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[Senate Hearing 109-17]
[From the U.S. Government Publishing Office]

                                                         S. Hrg. 109-17

                  FISCAL YEAR 2006 BUDGET REQUEST FOR 
                     THE DEPARTMENT OF THE INTERIOR

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

                                HEARING

                               before the

                              COMMITTEE ON
                      ENERGY AND NATURAL RESOURCES
                          UNITED STATES SENATE

                       ONE HUNDRED NINTH CONGRESS

                             FIRST SESSION

                                   TO

 RECEIVE TESTIMONY ON THE PRESIDENT'S PROPOSED FY 2006 BUDGET FOR THE 
                       DEPARTMENT OF THE INTERIOR

                               __________

                             MARCH 1, 2005

                       Printed for the use of the
               Committee on Energy and Natural Resources

                                 ______

                    U.S. GOVERNMENT PRINTING OFFICE
20-826                      WASHINGTON : 2005
_____________________________________________________________________________
For Sale by the Superintendent of Documents, U.S. Government Printing Office
Internet: bookstore.gpo.gov  Phone: toll free (866) 512-1800; (202) 512�091800  
Fax: (202) 512�092250 Mail: Stop SSOP, Washington, DC 20402�090001

               COMMITTEE ON ENERGY AND NATURAL RESOURCES

                 PETE V. DOMENICI, New Mexico, Chairman
LARRY E. CRAIG, Idaho                JEFF BINGAMAN, New Mexico
CRAIG THOMAS, Wyoming                DANIEL K. AKAKA, Hawaii
LAMAR ALEXANDER, Tennessee           BYRON L. DORGAN, North Dakota
LISA MURKOWSKI, Alaska               RON WYDEN, Oregon
RICHARD M. BURR, North Carolina,     TIM JOHNSON, South Dakota
MEL MARTINEZ, Florida                MARY L. LANDRIEU, Louisiana
JAMES M. TALENT, Missouri            DIANNE FEINSTEIN, California
CONRAD BURNS, Montana                MARIA CANTWELL, Washington
GEORGE ALLEN, Virginia               JON S. CORZINE, New Jersey
GORDON SMITH, Oregon                 KEN SALAZAR, Colorado
JIM BUNNING, Kentucky

                       Alex Flint, Staff Director
                   Judith K. Pensabene, Chief Counsel
                  Bob Simon, Democratic Staff Director
                  Sam Fowler, Democratic Chief Counsel
                 Carole McGuire, Deputy Staff Director
                David Brooks, Democratic Senior Counsel

                            C O N T E N T S

                              ----------                              

                               STATEMENTS

                                                                   Page

Akaka, Hon. Daniel K., U.S. Senator from Hawaii..................     2
Allen, Hon. George, U.S. Senator from Virginia...................    44
Bingaman, Hon. Jeff, U.S. Senator from New Mexico................     3
Bunning, Hon. Jim, U.S. Senator from Kentucky....................     2
Burr, Hon. Richard M., U.S. Senator from North Carolina..........    43
Craig, Hon. Larry E., U.S. Senator from Idaho....................    29
Domenici, Hon. Pete V., U.S. Senator from New Mexico.............     1
Landrieu, Hon. Mary L., U.S. Senator from Louisiana..............    32
Murkowski, Hon. Lisa, U.S. Senator from Alaska...................    37
Norton, Hon. Gale, Secretary, Department of the Interior.........     5
Salazar, Hon. Ken, U.S. Senator from Colorado....................     4
Wyden, Hon. Ron, U.S. Senator from Oregon........................    40

                                APPENDIX

Responses to additional questions................................    49

 
   FISCAL YEAR 2006 BUDGET REQUEST FOR THE DEPARTMENT OF THE INTERIOR

                              ----------                              

                         TUESDAY, MARCH 1, 2005

                                       U.S. Senate,
                 Committee on Energy and Natural Resources,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 10:06 a.m. in 
room SD-366, Dirksen Senate Office Building, Hon. Pete V. 
Domenici, chairman, presiding.

          OPENING STATEMENT OF HON. PETE V. DOMENICI, 
                  U.S. SENATOR FROM NEW MEXICO

    The Chairman. The hearing will please come to order. First, 
thank you all for coming. We will try, although there are an 
awful lot of questions about the proposals that were made for 
your budget, we will try to be brief this morning.
    First, I welcome you, Madam Secretary, and I also welcome 
Lynn Scarlett. You are already in the Department, but hopefully 
you will be the Deputy Secretary soon. We hope that your 
nomination can move through here quickly. We are also pleased 
to have the chief budget officer. We welcome you here to the 
hearing.
    Senator Bingaman, this is another one of those kind of we 
have to have hearings, and I thank you for making time today.
    Madam Secretary, I must say that the budget presents a real 
challenge. We sometimes think it is a challenge to this 
committee, and clearly it is, because we are supposed to know 
how the legislation that has been passed is being treated both 
in the budget and in appropriations. Many of the complaints and 
concerns, ideas, that we have here we will not be able to do 
much about unless we move in the Appropriations Committee 
because they are not--the budget is not part of our authorizing 
bailiwick.
    Nonetheless, with non-defense and non-homeland security 
programs held at about 1 percent below current funding levels, 
there are some very major challenges for Federal agencies. 
That's at large. $389 billion are for these appropriated 
programs, and it sounds like a lot of money, but these programs 
are all the rest of the Federal Government's programs except 
the two categories which I just mentioned. These programs 
provide a very wide range of services that many rely upon and 
that you will have to administer.
    The Department of the Interior under the President's budget 
has a total of $10.8 billion. Excluding the emergency fire 
funding of almost $99 million provided for this year, your 
budget is about a freeze. Is that about the way you see it?
    Secretary Norton. Yes.
    The Chairman. But not all programs are frozen, which means 
some are cut very much, some are eliminated, and some are 
increased. The administration proposes to terminate four 
programs. That will save approximately $117 million. 75 percent 
of these savings, about $90 million, would come from the 
termination of a State-wide grant program for the Land and 
Water Conservation Fund. I know that a number of our members on 
both sides of the aisle would have some serious questions about 
that, and I am not sure that that will not face some challenge 
as this budget moves down the line.
    If Congress does not adopt the proposed savings, some of 
the proposed increases for park operations, facilities repair, 
which you have indicated you need, BLM hazardous fuels 
reduction, which a lot of people think is very important, and 
Water 2025--just examples--they would be very hard to achieve 
if you don't achieve the terminations that are contemplated by 
the President.
    The administration's significant savings in mandatory 
programs under this committee's jurisdiction, some $267 million 
for 2006 and $4.1 billion over 5 years, these proposals will be 
discussed during the consideration of the budget resolution. Of 
course, if anyone wants to bring them up it would be good to do 
so today, and I might.
    So I am going to summarize and conclude my remarks. There 
is much more to be said, but we did not come here to hear my 
analysis. We came here to hear what you think about it. With 
that, I am going to yield to Senator Bingaman, and I thank the 
other members for coming.
    Senator Bingaman.
    [The prepared statements of Senators Akaka and Bunning 
follow:]

  Prepared Statement of Hon. Daniel K. Akaka, U.S. Senator From Hawaii

    Thank you, Mr. Chairman, for calling this hearing on the Department 
of the Interior's FY 2006 budget proposal. While there are some bright 
spots in the budget, for the most part there are decreases in too many 
programs that are important for my State of Hawaii and the nation. I 
know there are hard choices to be made, but I am concerned that the 
President's spending priorities for the war on terrorism, the war in 
Iraq, and tax cuts are forcing federal agencies to mortgage the future 
of parks, wildlife, public lands, and partnership programs with States.
    I have some general concerns, which I will note here, and some 
specific questions on other aspects of the proposed budget. I am 
referring to the elimination of the Stateside grants for the Land Water 
Conservation Fund and reductions in the 
Payment-In-Lieu-of-Taxes, or PILT program. State wildlife agencies need 
these funds. My State Department of Land and Natural Resources and our 
Counties in Hawaii need the resources from both of these Funds. Without 
them, Hawaii will have to cut back on programs and services for 
critically endangered species, hunters, and park management. These 
programs are part of the on going partnership with States and State 
wildlife agencies that are the bedrock of sharing revenues. We cannot 
step back from our commitment to States.
                                 ______
                                 
   Prepared Statement of Hon. Jim Bunning, U.S. Senator From Kentucky

    Today's hearing on the fiscal year 2006 budget for the Department 
Interior is important for the protection of our country's natural 
resources. I believe that funding conservation and management of those 
resources will help benefit communities today and preserve our cultural 
heritage for future generations.
    One particularly important program for the State of Kentucky is the 
Abandoned Mine Land (AML) program. Coal mining has been important to 
Kentucky's economy and has helped keep Kentucky's electricity rates the 
lowest in the Nation. AML has helped restore lands and waters impacted 
by mining but were left inadequately restored. Last year we passed a 
temporary reauthorization of the AML program with the hope of 
addressing the details and goals of the program more thoroughly this 
year. I will be interested to hear what your thoughts are for the AML 
program.
    I know that Congress will have the tough job of practicing some 
fiscal restraint. Although fiscal year 2006 will be a challenging one, 
I am confident that we can practice restraint while protecting our 
Nation's resources.
    I thank Secretary Norton and her staff for their hard work and her 
willingness to appear before us today to explain the Department of the 
Interior's budget in detail.
    Thank you, Mr. Chairman.

         STATEMENT OF HON. JEFF BINGAMAN, U.S. SENATOR 
                        FROM NEW MEXICO

    Senator Bingaman. Thank you very much, Mr. Chairman. I 
thank the Secretary and the Deputy Secretary for being here, 
soon to be Deputy Secretary.
    Let me mention four or five issues that I am concerned 
about and I am sure we will hear testimony on. One is this Land 
and Water Conservation Fund. We have had an ongoing 
disagreement about that. It is clear to me the budget that has 
been presented contradicts the purpose of Congress in setting 
up the Land and Water Conservation Fund. The law establishing 
the Land and Water Conservation Fund provides only for two 
types of expenditures within that fund. One is Federal land 
acquisition and the other is grants to the States for open 
space and outdoor recreational purposes. The law also says that 
the Federal land acquisition portion should not be less than 40 
percent of the total Land and Water Conservation Fund 
appropriation.
    This year, instead of asking for full funding, the 
administration has asked for $680 million. Only $154 million 
represents authorized expenditures from that fund, the way I 
read the law. That is one of the smallest proposals in the 
history of the Land and Water Conservation Fund. As the 
chairman mentioned, you do propose to zero out the State grant 
program in that fund, which of course is a serious concern to 
many of our States and I hope is something that the Congress 
will not agree to.
    On PILT funding, I am concerned that the budget you have 
presented proposes cuts in funding for Payment in Lieu of 
Taxes. This again is a very important program for my State and 
for many Western States.
    The Chairman. Senator, which one was that?
    Senator Bingaman. Payment in Lieu of Taxes, the PILT 
program. The budget would roll back hard-fought funding 
increases over the last few years and I think that goes in the 
wrong direction.
    On BLM oil and gas, the chairman convened a conference 
related to natural gas recently and every witness at that 
conference who spoke on the subject, both from industry and 
environmental groups, testified that the BLM needs to be given 
adequate resources to do its job with regard to leasing 
activities. I was disappointed that the budget requests cuts in 
that area.
    On abandoned mine land fees, I notice that your budget 
assumes the continuation of the abandoned mine land fee at the 
current rate. That fee is scheduled to expire June 30 of this 
year. Mr. Chairman, I hope we can move ahead and pass 
legislation to extend that fee. It is an extremely important 
program.
    On water issues, let me just express my concern there about 
proposed cuts in the Bureau of Reclamation water resources 
budget. These cuts have very serious implications for many of 
our communities, particularly in the arid West. As I read the 
budget, the President is proposing a 6.7 percent cut in 
Reclamation's overall budget, a 6 percent cut in the water and 
related resources accounts of Reclamation, a 3.3 percent cut in 
Geological Survey's budget for water resource investigations.
    I realize the Department has this Water 2025 Program. The 
reality of the budget, though, is that the $13 million increase 
that the President is seeking for the Water 2025 Program does 
not come close to offsetting the $19 million that are proposed 
for cuts from various studies, from water conservation and 
endangered species activities, the $29 million cut in rural 
water projects, the $16 million cut in water reuse projects, 
and the $5.3 million cut in desalination and water purification 
funding.
    I know the committee, Mr. Chairman, has scheduled a 
conference dedicated to water issues on April 5 and at that 
time I hope we can solicit some testimony from stakeholders 
about their views as to the proper level of funding for some of 
these activities.
    Thank you.
    The Chairman. Thank you very much, Senator.
    Does any other Senator want to make some observations early 
on or would you prefer to have the Secretary testify? Senator, 
would you like to proceed in the normal manner, let them go and 
then we ask our questions, or do you want to comment now?
    Senator Salazar. I have an opening statement.
    The Chairman. Of course.

          STATEMENT OF HON. KEN SALAZAR, U.S. SENATOR 
                         FROM COLORADO

    Senator Salazar. Thank you for appearing here today and 
when we get to the question and answer period I will have 
questions for you on the Land and Water Conservation Fund, the 
cut in PILT payments, and also the lack of investment from my 
point of view in the oversight of oil and gas exploration 
activities on BLM lands.
    I have an opening statement and I would just submit that 
for the record, Mr. Chairman.
    [The prepared statement of Senator Salazar follows:]
   Prepared Statement of Hon. Ken Salazar, U.S. Senator From Colorado
    Thank you, Mr. Chairman. Good morning to members of the committee 
and welcome Secretary Norton. Secretary Norton hails from Colorado and 
served as Colorado's Attorney General from 1991 to 1999, after which I 
was honored with the opportunity to serve as Colorado's Attorney 
General for six years.
    The Department of Interior manages over eight million surface acres 
and over twenty-five million subsurface acres in Colorado. These lands 
include our Bureau of Land Management holdings, our seven National 
Wildlife Refuges, our four National Parks, and numerous National 
Monuments, Recreation Areas and Historic Trails. So, as you can see, 
the proper funding and priorities of the Department of the Interior is 
critical to Colorado.
    Last week, I was home in Colorado. I traveled over 2,000 miles and 
conducted 17 meetings with local leaders, elected officials, and 
citizens from Colorado's 64 counties. During the week, I repeatedly 
heard from Coloradans about priorities related to public lands, natural 
resources, and the environment. These Coloradans told me loud and clear 
about their concerns with the President's budget and what it 
potentially means for Colorado. Specifically the people of Colorado are 
concerned with the President's retreat from funding major priorities 
such as Payment in Lieu of Taxes (PILT), the Land & Water Conservation 
Fund (LWCF), and oversight of oil & gas development.
    If the President's budget is enacted without changes, these poor 
choices in prioritizing funding in the Department of the Interior's 
budget will hurt Colorado.
    The Payment in Lieu of Taxes (PILT) Program provides money to our 
communities that include Federal lands (such as National Forests and/or 
Bureau of Land Management lands) to offset losses in property taxes. 
This program provided over $17 million in 2004 to 36 rural and mountain 
counties in Colorado. Yet, the President's budget would cut this 
program by 12%, a move that was opposed by 57 Senators (including 22 
Republicans) in 2004.
    At the same time, the President is eliminating state grants in the 
Land & Water Conservation Fund. These grants are what Great Outdoors 
Colorado (GOCO) partners with to provide Colorado with outstanding open 
space and recreation opportunities such as Roxborough State Park, the 
Great Sand Dunes National Park, and projects in almost every Colorado 
County. This failure to fund the LWCF is a betrayal to a shared 
commitment to invest in the preservation and protection of our public 
lands.
    Colorado is also experiencing rapid growth in energy production 
with a significant amount of BLM lands currently leased for oil and gas 
exploration and production. This growth has created challenges for our 
local communities. Colorado is striving to play an important part in 
our domestic energy production, while maintaining our natural heritage 
and quality of life that attracts our residents, visitors, and 
businesses. However, the current Administration seems intent on issuing 
more oil & gas well permits, without providing the needed funds for 
inspectors and inspections to insure our public lands and public 
resources are developed in a safe and responsible manner.
    I am hopeful that we will have the opportunity to address these 
issues today with Secretary Norton. Thank you.

    The Chairman. Thank you very much.
    Let us proceed. Madam Secretary, we will make your 
statement a part of the record and we would very much 
appreciate it if you would summarize it perhaps in 10 minutes 
if you could.

STATEMENT OF HON. GALE A. NORTON, SECRETARY, DEPARTMENT OF THE 
              INTERIOR; ACCOMPANIED BY LYNN SCAR-
 LETT, ASSISTANT SECRETARY FOR POLICY, MANAGEMENT AND BUDGET; 
          AND JOHN TRESIZE, DIRECTOR, OFFICE OF BUDGET

    Secretary Norton. Good morning, Mr. Chairman and members of 
the committee. I am pleased to be here with Lynn Scarlett and 
John Tresize to present our budget for 2006. Before I get into 
the regular discuss of our budget, I would like to highlight a 
very significant development that has impacts potentially on 
our budget. This is a ruling that we received from the district 
court, Judge Lamberth, in the Cobell litigation last Wednesday. 
This litigation, as you will recall, is dealing with our 
handling of individual accounts managed for Native Americans 
deriving from lands held in trust by the United States for 
individual Indians.
    Judge Lamberth reinstituted an injunction that was 
previously issued on September 23, 2003. It orders the 
Department of the Interior to perform a very expansive 
accounting of individual Indian trust accounts and assets. This 
accounting requires us to go back to 1887 and verify every 
single transaction that has taken place since then. This 
undertaking involves finding and indexing millions of records, 
canceled checks, invoices, leases, ledgers, documents like 
that. Many are currently housed in Federal facilities in 
Albuquerque and in Lee Summit, Missouri, but other records will 
have to be obtained from those who have leased Indian lands, 
like oil and gas companies, timber companies, farmers, and 
ranchers. The judge has ordered us to develop a plan for 
subpoenaing documents from those entities.
    Other records are held by Indian tribes or by individual 
Indians. These records will presumably also need to be 
acquired. We will need to index and electronically image these 
documents so that they can be effectively utilized by 
accountants.
    The Department estimates that the cost for completing this 
accounting, just the cost for the indexing, the imaging, and 
the work by accountants, would be $10 to $12 billion. To put 
that into perspective, the entire budget for the Bureau of 
Indian Affairs is $2.2 billion. Though our budget contains an 
increase to carry out our plan for historical accounting, our 
budget was clearly not designed to include the billions of 
dollars envisioned by the judge.
    As you may recall, in September 2003 the judge's order was 
stayed by the court of appeals and also by an appropriations 
rider adopted by Congress. The court of appeals later held that 
the appropriations rider, the way that it was structured, took 
away the jurisdiction for Judge Lamberth's original order. So 
the court of appeals essentially just blessed the congressional 
action, but did not look at the underlying merits of Judge 
Lamberth's order.
    There was a deadline of December 31, 2004, on the 
congressional action and when that expired the judge 
reinstituted his order.
    We are continuing discussions with the Justice Department 
on the courses of action that are available to us. Our efforts 
to improve the trust management system and to perform 
historical accounting have been a high priority for us. The 
Department's combined appropriations for Bureau of Indian 
Affairs and the Office of Special Trustee have increased by 8 
percent during our term compared with 2 percent in the 
Department's overall programs. The programs that are directly 
related to trusts have increased by 97 percent.
    We have a chart here showing that trend. The upper pink 
level of the chart is the unified trust budget, its 
expenditures in Bureau of Indian Affairs, Office of Special 
Trustee, and other agencies that deal with trusts. It shows 
that in comparison to the blue, which is the overall Bureau of 
Indian Affairs budget. This amount has increased from 9 percent 
in 1996 to 25 percent of the Indian Affairs budget, the BIA 
budget.
    Interior is aggressively pursuing historical accounting 
activities. Results to date indicate that there are differences 
involving both overpayments and underpayments, but they tend to 
be infrequent and small. A net of about $1.5 million in 
differences has been found after analyzing a throughput of $15 
billion, which includes both tribal and individual funds.
    We have engaged in mediation of this litigation, but the 
vast gap between what we are finding as we actually look at 
historical accounting of very few discrepancies compared to the 
plaintiff's allegations that we owe $176 billion has made 
settlement very difficult.
    The litigation focuses to a large extent on what 
instructions Congress gave Interior through the 1994 Indian 
Trust Fund Management Reform Act and earlier statutes. Congress 
has the ability to clarify these instructions.
    As we look at the possibility of settling this litigation, 
we have a historic opportunity to fix some longstanding 
problems in Indian country, like fractionated land ownership 
that hampers economic development. We can modernize antiquated 
arrangements that cause us to spend over $100 a year to manage 
an account with 50 cents, or to spend an average of $5,000 in 
probate costs to distribute estates worth as little as 11 
cents.
    I am pleased that Chairman McCain and Chairman Pombo are 
making this a high priority and I hope that appropriators will 
also continue their interest so that we can reach a bipartisan 
solution. I sincerely hope Congress will take this opportunity 
to resolve this dispute.
    We have been working to improve our trust processes and 
they have been reengineered to provide more efficient, 
consistent, and integrated service to beneficiaries. The 2006 
budget continues to strengthen Indian trust management by 
investing $591 million in the program, an increase of $80 
million over the 2005 appropriation. But again, this is far 
different than the amounts that are contemplated in the judge's 
order.
    Beyond our Indian trust responsibilities, Interior's 
mission is multi-faceted and complex. Our overall 2006 request 
for programs funded by this subcommittee is--our overall 
request is $10.8 billion or about 1 percent below the 2005 
level. The lands managed by Interior provide unparalleled 
outdoor recreational opportunities for individuals. 
Approximately 477 million people from all over the world 
visited Interior lands to hike, bike, canoe, camp, fish, and 
learn about the Nation's history, culture, and natural places.
    Our budget includes an increase of $33 million to respond 
to growing demands for recreational activities on public lands. 
In December of last year, the President signed the Federal 
Lands Enhancement Recreation Act into law. This law builds upon 
the recreation fee demonstration program. It provides for a 10-
year extension of the recreation fee, which will improve 
recreation visitor amenities on public land.
    The new act also provides safeguards. It mandates that fees 
be charged only at appropriate locations and that they be spent 
on infrastructure and services that directly benefit the 
public.
    In addition to enjoying outdoor recreation on public lands, 
more and more Americans are visiting historic and cultural 
sites. Currently 26 States have some form of heritage tourism 
program. The National Park Service offers several programs that 
focus on historic preservation. The 2006 budget contains $66 
million for historic preservation and heritage tourism, 
including $12.5 million for Preserve America. Initiated by the 
President and First Lady, Preserve America recognizes community 
efforts to develop sustainable uses for their sites and to 
develop economic and educational opportunities related to 
heritage tourism. To date over 200 communities in 34 States 
have been designated as Preserve America communities.
    Interior is one of the few Federal agencies that takes in 
more money than it spends. The key generator of revenues is 
responsible energy development. In 2006 Interior will help meet 
America's energy needs by providing appropriate access for 
exploration and development on Federal lands and portions of 
the outer continental shelf, expediting permitting and right of 
way processing, and encouraging development of clean renewable 
energy.
    Our 2006 budget provides $530 million for energy programs 
through appropriations and user fees, an increase of $22 
million. The budget assumes enactment of legislation to open 
the 1002 area of the coastal plain in the Arctic National 
Wildlife Refuge to oil and gas exploration and development. The 
U.S. Geological Survey estimates that the entire ANWR 
assessment area contains a mean of 10.4 billion barrels of 
technically recoverable oil. We have a chart that compares the 
estimated ANWR resources with that of other areas. On the 
chart, ANWR is the furthest left column. It is certainly our 
largest potential untapped source of oil onshore, and it has an 
estimated potential that at peak it could produce more than 
Texas, more than Louisiana, more than any other single State 
outside Alaska.
    The current estimates project $2.4 billion in revenues from 
the first bonus bid lease sale in 2007. The Congressional 
Budget Office recently did its own estimate that sales would 
produce bonus bids of $5 billion between 2007 and 2010.
    Consistent with the Government's policy to charge for 
government services where the direct beneficiary can be 
identified, the 2006 budget for the Minerals Management Service 
includes $19 million in new fees charged to offshore energy 
producers. Approximately $13.5 million of this would fund costs 
associated with processing permits.
    The Bureau of Land Management will also increase its fees 
to energy companies for onshore permitting, from $2 million in 
2005 to $11 million in 2006. The proposed BLM energy budget 
would enable them to reduce the backlog of applications for 
permits to drill pending over 60 days from nearly 1,700 to 120 
by the end of 2006. We anticipate that funding increases in the 
BLM energy and minerals program will result in production of an 
additional 47.6 million cubic feet of gas and 804,000 barrels 
of oil over 5 years.
    Protecting wildlife and habitat is one of Interior's most 
important functions. Over the past 4 years Interior has 
promoted cooperative conservation by joining with citizen 
stewards to conserve open space, restore habitat for wildlife, 
and protect endangered and at-risk species. From 2002 to 2005, 
our conservation partnership programs have provided $1.7 
billion for conservation investments, as shown by this chart.
    In the first 3 years of President Bush's administration, 
for example, we have restored, protected, or enhanced over 1.4 
million acres of prairie and upland habitat through two of 
these conservation programs, Partners for Fish and Wildlife and 
the Coastal program.
    The 2006 budget includes $379 million for cooperative 
conservation grant and challenge cost share programs. These 
programs also help us address concerns with endangered species. 
One of the best successes over the past few years was in 
working with sage grouse, where we were able to join with 
conservation groups, farmers and ranchers, States, local 
governments in vigorous efforts to prevent the decline in sage 
grouse population and sage grass habitat. The 2006 budget 
includes a $7 million increase in BLM to strengthen and expand 
partnership efforts to conserve and restore sage grouse 
habitat. We want to make sure that the voluntary sage grouse 
conservation efforts continue for the long term.
    Interior also does restoration work to reclaim abandoned 
mine lands. Today more than 3 million Americans still live less 
than 1 mile from dangerous abandoned coal mines. We want to 
work with Congress to update the Surface Mining Act. Our 2006 
budget facilitates congressional action by providing $148 
million for cleanup of high priority sites and $58 million to 
fairly address longstanding commitments to States and tribes 
that have already achieved their reclamation goals. The 
administration's approach would remove risk to 140,000 people 
annually.
    Interior is also reducing risks to communities adjacent to 
public forests and range lands that face risks of catastrophic 
wildfire. The fire season is always a difficult time, as we see 
people's homes threatened and we fight against nature to 
protect lives and save property. In recent years the buildup of 
unnaturally dense tree stands and underbrush, coupled with 
extended drought in many areas, has increased risk of 
catastrophic fire.
    Through the President's Healthy Forests Initiative and the 
bipartisan Healthy Forest Restoration Act, we have been working 
to reduce hazardous fuels. Over the past 4 years, together with 
the Forest Service, we have thinned over 12 million acres of 
public lands, as much in 4 years as had been accomplished in 
the previous 8 years. The 2006 budget includes an increase of 
$10 million for hazardous fuel reduction projects. Working with 
the Forest Service, we expect to complete more than 4 million 
acres of projects in 2006. We are also engaged in stewardship 
contracting to have public-private partnerships to help us with 
this effort.
    The U.S. Geological Survey plays a significant role in 
providing hazards monitoring. We all were greatly distressed to 
see the tsunami that hit in the Indian Ocean area. Our 2006 
budget proposes $5 million for the USGS to work in partnership 
with the National Oceanic and Atmospheric Administration to 
enhance our early tsunami warning system, to protect U.S. 
coastal residents in the States and the territories.
    I want to conclude by briefly discussing our efforts to 
manage Interior more efficiently and effectively. As public 
demands for our services increase, Interior must continually 
find ways to enhance service and spend dollars wisely. Behind 
all of our programs, out of the limelight, rests a management 
foundation through which we strive to improve program 
efficiency and effectiveness. For example, the financial 
business management system will integrate financial management, 
procurement, property management, and other systems. Today we 
have over 120 different property data bases and 26 different 
financial management systems. Our managers often operate with 
dozens of different information management systems, each 
needing different passwords and different training.
    Our 2006 budget includes $24 million for an improved 
system. Ultimately, we anticipate being able to eliminate some 
80 different information systems, ultimately saving us time and 
money. Through this and other innovations, our bureaus work 
hard to achieve management excellence.
    Our 2006 budget supports our vision of healthy lands and 
water, thriving communities, and dynamic economies. We look 
forward to working with Congress to advance these goals. Thank 
you.
    [The prepared statement of Secretary Norton follows:]

         Prepared Statement of Hon. Gale A. Norton, Secretary, 
                       Department of the Interior

    Good morning. I am pleased to be here to discuss the fiscal year 
2006 budget for the Department of the Interior. I appreciate the 
opportunity to highlight our priorities and key goals.
    The mission of the Department of the Interior is complex and 
diverse. Our 70,000 employees contribute to the Nation's environmental 
quality, economic vitality, and the well being of communities. Our 
mission encompasses resource protection, resource use, recreation, and 
scientific, educational, and other services to communities.
    The Department's geographically dispersed responsibilities are 
inspiring and sometimes challenging. Through our programs, we have 
close connections to America's lands and people. We protect some of the 
Nation's most significant cultural, historic, and natural places. We 
provide access to resources to help meet the Nation's energy and water 
needs, while protecting natural and cultural resources. We provide 
recreation opportunities to over 477 million people annually at our 
parks, refuges, and other public lands. We serve communities through 
science, wildland firefighting, and law enforcement. We fulfill trust 
and other responsibilities to American Indians, Alaska natives, and the 
Nation's affiliated island communities.
    Four principles shape our 2006 budget. First is the power of 
partnerships to leverage resources and achieve results. Second is the 
imperative of fiscal constraint to maintain a dynamic economic context. 
Third is an emphasis on investments that will help Interior work 
smarter, more efficiently, and more effectively. Fourth is the 
importance of funding activities and programs linked to core 
Departmental responsibilities.

                            BUDGET OVERVIEW

    Performance lies at the center of the President's 2006 budget 
request. The President's proposal also demonstrates the fiscal 
restraint necessary to cut the deficit in half by 2009 and maintain the 
Nation's dynamic economy.
    Our 2006 budget request for current appropriations is $10.8 
billion. Permanent funding that becomes available as a result of 
existing legislation without further action by the Congress will 
provide an additional $4.2 billion, for a total 2006 Interior budget of 
$15 billion.
    The 2006 current appropriations request is a decrease of $101.2 
million or 0.9 percent below the 2005 funding level. If contingent 
emergency fire funding provided in 2005 is not counted, the 2006 
request is a decrease of $2.6 million or 0.02 percent from 2005.
    The 2006 request includes $9.8 billion for programs funded in the 
Interior and Related Agencies Appropriations Act, a decrease of $69.7 
million or 0.7 percent from the 2005 level.
    The request for the Bureau of Reclamation (BOR) and the Central 
Utah Project, funded in the Energy and Water Development Appropriations 
Act, is $981.1 million, which is $31.5 million or three percent below 
the 2005 funding level. The Budget also assumes $30 million in direct 
funding from the Power Marketing Administrations for BOR hydropower 
Operations and Maintenance.
    The budget projects receipts collected by the Department in 2006 to 
be $13.8 billion, an increase of $914 million and equivalent to 141 
percent of the Department's current appropriations request to this 
Subcommittee.
    The Department manages over 500 million acres and some 40,000 
facilities at 2,400 locations. These responsibilities engage Interior 
as a principal manager of real property and other assets that require 
ongoing maintenance, direct services to public lands visitors, and 
ongoing activities to ensure public access, use, and enjoyment. A key 
goal of the Department's 2006 budget is to fund pay increases and other 
nondiscretionary cost increases for health benefits, workers and 
unemployment compensation payments, rental payments for leased space, 
and operation of centralized administrative and business systems. 
Providing for these costs will allow the Department to maintain basic 
services while continuing to improve efficiency and effectiveness to 
better serve the public.
    The budget includes $158.6 million for nondiscretionary, fixed-cost 
increases. Of this total, nearly three-quarters, or $115.7 million, 
funds higher pay costs. The budget assumes a January 2006 pay increase 
of 2.3 percent.
    Our budget also includes a number of key initiatives that will help 
us achieve our goals. Key activities include our efforts to:

   Pursue responsible energy development;
   Expand opportunities for cooperative conservation;
   Enhance recreation opportunities on Interior lands;
   Increase forest and rangeland health;
   Continue the clean up of abandoned mine lands;
   Advance trust reform; and
   Reduce risks resulting from natural disasters.

    In his February 2nd State of the Union Address, the President 
underscored the need to restrain spending in order to sustain our 
economic prosperity. As part of this restraint, it is important that 
total discretionary and non-security spending be held to levels 
proposed in the 2006 budget. The budget savings and reforms in the 
budget are important components of achieving the President's goal of 
cutting the budget deficit in half by 2009 and we urge the Congress to 
support these reforms. The 2006 budget includes more than 150 
reductions, reforms, and terminations in non-defense discretionary 
programs, of which four involve Interior programs. The Department wants 
to work with the Congress to achieve these savings.

                           ENERGY DEVELOPMENT

    ANWR Exploration and Development--Our 2006 budget continues our 
quest to achieve healthy lands and water, thriving communities, and a 
dynamic economy. Predictable, readily available supplies of energy at 
reasonable costs underlie both community well-being and economic 
action.
    In 2006, Interior, with Congress' assistance, will help meet energy 
needs by providing appropriate and environmentally sound access for 
exploration and development of the coastal plain of the Arctic National 
Wildlife Refuge (ANWR) and portions of the Outer Continental Shelf; 
expediting permitting and rights-of-way processing; and encouraging 
development and use of clean, renewable energy.
    Interior's 2006 budget provides $530 million for energy programs 
through annual appropriations and user fees, an increase of $22 
million.
    The budget assumes enactment of legislation to open a portion of 
the coastal plain in the ANWR to oil and gas exploration and 
development, with the first lease sale planned for 2007. The U.S. 
Geological Survey estimates a mean expected volume of 10.4 billion 
barrels of technically recoverable oil if Congress lifts the ban on 
development. At peak production, daily production from this area could 
be larger than the current daily onshore oil production of Texas.
    The budget assumes the first ANWR lease sale would produce an 
estimated $2.4 billion in bonus bids in 2007, the same estimate we have 
used for several years. It is based on conservative assumptions. The 
Congressional Budget Office recently estimated the first lease sale 
would produce bonus bids of $4 billion.
    ANWR exploration and development would occur within a 1.5 million-
acre area of the 19 million-acre refuge. The maximum amount of surface 
acreage covered by production and support facilities would occur on no 
more than 2,000 acres, or one-hundredth of one percent of the refuge. 
Through increased knowledge, experience, and technological advances, 
the footprint of energy development will be dramatically reduced from 
older development sites on the North Slope. For example, use of 
seasonal ice pads for exploration will limit site disturbance, and 
extended-reach drilling will reduce the number of sites by allowing 
development of over 50 square miles of subsurface resources from one 
single point on the surface.
    The budget includes $1.6 billion for resource use to better meet 
the increasing demands for water resources, to carry out the National 
Energy Policy, and to maintain appropriate access to other resources on 
public lands. Key initiatives include:

    Minerals Management Service (MMS)--The 2006 budget proposes $290 
million for MMS, a $12.6 million increase over 2005. This total 
includes a request for $167.4 million in annual appropriations and 
$122.7 million in offsetting collections. The proposed budget will 
enhance services and programs that protect the environment and offshore 
workers. It will also enhance methods to collect, account for, and 
disburse revenue from Federal and American Indian lands. The $12.6 
million net increase compared to 2005 includes a $19.0 million increase 
in offsetting collections and a $6.4 million decrease in annual 
appropriations.
    Bureau of Land Management (BLM) Oil and Gas Processing--The 2006 
budget will increase the BLM energy and minerals program from an 
estimated 2005 funding level of $108.5 million in appropriations and 
user fees to a 2006 funding level of approximately $117.6 million. This 
net increase will enable BLM to accelerate the processing time for 
applications-for-permits-to-drill and reduce the permit application 
backlog pending for over 60 days from 1,681 to 120 by the end of 2006.

                             WATER PROGRAMS

    Water 2025--Preventing Crises and Conflicts in the West--The 2006 
budget request includes an increase of $10.5 million for Water 2025, 
for a total funding level of $30.0 million. In many basins in the West, 
water demands for people, cities, farms, and the environment exceed the 
available supply even in normal, non-drought years. The goal of Water 
2025 is to prevent crises and conflicts over water in the West.
    CALFED--The Sacramento and San Joaquin Rivers provide potable water 
for two-thirds of California's homes and businesses, and irrigate lands 
on which 45 percent of the Nation's fruits and vegetables are grown. 
These Rivers also provide water for the Sacramento-San Joaquin Delta, 
which provides habitat for 750 plant and animal species. The CALFED 
Bay-Delta Authorization Act of 2004 provides a six-year Federal 
authorization to implement the CALFED collaborative plan for 
restoration and enhancement of the Delta estuary. The CALFED plan 
provides a long-term solution to the complex and interrelated problems 
in the Bay-Delta and is the foundation for the actions taken by a 
consortium of Federal and State agencies that are focused on goals to 
improve water management and supplies and the health of the ecosystem. 
The 2006 budget includes $35.0 million for the Bureau of Reclamation to 
implement CALFED activities.

                          RESOURCE PROTECTION

    The 2006 budget calls for $2.6 billion for resource protection 
programs that improve the health of landscapes and watersheds, sustain 
biological communities, and protect cultural and natural heritage 
resources. In August 2004, President Bush signed an Executive Order on 
Cooperative Conservation requesting that agencies strengthen efforts to 
work cooperatively with States, Tribes, local governments, and others 
to achieve conservation goals.
    Over the past four years, the Department has encouraged cooperative 
conservation through various grant programs, administrative actions, 
and policies. These efforts emphasize innovation, local action, and 
private stewardship. They achieve conservation goals while maintaining 
private and local land ownership. They foster species protection 
through land management and cooperative, on-the-ground habitat 
improvements, complementing traditional funding of ESA regulatory 
programs.
    Key initiatives in resource protection include:

    Cooperative Conservation Programs--Through partnerships, Interior 
works with landowners and others to achieve conservation goals across 
the Nation and to benefit America's national parks, wildlife refuges, 
and other public lands. The 2006 budget includes $381.3 million for the 
Department's cooperative conservation programs. These programs leverage 
limited Federal funding, typically providing a non-Federal match of 50 
percent or more. They provide a foundation for cooperative efforts to 
protect endangered and at-risk species; engage local communities, 
organizations, and citizens in conservation; foster innovation; and 
achieve conservation goals while maintaining working landscapes.
    Our budget proposes funding for the Landowner Incentive and Private 
Stewardship programs at a total of $50.0 million, an increase of $21.4 
million from 2005. Through these programs, our agencies work with 
States, Tribes, communities, and landowners to provide incentives to 
conserve sensitive habitats in concert with traditional land management 
practices such as farming and ranching, thus maintaining the social and 
economic fabric of local communities.
    Our budget proposes to fund challenge cost-share programs in the 
BLM, U.S. Fish and Wildlife Service (FWS) and NPS at $44.8 million. 
These cost-share programs better enable Interior's land management 
agencies to work together and with adjacent communities, landowners, 
and other citizens to achieve common conservation goals. The 2006 
proposal represents an increase of $25.7 million.
    The challenge cost-share program includes $21.5 million for 
projects that are targeted to natural resource conservation. In 2004, 
the Congress provided $21.2 million for these cost-share grants. 
Leveraged with matching funds, this provided a total of $52 million for 
on-the-ground projects including more than $19 million for projects to 
eradicate and control invasives and weeds.
    For example, in New Mexico, the Bosque del Apache refuge is working 
with the local community to restore riparian habitat along the Rio 
Grande River by eliminating tamarisk on over 1,100 acres.
    We also propose level or increased funding for a suite of other FWS 
cooperative programs: the Partners for Fish and Wildlife program, the 
Coastal program, the Migratory Bird Joint Ventures program, the North 
American Wetlands Conservation Fund, the State and Tribal Wildlife 
grants program, and the Cooperative Endangered Species Conservation 
Fund. These programs support a cooperative approach to conservation 
that emphasizes voluntary partnerships with private landowners, local 
governments, Tribes, and community organizations.
    Sustaining Biological Communities--Targeted increases in the FWS 
and BLM will focus new resources on the recovery of endangered, 
threatened, and at-risk species and increase interagency efforts to 
curtail harmful invasive species. We propose a programmatic increase of 
$1.9 million for general activities in the Fish and Wildlife Service 
ESA recovery program and $7.0 million in BLM to strengthen and expand 
efforts to conserve and restore sagebrush habitat to maintain sage-
grouse populations. An increase of $2.3 million in the FWS, BLM, and 
U.S. Geological Survey (USGS) will support invasive species work on a 
regional basis.
    Klamath River Basin--The 2006 budget commits $62.9 million toward 
finding long-term solutions to water issues in the Klamath Basin and 
proposes an 8.4 percent increase for Interior Department programs in 
the basin. In the short-term, water-supply shortages will continue to 
present challenges. As of mid-February, the snow pack in the upper 
Klamath River basin was 47 percent below average. With depleted 
groundwater supplies and expected continued drought conditions, the 
risks to endangered and threatened fish in the basin persist. We also 
anticipate impacts to the people and communities dependent on the 
river, including upper basin irrigators and downstream Indian and 
commercial fishermen.
    The BOR is currently putting together a water bank of over 100,000 
acre-feet to help meet water needs this calendar year for coho salmon. 
Efforts are also underway to recover listed species and improve 
conditions by restoring the water-retention capability of the riparian 
and adjacent habitat. The budget request includes $7.5 million for the 
FWS Partners for Fish and Wildlife program for these efforts; $6.0 
million for land acquisition to acquire the Barnes Tract, which will 
provide nursery and other habitat for the endangered fish and increase 
water storage in Upper Klamath Lake in most years; and $1.2 million to 
fund pumping necessitated by the removal of Chiloquin Dam to improve 
fish migration and spawning.
    Finally, the budget request includes $500,000 for a FWS prototype 
program to acquire and transfer water rights to the wetlands in the 
Klamath Basin refuges. These key wetlands on the Pacific Flyway depend 
entirely on return flows from the Klamath Irrigation Project. The 
wetlands need a reliable source of clean water as a hedge against 
droughts and to provide a base amount of water to which the return 
flows can be added.
    Everglades Restoration--Within the 2006 request for National Park 
Service (NPS) construction is $25 million for the Modified Water 
Deliveries Project, a key to restoring natural flows in the Everglades. 
Under a new agreement between the Department and the Corps of 
Engineers, the cost to complete the project will be shared by NPS and 
the Corps. The 2006 budget for the Corps includes $35.0 million for 
this project. Over the period 2007 to 2009, the Corps will contribute 
an estimated additional $88.0 million and the NPS an additional $41.0 
million. The 2006 NPS contribution consists of $8.0 million in new 
funding and $17.0 million redirected from unobligated balances for 
Everglades land acquisition not currently needed for high-priority 
acquisitions.
    Abandoned Mine Lands (AML)--Today, more than 3 million Americans 
live less than one mile from dangerous abandoned coal mines. Consistent 
with the Administration's 2005 reauthorization proposal for the 1977 
Surface Mining Control and Reclamation Act, the 2006 budget supports 
the Administration's vision to reauthorize the AML program. The 
Administration's approach would remove risk to 140,000 people annually.
    Our budget provides $147.5 million in AML grants to expedite clean 
up of high-priority sites and another $58.0 million in AML grants to 
address in a fair manner long-standing commitments to States and Tribes 
that have already achieved their reclamation goals. Under the funding 
formulas in the 1977 Act, AML funding is increasingly directed to 
States with significant coal production, but few, if any, abandoned 
mines. The Administration's approach would direct new AML funding to 
reclaim unhealthy and unsafe abandoned mines and provide to States that 
have already completed mine reclamation repayment of their statutory 
share of AML fees collected under the 1977 law.

                  RECREATION AND HISTORIC PRESERVATION

    Lands and waters managed by Interior offer unparalleled outdoor 
recreational opportunities. The BLM, BOR, FWS, and the NPS manage an 
inspiring and diverse collection of natural wonders. For example, in 
2003 our National Wildlife Refuges attracted 2.2 million hunting visits 
and 6.6 million fishing visits. The FWS looks for opportunities to add 
new or expand existing public hunting and fishing programs. There are 
currently 308 national wildlife refuges that are open to hunting and 
270 refuges that are open to sport fishing.
    Overall, the budget includes $1.3 billion in investments for 
recreation programs that will improve visitor services and access to 
recreation opportunities.
    This total includes an increase of $33 million to respond to 
growing demands for recreational activities on public lands, provide a 
safer environment for refuge visitors, and ensure continuous 
enhancements to visitor services at parks. In addition, the budget 
provides $82 million in the operating accounts of the BLM, FWS, and NPS 
to cover increased pay and other fixed costs and maintain existing 
performance and service levels to the public.
    The Federal Lands Enhancement Recreation Act--Passed by the 108th 
Congress and signed into law by the President on December 8, 2004, the 
Federal Lands Recreation Enhancement Act will enable Interior land 
management agencies to improve recreation and visitor amenities on 
public lands. The Act provides a 10-year extension of the recreation 
fee program piloted with the Recreation Fee Demonstration program. The 
Act establishes important parameters for the program to ensure that 
fees are charged only in appropriate locations and revenues are 
appropriately spent on infrastructure and services that directly 
benefit the public.
    The Department is working closely with the U.S. Department of 
Agriculture on key implementation issues, such as development of long-
term, multi-agency fee guidance, and the creation of the new ``America 
the Beautiful Pass'', which will cover entrance and standard amenity 
fees for the five agencies authorized under the Act. The Departments 
are committed to creating a dynamic program responsive to the public 
and Congress during the implementation process.
    In 2006, the Department will continue to transition from the 
Recreational Demonstration Program to the provisions of the new Act. 
Working with the Congress, the Department has established a set of 
principles to guide the program during the transition period. 
Specifically:

   No new fee areas will be created.
   Agencies will conduct an interim evaluation of existing fee 
        sites based on the new criteria and prohibitions.
   The Golden Eagle, Golden Age, and Golden Access Passes, and 
        the National Park Pass will continue to be sold until the 
        America the Beautiful Pass is available.
   Existing Golden Eagle, Golden Age, and Golden Access passes 
        and National Park passes will be ``grandfathered in'' under 
        their existing benefits and will remain valid until expired.
   Specific site, forest and regional passes, such as southern 
        California's Forest Service Adventure Pass, will continue to be 
        available.

    The Act includes criteria and directions that address issues raised 
by the public and members of Congress regarding recreation fees. For 
example, the Act prohibits fees for BLM and the Forest Service for 
general access to national forests and grasslands, access to overlooks 
and scenic pullouts, and areas with low or no expenditures for 
facilities or services. The use of Recreation Resource Advisory 
Committees required by the Act will ensure public input on decisions 
about expanding the fee program by providing the public and local 
communities an opportunity to make recommendations to the BLM or the 
Forest Service on specific recreation fee sites and fees. Public notice 
and participation provisions will guide the Department's efforts to 
conduct a program that is accountable and transparent. Under the Act, 
the vast majority of recreation sites will continue to be free.
    Park Maintenance Backlog--Through President Bush's commitment to 
address the maintenance backlog in parks, over the past four years more 
than 4,000 projects were undertaken to maintain, repair or replace park 
facilities. The 2006 budget includes $716.6 million for construction 
and park facility maintenance, an increase of $29.0 million. Included 
within the increase are an additional $22.2 million for NPS 
construction and $3.4 million in the repair and rehabilitation program 
to repair high-priority historic buildings. Including funds in the 
President's proposal for reauthorization of the Transportation Equity 
Act for the 21st Century, total NPS deferred maintenance funding will 
exceed $1.1 billion in 2006. The 2006 request will bring funding for 
park maintenance over five years to $4.9 billion, as pledged by then-
Governor Bush in 2000.
    Preserving Cultural Landscapes--More and more Americans are 
visiting historic and cultural sites across the nation. In 2002, 81 
percent of adults in the United States included at least one cultural, 
historic, or heritage activity in their vacation plans. Linking 
historic preservation to educational and economic opportunities ensures 
sustained commitment to those places that bring alive our nation's 
cultures and history.
    Through its Preserve America initiative, the Administration is 
recognizing and encouraging heritage tourism as a significant economic 
development and educational activity. Over 220 localities have been 
designated Preserve America Communities, serving as a focus for civic 
pride and a catalyst for preservation. The Administration proposes 
$12.5 million in competitive grants to encourage community preservation 
of our cultural, historic, and natural heritage through education and 
heritage tourism.
    Overall, the budget proposes $66.2 million for the Historic 
Preservation Fund, which includes funding for Preserve America, as well 
as $15.0 million for Save America's Treasures, and $38.7 million for 
grants to States and Tribes. The budget includes an additional $5.0 
million for National Heritage Areas.

                          SERVING COMMUNITIES

    With its broad-ranging responsibilities, Interior's activities 
touch the lives of all Americans. For example:

   Interior's U.S. Geological Survey, the nation's premier 
        earth sciences agency, generates scientific information that 
        helps inform decisions about land and water management. Its 
        hazards monitoring helps reduce risks to communities associated 
        with earthquakes, tsunamis, floods, mudslides, and volcanoes.
   Through performing its responsibilities to Native Americans, 
        Alaska natives, and other communities, Interior helps educate 
        children and enhance the economic well being of these 
        communities.
   Interior's implementation of the President's Healthy Forests 
        Initiative and the Healthy Forests Restoration Act is enhancing 
        forest and rangeland health and reducing risks to communities 
        from catastrophic fires.

