flows. Due to the need for more operating 
information about the Yuma Desalting Plant (YDP) and the on-going 
drought in the Southwest, Colorado River water users in the Lower Basin 
and Reclamation began discussing a jointly funded pilot run of the YDP. 
A 90-day demonstration run was completed in 2007, which provided some 
operational information to assist in planning for future operations. 
This jointly funded pilot run is for longer duration and would provide 
additional operating information needed to ascertain future plant 
operation needs and costs.
    The maximum anticipated cost of the run, including preparing the 
plant to operate, is estimated to be at $23 million. Funding partners 
include the Metropolitan Water District of Southern California, 
Southern Nevada Water Authority, and Central Arizona Water Conservation 
District. In return for funding, the partners would receive a share of 
the water produced.
    Preparations are underway for the pilot run of the YDP. The run is 
scheduled in the summer of 2009. Preparations for plant operations fall 
into three major categories: (1) readying the plant, (2) meeting 
appropriate compliance and regulatory requirements, and (3) preparing a 
funding agreement. Plant equipment is currently being inspected, 
tested, and repaired, with costs estimated at $2.6 million. These 
repairs will be completed in order to conduct the run (e.g., 
replacement of selected piping segments and the upgrade of chlorination 
and ammonia systems).
    For the pilot run, the YDP would operate for about 12 months, 
producing an estimated quantity of 30,000 acre-feet of water. 
Operations are currently anticipated to include 1 month to stabilize 
pretreatment, 2 weeks at 10 percent of full capacity, 2 weeks at 20 
percent of full capacity, and 10 months at 33 percent of full capacity.
                             loan guarantee
    Question. I have noticed in your budget that you are providing $1 
million to initiate implementation of the Loan Guarantee Program for 
rural water projects. As more than half of your projects are more than 
50 years old, I expect that this program has raised considerable 
interest in the West. How do you envision this program working?
    Answer. Reclamation is in the process of developing and publishing 
rules for implementation of the program. The law provides for three 
categories of projects: (a) rural water supply projects, (b) repair and 
rehabilitation of Reclamation facilities, and (c) improvements to water 
infrastructure directly related to Reclamation projects.
    Reclamation's budget request for fiscal year 2008 considered only 
category (b) projects, and was intended as a pilot year for the 
program. However, because the final rule has not been published yet, we 
expect to use the fiscal year 2008 budget request to accomplish 
necessary program outreach efforts as well as provide training for 
agency personnel in fiscal year 2009. In addition, we anticipate 
initiating a few pilot projects in fiscal year 2010. Following 
development of detailed eligibility criteria for category (a) projects, 
Reclamation's future appropriation request will include funding for 
these rural water supply projects as well.
    Generally, the steps involved in issuing loan guarantees will be as 
follows: (1) Reclamation will estimate the need and potential requests 
of eligible projects as identified in the statute, and make 
appropriations requests accordingly; (2) Reclamation will determine if 
a borrower's proposed project can be considered under the criteria 
given in the statute and the rules being developed; (3) Borrowers will 
apply for a loan from a lending institution; (4) The lender will 
determine whether the borrower meets its risk criteria; (5) Once the 
lender approves the application, the borrower and lender will meet with 
Reclamation to request consideration for a loan guarantee; (6) 
Reclamation will review the application based on prioritization 
criteria to be identified in the rules, as well as availability of 
appropriations, and approve or deny the request; (7) Following 
approval, and completion of all other requirements, such as 
environmental compliance, permits, etc. a final notice of guarantee 
will be issued to the lender and the loan funds will be disbursed.
    Question. What will be the eligibility criteria?
    Answer. Eligibility criteria are being developed through the formal 
rulemaking process, and will include factors such as financial 
capability for repayment, engineering need and feasibility, historical 
diligence in performing routine O&M, environmental impacts, and 
efficiency opportunities.
    Question. Will this solve the recapitalization problems for many of 
the older projects in the West?
    Answer. The loan guarantee program will not likely solve all of the 
recapitalization problems of older projects in the West, but it will be 
a valuable tool to assist in meeting this challenge.
                                 ______
                                 