    Interior's budget includes $5.1 billion to serve communities by 
improving Indian trust management and services to Tribes and individual 
Indians; providing resources for Indian education and other social 
services, advancing the Healthy Forests Initiative and related wildland 
fire activities; strengthening law enforcement; and enhancing 
scientific and hazards warning information for our agencies and the 
public. Key initiatives include:

    Trust Programs--The budget provides $591.4 million to continue the 
Department's ongoing efforts to reform management of its fiduciary 
obligations to Tribes and individual Indians, to continue historical 
accounting efforts for trust funds, and to reduce the exponentially 
growing costs of maintaining fractionated interests of Indian lands. 
Within this total, the President's budget proposes to increase funding 
for historical accounting from $57.2 million to $135.0 million. An 
increase of $9.6 million would strengthen efforts to address the 
current backlog of unresolved probate cases.
    In the ongoing Cobell lawsuit, last Wednesday, February 23rd, the 
court issued an order reinstating the historic accounting structural 
injunction previously issued on September 23, 2003, directing the 
Department to conduct a far more expansive accounting and requiring 
that it be completed under even more constrained time lines than the 
Department had planned. Preliminary estimates developed by the 
Department estimate the costs to comply with the order at between $10 
to $12 billion. The new injunction requires extensive work beyond what 
is currently budgeted in 2005 or proposed in 2006 to be completed by 
January 6, 2006. In addition to the completion of accounting for all 
judgment and per capita accounts back to 1887 and the completion of the 
accounting for all transactions in land-based accounts back to 1985, 
the court order directs the indexing of all trust-related records 
located at federal facilities in Albuquerque, New Mexico, and Lee's 
Summit, Missouri, the collection of all relevant trust records held by 
third parties, the systems tests related to electronic data gaps, and 
the systems conversion from the Integrated Records Management System to 
the Trust Funds Accounting System. The Department's budget for 2005 or 
2006 is not constructed to address these requirements. The Department 
is in continuing discussion with the Department of Justice on the 
course of action available to the Department.
    Healthy Forests--The 2006 budget supports the President's Healthy 
Forests Initiative with a $211.2 million budget for hazardous fuels 
reduction in the wildland fire program, a net increase of $9.8 million 
over the 2005 enacted level. The hazardous fuels budget includes a 
program increase of $10.3 million for fuels projects, partially offset 
by a scheduled $2.5 million reduction in funding for development of the 
LANDFIRE vegetative mapping and imaging system.
    Funding in the wildland fire program, together with funds for 
forest and range improvement in the land management agencies and the 
Bureau of Indian Affairs, will provide approximately $313.0 million in 
2006 to reduce the build-up of hazardous fuels in the Nation's forests 
and rangelands, reduce the risk of catastrophic fire to communities, 
protect threatened and endangered species, and support other activities 
under the Healthy Forest Restoration Act of 2003.
    Wildland Fire--In addition to funding additional hazardous fuels 
reduction projects, the 2006 wildland fire budget includes increases of 
$15.7 million to fund suppression operations at the 10-year average and 
$5.0 million to maintain the 2004 aviation fleet reconfiguration. In 
total, the 2006 budget for wildland fire management is $756.6 million, 
a net increase of $23.9 million over 2005, not including $98.6 million 
in 2005 contingent emergency funding.
    Rural Fire Assistance--The 2006 budget for Wildland Fire continues 
partnerships with local fire departments, proposing an increase in the 
Preparedness program to provide advance training to local fire fighters 
to help build a ready reserve of local firefighters that can support 
extended attack and thereby improve the effectiveness of Federal 
cooperation with local firefighting agencies. Rural fire assistance 
grants, which provided funds to local fire departments for equipment 
and basic training, are eliminated as a separate funding source in 
anticipation that equipment and training needs of local fire 
departments will be met through the much larger Forest Service and FEMA 
fire assistance programs.
    Tsunami Warning System--As part of a $37.5 million, two-year 
commitment by the Administration to expand U.S. tsunami detection and 
monitoring capabilities, the 2006 budget includes $5.4 million for USGS 
facilities and operations to provide more robust detection and 
notification of earthquakes that could trigger tsunamis. The President 
has submitted a 2005 budget supplemental request proposing $8.1 million 
for USGS to begin work on these enhancements. The balance of the 
funding for the tsunami warning system is in the National Oceanic and 
Atmospheric Administration's budget.
    Landsat--The 2006 budget requests $7.5 million for USGS to begin 
work on an upgraded ground-processing system to acquire, process, 
archive, and distribute data from a new generation of satellite-based 
land image sensors. The first of two Landsat Data Continuity Mission 
sensors will be flown on a NOAA polar orbiting satellite scheduled for 
operation in 2009. To continue the 30-year unbroken record of data on 
the Earth's continental surface collected by the Landsat program, the 
budget also contains a $12 million increase to support continued 
operation of the Landsat 7 satellite in 2006 and to repay a planned 
reprogramming for 2005 Landsat 7 operations. Although Landsat 7 data 
remain valuable and usable, revenue from commercial sale of the data 
that normally supports the Landsat program has sharply decreased as a 
result of the failure of the satellite's scan line corrector.
    Payments in Lieu of Taxes (PILT)--PILT payments are made to local 
governments in lieu of tax payments on Federal lands within their 
boundaries and to supplement other Federal land receipts shared with 
local governments. The 2006 budget proposes $200.0 million for these 
payments. The 2006 request is 60 to 97 percent higher than the PILT 
payments during the 1990s, but is a reduction of $26.8 million from the 
record high 2005 payment level.

                  PROGRAM TERMINATIONS AND REDUCTIONS

    As part of the President's effort to cut the budget deficit in half 
by 2009, the 2006 budget for the Department makes difficult choices to 
terminate or reduce funding for programs that are less central to the 
Department's core missions, have ambiguous goals, duplicate activities 
of other agencies, or require a lower level of effort because key goals 
have been achieved. Terminations and reductions include lower priority 
and one-time earmarks enacted in 2005. Other terminations and 
reductions include:

    LWCF State Grants--The 2006 budget terminates funding for Land and 
Water Conservation Fund State grants, a reduction of $89.6 million from 
the 2005 level. LWCF State grants support State and local parks that 
have alternate sources of funding through State revenues and bonds. As 
the nation strives to trim the Federal deficit, focusing on core 
Federal agency responsibilities is imperative. A 2003 Program 
Assessment Rating Tool (PART) review found the program could not 
adequately measure performance. The 2006 budget continues funding for 
the administrative portion of the grant program at $1.6 million, which 
will be used to review the accountability and performance of grants 
provided in previous years.
    Jobs-in-the-Woods--The budget proposes to discontinue the Jobs-in-
the-Woods program, which was created in the early 1990s as a temporary 
program to assist displaced timber workers in the Pacific Northwest by 
offering resource-based job opportunities to improve water quality and 
restore Oregon's coastal salmon populations. As most workers have 
transitioned and timber sales are increasing, the budget proposes to 
focus resources on programmatic priorities, including offering the full 
allowable sale quantity under the Northwest Forest Plan and supporting 
the Plan's requirement that late-succession reserves be managed to 
stimulate old growth characteristics.
    USGS Minerals Resources Program--The budget reduces funding for the 
USGS Minerals Resources program by $28.5 million. The budget continues 
funding for minerals surveys and studies relevant to ongoing Federal 
energy, land management, regulatory, and remediation activities. 
Funding is reduced for studies and information gathering for regional 
and local activities more oriented to the interests of States, local 
governments, and universities, all of whom are significant users of 
information generated by the Minerals Resources program.
    NPS Statutory and Contractual Aid--The budget does not continue 
funding for $11.2 million in Statutory and Contractual Aid activities 
that are secondary to the primary mission of the National Park Service.

                          MANDATORY PROPOSALS

    Accompanying the 2006 budget are several legislative proposals that 
affect receipt or spending levels in 2006 or in future years. These 
proposals, which will be transmitted separately from the budget for 
consideration by the Congress, include:

    Southern Nevada Public Lands Management Act--The budget proposes to 
amend the Southern Nevada Public Land Management Act of 1998 to return 
70 percent of the receipts from land sales under the Act to the 
Treasury, where receipts from land sales have historically been 
deposited. The Act, as amended by P.L. 107-282, authorizes the disposal 
through sale of approximately 49,000 acres of Federal land in Clark 
County, Nevada. Five percent of the proceeds are provided to the State 
of Nevada for use in the State's general education program and 10 
percent are provided to the Southern Nevada Water Authority for water 
treatment and transmission facility infrastructure in Clark County. The 
remaining 85 percent of funds are deposited in a special account to 
acquire environmentally sensitive lands in Nevada; make capital 
improvements to areas administered by the NPS, FWS and BLM in Clark 
County; develop a multi-species habitat plan for Clark County; develop 
parks, trails and natural areas and implement other conservation 
initiatives in the county; and reimburse the BLM for costs incurred in 
arranging sales and exchanges under the Act.
    The receipts generated by these land sales thus far have been 
nearly eight times higher than anticipated, with future revenue 
projections of almost $1 billion per year. When SNPLMA was originally 
passed, proceeds from land sales under the bill were estimated at 
roughly $70 million per year. Sale proceeds were $530.5 million in 
2004. In 2005, they are estimated to be $1.2 billion, or seventeen 
times the level anticipated in 1998.
    When the law was enacted, there was general agreement that a 
substantial portion of the revenues generated would be spent to acquire 
and conserve other lands around Nevada. However, as land sale receipts 
under the Act have increased in the last few years, the available 
funding has outpaced land acquisition needs. These funds are 
increasingly being dedicated to local projects--and many more projects 
than originally anticipated are being formulated without the 
accountability of further consideration by the Congress.
    The budget proposes that, beginning in 2006, 70 percent of all 
revenues from these lands sales would be returned to the Treasury, with 
the percent of receipts deposited in the special account set at 15 
percent. The amount of revenue currently provided to the State and to 
the water and airport authorities would not change. Total combined 
revenues retained in the State would total 30 percent, with revenues 
for 2006 for these purposes projected at $292.3 million, an amount four 
times larger than original projections in 1998 at time of enactment of 
the legislation.
    BLM Range Improvement--The budget for the BLM proposes to 
discontinue mandatory appropriations from the Range Improvement Fund 
totaling $10.0 million annually. Instead, revenues will be deposited to 
the Treasury. To address rangeland improvement needs, the discretionary 
budget request for BLM includes $6.0 million to focus on projects to 
improve rangeland health conditions, such as weed control, essentially 
replacing funding provided through the Fund. These projects are part of 
the Department's cooperative conservation request and will be matched 
by partners. Other operational increases for the BLM, including $7.0 
million for sagebrush habitat and sage grouse protection and $1.3 
million for invasive weed control, will also support rangeland 
improvement goals.

                   PICK-SLOAN MISSOURI BASIN PROGRAM

    The Administration proposes to re-allocate repayment of capital 
costs of the Pick-Sloan Missouri Basin Program, which is a series of 
hydropower dams, levees, and canals serving several purposes. Power 
customers would be responsible for repayment of all construction from 
which they benefit, whereas to date they have only been responsible for 
a majority but not all of it. Most of the remaining costs are those 
that were originally allocated to irrigation, which was ultimately not 
developed. This change would increase reimbursements from power 
customers by $33 million in 2006, and declining amounts in the 
outyears. Rate increases could be phased in over time.

                         MANAGEMENT EXCELLENCE

    As public demands for Interior services increase--from Indian 
children who need schools to visitors who seek more outdoor 
recreational opportunities on our public lands--Interior must continue 
to enhance service and spend dollars wisely. Behind all our programs, 
out of the limelight, rests a management foundation through which we 
strive to improve program efficiency and effectiveness. The Department 
and its bureaus continue to implement performance improvements.
    Our 2006 budget includes investments in tools to enable our 
employees to do their jobs more efficiently and generate cost savings 
by implementing standardized systems.
    The Department currently uses 26 different financial management 
systems and over 100 different property systems. Employees must enter 
procurement transactions multiple times in different systems so that 
the data are captured in real property inventories, financial systems, 
and acquisition systems. This fractured approach is both costly and 
burdensome to manage. We have underway an integration of our financial 
and business management systems to streamline and modernize basic 
administrative activities.
    Our budget proposes an increase of $9.5 million to support 
continued implementation of the Financial and Business Management 
System that will integrate financial management, procurement, property 
management and other systems. Through this effort, we will reengineer 
administrative processes throughout the Department. As the new system 
becomes fully operational, we will retire over 80 legacy systems and 
replace their functions with standardized business processes within the 
new, integrated system. In 2006, the NPS and FWS are scheduled to 
transition to the new system.
    The 2006 budget includes a $7.0 million increase for continued 
implementation of the Enterprise Services Network. The network 
leverages the existing BIA Trustnet, expanding it Department-wide, to 
provide secure, state-of-the-art internet and intranet connections and 
a fully functional operational center for data communications. In 
addition to providing better services for many Interior offices, the 
system will provide a uniformly secure environment, standardized and 
efficient 24-hour/7-day operations, and improved technical support.

                               CONCLUSION

    The budget plays a key role in advancing our vision of healthy 
lands, thriving communities, and dynamic economies. Behind these 
numbers lie people, places, and partnerships. Our goals become reality 
through the energy and creativity efforts of our employees, volunteers, 
and partners. They provide the foundation for achieving the goals 
highlighted in our 2006 budget.
    This concludes my overview of the 2006 budget proposal for the 
Department of the Interior and my written statement. I will be happy to 
answer any questions that you may have.

    The Chairman. Thank you very much. Well, in spite of your 
early remarks, which took about 5 minutes on the Indian trusts, 
I let you proceed well beyond the 10 minutes.
    I think it is a rather startling explanation of what is 
going on. I personally urge that you do everything possible to 
try to resolve that litigation.
    I remember once in this committee we were talking about the 
costs of Yucca Mountain before we could ever begin to build 
anything and this Senator right here, Senator Craig, said: 
Well, why do we not try something different. Why do we not 
build it and then see if it works, and if it does not work we 
close it up, because we are going to spend more than it costs 
to build it.
    You know, you have just told us that. I think you said over 
time your estimate of doing what the judge ordered might cost 
$10 billion. Well, we cannot pay that out of this budget. You 
are going to have to seek emergency funding or something, 
because we will not have any Bureau of Indian Affairs left.
    But you know, that analogy kind of works. It might be 
better if you could resolve the issue some other way. Maybe the 
Indian people would come out better than getting little or 
nothing but spending $10 billion to study things from 1886--is 
that the date--which you have indicated might be very 
difficult, but might be inconclusive, too. The study might not 
tell us what everybody thinks you are going to get. Is that not 
right? It may not yield what the Indian people think we are 
going to get out of that evaluation. Is that right?
    Secretary Norton. We may find out that the accounting was 
good and there is very little that was owed.
    The Chairman. Well, I cannot imagine----
    Secretary Norton. We had proposed a $335 million accounting 
project that would rely a lot on statistical sampling, and the 
judge said no statistical sampling.
    The Chairman. I cannot imagine going back to those records. 
I cannot imagine going back to records that long ago. Many of 
the records after you look and look and subpoena will not be 
determinative. I mean, many of them will not be there. Who 
knows? But anyway, my suggestion remains.
    I am not going to ask any questions. I am going to start 
with Senator Bingaman and get to the rest of you, and I will 
try to either intervene or wait until the end.
    Senator Bingaman.
    Senator Bingaman. Thank you very much, Mr. Chairman.
    Let me ask, begin by asking about a report that came out 
last week, I believe. This was a report the Inspector General 
issued last October, a very scathing report about the 
Department's handling of a settlement agreement involving 
Harvey Frank Robbins. The Inspector General in that report 
speaks about a senior BLM official having conducted himself 
without concern for the implications of the settlement 
agreement on the range land program, having failed to act 
impartially, having given preferential treatment, and on and 
on. There are various statements in that report.
    We had a problem a year or so ago, as you recall, involving 
the San Rafael Swell land exchange and you got very concerned 
about that, I know, and made a statement that you were going to 
put in place extensive procedural safeguards to ensure that 
decisions are made in a manner that protects the environment 
and the public interest. Obviously, those types of extensive 
procedural safeguards proved inadequate in this circumstance, 
at least according to the Inspector General. I wondered if you 
have taken any action in light of this report that was issued 
by the Inspector General in October to further prevent or 
further ensure that this kind of thing does not happen?
    Secretary Norton. First of all, as to the San Rafael Swell, 
we consolidated our whole appraisal process and so that is 
operated in a centralized way through the Department. That, I 
think, takes away some of the concerns that had existed in the 
past. We put in place a lot of requirements as to the overall 
way in which land exchanges are conducted.
    We have moved to strengthen our Department's ethics office. 
We have moved that to the Solicitor's Office and are operating 
with greater resources in that area as well as reminding people 
on a constant basis that they do need to coordinate with and 
work with the ethics office to make sure their activities are 
appropriate.
    Senator Bingaman. Has any of that been in response to this 
report I am referring to in October? Because in that report the 
Solicitor General said that the attorney in the Solicitor's 
Office ``capitulated to the pressure and intimidation of a 
senior political appointee.''
    Secretary Norton. What I would like to suggest is that we 
provide an individual briefing for you on that, because there 
are some personnel aspects of that that are not appropriate for 
me to discuss in an open session.
    Senator Bingaman. Well, I do not want you to get into 
personnel matters, but I would be interested in anything you 
could tell us about whether you have instituted any new 
procedures since or in response to this report that was issued 
in October?
    Ms. Scarlett. Senator, we have been trying to enhance 
overall our ethics efforts. We have increased the staffing in 
the ethics office, as Secretary Norton mentioned, moved the 
ethics office into the Solicitor's Office, and, once doing 
that, further increased ethics office resources. They have done 
individualized training on an annual basis for all the 
political appointees as well as others.
    Senator Bingaman. Now, this is in response to the IG report 
in October?
    Ms. Scarlett. This is an ongoing set of responses. We began 
these initial improvements several years ago, but as the IG 
continues to raise concerns, we continue to seek ways to 
further enhance the ethics office operation.
    Senator Bingaman. All right, let me go to another subject. 
On Indian water rights settlements, we have a couple of those 
that are quite important in New Mexico, the Navajo San Juan 
settlement and the Amant settlement that we are trying to get 
some closure on. I have been critical in a letter to you fairly 
recently about the Department's lack of serious participation 
in these negotiations. I am advised that one of the problems is 
you do not have a senior policy person who can negotiate on 
behalf of the Department in these Amant cases. The person who 
was doing that has now gone up to be your Solicitor. She is not 
able to hold down two jobs at once and there is nobody who 
really has the time and mission in their job description to get 
out and actually constructively participate in these 
negotiations.
    Is there a way to fix that? I think it is important that 
the Department be constructively engaged in these negotiations.
    Secretary Norton. We are moving to get a new person into 
that position who will be functioning as counselor to me. This 
individual, I think we have announced her. It is someone that 
is well known to Senator Salazar, I believe. It is Jennifer 
Gimbel, who is an attorney, who is a very well-respected water 
lawyer. She is someone that we have worked with from the 
Colorado Attorney General's Office and will be coming in as 
counselor to me and working closely with the Solicitor's 
Office, and so will be able to provide that senior-level policy 
guidance.
    We also have been working within the administration to look 
at how we handle the financial aspects of the settlements. So 
there are ongoing discussions.
    Senator Bingaman. Well, any speed you can add to the 
process would be appreciated. We are moving ahead rapidly to 
get these negotiations completed in New Mexico, we hope, and 
the involvement of the Department of the Interior would be most 
helpful.
    Let me ask on another issue. The Reclamation budget this 
year proposes a 35 percent cut in funding for the Middle Rio 
Grande Project, which Senator Domenici has been very involved 
in. I have as well. It includes a $4 million cut proposed for 
funding for the ESA compliance. This is in fairly sharp 
contrast to the proposal with regard to Klamath Basin. I notice 
that in your testimony you say that the 2006 budget commits 
$62.9 million toward funding long-term solutions to the water 
issues in the Klamath Basin and proposes an 8.4 percent 
increase for Interior Department programs in the basin.
    It strikes me as unfortunate that you are proposing an 8.4 
percent increase there and a 35 percent cut with regard to the 
Middle Rio Grande Project and I would be interested in any 
response you could give us on that.
    Secretary Norton. The cuts in funding for the Middle Rio 
Grande were primarily removing earmarks that had been put into 
the budget, and it is the consistent policy of the Office of 
Management and Budget that earmarks are removed when we do our 
new budget requests.
    Senator Bingaman. I will ask some additional questions in 
the next round, Mr. Chairman.
    The Chairman. Well, I told you all that I was going to let 
you go first, before I did, but I cannot do that. First of all, 
those earmarks you are talking about, Madam Secretary, were put 
in by this Senator. So you can rest assured they will be back 
there. So you might as well figure out how you are going to 
accomplish those projects.
    I want to tell you about Indian water settlements because I 
am very worried. First of all, there is something going on that 
does not seem right. We have gone along here for a number of 
years and whether or not we have been correct, the U.S. 
Government has gotten involved in these water settlements 
involving the Indian people versus surrounding communities, 
districts, private property owners and the like.
    All of a sudden in New Mexico we have a case that has been 
going on for 38 years. It centers around Indian pueblos, and we 
have the Federal Government involved for 38 years--it is not 
your fault; everybody has been on notice. We come up to the end 
and you act like you have never been involved. All of a sudden 
you offer something, an amount of money that will not solve 
one-fifth of the resolution.
    You might be right, but, you know, we do not have anybody 
that is really discussing with any authority or apparent 
knowledge of what is going on. I am here to tell you that I 
respect the President's budget. I am not sure that everything 
in it is what I want, but I do not have any sympathy for the 
Department and the Justice Department for the way they have 
conducted themselves lately on water settlements in our State.
    We helped Arizona get a big settlement. Compared to ours, 
it dwarfs all of them. And we passed it here. No complaints 
from the administration. I assume they are going to find the 
money, $5, $6 billion, a huge amount. Does anybody remember 
what the Arizona settlement is going to cost? $160 million we 
did for Idaho.
    So I just tell you we have got to do something about it. 
The Navajo problem is a major one. We need your people to 
analyze clearly what the significance of the Navajo claim is to 
all the rest of the properties, the States, the cities, because 
their claim is a valid claim, and they say if we do not settle 
they will enforce it. We need to know whether you all 
understand the significance of that claim, because leverage is 
the only way we can settle the case. What is the probability of 
success of that case that permits us to decide, and you, to 
decide what you are going to do?
    So I truly believe this is a terribly important issue and, 
while it is not as much as what you are going to have to spend 
for the 1886 inventory of the trust documentation as to what 
the Government has done, it will be a very large amount of 
money.
    Might I at least ask you to contribute some comment to the 
record, please?
    Secretary Norton. I do concur that Indian water right 
settlements are a very significant issue. We have 19 settlement 
negotiations that Interior is currently participating in. We 
have a process right now that causes us to engage in the 
settlements. Because our Federal process does not provide us 
the opportunity to decide up front how much is allocated to 
individual settlements, that usually comes in as Congress 
considers a settlement. So we do not have the ability 
ordinarily as we are doing settlement discussions for the 
individual who is working on behalf of the Federal Government 
to be able to commit the Federal Government to spending a 
certain amount of money.
    Within that, we have worked to try to resolve issues, to 
work past the many complex issues. But it is usually when you 
get to the final stage of congressional consideration that the 
financial issues are identified. It is a looming issue for the 
West. It has a tremendous impact on many States. We recognize 
that, and we want to continue Interior's longstanding 
commitment to try to resolve those issues.
    The Chairman. Well, Madam Secretary, I am not sure that 
what I hear you saying is reasonable, because if you are out 
there in a 38 year old lawsuit and you have attempted to arrive 
at some conclusions, there may be a number of options. There 
may be some things that the Federal Government would say they 
do not want or cannot do or offer alternatives.
    Now, if we introduce the legislation that comports to be in 
compliance with a major agreement that has been entered into, 
the way you are looking at it the first time we are going to 
hear substantively what you think about it is after the people 
and entities have made commitments and an agreement. I don't 
think that's a very good way to do it. I think there has to be 
more involvement early on so that we have a better idea of 
where we are.
    End of my statement in that regard. Let me move to oil and 
gas production and leasing. We have a problem that we have told 
you about where those who drill and have permits on public land 
for either oil or gas, you and others are saying, let us hurry 
up the permits, let us get out and produce. You do not have any 
problem with this Senator. What you are saying about getting 
rid of the backlog, that is fine.
    But we have some legitimate complaints, some not so 
appropriate, about the permittees, those who are drilling, the 
oil and gas companies, not taking care of their surface 
responsibilities--roads and making sure the area is properly 
attended to. This is not good, because we have had a 
relationship with ranchers and surface owners that has been 
very good and now it seems to be rather clouded on one hand and 
on the other very filled with anguish and anxiety.
    Are you aware of that?
    Secretary Norton. Yes, Senator, I am aware that there have 
been difficulties, especially where we have a split estate 
situation. We have been working first of all with the Western 
Governors Association. We have identified best management 
practices that are to apply as we are making final decisions on 
individual wells that help minimize the impacts from those 
wells.
    We also have been requiring the companies to work with the 
landowners more consistently, with the surface owners, so that 
we have discussions taking place, so that the companies will 
work with the surface owner to try to avoid problems. That has 
proceeded with great success with some companies, but not with 
others.
    We are requiring the posting of a bond by companies that 
are not getting agreements with surface owners. It is still a 
point of difficulty.
    The Chairman. Well, Madam Secretary, let me say, we do not 
yet have a report to our Senators about a site visit by one of 
our staffers. One of our staffers went out there because the 
property owner said: This company does it right, come and see 
it; this company does not do it right, come and see it. I am 
thinking there is going to be a conclusion that they were 
right, and you are suggesting that, some companies are doing it 
right, some are not.
    I submit to you that there ought to be an on the field 
response to some of the complaints, so that you can get, your 
Department can get, a real feel of what is going on. Just do 
not take the complaints, but have somebody go and see, so those 
property owners feel like somebody is listening. Maybe you are 
doing that, but I really suggest that you do it on a random 
basis so people really know that they are going to get looked 
at by a field person of your Department. Otherwise, in all 
deference to those who do the drilling, and we try to help and 
get it done, but they might not do their job right. Thank you.
    Now, I guess next on this is Senator Salazar.
    Senator Salazar. No, Senator Thomas was here before me.
    The Chairman. Were you here, Senator?
    Senator Thomas. I was here. Thank you.
    The Chairman. I made a mistake.
    Senator Thomas. Thank you for being here. It is very 
difficult. We all talk about reducing the deficit and yet we 
have a hard time reducing any of our spending, and I understand 
that.
    Let me ask you several things very quickly and perhaps you 
can respond fairly quickly. As you know, the President had a 
proposal for a number of years to deal with the maintenance 
backlog in the parks, and I wonder how we are doing on that. I 
do not think we have kept up with doing what was promised.
    Secretary Norton. Senator, we have been working toward the 
$4.9 billion backlog commitment that the President made. This 
year's funding should allow us to meet that commitment. A 
portion of the originally identified backlog, a very 
significant portion, was in the highway system. We have 
requested, it is almost a doubling of highway funding for the 
parks as part of the overall highway bill. That of course is in 
limbo until that legislation is passed.
    Senator Thomas. So we need to continue to work on this 
because the Park Service has done a pretty good job of getting 
an inventory of the backlog and now we need to get the work 
done.
    Heritage areas. We are trying to do something with that, 
but it is going on and you have some obligations there. How do 
you expect to provide only $5 million for Heritage Areas when 
the requests and demands are beyond that?
    Secretary Norton. We do know that is a very popular program 
and we have been looking at how we best to foster the kind of 
local heritage tourism efforts that are behind the heritage 
program. The Preserve America program is another way of doing 
that and that works with local communities.
    Senator Thomas. The Department has agreed to usually put in 
$10 million to each one of those areas, which we do not 
necessarily agree with, but that has been the position. And 
this is not enough money to do that, of course.
    Ms. Scarlett. Senator, my understanding is that we have had 
$14 million in total for heritage areas appropriated by the 
Congress. Our $5 million for heritage areas, coupled with the 
$12.5 million for Preserve America, we think would go a long 
way toward advancing heritage goals.
    Senator Thomas. You talk some about AML funds here and so 
on, but you never mention the State share. As you know, the 
States are not getting their share of the 50 percent. Now, I 
guess that is our responsibility, but you seem to have made 
plans for most of the money when in fact half of it belongs to 
the States.
    Secretary Norton. Senator, the $58 million that is in our 
budget for this time is to deal with exactly that. It would 
take the--that number was derived from looking at the promises 
that were made to States and that right now I think is a $580 
million figure, and to basically pay that off over 10 years.
    We recognize that we proposed legislation and a specific 
approach. We want to work with Congress to try to address that 
issue and to be flexible in the way we address that.
    Senator Thomas. Good.
    Secretary Norton. The $58 million was put into our budget 
specifically to show our commitment to address that issue.
    Senator Thomas. The States have about a billion dollars 
coming to them. I do not suppose we will ever get that, but 
that has happened because they have not gotten their share as 
it went along, which is as much our fault as it is anyone 
else's.
    PILT, all of us are concerned about PILT. This is a pretty 
legitimate program. I was in the House and helped raise the 
authorization. These are offsetting taxes that the county would 
otherwise have if it was not Federal land. So reducing that 
seems to be a pretty difficult thing when you talk about 
working cooperatively with local governments.
    Secretary Norton. We had to make some tough decisions this 
year in order to start bringing down the deficit, and that was 
one of the tough decisions that we had to make. We certainly 
recognize the appropriateness of that program.
    Senator Thomas. You basically took it away from the 
counties, as opposed to taking it away from the Department, 
however.
    Secretary Norton. We have made some changes in other 
programs as well. But one thing that I would suggest you might 
want to--I was surprised when I looked at the allocation of 
PILT funding to Colorado counties. It was not what I expected. 
The fact that many counties get funding from our revenue-
producing activities means that a lot of the counties--that in 
many areas the counties that have the most public land also 
share in some of the benefits from our revenue-producing 
activities, and so they should be seeing some additional 
revenues because of that.
    Senator Thomas. It is a concern for most of us.
    Wild horses. Again, we have a problem here. We began to 
solve a little of it, but it certainly is not solved. This 
year's request is substantially below last year's. How do you 
plan to continue to solve the problem?
    Secretary Norton. We have been working to enhance our 
adoption program. We have also been working with Indian tribes, 
with groups that are concerned about wild horses, to find some 
people that might be interested in having, in acquiring, wild 
horses for the long term. So we have got some transfers that 
are taking place or currently being negotiated that would help 
with that.
    So our goal is to reduce the number of horses that are in 
the long-term group.
    Senator Thomas. The problem really, as you know, is the 
numbers, in that we are always spending money gathering the 
horses and then we do not know what to do with them after they 
are gathered. Now we are paying $1,800 each to a rancher to 
hold them the rest of their lives and those kinds of things, so 
it gets pretty expensive.
    At any rate, how about homeland security? I have visited 
Oregon Pipes and I have gotten a notion of how much they are 
spending, for example, on that kind of thing. How much do we 
spend on homeland security out of this budget?
    Secretary Norton. We will find that number for you. 
Overall, we have done a very substantial increase in homeland 
security over the past few years. This year's budget does not 
ramp up in the way that our previous budgets did in order to 
meet the emerging areas.
    Senator Thomas. Do you get anything from the homeland 
security budget for this or does this come out of your budget 
entirely?
    Secretary Norton. The border security, for example, really 
is a responsibility of Department of Homeland Security. We have 
the responsibility for protecting our lands and cooperating 
with the Border Patrol.
    Senator Thomas. Sure, I understand.
    Secretary Norton. So while it is largely their 
responsibility, we do cooperate with that and have increased 
the funding for areas along the border.
    Senator Thomas. Finally, just as a comment on oil and gas 
production, of course the Federal lands get a good percentage 
of that money from the leases and then the percentage on the 
production itself. So it seems a little strange to charge the 
producers now for the administrative costs that you have to put 
in there when you are already getting two sources of revenue 
from that production.
    Secretary Norton. This is a way of recovering the costs 
that are incurred by----
    Senator Thomas. You more than recover your costs, Madam 
Secretary, out of that. It is hard to think that, because the 
consumers pay, you know, of course.
    At any rate, thank you very much and we will be working 
with you on the budget.
    Secretary Norton. Thank you.
    The Chairman. Thank you very much, Senator.
    Senator Salazar.
    Senator Salazar. First of all, Secretary Norton, let me 
welcome you here officially as your successor as Attorney 
General in Colorado. I again congratulate you in your position 
of Secretary of Interior. It is good to see you this morning.
    Secretary Norton. Thank you.
    Senator Salazar. A couple of quick comments before I ask 
you a question. One on the Indian issues that we have been 
talking about. I very much agree with Senator Domenici that if 
there is something that we can do to try to bring to resolution 
the trust fund litigation it would be helpful to our Nation, 
helpful to Interior, and helpful to the tribes, and if there is 
anything that I can personally do on that let me know.
    Second, on the Indian water rights settlements, I 
congratulate you on bringing Jennifer Gimbel on board. She is 
outstanding and will do a fabulous job. I do think there is a 
structural problem relative to how we deal with Indian water 
rights cases in Interior in that we do not have people who are 
assigned to work in those cases for the duration of the period 
of time that it takes to bring those cases to resolution.
    I speak from having worked with you and with Secretary 
Babbitt on cases that have taken multiple years and when you 
have faces that change every couple of years it is hard to have 
the right kind of leadership to bring those cases to 
conclusion.
    So those are the comments that I would make just on the 
tribal trust and water rights issues. Let me ask you a question 
on the Land and Water Conservation Fund. Let me just say that 
the Land and Water Conservation Fund when it was envisioned by 
John Kennedy back in the 1960's I think was intended to create 
the kind of land preservation effort for America that we would 
be proud of for generations and centuries to come. As you know, 
Secretary Norton, in our own State of Colorado I helped draft 
and led the effort to create the Great Outdoors Colorado 
program, and we have been able to protect and to preserve 
hundreds of thousands of acres of land and sensitive biological 
and ecological habitats within our State.
    When I saw the President's budget, which I know that you 
support, and the huge cuts in the Land and Water Conservation 
Fund, I was frankly dismayed, because it seems to me that as we 
move forward with the preservation of our lands with these 
grants that are given to the States to be able to do what they 
can to protect sensitive places, that the budget itself is a 
betrayal to the concept that we had for the Land and Water 
Conservation Fund when it was first created.
    I very much disagree with the President's budget in terms 
of the cutbacks for the Land and Water Conservation Fund. Over 
the years since the 1960's, in your home State and mine we have 
had over 1,000 projects that have been funded through the 
State-side part of the Land and Water Conservation Fund. So I 
would hope that you would revisit and that you, frankly, would 
disagree with the proposal to cut back on the Land and Water 
Conservation Fund.
    Can you please just explain to me the rationale for the 
cutback on LWCF to the States?
    Secretary Norton. This administration came into office very 
enthusiastic about the State-side Land and Water Conservation 
funding and proposed funding of that at $450 million. That was 
not adopted by Congress. We have since that time worked on a 
number of other conservation-type programs, including those 
that go through the States. We have endangered species 
programs, wetlands programs, other wildlife programs that go 
through the State governments as well as those that go directly 
to grant programs with the private sector.
    We recently had a study that was done by the Office of 
Management and Budget to analyze the State-side Land and Water 
Conservation program and to determine whether it was a program 
that had clearly defined goals and was meeting those goals. 
Their conclusion was that it was not. As we looked at the 
allocation of funding across our grant programs, the decision 
was made that it was not as effective as many of our other 
programs. So we have shifted our focus from that program and 
into our other conservation grant programs.
    Senator Salazar. So what you would say, Secretary Norton, 
then is that your decision and recommendation to OMB and to the 
President to do away with the Land and Water Conservation Fund 
State-side programs is something that was determined based on 
what you consider to be the ineffectiveness of that program 
based on the OMB study?
    Secretary Norton. That is correct, yes. That program did 
not fare well as it was analyzed. Some of our other programs 
have very direct and demonstrable benefits and clear goals that 
justified increasing the funding.
    Senator Salazar. I would like to request of you that I get 
a copy of the OMB report that reached those conclusions, and 
also your analysis as to why it is that there was the cutback 
on these State-side programs for the LWCF. I will tell you that 
in my own days of putting together the Great Outdoors Colorado 
program that it was a coalition of the business community along 
with the environmental community that came up with that program 
and the incentives that have been created by Great Outdoors 
Colorado have probably done more for conservation within the 
State of Colorado than almost anywhere else in the country, and 
the creation of these funds on LWCF or State-side grants I 
think acts as an incentive to try to avoid many of the problems 
that historically we faced across the West and across the 
country, where oftentimes we have ended up in litigation over 
takings and regulation when we can avoid that if we can put 
together the right kinds of partnerships that are incentivized 
by money that then leads to conservation with private 
landowners.
    So I would like you to take a look at that again.
    Secretary Norton. We will be happy to provide the 
materials.
    Senator Salazar. Let me move on to another quick area of 
questioning, the Payment in Lieu of Taxes cutbacks. When I look 
at the cutbacks of 12 percent to the Payment in Lieu of Taxes 
program, I am very concerned. Last week I spent time with 
county officials and mayors and city council persons from all 
64 counties of my State that we brought together in regional 
meetings. Without exception, each one of them is gravely 
concerned about what is going to happen to Payment in Lieu of 
Taxes.
    You know, for us, especially in the West, the Payment in 
Lieu of Taxes is I think the keystone to the functioning of 
many of these local governments, where so much of our landscape 
is owned by the Federal Government. You know these counties, 
whether they are the small counties of 600 people in Hinsdale 
or San Juan County or the larger counties like Mesa County that 
have a larger population, there is a huge increment of the 
functioning of those governments to serve their citizens that 
comes from Payment in Lieu of Taxes.
    So my question to you is, I would ask you to provide an 
explanation to all of us with respect to how you decided to 
come up with the kinds of cuts in the Payment in Lieu of Taxes 
program for our States?
    Secretary Norton. The Payment in Lieu of Taxes funding is 
higher than its historical levels by a significant amount. Our 
2006 budget amount is 60 to 97 percent higher than funding 
levels in the 1990's. So we have been increasing that program 
through time and we----
    Senator Salazar. Let me interrupt you. It may be higher 
than it was in the 1990's, but the Payment in Lieu of Taxes, 
Madam Secretary, the program itself has never been fully funded 
to 100 percent. In fact, we have only funded historically a 
very small portion of PILT. What you have done in your proposed 
budget for 2006 is you have proposed a 12 percent cut from what 
was authorized in the previous fiscal year.
    So that the comparison that we are doing more now than we 
were back in the 1990's does not satisfy me with respect to the 
concerns that I keep hearing from many of our colleagues back 
home, from Mesa County and other counties. So I know there is 
going to be a lot more conversation on PILT before we end up 
with the President's budget or with the congressional budget in 
response to the President's budget.
    Secretary Norton. We are all looking for ways to deal with 
the deficit.
    The Chairman. As I understand it now, the next Republican 
is Senator Craig, then Senator Landrieu.
    Senator Craig. Were you here first?
    Senator Murkowski. No.

        STATEMENT OF HON. LARRY E. CRAIG, U.S. SENATOR 
                           FROM IDAHO

    Senator Craig. Thank you.
    Let me add a couple of observations. Let me pick up on 
where Senator Salazar left off. While PILT is not fully funded, 
what we have attempted to do over the last several years is 
accelerate its funding to keep pace with the cost of doing 
business in the counties. If it were static, then all property 
taxes would be static. Property taxes are not static in any of 
these counties and the reason is obvious: the costs of doing 
business are greater.
    But these are very small fee simple counties. They are very 
large public counties. And much of that money, as you know, 
goes to doing what maybe the Government ought to do but we 
would prefer it not do: maintain some roads into those public 
lands, do a variety of other things, including law enforcement 
and in some instances a little fire protection.
    So we will work hard with you, but at the same time, that 
is a program that has worked. If there is some reasonable 
understanding that those dollars may not be flowing, we need to 
know about it. I understand the frustration between counties 
that have oil and still get Payment in Lieu of Taxes funding 
based on property, and counties who have no oil. That is an 
entirely different story and I understand that.
    Also, sometimes we ought to step back and look at programs 
that were passed years ago that maybe do not make sense today. 
How can we in a straight-faced way turn to the American public 
and say we are going to house thousands of head of horses at 
$1,800 a head until death do us part? That was never the intent 
of the Wild Horse and Burro Act. Yet we know that if we let 
them multiply at the rate they do now, they are more destroying 
and damaging to the public lands and to habitat than are proper 
grazing of other domestic livestock.
    We cannot adopt them out any more. People have found out 
that those neat little animals kick the hell out of them. That 
is being blunt about it. Some have been able to be transformed 
into domestic horses. Others have not. The adoption program is 
not the hot topic it used to be.
    So why do you not work with us and get bold about changing 
the public policy? We should not be boarding thousands of head 
of horses for $1,800 a year each. I should quit Congress--not a 
year?
    Senator Thomas. No.
    Senator Craig. Their lifetime, until death do us part, I 
guess. You know, at a ton of hay, a ton and a half of hay, dry-
lotting an animal--I have not fed horses in a good number of 
years, but I know that somebody is making an awful lot of money 
right now off the taxpayers of this country. I am quite sure 
Wild Horse Annie might roll over in her grave if she understood 
that we were now warehousing horses. That was not her intent 
either.
    I came to Congress just after the great episode of the wild 
horses and, frankly, it has not worked.
    Also, on the Cobell lawsuit, this country is not going to 
pay out that kind of money, so why do you not come to us to see 
if there is not some way to solve this legislatively for all 
the parties involved?
    Secretary Norton. We are very happy to work with Congress 
to try to address that. I think it is important.
    Senator Craig. A few of us are willing to be openly and 
publicly bold about issues like this when it costs tens of 
billions of dollars. So we drill ANWR and pay out all the money 
in this kind of a settlement? I think not. That really does not 
make a lot of sense for us.
    But oftentimes those are political hot stones that nobody 
wants to touch, when in fact 40 years after the fact the 
meaning has been lost or the intent is no longer there. It is 
time that we probably ought to revisit some of those issues.
    Let me touch briefly: rural fire assistance grants. We have 
got a problem there. The Forest Service and FEMA are reducing 
rural fire assistance grants by 30 percent. What effect do you 
foresee these reductions having on your partnership with local 
fire departments?
    Secretary Norton. We do have $1.9 million that is for 
training of local firefighters to make sure they are trained to 
do the wildland firefighting, which makes for a more efficient 
division of responsibility. We have an agreement that we have 
negotiated with FEMA and are working to expand to make sure 
that their $500 million in funding is available to work with 
local firefighters.
    We were in the process--we had our own little program doing 
the grants to local fire departments. It really makes more 
sense for the Forest Service to operate its grant program, for 
FEMA to operate its grant program, than to have us also 
duplicating efforts and operating our own smaller program. So 
we want to work with FEMA--and they are willing to work with 
us--through their program to provide some assistance in ways 
that will be beneficial for the wildland firefighting.
    Senator Craig. While I do not disagree with the idea of 
making sure that all agencies involved are working in a 
cooperative manner so there is no duplication, at the same time 
I think we have to appreciate the reality of well-trained 
people on the ground at the point of the spear when fires 
begin. All of those kinds of things are critical, and the 
protection of these small rural communities that have become 
encased within our less than healthy public lands that are 
producing these wildfires today with such magnitude depend on 
the Federal response.
    Let me touch on another issue. I know that in the struggle 
to find resources we oftentimes need to do or you need to do 
things that some of us disagree with. One of those programs 
that I have disagreed with you on is the amenities fee program, 
but over my objection it is now law. That is okay, I guess. I 
do plan to hold oversight hearings later this year, and I want 
the Department on notice that my constituents have not changed 
their mind about being taxed again and again, even though it 
might be called a fee for services rendered.
    So I guess I would ask of you and the agencies involved 
what you plan to do. Let us look at the programs involved and 
how you plan to charge the fees, the point of contact, all of 
those kinds of things. My experience in the past has been very 
clear: The Federal Government has an awfully hard job acting 
like a business, and telling the public that they are getting 
something for the fee charged--and if you are going to charge 
our public for access for a variety of reasons, we have got to 
get pretty good at convincing them that what they get is a good 
deal. And if we do not, I think the idea of objection or 
reaction will continue.
    Secretary Norton. Senator, I look forward to discussing 
that with you further. The successful fee demonstration places 
have been the ones where the public can see very concretely, 
very directly, what the fees are paying for. We have learned 
from some not-so-successful places that it does not make sense 
to charge fees where you are not providing services, you are 
not providing things that the public can see that they benefit 
from.
    The legislation has some requirements to help prevent that 
and we will be establishing recreation advisory councils so 
that the public has some very direct input into the places in 
which fees will be charged. So we look forward to working with 
you to make this a program that is successful and that does 
give the public something that they can see as a benefit.
    Senator Craig. Well, thank you.
    My time is up. I will close in making a couple of comments. 
Thank you for mentioning sage grouse conservation. Your effort 
there has been fantastic. We are working hard now in the Great 
Basin West to make sure that cooperative program continues for 
the benefit of all. That is greatly appreciated.
    Last, a former Secretary of the Interior introduced wolves 
into my State, foreign animals known as Canadian grey wolves, 
and now we have 420 of them by last count, 27 breeding pairs, 
destroying our wildlife, killing our elk and our deer, in many 
instances ravaging our domestic herds. I would hope that you 
and I can gain the political will to delist this species and 
move on with a reasonable approach toward managing them, now 
that they are there. We Idahoans, though, have not yet 
collectively decided to invite those foreigners into our 
presence.
    Thank you very much.
    The Chairman. Madam Secretary, I want you to know that when 
the committee works so hard at grilling you it does not mean 
that we do not think you are doing a good job. You understand. 
These are difficult times and we understand they are tough for 
you, but you must understand they are tough for us, and I think 
you do.
    Secretary Norton. Thank you.
    Senator Craig. Did I not smile while I was asking?
    The Chairman. Only a little bit.
    Senator Craig. Oh, I am sorry. Sorry, Gale.
    Secretary Norton. You smiled. It is okay.
    The Chairman. You do about the same as I do. You know, I 
watch myself and I say, what is the matter with you? Why are 
you not happy? At least I am chairman.
    Senator Craig. I heard a wolf howling in the background.
    The Chairman. Let us see. We are going to have the 
distinguished Senator, Senator Landrieu. Nice to have you this 
morning. Thanks for coming.

       STATEMENT OF HON. MARY L. LANDRIEU, U.S. SENATOR 
                         FROM LOUISIANA

    Senator Landrieu. Thank you, Mr. Chairman.
    It is one of the meetings I look forward to every year, 
talking with our Secretary about so many important issues that 
affect all of our country, not just the interior, but of course 
our coastal communities and our oil and gas-producing 
communities.
    I would like to just thank you for your visits to 
Louisiana, Ms. Secretary, and thank you for your interest in so 
many of the things that we are trying to get done in our State, 
which is not one of the western States that we spend a lot of 
time talking about here, but nonetheless an extremely important 
State to making contributions to energy self-sufficiency and 
independence, or at least getting us closer to the goal of 
independence.
    But I would like to begin just a couple of comments and one 
or two questions. I want to associate myself strongly with the 
remarks of our new Senator from Colorado, Senator Salazar, and 
just thank him for raising the subject and for being so 
articulate in his defense of the State side of the Land and 
Water Conservation Fund, as you know, a program that has been 
supported by Republican and Democratic presidents, Republican 
and Democratic Congresses, since the mid-60's, the program that 
has been responsible for an unprecedented number of parks in 
almost every community in every State, where children and 
families and the businesses, and the business community that 
many times leads these small and medium and large-sized towns 
advocates so strenuously for, because it is all about the 
bottom line of their quality of life.
    Whether it is a ball field or whether it is a fishing pond 
or whether it is a city park or just an area for people to get 
out of the hustle and bustle and bike or trail, these things 
are cherished by Americans, all Americans. There is a majority 
for conservation in this country that defies party lines or 
ideology.
    Senator Lamar Alexander has been of course a tremendous 
advocate. So I am going to be joining and continuing to help 
lead the efforts for restoration of this State side after 
reviewing the document that you will send us from OMB, letting 
us look at it. We do not want to fund programs that are 
unpopular or inefficient, but literally in my life of public 
service I have come across fewer programs that are more widely 
and deeply supported by the breadth of constituents than the 
State side of Land and Water Conservation.
    The Federal side has its advocates and critics based on the 
notion, as you know, of who should own private property. But 
the State side virtually has no enemies and all advocates from 
every different walk of life.
    So I appreciate this administration's initial interest, but 
even when pushback occurs sometimes in public life we just have 
to push on and press on. I think funding for the State side of 
land and water is one of those. So I am going to be joining 
Senator Salazar and look forward to that. But we have expressed 
our strong disapproval of the zeroing out of that extremely 
important program.
    But I would like to ask you about an elimination of another 
small but nowhere near the reach or the money involved, but 
very important I think to another aspect of what people cherish 
in this country. While Americans always look forward and want 
new things and are about building, there is an important effort 
underway for historic preservation in our Nation.
    We have a national center that was created several years 
ago that operates on literally a shoestring of a budget, a few 
million dollars, and the work that it turns out, not just for 
big cities and medium sized cities but small towns, as they try 
to make good decisions about what to raze and what to preserve 
and how best to spend the public dollars so they are not wasted 
and what new technologies can be used, was totally eliminated 
from the budget.
    So I wanted to just ask you if you could explain this 
either lack of awareness on the part of your Department or what 
prompted you all to totally eliminate the only national center 
for historic preservation in terms of technology development 
and transfer?
    Secretary Norton. The Department of the Interior has 
provided in the past for restoration and renovation of the 
building in which that center is funded, and has provided some 
funding for that center in the past.
    Senator Landrieu. Well, would you look into that?
    Secretary Norton. I will look into that and find out some 
more information.
    Senator Landrieu. Would you look into that for me, because 
this center is located in probably one of the most cost-
effective rent districts in the country. This is not in 
Manhattan or in the upper side of Chicago. This is in a rural 
community where the taxpayers of this Nation get a great 
benefit, because the technology that is developed there is able 
then to be spread out to all sorts of public, quasi-public-
private, and private associations that are looking for the 
newest technologies relative to preservation, all about saving 
taxpayers' and individuals' money as we make good decisions 
about what to preserve and what to raze.
    So I would like to ask you to look at that. It was a very 
important program to a former chairman of this committee, 
Senator Bennett Johnston, and continues to be a very important 
program to me and to many of us. I would like to ask you to 
look at that.
    Finally, Madam Secretary, I have to call again to your 
attention the ever-increasing money being generated for the 
operation of all the programs that we are talking about. I 
would ask the staff to maybe give me the page in the budget 
where this is, but I have a pullout that the estimates of the 
offshore oil and gas projections--Mr. Chairman, you will be 
very interested in knowing this--1991, the Federal revenues 
generated from offshore, primarily off the shores of Louisiana, 
Mississippi, and Alabama and Texas, which is the only place 
where there is aggressive current and ongoing offshore drilling 
in the entire continental United States, generated for our 
Nation almost $3 billion, which has gone into many of the 
programs that we support on this committee.
    But in the year 2015 it is projected that that number is 
going to grow from $3 billion to $8.5 billion in rents and 
royalties. So the Nation is benefiting in a direct way. Not 
only is the Nation receiving the oil and the gas to keep our 
industries competitive, but the Nation, your Department in 
particular, which funds about, takes about 50 percent of this 
money to fund all of your operations, from all of the wildfire 
efforts to the preservation of land in the West to the saving 
of the redwood forest in the Northwest to the preservation of 
desert lands to the restoration of the Everglades to the 
restoration of the Chesapeake Bay to the restoration of the 
Great Lakes--all of this money, which represents a half of the 
Department of the Interior's $14 billion budget, is being 
generated off of a piece of land the size, this big 
[indicating] on a map.
    But as you know, Madam Secretary, because you visited and 
you have flown over the lands, the counties that host this huge 
stream of revenue have received less than one-seventh of 1 
percent, one-seventh of 1 percent, of $140 billion since 1950. 
Madam Secretary, this cannot stand. This cannot continue.
    We have tried now in many different ways to be reasonable, 
to be team players, to be supportive. Our Governor has, 
Governors, Republican Governors, Democratic Governors, 
Republican Senators, Democratic Senators, we have supported and 
continue to support so many programs. But Madam Secretary, we 
cannot allow this stream of revenue to continue to come 
directly without supporting the host counties that make it 
possible.
    So we are going to continue to file our bills, continue to 
put forth our amendments. But I ask you to please, as a person 
who understands what we are facing--since President Bush has 
come to office, we have lost, we have lost, 125 square miles of 
America's last remaining coastal wetland, largest last 
remaining coastal wetland, 125 square miles. We lose 25 square 
miles a year.
    So I would just end by saying that this is just not going 
to be able to continue. I am not sure, Mr. Chairman, what our 
nuclear option is. I have considered it. I will not talk about 
that in public, but maybe a nuclear option for the States of 
Louisiana, Texas, Alabama, Mississippi that we may have to come 
up with if we cannot get some obvious relief to this grave 
injustice. Thank you.
    The Chairman. Well, a nuclear option; we look forward to 
seeing what it is.
    Senator Landrieu. We actually have a nuclear option in more 
nuclear power plants, which I suggest. But there was a little 
different approach that I was thinking about.
    But could you just comment briefly and then I am going to 
relinquish the mike.
    Secretary Norton. We are aware of the coastal erosion 
problems that you have raised. We are working through both the 
U.S. Geological Survey and the U.S. Fish and Wildlife Service, 
as well as through other Federal agencies, to study and to 
address those issues.
    The offshore programs are ones that are growing 
significantly. Right now the Federal lands and waters account 
for about a third of our domestic production, but as other 
areas are tapped out there is going to be more and more focus 
on those. Today, about half of our resource estimates for the 
future, about half of our resources, are on Federal lands or in 
our offshore areas.
    Senator Landrieu. How does the Department continue to 
justify the distribution of revenues for onshore Federal lands 
to States like our chairman's, New Mexico, and Wyoming, but not 
to advocate strongly, seeing the benefits of those programs 
over the years to the State of New Mexico and to Wyoming and to 
Utah, observing the benefits of those programs to the States?
    How is it not--how does the Department not feel compelled 
to go to bat for, in a more aggressive way, the coastal States 
of Texas, Mississippi, Louisiana, and Alabama?
    Secretary Norton. There certainly are things other than 
direct revenue-sharing that do benefit those communities. 
Certainly the funding goes into the overall Federal treasury 
that benefits everyone. The employment benefits are those that 
are available in the communities that are closest to the 
production areas.
    Senator Landrieu. Well, I am going to send some 
information. You have been very lenient, Mr. Chairman, but I am 
going to send some information about that, because the indirect 
benefits of either income taxes, payroll taxes, or employment 
do not anywhere come close to compensating the communities for 
the infrastructure, the pull on the infrastructure needs to 
support this huge industry out in the Gulf. I am going to 
provide some data about that, because it really is, Ms. 
Secretary, a misnomer.
    In fact, I ran across a man the last time I was home who 
lived in Maine, who came, flew down to Louisiana to go offshore 
because they work 14 on and 14 off. He had done this for 25 
years, flying down to Louisiana, working offshore, and taking 
his paycheck back to Maine. We are thrilled to help the Maine 
economy, but it is a misnomer that the people of Louisiana 
benefit from all of those tax dollars because it is an industry 
where suppliers from all over the 50 States get a direct impact 
of the work that is done.
    So I am going to leave it there, but we will continue our 
work on an energy bill and one that respects the contributions 
being made by all of our States.
    Thank you.
    The Chairman. Thank you very much, Senator.
    We are going to proceed, but I have asked Senator Thomas if 
he would take over for me shortly and he has indicated he will. 
So if you would just let me do a couple of things as I wrap up 
and then I will turn the hearing over to him. He will take care 
of the remaining two Senators, and if you want an additional 
round, he will be here.
    I ask consent that a letter from Senator Alexander 
regarding ANWR and his thoughts, which have been conveyed to 
OMB Director Bolten, be put in the record.
    [The letter referred to follows:]
                                      United States Senate,
                                     Washington, DC, March 1, 2005.
The Honorable Joshua B. Bolten,
Director, Office of Management and Budget, Washington, DC.
    Dear Mr. Bolten: We are writing to urge you to make it possible in 
the Budget Resolution for 2006 for some of the revenues from ANWR, in 
the event it is opened up for energy development, to go to a reserve 
fund for the stateside Land and Water Conservation Fund (LWCF).
    Specifically, we believe the Budget Resolution should instruct that 
$450 million of revenues be reserved each year for three years for the 
stateside LWCF grant program, beginning in the year in which ANWR 
receipts are first received by the U.S. Treasury. (The stateside LWCF 
state grant program is also known as the National Park Service 
Conservation Grant Account.) In 2003, the Budget Committee created such 
a reserve fund from ANWR receipts for $250 million for five years, but 
the Senate failed to approve ANWR.
    Many of our colleagues are concerned that drilling in ANWR would 
have an environmental impact. This provision would ensure such 
drilling, if it were to occur, would have a significant environmental 
benefit by fully funding the state grant program of the LWCF. These 
funds would be utilized to create state parks and open spaces across 
the country for the use and enjoyment of millions of Americans. This is 
balanced environmental policy--if you impact the environment in one 
place, you should conserve in another. ANWR is owned by the American 
people, and the conservation benefits would be dispersed all over the 
country.
    We look forward to working with you and our colleagues on this 
issue and thank you for your consideration.
            Sincerely,
                                   Lamar Alexander,
                                   Richard Burr,
                                   John Sununu,
                                     U.S. Senators.

    The Chairman. And questions that members have--and I have 
many--will be submitted to the Secretary for response as soon 
as possible.
    I have just one issue that is very imminent in my State 
that I want to put before you and then I will have to leave for 
a while. You are aware in the Middle Rio Grande--which you have 
probably had to learn more about than you ever wished, but you 
will have to keep learning, I am sorry to say we have a problem 
there that we have been involved in for a long time. It has to 
do with the bosque that is up and down the Rio Grande, kind of 
our greenbelt.
    The Corps of Engineers, the Bureau of Reclamation, 
Albuquerque, and the Middle Rio Grande Conservancy District, 
they have all been victim to decades of undermanagement, 
invasive species that have come into that area, and two fires, 
which you are aware of, that have been terrible. Much of this 
area is now included within the habitat of the Southwest Willow 
Flycatcher. I think you have been aware of that.
    Moving forward on that proposal would make it very 
difficult to restore the bosque. There is a bit of a habitat 
restoration inconsistency.
    First, would you support the establishment of a 
conservation program that allows us to continue restoring that 
bosque along the river, which could result in more water in the 
river and would allow the Southwest Willow Flycatcher to nest 
in its native habitat of willow and cottonwood trees?
    Secretary Norton. Senator, I have visited in New Mexico and 
seen one of our projects under way to eradicate the salt cedar 
and the Russian olive as invasive plants and to restore some of 
the native habitat. That is something that we support. We are 
funding through several different parts of the Department of 
the Interior, and we are also working to address some of the 
southwest willow flycatcher issues through some of our 
cooperative conservation funding.
    The Chairman. We are talking now about a conservation area 
that involves what you are talking about, but it also involves 
the bosque and the flycatcher habitat. You indicate you will 
support that, and work on trying to get it done.
    Secretary Norton. Let me find out some more about the 
specific proposal that you are discussing.
    The Chairman. We need to ask you if you would encourage the 
Fish and Wildlife Services to seek an extension of time to 
publish its final rule regarding the flycatcher so that we can 
create this conservation program that is built on a 
collaborative approach to the management of that area.
    Secretary Norton. We would be happy to work with you to 
study that issue some more and to learn some more about that.
    The Chairman. All right. I understand now we will proceed. 
Senator Murkowski is next, Senator Wyden, and then I think 
Senator Burr, is that correct? Oh, then we have the 
distinguished Senator from Virginia.
    Senator Murkowski.

        STATEMENT OF HON. LISA MURKOWSKI, U.S. SENATOR 
                          FROM ALASKA

    Senator Murkowski. Thank you, Mr. Chairman.
    Welcome to you, Madam Secretary. Now, the chairman has 
suggested that we need to be smiling as we grill you this 
morning, and I have to tell you that I can give you a genuine 
smile because I am pleased that the President has included in 
his budget again this year the estimates for the oil and gas 
leasing up in ANWR, the Arctic coastal plain. I know that there 
has been some discussion in the media and apparently on the 
House side as far as the estimates that you have included in 
that budget.
    In my opening statement, which I will ask to be included in 
the record, I guess I am backing you up in the sense that we 
too believe that these numbers are reasonable. In fact, we 
figure that they are probably a bit conservative, given the 
current prices of oil, given what we conclude is the amount of 
economically recoverable oil in the North Slope when we are 
finally able to move forward with that program, and also 
recognizing that the comparison needs to be made to Federal 
leases as opposed to some of the more current State leases.
    So I am pleased to see you discuss that in your opening 
statement this morning and to again address that and include 
that in the budget. We will have an opportunity to go up to 
ANWR at the end of this week. I was just up north yesterday and 
it is cold up there. It is 35 below. Yes, surprise. They say 
it is supposed to get warmer, but I was talking to the Slope 
workers as they were going up on the flight yesterday morning 
and they guarantee me that it is going to be colder. So we will 
make sure that we have gotten your bunny boots ordered and that 
you will be taken care of.
    A couple questions for you, and I wanted to reiterate some 
of the concerns expressed by my colleagues here about PILT and 
the Land and Water Conservation Fund. I had to step outside for 
just a few minutes to meet some constituents from the community 
of Ketchikan and they had no idea what we were taking up in 
here. They said: You need to make sure that we are okay on 
PILT; we rely so heavily on this. I said: I will convey the 
concerns of Alaskans to you.
    I think it was Senator Salazar that had requested this OMB 
report that did address some of the concerns. I too would be 
curious in looking at that. I guess it was Senator Thomas, you 
had mentioned that. But we would like to take a look at that.
    A little bit about ANWR. There was a somewhat interesting 
article in The New York Times about a week ago and they were 
questioning the interest of some of the larger oil companies in 
bidding on ANWR leases. I found the article interesting or 
bemusing, I guess, because I thought that we were proposing to 
open ANWR to promote America's energy independence and not 
necessarily to enhance the operation of the oil companies.
    I guess I would ask your opinion or your feelings about 
whether you feel the industry will show up to bid on the leases 
when we are successful in opening up ANWR to exploration and 
development?
    [The prepared statement of Senator Murkowski follows:]

  Prepared Statement of Hon. Lisa Murkowski, U.S. Senator From Alaska

    Secretary Norton, it is a pleasure to see you again before this 
committee. While I will have a number of questions for you concerning 
the future of funding for several Alaska programs in the President's 
proposed FY '06 budget, let me start on a brighter note.
    I want to congratulate the President and you for again including 
revenues to be gained from oil and gas leasing in the Arctic coastal 
plain in Alaska in your budget for next year.
    I know that some recently questioned the Administration's estimate 
that initial oil and gas leasing in the coastal plain of the Arctic 
National Wildlife Refuge will bring in a total of $2.4 billion in FY 
'07, and more revenue two years later. That is solely from leasing 
bonus bids, not from royalties or taxes from actual oil or gas 
production, which will come on line more than five years after leasing 
begins. I noted, in your prepared testimony, that you defended the 
estimates, noting that the Congressional Budget Office is predicting 
leasing revenues of about $4 billion.
    I would like to say that I also believe the revenue estimates from 
the Office of Management and Budget are conservative, and that I expect 
the CBO estimates may also prove conservative given the advantages that 
ANWR offers to find, economically produce and market oil and gas.
    First, we both know, that according to the U.S. Geological Survey 
that ANWR offers the best chance onshore for a major oil discovery in 
America.
    Given current world oil prices, well above $25 per barrel, your 
agencies have predicted that roughly 90% of the technically recoverable 
oil will be economic to produce. And the estimates for technically 
recoverable oil range from a low of 5.7 billion barrels to a high of 16 
billion, with a 50-50 chance of finding 10.4 billion barrels on the 
Arctic coastal plain.
    And those estimates are based on ANWR allowing recovery of only 35% 
of the oil. At the nearby Prudhoe Bay oil field we likely will be able 
to recover about 65% of the oil. If a similar level of recovery occurs 
at ANWR, we will be looking at a range of from 10 to 27 billion barrels 
of oil recovered, with a mean recovery of 18 billion barrels.
    There is no place on land in America that is anywhere close to as 
prospective. Even with the conservative estimates, the Energy 
Information Agency predicts there is from $125 billion to $350 billion 
of oil likely to be produced from the Arctic coastal plain. Given that 
rate of return, common sense would say that bidding $2.4 billion to 
earn a gross return of 50 to 150 times that amount would be good 
business.
    Secondly, some of my colleagues on the House side last week cited 
statistics that implied that companies generally bid only a few hundred 
dollars per acre for oil leases in Alaska. They looked only at state 
lease sales, generally for less prospective step-out leases, not at the 
federal experience.
    The last time there was even remotely close to as prospective a 
tract up for oil leasing in Northern Alaska was in October 1982 when 
tracts in the Beaufort Sea were on the federal auction block. Companies 
23 years ago, when oil was selling for less than half of its current 
price, bid $2.055 billion for 121 blocks of federal leases during Lease 
Sale 71--ten times what companies bid for a state sale in 1996.
    Given that experience, and the experience the federal government 
had in leasing tracts in 1988 in the highly speculative Chukchi Sea 
frontier area, where bids reached nearly a half billion dollars for 
leases a thousand miles from the nearest means to get any oil to 
market, I have no concerns about the government realizing its current 
estimates for leases on shore, where all the technology is already 
perfected and where a transportation system--the trans-Alaska oil 
pipeline--is literally eight dozen miles away.
    I'm looking forward to traveling with you, Secretary Bodman and a 
number of Senators this weekend to visit ANWR, to inspect the newest 
technology in use at fields in NPRA and to view the original Prudhoe 
Bay field and to meet with residents at Kaktovik, the only village in 
ANWR. It was a bit chilly on the North Slope over the weekend with lows 
hitting minus 35, but the forecast calls for a considerable warming 
trend by this weekend, so hopefully it will be a bit more pleasant than 
during your last winter trip to ANWR four years ago.
    Thank you for being here and I will have a number of questions for 
you during the question rounds.

    Secretary Norton. Well, first of all, Senator, I agree with 
you that it is the American government and the American public 
that needs to be concerned about America's domestic production 
and our reliance on foreign oil. The multinational oil 
companies can look wherever they want to around the world for 
their sources. So having our own domestic supply is a uniquely 
American concern.
    I think one thing people need to understand about our 
leasing process is that at the time we actually do leasing, 
first of all, this area would be open and so the legal 
situation would be clear. Second, we would have some additional 
seismic information on which the bidding would take place. So 
the companies would presumably evaluate that information. If 
there are large resources appearing to be present from 
additional work, then I certainly anticipate the companies will 
have tremendous interest. If the seismic work shows there is 
nothing there, then the concerns people have about the effects 
on the area will clearly fade away.
    Senator Murkowski. Until we get in there to explore, we are 
not going to know for certain. So that is why it is so 
important that we move forward. I appreciate your willingness 
to work with us on this, the President's support on this issue, 
and your willingness to come up North next week.
    Moving to some legislation that I had introduced last year 
and the President has signed into law, this is the Alaska Land 
Transfer Acceleration Act. This legislation was designed to 
facilitate the transfer of lands that the Federal Government 
owes to the State, to our native corporations, and to native 
allotment applicants by the fiftieth anniversary of Alaska's 
statehood, which will be in 2009.
    As we were working through this legislation last year, we 
all recognized that in order to accomplish this goal of 
transferring these lands it was going to take a very focused 
effort. It was my understanding that the Department was 
prepared to commit the resources necessary to achieve this 
objective. But in looking at the budget, there is a proposal to 
cut the appropriation for BLM's Alaska conveyance program by $9 
million. In looking at your briefing book, you state that the 
rationale is to return the pace of the program to the more 
sustainable level, which confuses me.
    It does not make sense because we passed the Land 
Conveyance Act prior to the formulation of the 2005 budget. So 
I guess what I need to know is that you are still committed to 
achieving the goals set forth in the Land Transfer Conveyance 
Act and whether we can do it if we are going to cut the budget 
in this area?
    Secretary Norton. We are still committed to moving forward 
with transfers and do still support the act. Our funding level 
is getting us to the same level that the administration 
requested last year, as our current funding. We have through 
the act that was passed some tools that now make the process 
more efficient, and so we should be able to function in a more 
efficient way.
    Senator Murkowski. Well, we do recognize that we did put in 
place those tools to create efficiencies. But we also recognize 
that we have got about 89 million acres that have yet to be 
conveyed. We have some considerable survey issues, as you know. 
The complicated land ownership makes this process more 
cumbersome. If it takes additional people, if it takes 
additional funding for surveys, we need to do what it takes.
    The promise to us at statehood was that we were going to 
get these lands. We figure 50 years is plenty of time to make 
these conveyances and we want to know that we will have that 
assistance from the Department to make that happen.
    Secretary Norton. We will work with you on that, and we 
will work to see that things like the ability for our 
Department and native corporations to establish a boundary 
without need for a survey, that that sort of tool will be 
utilized so that we can move forward.
    Senator Thomas [presiding]. Can we move on?
    Senator Murkowski. Thank you.
    Senator Thomas. Senator Wyden.

           STATEMENT OF HON. RON WYDEN, U.S. SENATOR 
                          FROM OREGON

    Senator Wyden. Thank you, Mr. Chairman.
    Welcome, Madam Secretary. Let me start by saying that, with 
southern California under water and Oregon bone dry, this is 
the year that the West has defied the Farmer's Almanac. I think 
what I would like to start with is your sense of what to do, 
particularly in parts of the West like the Klamath, where I 
think we are just headed for very, very difficult days?
    I read your testimony with respect to the Klamath and you 
want to have a water bank, which I am in favor of, but you 
cannot bank water you do not have. So I think what I would like 
to do is start by seeing if you would be willing to commit 
today to starting to put in place emergency measures for our 
part of the country for what is coming in terms of water.
    Everything you have got here I certainly think is sensible 
and I have no quarrel with any of it. But I think we are going 
to need some emergency measures, given the situation. It may 
not just be on the Klamath; it may be in eastern Washington as 
well. But would you commit to start working with us now on 
emergency measures, given what looks to be a very, very dire 
situation coming up?
    Secretary Norton. Senator, I just talked yesterday with the 
head of the Bureau of Reclamation about the overall picture in 
the West, where the rainfall is and where it is not. Klamath is 
certainly one of the areas that is a very dry area this year. 
His feeling was that a water bank allows us to provide water 
for endangered species and so we are, from the irrigator's 
perspective, in a regular shortage-type situation, a regular 
dry year, but not the same kind of conflict we had with the 
endangered species situation in the past.
    So we have moved past the huge crisis we had in 2001 
through some of the steps we have been able to take, if the 
current projections hold out. We do have increased funding in 
the 2006 budget for some of the projects in the Klamath area. 
We are working on things like the removal of the Chiliquin Dam 
that would open up some additional areas of habitat and help 
relieve some of the pressure. So I think we have been working 
toward an overall strengthening of the ecosystem within the 
Klamath Basin that hopefully means we will not be in an 
emergency crisis situation for this year.
    We certainly are happy to work with you to review the 
measures that we have planned and to look at the situation as 
the year develops.
    Senator Wyden. I would just urge you to do that, because I 
think, as I say, what you have listed here in a number of the 
initiatives that you mentioned are useful, but every way I look 
at it there is too little water, too little snowpack, a very 
dry summer ahead. I just want to make it clear today, given 
where we are the beginning of March, I would hope that you 
would start looking at planning for an emergency situation.
    If we do not need it, hallelujah and everybody will go away 
happy. I have a feeling we are looking at a very difficult 
summer.
    Let me ask you about another area that I have been 
interested in getting into and I want to start with your 
appraisal on. That would be your sense of the state of 
America's parks at this point. You guys are 4 years into it now 
and have had a chance to look at initiatives to deal with our 
parks. I understand my colleague from Wyoming asked some 
questions about this.
    Give me your sense, Madam Secretary, of what you think the 
state of America's parks is 4 years into your service?
    Secretary Norton. We feel very good about the state of our 
parks. We have been working, first of all through increased 
funding. The chart here shows the increase in park funding 
compared to the increase in overall Department of the Interior 
funding and I believe overall domestic discretionary Federal 
funding. So park funding has increased considerably more than 
funding for our other programs.
    We are also working smarter. We have a better system within 
our parks today for being able to assess what needs to be done 
on maintenance needs and to see that funds are actually put 
into those projects that need to be done. We are doing the 
highest priority ones first. So it moves us away from some of 
the problems we had in the past of not really being able to 
compare what one superintendent was telling us a problem was 
with what another superintendent was. We have now got a much 
more businesslike approach.
    We are also looking at how we can be better and more 
efficient managers within the Park Service. The regional 
directors have been looking at some ways to improve 
efficiencies between parks. For example, if you have two nearby 
parks that each need an archaeologist, the practice in the past 
was always for each park to look only within itself at its own 
needs. So each park would hire an archaeologist.
    Today we are trying to look at whether one archaeologist 
might be shared between two parks. I think there are a lot of 
possibilities by having a more flexible management focus to be 
able to manage the park resources better.
    So I feel very good about what the park employees through 
their own enthusiasm have done in trying to improve management 
as well as some of the efforts we have made from the national 
level.
    Senator Wyden. You mentioned that you have designated 
priorities in terms of the parks. Can you make that information 
available to us? In other words, if you have a list of priority 
park improvements that is something that I think I and other 
members of this committee would be very interested in. Can you 
get that up to us?
    Secretary Norton. Yes, we have an Oregon-specific report 
that we have put out in the past that lists the projects that 
are completed and under way and the ones that are coming up for 
the current fiscal year.
    Senator Wyden. Maybe I am confused. Do you have a list of 
priorities for parks all across the country?
    Secretary Norton. Yes, we do. It is a list--we have about 
4,000 projects that are in the current timeframe.
    Senator Wyden. I thought you had priorities, for example, 
like these are the first ten priorities for America's parks. Is 
that something you have?
    Secretary Norton. It is a much larger list than that. But 
we can provide you with some information.
    Senator Wyden. I think it sounds very useful. I would just 
be interested in seeing the Department's priorities for the 
parks in this country, in other words the ones that you think 
are the most important, because that is obviously something 
important for the Department, and then obviously I would be 
interested in what kind of work you are looking at in terms of 
Crater Lake and Oregon.
    Secretary Norton. Let me clarify one thing----
    Senator Thomas. Could we--the red light is on here.
    Secretary Norton. All right. There are some things that--it 
is not necessarily a nationwide highest priority, because just 
painting a historic building to prevent future degradation may 
be very, very important. So it's not just a pure single 
priority list.
    Senator Wyden. Well, let us see what you have.
    Thank you, Mr. Chairman.
    Senator Thomas. Senator Allen, I believe. Were you next?
    Senator Allen. Senator Burr.
    Senator Thomas. Oh, I am sorry. Senator Burr.

         STATEMENT OF HON. RICHARD BURR, U.S. SENATOR 
                      FROM NORTH CAROLINA

    Senator Burr. I thank the distinguished gentleman from 
Virginia--the Commonwealth of Virginia, excuse me.
    Welcome, Madam Secretary. If I could I am going to focus 
very briefly on OMB's decision to zero out the Land and Water 
Conservation Fund and specifically talk about their program 
rating assessment tool process that they went through. As we 
know, they reviewed the period 2003-05. They asked questions 
like is the program's purpose clear? Yes. Does the program 
address specific and existing problems, interests or needs? 
Yes. Is the program designed so that it is not redundant or 
duplicative with any other Federal, State, local or private 
effort? Explanation: The program is well designed to assist 
State and local governments. The gap in non-Federal services is 
large enough to warrant a Federal program. Evidence: NPS argues 
the gap in non-Federal efforts is best shown through surveys, 
various capital investment plans, the large number of 
applicants willing to meet the 50 percent matching 
requirements.
    It goes on: Do all partners, including grantees, 
subgrantees, contractors, cost-sharing partners, other 
government partners, commit to and work toward annual or long-
term goals of the program? Evidence: No evidence available. No 
answer.
    Has the program taken meaningful steps to correct its 
strategic planning deficiencies? No relevant evidence 
available. No answer.
    Question: Did you challenge the OMB report?
    Secretary Norton. Let me ask Lynn Scarlett, who has been 
working directly with OMB on the overall program assessment 
rating tool program.
    Senator Burr. First question first: Did we challenge it?
    Ms. Scarlett. Senator, the process for doing the program 
assessment rating is a back and forth process, a lot of 
discussion, and indeed initial assessments we ask questions 
about. In the end, the key issue raised with respect to the 
Land and Water Conservation State side was the lack of 
performance measures, and we were not able to demonstrate that 
in fact they did have those clear measures.
    Senator Burr. It is my understanding that each State and 
territorial director consult with DOI about the performance of 
their State's Land and Water Conservation Fund side grant 
programs. Was their survey compared to the results of OMB's 
study?
    Ms. Scarlett. We worked closely with the States as we went 
through this back and forth process. Indeed, through the dialog 
we convened a number of States together to try and come up with 
clearer performance goals, but that was not able to be 
accomplished before this process was completed, and in the end 
we had to acknowledge and agree with the Office of Management 
and Budget that the goals were not clear.
    Senator Burr. Would you allow me to ask you to be specific. 
Were there gross management problems, the redirection of money, 
no tangible results? How did it manage to receive a performance 
standard that zeroed it out?
    Ms. Scarlett. Senator, as Secretary Norton has noted, we 
had to make some very tough decisions and obviously have funded 
the Land and Water Conservation Fund over recent years with the 
support and help of Congress. But as we made this tough 
decision we compared this program to other programs with 
similar goals and purposes and found that other programs with 
similar goals and purposes were generating more leveraging of 
funding and clearer priority-setting and goals of how that 
funding would be expended.
    Senator Burr. I would only surmise from what I have been 
able to read out of the OMB rating tool that ``no relevant 
evidence available'' is not necessarily adequate to make a 
decision to take a 50-50 cost share program and zero it out. I 
will pose the question, I will not ask for an answer. That is, 
is this something that the Department of the Interior 
wholeheartedly endorses or is this a budget action by the 
Office of Management and Budget?
    I look forward to your next 4 years. Thank you very much.
    Senator Thomas. Senator Allen.

         STATEMENT OF HON. GEORGE ALLEN, U.S. SENATOR 
                         FROM VIRGINIA

    Senator Allen. Thank you, Mr. Chairman.
    Thank you, Madam Secretary, for being here with us. I want 
to focus on battlefields, battlefield preservation, protection, 
and the value they have, and their interpretation and saving 
them for future generations. These are hallowed grounds. I 
think they are important to be saved and protected, first out 
of respect for those who fell on those fields; second and 
importantly, for the education about our history and our 
heritage for present and future generations about our history 
and our heritage; and third, heritage tourism, very good for 
jobs. A lot of small businesses rely on that, and they can be 
everything from small motels to small shops and others.
    According to the Civil War Preservation Trust, they have 
identified the ten most endangered battlefields, some of which 
are in Virginia. Just to let everyone know and be clear, the 
protected sites are in many, many States in the country. But 
one of the areas is Spotsylvania County that is considered most 
endangered, and that is the site of four of the Civil War's 
bloodiest battles: Fredericksburg, Chancellorsville, 
Spotsylvania Courthouse, and the Wilderness battles.
    It is estimated that the acquisition of 2,000 acres there 
will cost about $18.5 million. Now, the land values are 
escalating around the Richmond area, the Chancellorsville-
Spotsylvania County area, and in the Shenandoah Valley. I am 
not one who likes to take property without compensation. The 
localities will try to down-zone or restrict. The best thing to 
do is with a willing seller find a price and protect that 
hallowed ground, as opposed to condemnation or diminished use 
without compensation.
    As you may know, in 1990 the Congress created the Civil War 
Sites Advisory Commission. These sites are not just ad hoc 
sites. The purpose of that commission was to determine the 
preservation status of the Nation's most historically 
significant Civil War battlefields and offer alternatives for 
saving them. They reviewed all 10,000 engagements of the War 
between the States, or the Civil War, and eventually settled on 
383 as historically significant and worthy of preservation.
    These are in States from Pennsylvania, Ohio, Indiana, of 
course all the southern States, and including Missouri and New 
Mexico, where there are historically significant sites worthy 
of preservation. They then said we would have to spend $10 
million a year in emergency matching grants, and these are 
matching grants where the Federal funds are matched by 
charitable donations of others, to acquire these significant 
battlefields, this land for them.
    It was not until 1999 that Congress appropriated funds for 
this purpose. It was not until 2002 that the Civil War 
Battlefield Preservation Program would be officially authorized 
as part of the Civil War Battlefield Preservation Act of 2002. 
Since 1999, Congress has appropriated $26 million for the Civil 
War Battlefield Preservation Program, including $7 million that 
was requested in a 2-year period in the fiscal year 2004 and 
2005 budgets from the Bush Administration.
    Of that amount, $20 million has been awarded in matching 
grants. $5 million was just approved as part of the 
Consolidated Appropriation Act of Fiscal year 2005, although $1 
million was reprogrammed for Federal wildfire fighting. 
Understood, but that should be paid back. This funding, though, 
has been used and allowed us to save more than 13,600 acres of 
hallowed ground in 15 different States.
    Now, the President's 2006 budget includes a request of only 
$2 million for the Civil War Battlefield Preservation Program. 
Also, while the administration previously last year requested 
$4.5 million in last year's budget for Manassas, Petersburg, 
and Shenandoah Valley National Battlefield Parks, they were all 
zeroed out in this year's budget proposal.
    So as we are making preparations for the 150th anniversary 
of various battles of the Civil War, and with so many of these 
historic and I believe hallowed grounds in danger of being 
developed and lost for that interpretation, that understanding 
of what happened on that ground and everything surrounding it, 
how does this budget reflect that we are keeping our commitment 
to protect and preserve and maintain these national treasures 
for education, for tourism, and for jobs, as well as the 
heritage they represent?
    Secretary Norton. Senator, as you pointed out, we were able 
to provide some funding and to propose funding in our last 
year's budget that would specifically address battlefields. 
This year, because of both our need to meet Indian trust 
responsibilities as well as the need to handle the deficit, we 
have not been able to provide that same level of funding. It is 
simply one of the difficult decisions we have had to make as we 
are trying to address and balance all the needs.
    Senator Allen. Would you recognize, though, that the 
longer--one, that without these funds to be matched by the 
private sector and others, that property values will increase 
and therefore in the event that they are not lost, which some 
will; some will be lost, simply cannot be purchased nor should 
they be condemned without compensation--but that the cost to 
actually preserve these historic grounds that have been 
designated--it is not just an ad hoc question that, gosh, some 
troops walked across there or someone slept here or someone 
rode their horse across here--these are battlefields that are 
significant; that the cost ultimately would be greater?
    Secretary Norton. We have to deal with the situation in 
which we find ourselves today. We certainly--last year we were 
able to provide some additional funding, recognized that issue 
of battlefields and provided funding. We were able through that 
to purchase some lands and easements and to work on those 
partnerships. We are focusing on trying to work with local 
communities on heritage tourism overall as one of the 
approaches to try to balance our less expansive resources than 
we have had in the past.
    Senator Allen. Well, do you consider Civil War battlefield 
preservation an important function and purpose?
    Secretary Norton. Yes. That is one of the reasons that in 
our National Park Service land acquisition program, which is a 
list of about ten projects that we would propose funding, that 
one of those is specifically for Civil War battlefields multi-
state acquisitions.
    Senator Allen. Thank you.
    Thank you, Mr. Chairman.
    Senator Thomas. Senator Salazar is committed for 2 minutes.
    Senator Salazar. Thank you, Chairman Thomas.
    Madam Secretary, once again back to the Land and Water 
Conservation Fund. This crack staff that we have back here did 
get some of the answers to the questions that were examined by 
OMB. I will not go through Senator Burr's repetition of the 
questions and answers, but it seemed like the questions were--
many of the questions that were answered were about the 
effectiveness of the program and many of them were answered yes 
in a positive way, and there was also some criticism relative 
to long-range planning for the Land and Water Conservation Fund 
Assistance Program.
    So as I look at the National Park Service's own response to 
the OMB report, it is I think an initiative on the part of the 
National Park Service and your Department to address the issues 
that were set forth in that OMB report. As I walk through that 
report, first of all, when I see the picture of the President 
and a whole number of Senators signing off on the Land and 
Water Conservation Fund 40 years ago and saying ``Happy 
fortieth birthday to the Land and Water Conservation Fund,'' I 
think it is an important statement of achievement about how we 
as a Nation, Democrats and Republicans, have come together to 
make sure that as we develop our natural resources we are also 
investing in the preservation and protection of our lands.
    As you go through the continuation of this report--and I 
will just read you the following, and it is from the Park 
Service. It says: ``During 2003, the Office of Management and 
Budget evaluated the performance of the LWCF State Assistance 
Program as part of a government-wide review of all Federal 
programs over a 5-year period. In its assessment of the 
program's purpose, national relevance, and delivery, the review 
was generally positive. However, OMB found room for 
improvement.''
    Then it continues: ``In response to the OMB 
recommendations, National Park Service program managers worked 
with a team of State partners to develop three national program 
goals and seven performance goals to define the core purposes 
and fundamental mission of the LWCF State Assistance Program. 
Next the team established 13 performance measures that 
summarize key program accomplishments.''
    So I would say that what we have here in the conclusion of 
the Park Service is that the implementing of the new 
performance framework is an ongoing effort that will extend 
into 2005 and beyond. My comment to you is that I think that 
the initiative of the Park Service to address management issues 
that were described in that OMB report were in fact laudable 
management initiatives. My hope is that as we move forward in 
this Congress and working with you through the year that we can 
find ways of restoring the Land and Water Conservation Fund 
State Assistance Program.
    I think that one of the key issues of debate for us in this 
Congress and in this administration is going to be how we 
balance development of our energy and natural resources and at 
the same time find the right balance in the preservation and 
protection of our natural resources. At least from what I have 
heard and known about this program over many, many years, I can 
think of no better testament to our effort to try to find 
balance between development and protection. So I would hope 
that we can move forward in a manner that carries out the 
recommendations of the National Park Service and at the same 
time restores funding to the Land and Water Conservation Fund.
    Secretary Norton. If I can make two quick points. One is 
that the Land and Water Conservation Fund is a budget item that 
has expanded and contracted as funding has been available. 
There were several years during the Clinton administration when 
both the administration and Congress decided to basically zero 
funds to the Land and Water Conservation State-side program as 
well.
    We are working--part of the problem in terms of the goals 
was that the goals were not really performance goals. They did 
not deal with the recreation and conservation goals as much as 
just with numbers of acres acquired. So the thinking was that 
the true goals of the program were not adequately addressed.
    Senator Salazar. If I may, just one more question.
    Senator Thomas. Sure.
    Senator Salazar. I take it, though, that since there is 
still funding for the State side program for LWCF, that the 
National Park Service is in fact moving forward in implementing 
the recommendations that came out of its 2004 report?
    Secretary Norton. Let me ask Lynn to address that.
    Ms. Scarlett. Yes, Senator, during 2005 there is current 
funding and the Park Service is trying to work with the States 
to implement a number of the issues that they identified in 
that report that you have. Again, I think the issue has been 
both, as Secretary Norton noted, one of balancing and making 
some difficult choices and focusing on core activities; and the 
other was for several years in succession an inability to show 
clear goals and outcomes of the program.
    Senator Salazar. Thank you. I have no further comment other 
than again, Secretary Norton, it is good to see you here.
    Senator Thomas. All right, thank you, sir.
    Thank you, Secretaries, for being here. I just cannot 
resist one comment. I know we do not have jurisdiction over the 
Fish and Wildlife Service in this committee, but I do suggest 
to you that we need to take a long look at our endangered 
species activities in the West. We have 1,500 species listed 
and we have recovered about 12. So we need to change some of 
the emphasis there and I hope we can do that.
    Secretary Norton. Thank you. That is an important issue, 
and I will note that a lot of the conservation programs we 
shifted money to are ones that deal in a cooperative way with 
endangered species issues.
    Senator Thomas. We will be looking at it.
    Well, thank you very much, all three of you, for being 
here.
    The committee will stand in recess until 10 o'clock 
tomorrow, when we will receive testimony from the 
administration witness for the fiscal year 2006 budget for the 
U.S. Forest Service. The committee is adjourned.
    [Whereupon, at 12:16 p.m., the hearing was adjourned.]
                                APPENDIX

                   Responses to Additional Questions

                              ----------                              

                    Questions From Senator Domenici

                    INDIAN WATER RIGHTS SETTLEMENTS

    Madam Secretary, unadjudicated Indian water rights claims in New 
Mexico have reached a critical juncture and must be resolved. Despite 
their substantial Federal commitment and cost share, the President 
signed into law the Arizona Water Settlement Act of 2004 and the Snake 
River Water Rights Act of 2004 at a total cost of $2.3 billion. Based 
on this fact, I find it unacceptable that the administration is willing 
to contribute so little money and effort towards the New Mexico 
settlements.
    The settlement negotiations are not new developments. The Aamodt, 
Taos, and Navajo settlement negotiations have all been going on for 
well over four years. Despite making numerous requests that your office 
become more involved in the New Mexico settlements, the Department's 
involvement has been minimal. Not only has the Department acted 
contrary to stated administration policy and contrary to Indian 
interests in this matter, but it has acted with a lack of 
professionalism and courtesy.
    Question 1. Do I have your assurance that you will work with OMB to 
ensure that these settlements are adequately funded?
    Answer. Resolution of the issues in the negotiations is very 
important to the Department. We are committed to working with the 
parties and the Office of Management and Budget to reach and fund fair 
and appropriate settlements.
    Question 2. Do you feel that sufficient resources are available in 
this budget to ensure that the administration and Indians are 
adequately represented in settlement negotiations?
    Answer. The budget will enable us to continue to meet all 
Departmental responsibilities.
    Question 3. Will a high-level DOI official be present at future New 
Mexico water settlement negotiations?
    Answer. Jennifer Gimbel has been appointed counselor to the 
Secretary and will be the official responsible for policy matters 
relating to Indian water rights settlements, including those in New 
Mexico. She will be available, as needed, to participate in the New 
Mexico negotiations.
    Question 4. Why has the administration not been consistently 
involved in these negotiations over the past 5 years?
    Answer. Federal negotiation teams have been consistently involved 
in the water allocation and other aspects of settlement negotiations. 
The Federal financial contribution is a difficult issue that remains 
unresolved in these settlements.
    Question 5. Is the lack of involvement by the administration an 
indication of a policy change with respect to Indian water rights 
settlements?
    Answer. No. The Administration still supports settlement of Indian 
water claims through negotiation rather than through litigation 
wherever possible.
    Question 6. Do you feel that the Department's budgetary interests 
prohibit it from being an effective trustee of Indian tribes?
    Answer. No. The Congress has placed major responsibility for Indian 
matters in the Department of the Interior. As the trustee for American 
Indian lands and funds as well as water rights, Interior is committed 
to protecting trust assets and fulfilling our trust responsibilities to 
individual and tribal trust beneficiaries.

                           MINNOW SANCTUARIES

    The Reasonable and Prudent Alternatives specified in the 2003 Fish 
and Wildlife Service's Biological Opinion on the Rio Grande Silvery 
Minnow required the construction of two minnow refugia. In order to 
comply with this mandate, I have been working with the BOR Albuquerque 
Area Office to construct a minnow sanctuary. While the BOR has 
undertaken some pre-construction activities, there has been some 
question if the BOR had adequate authority to undertake construction of 
the sanctuary. I am pursuing legislation in Congress that would provide 
the authority necessary to construct the project.
    Question 1. What is the status of the pre-construction activities 
underway?
    Answer. Reclamation is working, together with the Fish and Wildlife 
Service, Army Corps of Engineers and the Middle Rio Grande Conservancy 
District, on the design and environmental compliance now. Reclamation 
has issued a contract to design a plan for the sanctuary.
    A contractor has been hired to assist with site-specific design 
work. Studies needed to complete the conceptual design of the facility 
have been initiated, and site investigations to determine the location 
for the sanctuary are continuing, including groundwater and soil 
testing as well as toxicological assessment of the source water. The 
sanctuary is being designed for research and possible future expansion 
for meeting additional life stage requirements (e.g., spawning) of the 
silvery minnow. A technical team composed of the Fish and Wildlife 
Service, university affiliated researchers, and the City of Albuquerque 
has been convened to provide regular input into the planning process.
    The preliminary work is scheduled to be completed in early fall 
2005, assuming BOR obtains the necessary legislative authority by then. 
We are working closely with partners to bring the sanctuary online by 
the summer of 2006.
    Question 2. Assuming authorizing legislation is passed by congress, 
how long following passage will it take to begin construction and 
ultimately complete the project?
    Answer. If construction begins in fall 2005, the facility is 
expected to be operational by summer 2006.

                   MIDDLE RIO GRANDE PROJECT FUNDING

    Despite encouraging run-off forecasts, there remains a paucity of 
water in storage in the Rio Grande Basin. The BOR is tasked with 
meeting compact deliveries and complying with the Fish and Wildlife 
Service 2003 Biological Opinion. Meeting the Biological Opinion 
requires providing water to meet minimum flow requirements.
    Over the past 4 years, Congress has provided funding to assure that 
BOR can meet these obligations. It concerns me that the President's 
budget proposes an $8 million cut in funding for Middle Rio Grande 
projects.
    Question 1. How will the BOR meet its statutory and court-ordered 
obligations with such a greatly decreased budget?
    Answer. Reclamation will continue to meet the requirements of the 
biological opinion with the funds provided. Reclamation will adjust 
priorities and reprogram money if necessary and where practicable to 
meet the biological opinion requirements. The fiscal 2006 budget 
request closely matches the fiscal 2005 request.
    Question 2. Where does the BOR anticipate it will get water from 
this year in order to meet the regulatory requirements?
    Answer. The water remaining from 2004 can be used this year. 
Reclamation continues to lease water from willing San Juan-Chama 
contractors, will store some water under the Emergency Drought Water 
Agreement, and cooperate with other Federal and non-Federal agencies in 
managing the river flows to meet the needs of all Middle Rio Grande 
water users, including endangered species.

       MIDDLE RIO GRANDE PUEBLO WATER DELIVERY AND INFRASTRUCTURE

    Pursuant to the 1982 agreement between the MRGCD and the 6 Middle 
Rio Grande Pueblos, the BOR is responsible for delivering water to meet 
the Pueblos ``prior and paramount'' rights. The BIA was also given 
authority to ensure that these obligations were met. The signatory 
Pueblos rely upon the BOR to deliver the water that they hold rights to 
in order to irrigate over 8,000 acres of land. The Pueblos question if 
the BOR is delivering water consistent with the 1982 agreement and has 
questioned if the BIA is fulfilling its trust responsibility.
    Furthermore, the Pueblos rely on the BOR for irrigation 
infrastructure which has fallen into a state of disrepair and needs to 
be upgraded.
    Question 1. How does your department plan to resolve the conflict 
that has arisen between the BIA, BOR and Pueblos? Does the department 
have any plans to quantify Indian rights?
    Answer. The Department of the Interior established a technical team 
consisting of representatives from Reclamation, the U.S. Geological 
Survey, and the Bureau of Indian Affairs to evaluate potential 
differences regarding the interpretation of the 1981 Agreements in 
``prior and paramount'' storage calculation procedures and to provide 
recommendations. This review, as well as further discussions with the 
Pueblos and others should help resolve any remaining issues regarding 
``prior and paramount'' storage. No adjudication of water rights, 
including Pueblo water rights, has been instituted on the Middle Rio 
Grande.
    Question 2. How does the BOR plan to upgrade and maintain the 
Pueblo water delivery infrastructure? Is funding available for these 
purposes through Water 2025 or other grants? How do you plan to meet 
these trust responsibilities?
    Answer. Portions of the six Middle Rio Grande Pueblos irrigation 
infrastructure fall within the boundaries of the Middle Rio Grande 
Project and can be served by Reclamation. The Middle Rio Grande 
Conservancy District has received about $3 million under Water 2025 for 
water conservation and infrastructure improvements. This funding can be 
used throughout the District, including project facilities serving six 
Middle Rio Grande Pueblos.
    In addition, the Department entered into a new agreement with 
Middle Rio Grande Conservancy District with respect to project service 
to the Pueblos. Through the development of annual work plans and annual 
appropriations to pay the Middle Rio Grande Conservancy District for 
specified charges, the Middle Rio Grande Conservancy District will 
perform operations, maintenance, and betterment work on the facilities 
serving Pueblo lands.
    Through Reclamation's Native American Program, Reclamation has 
funded a variety of small infrastructure improvement projects for 
pueblos in New Mexico. Reclamation continues to look for opportunities 
using existing authority and funding to upgrade Pueblo facilities.

                        ANIMAS-LA PLATA PROJECT

    Despite past claims of mismanagement and poor planning and 
oversight, the ALP project is now proceeding at an acceptable rate. The 
President's budget calls for $52 million for the project in FY 2006. 
However, some of the project beneficiaries claim that the project 
requires $75 million in FY 2006 to keep it on schedule.
    This project is of great importance to the communities of northern 
New Mexico and southern Colorado.
    Question 1. Do you believe that the $52 million requested by the 
administration is adequate to keep the project on schedule?
    Answer. The amount requested by the Administration is adequate to 
maintain the current schedule, which contemplates construction 
finishing in calendar year 2011.
    Question 2. What precautions are being taken to ensure that there 
are not further cost overruns with the project?
    Answer. We have refined and streamlined reporting within 
Reclamation for the ALP. The ALP Construction Office is responsible for 
all matters pertaining to the construction of the project. This office 
is managed by a Project Construction Engineer who reports directly to 
the Regional Director of the Upper Colorado Region in Salt Lake City, 
Utah. The construction office continually evaluates ways to save costs 
and still maintain the project features. Cost tracking procedures 
implemented in 2004 now relate all project costs to the cost estimate 
(indexed for inflation) for early detection of problems. This cost 
information is shared with the Project Sponsors on a monthly basis.
    Question 3. How is the BOR addressing recent environmental 
challenges?
    Answer. Funding for the completion of the cultural and 
environmental mitigation features of the project has been given a high 
priority within the ALP project budget. Although there have been may 
environmental challenges associated with construction of project 
facilities, ranging from controlling extreme flood events to protecting 
nesting Golden eagles, these challenges have been resolved in a timely 
fashion. All environmental compliance and mitigation obligations are 
either currently being met or are on schedule to be completed 
concurrent with project facility construction

                          WATER TECHNOLOGY R&D

    Recent drought and population growth in the western U.S. requires 
that we make more efficient use of water and develop technologies to 
make use of previously impaired or unusable water. During the 1960's, 
the federal government funded extensive research in water technology 
which resulted in reverse osmosis-the desalination technique most 
widely used today.
    I believe that the federal government should renew its investment 
in water treatment technology. Toward this end, I have funded 
construction of a Tularosa Basin Desalination Research and Development 
center in New Mexico. Also, I plan to introduce legislation this year 
that would create a program to develop the next generation of water 
treatment technologies.
    Question 1. What do you believe is the federal government's role in 
water technology research?
    Answer. Reclamation and the other Federal agencies involved in 
water resources R&D are currently working through the President's 
Office of Science and Technology Policy to develop a coordinated, 
multi-year Federal R&D plan for water availability to ensure an 
adequate water supply for the Nation's future. The President's 
Management agenda also directs agencies to use the Administration's 
Research and Development criteria for guiding federal research efforts. 
The following criteria to improve investment decisions for and 
management of their R&D programs are part of the Administration's R&D 
criteria:

   Relevance to agency missions and national needs--ensure that 
        Federal R&D investments are relevant to national needs, agency 
        mission-driven needs, and target potential public benefits that 
        are beyond those of any similar efforts that have been funded 
        or are being funded by the government or others.
   Industry relevance--ensure that Federal R&D investments 
        avoid duplicating research that industry is capable of doing 
        and would otherwise conduct in lieu of the federal investment.

    In accordance with the Administration's investment criteria, where 
industry R&D investment is not optimal, the Federal Government's role 
in water technology research is to speed the development of new 
technologies, reduce costs, and speed the implementation of solutions 
in order to meet the water supply challenges of the future. This can be 
done effectively through better communication and coordination of 
existing research efforts, facilitation of technology development and 
transfer, evaluation of product capabilities and the assessment of 
research gaps and new technologies.
    Question 2. As you are aware, the authority for the BOR's Water 
Desalination Research and Development Act of 1996 expires this year. Do 
you believe that this program should be reauthorizes and with what 
changes?
    Answer. The Water Desalination Act of 1996 expired at the end of 
fiscal year 2004. The Administration is currently considering its long-
range desalination research and development policy in the context of 
the interagency efforts being coordinated by the White House Office of 
Science and Technology Policy.
    Question 3. How is construction of the Tularosa facility 
proceeding?
    Answer. Construction is 66% complete on the 40 acre site. Work on 
the research center component will begin when funds are available. 
Reclamation will begin demonstration testing of the military's 
Expeditionary Unit for Water Purification in early April, 2005. The 
facility plan is being written and will be in draft form by the end of 
the fiscal year.