              Questions Submitted by Senator Patty Murray
                      odessa subarea special study
    Question. I am pleased to see that the Odessa Subarea Special Study 
is progressing on schedule and that the Bureau last month released the 
``Appraisal-Level Investigation--Summary of Findings'' report. It is my 
understanding that this report identified the water supply and delivery 
alternatives that have been selected for further study. And I was happy 
to see that the President's budget included funding for this important 
study.
    Now that you have narrowed down the alternatives to be studied, can 
you please tell me how this better understanding of what remains to be 
done will shape your timeline?
    It is my understanding that now that the path forward has become 
more clear, an increase in the annual funding level will be needed to 
make sure that the study is completed in a timely fashion. Can we 
expect to see future requests from the Bureau to reflect this?
    Answer. An expedited study schedule has been developed at the 
request of the State of Washington to respond to commitments it has 
made to constituents to seek a solution as quickly as possible to 
address the urgency of the declining Odessa Ground Water Aquifer. 
Reclamation plans to complete feasibility-level engineering 
investigations; economic analyses; environmental compliance activities, 
including requirements for National Environmental Policy Act 
requirements under the expedited study schedule Reclamation would 
prepare a combined planning report and final environmental impact 
statement by the end of fiscal year 2011.
    Given the current budget climate it will be difficult to fund the 
study at the level needed to complete on schedule (fiscal year 2011). 
The State of Washington has been Reclamation's Study partner and has 
provided substantial funding to date for the Study which is one of its 
highest priorities in the Columbia River Basin.
        columbia basin project, potholes supplemental feed route
    Question. As you know, the Columbia Basin Project is an important 
tool for farmers in my home State of Washington. And securing a 
reliable water supply for the Potholes Reservoir is a key element to 
ensure efficient operation of the Project. I worked with my colleagues 
to include funding for the Potholes Reservoir Supplemental Feed Route 
in the fiscal year 2008 appropriations bill.
    Can you please tell me how the Bureau is currently working to carry 
out its efforts on the Supplemental Feed Route and how this fits into 
your larger list of priorities at the Project?
    Answer. The Columbia Basin Project is designed to collect return 
flows in Potholes Reservoir from irrigation in the northern half of the 
project for delivery to the southern half. Return flows do not provide 
all the water for the southern half and have to be augmented by direct 
feed from water pumped from the Columbia River at Grand Coulee Dam. The 
feed route, developed in 1980, has served well but is strained due to 
increased demand and water conservation measures that reduced returns. 
Reclamation completed a study funded by the State of Washington to 
evaluate and select a supplemental route that could supply one quarter 
of the yearly average feed need.
    With the completion of the study, the State provided funds to 
enlarge a road crossing on the Frenchman Hills Wasteway. This work was 
completed in March 2008 and will provide a supplemental feed capacity 
of approximately 25,000 acre/feet when land acquisition is completed. 
On the Crab Creek portion of the supplemental feed route, the State is 
providing funds to study sedimentation into Moses Lake. This study is 
underway and will be completed next year.
    Fiscal year 2008 funds are being used to begin the purchase of land 
rights and to design and develop specifications for several 
improvements needed to implement the supplemental route. Improvements 
include: an outlet structure on Pinto Dam and Brook Lake, Grant County 
Road 16 crossing on Crab Creek, and conceptual designs for various 
wildlife enhancements structures along the creek
    Given the current budget climate we have been unable to provide 
funding to this effort. Fortunately, the State as part of their 
Columbia River Water Management Program has been able to make 
significant contributions to assist in this effort.

                          SUBCOMMITTEE RECESS

    Senator Dorgan. The hearing is recessed.
    [Whereupon, at 11:08 a.m., Thursday, April 10, the 
subcommittee was recessed, to reconvene subject to the call of 
the Chair.]
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