                        RURAL WATER LEGISLATION

    As you are aware, my staff has been working with the BOR and the 
minority staff to develop legislation to aid small and rural 
communities to meet their often extensive water needs. Many western 
communities rely on aquifers for water that will be depleted within the 
next decade. This fact makes the situation especially desperate.
    There are also rural water programs within several other agencies. 
However, they are not as broad in scope and not of the scale that would 
allow many communities to make use of them. Furthermore, it is my 
belief that the BOR has the technical expertise to undertake such a 
project.
    Question 1. Is a rural water program a new authority that you feel 
would be appropriate for the BOR to undertake?
    Answer. We believe it is appropriate for the BOR to undertake a 
rural water program with appropriate scope and requirements. Since the 
early 1980s, Congress has directed Reclamation to develop 13 
independently authorized, single-purpose municipal and industrial water 
supply projects for rural communities throughout the West. In the 
course of developing the 2004 budget, Reclamation participated in two 
performance assessments--the Program Assessment Rating Tool (PART) and 
a review to develop a set of common performance measures for all 
Federal agencies that play a role in delivering water to rural areas. 
Both assessments found shortcomings in Reclamation's involvement in 
rural water projects, mainly due to the lack of a formal rural water 
program. Consistent with the assessments' recommendations, the 
Administration submitted a legislative proposal, and legislation was 
introduced in the 108th Congress, that would allow the Department and 
Administration to set priorities and establish a Reclamation rural 
water program with adequate controls and clear guidelines for project 
development. While it is expected that the legislation will be 
reintroduced in the new Congress, we will continue to work with 
Committee staff on this effort
    Question 2. What form do you see this program taking? Do you feel 
that a loan guarantee program is a viable mechanism to aid rural 
communities?
    Answer. The program would likely be similar to the proposal the 
Administration sent up during the 108th Congress. We are currently 
examining whether a loan guarantee program would be a viable mechanism 
for providing assistance to communities to develop rural water 
projects.

                 ENDANGERED SPECIES--MIDDLE RIO GRANDE

    Secretary Norton, as you know, New Mexico faces many endangered 
species issues. One current issue my state faces involves a migratory 
bird known as the Southwest Willow Flycatcher.
    I have been actively involved in restoring New Mexico's bosques for 
almost fifteen years. Together with the Corps of Engineers, the Bureau 
of Reclamation, and the City of Albuquerque, I have been rehabilitating 
this land along the Middle Rio Grande, which has been victim to decades 
of under-management: invasive species have replaced natural vegetation; 
litter has accumulated, and two fires have burned more than 250 acres 
of land within Albuquerque's city limits.
    Much of this area is included within the Southwest Willow 
Flycatchers' proposed critical habitat, and moving forward with the 
proposal would impede our efforts to restore the bosque.
    Question 1. Would you support the establishment of a conservation 
program that allows us to continue restoring the bosque along the 
Middle Rio Grande, which could result in more water in the river and 
would allow the Southwest Willow Flycatcher to nest in its native 
habitat of willow and cottonwood trees?
    Answer. The Fish and Wildlife Service fully supports opportunities 
to engage in collaborative conservation efforts for the benefit of both 
endangered species and overall bosque habitat. The Middle Rio Grande 
Endangered Species Act Collaborative Program (Collaborative Program), 
in which the Bureau of Reclamation and the Fish and Wildlife Service 
are participants, is working toward the establishment of that very kind 
of collaborative conservation program. The Fish and Wildlife Service 
supports restoration activities that will result in improved habitat 
for the Southwestern Willow Flycatcher. If the framework of the 
Collaborative Program allows for assurances that identified restoration 
activities will be implemented, then we believe that establishment of 
another, separate, conservation program is not necessary at this time.
    Question 2. Will you encourage Fish and Wildlife Service to seek an 
extension of time in which to publish its final rule regarding 
Southwest Willow Flycatcher critical habitat so that we can create a 
conservation program for the Middle Rio Grande that is built on a 
collaborative approach to management and benefits the Southwest Willow 
Flycatcher and other endangered species in the area?
    Answer. The Fish and Wildlife Service does not expect to seek an 
extension of time in which to publish the final rule for the 
designation of critical habitat for the southwestern willow flycatcher. 
However, we expect to further extend the current comment period to May 
of 2005, allowing it to be open for over 7 months. Currently, the Fish 
and Wildlife Service plans to meet the court-ordered deadline of 
September 30, 2005.
    The Fish and Wildlife Service is aware of ongoing efforts by the 
Collaborative Program to develop a plan designed to manage and restore 
habitat along the Middle Rio Grande. The plan focuses on habitat 
restoration along the Middle Rio Grande to benefit the Rio Grande 
silvery minnow and the Southwestern Willow Flycatcher. We understand 
the plan emphasizes projects that reduce fire danger, riparian 
vegetation loss, and exotic vegetation encroachment--all of which may 
be beneficial to the flycatcher. In previous critical habitat 
designations, the Fish and Wildlife Service found that similar plans 
may preclude the need for designating lands as critical habitat if the 
plan meets specific criteria associated with conservation benefits, 
assurances, and effectiveness.
    We look forward to reviewing any management plans submitted during 
the comment period. To be legally sufficient, we must be certain that 
the plans will be implemented, and when implemented, the measures will 
be effective in conserving the flycatcher and its habitat. Ideally, the 
Fish and Wildlife Service will receive a plan early enough for any 
issues to be resolved while the comment period is still open.

                           ENERGY PRODUCTION

    The Department's budgets during your tenure have emphasized 
responsible development of energy resources on Federal lands. Senator 
Bingaman and I hope to complement that effort will with a comprehensive 
energy package very soon.
    The Presidents proposals and your Department have provided the kind 
of forward thinking and long term vision needed in a national energy 
policy that will dramatically reduce our dependency on foreign oil. We 
all see the need to develop new technology, but we also need to address 
the short term problem on all fronts.
    We will need to do more to reduce energy consumption through 
conservation; we will look to new opportunities for renewable energy 
sources such as wind , solar, geothermal and biomass; and we will need 
to increase production from our own domestic resources--oil, natural 
gas, coal--that will be critically needed for the short-term.
    Your Department plays a central role to ensure that America will be 
able to reach our own resources--while protecting the environment--from 
our own public lands.
    Question 1. Can you tell us what progress the Department has made 
in implementing the President's Energy proposal of nearly four years 
ago?
    Answer. DOI has implemented a number of National Energy Policy 
(NEP) directives to increase domestic energy supplies and enhance 
national energy security by ensuring continued access to Federal lands 
for domestic energy development, and by expediting permits and 
undertaking other Federal actions necessary for energy-related project 
approvals.
    Over 20 of the recommendations within the NEP were identified as 
specifically affecting one or more of the Bureau of Land Management's 
energy-related responsibilities. The BLM identified 54 short-and long-
term action items needed to achieve results on the recommendations 
applicable to the Bureau. In implementing these action items, the 
Bureau has been working closely with other Federal agencies, state and 
tribal governments, local communities, industry and the public to 
develop dependable, affordable and environmentally sound energy 
resources from the public lands.
    The BLM has completed a majority of the 54 short-and long-term 
action items, including several related to expediting the approval of 
Applications for Permits to Drill, such as issuing new policies and 
procedures to streamline the permitting process. Working with other 
Federal agencies and the State of Alaska, the BLM played a key role in 
the renewal of the Federal right-of-way for the Trans-Alaska Pipeline. 
The Secretary approved the 30-year renewal of the right-of-way, 
effective January 23, 2004.
    In addition, in evaluating and increasing access to renewable 
energy resources, the BLM issued a Wind Energy Policy to expedite the 
development of those resources on public lands and a Draft Programmatic 
Environmental Impact Statement (EIS) to analyze wind energy 
opportunities on public lands in the 11 Western states. The BLM will 
publish a Final EIS in the near future. Together with the National 
Renewable Energy Laboratory (NREL), the BLM prepared a joint report, 
``Assessing the Potential for Renewable Energy on Public Lands,'' to 
help Federal land managers make decisions on prioritizing land-use 
activities that will increase development of renewable resources on 
BLM, Tribal and Forest Service lands in the in the western United 
States.
    The BLM has also issued more than 200 new geothermal leases since 
2001, a 1000 percent increase over the previous four years. Together 
with the Department of Energy, the BLM completed a collaborative 
resource assessment and prepared a report, ``Opportunities for Near-
Term Geothermal Development on Public Lands in the Western United 
States,'' issued in April, 2003. The report identifies 35 BLM sites in 
18 planning units in 6 states with high potential for near-term 
geothermal development.
    As directed in the NEP, DOI is continuing Outer Continental Shelf 
(OCS) oil and gas leasing and approval of exploration and development 
plans on predictable schedules. Since May 2001, DOI has held 13 OCS oil 
and natural gas lease sales on schedule while undertaking a 
comprehensive consultation process with other Federal agencies, State 
and local governments, and the public. These sales resulted in the 
leasing of almost 18 million acres of OCS lands to industry for oil and 
gas exploration and development, and generated about $2.4 billion 
dollars in bonus bid revenue (not counting future royalties and 
rentals) for the American taxpayer. Production from leases issued as a 
result of these sales will contribute substantially to future domestic 
oil and gas production. DOI is on schedule for completing the next 5-
Year Program by July 2007, which will establish the schedule for future 
OCS lease sales during the 2007-2012 timeframe.
    The NEP also recommended that the Department consider economic 
incentives for environmentally sound offshore oil and gas development 
where warranted by specific circumstances. In response, the Department 
has established a suite of economic incentives to promote discovery of 
new sources of energy for the Nation and stimulate domestic oil and 
natural gas production. For 2001-2005 OCS lease sales, DOI continued 
the royalty incentive program--first established by the Deep Water 
Royalty Relief Act of 1995--to promote continued interest in deepwater 
leases, and expanded the incentive program to promote development of 
new natural gas from deep horizons in the Gulf's shallow waters. A new 
regulation in January 2004 extended the deep gas incentive to existing 
leases, issued before the incentives were first provided in 2001, to 
promote additional deep drilling for natural gas on the shelf. MMS has 
also developed policies for extending lease terms to aid in planning 
wells to be drilled to sub-salt and ultra-deep prospects, accounting 
for the additional complexity and cost of planning and drilling such 
wells. Within the next 5 years, offshore production will likely account 
for more than 40% of oil and 26% of natural gas domestic production, 
owing primarily to deepwater discoveries. DOI has also provided 
economic incentives for all Alaska OCS lease sales to promote leasing 
interest and encourage oil and gas exploration development in this area 
of high cost and little infrastructure.
    To help streamline its permitting procedures, MMS's ongoing e-
Government Transformation project is re-engineering OCS business 
processes, using technology to receive and process data and 
information, to improve the quality of the information exchanged 
between MMS and the private sector, thus helping ensure timely 
approvals of plans and permits. MMS has developed an online public 
commenting system and is implementing an online well permitting system 
that will streamline the permitting and approval process for OCS oil 
and gas well drilling operations. As the primary regulatory and 
permitting agency for OCS activities, MMS has been working closely with 
other agencies to develop a more efficient means of issuing permits and 
has been working closely with NOAA to achieve prompt and efficient 
consultations under the Endangered Species Act and rulemakings under 
the Marine Mammal Protection Act and on revisions to their Coastal Zone 
Management Act consistency regulations (final regulations pending).
    While the vast majority of OCS leasing activity is in the Gulf of 
Mexico, the Department is working with other Federal, state and local 
government agencies to streamline the permitting process for OCS 
exploration and development projects in Alaska. This includes 
implementing provisions of a MOU for the proposed Liberty project off 
Alaska, in the Beaufort Sea, to ensure timely completion of the 
exploration and development plan review and approval process. This 
project will be the first proposed development entirely on the Federal 
OCS off Alaska. The NEP directed that the Administration determine 
whether or not to resume deliveries of oil for the Strategic Petroleum 
Reserve (SPR), the world's largest supply of emergency crude oil, with 
the Federally-owned oil stocks stored in huge underground salt caverns 
along the coastline of the Gulf of Mexico in south Louisiana and Texas. 
Responding to a Presidential directive issued in November 2001, the 
DOI, in partnership with the Department of Energy, launched the SPR 
Fill Initiative to complete filling the remaining capacity of the SPR 
(700-million-barrel total capacity) using oil produced from OCS Gulf of 
Mexico leases. The MMS Royalty in Kind program provides an efficient 
and cost-effective means to fill the Nation's Strategic Petroleum 
Reserve using the Federal royalty share of oil produced from some OCS 
leases. As of early February 2005, the SPR held a total of 681 million 
barrels. When completed this summer, the fill initiative will have 
involved MMS delivering approximately 120 million barrels of royalty 
oil to DOE for use in exchanges for approximately 108 million barrels 
of crude oil of suitable quality delivered to the SPR.
    Question 2. Your budget request assumes more than $20 million in 
new fees from both onshore and offshore energy producers to augment 
funding appropriated by Congress. What authority does the Department 
have to recover costs in this way? What kinds of things will the BLM 
and MMS charge new fees for?
    Answer. Title V of the Independent Offices Appropriation Act (IOAA) 
of 1952 (31 U.S.C. 9701) is a Government-wide authority that permits 
cost recovery. The terms of the IOAA require implementation by 
rulemaking. Additional implementing guidance includes OMB Circular No. 
A-25 (User Charges); and Chapter 6.4 of the Department of the 
Interior's Accounting Handbook (Cost Recovery/User Charges).
    New fees will be proposed for services that MMS currently provides 
at no charge. Fees may include costs associated with the submittal of 
permitting and plan requests, such as well permits, facility permits, 
structure permits, geological and geophysical permits, sand and gravel 
permits, deepwater operation plans, exploration plans, etc. Additional 
revenue will also be generated through upward adjustments in rental 
rates for new leases, unchanged for Gulf of Mexico sales since 1996, 
and increased revenue from cost recovery fees proposed in 2005. As 
required by the IOAA, most of these fees will require rulemaking 
action.
    In addition to IOAA, BLM's authority to recover costs is found in 
the Federal Land and Policy Management Act (FLPMA). The language of 
section 304 of FLPMA states that (a) Notwithstanding any other 
provision of law, the Secretary may establish reasonable filing and 
service fees and reasonable charges, and commissions with respect to 
applications and other documents relating to the public lands and may 
change and abolish such fees, charges, and commissions; (b) The 
Secretary is authorized to require a deposit of any payments intended 
to reimburse the United States for reasonable costs with respect to 
applications and other documents relating to such lands. The moneys 
received for reasonable costs under this subsection shall be deposited 
with the Treasury in a special account and are hereby authorized to be 
appropriated and made available until expended. As used in this section 
``reasonable costs'' include, but are not limited to, the costs of 
special studies; environmental impact statements; monitoring 
construction, operation, maintenance, and termination of any authorized 
facility; or other special activities. In determining whether costs are 
reasonable under this section, the Secretary may take into 
consideration actual costs (exclusive of management overhead), the 
monetary value of the rights or privileges sought by the applicant, the 
efficiency to the government processing involved, that portion of the 
cost incurred for the benefit of the general public interest rather 
than for the exclusive benefit of the applicant, the public service 
provided, and other factors relevant to determining the reasonableness 
of the costs.
    Question 3. We expect an improvement in service before the 
Department implements any new fees? Where does the Department stand on 
reducing its backlog on drilling permit applications.
    Answer. The BLM has taken a number of steps to improve the 
processing of Applications for Permits to Drill (APDs) and to improve 
the process for leasing lands for oil and gas development. For example, 
the BLM tracks the processing of APDs on a weekly basis so that 
managers can make necessary adjustments in workloads. The BLM has 
implemented a computerized tracking system to better identify 
bottlenecks in the process for approving APDs. The BLM is providing 
technical assistance to industry to ensure the submission of complete 
applications. Between 2001 and 2004, we approved over 17,000 APDs, a 74 
percent increase over the numbers of APDs approved between 1997 and 
2000.
    The BLM has formed Quality Assurance Teams to identify tasks that 
Field Offices are successfully implementing so that these successes can 
be duplicated in other offices. These Quality Assurance Teams also 
identify areas for improvement. The BLM has worked with State Historic 
Preservation Officers to streamline cultural resource clearances.
    The BLM has implemented Best Management Practices, which provide 
guidance for companies to use in developing their operating plans. This 
should allow the BLM and the energy industry to minimize the amount of 
surface disturbance to public and private lands while maintaining 
access to energy resources. We continue to look for ways to improve the 
permitting process to allow increased access to oil and gas development 
on the public lands. For example, we are nearing completion of revised 
guidance for oil and gas companies that will assist them in developing 
complete APD packages. Complete application packages will allow the BLM 
to process the applications while minimizing delays to obtain 
additional information.
    As a result of these improvements, the APD backlog has 
substantially decreased, as indicated in the table below, at the end of 
2004, 2,214 applications for permits to drill had been pending for more 
than 60 days, down from 2,780 at the end of 2003. Through management 
improvements, BLM plans to reduce this backlog to 1,681 by the end of 
2005. The new cost recovery fees proposed for 2006, together with a 
continued emphasis on management improvements, will allow BLM to 
essentially eliminate the backlog. BLM estimates that by September 30, 
2006, only 120 pending APDs will have been pending for more than 60 
days.
    BLM's goal is to process all APDs on BLM-managed surface as 
expeditiously as possible, if the application is complete and there are 
no unforeseen circumstances. Processing time increases are primarily 
due to NEPA reviews, compliance with the National Historic Preservation 
Act, compliance with the Endangered Species Act, the submission of 
incomplete applications, and legal challenges that delay approval. The 
BLM efforts in APD streamlining and improvements in its NEPA review 
process have been designed to decrease this processing time and improve 
the defensibility of the final decisions.
    The 2006 BLM budget request will effectively increase funds 
available for managing energy and minerals development by an estimated 
$9.0 million over the 2005 level by assessment of additional user fees. 
Of the projected $9.0 million in additional cost recoveries in the 
Energy and Minerals Management program, $8.15 million would be 
generated in the Oil and Gas Management program, all from processing 
APDs. The significantly higher funding resources will enable BLM to 
process more APDs, process them more quickly, and significantly reduce 
the number of pending APDs greater than 60 days old. BLM plans to 
process 500 more APDs in 2006 than it will in 2005 (approximately 7,900 
versus 7,400).

                                                OIL AND GAS APDS
----------------------------------------------------------------------------------------------------------------
                                                                     2003        2004        2005        2006
                                                                    Actual      Actual     Estimate    Estimate
----------------------------------------------------------------------------------------------------------------
Pending APDs less than 60 days old at start of year.............      240         460         654         787
Pending APDs greater than 60 days old at start of year..........    3,080       2,780       2,214       1,681
Total Pending APDs at start of year.............................    3,320       3,240       2,868       2,468
New APDs Received...............................................    5,063       6,979       7,000       6,700
[APDs Approved].................................................  [3,961]     [6,452]     [6,550]     [6,800]
Total APDs Processed............................................    5,143       7,351       7,400       7,900
Pending APDs less than 60 days old at end of year...............      460         654         787       1,148
Pending APDs greater than 60 days old at end of year............    2,780       2,214       1,681         120
Total Pending APDs at end of year...............................    3,240       2,868       2,468       1,268
----------------------------------------------------------------------------------------------------------------

                       PAYMENTS IN LIEU OF TAXES

    I've been pleased, that in recent years, the Department has 
recognized the importance of PILT payments to counties by requesting 
funding at a level consistent with what Congress has funded. But I'm 
disappointed in the cut proposed in this year's request.
    Let's not forget, that just as budgets are tight here in 
Washington, they are also tight in rural America. Most counties have 
placed estimated PILT receipts in their operating budgets. They assume 
they can depend on regular PILT payments for the public lands in their 
counties. As long as there are federal lands in these counties, this 
nation has an obligation to provide local governments funding for the 
important role they play in implementing in the administration of uses 
of the public lands and by providing public services on lands they do 
not own and over which they cannot levy property taxes.
    Question 1. Why does the Department propose reductions in PILT, 
please tell me what your thinking is here?
    Answer. The 2006 budget for the Department makes difficult choices 
as part of the President's efforts to reduce the budget deficit by half 
over five years. The budget includes funding to compensate counties for 
lost revenue, providing a total of $200 million for the Payment In Lieu 
of Taxes program. Although a reduction from the funding level 
appropriated by Congress, the 2006 budget is 76 percent above the 
funding level ten years ago. By comparison the Department's 
discretionary budget is 52 percent above the 1996 funding level.
    Question 2. Does this represent a change in commitment to counties 
that over time we can anticipate the administration to further reduce 
PILT funding?
    Answer. The 2006 budget request does not represent a change in 
commitment to counties. Our support for counties encompasses more than 
the annual PILT payments provided to counties. Our budget promotes the 
importance of local communities in helping to shape the future of 
public land management and supports their role with funding provided 
many cooperative conservation programs. Over the past four years 
Interior has allocated a total of $1.7 billion to partners for 
conservation activities.

                                GRAZING

    Grazing on public lands continues to be a priority for this 
Committee and I personally want to applaud the efforts by BLM in 
improving administration of this program. They have made real progress 
in reducing the backlog in issuing new permits, implementing new 
grazing regulations, improving monitoring programs and other efforts to 
protect grazing on public lands such as the Sage Grouse Habitat 
Improvement Initiative.
    But I am concerned with a new proposal made in this year's budget 
request. As you know current law requires a certain percent of grazing 
fees to be deposited into an account to help pay the federal share of 
range improvements. Your Department has proposed to amend the law by 
making deposition of these funds a discretionary rather than mandatory 
matter. This change could have the effect of eliminating the 
availability of the funds during times of lean budgets as is expected 
to be the case next fiscal year.
    I believe the availability of range improvement funds is essential 
to maintaining a solid infrastructure for public land ranching.
    Question 1. If I understand the proposal correctly, you would now 
de-couple grazing fees from range improvements, but continue, at least 
for this year, to provide those improvements with discretionary 
funding. What is your thinking here?
    Answer. Part of the Administration's strategy for reducing the 
Federal deficit is to rein in mandatory spending, such as the Range 
Improvement Fund, and where possible and merited, to continue to 
perform this work with discretionary funding. This provides greater 
flexibility to adjust funding levels to actual needs from year to year, 
including adjustments between various types of projects that benefit 
range health.
    Question 2. It appears to me this change could have the effect of 
eliminating the availability of the funds during times of lean budgets. 
How would this be good for the resource you are trying to manage?
    Answer. The BLM will continue to fund these range improvement 
projects in 2006, but will do so through its Deferred Maintenance 
program and Cooperative Conservation Initiative programs in the 
Management of Land and Resources account. Specifically, an estimated 
$7.0 million in base Deferred Maintenance program funding as well as 
$3.0 million of the $6.0 million increase requested for CCI will be 
targeted to high priority range improvement projects.
    Other aspects of the 2006 BLM budget request also emphasize the 
importance of rangeland health and productivity. For the second year in 
a row, BLM is proposing a significant increase in funding to support an 
aggressive plan of sagebrush conservation and restoration. The 2006 
budget includes an increase of $7.0 million, which builds on a $2.7 
million increase provided in 2005. Of the requested $7.0 million 
increase, $3.4 million will be matched by partner contributions under 
the Challenge Cost Share program. Maintaining and improving the health 
of the sagebrush habitat to ensure viable sage-grouse populations are 
critical to the continued multiple use management of these lands, 
including grazing.
    Invasive weeds also damage the health and productivity of 
rangelands. The 2006 BLM budget includes increases of at least $1.3 
million to address weed management on BLM-administered lands. Of this 
$1.3 million, $1.0 million is in the Challenge Cost Share program, and 
will therefore be leveraged with non-Interior funds to treat additional 
acres.
    Question 3. Will the Administration be submitting a legislative 
proposal?
    Answer. The Administration is developing a legislative proposal to 
amend the Federal Land Policy and Management Act to eliminate the Range 
Improvement Fund and to direct that all grazing fees currently 
deposited in the Range Improvement Fund be deposited in the General 
Fund of the Treasury.

               NATIONAL PARK SERVICE--VANISHING TREASURES

    Madam Secretary, I am very supportive of the Park Service vanishing 
treasures initiative to protect, stabilize, and preserve some of our 
historical sites and ruins in our national parks. I have pressed our 
Appropriations Subcommittee to increase funding for the program in each 
of the past several years, and we have made some progress.
    Madam Secretary, the vanishing treasures program is very important 
to New Mexico park units. Seven of the 25 national park units receiving 
vanishing treasure funding are in my State.

   Could you give a few specific examples of the work that is 
        being done in our national parks with vanishing treasures 
        funding?
    Answer. Three examples of the many valuable projects the Vanishing 
Treasures (VT) program is funding include:

    Bandelier National Monument: The Cavate Project preserves and 
protects the architectural remnants of the ancestors of modern Pueblo 
people. This project consists of mapping and documenting 700-year-old 
cave dwellings, then providing treatment for the long-term preservation 
of these extremely fragile historic places. The VT funds serve as seed 
money to attract public and private partners through grants and 
cooperative agreements.
    El Morro National Monument: The VT funds are saving the ruins of 
the mesa top Atsina Pueblo which dates to circa 1300. They enabled the 
NPS to hire native Zuni masons, descendants of the Atsina peoples, who 
are applying culturally-appropriate technical solutions to conservation 
problems. As a result of this work, the National Park Service is better 
prepared to treat other historic sites using culturally-appropriate 
techniques throughout the arid southwest.
    San Antonio Missions National Historical Park: The VT funds were 
used to preserve the historic Mission San Jose grist mill, an actively 
working flour mill that tells the story of 18th century mission life. 
The VT work effectively stabilized and conserved the water basins and 
historic remains of lime kilns through the use of plasters and mortars 
based on historic formulas.

   Would you please provide for the record additional 
        information on the work being done at various park units with 
        vanishing treasures funds?
    Answer. The Vanishing Treasures program continues to address the 
needs of 44 parks using Vanishing Treasures resources as follows: 9 
parks in New Mexico, 15 in Arizona, 8 in Utah, 5 in Texas, 3 in 
Colorado, 3 in California, and 1 in Wyoming.
    Over the last 10 years, more than $11 million has been spent on 
emergency and high priority projects and the training of a highly 
skilled preservation workforce. About $7 million was used to complete 
thirty-one projects requiring the very specialized work needed to 
preserve these rare historic resources. These projects spanned the full 
historic preservation spectrum from initial condition assessments 
documentation to full structural stabilization and site reburial. 
Project funding allowed parks to hire temporary and seasonal personnel 
to address identified preservation needs and to provide needed 
supplies, materials, and equipment. Parks also used funding to contract 
with the private sector, local universities and colleges, and Tribes 
and local communities, and to establish local and regional 
partnerships.
    About $4 million was used to recruit and train 66 preservation 
specialists in 24 parks. We actively recruit, hire, and train a highly 
professional and culturally diverse workforce that includes a cadre of 
professionals consisting of craft-specialists, historical architects, 
archaeologists, architectural conservators, and structural engineers.

   The FY 2006 budget includes just over $5.2 million for the 
        vanishing treasures program, which is essentially a freeze at 
        the current funding level. Is this the amount that our park 
        units can realistically spend?
    Answer. Yes. The funding requested in the FY 2006 budget would 
cover the costs of existing staff positions and provides for an 
allocation of funds that would allow the completion of approximately 13 
to 15 projects.

   Are there additional projects that could be undertaken if 
        Congress again provides additional vanishing treasures funding?
    Answer. The needs of the Vanishing Treasures program must be 
balanced with the other funding needs for the National Park Service. In 
that context, the $5.3 million proposed for FY 2006 is an appropriate 
amount.

                               BACKGROUND

    The seven national parks in New Mexico receiving vanishing 
treasures funding are:

          Aztec Ruins National Monument (NM)
          Bandelier NM
          Chaco Culture National Historical Park (NHP)
          El Malpais NM
          El Morro NM
          Fort Union NM
          Salinas Pueblo Missions

                   CHACO CULTURE AND HIBBEN INSTITUTE

    Madam Secretary, I want to thank you for including funding in the 
FY 2006 budget to help preserve the incredibly rich history of the 
Chaco Culture National Historical Park.
    The President's request of $4.24 million in Park Service 
construction funding will allow implementation of the Hibben Center Act 
that was passed in the last Congress. This Act authorizes the 
Department to collaborate with the University of New Mexico and the 
Hibben Archaeology Research Center to research and manage the extensive 
collection of Chaco artifacts.

   Madam Secretary, is this a unique collaboration for the Park 
        Service and for the Department?
    Answer. Although NPS partners with many universities, the 
collaboration between the University of New Mexico and the National 
Park Service is unique because of its longevity. When Chaco Culture 
National Historical Park was created as a national monument in 1907, 
the University of New Mexico owned four sections of land within the 
monument's boundaries. The University used its land for archaeological 
field schools in the 1930s and 1940s. Since 1949, when the University 
deeded its land to the Federal government, NPS and the University have 
had a continuous series of agreements focused on archaeological 
research. From 1970-1985, NPS and the University cooperatively managed 
the Chaco Project, an archaeological survey and excavation project that 
collected many of the artifacts that will be housed in the Hibben 
Center. The collaboration's strength lies in the joint emphasis on 
research, based on the mission of both entities, and its success lies 
in the ability of the two institutions to allow the nature of the 
partnership to evolve over time, based on mutual interests, needs, and 
benefits.

   If so, could this partnership possibly serve as a model for 
        future collaborations?
    Answer. Yes, this partnership is an excellent example of where the 
NPS and a university work together to accomplish mutual goals. While 
the creation of this partnership may be unique because of its 
longevity, we are exploring other opportunities for similar 
collaborations. The ongoing development of CESU's (Cooperative 
Ecosystem Studies Units) between Federal land management, 
environmental, and research agencies and universities also provides 
examples of partnership successes.

                  RIO PUERCO WATERSHED REHABILITATION

    Madam Secretary, I have been working for several years to provide 
funding to rehabilitate earthen dams in the Rio Puerco Watershed. This 
work is designed to improve the overall health of the watershed and to 
prevent siltation of areas such as the reservoir at Elephant Butte in 
New Mexico.
    I am pleased to see the Administration continue this initiative 
with about $600,000 in the BLM budget.

   Would you please provide the Committee with a progress 
        report on the BLM work in the Rio Puerco watershed?
    Answer. Of the $600,000 appropriation for Rio Puerco restoration, 
$400,000 has been used for BLM projects on public land and $200,000 for 
projects recommended by the Rio Puerco Management Committee (RPMC), a 
partnership of stakeholders established by P.L. 104-333.
    Using a nine-person labor crew of local hires from rural Sandoval 
County, the BLM has been repairing on the average of three large 
sediment retention dams per year. These are generally structures that 
have breached or are in danger to losing their stored sediment 
downstream. In addition, the crew has been performing needed 
maintenance on approximately 12 to 15 dam structures per year.
    The RPMC approves projects averaging $25,000 that benefit ranchers, 
tribal land users, and local communities. A key multi-year effort has 
been RPMC's support of a Navajo summer youth program that provides 
summer employment to high school students to construct low tech erosion 
control structures using available materials. The project is in its 
fifth year and now includes eight Navajo Chapters.
    This year the RPMC is also funding a motivational video aimed at 
land users about erosion control techniques, the reshaping and seeding 
of eroded gullies that fill up livestock waters, the planting of 
cottonwood and willows for riparian restoration, and chemical control 
of sagebrush for local ranchers.

   I understand that there has there been additional federal 
        funding for this project through the Environmental Protection 
        Agency. Could you tell the Committee how this collaboration is 
        working, and what specific projects have been completed with 
        BLM funding?
    Answer. Because of the RPMC's demonstrated ability to complete 
projects with Congressional funding, the committee has been able to 
leverage several EPA grants including a three-year targeted watershed 
grant.
    This year, BLM's labor crew is completing the structures needed to 
return the Rio Puerco to its original channel at La Ventana. The river 
had been channelized in the mid 1960s by the NM Highway Department, 
which resulted in accelerated erosion and the loss of 14.1 million 
cubic feet of sediment.
    EPA funding this year will help train a Youth Conservation Corps 
crew from Cuba High School to control erosion and fund a demonstration 
of noxious weed control using goats. In addition, funding is being used 
to sponsor roads maintenance workshops, and train ranchers and county 
road maintenance workers in better road drainage methods.
    The main thrust of the EPA targeted watershed project is to train 
land users in better stewardship practices that will result in improved 
water quality and watershed health. The committee hopes to build 
thousands of low tech erosion control structures.

                         NATIONAL PARK SERVICE

    Homeland Security requirements have imposed a burden on several of 
your bureaus including the National Park Service.

   How much did the National Park Service spend on Homeland 
        Security in 2003 and 2004?
    Answer. The NPS did not track the total amount spent on homeland 
security in 2003 and 2004. However, the total icon park base operations 
funding totaled $70.6 million in 2003 and $76.3 million in 2004. The 
icon parks include, Boston NHP, Fort Point NHS, Independence NHP, 
Jefferson National Expansion Memorial, Mount Rushmore, Statue of 
Liberty NM and Ellis island, and the National Mall (excluding National 
Capital Parks-Central).

   How much of that was in excess to the amount that you 
        expected to spend?
    Answer. In 2003 there were three Orange Alerts by the Department of 
Homeland Security, increased costs for security at the icon parks July 
4th celebrations, and other law and order transfers primarily related 
to the Orange alerts. The NPS spent an additional $8.6 million, mostly 
from receipts, for heightened levels of security, infrastructure, and 
equipment needs. In 2004 there was one Orange Alert in late December 
through early January that cost the icon parks an additional $1.4 
million. These amounts do not include the budget of the U.S. Park 
Police. Emergency supplemental funding for the Park Police in 2002, 
with significant carryover into 2003, allowed it to stay within 
budgeted amounts.

   What changes have you made in National Park Service 
        operations to improve response and cost efficiency for 
        requirements associated with homeland security?
    Answer. NPS has made permanent enhancements to icon park security. 
For example, at the Statue of liberty, NPS made a series of safety and 
security improvements, which allowed it to reopen the Statue to 
visitors in August 2004. During 2003 and in early 2004 there were 
significant daily costs when the Nation was at Orange Alert. During 
2004, the NPS made adjustments because of additional funding provided 
to those icon parks and NPS became more efficient at making the 
transition from Yellow Alert to Orange Alert. Should a nation-wide 
Orange Alert be issued today, these adjustments allow NPS to 
immediately go from Yellow to Orange with little cost, depending on the 
staffing level at the icon park. It is also noted that there have been 
no national Orange alerts since early 2004 and that future Orange 
alerts are likely to be area specific and not nation-wide.

   Should the Administration initiate a budget system similar 
        to wildfire funding to reimburse bureaus for homeland security 
        requirements?
    Answer. The Department does not believe a budget system similar to 
wildfire is necessary at this time. Should future icon park assessments 
show specific vulnerabilities, they can be addressed through the normal 
budget process.

    The National Park Service issued a permit for the National Football 
League to kick off the season with an event on the National Mall. Large 
advertising banners were erected to acknowledge sponsor participation. 
Many people including members of the Senate thought the advertising was 
excessive and inappropriate for the National Mall.

   Did the National Park Service incur any expenses outside of 
        normal operating costs for supports this event?
    Answer. Yes. However, those expenses were reimbursed. The National 
Football League paid the NPS $430,000 to cover all event monitoring 
costs and to repair damage to the resource, primarily to turf and sod.

   Are any events of such magnitude scheduled for 2005?
    Answer. There are no planned special events of that magnitude. 
Applications have been received for two large-scale First Amendment 
demonstrations, the Million Man March 10th Anniversary and the Luis 
Palau evangelistic crusade. Those are expected to involve large numbers 
of participants, but not the logistical setup for a televised event or 
the sponsorship that was associated with the NFL activities.

   What changes have you implemented to prevent a repeat of 
        such misuse of the National Mall?
    Answer. We have implemented the provision included in the Fiscal 
Year 2004 appropriations for the Department of the Interior (P.L. 108-
108) which addresses commercial sponsorship and advertising. We have 
revised the Special Events Guidelines for applicants to require any 
special event involving signage to submit, a minimum of 30 days in 
advance, a comprehensive plan showing the overall size, number, and 
design of any signs or banners recognizing all event sponsors. We have 
also amended our Special Events Guidelines for large-scale events by 
requiring permittees to use newly developed materials to reduce impacts 
to turf.

    The Administration has proposed an increase of $50.5 million for 
park operations in 2006 when compared with the 2005 budget.

   What do you anticipate using this additional money to fund?
    Answer. The net increase of $50.5 million will allow the NPS to 
cover fully the anticipated pay cost increases and other fixed costs 
expected in 2006. Most of the uncontrollable cost funding is provided 
to park units. In addition, there are a series of increases which 
selectively target high-performing areas such as natural resources 
management, fee management, and cultural resource preservation. A 
number of other increases will focus on management improvements in 
areas such as information technology and partnership program oversight, 
where small investments in funding can yield impressive productivity 
gains and leverage additional financial resources.

   Will this be used to fund any shortfalls in visitor 
        services?
    Answer. When combined with the healthy increase for park units 
enacted in 2005, the inclusion of full pay cost in the 2006 budget 
request and the continued implementation of management reforms will 
allow NPS to manage and operate the parks effectively and to sustain 
visitor services. The additional funding will assist in ensuring that 
the visitor satisfaction rating in the National Park Service remains 
above 95 percent, as well.

    The Administration has been developing systems and procedures to 
assess and track the National Park Service maintenance backlog.

   What progress has been made in reducing the backlog?
    Answer. Significant progress has been made in both addressing known 
maintenance projects through the park system as well as in establishing 
and implementing the management framework that will guide the Service's 
21st century approach to asset management. The President's 2006 budget 
fulfills the pledge to devote $4.9 billion towards the NPS maintenance 
backlog. With these funds, NPS has undertaken over 4,000 projects since 
2002, ranging from road repairs, to historic building stabilizations, 
to restroom rehabilitations. In addition, NPS has completed the first 
ever systematic inventory of its assets and conducted initial condition 
assessments at all parks. Comprehensive condition assessments are 
scheduled to be completed by the end of FY 2006.

   How much do you anticipate spending in 2005 and 2006 to 
        address the backlog?
    Answer. The estimated FY 2005 amount is $1.001 billion; the FY 2006 
requested amount is $1.145 billion. Both of these amounts are 
predicated on enactment of the funding levels assumed in the 
President's request for the transportation reauthorization bill.

   What is your schedule for completing the backlog and 
        transitioning to a preventative maintenance program?
    Answer. The comprehensive condition assessments will be completed 
by the end of FY 2006. This will provide a more accurate picture of the 
condition of the NPS asset inventory and the funding levels needed to 
improve the overall condition of NPS assets to acceptable condition. 
Just as with one's home, it is not assumed that a backlog is ever 
completely eliminated. Conditions are not static; they change daily. A 
simple dollar amount also assumes that every asset is of equal priority 
and deserves to be restored to excellent condition. The goal of NPS is 
to manage its vast asset inventory systematically so that investment 
decisions are prioritized and tiered to the known condition of an asset 
and its priority to fulfilling the park mission. The backlog can be 
viewed as the funding needed to improve the condition of the asset 
inventory from poor to acceptable. NPS will not be in a position to 
determine that amount until after the comprehensive condition 
assessments are completed at the end of FY 2006. Understanding the 
preventative maintenance requirements of our asset inventory is a 
crucial component of the comprehensive condition assessments. NPS is 
already shifting to requiring the use of asset condition and priority 
information in its funding determinations regarding the allocation of 
cyclic maintenance dollars.

    2006 is the last year for the Natural Resources Challenge in the 
National Park Service.

   What are the most significant achievements of the Natural 
        Resources Challenge since its inception?
    Answer. The Natural Resource Challenge funding increases provided 
from FY 2000-2004 enabled the National Park Service to systematically 
inventory its resources at the park level and to establish a vital 
signs monitoring program to understand and track the health of those 
resources. Over 1,637 park-inventory data sets have been compiled for 
parks and placed on a geospatial platform, including documentation of 
264,948 species, providing important operational, planning and 
compliance information. The monitoring program, based on networks of 
parks sharing resources, represents a performance management framework 
that is crucial to the long-term protection of the nation's natural 
heritage. In addition to vital signs monitoring, key water and air 
monitoring has been strengthened in parks.
    The Challenge also provides park managers important tools to ensure 
success in managing resources to the standard of ``unimpaired.'' The 
Cooperative Ecosystem Studies Unit network (17 competitively selected 
university-based units) provides the resources of 180 university 
partners directly to parks. Over 1,800 research, technical assistance, 
and education cooperative projects have been initiated by parks--vastly 
increasing technical expertise and resources available to parks without 
increased Federal staffing or infrastructure.
    Sixteen mobile Exotic Plant Management Teams (EPMTs) have been 
established to stem the tide of invasive plant destruction of park 
habitats. In 2003-04, over $4 million in outside support was leveraged 
by these teams. In 2003-04, almost 621,000 acres in 209 parks were 
treated to control invasive plants. Other agencies are adopting this 
approach.
    The Challenge also provided increased project funds to restore 
habitats and key species. Over 195 projects--peer reviewed and 
competitively awarded--have been supported in parks as a result of the 
Challenge.
    Twelve Research Learning Centers have been established in parks, 
often adaptively re-using historic structures and leveraging private 
funding, to attract independent researchers to parks and provide their 
science directly to park visitors as well as managers. Over 500 
projects have been supported so far.

   What do you see as the future of this program?
    Answer. The Challenge was seen as the necessary long-range 
investment needed for park managers to be successful in the 21st 
Century. Adaptive management of each element of the Natural Resource 
Challenge is underway. Constant improvements and adjustments will be 
required. A missing element is the institutional memory needed to 
synthesize vast amounts of information to achieve a usable 
understanding of the complex natural systems in many national parks. 
Projects and partners suffice for much of the information generation 
needed in parks but long-term site-fidelity and synthesis is needed to 
comprehend the natural variability, vulnerability, and strengths within 
these systems. This element does not presently exist and should be part 
of a future organizational commitment to generating and retaining the 
expertise necessary to manage national parks wisely.

    National Heritage Areas were first designated in 1986. Since then, 
27 National Heritage Areas have been designated. I noticed in your 
budget request for 2006 that $5 million is included for National 
Heritage Areas. In 2004, you asked for $2.5 million and Congress 
enacted $14.5 million.

   Why do you ask for only $5 million when you know it will 
        take more than 3 times that amount to fund the program?
    Answer. We recognize that the Congressional heritage area 
designation is an effective tool to bring together local communities' 
interests for the preservation of local heritage resources. With 
designation, local communities are able to coalesce support for 
important regional needs that conserve cultural and natural resources, 
improve the quality of life, and help to develop sustainable self-
supporting economies.
    The 2006 budget reduces pass-through funding for the national 
heritage areas reflecting an emphasis on encouraging them to become 
self-sufficient. However, the 2006 budget expands opportunities and 
resources that the heritage area partners can competitively apply for, 
including: $15 million for Save America's Treasures, $38.7 million for 
historical preservation grants to States and Tribes, and $12.5 million 
through the new Preserve America grants program.

   How do you intend to manage 27 National Heritage Areas (and 
        growing) with such little funding?
    Answer. The NPS does not manage the national heritage areas but 
provides technical assistance. The heritage areas are managed by 
private nonprofit groups or States and they secure funding for projects 
from a variety of sources including local fund raising, States, other 
Federal agencies, and Interior grant programs. Since the inception of 
the national heritage areas concept, the focus has always been that the 
entities would become self-sufficient and no longer need pass-through 
funding.

    The National Park Service will celebrate its centennial in 2016. 
The Administration began planning and implementing several activities 
well in advance of the 50th anniversary in 1966.

   What have you begun to do to plan for the centennial?
    Answer. The National Park Service is just beginning to consider 
ideas for commemorating the 100th anniversary of the Service. The NPS 
Director has asked the chief of policy to take the lead on this 
project. The NPS is soliciting ideas among its employees through a 
forum that has been set up on the agency's internal website. The 
approaching centennial will be a subject of discussion at each of the 
regional leadership conferences this year. We anticipate that a year 
from now we will have a better idea of the direction we will be 
pursuing for commemorating the centennial.

   What type of support do you need from Congress to begin 
        preparing for this important milestone in the history of the 
        National Park Service?
    Answer. At the moment, we are not far enough along to know what 
support we will need from Congress. We plan to keep in close touch with 
Congress as we move forward on this project.

                               WATER 2025

    The Administration's FY 2006 budget requests $946.7 million for the 
Bureau of Reclamation, compared to the $964 million enacted for the 
Bureau in FY 2005. However, the budget calls for a nearly 50% increase 
from FY 2005 levels for the Bureau's Water 2025 program, for a total 
funding level of $30 million.
    Question 1. The budget tells a story of no growth, particularly in 
the area of desalination. I note that one area where growth is 
occurring is in Water 2025. Please explain how this program will meet 
the needs of desalination research given the fact that the 
Administration has decided to effectively eliminate funding of 
desalination research programs. Also, how will Water 2025 address basic 
research?
    Answer. The Water 2025 program is currently funding desalination 
research. The FY 2006 request would continue this funding for 
activities that are undertaken consistent with the Administration's 
Research and Development criteria. Desalination research within Water 
2025 is focused on laboratory-scale, pilot-scale, and demonstration-
scale research. Because the laboratory-scale research will take many 
years to impact the marketplace, it is viewed as basic research. Both 
the pilot-scale and demonstration-scale are applied research that will 
reach the marketplace more rapidly.
    The Administration is currently considering its long-range 
desalination research and development policy in the context of the 
interagency efforts being coordinated by the White House Office of 
Science and Technology Policy.
    Question 2. Congress has provided two years of funding for Water 
2025. Please provide a summary of the accomplishments of the program. I 
am particularly interested in learning how Water 2025 has provided 
advances in the development of policies and activities to address 
drought-related needs.
    Answer. The Challenge Grant Program, a key feature of Water 2025, 
elicited an overwhelming response in FY 2004 and 2005. Over 100 
proposals both years enabled the Department to select an impressive 
array of water conservation projects for Federal cost-sharing. Many of 
these activities will help mitigate the impacts of droughts. However, 
Water 2025 is not intended to focus on drought-related water shortages. 
Rather, Water 2025 focuses on addressing and avoiding the water 
conflicts that will occur even in normal water years.
    With the $4 million available for the FY 2004 Challenge Grant 
Program, 19 projects were selected in 10 different states throughout 
the West. Those projects broke ground in 2004 and will be completed 
during 2006. One of the 19 projects, in the Springville Irrigation 
District in Utah, was completed just six months after the date of the 
award; the rest are progressing according to schedule.
    The 19 selected projects represent a total of almost $40 million in 
on-the-ground water delivery system improvements, including 
Reclamation's contribution of $4 million and a non-Federal contribution 
of approximately $36 million. These projects improve water delivery 
systems, and involve a combination of different measures to improve 
water management and conserve water.
    Ten projects will collectively convert almost 20 miles of leaky 
dirt canals to pipeline, eliminating water losses due to seepage and 
evaporation, resulting in substantial water savings. Five projects 
focus on installation of measuring devices; several also involve 
installation of Supervisory Control and Data Acquisition (SCADA) 
systems. Both greatly improve water delivery control and reduce 
spillage. Three projects involve installation of automation technology 
allowing precise, remote control of water diversions and/or deliveries. 
Two projects involve water marketing, including one project to 
establish a pilot water bank in the Deschutes River Basin in Oregon, 
aimed at facilitating the voluntary transfer of water among water 
users.
    In addition to the Challenge Grant program, Reclamation was 
appropriated $1 million for the Desert Research Institute (DRI) to 
address water quality and environmental issues. Reclamation entered 
into a cooperative agreement with DRI for three projects: (1) 
Investigation into the human health and environmental safety of using 
polyacrylamide (PAM) to reduce canal seepage in unlined canals; (2) 
evaluation of sediment transport in the downstream reach of the Las 
Vegas Wash, including analysis of water quantity and quality impacts on 
Lake Mead; and (3) evaluation of system optimization alternatives for 
automation of check and diversion structures along the Truckee River. 
Work on these projects is proceeding according to schedule and should 
be completed by the fall of 2006.
    In addition, using Water 2025 funding, Reclamation is entering into 
a strategic alliance with a consortium of universities including the 
International Center for Water Resources management at Central State 
University in Ohio, the Ohio View Consortium, and Colorado State 
University in Colorado (collectively, ``Alliance Universities'' or AU). 
Reclamation and the AU will develop remote sensing technologies to aid 
in making water management decisions.
    In October 2004, Reclamation entered into a Water 2025 cooperative 
agreement with the Middle Rio Grande Conservancy District (MRGCD) 
awarding the District $1.3 million for delivery system improvements. 
The award was a 50/50 cost share between Reclamation and MRGCD, for a 
total of $2.6 million for the project. This project will improve and 
modernize irrigation surface water conveyance facilities through the 
replacement of turnouts and old gates, concrete lining of canals, 
installation of telemetry, measurement devices, and automation. The 
project also involves the development of a computer system able to 
manage hundreds of gates, with information being published on the 
internet and will be made available to other water agencies to aid in 
managing flows of the Rio Grande. MRGCD expects to begin construction 
and implementation of the improvements in the spring of 2005, and will 
complete the project in the fall of 2007.
    Of the $19.5 million appropriated in FY 2005, $10 million was 
allocated to the grant program. Reclamation received 117 proposals 
requesting $35.5 million in Federal assistance--$10 million more than 
was requested in FY 2004--for a total of $115 million in water delivery 
system improvements across the West. $79.5 million is proposed to come 
from non-Federal matching funds. Reclamation will select the projects 
by July 2005.
    The FY 2005 funding for Water 2025 also included $1,750,000 for 
continued water conservation and efficiency improvements related to the 
MRGCD. Reclamation and MRGCD are working together to develop a plan for 
application of this additional funding.
    Taken together, these projects advance the purpose of making water 
delivery and use more efficient
    Question 3. Water 2025 envisions collaboration as a key to future 
successes in mitigating drought impacts. What has the Department done 
to improve collaboration among the various federal agencies and 
departments to leverage available resources to support improved 
responses to water shortages?
    Answer. At the policy level, Reclamation and the other Federal 
agencies involved in water resources research and development are also 
working under the guidance of the White House Office of Science and 
Technology Policy to coordinate Federal R&D for water availability to 
ensure an adequate water supply for the Nation's future.
    Meanwhile, the Department's day-to-day collaboration among sister 
Federal agencies on response to water shortage has several facets. 
First, the Bureau of Reclamation collaborates closely with the Fish and 
Wildlife Service and with the National Oceanic and Atmospheric 
Administration of the Department of Commerce to meet the water supply 
requirements of irrigators, municipalities, and others while still 
taking necessary steps to meet the requirements of the Endangered 
Species Act throughout the West. An example of this type of 
collaboration (which also includes States and other entities) is the 
Multispecies Conservation Program in the Lower Colorado River Basin.
    Reclamation is currently working with the U.S.D.A. Natural 
Resources Conservation Service to assess the drought conditions across 
the West and coordinate programs of both agencies to maximize benefits 
in those areas of the West most in need. Additionally, Reclamation 
collaborates with the U.S. Army Corps of Engineers, most recently 
through an interagency Memorandum of Understanding to enhance our 
historic partnership. The Pick-Sloan Missouri River Basin Project, a 
joint operation of the Corps and Reclamation which serves some of the 
most drought stricken areas of the Nation is an example of this 
historic relationship. The Department also partners with the U.S. 
Department of the Navy on desalination project development at the 
Tularosa Desalination Research and Development Center in New Mexico. 
Recently, Reclamation and the Corps worked closely to manage flooding 
in the Colorado River Tributaries in Arizona, effectively minimizing 
spill of unregulated water to Mexico and maximizing storage in Lake 
Mead.
    Question 4. Why is there no construction element to Water 2025?
    Answer. Larger Reclamation construction projects have traditionally 
been authorized by Congress individually, while Water 2025 work in the 
field has focused on competitive, cost-shared grants for conservation 
improvements, installing technology for measuring and accurately 
delivering water, and similar projects. Although some conservation 
improvements aimed at preventing leakage in canals involve significant 
capital improvements (i.e. headgates, canal lining, pipe replacement, 
and water measurement flumes), they are not regarded by Reclamation as 
part of its construction program.

                             WESTERN WATER

    The Administration's decreased budget request seems to scale back 
significantly federal involvement in western water resources needs.
    Question 1. How will the Administration's FY 2006 budget proposal 
impact the need for increased water storage in the West?
    Answer. First, the Department's budget provides for full 
maintenance and retention of the existing storage infrastructure that 
has been developed over the past 103 years. It is this existing set of 
storage projects that have made it possible for the West to cope with 
drought as well as it has to date.
    Second, we are looking at new storage capacity in key locations. 
For example, in carrying out the recently enacted CALFED legislation, 
the Department has budgeted $10 million in FY 2006 to study four 
potential storage projects: Shasta Dam Enlargement, San Joaquin River 
Basin storage, Sites Reservoir, and Los Vaqueros. As we study any new 
storage options, we focus on ensuring that any new projects are 
economically and environmentally justified. All of these projects are 
subject to rigorous evaluation relative to the Economic and 
Environmental Principles and Guidelines for Water and Related Land 
Resources Implementation Studies. These evaluations help determine 
whether the proposed project is in the best interests of the Nation. 
For example, the initial evaluation of the proposed Black Rock 
Reservoir in Washington State calls for a rigorous examination of its 
benefits and financial viability, and of other possible alternatives.
    Question 2. Please provide a brief statement on how the Department 
envisions addressing the ever-increasing western water needs over the 
next five to ten years.
    Answer. The Department has three groups of options in dealing with 
the various growing demands on Western water in coming years. The first 
is maintaining and studying the expansion of storage; the second is 
improving efficiency, water conservation, and water markets through 
programs such as Water 2025; and the third is water treatment 
technologies such as desalination.
    Question 3. Has the Department considered alternative financing 
mechanisms such as a loan guarantee program?
    Answer. While the Department has engaged in preliminary internal 
discussions regarding loan guarantee concepts, as of this writing, it 
has not recommended legislation to Congress.

                     TITLE XVI RECYCLING AND REUSE

    Every year Congress supports the authorization of new Title XVI 
recycling and reuse projects, despite the Administration's stated 
objections to the program. Last Congress, Commissioner Keys appeared 
before this Committee and testified that the program has a 15-year 
funding backlog.
    The Administration's FY 2006 budget requests approximately $10 
million to support a handful of projects. As you know, this Committee 
will hold a Water Conference in April to examine numerous water issues, 
including the Title XVI program.
    Question 1. The FY 2006 budget request suggests that the 
Administration does not envision a substantial federal role in the area 
of water recycling and reuse. Please respond.
    Answer. The Department has undertaken water recycling and reuse 
through its Title XVI Water Reclamation and Reuse program since 1992. 
The program has provided financial assistance to local water agencies 
to demonstrate water recycling technology to extend water supplies. 
That technology demonstration phase has largely been accomplished. 
Funds requested will help complete previously initiated projects.
    Question 2. As you know, a number of Title XVI projects have been 
authorized for federal assistance. What criteria does the Department 
use for either supporting or not supporting projects authorized to 
receive federal assistance?
    Answer. Because the recycling and reuse technology demonstration 
purpose of Title XVI has largely been accomplished, as noted above, the 
Administration focuses its budget requests in this area on completing 
projects already under construction.
    Question 3. Why is the Department so seemingly reluctant to engage 
in M&I water projects?
    Answer. While Reclamation has been involved in municipal and 
industrial water supplies since 1906, few recent project sponsors have 
proposed M&I water projects under traditional Reclamation law, perhaps 
because Reclamation law requires repayment of the construction costs 
allocable to M&I purposes. The interest rate for repayment is 
determined each fiscal year by the Secretary of the Treasury, pursuant 
to Section 301(b) of the Water Supply Act of 1958. The interest rate 
for Fiscal Year 2005 is currently set at 8.077 percent. Unless there is 
a significant portion of proposed M&I water projects that can be 
allocated to non-reimbursable benefits, such as flood control, or 
environmental purposes, there is little incentive for M&I entities to 
propose water projects under Reclamation Law. The current non-Federal 
interest rate in most cases is less than the Federal rate.
    Moreover, most urban areas requesting municipal and industrial 
water supply projects are better able to raise funds for their projects 
than the more rural areas of the West, where Reclamation has a larger 
presence.

                                 CALFED

    Last year, Congress enacted the long-awaited CALFED authorization. 
The Bureau's FY 2006 Budget requests $35 million to support the CALFED-
related activities.
    Question 1. The Bureau's FY 2006 Budget requests $35 million to 
support the CALFED program. What is the total amount that the 
Administration as a whole is proposing for the CALFED program?
    Answer. The total amount that the Administration is requesting for 
CALFED-related activities is $207 million. This amount consists of $77 
million for Category A programs and $130 million for Category B 
programs. Category A includes programs and funding that are consistent 
with the CALFED Program goals and objectives and priorities and are 
submitted to the California Bay-Delta Authority for review and 
recommendations. Category B includes programs and funding that have 
related and overlapping program objectives within the geographic area 
of the CALFED solution area and are shared with the California Bay-
Delta Authority for review and comment.
    Question 2. In the recently enacted CALFED legislation, Congress 
directed the Department to review, within 180 days of enactment, the 
feasibility of proceeding to construction of a number of projects 
studied as part of the Southern California Comprehensive Water 
Reclamation and Reuse Study and the Bay Area Water Plan. What is the 
status of this effort and when can the Committee expect to receive the 
Administration's evaluations and recommendations consistent with the 
statutory provisions of the law?
    Answer. Reclamation has coordinated with local agencies requesting 
existing planning studies for water recycling projects identified in 
both the Southern California Comprehensive Water Reclamation and Reuse 
Study (SCCWRRS) and the Bay Area Regional Water Recycling Program 
(BARWRP). On January 21, 2005, the Mid-Pacific Region sent a letter to 
36 local BARWRP agencies requesting planning reports for water 
recycling projects identified in the BARWRP Master Plan. The Mid-
Pacific Region received planning reports for about 24 projects from 18 
different local BARWRP agencies.
    The Lower Colorado Region sent letters to about 140 local agencies 
requesting planning reports for water recycling projects identified in 
SCCWRRS. The deadline for submitting the reports by local agencies was 
March 11, 2005.
    Reclamation is establishing a review team to review the local 
planning reports to make a determination of feasibility. Reclamation is 
currently looking into how to fund this review in order to complete the 
determination of feasibility for a large number of locally completed 
water recycling planning studies.
    Question 3. Is the CALFED program a useful model for resolving 
other water conflicts throughout the West? Please explain.
    Answer. Yes, there are many policy and structural aspects of the 
CALFED Bay-Delta Program that would have application to other 
intensifying environmental/water supply conflicts in the Western 
States. The collaborative, coordinated effort among stakeholders and 
Federal, state and local agencies in the CALFED Bay-Delta Program has 
been instrumental in identifying problems and uniting the various 
entities behind a common goal and program to resolve environmental, 
water supply reliability, natural disasters and water quality resource 
conflicts.

                             TRINITY RIVER

    As you know, the Federal Court of Appeals recently upheld the 
Trinity Record of Decision. As a result, Trinity River flows will now 
vary between 369,000 and 815,000 acre-feet per year (excluding safety 
of dam releases). This represents an average flow increase of 
approximately 260,000 acre-feet per year.
    Water diverted from the Trinity River to the Sacramento River flows 
through three different power plants, generating 1100 kWh for every 
acre foot of water. With this water no longer being diverted to the 
Sacramento River, the output of the Central Valley Project power system 
will be reduced by almost 10 percent.
    Question 1. According to the public power customers in Northern 
California, they will incur $15--$22 million in costs per year to 
replace that power. Does the Department agree with that assessment?
    Answer. Yes, in general. The Environmental Impact Statement/Report 
and the Supplemental Environmental Impact Statement provided detailed 
analysis of the potential impacts associated with increased flows in 
the Trinity River and resulting associated decease in Central Valley 
Project generation. The amount of foregone generation (kilowatt-hours) 
is generally agreed upon, but the value of that generation is where 
differences often occur. The Department's power value estimate was 
based on a consultant's forecast of energy prices and these are 
comparably lower than that claimed by some Northern California power 
customers. For instance, based on the Record of Decision flows, the 
value of foregone CVP generation forecast by the Department's 
consultants is $7.2 million to $21.2 million depending on the water 
year type.
    Question 2. As a result of the Trinity decision, power output from 
the Central Valley Project has been significantly reduced. Since the 
allocation of costs is supposed to track the distribution of benefits, 
does the Bureau intend to reallocate costs associated with the Trinity 
Project to reflect this operational change? If so, when do you expect 
to have this change in place?
    Answer. Reclamation is currently developing a formal response to 
the request that has been received from CVP water and power customers. 
A forecast schedule for performing the cost allocation process as well 
as a budget estimate of its cost is being prepared and will be reviewed 
with these customers within the next few weeks. Preliminary results 
indicate the cost allocation process may take as long as 36 months and 
could cost as much as $5 million. These estimates will be modified as 
more refined cost estimates are received from the entities that will be 
assisting in the cost allocation process (for instance, the Corps of 
Engineers will be preparing the flood protection benefits portion of a 
cost allocation).

                         O&M COSTS FOR SECURITY

    The Administration has requested $50 million for site security 
efforts, an increase of $6.8 million from FY 2005 levels. The budget 
further proposes that the O&M related security costs will be 
reimbursable from project beneficiaries.
    Question 1. Can the Department make such a change administratively 
or does legislation need to be enacted?
    Answer. Reclamation has the administrative discretion to determine 
the circumstances in which additional security measures are 
reimbursable, and proposes that annual costs associated with activities 
for guarding our facilities be treated as project O&M costs subject to 
reimbursability based upon project cost allocations while funding for 
capital improvements, including physical security upgrades, remain non-
project cost and non-reimbursable. The proposal to make security costs 
reimbursable is consistent with existing law.
    The Reclamation Project Act of 1939 (53 Stat. 1187) which 
authorizes Reclamation to enter into contracts to furnish water from 
its projects provides at Section 9(e): ``Each such contract shall be . 
. . at such rates as in the Secretary's judgment will produce revenues 
at least sufficient to cover an appropriate share of the annual O&M 
cost and an appropriate share of such fixed charges as the Secretary 
deems proper.''
    Question 2. How does the Department plan to deal with any O&M costs 
that are related to meeting its Trust responsibilities for Indian 
Tribes?
    Answer. Reclamation will allocate O&M costs based on project cost 
allocations pursuant to individual project authorizations. Where those 
allocations are reimbursable, the costs will be reimbursed from other 
sources, including Indian Tribes. Where those allocations are non 
reimbursable, the cost will not be reimbursed from other sources.
    Question 3. The proposal notes that the ``project beneficiaries'' 
will be responsible for these O&M related security costs. Does this 
include M&I users or will the Department only target power customers? 
Will the Department consider only the primary purposes of the project 
or will it consider secondary purposes as well?
    Answer. Reclamation will allocate costs to all authorized project 
functions which could include in any one project the following types of 
functions: irrigation, M&I, power, recreation, flood control, fish and 
wildlife. Unauthorized secondary functions have no allocations and 
therefore, will not be reimbursable to those functions.
    Question 4. What has been the power customers' reaction to this 
proposal?
    Answer. Without disputing the increased security need at critical 
Reclamation facilities, power customers have expressed concern with the 
prospect of being allocated a portion of costs that they see as new, 
unforeseen, and beyond their control. They believe that protecting 
these facilities is in the national interest and the costs should be 
borne by all taxpayers through non-reimbursable appropriations.

                   PICK-SLOAN MISSOURI BASIN PROGRAM

    The Administration's FY 2006 budget proposes to re-allocate 
repayment of capital costs of the Pick-Sloan Missouri Basin program. 
According to the proposal, power customers would be responsible for 
repayment of all construction from which they benefit, whereas to date 
they have only been responsible for a portion of these costs. The 
proposal further notes that the increase in reimbursements from power 
customers is estimated to be approximately $33 million in FY 2006.
    Question 1. How much of an increase will the project customers be 
expected to bear in the next 5-10 fiscal years?
    Answer. Depending on the reallocation option chosen, the increase 
could be as much as 20 percent. Additionally, because of drought 
conditions, power customers will be receiving a 20 percent increase 
next year on top of 15 percent incurred the past year. With the 
increase due to the reallocation, rates could go up 40 percent next 
year. Over the next 5 years, rates were projected to go up 16 percent 
under normal circumstances. The total increase could approach 56 
percent unless circumstances related to drought make a dramatic change.
    Question 2. What is the basis for this proposed reallocation?
    Answer. The Pick-Sloan Missouri Basin Program is a comprehensive 
program to manage the water and power resources of the Missouri River 
Basin. While much of the originally planned project development has 
occurred, including reservoir storage and power generation facilities, 
only about 11% of the irrigation anticipated in the Pick-Sloan plan has 
been Federally-developed. Originally, about $500 million of the 
program's hydropower and water storage capital costs were allocated to 
irrigators, and because the irrigation was never developed, the capital 
and O&M costs on this portion of the project are not being repaid to 
the Federal government. Under current economic and financial 
conditions, further irrigation development is not expected. The 
proposed reallocation would therefore make power customers responsible 
for repayment of all the construction costs from which they benefit. 
This would change current law, under which Reclamation is bound by the 
cost allocation developed under the assumption that irrigation projects 
would be developed and costs associated with irrigation-related pumping 
power and reservoir storage continue to be allocated to future 
irrigation development.
    Question 3. Will any other project beneficiaries be assigned 
repayment costs? Please explain.
    Answer. Of the facilities affected, there are only two reimbursable 
functions that can repay costs, irrigation and power. If irrigation is 
not developed, power is left as the only reimbursable function with the 
exception of some minor municipal and industrial water. The other 
functions such as flood control, navigation, recreation, fish and 
wildlife are not reimbursable. Different methods for accomplishing the 
reallocation would result in different allocations among these 
functions. Regardless of the method by which reallocation is 
accomplished, however, the only beneficiaries that could bear any 
increased repayment costs are the firm power customers.

                          CENTRAL UTAH PROJECT

    The FY 2006 budget request for the Central Utah Project is $34.4 
million, a decrease of $13.3 million below the FY 2005 enacted level.
    Question 1. According to the budget request, the $13.3 million 
decrease is ``primarily due to the transfer of budget authority from 
Interior to the Western Area Power Administration.'' Please explain 
this transfer. Under the Administration's proposal, how much money will 
WAPA provide for the Central Utah Project in FY 2006?
    Answer. In Fiscal Year 2005, the Administration proposed that 
funding for the Utah Reclamation Mitigation and Conservation Commission 
(Mitigation Commission) pursuant to Title IV of the Central Utah 
Project Completion Act be included in Interior's budget request rather 
than that of the Western Area Power Administration (WAPA). The Congress 
rejected this proposal, and funded the Mitigation Commission in both 
Interior and WAPA's FY 2005 appropriations. The Administration's Fiscal 
Year 2006 request is consistent with Congress's evident preference that 
funding responsibility for the Mitigation Commission remain with WAPA. 
WAPA's 2006 request includes $6.65 million for the Mitigation 
Commission to be derived from Colorado River Storage Project receipts 
on a reimbursable basis. The remaining decrease in the request reflects 
the significant carryover balances of the Mitigation Commission, which 
will allow the Commission's work to proceed even with the reduced 
request.
    Question 2. What is the schedule for completion of this project?
    Answer. At the present time, the Central Utah Project is projected 
to be complete in approximately 2016.

                                DROUGHT

    As you are well aware, the Southwestern U.S. has been experiencing 
drought conditions since 2000. The Pacific Northwest is also 
experiencing water supply shortages and the current snow pack is almost 
50% below average. In anticipation of our upcoming water conference, 
this Committee has asked for proposals to address the drought 
situation. Given the importance of the drought conditions, we plan on 
examining the proposals received at a separate hearing.
    Question 1. It is my understanding that in your role as Water 
Master for the Colorado River, you are working with the basin states to 
develop a voluntary protocol to deal with water shortages. What is the 
status of that protocol? When will it be completed? Are the states 
willingly engaged in this effort?
    Answer. Representatives of the seven Colorado River Basin States 
have been actively meeting and engaged in discussions regarding 
prospective actions to address the drought in the Colorado River Basin. 
In late 2004 the Department asked the Colorado River Basin States for 
recommendations regarding the development of ``shortage guidelines'' 
for the Lower Basin of the Colorado River. In light of the significant 
drought in the Colorado River Basin since the fall of 1999, the 
Department anticipates initiating a public process to develop Lower 
Basin shortage guidelines later this year. It is likely that such a 
public review process would take approximately two years to complete. 
This process is anticipated to follow a similar development protocol as 
that the one the Department utilized for the development and adoption 
of Lower Basin Interim Surplus Guidelines in 2001. In that process, the 
seven Colorado River Basin States submitted a consensus-based 
recommendation that formed the basis of the Surplus Guidelines that 
were adopted by the Department and are relied upon by the Secretary in 
the preparation of each year's Annual Operating Plan.
    Question 2. How is the Department dealing with the drought 
situation? What funding is the Administration proposing that deals 
specifically with the drought? Are the Administration's funding 
proposals limited to the Department of the Interior's Water 2025 
program? If not, what agencies are also attempting to address this 
situation? If there are multi-agencies engaged in this effort, how are 
you coordinating them?
    Answer. The Reclamation States Emergency Drought Relief Act of 1991 
(P.L. 102-250), as amended, (Drought Act) authorizes the Bureau of 
Reclamation to undertake drought relief measures through emergency 
assistance (Title I) and planning activities (Title II). Title I is 
temporary authority.
    Title I provides authority for construction, management, and 
conservation measures to alleviate the adverse impacts of drought, 
including the mitigation of fish and wildlife impacts. Only temporary 
construction activities are authorized, except for the construction of 
permanent wells. Title I also authorizes temporary contracts to make 
available project and non-project water and to allow for the use of 
Reclamation facilities for the storage and conveyance of water. The 17 
Reclamation States and Hawaii, as well as tribes within those states, 
are eligible for this assistance.
    In Fiscal Year 2006, the request is for $500,000.
    Over the years, much of the funding appropriated under RSEDRA has 
been used for water acquisitions for fish and wildlife mitigation, as 
seen on the Rio Grande and Pecos River. Although that trend has 
continued on an availability basis, significant funding has been used 
to construct wells on tribal lands and for smaller towns and counties. 
Reclamation has constructed many wells for drinking water for smaller, 
financially-strapped entities (towns, counties, tribes) that do not 
have the financial capability to deal with the impacts of drought.
    In many cases, Reclamation is the ``last resort'' for these 
communities. While the current drought has caused many problems in many 
areas of the West, there are more pervasive realities across the West 
that cause conflict and crises over water, dividing communities and 
pitting neighbor against neighbor, people against fish, and farmers 
against cities. These realities include increasing population growth, 
strains on existing water supplies, even in normal years, current water 
delivery infrastructure is aging, crisis management is ineffective, and 
new technology can help stretch water supplies further. Water 2025 was 
created to help the West deal with these realities, as well as with the 
current drought conditions, through Challenge Grants that provide cost-
shared funding for on-the-ground water conservation and management 
projects that address conflict over water before it happens. The Fiscal 
Year 2006 request for Water 2025 is $30 million.

                          KLAMATH RIVER BASIN

    In a time when many programs are experiencing significant cuts, the 
Administration's FY 2006 Budget requests $62.9 million for the Klamath 
River Basin. This represents an 8.4% increase from the FY 2005 funding 
levels.
    Question 1. Why did the Administration prioritize funding for the 
Klamath River basin?
    Answer. The reason for the high priority is that the Klamath basin 
is currently experiencing drought conditions that have triggered a 
cycle of disruptions in water supplies. In 2001, drought conditions 
required water diversions from the Klamath Project, a Bureau of 
Reclamation irrigation project, to be curtailed to meet a) upstream 
lake level requirements as specified in a U.S. Fish and Wildlife 
Service biological opinion designed to avoid jeopardizing two species 
of endangered suckers and b) downstream water flow requirements as 
specified in a NOAA Fisheries biological opinion designed to avoid 
jeopardizing threatened coho salmon. The restrictions on the water 
diversions in response to the drought lead to economic disruption among 
project irrigators with varying degrees of financial loss though some 
of that was ameliorated from emergency farm bill assistance. In light 
of scientific conclusions of the National Academy of Science's National 
Research Council (NRC), those biological opinions were revised in 2002. 
Meeting all of the needs in this Basin, including those of water users 
and the requirements of the ESA, creates extreme challenges in 
allocating water in the basin among competing uses. The lake level and 
downstream flow levels specified in the 2002 biological opinions were 
supported by the NRC final report. Low downstream flows were cited by 
the FWS' report on the major fish die-off in the Klamath River that 
occurred in September, 2002, as one of several contributing factors to 
the die-off of over 30,000 salmon, although most of them were not 
listed species. Still, all of the salmon are important economically 
from the standpoint of commercial fishermen and tourism based on sports 
fishing (and escapement goals for Chinook salmon determine the 
commercial and sports catch levels from southern Oregon to well south 
along the California coast) and economically and from a subsistence 
standpoint for Indian fishermen with fishing rights in the Klamath 
River. The die-off created substantial disruption downstream. The large 
suckers in Upper Klamath lake have traditionally been a subsistence 
resource for the Klamath Tribes, but fishing has been halted since the 
1980s due to their endangered status. Both the 2001 and 2002 events 
also spawned multiple, extensive lawsuits, which are still wending 
their way through various courts.
    The Department is using the best information available to wisely 
manage the lake levels, diversions and downstream flows, but can 
provide no assurances on a year-to-year basis that substantial further 
disruptions will not occur.
    Given the five major concerns, protecting the endangered fish in 
Upper Klamath Lake, protecting the threatened fish downstream, meeting 
trust responsibilities to tribes in both the upper and lower basins, 
helping maintain a predictable water supply for project irrigators, and 
meeting water needs for key National Wildlife Refuges, the Department 
and the Administration are taking many steps to address the underlying 
issues. Many of those steps can be taken within current funding levels, 
such as the use of a large water bank. Some require additional funding, 
however. Two cases in point are the 2006 request for increasing 
restoration work on spawning and nursery habitat for upstream suckers 
and acquisition of a property at the northern edge of Upper Klamath 
Lake to provide nursery habitat, both of which are intended to help 
stabilize the fish populations and begin their recovery. The property 
acquisition will also expand substantially the amount of water that can 
be stored in the lake during most years, which will have benefits for 
both downstream flows and project irrigation diversions during low-flow 
periods in those years. Among other things the high rate of funding for 
the water bank may not be sustainable in the long-term, and solutions 
such as increasing storage through restoring some of Upper Klamath 
Lake's natural capacity will help ameliorate those high annual funding 
requirements and also the annual uncertainty of water supply. It should 
be noted that the property acquisition funding of $6,000,000 is a one-
time item with minimal subsequent annual operation and maintenance 
costs.
    The Department strongly supports the increased request to help get 
beyond the year-to-year crisis management that has prevailed over the 
past four years and which can only be resolved by continuing to focus 
on long-term resolutions to the Klamath Basin's many challenges.
    Question 2. The Budget notes that Interior is in the process of 
putting together a water bank of approximately 100,000 acre-feet to 
help meet the water needs for coho salmon. Please explain this effort. 
Is this supported by the Klamath River stakeholders, including the 
environmentalists?
    Answer. In 2001, Reclamation conducted a one-year pilot demand 
reduction program which provided a payment to irrigators in lieu of 
applying Project water to land previously irrigated. In 2002, 2003, and 
2004, a pilot water bank program was implemented to assist in meeting 
NOAA Fisheries Biological Opinion (BO) requirements for threatened 
salmon in the Klamath River. The pilot water bank consists of 
compensating agricultural water users to either forebear use of water, 
substitute groundwater for surface water, or pump ground water to 
increase the supply. The results of the pilot water bank program for 
the various years have been or are being reviewed by Cal Poly-San Luis 
Obispo and the U.S. Geological Survey. Reclamation refines the water 
bank program each year, changing its selection process, contracting 
process, and program rules based on what was learned in previous years 
to meet its increasing obligations. For example, in 2002 Reclamation 
paid a flat fee per acre foot of water. Since then they have instituted 
a new process where landowners offer to enroll their lands in the water 
bank by bid. The least expensive, highest yield lands receive priority.
    In addition, the Government Accountability Office has recently 
completed a Report to Congressional Requesters on the 2002, 2003, and 
2004 water banks. These reviews have identified several important 
points: (1) the use of land idling or downsizing the Klamath Project 
will not meet the high spring flows desired by NOAA-Fisheries because 
water from areas temporarily idled or permanently removed from 
irrigation accrues gradually to the water bank throughout the 
irrigation season in the same pattern and rate as it would normally be 
diverted for irrigation. Therefore, it is not available at the time of 
the high river flow requirements envisioned in the BO, (2) pumping 
large volumes of groundwater is not sustainable on a long-term basis 
during drought periods, (3) a water bank comprised primarily of idled 
project land and groundwater pumping is only an interim solution to the 
water supply problems in the Basin, and (4) storage to carryover 
surplus water from one year to the next is the best long-term solution, 
particularly during drier years.
    The water bank has been successful in that it has allowed 
Reclamation to meet the requirements the NOAA Fisheries and Fish and 
Wildlife Service biological opinions and provide sufficient water to 
meet the need of the contracts for irrigation. However, the high annual 
cost of the water bank is not sustainable, and the water bank is viewed 
as a temporary solution while long term solutions are developed. The 
water users are seeking assurance of water supply which the water bank 
does not provide, and are concerned that idling land will negatively 
affect agribusiness of the basin. The environmental community supports 
the concept of a water bank, however, they believe 100,000 acre feet 
annually is insufficient and that lands should be permanently retired. 
Indian Tribes in the lower basin claim that even with the 50,000 acre 
foot water bank in 2002, low flows resulted in a fish kill.
    Question 3. I would also like to know more about the $500,000 
requested for a Fish and Wildlife Service prototype program to acquire 
and transfer water rights to the wetlands in the Klamath Basin refuges. 
Will the Department buy or lease these water rights? Have you 
identified people who would be willing to let the Department acquire 
their water rights?
    Answer. The Department proposes to buy the water rights. The 
prototype or test acquisition is being taken because of the uncertainty 
of water supply to the Klamath basin refuges and the severe water 
shortages they have faced in recent years. The refuges are primarily 
dependent on return flows from irrigated land through the larger part 
of the irrigation season and excess water during the spring and fall to 
sustain their wetland habitat. That habitat is one of the premier 
migratory waterfowl areas on the west coast. To adequately maintain the 
productivity of the area, a more assured water supply is needed.
    The 2006 budget initiative is described as a prototype program 
because of uncertainties in the acquisition and transfer of water 
rights in the Klamath River basin. Portions of the water put to use in 
the basin are from adjudicated water rights; other portions use water 
rights currently undergoing adjudication as to their quantity and 
priority. There are a substantial number of willing sellers in the 
basin, but little past work has been done on actually acquiring and 
transferring water rights from willing sellers to other lands in the 
basin. The initial funding is a one-time step to realistically test 
varying aspects of the market and the transfer mechanisms to determine 
the extent to which a more expansive subsequent program would be 
beneficial and cost-effective.

                            INVASIVE SPECIES

    Secretary Norton, the Department of Interior budget request 
includes $60.5 million for six agencies and the Office of Insular 
Affairs to combat invasive species. The requested funding is about 
$350,000 above the current level. This is a high priority issue for our 
Western states. In New Mexico, we have a serious problem with tamarisk, 
or salt cedar.

   I appreciate that the Administration is focused on the 
        invasive species problem. Would you please tell the Committee 
        what is the most urgent need for these funds?
    Answer. The best approach to reducing impacts to Department of the 
Interior trust resources is, generally, preventing the introduction of 
invasive species. Once introduced, early detection and rapid response 
can minimize or mitigate impacts to our lands and waters and, when 
established, control and management must be carried out to reduce 
impacts.

   Of the $60.5 million requested, nearly one-third of the 
        funding will go to control and management activities. Please 
        tell the Committee what specific types of projects will be 
        undertaken with the nearly $28 million for invasive species 
        control and management?
    Answer. Since 2004, the Department has presented a unified invasive 
species performance-based crosscut budget, in conjunction with other 
Federal agencies, through the National Invasive Species Council (NISC). 
In coordination with NISC, the Department has focused its past budget 
increases on species-specific government-wide priorities, such as 
tamarisk, the brown tree snake, and aquatic invasives.
    In 2006, the Department will coordinate invasive species activities 
based on geo-regional areas in response to bureau concerns that the 
species-specific focus areas do not always accurately portray the 
invasives work done on any given piece of land. For example, when BLM 
is controlling and managing weeds on public lands in the West, BLM will 
identify the target species, such as tamarisk or leafy spurge, while 
also taking into consideration the other associated weed species in the 
area. The goal is to treat the target species as well as the other 
invasive and noxious weeds in the same area.
    The Department will also focus invasives work on three priority 
geo-regional areas that also contain an abundance of invasives targeted 
by NISC priorities. The bureaus submitted coordinated, joint budget 
requests for each of these areas, developed in each case by an inter-
bureau team. Increases totaling $2.3 million are proposed for the three 
areas. Base funding will also be redirected to the coordinated efforts.
    Examples of specific projects include, in the Rio-Grande River 
Basin, 4,915 acres of tamarisk and other invasives will be treated and 
controlled, 1,000 acres will be inventoried for weeds, research will be 
conducted on re-vegetation, and one decision support system will be 
developed. With a $200,000 proposed budget increase, USGS will conduct 
research on re-vegetation and will provide technical and scientific 
support in the development of the BLM decision support system.
    In addition, the Fish and Wildlife Service budget proposes $1.0 
million for tamarisk eradication through the endangered species 
recovery program. This exotic plant is considered a threat to some 
endangered and threatened species, such as the southwestern willow 
flycatcher. Tamarisk removal is identified as a key recovery action 
that is needed for many listed species that occur in wetland areas 
throughout the arid southwest. For example, the recovery plan for the 
Pecos sunflower requires the management and control of Tamarisk. These 
funds will be spent in cooperation with non-federal partners consistent 
with the Team Tamarisk Guiding Principles.
    The Team Tamarisk initiative, begun in April 2004, relies upon USGS 
mapping and modeling of tamarisk occurrences and potential areas of 
spread to target multi-agency action. The Albuquerque, New Mexico, Team 
Tamarisk conference brought together Federal, state and local 
officials, tribal representatives, water and land managers, and plant 
and water scientists. The goal was to establish a framework for forging 
close working partnerships, leading to on-the-ground projects that make 
the most efficient and effective uses of our collective resources.
    Those partnerships include a comprehensive web-based live 
cooperative mapping initiative led by the USGS and involving geospatial 
data from hundreds of partners (www.tamariskmap.org/cwis438/tmap/
index.asp). Team Tamarisk is also pursuing an in-depth economic 
analysis of tamarisk control and effects coordinated by NISC and led by 
the U.S. Forest Service and Erika Zavaleta, Assistant Professor, 
Environmental Studies Department, University of California.
    In South Florida, a $1.0 million increase for the Fish and Wildlife 
Service would focus on invasives efforts at the Loxahatchee National 
Wildlife Refuge (NWR). This funding will be used to treat 2,500 acres 
of dense lygodium on tree islands and allow re-treatment of 14,000 
acres infested with melaleuca, lygodium, Brazilian pepper, and 
Australian pine on other lands. A $100,000 increase in the U.S. 
Geological Survey will provide research to assist in the detection, 
control, and eventual eradication of the Brazilian pepper tree.
    On the Northern Great Plains, BLM, with a $500,000 budget increase, 
will treat and control 7,500 acres of leafy spurge and other invasives, 
inventory and monitor 209,000 acres for weeds, and map 20,000 acres for 
invasive species. Much of the invasive species and noxious weed control 
and management efforts on BLM and other DOI lands are conducted in 
cooperative weed management areas (CWMAs) through partnerships.

   The Department requests $11.6 million for invasive species 
        research. How would the proposed funding support the ongoing 
        research program? Which invasive species are receiving the 
        highest priority for research dollars distributed?
    Answer. The proposed funding, which includes a $300,000 increase 
for U.S. Geological Survey work ($200,000 on Rio Grande River basin and 
$100,000 for South Florida) on invasive species, funds the invasive 
species research program whose goals focus on research related to 
prevention, early detection and rapid assessment, monitoring, control 
and management, information management, and effects of invasive 
species. These activities support the resource management agencies in 
the Department of the Interior to address critical research needs. At 
the present time, research is focusing on high priority invasive 
species such as tamarisk, nutria, brown tree snake, leafy spurge, 
yellow star thistle, Asian carp, and cheatgrass.

   How would you describe the Department's efforts at early 
        detection and response? Is the $8.1 million requested 
        sufficient to carry out a successful program?
    Answer. The Department has begun an integrated approach in 
collaboration with other agencies and the public to build a network of 
trained professionals and volunteers to detect and treat new outbreaks 
of noxious weeds. They are working to develop and implement new methods 
of detection and identification of invasive species, and to develop 
early detection pilot projects for particular geographic areas and 
taxonomic groups. They also are developing rapid response strategies to 
detect and control invasive species for both aquatic and terrestrial 
species. The group has a goal of training over 2,000 volunteers, 
resulting in over 50,000 hours of volunteer service, to work on these 
efforts.
    Participating agencies in this integrated effort include the 
Department's Bureau of Land Management, U.S. Fish and Wildlife Service, 
U.S. Geological Survey, National Park Service, Bureau of Reclamation, 
and the Agriculture Department's Animal and Plant Health Inspection 
Service, Agricultural Research Service, Cooperative State Research, 
Education, and Extension Service, U.S. Forest Service, and the U.S. 
Army Corps of Engineers.
    The funding included in the President's budget is sufficient to 
carry out a successful program.

                             FOREST HEALTH

    Madam Secretary, I am pleased to see that the Administration has 
requested an increase in funding for implementation of the Healthy 
Forest Restoration Act. As I read the budget, $211.2 million is 
proposed, which is $9.8 million above the current level. The Forest 
Service will also receive funding for this program.

   I will also pursue this line of questioning with the Forest 
        Service when they appear before the Committee tomorrow. Would 
        you please provide for the Committee, in detail, information on 
        the expenditure of the hazardous fuels reduction funding over 
        the past two years?
    Answer. The attached chart responds to this question.

----------------------------------------------------------------------------------------------------------------
                                                                      FY 2003                         FY 2004
                      State                       FY 2003  Acres   Expenditures   FY 2004  Acres   Expenditures
                                                      Treated         ($000)          Treated         ($000)
----------------------------------------------------------------------------------------------------------------
Alabama.........................................        1,230             120           1,010             111
Alaska..........................................       11,676           4,397          59,089           5,290
Arizona.........................................      108,578          14,865         100,788          15,160
Arkansas........................................        5,718             654          23,720             792
California......................................       77,226          28,882          61,725          20,842
Colorado........................................       23,791          12,508          32,659          11,471
Connecticut.....................................           10               0               0               0
Delaware........................................        3,605             307           6,935             205
Florida.........................................      137,853           4,328          91,370           2,689
Georgia.........................................       12,539           3,264          30,720           2,462
Hawaii..........................................        1,071             479           1,010             208
Idaho...........................................      202,596          28,620         117,310          22,518
Illinois........................................          428              87             325              45
Indiana.........................................       10,713             333          10,187             330
Iowa............................................        3,568             338           7,769             349
Kansas..........................................       23,190             512          26,860             703
Kentucky........................................          498             303           2,228             333
Louisiana.......................................        2,642             477          15,204             282
Maine...........................................          876             389             646             396
Maryland........................................        6,513             142          11,862             513
Massachusetts...................................          361             783             869             390
Michigan........................................        1,409             202           2,584             465
Minnesota.......................................       64,068           3,977          52,002           3,727
Mississippi.....................................       13,085           1,836           9,359           1,424
Missouri........................................        3,066             417           4,378             337
Montana.........................................       23,461          11,731          31,405          10,105
Nebraska........................................        6,911             903          11,575           1,437
Nevada..........................................       53,908           9,431          30,131           6,695
New Hampshire...................................           80               2               0               0
New Jersey......................................        1,080             163           1,008              97
New Mexico......................................      111,641          14,257          87,411          13,332
New York........................................          606              71             685              33
North Carolina..................................       11,307             735          19,802             680
North Dakota....................................       17,906           1,390          21,202           2,060
Ohio............................................           50               3              59               1
Oklahoma........................................        8,809           2,443          23,087           1,242
Oregon..........................................      114,386          38,787         134,316          29,577
Pennsylvania....................................          862              38              90             222
Rhode Island....................................          167               2               3               1
South Carolina..................................       21,520             565          16,252             509
South Dakota....................................       16,100           3,583          17,103           2,066
Tennessee.......................................        1,586           1,248             480             935
Texas...........................................       37,544           4,067          77,261           2,902
Utah............................................       56,884          11,695          51,960          10,257
Vermont.........................................          129               2              24               2
Virginia........................................          351             591           2,660           1,407
Washington......................................       18,424           6,434          27,982           5,049
West Virginia...................................          219              61               0               1
Wisconsin.......................................        7,533           1,235           6,909           1,090
Wyoming.........................................       31,063           4,222          28,669           4,136
                                                 ---------------------------------------------------------------
    Total.......................................    1,258,837         221,879       1,260,907         184,878
----------------------------------------------------------------------------------------------------------------

   How much of the appropriated funding has been spent on 
        planning projects?
    Answer. In FY 2004 and FY 2005, approximately $63 million per year 
was spent on planning projects. The planning process includes 
collaboration, coordination, identification, prioritization and 
selection of projects, NEPA, project planning and layout, and 
consultations with the National Marine Fisheries Service and Fish and 
Wildlife Service. These processes are critical for ensuring that 
projects are effective in meeting their desired goals and in ensuring 
the safe implementation of prescribed burns. The funds are also used to 
design projects that will be completed in subsequent years.

   How much of the funding has been spent on actual thinning 
        projects? How many acres have been treated, and in what states?
    Please refer to the chart on page 46 for the response to this 
question.

   What are the Department's projections for the work to be 
        done in FY 2006 under the budget request?
    Answer. For FY 2006, the Department is requesting an increase of 
$10.3 million for the Hazardous Fuels Reduction Program, of which $6.7 
million is for treatments in the Wildland Urban Interface (WUI) and 
$3.6 million is for non-WUI treatments. The increase will be focused on 
expanding and improving the program to meet the identified highest 
priority treatments to protect communities and the environment. With 
the completion of risk assessments, mitigation plans, Community 
Wildfire Protection Plans (CWPP) and interagency Fire Management Plans, 
the bureaus and collaborative partners are able to identify an annual 
program that prioritizes mitigation activities that will make the 
greatest impact in reducing risks and restoring priority landscapes. 
Priority acres will be treated. This means that the final project list 
will increasingly include projects identified in CWPPs which may 
include higher cost acres. The Department will continue to emphasize 
involvement of the local communities through contracting, stewardship 
and biomass utilization.

   How would you describe the collaboration with local 
        communities under the Healthy Forest Restoration Act?
    Answer. The HFRA builds on community and resource protection 
activities carried out under the National Fire Plan and the 10-year 
Comprehensive Implementation Strategy. The HRFA encourages local 
communities to work collaboratively with wildland fire protection 
agencies to develop Community Wildfire Protection Plans (CWPP's). 
CWPP's assist local communities, as well as State, Federal, and Tribal 
cooperators to clarify and refine hazardous fuels treatment priorities, 
identify roles and responsibilities in the protection of life and 
property, and assist in identifying critical infrastructure in the WUI. 
The interagency wildland fire agencies have developed guidance and 
conducted workshops to assist communities in the development of CWPP's. 
Risk reduction projects identified in CWPP's are given priority for 
Federal funding in the collaborative planning process.
    The Department has assisted over 1,000 communities to develop 
CWPP's. Many of these plans, previously called Community Risk 
Assessment and Mitigation Plans, were begun prior to enactment of the 
Healthy Forests Restoration Act. Those earlier plans meeting the spirit 
of the CWPP's are included in the above number. Thus far in FY 2005 
alone, the Department has assisted 140 communities in completing their 
CWPP's.

                        WILDLAND FIRE MANAGEMENT

    I am pleased that the Congress and Administration worked together 
last year to provide approximately $500 million in additional FY 2005 
funding for the Department of Interior and the Forest Service to 
prepare for the anticipated fire season.
    For some states, such as New Mexico, there has been some relief 
from the serious drought we have experienced over the past several 
years. However, we know we have a long way to go before the drought is 
over.

   What is the Department's current status of its firefighting 
        funds?
    Answer. For FY 2005, the Department has a regular annual 
appropriation of $218.4 million based on the 10-year average actual 
costs. In addition, we have $35 million in carryover funds from FY 
2004, and $98.6 million Title IV funds for emergency firefighting 
costs.

   Have agency borrowings been repaid?
    Answer. In 2003, $189 million of the previously borrowed $240 
million was repaid.

   What is your preliminary assessment of the upcoming fire 
        season? Is there sufficient funding in the President's budget 
        to be initially prepared to meet the anticipated requirements 
        for fire funding in the upcoming season?
    Answer. The preliminary outlook for this year's fire season 
indicates above normal fire potential in the Pacific Northwest, 
Northern Rockies, the lower elevations of the Great Basin, and over 
much of Florida.
    Mountain snowpacks are at or near record low levels in portions of 
Washington, Oregon, Idaho, Montana and northwest Wyoming. These low 
snowpacks, combined with long-term drought and vegetation mortality 
from insect damage, will increase fire potential in portions of the 
West.
    Winter storms have brought heavy rain and snow in California, 
Colorado and the Southwest. This will help moderate the fire season in 
the mountains, but will increase fire potential in the lower elevations 
of Nevada, Utah and the California deserts, due to heavier 
concentrations of fine fuels such as the grasses found on much of the 
land managed by this Department.
    Florida has been drier than normal so far this winter. The dry 
winter, combined with downed trees from the 2004 hurricanes, will lead 
to the potential for an active fire season.
    Predicting the Alaska fire season is very difficult this early in 
the year. However, preliminary indications point to a less active 
season compared to last year's record breaking fire season.
    This map of the United States shows the areas where above normal 
and below normal fire activity are anticipated through August.*
---------------------------------------------------------------------------
    * All graphics have been retained in the committee files.
---------------------------------------------------------------------------
    Readiness for wildland fire response will be maintained at a level 
sufficient to meet or exceed a 95 percent initial attack success rate. 
Strategic pre-positioning of resources, combined with advanced fire 
weather forecasting capabilities will ensure a high level of readiness.

                                  ANWR

    The President's FY 2006 Budget assumes the first ANWR lease sale 
would produce an estimated $2.4 billion in bonus bids in 2007. I 
support the Administration's inclusion of ANWR receipts in the Budget. 
I plan to work with the Budget Committee and Senate leadership to 
include ANWR instructions in the budget resolution and fight for 
passage of that resolution on the Senate floor.
    As many of you know, I am leading a CODEL to ANWR beginning this 
Friday, March 4th, so Senators and Cabinet Secretaries can see for 
themselves how sensitive today's oil development is on the environment 
and wildlife. I am delighted that Secretary Norton will accompany me on 
this trip.
    Question 1. In your testimony, you explain that the $2.4 billion in 
2007 bonus bids is the same estimate that has been used for several 
years and is based on ``conservative assumptions.''
    Please explain the basis for the Administration's calculation. What 
budget assumptions were used to derive the $2.4 billion leasing figure?
    Answer. The calculation was made by 1) analyzing geology and 
geophysical information to determine geology parameters; 2) conducting 
an engineering analysis of the exploration, development, production, 
and reclamation phases for the potential range of sources; and 3) 
running an economic analysis of 1) and 2) under projected market 
conditions. As we have stated a number of times, this estimate has been 
used for several years and does not reflect the recent sharp increases 
in the price of oil. The estimate included an assumption regarding oil 
prices in the year 2001 of $30. It assumed a 50/50 split of revenues 
with the State of Alaska, a royalty rate of 12\1/2\%, and that almost 
all tracts would be available for nomination in each sale. The model 
used for the analysis was a Monte Carlo Discounted Cash Flow model. In 
addition, natural gas was assumed at the time of the analysis to be 
uneconomic and was thus ignored in the valuation.

                USGS WATER RESOURCES RESEARCH INSTITUTES

    The President's FY 2006 Budget requests $933.5 million for the U.S. 
Geological Survey, a $1.9 million decrease from FY 2005 funding levels. 
The USGS provides critical data collection and analysis on water 
resources to agencies throughout the federal government and through 
collaborative programs with the States.
    Like last year, the Administration proposes to terminate funding 
for the 54 State Based Water Resources Research Institutes (``WRRI'') 
for only a $6.4 million savings. This would eliminate a critical 
program for my state of New Mexico.
    Question 1. How can the Administration justify the elimination of 
the WRRI institutes?
    Answer. The State Water Resources Research Institutes have been 
highly successful in leveraging the USGS grants under the Water 
Resources Research Act Program with other Federal and non-Federal 
funding. The Department considers this program a success, as the 
initial grants from the Department were considered implementation 
funding for the Institutes. Today, the Department anticipates that the 
majority of these Institutes will be able to continue operations 
without Federal grant funding, due to the successful partnerships that 
the Institutes have been able to make with others.

                    USGS MINERALS RESOURCES PROGRAM

    The Administration's FY 2006 budget requests a total of $208.1 
million for Geologic Assessments, a $21.1 million of 9.2% decrease from 
FY 2005 funding levels. Within that account, the Administration 
proposes to reduce the Mineral Resources Program by $28.5 million from 
FY 2005 levels.
    The Administration explains that the budget continues funding for 
minerals surveys and studies for Federal activities. However, funding 
is reduced for regional and local activities.
    Question 1. In your testimony, you note that ``funding is reduced 
for studies and information gathering for regional and local activities 
more oriented to the interests of States, local governments, and 
universities, all of whom are significant users of information 
generated by the Minerals Resources Program.''
    Why has the Administration opted to reduce funding for this program 
when it acknowledges that numerous non-federal users rely on the 
critical information produced by the USGS?
    Answer. This reduction was a difficult decision based on funding 
priorities and budget constraints. The Administration chose the 
Minerals Resources Program for reduction because the research is lower 
priority as compared to other USGS programs and because the expertise 
to continue this work exists with State geological surveys and in 
universities. The Administration believes that if the work being 
eliminated is of high importance to private industry or States, they 
will pick up the work, in partnership arrangements.
    Question 2. Does the Interior Department intend to continue 
decreasing the involvement of USGS on non-federal lands? Please 
explain.
    Answer. As the science bureau of the Department of the Interior, a 
basic priority of USGS science is to provide information and 
technologies that are critical to achieving the missions of the 
Department's land and resource management bureaus. Nevertheless, the 
USGS will, as always, continue to work in close cooperation with more 
than two thousand Federal, State, and local government entities, 
educational institutions, private sector firms, and non-profit 
organizations across the country.

                            MAPPING PROGRAM

    The President's FY 2006 Budget proposes a total of $139.5 million 
for USGS mapping, land remote sensing, and geographic research, an 
increase of $20.7 million or 17.4% above FY 2005 funding levels.
    The budget proposes an increase of $250,000 for a science impact 
program designed to improve and expand the use of USGS scientific data, 
with a particular emphasis on western water issues.
    Question 1. As you know, this Committee is holding a Water 
Conference in April. One of the topics we want to discuss is our 
knowledge of water resources, in particular, whether or not we have the 
level of scientific understanding needed to assess accurately the 
sustainability of the surface and groundwater resources upon which we 
depend.
    Do we have the necessary scientific understanding of our water 
resources? How will the expansion of the Department's science program 
assist us in our knowledge of water resources?
    Answer. At the request of the Directors of OMB and the Office of 
Science and Technology Policy (OSTP), the Subcommittee on Water 
Availability and Quality, Committee on Environment and Natural 
Resources of the National Science and Technology Council is currently 
developing a Federal strategic plan for water science and technology. 
The USGS is a co-chair of the Subcommittee. The National Research 
Council's reports, ``Confronting the Nation's Water Problems: The Role 
of Research,'' and a preceding report, ``Envisioning the Agenda for 
Water Resources Research in the Twenty-First Century,'' are important 
source materials for this planning effort. Some of the key issues 
across the country are impacts of ongoing ground water depletion on 
stream flow and on supplies of water for future generations, assessment 
of the amount and timing of water needed to sustain aquatic habitats, 
development and evaluation of the long term viability of a variety of 
supply-enhancing technologies, impacts of ongoing climate variations 
and changes on water supplies (especially where snow pack is a crucial 
part of the regional water supply), and a need for accurate estimates 
of current consumptive use of water and accurate forecasts of future 
consumptive use across all sectors of the economy and all regions of 
the Nation. The USGS Water Availability and Use Program, which began in 
a pilot phase in FY 2005, is designed to help improve the science base 
related to these issues. This program will provide citizens, 
communities, and natural-resource managers with:

   A clearer knowledge of the status of the Nation's water 
        resources (how much water we have now),
   Evaluation of trends over recent decades in water 
        availability and use (how water availability is changing), and
   An improved ability to forecast the availability of water 
        for future economic and environmental uses (how much water will 
        we have in the future).
insular affair--the commonwealth of the northern mariana islands (cnmi)
   Secretary Norton, does the Department agree that the federal 
        government owes the CNMI some amount of funds under section 
        703(b) of the Covenant for amounts collected by the US prior to 
        2002 and not covered over?
    Answer. Section 703(b) of the Covenant requires that ``the proceeds 
of all customs duties and Federal income taxes derived from the 
Northern Mariana Islands '' and ``the proceeds of any other taxes which 
may be levied by the Congress on the inhabitants of the Northern 
Mariana Islands'' be paid to the CNMI treasury. Section 7654 of the 
Internal Revenue Code of 1954, applicable with respect to the CNMI 
pursuant to section 601 of the Covenant, provides detailed rules 
regarding the cover over of income taxes. Section 7654 generally 
requires both the U.S. Treasury and CNMI treasury to cover over to one 
another the taxes they collect with respect to income from the other 
jurisdiction.
    It appears that some amount of money is owed by the Federal 
Government to the CNMI, and potentially some amount could be owed by 
the CNMI to the Federal Government. The exact amount, however, is 
difficult to determine because records are available only for certain 
years for certain categories of taxes to be covered over.
    In 1990, the IRS suspended payments to the CNMI due to concerns 
about whether taxpayer information provided to the CNMI as a necessary 
part of the cover over process was adequately protected from disclosure 
as required by Federal law. This problem was resolved in 2003, and the 
Department of the Treasury is working with the CNMI to determine what 
is owed.

   Secretary Norton, the Department was provided a partial 
        accounting and methodology by the CNMI on amounts owed to them 
        under section 703(b) last year. That accounting included only 
        the major categories, but totaled over $100 million. Does the 
        Department agree that it is possible that the US could owe the 
        CNMI as much as $100 million, taking into account the 
        categories included in the accounting as well as other 
        collections, such as certain excise taxes, that were not 
        included?
    Answer. In 2004, the CNMI submitted the figure of $110,505,859 as 
the amount owed by the Federal government to the CNMI under the cover 
over provision of section 703(b) of Public Law 94-241 for principal and 
interest relating to years 1978 through 2002.
    The Department of the Interior has been consulting with the 
Department of the Treasury on the amounts that may be owed. Because a 
great deal of time has elapsed since the implementation of the U.S.-
CNMI Covenant in 1978, many of the records from the early years are 
difficult to locate and hence it is difficult to confirm the CNMI's 
figure of $110,505,859. The Department of the Treasury is continuing to 
investigate the matter.

   Secretary Norton, is it an US obligation to comply with 
        federal law requiring a cover over. Given the number of years 
        and the quality of record keeping, is a complete accurate 
        accounting possible? In addition, in order to provide such an 
        accounting, would it not be both very expensive and possibly 
        not completely accurate?
    Answer. The Department of the Interior believes that the United 
States has a statutory obligation to pay the CNMI the funds required to 
be covered over under the Covenant and the Internal Revenue Code.
    Given the passage of time and possible loss of data and records 
that may have occurred in the intervening years, the Department 
believes that it may not be possible to fully reconstruct the record of 
duties and taxes that may be due the CNMI. The Department of the 
Treasury would be better able to make that assessment.

   Secretary Norton, would the Department support a settlement 
        of all past due sums rather than litigation?
    Answer. The CNMI Covenant in section 902 calls for periodic 
discussions of issues that may affect the CNMI-Federal relationship. 
The Department of the Interior would be amenable to placing this cover 
over issue on the agenda for section 902 discussions.

                  MINERAL MANAGEMENT SERVICE QUESTIONS

   Secretary Norton, with respect to the $290 million MMS 
        budget proposal, please comment on specific examples of 
        enhancements to the services and programs that protect the 
        environment and offshore workers.
    Answer. MMS is an international leader in offshore safety, with a 
regulatory program that sets standards for the design of facilities and 
the conduct of operations. As a leader in scientific inquiry in the 
oceans, MMS is currently conducting far ranging research on a variety 
of topics, including the effects of noise on marine mammals, the nature 
of deepwater ocean currents in the Gulf of Mexico and ocean currents on 
the Arctic shelf, and deepwater corals and chemosynthetic communities. 
All of this research is focused to provide information for management 
of offshore oil and gas and sand and gravel activities. Enhanced 
understanding of ecosystem processes enables development of effective 
mitigating measures and enhanced environmental protection. MMS works in 
partnership with State and local governments, academia, industry, and 
other Federal agencies to carry out this research and conduct its 
resource management activities. Some specific examples include:

   Since the early 1970s, MMS has supported a comprehensive 
        program of mapping, monitoring and protection for coral reefs 
        of the East and West Flower Garden Banks, a National Marine 
        Sanctuary in the Gulf of Mexico. MMS has used this information 
        to develop lease stipulations for gas and oil exploration, 
        development and production near the Sanctuary that have been 
        effective in preventing environmental impacts.

   The OCS Lands Act amendments mandate that annual inspections 
        be performed on each permanent structure and drilling rig which 
        conducts drilling, completion, or workover operations. Safety 
        is a priority for MMS staff, and onsite facility inspections 
        and enforcement actions are important components of MMS's 
        safety program. MMS inspectors visit offshore oil and gas 
        facilities in order to conduct mandatory inspections and ensure 
        compliance with MMS regulations. The Gulf of Mexico Region 
        currently leases single-engine helicopters that have been 
        adequate to reach the approximately 8,000 leases, 4,000 
        producing facilities, and 900 drilling sites in the GOMR 
        annually. However, MMS is reviewing helicopter needs based upon 
        the significantly greater distances and flight times to reach 
        newer offshore facilities.

   Secretary Norton, please comment on how the TAR program 
        (Technology Assessment and Research) will continue to 
        effectively address important issues with a 55% requested 
        reduction from FY 2005. More specifically, comment on steps 
        that MMS is taking to manage offshore infrastructure such as 
        protecting and maintaining wells, platforms and pipelines.
    Answer. The TAR Program performs applied research in regulatory 
technologies to ensure safe, pollution-free operations and conducts 
applied research in the prevention of oil pollution and the improvement 
of oil spill response and clean-up. The Department leverages available 
funds for TAR through joint projects with other Federal and State 
agencies, academia, international regulatory organizations, and 
industry. In the FY 2005 enacted budget, $600,000 was earmarked for the 
Offshore Technology Research Center and $500,000 was earmarked for the 
Minerals Management Service to conduct Hurricane Ivan studies. These 
two earmarks were unrequested and are not proposed for funding in the 
FY 2006 request. They account for the $1.1 million reduction from FY 
2005.

   Secretary Norton, as I urged in a letter in December 2004, 
        while I recognize that many OCS areas are under administrative 
        withdrawal and/or congressional moratoria, as the Department of 
        Interior prepares to issue a Request for Comments for the 
        development of its new 5-Year OCS Oil and Gas Leasing Program 
        for 2007-2012, please comment on whether the Department will 
        solicit comments from all interested parties on the 
        appropriateness of leasing in both moratoria and non-moratoria 
        areas on the OCS.
    Answer. The Department is reviewing this issue and will shortly 
publish the initial solicitation for comments regarding the 5-year OCS 
Oil and Gas Leasing Program for 2007-2012.

                     Questions From Senator Thomas

                          PARKS AND OPERATIONS

    The Administration has proposed an increase of $50.5 million for 
park operations in 2006 when compared with the 2005 budget.
    Question 1. What do you anticipate using this additional money to 
fund?
    Answer. The net increase of $50.5 million will allow the NPS to 
cover fully the anticipated pay cost increases and other fixed costs 
expected in 2006. Most of the uncontrollable cost funding is provided 
to park units. In addition, there are a series of increases which 
selectively target high-performing areas such as natural resources 
management, fee management, and cultural resource preservation. A 
number of other increases will focus on management improvements in 
areas such as information technology and partnership program oversight, 
where small investments in funding can yield impressive productivity 
gains and leverage additional financial resources.
    Question 2. Will this be used to fund any shortfalls in visitor 
services?
    Answer. When combined with the healthy increase for park units 
enacted in 2005, the inclusion of full pay cost in the 2006 budget 
request and the continued implementation of management reforms which 
will allow NPS to manage and operate the parks effectively and to 
sustain visitor services. The additional funding will assist in 
ensuring that the visitor satisfaction rating in the National Park 
Service remains above 95 percent, as well.

    The Administration has been developing systems and procedures to 
asses and track the National Park Service maintenance backlog.

    Question 3. What progress has been made in reducing the backlog?
    Answer. Significant progress has been made in both addressing known 
maintenance projects through the park system as well as in establishing 
and implementing the management framework that will guide the Service's 
21st century approach to asset management. The President's 2006 budget 
fulfills the pledge to devote $4.9 billion towards the NPS maintenance 
backlog. With these funds, NPS has undertaken over 4,000 projects since 
2002, ranging from road repairs, to historic building stabilizations, 
to restroom rehabilitations. In addition, NPS has completed the first 
ever systematic inventory of its assets and conducted initial condition 
assessments at all parks. Comprehensive condition assessments are 
scheduled to be completed by the end of FY 2006.
    Question 4. How much do you anticipate spending in 2005 and 2006 to 
address the backlog?
    Answer. The estimated FY 2005 amount is $1.001 billion; the FY 2006 
requested amount is $1.145 billion. Both of these amounts are 
predicated on enactment of the funding levels assumed in the 
President's request for the transportation reauthorization bill.
    Question 5. What is your schedule for completing the backlog and 
transitioning to a preventative maintenance program?
    Answer. The comprehensive condition assessments will be completed 
by the end of FY 2006. This will provide a more accurate picture of the 
condition of the NPS asset inventory and the funding levels needed to 
improve the overall condition of NPS assets to acceptable condition. 
Just as with one's home, it is not assumed that a backlog is ever 
completely eliminated. Conditions are not static; they change daily. A 
simple dollar amount also assumes that every asset is of equal priority 
and deserves to be restored to excellent condition. The goal of NPS is 
to manage its vast asset inventory systematically so that investment 
decisions are prioritized and tiered to the known condition of an asset 
and its priority to fulfilling the park mission. The backlog can be 
viewed as the funding needed to improve the condition of the asset 
inventory from poor to acceptable. NPS will not be in a position to 
determine that amount until after the comprehensive condition 
assessments are completed at the end of FY 2006. Understanding the 
preventative maintenance requirements of our asset inventory is a 
crucial component of the comprehensive condition assessments. NPS is 
already shifting to requiring the use of asset condition and priority 
information in its funding determinations regarding the allocation of 
cyclic maintenance dollars.

                             HERITAGE AREAS

    National Heritage Areas were first designated in 1986. Since then, 
27 National Heritage Areas have been designated. I noticed in your 
budget request for 2006 that $5 million is included for National 
Heritage Areas. In 2004, you asked for $2.5 million and Congress 
enacted $14.5 million.
    Question 1. Why do you ask for only $5 million when you know it 
will take more than 3 times that amount to fund the program?
    Answer. We recognize that the Congressional heritage area 
designation is an effective tool to bring together local communities' 
interests for the preservation of local heritage resources. With 
designation, local communities are able to coalesce support for 
important regional needs that conserve cultural and natural resources, 
improve the quality of life, and help to develop sustainable self-
supporting economies.
    The 2006 budget reduces pass-through funding for the national 
heritage areas reflecting an emphasis on encouraging them to become 
self-sufficient. However, the 2006 budget expands opportunities and 
resources that the heritage area partners can competitively apply for, 
including: $15 million for Save America's Treasures, $38.7 million for 
historical preservation grants to States and Tribes, and $12.5 million 
through the new Preserve America grants program.
    Question 2. How do you intend to manage 27 National Heritage Areas 
(and growing) with such little funding?
    Answer. The NPS does not manage the national heritage areas but 
provides technical assistance. The heritage areas are managed by 
private nonprofit groups or States and they secure funding for projects 
from a variety of sources including local fund raising, States, other 
Federal agencies, and Interior grant programs. Since the inception of 
the national heritage areas concept the focus has always been that the 
entities would become self-sufficient and no longer need pass-through 
funding.

                            LAND ACQUISITION

    The budget proposes funding for land acquisition and State 
assistance at $54.5 million in current appropriations. The request 
includes $52.5 million in for the NPS portion of the Federal land 
acquisition program.
    Question 1. Are any of these funds designated for settling the 
Teton Land Exchange that was authorized in the 108th Congress?
    Answer. None of the funds requested in the 2006 President's Budget 
Request are designated for the Teton Land Exchange.
    Question 2. Are any designated for other park inholdings? (such as 
the Halpin property in Grand Teton National Park in Wyoming)
    Answer. None of the funds requested as line-item projects in the 
2006 President's Budget Request are for work at Grand Teton National 
Park. While the ongoing inholding projects are a priority for the 
National Park Service, in determining the national priority list they 
did not rank high enough for funding. If an emergency situation 
develops, funds could be made available from the general line-item 
``Inholdings, Donations, and Exchanges'' for projects at Grand Teton 
National Park. This general line-item is available for such cases.

                           HOMELAND SECURITY

    Homeland Security requirements have imposed a burden on several of 
your bureaus including the National Park Service.
    Question 1. How much did the National Park Service spend on 
Homeland Security in 2003 and 2004?
    Answer. The NPS did not track the total amount spent on homeland 
security in 2003 and 2004. However, the total icon park base operations 
funding totaled $70.6 million in 2003 and $76.3 million in 2004. The 
icon parks include, Boston NHP, Fort Point NHS, Independence NHP, 
Jefferson National Expansion Memorial, Mount Rushmore, Statue of 
Liberty NM and Ellis island, and the National Mall (excluding National 
Capital Parks-Central).
    Question 2. How much of that was in excess to the amount that you 
expected to spend?
    Answer. In 2003 there were three Orange Alerts by the Department of 
Homeland Security, increased costs for security at the icon parks July 
4th celebrations, and other law and order transfers primarily related 
to the Orange alerts. The NPS spent an additional $8.6 million, mostly 
from receipts, for heightened levels of security, infrastructure, and 
equipment needs. In 2004 there was one Orange Alert in late December 
through early January that cost the icon parks an additional $1.4 
million. These amounts do not include the budget of the U.S. Park 
Police. Emergency supplemental funding for the Park Police in 2002, 
with significant carryover into 2003, allowed it to stay within 
budgeted amounts.
    Question 3. What changes have you made in National Park Service 
operations to improve response and cost efficiency for requirements 
associated with homeland security?
    Answer. NPS has made permanent enhancements to icon park security. 
For example, at the Statue of liberty, NPS made a series of safety and 
security improvements, which allowed it to reopen the Statue to 
visitors in August 2004. During 2003 and in early 2004 there were 
significant daily costs when the Nation was at Orange Alert. During 
2004, the NPS made adjustments because of additional funding provided 
to those icon parks and NPS became more efficient at making the 
transition from Yellow Alert to Orange Alert. Should a nation-wide 
Orange Alert be issued today, these adjustments allow NPS to 
immediately go from Yellow to Orange with little cost, depending on the 
staffing level at the icon park. It is also noted that there have been 
no national Orange alerts since early 2004 and that future Orange 
alerts are likely to be area specific and not nation-wide.

                            BLM--OIL AND GAS

    The proposed budget for the BLM's oil and natural gas program 
contains language calling for oil and gas operators on public lands to 
pay for the administrative costs of the federal government's oil and 
gas program. This proposed ``cost recovery'' initiative would cost 
producers approximately $9 million dollars.
    As you know, many of the oil and gas producers that work in Wyoming 
are small operators who do not have ``deep pockets'' and work on thin 
financial margins. Because of the extensive regulatory requirements 
operators currently face on public lands, the costs associated with 
producing oil and natural gas on federal lands are already 
significantly higher than those for private lands.
    What is the rationale for further increasing the costs to operate 
on federal lands in the West?
    Answer. The BLM currently charges various types of fees for various 
programs, including special recreation permits and right-of-way grants. 
The Administration has been systematically reviewing the program 
efficiency of approximately 20 percent of its programs each year 
through the Program Assessment Rating Tool (PART). The Energy and 
Minerals programs were reviewed in 2004. One of the major 
recommendations from that review was to implement energy and minerals 
cost recovery in order to improve program efficiencies. Past Inspector 
General (IG) reviews have made similar recommendations.
    The BLM believes that cost recovery will allow the BLM offices to 
respond to demand more efficiently in an environment where both 
appropriations and industry demand are subject to fluctuations. Funds 
collected through cost recovery will be spent by the offices processing 
the documents and only within the energy and minerals programs in those 
offices.
    The BLM expects to publish a proposed cost recovery regulation 
shortly. We will request comments from the public and then publish a 
final regulation by fall 2005. The regulation, to be implemented in FY 
2006, will provide funding to allow the BLM to more effectively meet 
increased customer demand.

                                  AML

    Question 1. Can you tell me if your budget proposal includes giving 
the states back what they are owed from the AML fund and providing 
future funding for the 50% state share to all states? (Currently, 
Wyoming is owed around $450 million and the number continues to climb.)
    Answer. Consistent with the Administration's 2004 reauthorization 
proposal for the Abandoned Mine Land (AML) Fee under Title IV of the 
Surface Mining Control and Reclamation Act (SMCRA), the 2006 budget 
request supports the Administration's vision for reauthorizing the AML 
program. It provides $147.5 million in AML grants to non-certified 
States and $58 million in AML grants to certified States and Tribes. 
The Administration's approach would direct new AML funding to the 
reclamation of unhealthy and unsafe abandoned mines and provide for 
repayment to certified States and Tribes of their share of AML fees 
collected under SMCRA. That is, of the increased appropriations 
requested, which are contingent upon enactment of appropriate AML 
reauthorization legislation, non-certified States and Tribes would 
receive an increase of $37 million over current normal grant levels and 
the certified States and Tribes would receive an increase of $21 
million over current normal grant levels. This payment to the certified 
States would serve as the first installment on a multi-year payment of 
their unappropriated State Share balances.

                    PAYMENT IN LIEU OF TAXES (PILT)

    Question 1. The budget proposal calls for a 12% ($27 million) 
decreasing for PILT funding. Even at last year's funding level, PILT is 
well below its authorized amount. As you know, the PILT program 
compensates local communities for tax-exempt federal land within their 
counties. Counties cannot collect taxes for the federal lands, but must 
provide services to those lands, including search and rescue, law 
enforcement, garbage collection, and road maintenance. Not fully 
funding PILT unfairly places this burden on the backs of local 
governments.
    Answer. [Answer not received.]
    Question 2. Your proposed cut to PILT is described as a deficit 
reduction measure, yet the overall budget request for the Department of 
the Interior is only 1% lower than last year. How can you say that this 
budget request reflects a core departmental mission of ``serving 
communities'' when you are asking public lands counties to ``partner'' 
with you more and more, yet you simultaneously propose cutting off 
their means to do so?
    Answer. Our support for counties encompasses more than the annual 
PILT payments provided to counties. Our budget promotes the importance 
of local communities in helping to shape the future of public land 
management and supports their role with funding provided many 
cooperative conservation programs. Over the past four years Interior 
has allocated a total of $1.7 billion to partners for conservation 
activities.
    Question 3. Funding the PILT program fills a promise made by the 
federal government to local governments. Why is the administration 
resistant to properly funding PILT?
    Answer. The 2006 budget for the Department makes difficult choices 
as part of the President's efforts to reduce the budget deficit by half 
over five years. The budget includes funding to compensate counties for 
lost revenue, providing a total of $200 million for the Payment In Lieu 
of Taxes program. Although a reduction from the funding level 
appropriated by Congress, the 2006 budget is 76 percent above the 
funding level ten years ago. By comparison the Department's 
discretionary budget is 52 percent above the 1996 funding level.
    Question 4. Last year your budget request at long last equaled the 
amount that Congress appropriated the year before. At the same time you 
proposed--and Congress agreed--to move PILT from the BLM to the Office 
of the Secretary. Why is it that you are reversing the positive trend 
towards full funding now that PILT is under your direct supervision?
    Answer. The PILT program is now under the direct supervision of the 
Office of the Secretary. The 2006 budget is 76 percent above the 
funding level ten years ago. By comparison the Department's 
discretionary budget is 52 percent above the 1996 funding level.

                                GRAZING

    Question 1. Your legislative proposal would deposit receipts from 
grazing fees in the Treasury instead of going directly to fund range 
improvements. What is the rationale and need for this change?
    Answer. Part of the Administration's strategy for reducing the 
Federal deficit is to rein in mandatory spending, such as the Range 
Improvement Fund, and where possible and merited, to continue to 
perform this work with discretionary funding. The budget recognizes the 
importance of continued investments in projects to improve the health 
and productivity of rangelands, and proposes to continue this work with 
discretionary funding through other BLM programs. This provides greater 
flexibility to adjust funding levels to actual needs from year to year, 
including adjustments between various types of projects that benefit 
range health.
    Question 2. Won't this necessarily mean less funding for range 
improvements in the future?
    Answer. The BLM will continue to fund these range improvement 
projects in 2006, but will do so through its Deferred Maintenance 
program and Cooperative Conservation Initiative programs in the 
Management of Land and Resources account. Specifically, an estimated 
$7.0 million in base Deferred Maintenance program funding as well as 
$3.0 million of the $6.0 million increase requested for CCI will be 
targeted to high priority range improvement projects.
    Other aspects of the 2006 BLM budget request also emphasize the 
importance of rangeland health and productivity. For the second year in 
a row, BLM is proposing a significant increase in funding to support an 
aggressive plan of sagebrush conservation and restoration. The 2006 
budget includes an increase of $7.0 million, which builds on a $2.7 
million increase provided in 2005. Of the requested $7.0 million 
increase, $3.4 million will be matched by partner contributions under 
the Challenge Cost Share program. Maintaining and improving the health 
of the sagebrush habitat to ensure viable sage-grouse populations are 
critical to the continued multiple use management of these lands, 
including grazing.
    Invasive weeds also damage the health and productivity of 
rangelands. The 2006 BLM budget includes increases of at least $1.3 
million to address weed management on BLM-administered lands. Of this 
$1.3 million, $1.0 million is in the Challenge Cost Share program, and 
will therefore be leveraged with non-Interior funds to treat additional 
acres.

                              WILD HORSES

    Question 1. Last year, the administration requested a more than $10 
million increase in funding for the wild horse and burrow program. This 
year's request is $2.4 million below last year's spending on the 
program. How was the increased funding spent last year, and why is it 
not all needed again this year?
    Answer. With funds appropriated in 2005 the BLM plans to remove 
9,810 animals; provide 8,419,000 days of care and feeding of animals; 
adopt 7,100 animals; conduct 4,150 compliance inspections; conduct 
census on 62 herd management areas; monitor 121 herd management areas; 
complete necessary analysis and established the appropriate management 
level on 30 herd management areas; and achieve appropriate management 
level on 79% of 201 herd management areas. Appropriate management level 
was achieved on 51% of the herd management areas in 2004.
    Efficiencies and improvements in the program will allow us to 
reduce costs by $2.5 million in 2006. The BLM has taken a number of 
steps to improve its ability to place animals in good homes and will 
continue to work toward program efficiencies. These include hiring a 
national marketing director; working with the National Wild Horse and 
Burro Foundation to identify additional markets and to promote new ways 
to market the image of wild horses and burros; and increasing the 
number of trained animals through contracting.
    The BLM has already reduced the unit costs for gathers and 
adoptions. The BLM believes it can bring about cost reductions in the 
overall program by placing more animals in good homes, reducing the 
number of animals in long term holding facilities, and gaining more 
program efficiencies.
    Each animal in the BLM's long term holding facilities costs 
approximately $500 per year. Between 2003 and 2004, BLM reduced its 
adoption unit cost from an average of $1,451 per animal to $1,209 per 
animal while adopting 336 more animals. BLM believes that some 
additional reductions in unit costs may still be realized and adoption 
numbers should increase. The BLM expects to reduce the number of 
animals in long term holding facilities in FY2005. If BLM can reduce 
that number by 5000 head, this, together with anticipated program 
efficiencies, should result in a budget need in FY2006 that is 
approximately $2.5 million less than the FY2005 figure
    Question 2. Describe any changes in management of the wild horse 
and burrow program from last year?
    Answer. The BLM is working hard to reach appropriate management 
levels of horses on the range by the end of fiscal year 2007. We have 
been taking a number of steps to improve our ability to place animals 
in good homes and will continue to work toward program efficiencies, 
including hiring a national marketing director to coordinate national 
activities for the adoption program; working with the National Wild 
Horse and Burro Foundation to identify additional markets and to 
promote new ways to market the image of wild horses and burros; and 
working through partnerships to train certain wild horses to enhance 
adoption demand. In addition, we are increasing the use of volunteers 
and increasing partnerships with external groups to gain knowledge and 
expertise within domestic equine industry to aid in adoption promotion.
    Finally, the BLM is complying with the Congressional mandate in the 
new Wild Horse and Burro Sale Authority Law (Fiscal Year 2005 Omnibus 
Appropriations Act--P.L. 108-447). This law directs the BLM to sell 
without limitation animals that are more than 10 years old or have been 
unsuccessfully put up for adoption at least three times. The BLM is 
engaged in an aggressive outreach campaign to advocacy groups, Indian 
tribes, and humane organizations that may be interested in acquiring 
these wild horses and burros and providing for their long-term care.

                      Questions From Senator Smith

    Question 1. I would like to be supportive of the Administration's 
request in the Fish and
    Wildlife Service Budget for the acquisition of the Barnes Property. 
However, in order for me to be supportive of this $6 million request, I 
need to know how any water created by the inundation of the Barnes 
Property and the adjacent Agency Ranch property will be managed within 
the federal project (i.e. will this water be available for irrigation, 
will it be water bank water, etc.?). Please let me know how this water 
will be used by the federal project and how it will be credited against 
the Endangered Species Act obligations of the federal project.
    Answer. The Barnes tract would be passively managed in conjunction 
with Agency Lake Ranch to accomplish three goals. These include:

    1. Helping protect and recover the endangered suckers at Upper 
Klamath Lake by providing additional habitat for the suckers, 
especially juvenile-rearing habitat. A major problem in recovering the 
fish is that there is little recruitment from the juvenile stage to the 
adult population. Providing additional juvenile-rearing habitat in most 
years is a key step in recovering the suckers.
    2. Storing additional water in Upper Klamath Lake to provide water 
that can be counted as part of the water bank. Storing water on Agency 
Lake Ranch alone adds approximately 12,000-15,000 acre feet of water in 
most years to Upper Klamath Lake (when Upper Klamath Lake fills). This 
water is counted as part of the water bank and is managed to meet coho 
salmon flows under the NOAA biological opinion. Any additional storage 
at currently managed sites would flood the adjacent Barnes Ranch, a 
private holding. With Barnes acquired by the FWS as part of Upper 
Klamath Lake National Wildlife Refuge and managed conjunctively with 
Agency Lake Ranch, between 34,000 and 42,000 acre feet of additional 
water would be stored in Upper Klamath Lake. This water would be 
counted as part of the water bank. By increasing this component of the 
water bank, Reclamation will be able to reduce the amount of land idled 
and/or ground water pumped to provide the water needed for the water 
bank. Additionally, the consumptive use portion of water rights that go 
with the Barnes property (roughly estimated at 2,700 acre feet) can be 
counted as part of the water bank, further offsetting the need for land 
idling and groundwater pumping to meet the water bank requirement.
    3. Contributing, over the long term, to improving water quality in 
Upper Klamath Lake and downstream in the Klamath River. Typical 
operations for Barnes Ranch involve using the Barnes' water rights to 
irrigate their land for forage, and then pump the tail water into 
drainage canals connecting with the lake. This water has a high 
phosphorous and nitrogen content and adds to the nutrient loading of 
Upper Klamath Lake. This contributes to the severe algae problem in the 
lake, a serious water-quality problem for fish in Upper Klamath Lake 
and also a significant source of water-quality problems downstream. The 
additional wetlands habitat will also add substantially to the prime 
waterfowl and wetland habitat contained in Upper Klamath National 
Wildlife Refuge.

    Question 2. How much money will be needed to stabilize the levies 
at the back of the Barnes Ranch property?
    Answer. A preliminary estimate from the Bureau of Reclamation is 
approximately $2 million, a portion of which can be met through account 
work by Reclamation to increase the storage on Agency Lake Ranch.
    Question 3. If Barnes Ranch is acquired by the U.S. Fish and 
Wildlife Service, it will be adjacent to the Agency Ranch property 
owned by Reclamation and near another federal parcel managed by the 
Bureau of Land Management. How does the Department of the Interior 
intend to coordinate the management of these three parcels? Is the 
Department considering consolidating these three parcels under the 
management of one Interior agency?
    Answer. Answer. Our intention is to develop an efficient, 
effective, and coordinated approach to managing these parcels. The area 
actually includes four parcels, counting Upper Klamath Lake National 
Wildlife Refuge. Agencies have had preliminary discussions about 
combining the other three parcels with Upper Klamath Lake National 
Wildlife Refuge, since one option would be to manage them efficiently 
and at modest cost by FWS.
    Question 4. Next year, the power rates in the Klamath Basin could 
go up twenty-fold from the current rate. What is the Department doing 
now to prepare for these increased power rates? Is the Department 
studying ways to reduce power use by the Fish and Wildlife Service, by 
Reclamation and by the BLM in the Upper Basin? How much of 
Reclamation's annual reimbursable operations and maintenance costs are 
attributable to power? What does the Department anticipate that cost to 
be once power rates increase?
    Answer. The Department is negotiating with PacifiCorp and the power 
users. Key issues include the Federal Energy Regulatory Commission re-
licensing of the PacifiCorp's power project, provisions of the 
Interstate Compact, falling water charges, and rate equity for all 
users. It appears that the FERC re-licensing process will not be 
completed by 2006 and an extension will be requested. The Department 
believes the provisions of the 1956 contract between CopCo (now 
PacifiCorp) and Reclamation should similarly be extended. Energy 
efficiency has been an ongoing concern of the Department, and the 
operation of Bureau facilities is continually being reviewed to ensure 
cost savings where ever possible.
    The specific amount of Reclamation's annual reimbursable operations 
and maintenance costs attributable to power is difficult to determine 
because the data currently on hand do not separate maintenance costs 
from power costs. Reclamation estimates that operation and maintenance 
costs for electrical power to operate numerous pumps within the Klamath 
Project currently range between $100,000 and $175,000 each year. These 
costs represent between 25% and 50% of all O&M reimbursable costs. If 
power costs to the Project were to increase 10 times, as some have 
predicted, reimbursable costs to the irrigation Districts would range 
between $1,000,000 and $1,750,000 each year and become the single 
largest reimbursable O&M expense. I would be pleased to keep you 
informed as we proceed through this process.
    The BLM's Klamath Falls Resource Area uses minimal electricity in 
the Upper Klamath Basin, to operate the fish screens at the Wood River 
Wetlands; in 2004, this cost was $10.45. The BLM does not use 
electricity to bring water onto the property, as it is all done through 
a gravity system. Due to minimal consumption, the Resource Area has not 
done an energy analysis and currently has no plans to do so.
    Question 5. When does the Department intend to implement an 
inholder access policy for the Steens Mountain that conforms with 
clearly stated congressional intent?
    Answer. The Steens Mountain Cooperative Management and Protection 
Act of 2000 (P.L. 106-399) (the Steens Act) established both a 500,000-
acre Cooperative Management and Protection Area (CMPA) and, wholly 
contained within the boundaries of the CMPA, an approximately 170,000-
acre Wilderness Area.
    The Steens Act required the BLM to provide ``reasonable access to 
private lands within the boundary of the Wilderness Area.'' The BLM has 
been working through the Steens Mountain Advisory Committee (SMAC) to 
address the issue of inholder motorized access in the Wilderness Area.
    Based on recommendations of the SMAC, the BLM prepared an 
environmental assessment (EA) and in June 2004 issued a decision to 
permit motorized access from May through November to the Ankle Creek 
Route. The decision was appealed to the Interior Board of Land Appeals 
(IBLA), which issued a stay preventing the BLM from implementing its 
decision. The BLM interprets the stay as return to management practices 
and policy that precede the EA. Allowable uses prior to the EA included 
motorized access to the inholdings along the Ankle Creek Route at 
historically established levels.
    The BLM is currently considering additional access requests to the 
inholdings in a second EA which is under development. This EA is 
anticipated to be available for public comment in the near future.
    The BLM will continue to work with the SMAC and the inholders to 
implement reasonable access to their inholdings.

                     Questions From Senator Bunning

    Question 1. After trying to move forward with a new plan for AML 
last year, Congress was only able to pass a temporary reauthorization 
of the AML program. That temporary fix was made with the hopes of this 
year achieving an overhaul of the AML program. While I am still hopeful 
that we can address this important issue, what will the Department of 
the Interior do if Congress does not act again this year? Will the 
Department begin to explore its own changes to the AML program?
    Answer. Early in 2004, the Administration set the stage for the AML 
debate by advancing a proposal, paid for exclusively from AML fee 
collections, that achieved three simple objectives; 1) extending the 
AML fee collection authority to allow us to collect sufficient funds to 
finish the job of reclaiming the high priority health and safety 
abandoned coal sites remaining in this country; 2) directing more 
resources from annual appropriations to States that have the greatest 
need, i.e., high priority coal related problems; and, 3) expediting 
payments to certified States and Tribes from current unappropriated 
balances. The Administration's proposal, along with the myriad of other 
AML proposals advanced, did not achieve consensus on many issues. 
Recognizing the importance of this program, Congress extended the 
authority to collect the abandoned mine land fee until June 30, 2005.
    The Administration is continuing to work with Congress to achieve 
the three objectives advanced in the legislative proposal. While we 
remain hopeful that Congress will address this important issue, even if 
AML fee collection authority is not extended further, other provisions 
of SMCRA, both in Title IV (Abandoned Mine Reclamation) and in Title V 
(Regulatory control of active mining) remain in full effect. 
Furthermore, even without an extension of fee collection authority, 
current unappropriated balances in the AML fund are available for 
appropriation pursuant to the allocation formula prescribed by law. As 
the AML program is a statutorily driven program, only Congress can make 
necessary changes to it.
    Question 2. Last year, Congress extended the authority of the 
Recreation Fee Program for another 10 years. During the pilot program, 
we saw several problems with these new fees such as jurisdictional 
issues and public confusion. You said in your statement that you will 
make the transition carefully and no new fees will be created during 
fiscal year 2006. When and how do you envision expanding this program?
    Answer. The new Act provides for a nationally consistent 
interagency program with clear criteria regarding sites eligible for 
using recreation fees, additional on-the-ground improvements to visitor 
services at recreation sites across the nation, a new national pass for 
use across interagency federal recreation sites and services, and more 
public involvement in the program. The Act specifically addresses 
public concerns about the Fee Demo Program by limiting fees to sites 
that have a certain level of development and meet specific criteria. 
The Act includes additional safeguards against unwarranted expansion of 
the program on Forest Service and BLM public lands by creating 
Recreation Resource Advisory Committees and providing other public 
participation opportunities.
    We have indicated that no significant changes are anticipated 
during the transition period, such as creating new fee areas. In fact, 
the agencies are currently reviewing all existing fees and where the 
existing fee program is inconsistent with the Act, we are making 
appropriate changes. This review, as we mentioned in our testimony, has 
resulted in some fees dropping out of the program or being limited in 
scale or scope.

                    Questions From Senator Bingaman

                         NATIONAL PARK SERVICE

    Question 1. Your testimony highlighted the Federal Land Enhancement 
Recreation Act. I understand that the Administration strongly supported 
this authority, which was included in last year's Omnibus 
Appropriations Act. One of the concerns I have with the new authority 
is that appears to me that visitors to the National Park System will 
likely have to pay significantly more for an annual pass under the new 
fee program than they do using an existing National Park Pass. I am 
assuming you will not set the price of the new ``America the 
Beautiful'' pass below the $65 currently charged for a Golden Eagle 
Passport, since the two passes provide the same benefits. Is that 
assumption correct? If so, how will you justify to the 400,000 people 
who purchased a National Park Pass last year that they must now pay 30 
percent more, and perhaps more than that, for the privilege of visiting 
their National Parks?
    By almost everyone's account, the National Park Pass has been one 
of the Park Service's success stories in recent years, with sales about 
double of what they were when the Pass was created. Visitors who wanted 
the option to access other Federal lands had the option of upgrading to 
a Golden Eagle Passport and those who were content with visiting only 
units of the National Park System could stay with the National Park 
Pass. Why is it such a good idea to take away a visitor's choice in 
this matter and force them to pay a higher fee?
    Answer. The America the Beautiful Pass expands the National Parks 
Pass to cover other agencies, while retaining the successful elements 
of the National Parks Pass program, such as the image competition and 
active marketing. With recreation demand growing at federal lands 
managed by agencies other than the National Park Service, one of the 
important benefits of the America the Beautiful Pass is to improve 
visitor service by streamlining recreational opportunities on our 
federal lands. Our experience has shown that the existence of multiple 
national passes has led to visitor confusion and frustration. We have 
found many visitors do not distinguish between lands managed by 
different federal agencies and sometimes expect that the National Parks 
Pass will be accepted at National Forests, BLM Recreation Areas, and 
National Wildlife Refuges. Creation of the America the Beautiful pass 
will address this confusion.
    We have not yet decided on the price of the America the Beautiful 
pass. The National Pass Working Group plans to conduct a market 
analysis on the price of the America the Beautiful Pass, as needed. The 
National Pass Working Group also will take into consideration past 
studies and surveys, data related to pricing of other national passes, 
and the relationship of the pass to other recreation fees and site-
specific passes. Other surveys, studies, and market analyses may be 
conducted as necessary.
    A key goal is to ensure that the America the Beautiful pass remains 
a good value for frequent visitors to our federal lands. We recognize 
that setting the price of the pass is not just an exercise to raise the 
maximum amount of revenue possible. Price setting needs to take into 
account the use patterns, other existing fees, and the extent to which 
the pass could be used as a tool to educate and broaden the American 
public's knowledge and experience about our federal recreational lands.
    Question 2. Your written testimony discusses the National Park 
maintenance backlog, and then notes that the FY 2006 budget request 
``will bring funding for park maintenance over five years to $4.9 
billion, as pledged by then-Governor Bush in 2000.'' As I remember, the 
President's original proposal was to eliminate the backlog, not just 
provide a certain amount of funding, as stated in the Interior Budget 
in Brief for FY 2002: ``It is estimated that the current deferred 
maintenance backlog is roughly $4.9 billion . . . . In order to meet 
President Bush's commitment to eliminate the NPS backlog over five 
years the NPS budget request includes . . .'' I recognize that the 
Administration is no longer claiming that the backlog has been, or will 
in the near future be eliminated, but to date I have not seen any 
estimate as to the progress that has been made toward this goal. What 
is your estimate of the current status of the backlog?
    Answer. NPS has made significant progress in addressing known 
maintenance projects through the park system as well as in establishing 
and implementing the management framework that will guide the Service's 
21st century approach to asset management. The President's 2006 budget 
fulfills the pledge to devote $4.9 billion towards the NPS maintenance 
backlog. With these funds, NPS has undertaken over 4,000 projects since 
2002, ranging from road repairs, to historic building stabilizations, 
to restroom rehabilitations. In addition, NPS has completed the first 
ever systematic inventory of its assets and conducted initial condition 
assessments at all parks. Comprehensive condition assessments are 
scheduled to be completed by the end of 2006.
    Based on the inventory, NPS was able to establish a baseline 
Facility Condition Index to use for measuring performance 
accomplishments in improving the condition of our assets. Last year, 
the overall FCI for the eight industry standard assets of NPS was 0.25. 
As of the end of 2004, the FCI was 0.24. This number will continue to 
fluctuate as more comprehensive information is gathered from all of the 
parks, as well as the improvements resulting from the significant 
project investments of the last several years are realized. This 
performance metric will allow NPS, the Department, OMB, and the 
Congress to evaluate the change in condition of NPS assets over time. 
The power of the FCI tool is at the individual asset level. Managers 
will be able to evaluate the condition of their assets, and prioritize 
the expenditure of funds towards those assets that are most important 
to fulfilling the park's mission as well as in the poorest condition.
    Question 4. Your FY 2006 budget proposes $324.3 million in the NPS 
Construction and Major Maintenance Account, which is about 2.8 percent 
higher than the $315.3 million appropriated for the same account in FY 
2001. Of the $4.9 billion in funding over the past 5 years (including 
this year's proposed budget) how much accounts for new spending above 
and beyond baseline funding levels?
    Answer. The $4.9 billion maintenance backlog commitment consists of 
four distinct funding sources. As you have stated, the Construction 
funding level has increased by $14.3 million since 2001. Facility 
Maintenance has increased by $113.7 million. Fee funding directed to 
deferred maintenance activities has increased by $47 million and 
Federal Highway funding has increased by $155 million, assuming 
enactment of the new Highway bill. While the increase to the ``base'' 
of these components totals only $330 million over 2001, it is more 
legitimate to speak of the entirety of funding for each project program 
over the five-year period. The majority of the funding from these 
components is comprised of project funds and is redistributed annually 
to complete new projects. Therefore, nearly $4.9 billion can be counted 
against the reduction of the deferred maintenance backlog.

                      WATER/BUREAU OF RECLAMATION

    Question 5. Many parts of the West are experiencing a record 
drought. What is the Department doing to anticipate and address the 
effects of the drought? Are there any specific programs that are 
available to mitigate the impacts of drought on Indian reservations?
    Answer. The Reclamation States Emergency Drought Relief Act of 1991 
(P.L. 102-250) as amended (Drought Act) authorizes the Bureau of 
Reclamation to undertake drought relief measures through emergency 
assistance (Title I) and planning activities (Title II). Title I is 
temporary authority.
    Title I provides authority for construction, management, and 
conservation measures to alleviate the adverse impacts of drought, 
including the mitigation of fish and wildlife impacts. Only temporary 
construction activities are authorized, except for the construction of 
permanent wells. Title I also authorizes temporary contracts to make 
available project and nonproject water and to allow for the use of 
Reclamation facilities for the storage and conveyance of water. The 17 
Reclamation States and Hawaii, as well as tribes within those states, 
are eligible for this assistance.
    For example, in Fiscal Years 2003 and 2004, Reclamation funded 
Title I emergency assistance projects for the Hopi Tribe, the Navajo 
Nation, and the Hualapai Nation consisting primarily of well drilling 
and one mitigation of fish and wildlife impacts projects, and Title II 
planning assistance to the Hualapai Nation and the White Mountain 
Apache Tribe.
    Question 6. I see that the budget request includes a small increase 
for site security. Do you have the funding you need to provide for site 
security at the dams, monuments and other critical infrastructure 
administered by the Department?
    Answer. Yes, the increase allows Reclamation to maintain the 
necessary guards and surveillance activities and to focus on completing 
the physical improvements on National Critical Infrastructure 
facilities, completing security risk assessments at all its key 
facilities, and conducting research on identifying potential 
vulnerabilities and measures to deal with them.

   Please provide a description of accomplishments relating to 
        site security during each of the three past fiscal years.
    Answer. In the past three fiscal years, Reclamation has initiated 
an integrated long-term security response plan under which 
vulnerability risk assessments have been completed for the most 
critical water and power facilities, emergency security upgrades have 
been implemented at numerous facilities, and physical fortification 
measures have been installed at Grand Coulee Dam and Powerplant and are 
being implemented at the other four National Critical Infrastructure 
facilities. Necessary guards and surveillance activities have been 
maintained at all key facilities, and research has been conducted in 
cooperation with other Federal agencies to identify potential threats 
and vulnerabilities and develop response measures.

    Question 7. The budget request for the Bureau of Reclamation cuts 
the request for Title XVI programs by more than half, by some $15.7 
million. Why is this program not a budget priority? Doesn't this 
program provide important water resources for the water-short West?
    Answer. The Administration's FY 2006 request for Title XVI programs 
is only $1.3 million below the FY 2005 request. The Title XVI water 
reclamation and reuse program has proven to be a successful and popular 
program, especially in the urban areas of the West. The Department 
believes that the program has met its primary mission of demonstrating 
that recycling and reuse can expand and augment existing water 
supplies. Reclamation intends to continue to support the completion of 
those ongoing projects included in the President's budget request in 
prior years.
    Question 8. The budget proposes direct funding of certain 
hydropower operation and maintenance activities. Can you please provide 
for the record detail regarding which activities are proposed to 
receive direct funding?
    Answer. The $30 million proposed would authorize the direct funding 
for the base operation and maintenance of Reclamation hydropower 
facilities not currently covered by direct funding agreements or 
revolving funds. Base operation and maintenance includes activities 
such as repairs, replacements, testing, and exercising of any or all 
portions of the power equipment.
    The projects included in this proposed authorization are: Pick 
Sloan Project and Fryingpan-Arkansas Project in the Great Plains 
Region; Central Valley Project in Mid-Pacific Region; and Collbran 
Project, Rio Grande Project, and Provo River Project in Upper Colorado 
Region.
    Question 9. The Budget in Brief states that the 2006 budget 
includes ``spending reductions in activities that, while important, are 
less central to the Department's core mission, have ambiguous goals, 
duplicate activities of other agencies or require less effort because 
key goals have been achieved.'' In the area of water, the President is 
proposing a 6.7% cut ($68 million) in Reclamation's overall budget, 
including a 6% reduction ($51 million) in the Water & Related Resources 
account. The USGS budget for Water Resources Investigations is cut 
another 3.3% ($7 million). In areas outside Interior, the Corps of 
Engineers budget is cut by 6% ($280 million); the Clean Water Act State 
Revolving Fund is cut by 33% ($361 million); and the USDA Rural Water & 
Wastewater grant program is cut by 17% ($77 million). All these 
percentages do not take into account inflation.
    Of the reasons quoted in the Budget in Brief, which applies to the 
budget cuts in DOI's water programs? Given the water challenges facing 
communities in the West, it can't be that less effort is needed. Do you 
believe that addressing the nation's future water needs is no longer 
central to the Department's core mission?
    Answer. The Department certainly believes that finding solutions to 
the Nation's water needs is an important function and a central part of 
our goals. While it is true that the budget is $68 million below the 
2005 Enacted level, the reductions are offset by receipts in the 
Central Valley Project Restoration Fund and by a proposal to offset 
$30.0 million through direct funding of certain hydropower operations 
and maintenance activities. Additionally, an undistributed 
underfinancing reduction of $30.2 million is included in the Water and 
Related Resources account is due to anticipated delays in construction 
schedules and other planned activities and $20.7 million of the 
reduction was due to a technical adjustment in the permanent 
appropriations, closing out the loan program subsidy estimate. The 
Department and the Bureau of Reclamation are committed to working with 
the bureau's customers, States, Tribes, and other stakeholders to find 
ways to balance and provide for the mix of water resource needs in 2006 
and beyond. In this vein, the budget also includes important increases 
to help address the Nation's water needs, such as a $6.4 million 
increase to increase the safety at our dams, $10.5 million to increase 
the grants made to States, tribes and local governments for Water 2025 
projects, and $35 million for the California Bay-Delta Restoration 
program (which includes some activities that have previously been 
funded under the Water & Related Resources account).
    Question 10. In 2003, the Department developed a 10-year biological 
opinion for water operations in the Middle Rio Grande. Compliance with 
that opinion requires compliance with a reasonable and prudent 
alternative (RPA). The Department estimates that implementation of the 
RPA will cost $230 million--an average of $23 million per year. Yet, 
over the last three years, the Department has proposed investing a 
total of only $19.4 million to address ESA activities in the Middle Rio 
Grande. This year, Reclamation's budget proposes a 35% cut in funding 
for the Middle Rio Grande project--including at least a $4 million cut 
in the funding available for ESA compliance.
    How does the Department justify this minimal level of funding when, 
by its own estimates, it knows such funding will be insufficient to 
comply with the biological opinion? Water 2025 designates the Middle 
Rio Grande as a ``hot spot.'' Shouldn't it receive more of a priority 
given this designation? Why does the Department actively work to put 
together a cross-cut budget ($62.9 million) to address similar issues 
in the Klamath basin but decide to cut the budget for the Middle Rio 
Grande?
    Answer. We feel that the fiscal 2006 budget request is adequate to 
meet the 2006 requirements of the biological opinion for water 
operations in the Middle Rio Grande. The total estimated cost of $230 
million is not expected to be spent in equal amounts during each of ten 
years. In future years we anticipate some larger capital expenditures 
such as relocating a bridge. If for any reason we find that the budget 
request for 2006 is not adequate to meet the 2006 requirements we will 
seek a re-programming of funds to compensate for the difference.
    Question 11. The Bureau of Reclamation has over $1.8 billion in 
authorized rural water projects. Rather than focusing on the completion 
of those projects, the budget cuts overall rural water funding by $29.5 
million, asserting that such reduction is appropriate until the 
establishment of a formal rural water program.
    How does this delay affect the status of those projects which are 
already receiving FY 2005 funding, in particular Perkins County, Ft. 
Peck/Dry Prairie, and North-Central Montana? Why should these 
authorized projects be delayed until a new program to address new 
projects is authorized?
    Answer. Reclamation has growing funding needs associated with 
operating and maintaining those ``traditional'' facilities that are 
critical to accomplishing our core mission of delivering water and 
generating power throughout the western United States. Funding emphasis 
has been placed on those ongoing projects which are nearest completion 
or for which sunset dates have been legislated (e.g., Mni Wiconi).
    During the FY 2004 budget formulation process, OMB conducted a PART 
analysis to identify strengths and weaknesses of Reclamation's rural 
water activities in order to make informed budget, management, and 
policy recommendations. It was determined through the PART analysis 
that Reclamation's rural water program needed stronger controls and 
that a lack of agency involvement during project development may be 
resulting in funding for projects that are not in the best interest of 
the United States. To address their findings, OMB suggested that 
legislation be introduced to formalize a Reclamation rural water 
program with adequate controls.
    The Administration submitted legislation to the 108th Congress that 
would have established a formal rural water program within Reclamation, 
thereby addressing many of the problems identified in the PART. 
Additionally, individual projects must compete for limited resources on 
their merits.
    Question 12. When will the Department submit legislation to 
reallocate repayment of capital costs of the Pick-Sloan Missouri Basin 
program? Has a NEPA analysis been completed on the legislation to be 
proposed? What is the exact basis for reallocating construction costs?
    Answer. Reclamation has been analyzing options for the legislation. 
No NEPA analysis has been completed.
    The Pick-Sloan Missouri Basin Program is a comprehensive program to 
manage the water and power resources of the Missouri River Basin. While 
much of the originally planned project development has occurred, 
including reservoir storage and power generation facilities, only about 
11% of the irrigation anticipated in the Pick-Sloan plan has been 
Federally-developed. Originally, about $500 million of the program's 
hydropower and water storage capital costs were allocated to 
irrigators, and because the irrigation was never developed, the capital 
and O&M costs on this portion of the project are not being repaid to 
the Federal government. Under current economic and financial 
conditions, further irrigation development is not expected. The 
proposed reallocation would therefore make power customers responsible 
for repayment of all the construction costs from which they benefit. 
This would change current law, under which Reclamation is bound by the 
cost allocation developed under the assumption that irrigation projects 
would be developed and costs associated with irrigation-related pumping 
power and reservoir storage continue to be allocated to future 
irrigation development.
    Question 13. The Bureau of Reclamation's budget calls for an 
overall investment of $4.0 million in desalination and water 
purification research ($2 million-Water 2025; $1 million-Science & 
Technology; and $1 million-Title XVI). This would represent a 57% cut 
in the resources made available in the FY 2005.
    Does the Administration have a long-term commitment to developing 
new technologies in the area of desalination and water purification? If 
so, will the Bureau of Reclamation be expected to have a lead role in 
that effort? How can it perform that role at such low levels of 
funding? Does the budget include any funding for the Tularosa Basin 
desalination facility? Does the Administration view this research 
facility as an integral part of its efforts to develop new technologies 
to address increasing demands for water in the West?
    Answer. Under the leadership of the White House Office of Science 
and Technology Policy, Reclamation and the Department are currently 
working with an array of Federal agencies to develop an integrated 
interagency strategy for advancing the technology of water 
purification, including desalination. Pending the outcome of that work, 
the ultimate role for Reclamation among several Federal agencies 
(including the role of the Tularosa facility) and the resulting 
appropriate level of Reclamation funding for such a long-term mission 
(including funding for the Tularosa facility) are not yet resolved. 
Pending that resolution, no funds were included in the President's 
budget request for the Tularosa facility for FY 2006. However, should a 
leading role for Tularosa (and funding to carry it out) be featured in 
the integrated interagency strategy under current development, it will 
likely be in treatment of brackish ground water as a complement to 
projects elsewhere that focus on treating sea water.

                        DEPARTMENTAL MANAGEMENT

    Question 14. I would like to follow up on our discussion at the 
hearing on the Inspector General's report on the Robbins settlement 
agreement. I respect your concern about the sensitivity of personnel 
matters and I look forward to a private briefing on this matter, as you 
offered. I have a general question, however, about the impact of this 
matter on the morale of career employees at the Department of the 
Interior. According to the Inspector General's report, ``the conduct 
chronicled in this report cries out for administrative action. It is 
also the very kind of conduct that DOI employees perceive is either 
taken lightly or goes wholly unaddressed . . .'' A staff attorney in 
the Office of the Solicitor was criticized in the report for 
capitulating to the ``pressure and intimidation'' of a political 
employee and because he ``passively conceded to the ill-advised will of 
his superiors.''

   First of all, without going into specific personnel matters, 
        what actions have you taken specifically in response to the 
        Inspector General's report?
    Answer. I take the report very seriously. The Inspector General 
issued his report to the Solicitor and the Assistant Secretary for Land 
and Minerals Management, and I have discussed the issues raised in the 
report with them. The Solicitor is developing measures to assure 
employees that they may raise concerns about alleged improper pressure 
or intimidation by superiors without fear of reprisal. I am assured 
that the Solicitor has thoroughly considered and is pursuing 
appropriate responses to address the facts and issues raised, at both 
the individual employee and organizational levels.
    I am further assured that the Assistant Secretary for Land and 
Minerals Management has consulted with and thoroughly considered the 
report of the Inspector General. She has discussed the conclusions and 
recommendations of the report, their implications for the Bureau of 
Land Management (BLM) as an organization, and appropriate actions with 
the Director of the BLM.

   What is the message that career employees should take from 
        this incident? How are they supposed to react when being 
        ``pressured and intimidated'' by politically-appointed 
        superiors, without fearing reprisals?
    Answer. I believe the Department's attention to this matter will 
help assure employees that if they believe they are being or have been 
improperly pressured or intimidated by any superior, political or 
otherwise, they should feel free to discuss their concerns with their 
appropriate managers or other Departmental officials, including the 
Office of the Inspector General, without any fear or reprisal.
    Question 15. What rulemakings is the Department anticipating during 
the remainder of FY05 and FY06? Please list these rulemakings 
(including draft and final rules) by subject matter and Bureau with 
expected date of publication?
    Answer. Enclosed for your review (as Attachment A) is the 
Department's Semiannual Regulatory Agenda published in the Federal 
Register on December 13, 2004, which provides notice of the rules 
scheduled for review or development between the fall of 2004 and the 
spring of 2005.

   Will you commit to consulting with us prior to the issuance 
        of draft and final rules?
    Answer. In 1995 and 1996, Congress enacted several statutes that 
changed the way agencies plan, develop and issue rules. In enacting the 
Congressional Review Act of 1996, Congress established procedures by 
which agencies must consult with Congress in the course of promulgating 
rules. Recognizing the broad scope of the definition of ``rules'' under 
the Administrative Procedure Act, Congress limited the consultation 
requirement to rules meeting the definition of ``major'' rules. The 
Department will continue to comply with applicable requirements, along 
with ex parte limitations that adhere during the rule-making process. 
As noted above, the regulatory agenda is published in the Federal 
Register and provides Congress with a semi-annual update concerning the 
Department's regulatory priorities. The Department will promptly 
respond to any Committee requests for information and will be available 
to discuss particular regulatory initiatives.
    Question 16. What Solicitor's Opinions are currently under review? 
What Solicitor's Opinions do you expect to review during the remainder 
of FY05 and FY06? Please provide a list.
    Answer. The Solicitor's Office is currently reviewing an opinion 
written by former Solicitor John Leshy entitled, Use of Mining Claims 
for Purposes Ancillary to Mineral Extraction, M-37004 (January 18, 
2001).
    We will review other opinions as requested by the Secretary, Deputy 
Secretary and Assistant Secretaries.
    Question 17. The budget request includes an increase for the 
Solicitor's Office.

   What is the justification for this increase?
    Answer. The request includes $1,930,000 for fixed cost increases 
and $2,166,000 for program changes. The program changes include: (a) IT 
increases in support of the Departmental IT initiatives, two additional 
IT staff, on-going capital improvement costs, and a Legal Knowledge 
Management System; (b) four additional attorney positions to support 
the Department's strategic plan of more focused partnership initiatives 
and expanded grants programs, to address the need for electronic 
discovery, and to support the growing need for legal support by the 
Department's bureaus; (c) through a Secretarial Order, the FOIA appeals 
function, which included one FTE, was transferred to the Office of the 
Solicitor to more effectively and efficiently manage the Department's 
FOIA appeals. This transfer is presented in the 2006 Congressional 
Budget Justification as a technical change; (d) two new support 
positions to fully staff the FOIA appeals function. The additional 
staff will help to reduce the current backlog and support the on-going 
work in the FOIA appeals branch; (e) additional funding requested to 
support employees in training, travel, promotions, and awards.

   How many additional FTEs will be funded with this increase?
    Answer. Nine additional FTEs will be funded with the increase.

   In what offices or divisions will these FTEs be placed?
    Answer. Two Attorneys will be placed in the Division of General 
Law; one attorney in the Rocky Mountain Regional Office in Denver 
Colorado; one attorney in the Northeast Region, Twin Cities Field 
Office, Minnesota; two IT Specialists in the Division of 
Administration; one FOIA appeals officer in the Division of 
Administration; and two FOIA appeals support staff in the Division of 
Administration.
    Question 18. Page DH-83 of the Interior Budget in Brief lists 
activities and programs that were subject to the Program Assessment 
Rating Tool analysis. Several of these programs were rated ``results 
not demonstrated'' or ``moderately effective.'' Please explain the 
results for each activity and program. What are the criteria and other 
information upon which these ratings are based? Are stakeholders 
consulted as part of the ratings process?
    Answer. The final summary discussion of the PART findings and 
results for each activity and program reviewed for the FY 2006 
President's Budget is provided as Attachment B.
    Each PART includes 25 basic questions and some additional questions 
tailored to the program type, divided into four sections. The first 
section of questions gauges whether a program's design and purpose are 
clear and defensible. The second section involves strategic planning, 
and weighs whether the agency establishes valid annual and long-term 
goals for its programs. The third section rates the management of an 
agency's program, including financial oversight and program improvement 
efforts. The fourth section of the questions focus on results that 
programs can report with accuracy and consistency.
    The answers to questions in each of the four sections result in a 
numerical score for each section from 0 to 100 (100 being the best 
score.) Numerical scores are translated into qualitative ratings. The 
bands and associated ratings follow:

------------------------------------------------------------------------
                             Rating                               Range
------------------------------------------------------------------------
Effective......................................................   85-100
Moderately Effective...........................................    70-84
Adequate.......................................................    50-69
Ineffective....................................................     0-49
------------------------------------------------------------------------

    Regardless of overall score, programs that do not have acceptable 
performance measures or have not yet collected performance data and 
overall cannot demonstrate results generally receive a rating of 
Results Not Demonstrated.
    Although the PART assessment process is internal to the Federal 
Government, and is accomplished through the efforts of managers and 
staff who work on the programs together with OMB, the criteria and 
scoring include consideration of stakeholder's point of view.
    Question 19. How does the Department make use of information from 
the network of State natural heritage programs? Does the Department 
support further partnership efforts with these programs? How does this 
State-based network help ensure a strong scientific foundation for 
natural resource decisions?
    Answer. The Department has built a cooperative, collaborative 
effort with the network of State natural heritage programs through 
partnerships with NatureServe and the International Association of Fish 
and Wildlife Agencies (IAFWA). NatureServe is a non-profit organization 
that focuses on providing scientific information from the State natural 
heritage programs on the status and distribution of rare and endangered 
species and ecosystems of conservation concern. The IAFWA represents 
the government agencies responsible for fish and wildlife resources in 
North America. By collaborating among and between these and other 
partners, the Department strengthens the collective information base on 
flora and fauna in the United States. For example, NatureServe and the 
USGS's National Biological Information Infrastructure (NBII) are 
working together to make information about at-risk species and 
ecosystems more broadly available. NatureServe is also a primary 
partner in the joint USGS and National Park Service effort to classify, 
describe and map ecological communities in more than 250 National Park 
units across the United States. The species at-risk information 
provided by the State natural heritage programs provides the U.S. Fish 
and Wildlife Service with historic and current range information about 
species under consideration for listing under the Endangered Species 
Act. Current NBII activities also include working with IAFWA to help 
design a data and information management template that States may opt 
to follow to help streamline that portion of the wildlife conservation 
management plans they currently are writing. These plans must be 
completed by October 2005. The Department strongly supports partnership 
efforts and will continue to pursue opportunities to make natural 
resource data and information more accessible and more usable for 
everyone.

                   MINERALS MANAGEMENT SERVICE (MMS)

    Question 20. The FY 2006 Budget request contains a proposal to 
collect $19 million in new user fees. Please provide details regarding 
this proposal.
    Answer. For 2006, the Minerals Management Service anticipates 
additional revenue from a combination of new fees, existing fees, and 
increased rental rates. This revenue will be used to offset MMS's 
operating costs and supports the Administration's policy to charge for 
government services where the direct beneficiary can be identified.
    New fees will be proposed for services that MMS currently provides 
at no charge. Fees may include costs associated with the submittal of 
permitting and plan requests, such as well permits, facility permits, 
structure permits, geological and geophysical permits, sand and gravel 
permits, deepwater operation plans, exploration plans, etc. MMS 
believes that in FY 2006 it can recover approximately $13.5 million in 
revenue by charging for these services. This amount would compensate 
MMS for costs associated with providing these services, including 
overhead charges. Implementation of these fees will require rulemaking 
action. Additionally, upward adjustments in rental rates, unchanged for 
Gulf of Mexico sales since 1996, would generate an additional $4.5 
million, and increased revenue from cost recovery fees proposed in 2005 
would generate an increase of an additional $1 million, for a total 
increase of $19 million.
    These fees represent a fraction of the total private investment in 
offshore energy development. The additional revenue will allow for a 
corresponding $19 million reduction in appropriated funds in FY 2006.
    Question 21. The Budget highlights book indicates that increased 
funding will be used to provide inspections in frontier areas of the 
OCS. What areas specifically will be subject to increased inspections?
    Answer. Periodic inspections of all drilling, exploration, and 
production activities are mandated by the OCSLA. Additional funds are 
needed to ensure that MMS can safely meet its regulatory inspection 
requirements in FY 2006. The requested funds will not be used to 
increase the number of inspections currently being conducted, but are 
needed to cover the increased cost of fuel and increased flight time 
required to reach drilling and production activities in the ultra-deep 
water frontier. Typically, ultra-deep water areas are 100 to 200 miles 
offshore. In the last three years, companies have made seven new major 
discoveries in ultra-deepwater areas. The new discoveries will result 
in the drilling of appraisal, delineation, and development wells in 
proximity to each discovery, all of which require MMS inspections. MMS 
believes this trend will continue, as the industry is employing an all-
time record number of drilling rigs in these water depths, and new 
leasing activity remains strong.
    The number of inspections in ultra-deep water will increase as the 
number of major discoveries increase.
    Question 22. With respect to legislation to grant the Secretary 
authority to authorize non-oil and gas energy projects on the OCS, how 
can the Secretary ensure that the public receives fair market value for 
the use of the OCS? What type of consultation do you think should occur 
between the federal government and the states with respect to non-oil 
and gas energy projects on the OCS? What consultation should take place 
among federal agencies?
    Answer. The Department has extensive experience with developing 
criteria for fair market value for oil and gas leases, as well as 
offshore LNG terminals. This same experience will be applied to 
establish specific and transparent methodologies for other energy 
projects. The Secretary would have authority to develop a competitive 
leasing program appropriate for such activities. The existing authority 
of any other state or Federal agency will not be superseded or modified 
the with respect to the permitting of energy projects on the OCS. MMS 
would continue to develop and leverage the valuable cooperative 
relationships with other Federal agencies and coastal states it has 
developed over the past several decades.
    Question 23. Has MMS or the Department undertaken any analysis of 
or provided comments on the report of the National Commission on Ocean 
Policy? If so, please provide them to us.
    Answer. On December 17, 2004, the President sent his U.S. Ocean 
Action Plan to Congress in response to the U.S. Commission on Ocean 
Policy. The Office of the Assistant Secretary for Policy, Management, 
and Budget is coordinating all DOI Bureau Activities to implement the 
new Ocean Governance Structure as outlined in the Action Plan. The 
Action Plan calls for enactment of the Administration's proposed 
legislation on Outer Continental Shelf Alternative Energy, and supports 
MMS's activities in support of the Integrated Ocean Observation System 
(IOOS), and the Bureau's efforts in science such as its deep water 
coral assessment in the Gulf of Mexico.
    Question 24. The MMS recently completed a rulemaking relating to 
natural gas production from deep wells in shallow waters of the OCS. 
Are additional statutory authorities necessary? What budgetary impacts 
are expected as a result of this initiative?
    Answer. The Deep Water Royalty Relief Act (DWRRA) provides broad 
authority to the Secretary to establish incentives to encourage 
domestic investments. In 2001, under this authority, MMS began offering 
deep gas royalty relief for new shallow water leases in Central and 
Western Gulf of Mexico Lease Sales. This relief was designed to promote 
increased deep drilling for natural gas. In 2004, MMS issued a final 
rule that provided royalty relief for deep gas drilling on leases 
issued prior to 2001. It is too early to evaluate the budgetary impacts 
of the program, but MMS is beginning to collect data to do so. In any 
event, MMS is encouraged by industry's new emphasis to explore at deep 
depths in the shallow water area.
    Question 25. MMS has completed a rulemaking relating to deep water 
royalty relief. Do you believe that additional statutory authorities 
are necessary? What are the expected budgetary impacts of continued 
deep water royalty relief?
    Answer. MMS believes it has adequate statutory authorities with 
respect to royalty relief for deepwater areas to effectively lease and 
regulate offshore properties. The Deep Water Royalty Relief Act (DWRRA) 
expanded the Department's authority to offer royalty relief to promote 
increased production in certain areas of the Gulf of Mexico, and 
provided various levels of relief by water depth categories for a 
period of 5 years (1996-2000). In 2001, MMS issued regulations for both 
a new deepwater leasing program and for a discretionary royalty relief 
program in continued recognition of the greater costs and economic 
risks involved in operating at these depths. This new deepwater program 
replaced the one implemented under the DWRRA.
    The FY 2006 Budget assumes that of total production, about 10% of 
oil and 9.4% of gas will be subject to deep water royalty relief with 
the actual amounts dependent on whether oil and/or gas price thresholds 
are exceeded. MMS currently has a study under way to examine what 
impacts deep water royalty relief has had on exploration and 
development of our oil and gas resources on the OCS as well as revenue 
production (bonuses, rents and royalty) to the American public for 
those resources. Once the study is completed, MMS will provide the 
information to the Committee.
    Question 26. Please describe the types of royalty relief already 
available on the OCS. Are additional statutory authorities necessary?
    Answer. The Department has broad existing authority under the Outer 
Continental Shelf Lands Act to offer certain categories of royalty 
relief to promote increased production through reduction or elimination 
of any royalty set forth in the lease. In 1995, those authorities were 
expanded for areas of the Gulf of Mexico with the passage of The Deep 
Water Royalty Relief Act of 1995 (DWRRA). The Department believes these 
authorities should be expanded to cover existing leases in Alaska.
    Following the 2000 sunset on the DWRRA mandatory relief, the 
Department set discretionary royalty suspension volumes starting in 
March 2001 for oil production from leases in water depths of at least 
200 meters. We have continued to offer these deep water suspension 
volumes for subsequent lease sales in the Gulf, adding the 400-800 
meter water depth category to the set in 2002. This post-DWRRA program, 
which is governed in part by oil and gas price thresholds above which 
royalty relief is suspended, has provided the appropriate balance 
between the financial incentive for lessees and the national benefits 
of promoting development in deep water. In 2004, for example, both oil 
and gas price thresholds were exceeded by actual market prices of those 
products. Thus, in the case of deepwater leases issued in all but 2 
years since 1996, no deepwater royalty relief was provided in 2004, 
when the market prices for oil and gas were high by historical 
standards.
    In addition, in 2001, under existing authority, MMS began offering 
deep gas royalty relief for new shallow water leases in Central and 
Western Gulf GOM Lease Sales. This relief was designed to promote 
increased drilling for natural gas. The lease terms encouraged industry 
interest by suspending royalties for deep gas production in reservoirs 
15,000 feet or greater, subsea, and providing a ``royalty suspension 
supplement'' for certain unsuccessful deep wells. In 2004, the deep gas 
program in a somewhat modified form was extended to active leases 
issued prior to 2001.
    MMS also has an end of life royalty relief program and special 
royalty relief program. A lessee may submit an application on a case-
by-case basis under either of those programs if their lease is eligible 
for consideration. Most leases not covered by the deep gas or deepwater 
programs are eligible for these other programs.

          OFFICE OF SURFACE MINING RECLAMATION AND ENFORCEMENT

    Question 27. Current authority to collect the Abandoned Mine Land 
fee expires on June 30, 2005. I think it is extremely important that 
Congress act to extend this authority. I note that the President's 
Budget proposes reauthorization of the fee collection at the current 
rate.
    Does it make sense to lower the fee at this time?
    Answer. Any cut in the fee would be tied to reauthorization of the 
collection authority under SMCRA. We estimate that an extension of the 
fee at the current rate,
without any other changes, would mean that we would need to collect AML 
fees for another 23 years just to address the existing high priority 
health and safety related coal problems. Such a reauthorization would 
not even consider the billions of dollars of lower priority work 
outstanding. The rate of the AML fee has little, if any, consequence on 
the competition among coal producers so long as the fee is applied in a 
uniform manner across the Nation. In most cases, coal producers embed 
the AML fee in the contract price for coal and therefore any savings 
realized from manipulation of the AML fee are passed on to the consumer 
of the coal produced. As annual collections have historically exceeded 
appropriations, any reduction in the AML fee would only serve to extend 
the period of time collections need to be continued in order to collect 
sufficient funds to finish the job of reclaiming AML sites.
    The President's budget supports the Administration's vision of 
reauthorizing the AML fee collection authority and bringing reform to 
the AML program that expedites the elimination of high priority health 
and safety abandoned coal mines as well as providing for the expedited 
payment of unappropriated balances to certified States and Tribes, 
within the President's mandatory and discretionary spending limits.
    Question 28. I understand that the President's fiscal year 2006 
Budget proposes that the AML program be reformed to expedite 
reclamation of high priority sites and payment of unappropriated 
balances to the states and tribes. Can you please elaborate?

   Does this mean that you think more of the funding should be 
        directed to eastern states where more the abandoned sites are 
        located?
    Answer. We believe that the primary focus of the AML program is to 
address the health and safety hazards attributable to past coal mining 
practices wherever they exist. To that end, we support legislation that 
would focus efforts on reclaiming the high priority sites faster, 
getting more people out of danger from those sites sooner, regardless 
of where those problems are located.

   Am I correct in understanding that the Budget does not 
        assume any spending that is not subject to appropriation for 
        purposes of paying unappropriated balances to states and 
        tribes?
    The budget does not assume any spending that is not subject to 
appropriation.
    Question 29. The OSM 2006 budget request includes $58 million in 
the Abandoned Mine Land grants to certified states and tribes.
    Please provide a list of which states and tribes are certified and 
will receive payment and how much will be paid to each.
    Answer. As previously stated, we have requested an additional $58 
million in FY 2006 for grants to support legislation to accomplish our 
goals of extending the AML fee collection authority, increasing the 
percentage of appropriations used for reclamation of high priority coal 
problems and returning the unappropriated balance of State Share 
collections to the States and Tribes. Of this additional $58 million, 
$37 million would be granted to non-certified States to address high 
priority coal problems and $21 million would go to certified States. 
This $21 million is in addition to the $37 million that certified 
States would receive under the normal grant distribution--an amount 
which also totals $58 million. Should appropriate legislation be 
enacted, the $58 million for certified states would serve as the first 
installment on a multi-year payment of their unappropriated State Share 
balances. The following are the multi-year payments that would result 
from such a proposal:

                                        [Figures in millions of dollars.]
----------------------------------------------------------------------------------------------------------------
                                                                                                    Proposed
                                                                Estimated                           Estimated
                                                             Unappropriated      2005 Grant       Annual Grant
                           State                              State/Tribal      (Current Law)         Under
                                                             Share Balances                     Administration's
                                                                                                      Plan
----------------------------------------------------------------------------------------------------------------
Louisiana.................................................         1.5                .1                .1
Montana...................................................        47.7               3.3               4.8
Texas.....................................................        20.5               1.4               2.1
Wyoming...................................................        45.8              29.9              46.0
Hopi......................................................         5.5                .4                .6
Navajo....................................................        32.0               2.1               3.3
Crow\1\...................................................         8.1                .5                .8
----------------------------------------------------------------------------------------------------------------
\1\ Based upon the AML inventory and the level of grants going to the Tribe annually, the Crow Tribe could be
  expected to certify within the next five years.

    Question 30. Will the Administration transmit a legislative 
proposal to extend the AML fee collection authority and to make other 
changes in the AML program, as described in the Budget documents? If 
so, when?
    Answer. The President's 2006 budget supports the Administration's 
vision of reauthorizing the AML fee collection authority. The 
Administration continues to work and deliberate with Congress and other 
stakeholders on developing a mutually acceptable bill that implements 
the Administration's vision without polarizing individual stakeholders.
    This vision includes:

   A fee extension for a period sufficient to collect funds to 
        address the current inventory of health and safety coal-related 
        problems.
   Expedited payment of the current unappropriated balances to 
        certified states and tribes.
   Change in the allocation of future collections to focus on 
        reclamation of high priority coal-related health and safety 
        problems.

    Question 31. Please provide greater detail regarding the proposed 
downsizing of the OSM workforce, as generally described in the budget 
documents.
    Answer. OSM is not proposing to downsize its workforce. OSM's 
budget document requests 580 FTE which is the same as that for FY 2005. 
OSM has developed a workforce plan that analyzes, identifies and 
determines the human capital competencies required to meet its mission. 
Through that process, we are scrutinizing every vacancy that occurs 
within OSM to make sure that we only backfill those positions that we 
need, that we transfer those vacancies to the locations where we need 
them, and that we fill vacancies with individuals who have the skills 
necessary to meet the emerging challenges of our mission goals.
    Question 32. Does the Administration support allowing Tribes to 
have primacy under the same standards as apply to States for purposes 
of administering the regulatory program under Title V of SMCRA?
    Answer. Section 710 of SMCRA directed the Secretary to study the 
regulation of surface coal mining operations on Indian lands and 
develop legislation designed to allow Tribes to assume full regulatory 
authority over the administration and enforcement of the regulation of 
surface coal mining on Indian lands. The Secretary completed and 
submitted the required report to Congress in 1984. In 1987, Congress 
granted authority to the Navajo Nation and the Hopi and Crow tribes to 
obtain approval of AML reclamation plans, but it took no action on 
authority for regulatory programs. The Energy Policy Act of 1992 
required that OSM make grants to the Navajo Nation and the Hopi, Crow, 
and Northern Cheyenne tribes to assist the tribes in developing 
regulatory programs.
    In 1995, OSM initiated an effort with the Tribes to develop a 
consensus legislative package. While the effort has resulted in the 
development of several draft legislative proposals, the Tribes have not 
been able to achieve consensus. Therefore, no proposal has been 
forwarded to Congress. We continue to work with the Tribes to resolve 
the outstanding issues, and with Congress should any legislation be 
introduced.

                       BUREAU OF LAND MANAGEMENT

    Question 33. The Bureau of Land Management has published 
information concerning the sale of BLM lands in and around Las Vegas, 
Nevada, under the authority of the Southern Nevada Public Lands 
Management Act. Under that law, lands are sold at public auction, which 
by definition, is market value. According to the BLM, approximately 80 
percent of the lands have been sold for a price that exceeded the 
Department's appraised value, with the average sale price almost double 
the appraised value. Are you concerned that the reforms in appraisal 
procedures you instituted following the failed land exchange with the 
State of Utah are not achieving their desired results since it appears 
that departmental appraisals are still substantially undervaluing 
public lands?
    Answer. You are correct in pointing out that the auction prices 
resulting from the SNPLMA sales have been considerably higher than the 
appraised values of the lands offered for sale. However, we do not 
believe that this discrepancy indicates a failure in the appraisal 
reform procedures instituted by the Department. Appraised values are 
based on historic data and have effective dates many months prior to 
the auction date. In rapidly expanding markets, this may cause a 
significant difference in appraised value and sale price at the time of 
auction. The Las Vegas real estate market is unique in that there is a 
very strong demand for, and limited supply of, developable land which 
has put upward pressure on lands prices. The adjustment for market 
conditions used in some of the appraisals of Las Vegas properties 
auctioned at the February 2, 2005, sale ranged from roughly 20% to 90% 
appreciation compounded annually. In this light, it is not surprising 
that knowledgeable buyers would be willing to pay a price higher than 
the appraised value on the day of the auction.
    As you know, land parcels offered for sale at the SNPLMA auctions 
are nominated by local government agencies on behalf of individuals. 
The nominated parcels typically have been targeted by developers or 
entrepreneurs as desirable acquisitions. Potential buyers often own 
adjacent lands, or have a specific use in mind for a site, and are not 
willing to accept substitute properties. In this situation, sale prices 
can be influenced by the buyer's need for a particular piece of land 
incorporating not only the perceived economic value of the property for 
its intended use, but also the value of that property in the buyer's 
larger enterprise.

                          ENERGY AND MINERALS

    Question 34. Why did the White House Task Force on Energy Project 
Streamlining stop operations as of January 20, 2005? Is there a need to 
continue the Task Force?
    Answer. The White House Task Force on Energy Project Streamlining 
was established by Executive Order 13212, signed by President Bush in 
May 2001. The Executive Order has no sunset date, and is still in 
effect. The Task Force is chaired by the Chairman of the Council on 
Environmental Quality (CEQ) and comprises policy-level representatives 
of the Cabinet agencies involved in federal energy-related projects 
across the U.S. On January 20, 2005, the Charter that established an 
interagency staff supporting the efforts of the Task Force did sunset 
and the career staff returned to their respective agencies. The 
continuing responsibilities of the Task Force are currently being 
managed at CEQ.
    Question 35. At the Committee's recent Conference on Natural Gas 
several witnesses suggested that adequate resources are essential to 
the timely processing of oil and gas leases and applications for 
permits to drill. I have long supported efforts to ensure that BLM is 
funding adequately. In addition, the witnesses suggested that both the 
Forest Service and the Fish and Wildlife Service need additional 
funding to support timely action on oil and gas applications. Do you 
agree?
    Answer. The funding level for the BLM in the FY 2006 President's 
Budget Request, when combined with the amounts we expect to collect 
through cost recovery, provides adequate funding to accomplish 
oversight of oil and gas operations on Federal lands as well as for 
oversight of oil and gas operations on split estate lands. The Fish and 
Wildlife Service manages oil and gas operations occurring in the 
National Wildlife Refuge System (NWRS) through its general 
appropriation. As a consequence, funding for these activities competes 
with many other priorities, including law enforcement and invasive 
species management. Issues relating to oil and gas operations in the 
NWRS, including availability of resources and lack of guidance or 
consistent training, were addressed by the Government Accountability 
Office in its 2003 report, National Wildlife Refuges: Opportunities to 
Improve the Management and Oversight of Oil and Gas Activities on 
Federal Lands. The Fish and Wildlife Service is working to address 
these issues, and is in the final stages of developing a comprehensive 
handbook to provide personnel with the technical, administrative, and 
legal information needed to consistently manage oil and gas activities 
throughout the Refuge System and ensure protection of trust resources. 
The Fish and Wildlife Service is also in the process of developing a 
training course that will mirror the handbook and provide an 
opportunity for staff to receive instruction in properly managing oil 
and gas activities in the NWRS.
    Question 36. On January 11, 2005, several of my colleagues on the 
Committee and I sent a letter to Director Bolten seeking increased 
funding for BLM oil and gas activities. Unfortunately, I am 
disappointed by the President's FY 2006 Budget in this regard. The 
Budget proposes a $2.1 million decrease in funding for energy and 
minerals with a proposal for new user fees.
    Please describe these proposed user fees. Will they be enacted 
through a formal rulemaking with an opportunity for public comment? 
What is the time frame for putting these user fees in place?
    Answer. The Administration has been systematically reviewing for 
program efficiency approximately 20 percent of its programs each year, 
through the Program Assessment Rating Tool (PART). The Energy and 
Minerals programs were reviewed in 2004. One of the major 
recommendations was to implement energy and minerals cost recovery in 
order to improve program efficiencies. Past Inspector General (IG) 
reviews have made similar recommendations.
    BLM believes that cost recovery will allow the BLM offices to 
respond to demand more efficiently, in an environment where both 
appropriations and industry demand are subject to fluctuations. Funds 
collected through cost recovery will be spent by the offices processing 
the documents and only within the energy and minerals programs in those 
offices.
    The BLM expects to publish a proposed cost recovery regulation 
shortly. We will request comments from the public and then publish a 
final regulation by Fall 2005. The regulation, to be implemented in FY 
2006, will provide funding to allow the BLM to more effectively meet 
increased customer demand.
    Below is a detailed listing of existing fees. We have not yet 
determined the specific fee levels for various activities for the new 
regulation.

                              EXISTING FEE
                         [Paperwork Processing]
------------------------------------------------------------------------

------------------------------------------------------------------------
OIL AND GAS (3100)
    Competitive lease offer................................      $75
    Competitive Lease high bid.............................       75
    Assignment and transfer................................       25
    Overriding royalty transfer, payment out of production.       25
    Lease renewals and exchanges...........................       75
    Lease reinstatement, Class 1...........................       25
    Leasing under right-of-way.............................       75
GEOTHERMAL (3200)
    Noncompetitive Lease...................................       75
    Application Assignment and transfer....................       50
COAL (3400)
    Exploration license application........................      250
    Lease or least interest transfer.......................       50
Non-energy Leasable (3500)
    Lease renewals.........................................       25
    Propsecting Permit application.........................       25
Mining Law Administration (3800)
    Notice of Location.....................................       10
    Amendment to location..................................        5
    Transfer of Interest...................................        5
    Affidavit of Assessment Work...........................        5
------------------------------------------------------------------------

    Question 37. What assumptions does the FY06 Budget make with 
respect to leasing in the Arctic National Wildlife Refuge? Please 
provide the specific information and data supporting the assumption 
contained in the Budget that the first lease sale to be held in 2007 
and will generate an estimated $2.4 billion in bonus bid revenues. Did 
you look at comparable lease sales? If so, please provide that specific 
information. What assumptions does the Budget make regarding the timing 
and magnitude of oil production?
    Answer. The calculation was made by 1) analyzing geology and 
geophysical information to determine geology parameters; 2) conducting 
an engineering analysis of the exploration, development, production, 
and reclamation phases for the potential range of sources; and 3) 
running an economic analysis of 1) and 2) under projected market 
conditions. As we have stated a number of times, this estimate has been 
used for several years and does not reflect the recent sharp increases 
in the price of oil. The estimate included an assumption regarding oil 
prices in the year 2001 of $30. It assumed a 50/50 split of revenues 
with the State of Alaska, a royalty rate of 12\1/2\%, and that almost 
all tracts would be available for nomination in each sale. The model 
used for the analysis was a Monte Carlo Discounted Cash Flow model. In 
addition, natural gas was assumed at the time of the analysis to be 
uneconomic and was thus ignored in the valuation.
    The budget assumes a lease sale in 2007 and in 2009. Because 
production is not expected during the five year period covered by the 
budget, specific production assumptions were not directly made.
    Question 38. If the Coastal Plain of the Arctic National Wildlife 
is opened to oil and gas exploration and development as proposed by the 
Administration, what will be the effect on the 92,000 acres of 
subsurface lands owned by Alaska Native Corporations? Does the 
Administration intend that those lands be available for oil and gas 
exploration and development? If development is limited to a 2,000-acre 
footprint, as has been proposed previously, would the Native-owned 
lands be included within that limitation?
    Answer. It is up to Congress how the Native-owned acreage is 
treated. The legislative provisions passed by the House in 2001 and 
2003 define the term ``Coastal Plain'' in such a way as to lead one to 
assume the Native-owned subsurface is included in that definition. 
Since the 2000 acre limitation applies to the Coastal Plain, it appears 
it would apply to the Native lands. The Administration has always 
supported including a repeal of section 1003 in any legislation opening 
the Arctic National Wildlife Refuge, thus clearing the way for the 
Arctic Slope Regional Corporation to explore and develop its holdings 
on the Coastal Plain.
    Question 39. What is the total amount of funding for the oil and 
gas I&E program included in the request for FY06? Please provide a 
table showing the funding for this program (both requested and enacted) 
for the previous 10 fiscal years.
    Answer. Inspection and Enforcement (I&E) are integral and key 
components of BLM's management of onshore oil and gas operations. BLM 
has committed considerable resources in recent years to ensure that we 
have an effective I&E program. Over the past four years, the BLM 
recognized the need to strengthen its I&E program as the number of APDs 
approved and drilled increased. The BLM has documented its need for 
additional inspectors and funding increases were enacted in FY2002, 
2003 and 2004. Those funds have been used to hire additional inspectors 
in priority locations and are retained in the 2006 request.

                   INSPECTION AND ENFORCEMENT FUNDING
                                 [$000]
------------------------------------------------------------------------
                   Fiscal Year                      Request     Enacted
------------------------------------------------------------------------
1996............................................    14,850      14,850
1997............................................    14,850      14,850
1998............................................    14,850      14,850
1999............................................    14,850      14,850
2000............................................    15,365      15,365
2001............................................    20,042      20,042
2002............................................    22,673      22,673
2003............................................    24,000      24,000
2004............................................    26,000      26,000
2005............................................    26,000      26,000
2006............................................    26,000
------------------------------------------------------------------------

   I had requested funding for additional inspectors in the 
        Farmington Field office. How many additional inspectors have 
        been added to this office in each of the past three fiscal 
        years?
    Answer. In FY 2002, the Farmington Field Office (FFO) had 11 I&E 
program staff. There were 10 petroleum engineering (I&E) inspectors and 
auditors, and one technician. No additional positions were hired with 
new funding.
    In FY 2003, an additional seven I&E inspectors were brought on 
board in the FFO (four under the new funding authority, three through 
filling vacancies and reassigning employees). An additional I&E 
coordinator from the BLM State Office provides onsite oversight and 
coaching, including a seven month detail as a supervisor.
    In FY 2004, there were no new inspectors hired by FFO as the new 
hires completed their certification training.
    At the start of FY 2005, a total of 18 I&E FFO inspectors (PET) 
were on staff at the FFO: 14 PETs, three PET leads, and one supervisory 
PET. One PET working as an Natural Resource Specialist focusing on 
environmental surface compliance, and one PET position which actually 
funds two SCEP students to train as PETs are also on I&E staff 
(totaling 21 staff). The I&E staff is also supported by three 
Production Accountability Technician (PAT) auditors. In addition, the 
21 FFO inspectors and three PAT auditors, are provided support by two 
PETs assigned to the Federal Indian Mineral Office for trust 
responsibilities on Navajo allotted leases, and five Tribal I&E 
inspectors working under cooperative agreements with the Navajo. Total 
staff count contributing directly to I&E is 32 (includes the onsite 
State Office coordinator). No new additional staff has been hired in FY 
2005.
    Also, in FY 2005, in addition to the 32 I&E staff in FFO, 2 I&E PET 
inspectors, one supervisory PET, and three Tribal I&E inspectors were 
reassigned by consolidation to the FFO from the BLM's Cuba, NM, office. 
The Cuba office inspects and audits federal and Jicarilla Indian 
reservation lease activities.

   Are you planning to hire additional inspectors in offices 
        where the workload is increasing due to coalbed methane 
        production? Please provide specifics.
    Answer. Due to sustained record global prices, BLM is faced with 
unprecedented demand for leases and permits to develop oil and gas. BLM 
approved 6,452 Applications for Permit to Drill (APDs) in FY 2004, a 
record number. This will lead to an increase in the number of 
inspections BLM needs to conduct in FY 2005 and FY 2006. The FY 2006 
President's Budget Request maintains past increases in funding for the 
I&E program. These increases, together with adjustments that may be 
needed within the oil and gas program, will ensure that BLM meets its 
commitment to ensure that higher priority inspections are completed in 
FY 2006.
    In preparation for the FY 2007 budget request, BLM is updating its 
estimated long-term requirement for certified inspectors to reflect 
this recent increase in oil and gas activity. This state-by-state 
analysis will include estimates of inspections needed for coalbed 
methane activities.
    Question 40. What is the total amount of requested funding for oil 
and gas NEPA compliance for FY06? Please provide a table showing the 
funding for NEPA compliance (both requested and enacted) for the 
previous 10 years.
    Answer. The BLM's FY 2006 Budget Request does not specify a funding 
amount for NEPA compliance within the Oil and Gas Management program. 
The costs of NEPA compliance are not individually tracked within the 
BLM's oil and gas financial management system. They are aggregated 
across various portions of the BLM's oil and gas budget, such as APD 
processing and inspection and enforcement. Because of changes in the 
BLM's cost management system, the BLM does not have the ability to 
accurately estimate NEPA costs prior to 1999.
    The following is a table which estimates the BLM's NEPA compliance 
costs in the Oil and Gas program over the last six years. NEPA 
compliance costs have increased as the number of leases and permits 
processed have increased.

                     ESTIMATED NEPA COMPLIANCE COSTS
                          [Oil and Gas Program]
------------------------------------------------------------------------
                     Fiscal Year                       Funding Requested
------------------------------------------------------------------------
1999.................................................      $9,000,000
2000.................................................       9,500,000
2001.................................................       9,600,000
2002.................................................      10,040,000
2003.................................................      10,500,000
2004.................................................      11,750,000
------------------------------------------------------------------------

    Question 41. Is the BLM capable of completing NEPA compliance in 
all cases within 10 days of the receipt of a complete application for 
permit to drill?
    Answer. No. In all but exceptional cases, it would be impractical 
for the BLM to complete NEPA compliance within 10 days of receipt of a 
complete APD. In many cases, an onsite inspection is necessary and 
would require more time to arrange and conduct. There are often 
internal technical reviews that need to take place, and it is not 
realistic to expect that these could be finished within this timeframe.
    Question 42. I understand that according to BLM, ``parcel pre-lease 
protests'' have increased from 666 being filed during the period 1997-
2000 to 4425 being filed during the period 2001-2004. What do you think 
are the reasons for this?
    Answer. In the past few years, oil and gas--and specifically, 
coalbed methane--leasing activity has markedly increased and, with it, 
there has been an increase in interest by the public in the BLM's oil 
and gas leasing program and other programs. During the same time frame, 
the population in the West has grown at an accelerated rate, a trend 
which is continuing. Population growth has led to an increase in the 
demand for competing uses of the public lands. Increased demand from 
competing user groups has resulted in the marked increase in protests 
filed.

   Please provide this data by State.
    The information below is for calendar years 1997 through 2000. The 
information was collected from the information in the BLM's 
computerized database, the Case Recordation System. The database 
indicates that parcels were protested in three states, Colorado, 
Montana and Wyoming. The remaining states have only a minimal number of 
protests. This is the best data available for 1997 through 2000.

                       NUMBER OF PARCELS PROTESTED
------------------------------------------------------------------------
                                           1997    1998    1999    2000
------------------------------------------------------------------------
Colorado...............................     0       28      20       3
Montana................................     0        1       0       0
Wyoming................................     0        2       0     612
------------------------------------------------------------------------

    The BLM gathered the information concerning FY 2001 to 2004 by 
requesting that each State Office review paper files and the 
computerized record keeping system. Colorado, Montana, New Mexico, Utah 
and Wyoming have the most oil and gas activity as shown in the charts 
below. The remaining states have a minimal number of protests.

             OIL AND GAS LEASE PROTESTS FROM FY 2001 TO 2004
------------------------------------------------------------------------
                               FY 2001    FY 2002    FY 2003    FY 2004
------------------------------------------------------------------------
Colorado
    Offered.................     721        345        280        344
    Protested...............      29         43         68        291
    % Protested.............       4         12         24         85
Montana
    Offered.................     632        326        407        546
    Protested...............       0         27          2        408
    % Protested.............       0          8          0         75
New Mexico
    Offered.................     312        361        460        291
    Protested...............       0         27        157        200
    % Protested.............       0          7         34         69
Utah
    Offered.................     216        149        242        481
    Protested...............     145        104        100        405
    % Protested.............      67         70         41         84
Wyoming
    Offered.................   1,023        804        615        670
    Protested...............     778        464        216        286
    % Protested.............      76         58         35         43
Total BLM, including states
 not listed above
    Offered.................   4,453      2,684      2,697      3,814
    Protested...............     952        856        544      2,073
    % Protested.............      21         32         20         54
------------------------------------------------------------------------

   How many of these protests involved lands that were formerly 
        in wilderness inventory areas or citizen proposed wilderness 
        areas?
    Answer. This information is not readily available. However, the BLM 
has deferred leasing on numerous acres nominated by industry, due to 
concerns with endangered species and historic and cultural sites, to 
conduct additional environmental analysis, and to revise or amend land 
use plans. For example, in FY 2004, the BLM deferred leasing on 2.7 
million acres nominated by industry.

   In how many instances were the protested tracts not offered 
        for lease?
    Answer. As described more fully below, when a protest is filed on a 
lease parcel, the BLM has the choice of not offering the parcel for 
sale until after the protest is resolved, or offering the parcel for 
sale, but delaying any issuance of the lease until the protest is 
resolved in favor of the lease issuance.
    The BLM does not have readily available data, by State, on the 
number of protests that resulted in leases not being offered for sale. 
For parcels that are offered for lease, on which protests have been 
filed, the vast majority of protests are eventually denied and the 
leases are then issued.

   Please describe the ``parcel pre-lease protest'' process.
    Answer. The BLM holds lease sales at least quarterly if lands are 
available for competitive leasing. A Notice of Competitive Lease 
(Notice) sale, which lists lease parcels to be offered at the auction, 
is posted at each BLM State Office for at least 45 days before the 
auction is held. A protest of inclusion in the Notice of a sale for a 
specific parcel may be filed with the BLM up until the lease sale. The 
BLM may offer the parcel, notifying potential bidders that the parcel 
is subject to a protest, and that the lease will be conveyed only upon 
successful resolution of the protest. Alternatively, the BLM may 
suspend the offering of a specific parcel while considering a protest.

   How many of these pre-lease protests have resulted in 
        appeals or litigation?
    Answer. From calendar year 1997 to 2000, the BLM received 366 
appeals, and from FY 2001 to 2004, the BLM received 925 appeals. The 
BLM does not track the relationship between protests and court cases 
because one court case could cover multiple protests. The Government 
Accountability Office recently recommended that the BLM implement a 
system to track public challenge data for oil and gas leasing decisions 
and other decisions. The BLM is implementing that recommendation.
    Question 43. What is the total backlog of APD's? Please provide a 
table showing the backlog over the last ten years and the number of 
APD's received and processed during each of the last ten years. Please 
display this information on a State-by-State basis.
    Answer. At the end of FY 2004, BLM had 2,868 APDs pending, of which 
2,214 were pending for more than 60 days. The tables below show APDs 
pending at the end of each fiscal year.

                                                   BUREAU-WIDE
----------------------------------------------------------------------------------------------------------------
                                                                                         Increase or
                                                    Total APDs     APDs     Total APDs   Decrease in  Total APDs
                                                    Pending at   Received    Processed    Number of   Pending at
                    Fiscal Year                      Beginning    During      During    Pending APDs    End of
                                                     of Fiscal    Fiscal      Fiscal      at End of     Fiscal
                                                       Year        Year        Year      Fiscal Year     Year
----------------------------------------------------------------------------------------------------------------
1994..............................................    4,033       1,171       2,216        -1,045       2,988
1995..............................................    2,988       1,172       1,964          -792       2,196
1996..............................................    2,196       1,409       2,129          -720       1,476
1997..............................................    1,476       2,645       2,867          -222       1,254
1998..............................................    1,254       3,144       2,670           474       1,728
1999..............................................    1,728       4,505       2,306         2,199       3,927
2000..............................................    3,927       3,977       3,892            85       4,012
2001..............................................    4,012       4,819       4,266           553       4,565
2002..............................................    4,565       4,585       5,830        -1,245       3,320
2003..............................................    3,320       5,063       5,143           -80       3,240
2004..............................................    3,240       6,979       7,351          -372       2,868
----------------------------------------------------------------------------------------------------------------

                                                     ALASKA
----------------------------------------------------------------------------------------------------------------
                                                                                         Increase or
                                                    Total APDs     APDs     Total APDs   Decrease in  Total APDs
                                                    Pending at   Received    Processed    Number of   Pending at
                    Fiscal Year                      Beginning    During      During    Pending APDs    End of
                                                     of Fiscal    Fiscal      Fiscal      at End of     Fiscal
                                                       Year        Year        Year      Fiscal Year     Year
----------------------------------------------------------------------------------------------------------------
1994..............................................       14           0           1            -1          13
1995..............................................       13           1           3            -2          11
1996..............................................       11           0           5            -5           6
1997..............................................        6           1           1             0           6
1998..............................................        6           2           3            -1           5
1999..............................................        5          14           7             7          12
2000..............................................       12          11           9             2          14
2001..............................................       14          23          13            10          24
2002..............................................       24          12          33           -21           3
2003..............................................        3           6           9            -3           0
2004..............................................        0          18          15             3           3
----------------------------------------------------------------------------------------------------------------

                                                   CALIFORNIA
----------------------------------------------------------------------------------------------------------------
                                                                                         Increase or
                                                    Total APDs     APDs     Total APDs   Decrease in  Total APDs
                                                    Pending at   Received    Processed    Number of   Pending at
                    Fiscal Year                      Beginning    During      During    Pending APDs    End of
                                                     of Fiscal    Fiscal      Fiscal      at End of     Fiscal
                                                       Year        Year        Year      Fiscal Year     Year
----------------------------------------------------------------------------------------------------------------
1994..............................................       90         148         174           -26          64
1995..............................................       64         146         137             9          73
1996..............................................       73         206         218           -12          61
1997..............................................       61         356         347             9          70
1998..............................................       70         395         430           -35          35
1999..............................................       35         219         193            26          61
2000..............................................       61         121         143           -22          39
2001..............................................       39          70          96           -26          13
2002..............................................       13         118         120            -2          11
2003..............................................       11          69          77            -8           3
2004..............................................        3         116         114             2           5
----------------------------------------------------------------------------------------------------------------

                                                    COLORADO
----------------------------------------------------------------------------------------------------------------
                                                                                         Increase or
                                                    Total APDs     APDs     Total APDs   Decrease in  Total APDs
                                                    Pending at   Received    Processed    Number of   Pending at
                    Fiscal Year                      Beginning    During      During    Pending APDs    End of
                                                     of Fiscal    Fiscal      Fiscal      at End of     Fiscal
                                                       Year        Year        Year      Fiscal Year     Year
----------------------------------------------------------------------------------------------------------------
1994..............................................      113          82         184          -102          11
1995..............................................       11          75          54            21          32
1996..............................................       32          70          86           -16          16
1997..............................................       16         107         109            -2          14
1998..............................................       14         122         106            16          30
1999..............................................       30         184         169            15          45
2000..............................................       45         254         238            16          61
2001..............................................       61         299         255            44         105
2002..............................................      105         265         259             6         111
2003..............................................      111         323         325            -2         109
2004..............................................      109         502         424            78         187
----------------------------------------------------------------------------------------------------------------

                                                 EASTERN STATES
----------------------------------------------------------------------------------------------------------------
                                                                                         Increase or
                                                    Total APDs     APDs     Total APDs   Decrease in  Total APDs
                                                    Pending at   Received    Processed    Number of   Pending at
                    Fiscal Year                      Beginning    During      During    Pending APDs    End of
                                                     of Fiscal    Fiscal      Fiscal      at End of     Fiscal
                                                       Year        Year        Year      Fiscal Year     Year
----------------------------------------------------------------------------------------------------------------
1994..............................................      153          13          44           -31         122
1995..............................................      122          25          62           -37          85
1996..............................................       85           4          46           -42          43
1997..............................................       43          29          54           -25          18
1998..............................................       18          28          43           -15           3
1999..............................................        3          37          16            21          24
2000..............................................       24          39          26            13          37
2001..............................................       37          23          33           -10          27
2002..............................................       27          14          18            -4          23
2003..............................................       23          73          64             9          32
2004..............................................       32          70          76            -6          26
----------------------------------------------------------------------------------------------------------------

                                                     MONTANA
----------------------------------------------------------------------------------------------------------------
                                                                                         Increase or
                                                    Total APDs     APDs     Total APDs   Decrease in  Total APDs
                                                    Pending at   Received    Processed    Number of   Pending at
                    Fiscal Year                      Beginning    During      During    Pending APDs    End of
                                                     of Fiscal    Fiscal      Fiscal      at End of     Fiscal
                                                       Year        Year        Year      Fiscal Year     Year
----------------------------------------------------------------------------------------------------------------
1994..............................................      278           4          71           -67         211
1995..............................................      211           8          88           -80         131
1996..............................................      131           8          95           -87          44
1997..............................................       44         180         191           -11          33
1998..............................................       33         183         110            73         106
1999..............................................      106          89         124           -35          71
2000..............................................       71         271         186            85         156
2001..............................................      156         213         186            27         183
2002..............................................      183         221         261           -40         143
2003..............................................      143         325         358           -33         110
2004..............................................      110         421         292           129         239
----------------------------------------------------------------------------------------------------------------

                                                     NEVADA
----------------------------------------------------------------------------------------------------------------
                                                                                         Increase or
                                                    Total APDs     APDs     Total APDs   Decrease in  Total APDs
                                                    Pending at   Received    Processed    Number of   Pending at
                    Fiscal Year                      Beginning    During      During    Pending APDs    End of
                                                     of Fiscal    Fiscal      Fiscal      at End of     Fiscal
                                                       Year        Year        Year      Fiscal Year     Year
----------------------------------------------------------------------------------------------------------------
1994..............................................      110           0          25           -25          85
1995..............................................       85           1          29           -28          57
1996..............................................       57           0          23           -23          34
1997..............................................       34           2          34           -32           2
1998..............................................        2           7           8            -1           1
1999..............................................        1           0           1            -1           0
2000..............................................        0           0           0             0           0
2001..............................................        0           1           0             1           1
2002..............................................        1           7           6             1           2
2003..............................................        2           4           3             1           3
2004..............................................        3          15          10             5           8
----------------------------------------------------------------------------------------------------------------

                                                   NEW MEXICO
----------------------------------------------------------------------------------------------------------------
                                                                                         Increase or
                                                    Total APDs     APDs     Total APDs   Decrease in  Total APDs
                                                    Pending at   Received    Processed    Number of   Pending at
                    Fiscal Year                      Beginning    During      During    Pending APDs    End of
                                                     of Fiscal    Fiscal      Fiscal      at End of     Fiscal
                                                       Year        Year        Year      Fiscal Year     Year
----------------------------------------------------------------------------------------------------------------
1994..............................................     1485         709        1031          -322        1163
1995..............................................     1163         606         871          -265         898
1996..............................................      898         745         949          -204         694
1997..............................................      694         926         980           -54         640
1998..............................................      640        1034         845           189         829
1999..............................................      829         832         907           -75         754
2000..............................................      754       1,280       1,056           224         978
2001..............................................      978       1,351       1,240           111       1,089
2002..............................................    1,089       1,087       1,373          -286         803
2003..............................................      803       1,385       1,590          -205         598
2004..............................................      598       1,668       1,657            11         609
----------------------------------------------------------------------------------------------------------------

                                                      UTAH
----------------------------------------------------------------------------------------------------------------
                                                                                         Increase or
                                                    Total APDs     APDs     Total APDs   Decrease in  Total APDs
                                                    Pending at   Received    Processed    Number of   Pending at
                    Fiscal Year                      Beginning    During      During    Pending APDs    End of
                                                     of Fiscal    Fiscal      Fiscal      at End of     Fiscal
                                                       Year        Year        Year      Fiscal Year     Year
----------------------------------------------------------------------------------------------------------------
1994..............................................      123         157         135            22         145
1995..............................................      145         219         237           -18         127
1996..............................................      127         228         203            25         152
1997..............................................      152         388         359            29         181
1998..............................................      181         389         302            87         268
1999..............................................      268         271         204            67         335
2000..............................................      335         394         367            27         362
2001..............................................      362         680         539           141         503
2002..............................................      503         496         547           -51         452
2003..............................................      452         639         557            82         534
2004..............................................      534         792         855           -63         471
----------------------------------------------------------------------------------------------------------------

                                                     WYOMING
----------------------------------------------------------------------------------------------------------------
                                                                                         Increase or
                                                    Total APDs     APDs     Total APDs   Decrease in  Total APDs
                                                    Pending at   Received    Processed    Number of   Pending at
                    Fiscal Year                      Beginning    During      During    Pending APDs    End of
                                                     of Fiscal    Fiscal      Fiscal      at End of     Fiscal
                                                       Year        Year        Year      Fiscal Year     Year
----------------------------------------------------------------------------------------------------------------
1994..............................................     1667          58         551          -493        1174
1995..............................................     1174          91         483          -392         782
1996..............................................      782         148         504          -356         426
1997..............................................      426         656         792          -136         290
1998..............................................      290         984         823           161         451
1999..............................................      451       2,859         685         2,174       2,625
2000..............................................    2,625       1,607       1,867          -260       2,365
2001..............................................    2,365       2,159       1,904           255       2,620
2002..............................................    2,620       2,365       3,213          -848       1,772
2003..............................................    1,772       2,239       2,160            79       1,851
2004..............................................    1,851       3,377       3,908          -531       1,320
----------------------------------------------------------------------------------------------------------------

    Question 44. How many acres have you put under oil and gas lease 
during each of the past ten fiscal years? Please display this on a 
State-by-State basis.
    Answer. The following table provides this information on a state-
by-state basis.

                                     NUMBER OF ACRES LEASED DURING THE YEAR
----------------------------------------------------------------------------------------------------------------
            Geographic State                FY 1994     FY 1995     FY 1996     FY 1997     FY 1998     FY 1999
----------------------------------------------------------------------------------------------------------------
Alabama.................................       9,135       6,319           0         684          80           0
Alaska..................................           0           0           0           0           0     861,318
Arizona.................................      51,578       3,420           0           0      55,921           0
Arkansas................................      22,610       9,784         928      39,602      48,011      74,442
California..............................         301      10,338           0      27,120      39,638      38,430
Colorado................................     255,328     373,799     217,896     230,242     336,590     242,911
Florida.................................       3,851           0           0           0           0           0
Idaho...................................       3,753           0           0           0           0           0
Illinois................................      19,566           0           0           0           0           0
Indiana.................................
Kansas..................................       2,436       2,252           0          80         958       2,354
Kentucky................................       1,482       1,606           0           0       1,264           0
Louisiana...............................       5,709      50,399      42,900       5,687      25,442      12,333
Maryland................................           0           0           0           0         320           0
Massachusetts...........................
Michigan................................         380         987           0      20,810           0      18,650
Minnesota...............................           0           0           0           0           0           0
Mississippi.............................      20,985      55,049      24,945      71,009      78,586       8,524
Montana.................................     156,123     256,581     299,376     241,346     363,402     289,719
Nebraska................................         640           0         320           0         760          80
Nevada..................................     606,755     244,376     178,372     293,760     181,938      69,534
New Mexico..............................     256,619     207,811     195,623     329,896     213,957     130,552
New York................................
North Dakota............................      35,074      80,469      38,139     188,650      67,110      28,705
Ohio....................................       1,092       5,693       8,324         285         337         193
Oklahoma................................       5,106      37,231      56,163      11,815      13,155      12,432
Oregon..................................       8,553      14,318      14,100         837      11,948
Pennsylvania............................           0           0           0           0           0           0
South Dakota............................       2,921      61,091      60,059      74,693       8,200           0
Tennessee...............................           0           0           0           0           0           0
Texas...................................      16,439      22,396      38,384      35,576       5,784      31,781
Utah....................................     485,119     393,573     316,989     444,385     278,702     217,934
Virginia................................           0           4           0           0           0         870
Washington..............................           0      11,218       1,243      11,485         663      32,899
West Virginia...........................       4,657       2,528           0           0           0           0
Wisconsin...............................           0           0           0           0           0           0
Wyoming.................................   1,837,810   2,030,090   1,029,579   1,426,795   1,880,476   1,516,941
                                         -----------------------------------------------------------------------
  Total.................................   3,805,469   3,875,567   2,523,558   3,468,020   3,602,131   3,602,550
                                         =======================================================================
----------------------------------------------------------------------------------------------------------------

                                     NUMBER OF ACRES LEASED DURING THE YEAR
----------------------------------------------------------------------------------------------------------------
                  Geographic State                      FY 2000     FY 2001     FY 2002     FY 2003     FY 2004
----------------------------------------------------------------------------------------------------------------
Alabama.............................................       7,855       4,486       4,185       8,990       5,077
Alaska..............................................           0           0     567,769      11,500   1,403,561
Arizona.............................................           0      35,584       6,983       3,040       1,224
Arkansas............................................      21,573     178,785      71,247      95,792     182,158
California..........................................      34,811      25,290      29,079      60,520      34,343
Colorado............................................     299,978     594,369     448,029     252,004     241,188
Florida.............................................       2,018           0           0       3,368
Idaho...............................................          40           0       5,798         671
Illinois............................................           0           0         112           0
Indiana.............................................
Kansas..............................................       1,154         599       2,378       5,764       1,240
Kentucky............................................       1,143           0       2,103           0       4,968
Louisiana...........................................         322         606       3,033         511       1,366
Maryland............................................           0           0           0           0
Massachusetts.......................................
Michigan............................................       2,337           0       3,939       4,050
Minnesota...........................................           0           0           0           0
Mississippi.........................................      25,920      19,826      54,755      15,741      41,205
Montana.............................................     380,273     551,660     293,461     172,874     221,740
Nebraska............................................         503       7,126           0       1,880
Nevada..............................................     235,348     746,400     259,920     116,292     638,632
New Mexico..........................................     190,598     130,193     192,124     239,979     214,756
New York............................................         172
North Dakota........................................      21,944      52,858      39,354       6,099      82,527
Ohio................................................       1,870         268         121           0       5,676
Oklahoma............................................       8,732       8,619       6,018      12,389       3,827
Oregon..............................................      12,605       4,272       5,006         160
Pennsylvania........................................           7           0         835           0
South Dakota........................................      62,235      91,880       2,760         548      10,862
Tennessee...........................................           0           0           0           0
Texas...............................................      13,396      60,972      38,156      43,877      19,509
Utah................................................     247,126     284,928     222,070     240,527     118,878
Virginia............................................       5,805           0           0           0
Washington..........................................      33,891      16,297      11,544     210,188     192,979
West Virginia.......................................      34,358           0           0       9,830       8,974
Wisconsin...........................................           0           0           0           0
Wyoming.............................................   1,004,479   1,182,253     541,827     547,695     722,431
                                                     -----------------------------------------------------------
  Total.............................................   2,650,493   3,997,271   2,812,606   2,064,289   4,157,121
                                                     ===========================================================
----------------------------------------------------------------------------------------------------------------

    Question 45. How many acres of lands administered by the Forest 
Service and the BLM in States west of the one hundredth meridian are 
currently under oil and gas lease? Please display by state and agency.
    Answer. The following is a table listing the acreage under oil and 
gas leases on BLM and FS-managed lands in states west of the hundredth 
meridian. (Note: These figures do not include Federally-owned mineral 
estate under privately-owned surface lands.)

----------------------------------------------------------------------------------------------------------------
                                                                            BLM               Forest Service
                                                                 -----------------------------------------------
                              State                                Number of   Number of   Number of   Number of
                                                                    Leases       Acres      Leases       Acres
----------------------------------------------------------------------------------------------------------------
Alaska..........................................................         193   1,446,990           0           0
Arizona.........................................................          62     105,020           0           0
California......................................................         654     304,876          22       6,403
Colorado........................................................       4,867   3,897,708         513     498,077
Idaho...........................................................           7       8,768           1       1,495
Kansas..........................................................          67      23,913         298      65,281
Montana.........................................................       3,420   2,968,337         689   1,324,975
Nebraska........................................................           3         560           0           0
Nevada..........................................................       1,112   1,940,371           8      18,950
New Mexico......................................................       8,833   5,199,557         287     235,309
North Dakota....................................................         303     107,350       1,201     643,745
Oklahoma........................................................         829     100,138         223      97,708
Oregon..........................................................          19      29,355          10      32,480
South Dakota....................................................         143     121,913          44      30,396
Texas...........................................................          10       2,528         494     388,986
Utah............................................................       3,252   3,211,172         307     576,225
Washington......................................................         227     347,325           0           0
Wyoming.........................................................      20,869  14,904,462         854     574,360
                                                                 -----------------------------------------------
    Total.......................................................      44,870  34,720,343       4,951   4,494,390
                                                                 ===============================================
----------------------------------------------------------------------------------------------------------------

   How much acreage is under lease but not producing?
    Answer. Approximately 23.8 million acres

   What are the reasons for this?
    Answer. Each oil and gas lease is effective for 10 years and 
contemplates that production may not occur immediately, but must occur 
within the lease period or any extension granted for good cause. 
Exploration and production companies generally have significant 
inventories of leased acreage that do not have oil or gas production. 
These leased acreage inventories are normal and necessary for a 
company's efficient exploration and production program. For example, 
companies sometimes desire to lease as many parcels of land as possible 
in a specific area before beginning exploration activities. Lead time 
on getting a lease drilled may be many years depending on litigation 
and time frames to complete NEPA documentation.
    There are many other explanations for non-producing leases. Private 
individuals, as well as companies, often hold leases for speculation. 
Non-producing leases may be within a unit agreement or development 
contract and not have been drilled. Some leases are suspended as a 
result of litigation. Acquisitions and mergers within the industry 
sometimes result in a company selling or dropping a lease. Changes in 
corporate priorities resulting in management changes also sometimes 
lead to a company not developing a lease.
    Question 46. What is the status of BLM's work on the study required 
under the EPCA? What areas are currently being evaluated? When will 
this work be completed? Will your analysis provide information on both 
the technically recoverable and economically recoverable resources?
    Answer. Phase I of the inventory required by the Energy Policy & 
Conservation Act (EPCA) was released in January 2003 and covered five 
major basins within the Interior West: the San Juan/Paradox, Uinta-
Piceance, Greater Green River, and Powder River Basins, and the Montana 
Thrust Belt. Collectively these basins contain 50 percent of the oil 
and 78 percent of the natural gas underlying the onshore Federal lands 
of the United States outside of Alaska. The inventory found that of the 
59.4 million Federal acres, 39 percent were available for leasing under 
standard lease terms, 25 percent were available for leasing with 
constraints beyond standard lease terms, and 36 percent were not 
available for leasing.
    The BLM, as lead agency, is working closely with the Department of 
Energy (DOE), U.S. Forest Service, and U.S. Geological Service to 
continue the inventory required by EPCA. The Phase II inventory for six 
more basins was begun in 2004. The basins covered in the Phase II 
inventory include Northern Alaska (NPRA and ANWR 1002 only), the 
Wyoming Thrust Belt, the Denver, Black Warrior and Appalachian Basins, 
and the Florida Peninsula. The Phase II inventory is scheduled for 
release in the third quarter of FY 2005.
    In FY 2005, BLM plans to continue EPCA inventories beyond the 
basins that were analyzed in the first two EPCA phases. This 
continuation of the EPCA studies will cover the remaining basins that 
have not been covered in previous reports and will include an analysis 
of conditions of approvals of Applications for Permit to Drill (APDs). 
The Phase I basins will be updated as a part of this effort as several 
Resource Management Plans and Forest Plans have been amended or revised 
since the initial inventory was released.
    Question 47. The budget document indicates that BLM proposes to 
offset the reduction in the oil and gas leasing program request with a 
cost recovery offset from lessees.
    Please describe the time frame for implementing these user fees, as 
well as providing a detailed listing of the amount of the fees and the 
proposed payors.
    Answer. The Administration has been systematically reviewing for 
program efficiency approximately 20 percent of its programs each year, 
through the Program Assessment Rating Tool (PART). The Energy and 
Minerals programs were reviewed in 2004. One of the major 
recommendations was to implement energy and minerals cost recovery in 
order to improve program efficiencies. Past Inspector General (IG) 
reviews have made similar recommendations.
    BLM believes that cost recovery will allow the BLM offices to 
respond to demand more efficiently, in an environment where both 
appropriations and industry demand are subject to fluctuations. Funds 
collected through cost recovery will be spent by the offices processing 
the documents and only within the energy and minerals programs in those 
offices.
    The BLM expects to publish a proposed cost recovery regulation 
shortly. We will request comments from the public and aim to publish a 
final regulation by Fall 2005. The regulation, to be implemented in FY 
2006, will provide funding to allow the BLM to more effectively meet 
increased customer demand.
    Below is a detailed listing of existing fees. We have not yet 
determined the specific fee levels for various activities for the new 
regulation.

                              EXISTING FEE
                         [Paperwork Processing]
------------------------------------------------------------------------

------------------------------------------------------------------------
OIL AND GAS (3100)
    Noncompetitive Lease offer.............................      $75
    Competitive Lease high bid.............................       75
    Assignment and transfer................................       25
    Overriding royalty transfer, payment out of production.       25
    Lease renewals and exchanges...........................       75
    Lease reinstatement, Class 1...........................       25
    Leasing under right-of-way.............................       75
GEOTHERMAL (3200)
    Noncompetitive Lease...................................       75
    Application Assignment and transfer....................       50
COAL (3400)
    Exploration license application........................      250
    Lease or least interest transfer.......................       50
Non-energy Leasable (3500)
    Lease renewals.........................................       25
    Propsecting Permit application.........................       25
Mining Law Administration (3800)
    Notice of Location.....................................       10
    Amendment to location..................................        5
    Transfer of Interest...................................        5
    Affidavit of Assessment Work...........................        5
------------------------------------------------------------------------

    Question 48. What is the current level of funding and what level is 
proposed for fiscal year 2006 for the administration of renewable 
energy development on public lands? Please provide allocation by energy 
type.
    Answer. Renewable energy projects involving wind and solar energy 
are authorized through the granting of rights-of-way, which are 
administered by the Land and Realty Management program. In FY 2005, the 
Land and Realty Management program received an increase in funding of 
$250,000 for renewable energy development on the public lands. Total 
funding for rights-of-way for renewable energy projects in FY 2005 is 
approximately $815,000.
    In FY 2006, the appropriated funding for rights-of-way for 
renewable energy development will be similar. Additional funding will 
be available through cost recovery. We anticipate publishing a final 
regulation in the Spring of 2005 that will update the cost recovery 
regulations for the rights-of-way program. As a result, we anticipate 
recovering additional costs, which will be used to process additional 
rights-of-way applications.
    In addition to the funding for rights-of-way for renewable energy 
projects, the BLM will spend approximately $600,000 to complete a Final 
Programmatic Environmental Impact Statement (FEIS) analyzing wind 
energy development in the Western United States. This FEIS will 
expedite the approval of rights-of-way applications for wind energy 
projects.
    In addition to funding for rights-of-way and the FEIS for wind 
energy, the BLM funds geothermal development on the public lands 
through the Energy and Minerals program budget. In FY 2005, the BLM 
will spend approximately $1.2 million in the geothermal energy program. 
Please see the answer to question number 60 for a description of that 
program.
    Question 49. Please provide a table displaying the level of funding 
requested and enacted for each of the past 10 fiscal years for the 
Energy and Minerals program.
    Answer.

                       ENERGY AND MINERALS FUNDING
------------------------------------------------------------------------
                                              Funding         Funding
               Fiscal Year                   Requested        Enacted
------------------------------------------------------------------------
1994....................................     $71,126,000     $70,876,000
1995....................................      68,479,000      68,121,000
1996....................................      66,694,000      67,049,000
1997....................................      67,493,000      67,493,000
1998....................................      68,263,000      70,363,000
1999....................................      69,834,000      69,944,000
2000....................................      72,230,000      74,010,000
2001....................................      79,889,000      79,419,000
2002....................................      91,488,000      95,393,000
2003....................................     104,841,000     105,898,000
2004....................................     106,565,000     108,519,000
2005....................................     109,063,000     108,181,000
2006....................................     117,572,000
------------------------------------------------------------------------
Funding in 2004 to 2006 includes fees retained to fund agency processing
  costs.

    Question 50. I am interested in learning more about the type of 
NEPA compliance undertaken with respect to the issuance of APD's. In 
what percentage of the cases are APD's issued based on: (1) categorical 
exclusion; (2) environmental assessment/finding of no significant 
impact; and (3) environmental impact statements relating to the 
specific APD? Typically, how long does it take to prepare each of the 
above, how is the NEPA compliance handled (in-house or using a 
consultant), and what are the expenses incurred to the applicant in 
completing the NEPA compliance work?
    Answer. Applications for Permit to Drill (APDs) are authorized 
after an environmental assessment (EA) and/or an environmental impact 
statement (EIS). APDs rarely qualify for categorical exclusions to the 
National Environmental Policy Act (NEPA).
    Typically, a large-scale EIS is done for land use plans that 
addresses, among other things, the cumulative impact of oil and gas 
leasing and development. EISs for land use plans are paid for by 
Congressionally-appropriated funds and may be completed solely by the 
BLM or with the assistance of contractors or consultants.
    Frequently, the BLM prepares additional EISs analyzing oil and gas 
development in many of the new and expanding oil and gas fields in the 
western states. The costs for these development EISs are generally 
borne by the operators who will benefit from the anticipated 
development. The time frame for preparation of these EISs varies; 24 
months for completion is typical.
    Individual APDs would then be authorized after analysis in a 
subsequent EA. These are usually prepared by the BLM staff in the field 
offices. However, at times companies pay for cultural or biological 
surveys and sometimes hire contractors to prepare EAs, as a means to 
facilitate the NEPA process. The timeframes for completion of EAs vary 
from less than 30 days to several months, depending upon the complexity 
of the project.
    Approximately three-fourths of the APDs authorized in FY 2004 were 
covered by an EIS that tiered to a land use plan EIS and analyzed 
development of an oil and gas field. Most of these APDs, and all other 
APDs authorized in FY 2004, were further analyzed by an EA that 
analyzed individual wells or small groups of wells.
    The cost for operator-supplied NEPA documents varies widely. A 
relatively simple EA for a single well could cost under $3,000, while a 
typical EIS analyzing oil and gas development for a field may cost from 
$750,000 to $1.5 million.

   I understand that BLM is reviewing NEPA compliance 
        requirements and may institute the additional use of 
        categorical exclusions. What changes are you considering in 
        general? What proposals are you considering for extending the 
        use of categorical exclusions? Will the proposals be subject to 
        public review and comment?
    Answer. The BLM is tentatively looking at options for instituting 
additional categorical exclusions. If the BLM does propose additional 
categorical exclusions, they will be published in the Federal Register 
and will be open for full public review and comment.
    Question 51. What is the current status of BLM's implementation of 
best management practices under the onshore oil and gas leasing 
program? Please describe the best management practices. Does BLM 
require these BMPs to be used by lessees?
    Answer. It is BLM policy that all Field Offices incorporate 
environmental best management practices (BMPs) into proposed 
Applications for Permit to Drill (APDs) and associated rights-of-way 
after appropriate National Environmental Policy Act (NEPA) evaluation. 
BLM Field Offices are encouraged to work with affected oil and gas 
operators early, to explain how BMPs may fit into their development 
proposals. The operator may voluntarily incorporate BMPs into their 
APD. BMPs not incorporated into the APD by the operator may be 
incorporated into the approved APD by the BLM after appropriate 
environmental review.
    BMPs are innovative, dynamic, and economically feasible mitigation 
measures applied on a site-specific basis to reduce, prevent, or avoid 
adverse environmental or social impacts. BMPs that are to be considered 
for use in nearly all oil and gas development circumstances include: 
interim reclamation of well locations and access roads soon after the 
well is put into production; painting all facilities a color which best 
allows the facility to blend into the background; designing and 
constructing new roads to a safe and appropriate standard ``no higher 
than necessary'' to accommodate their intended use; and, final 
reclamation recontouring of all disturbed areas, including access 
roads, to the original contour and revegetating the areas to 
reestablish native vegetation and wildlife habitat. A menu of potential 
BMPs for consideration in energy development can be found at: 
www.blm.gov/bmp.
    Question 52. What is the current statewide acreage limitation for 
the onshore oil and gas leasing program? In how many instances are 
lessees approaching this limit? Does BLM support modification of this 
statewide acreage limitation?
    Answer. The maximum amount of acreage that may be held or 
controlled by an individual or entity is 246,080 acres in any one 
state, other than Alaska. The acreage that can be held in Alaska is 
limited to 300,000 acres in the northern district and 300,000 acres in 
the southern district. In recent years six companies have exceeded 
their acreage limitations, largely as the result of mergers and 
acquisitions. They subsequently divested the excess acreage. BLM is 
looking at the issue of whether modifying these acreage limitations 
might benefit production of the resource and protection of surface 
natural resources.
    Question 53. Has BLM conducted an inventory of abandoned, orphaned 
and idled oil and gas wells on lands administered by BLM? If so, please 
describe. How many of each category of well (abandoned, orphaned, or 
idled) is located on BLM administered lands? Please provide the 
information by state.
    Answer. An abandoned well is a well whose well bore is secured and 
is no longer in use. An idle well is a well that has been inactive for 
over one year. An orphaned well is a well for which there is no 
responsible party to assume the liability for the well. Idle and orphan 
well inventories are conducted semiannually. Data listed below were 
queried from BLM's Automated Fluid Mineral Support System database on 
March 11, 2005:
    The current inventory of abandoned wells is:

------------------------------------------------------------------------

------------------------------------------------------------------------
Alaska.....................................................        76
Arizona....................................................        17
Arkansas...................................................        13
California.................................................     2,217
Colorado...................................................       616
Kansas.....................................................        26
Kentucky...................................................         1
Louisiana..................................................        76
Mississippi................................................        15
Montana....................................................       570
Nebraska...................................................         3
Nevada.....................................................        32
New Mexico.................................................     2,654
North Dakota...............................................       105
Ohio.......................................................        72
Oklahoma...................................................       693
Pennsylvania...............................................        16
South Dakota...............................................        14
Tennessee..................................................         6
Texas......................................................        37
Virginia...................................................         1
West Virginia..............................................         4
Wyoming....................................................     3,594
------------------------------------------------------------------------

    The current inventory of orphaned wells administered by the BLM is:

------------------------------------------------------------------------

------------------------------------------------------------------------
California.................................................        23
Utah.......................................................        16
New Mexico.................................................         1
Oklahoma...................................................        17
------------------------------------------------------------------------

    The current inventory of idle wells is:

------------------------------------------------------------------------

------------------------------------------------------------------------
Alaska.....................................................        67
Arkansas...................................................        11
Arizona....................................................        14
California.................................................     1,940
Colorado...................................................       595
Kansas.....................................................        25
Kentucky...................................................         1
Louisiana..................................................        57
Mississippi................................................        13
Montana....................................................       438
Nebraska...................................................         2
Nevada.....................................................        29
New Mexico.................................................     2,326
North Dakota...............................................        94
Ohio.......................................................        53
Oklahoma...................................................       681
Pennsylvania...............................................        16
South Dakota...............................................        12
Tennessee..................................................         6
Texas......................................................        33
Virginia...................................................         1
West Virginia..............................................         4
Wyoming....................................................     2,896
------------------------------------------------------------------------

    Question 54. Does the Department support legislation to permit the 
Secretary to issue separate leases for the extraction of tar sand and 
the exploration and development of oil and gas where an area contains a 
combination of tar sand and oil or gas? If so, why is such legislation 
necessary? Would this have revenue implications?
    Answer. The Department of the Interior supports legislation that 
would permit the Secretary to issue separate leases for the extraction 
of tar sand and the exploration and development of oil and gas where an 
area contains a combination of tar sand and oil/gas.
    Such legislation would enable an operator to obtain only an oil and 
gas lease when the operator has no interest in extracting tar sands. 
This change should stimulate additional leasing for oil and gas in the 
Combined Hydrocarbon Leasing Act areas and ultimately result in 
increased Federal revenue.
    Question 55. Do you think the royalty rates for geothermal leases 
need to be revised? If so, please describe and provide the analytical 
basis for your conclusions. How can we ensure a fair return to the 
public for the use of geothermal resources? What budget impacts would 
you anticipate from such a modification?
    Answer. The President's National Energy Policy did not call for a 
revision of the royalty rates for geothermal leases. See the answer to 
the following question, number 56, for a discussion of the process the 
Department is currently conducting in an effort to simplify the 
methodology for calculating geothermal royalties.
    Question 56. Has the Department considered simplifying the 
methodology for calculating geothermal royalties? Has the Department 
considered a gross proceeds methodology? If so, please provide the 
analysis and conclusions reached by the Department. Could a gross 
proceeds methodology be imposed in a way that would be revenue neutral?
    Answer. The Department believes it would be beneficial to both the 
government and industry to simplify the methodology for calculating 
geothermal royalties. To that end, the Royalty Policy Committee (RPC), 
an advisory council to the Secretary, formed a Geothermal Subcommittee 
in October 2004 to address the Minerals Management Service's geothermal 
royalty valuation regulations in an effort to simplify the language and 
reduce the administrative costs to the geothermal industry. The 
Assistant Secretary for Land and Minerals Management recommended that 
the Subcommittee complete a report that recommends changes that can be 
accomplished immediately within the current regulatory and legislative 
framework as well as those that will require regulatory and legislative 
changes. The Subcommittee is looking at recommending changes to 
geothermal royalty valuation methods to make royalty valuations more 
efficient and effective for the government while ensuring that the 
government receives fair market value and not discouraging geothermal 
development, including direct use, on Federal lands. The members of the 
Subcommittee include representatives from the Geothermal Energy 
Association, industry, states, public and local governments. The 
Subcommittee is expected to finish their work and forward a report on 
their recommendations to the full RPC in May 2005.
    Question 57. What role do you see BLM-administered lands playing in 
providing geothermal energy over the next five years?
    Answer. Fully 90 percent of the geothermal resources in the United 
States occur on Federal lands. In addition, many states are enacting 
energy portfolios that require a greater share of their energy needs to 
be met with renewable resources such as geothermal. BLM-administered 
lands can be expected to play a major role in geothermal energy 
production over the next 5 years and beyond. Industry has expressed 
great interest in Glass Mountain and Truckhaven in California, Fish 
Lake and Salt Wells in Nevada, Lightning Dock and Radium Springs in New 
Mexico, Klamath Falls and Clump in Oregon, Roosevelt Hot Springs and 
Thermo Hot Springs in Utah and the Mt. Adams and Mt. Baker areas of 
Washington State, among others.
    Question 58. Has BLM compared its current geothermal leasing system 
with that of the states or local governments? If so, what are the 
similarities and differences regarding how lands are selected for 
leasing and how royalties or other payments for the use of the resource 
are assessed? Please provide a copy of any such analysis.
    Answer. The BLM has been bound to the same leasing system since 
enactment of the Geothermal Steam Act of 1970. While we have followed 
State activities with great interest, we have never conducted a formal 
review or comparison of State leasing procedures.
    Question 59. Do you think there need to be other changes to the 
geothermal leasing program? If so, please describe. Should the KGRA 
determination be eliminated? If so, how should existing applications be 
treated? Will there be revenue impacts?
    Answer. The Department supports an all-competitive leasing system 
and the elimination of Known Geothermal Resource Areas (KGRAs). An all-
competitive leasing system, properly designed and administered, would 
better reflect true competitive interest and insure that the public 
receives fair market value for the resources. This will lead to more 
timely and efficient development of the resources. We believe that the 
revenue impacts will be positive.
    Question 60. Does BLM have adequate resources to administer the 
geothermal leasing program? Please provide a chart indicating the level 
of funding for this program for the last 10 fiscal years.
    Answer. BLM has a 30-year history of managing geothermal resources 
on Federal lands. During this time, the resources devoted to the 
geothermal program have varied widely depending on the cost and 
availability of conventional energy as well as administration 
priorities. In the mid-1980s, BLM had a budget of more than $4 million 
to manage nearly 2000 competitive and noncompetitive leases with the 
equivalent of nearly 50 full time employees. During the 1990s, 
conventional energy was cheap and interest in geothermal energy waned. 
The geothermal budget was nearly zeroed-out as emphasis was placed on 
oil and gas and coal resources. In FY 2002, the budget was increased to 
$300,000 and increased to $700,000 in FY 2003. In FY 2004, the funding 
level was $1.2 million, and the BLM managed more than 400 geothermal 
leases, with approximately 9 full-time positions. Since FY 2001, the 
BLM issued 200 geothermal permits, compared to 20 in the previous four 
years. The FY 2005 funding is adequate for current leasing levels.
    Question 61. What are the total revenues resulting from the Federal 
geothermal leasing program administered by BLM to the Federal, State 
and local governments during each of the past 10 years? Please list 
this information by State and local government entity.
    Answer. MMS distributes geothermal leasing revenues directly to the 
States and the States are responsible for any further distributions. 
The following chart provides Federal geothermal reported royalty 
revenue for Calendar Years 1994-2003. The State receives 50 percent of 
this amount:

                          FEDERAL GEOTHERMAL REPORTED ROYALTY REVENUE FOR CYS 1994-2003
----------------------------------------------------------------------------------------------------------------
              State                    1994            1995            1996            1997            1998
----------------------------------------------------------------------------------------------------------------
California......................     $19,451,423     $16,853,748     $19,828,959     $20,359,360     $13,828,169
Nevada..........................       4,455,959       4,766,017       5,381,015       5,295,883       4,247,267
New Mexico......................           1,555           1,103             787             759             578
Utah............................         167,257         163,848         228,786         182,453         175,169
                                 -------------------------------------------------------------------------------
    Totals......................     $24,076,194     $21,784,716     $25,439,547     $25,838,455     $18,251,183
                                 ===============================================================================
----------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------
              State                    1999            2000            2001            2002            2003
----------------------------------------------------------------------------------------------------------------
California......................      $8,932,594     $14,373,308     $13,405,680      $9,387,093      $6,632,374
Nevada..........................         889,052       1,493,879       1,767,858       4,267,832       3,220,344
New Mexico......................           1,049           1,273             129             893             374
Utah............................         192,432         206,909         198,807         236,390         174,546
                                 -------------------------------------------------------------------------------
    Totals......................     $10,015,127     $16,075,369     $15,372,474     $13,892,208     $10,027,638
                                 ===============================================================================
----------------------------------------------------------------------------------------------------------------
\1\ Source: 1994-2000, Minerals Revenue 2001-2003, Interim Solution tool

    Question 62. In July of last year, the Government Accountability 
Office completed a report that I had requested relating to the venting 
and flaring of natural gas (GAO-04-809). I am concerned about this 
issue from an energy perspective and also due to the environmental 
impact of flaring and venting. The GAO recommended that you direct BLM 
and MMS to consider the cost and benefit of certain actions and also 
work with DOE regarding information collection.

   What is the status of these efforts?
    Answer. Work is underway to complete the cost and benefit analysis 
of GAO's recommendations regarding: 1) flaring of natural gas, whenever 
possible, when flaring or venting is necessary; and, 2) the use of 
flaring and venting meters to improve oversight. The BLM and MMS expect 
to have completed this analysis by September 30, 2005.

                         U.S. GEOLOGICAL SURVEY

    Question 63. The Administration has placed a strong emphasis on the 
use of sound science at the Department of the Interior. However, the 
USGS budget request reflects an overall net decrease from 2005 enacted 
levels. Please provide a listing of these funding reductions.
    Answer. Due to the constraints of funding limitations and high 
priority objectives, the Administration had to choose among many 
programs to fund the objectives that are most important. In the case of 
USGS, the 2006 budget maintains and adds funding for the highest 
priority programs, while reducing 2005 increases not requested by the 
Administration and lower priority programs such as the Minerals 
Resources Program.
    USGS reductions include $28.5 million in mineral resource 
assessments, $6.4 million to eliminate the water resource research 
institutes as they should generally be able to support themselves 
through outside contributions; $500,000 in carbon sequestration 
studies; $1.3 million in the National coastal program; and $100,000 in 
lower priority general decreases. The budget also includes $11.8 
million in reductions of unrequested Congressional earmarks; a table 
listing the earmarks is attached. The budget also proposes $3.7 million 
in administrative savings, which focus on better management of travel, 
space and motor vehicle fleet costs.
    The following is a compilation of proposed earmark reductions for 
the USGS.

                2006 PROPOSED EARMARK REDUCTION FOR USGS
                         [Dollars in Thousands]
------------------------------------------------------------------------
                                                               Amount
------------------------------------------------------------------------
North Carolina Flood Mapping..............................       -986
Global Dust Monitoring Study..............................       -247
Alaska Mineral Resource Assessment Program................     -1,134
Geological Minerals Center in Alaska......................        -99
Collaborative Study with the University of Oklahoma.......     -1,460
Toxic Substances Hydrology Program........................       -227
Study of extremophillic life in Berkeley Pit, w/ MT Tech..       -195
Potomac River Ground Water Study..........................       -296
Spokane Valley/Rathdrum Prairie Aquifer Study.............       -493
Chesapeake Bay Program....................................       -247
Hood Canal Fish Mortality Research........................       -345
Requirements of the San Pedro Partnership.................       -247
Lake Champlain Basin Toxic Materials......................       -291
Monitoring Water Resources in Hawaii......................       -437
Coalbed Methane Study of Tongue River Watershed...........       -877
Mark Twain National Forest Mining Study...................       -731
Molecular Biology at Leetown Science Center...............       -779
Pallid Sturgeon Research..................................       -296
Diamondback Terrapins Study...............................       -195
DNA Bear Sampling Study in Montana........................       -974
Multidisciplinary Water Resources Study at Leetown Science       -292
 Center...................................................
Manatee Research in support of FWS........................       -493
Delaware River Basin Ecologically Sustainable Water              -247
 Management Project.......................................
CRU at the University of Nebraska.........................       -395
                                                           -------------
    Total, 2006 Proposed Earmark Reductions...............    -11,983
                                                           =============
------------------------------------------------------------------------

    Question 64. The budget proposes a substantial cut ($28 million) in 
geologic resource assessments relating to basic geologic, geochemical, 
geophysical and mineral deposit data, mineral resource assessments of 
critical minerals, data collection on mineral commodities outside the 
United States, and the Mineral Resources External Research Grant 
Program. Please provide the specific justification for cutting each of 
these activities. How will this information be provided in the future? 
How do you expect the research to be undertaken in the absence of 
funding?
    Answer. As explained in the answer to the prior questions, the 
Administration had to choose among many programs to fund the objectives 
that are most important. In the case of USGS, the 2006 budget maintains 
and adds funding for the highest priority programs, while reducing 2005 
increases not requested by the Administration and lower priority 
programs such as the Minerals Resources Program.
    The main beneficiaries of the work being eliminated are States and 
private industry. If there is a true need for the work to be continued, 
the Administration believes that this work will continue in partnership 
in the non-Federal sector, as there is expertise to conduct this work 
in various State geological surveys and universities throughout the 
Nation.

   The budget documents state that ``funding is reduced for 
        studies and information gathering for regional and local 
        activities that are more oriented to the interests of State, 
        local governments, and universities . . .'' Why does the Budget 
        target these users of information?
    Answer. This change in program is designed to focus USGS on those 
areas that are most critical to Federal government needs, which 
involves Federal land management agencies. The expertise to take on 
this work exists at various universities and State geological surveys 
across the Nation, and they might be willing to perform or fund some 
functions that the USGS currently performs. The National Science 
Foundation also supports some work in this area.
    Question 65. Why is funding being cut for USGS research on carbon 
sequestration?
    Answer. Although the USGS provides important contributions to 
carbon sequestration research, this research does not address the 
highest priority science needs of the USGS and the Administration. The 
Administration has had to make very difficult choices among all Federal 
programs to reduce Federal spending to ensure the Nation meets the 
objective of reducing the Federal deficit by 50 percent by 2009. The 
President's FY 2006 Budget does preserve significant carbon 
sequestration research related to wetlands in the USGS budget.
    Question 66. What is the time frame for enhancing the tsunami 
warning system in the Pacific and adding new tsunami warning systems in 
the Atlantic, Caribbean, and the Gulf of Mexico?
    Answer. The primary responsibility for tsunami warning lies with 
the National Oceanographic and Atmospheric Administration (NOAA) of the 
Department of Commerce. The U.S. Geological Survey (USGS) passes to 
NOAA the seismic monitoring data that underlie NOAA tsunami warnings. 
As proposed by the President, the Department of the Interior will 
contribute to improved tsunami warning by making needed enhancements to 
the seismic monitoring and earthquake reporting capabilities of the 
USGS. The USGS is currently in the process of upgrading satellite 
telemetry systems in the Pacific region to more modern equipment. USGS 
plans to continue this process elsewhere in its seismic network as 
lower cost, more efficient telemetry systems become available.

   Please describe these enhanced and new systems.
    Answer. The proposed enhancements to USGS seismic monitoring 
efforts include: expanding of real-time communications to the stations 
of the Global Seismographic Network (GSN) and improving station 
maintenance; adding up to nine new stations to the GSN in the Caribbean 
basin and upgrading up to four existing GSN stations in Central America 
and northern South America; and upgrading the USGS National Earthquake 
Information Center (NEIC), which will be staffed by NEIC scientists 24 
hours a day, 7 days a week.
    The proposed enhancements to the GSN involve adding real-time data 
communication to the remaining 20 percent of the stations in the 
network that do not have real-time communications to the USGS National 
Earthquake Information Center and the NOAA Tsunami Warning Centers. 
Under the Administration's proposal, satellite Internet communications 
will be added to all remaining USGS-operated stations where it would be 
practical to do so.

   What is the current capability in each of these areas?
    Answer. The Global Seismographic Network is funded and managed as a 
partnership between the USGS and the National Science Foundation. USGS 
operates about two-thirds of the current 137 stations in the GSN. 
Currently about 80 percent of stations of the network have real-time 
telemetry. Data availability from those stations is about 90 percent 
for the USGS-operated portion of the network. In the Caribbean, there 
is currently one station in Puerto Rico, two in South America, and two 
in Central America.
    Question 67. The USGS budget proposes a $400,000 initiative to 
begin a broad, multi-state assessment of groundwater depletion. I view 
this as potentially a very important initiative.
    In what region or specific aquifer(s) will the resources for this 
program be focused? How will State water resource agencies be 
integrated into the assessment process?
    Answer. The proposed new funding would allow the USGS to extend the 
Great Lakes Basin groundwater assessment pilot effort to part of the 
western United States by developing a web-based system to display and 
analyze existing information on long-term changes in ground water 
reserves. The exact basin or area in the West has not been determined 
yet. The USGS will work closely with the State water resource agencies 
to conduct this assessment, just as we do in our periodic analysis of 
depletion of ground water in the High Plains Aquifer. The USGS and the 
States all have very substantial holdings of long-term water level 
records from the major aquifers of the West. We will utilize all of 
this information and seek collaboration and review from the water 
agencies in these States. The USGS regularly attends the meetings of 
the Western States Water Council and will use that group as a forum to 
share work plans and obtain State input to the process.
    Question 68. The USGS budget cuts over $28 million from geologic 
resource assessments, including a $500,000 cut to USGS carbon 
sequestration studies. The budget states that ``[t]he proposed funding 
reduction in FY 2006 will stop research associated with the geologic 
sequestration of CO2 project, and will preclude the 
development of a consistent, scientifically robust CO2 
sequestration assessment methodology and the efforts to test this 
assessment methodology on geologic sites.''
    This is important research. Why is the Administration proposing to 
eliminate it? The USGS is uniquely qualified to add to the nation's 
scientific knowledge of geologic carbon sequestration potential. Does 
the Administration not view this research as important? If it does, 
shouldn't USGS have a role in the Administration's overall approach to 
addressing carbon sequestration potential?
    Answer. As we stated above, although the USGS provides important 
contributions to carbon sequestration research, the Administration has 
had to make very difficult choices among all Federal programs to 
reduced Federal spending to ensure the Nation meets the objective of 
reducing the Federal deficit by 50 percent by 2009. The USGS Energy and 
Environment Program will sustain efforts in carbon sequestration by 
serving in an advisory role to other Federal, State, and international 
groups. The President's FY 2006 Budget also preserves significant 
carbon sequestration research related to wetlands in the USGS budget.

                             INDIAN AFFAIRS

    Question 69. The Department has been reticent to participate in the 
Navajo-San Juan and the Aamodt water rights settlements. Now, the 
budget proposes cutting $4.4 million (20%-25%) from the two BIA 
accounts that help Indian tribes develop their water rights claims and 
negotiating positions (water planning & pre-development and water 
rights negotiation and litigation).
    Given the increasing need to address water needs on Indian 
reservations where many of the residents still haul water, and the 
desire of the States to resolve these claims so that water resources 
can be better managed, what is the Department's rationale for proposing 
these cuts? If the programs have been deemed non-effective, what is the 
criteria for making that assessment? Has that criteria been reviewed by 
the stakeholders (i.e. Indian tribes) who benefit from the programs 
through a consultation process?
    Answer. The BIA has for many years assisted tribes in defining and 
establishing water rights and settling claims through litigation and/or 
negotiations. Program dollars support both the BIA and tribal work 
associated with this effort. At the requested level of funding for 
2006, the BIA will continue to conduct technical research and studies 
related to the preparation and defense of tribal water rights claims. 
BIA will fund an estimated 100 projects related to establish water 
rights associated with some 40 tribes.
    The BIA will also continue to provide grants to tribes to conduct 
water management and planning projects for the purpose of managing and 
conserving Indian water resources. The requested level of funding for 
2006 maintains funding levels for grants at the 2005 level. Tribes 
typically use these grants to determine the quantity and quality of 
ground and surface water or to work with partners at the Federal, state 
and local governments to manage water resources. The reduced 2006 
funding level reflects the elimination of the water resource technical 
training program, which will serve 45 tribal youth in 2005.
    In formulating its budget request, the Administration focused on 
programs that are a higher priority on a nationwide basis.
    Question 70. Are there any resources in the budget to assist Indian 
tribes in developing renewable energy resources on their lands? If so, 
how much, and where are those resources being focused?
    Answer. The Department is committed to carrying out the President's 
energy development goals and encouraging sustainable energy production 
and economic self-sufficiency in Indian Country. The BIA budget 
includes a total of $8.3 million for the minerals and mining program. 
Approximately $5.7 million of this amount is available for grants to 
Tribes to support energy development projects. In addition, there is 
approximately $135,000 in the 2006 budget for an energy grants program 
managed by the Deputy Assistant Secretary Indian Affairs-Policy and 
Economic Development's office. The Energy Grants are available directly 
to Tribes for funding of feasibility studies, economic analyses, and 
business plans for energy projects that will help foster economic 
development on tribal lands.
    Much of this funding is directed towards non-renewable energy 
resources, since these resources are historically underdeveloped on 
Indian lands. However, BIA staff has been working with tribal wind 
advocates to develop an Environmental Impact Statement ``template'' 
that will hasten NEPA approvals for tribal wind energy projects in the 
Plains States.
    Question 71. The BIA budget requests only $12.8 million dollars of 
construction money for the Navajo Indian Irrigation project (NIIP).
    Is this enough money to do any new construction on NIIP--i.e. 
blocks 9-11? If not, please explain in detail how is this money being 
expended? Is there any plan to rehabilitate blocks 1-8 of the project? 
If so, is that plan being implemented? How much money would it take to 
complete construction of the project (i.e. the remaining blocks)? Over 
what time period? How much does OM&R on the project currently cost on 
an annual basis? Is it completely covered by the $3.75 million request 
made in the budget? What are the projections for annual OM&R costs for 
the full project (blocks 1-11)?
    Answer. The FY 2006 request provides funding for activities in the 
following areas:

   Continue rehabilitation of the main canal system and the 
        correction of other transfer facilities.
   Continue construction of Block 9 pumping plants and 
        laterals.
   Continue construction of 34.5kV and 13.8kV overhead power 
        lines to serve project-pumping plants along with associated 
        supervisory control equipment.
   Ongoing Endangered Species Act work as required by a U.S. 
        Fish and Wildlife Services (FWS) biological opinion. This work 
        must continue to meet BIA's commitments to FWS and the 
        Secretary in the Recovery Implementation Program with other 
        Federal, State, and Tribal entities. Also other environmental 
        research studies.
   Office of Inspector General mandated deficiency correction 
        work must be continued to ensure the stable delivery of water 
        to the crops. (Cost is related to Facilities Transfer 
        Correction.)
   Payment for miscellaneous minor contracts and for contract 
        modifications.
   Payment for claim settlement cost related to the Gallegos 
        Pumping Plant completion contract.
   Payment to Western Area Power Administration for project 
        power cost.
   Payment to Reclamation for providing construction management 
        and designs for future work.

    In addition to the activities listed above, funds may be used for 
the relocation of Navajo Indian families from project lands and for 
compensation for grazing rights and structures; to continue 
environment-related studies on the project; and to provide technical 
assistance to the Navajo Agricultural Products Industry (NAPI). These 
funds may also be used to perform maintenance on completed segments of 
the facilities as necessary to ensure reliable and efficient delivery 
of available water.
    The BIA is still negotiating with the Navajo Nation to establish a 
Memorandum of Understanding (MOU) identifying activities and addressing 
responsibilities to initiate the turnover of completed blocks to the 
Navajo Nation and identify the date of project completion. Construction 
of additional facilities is being deferred until the MOU is finalized 
and signed. At the end of FY 2005, NIIP will remain at 67 percent 
complete. Completion of NIIP is projected in the year 2040 or beyond at 
the current funding level.
    The latest estimate for the current annual OM&R costs is over $5 
million. At the current funding level of $3.75 million, the backlog of 
maintenance on constructed facilities and infrastructure is increasing 
and will be factored into the total cost to complete the project. The 
latest estimate for OM&R costs for the full project is approximately 
$7.4 million.
    Question 72. The BIA budget requests $1.9 million to ``fulfill 
requirements associated with water management within the Middle Rio 
Grande Conservancy District (MRGCD).'' Presumably, this funding would 
be used to address OM&R costs associated with the irrigation works of 
the 6 Middle Rio Grande Pueblos.

   What requirements are currently in place with respect to 
        water management within the Middle Rio Grande Conservancy 
        District?
    Answer. The State of New Mexico's 1927 Conservancy Act authorized 
conservation, irrigation, drainage, and flood control works in the 
State, including the operation and maintenance of an irrigation system 
to deliver water to lands within the Middle Rio Grande Valley. Because 
of the interspersed nature of Pueblo and non-Indian lands in the 
Valley, Congress passed legislation in 1928 that authorized the 
Secretary of the Interior to enter into an agreement with the Middle 
Rio Grande Conservancy District (MRGCD) to incorporate and serve the 
Pueblos' lands within MRGCD's boundaries as part of its irrigation and 
drainage system, (Act of March 13, 1928; 45 Stat. 312) (1928 Act). The 
1928 Act specified that the agreement would recognize and protect the 
Pueblos' ``prior and paramount''(senior) water rights for lands then 
being irrigated; provide for the future irrigation of the ``newly 
reclaimed lands''; and exempt the Pueblos' prior and paramount lands 
from being subject to a pro rata share of MRGCD's operation, 
maintenance and betterment costs. Subsequent legislation in 1935 both 
authorized the Secretary to enter into an agreement with MRGCD in order 
to pay MRGCD for operation and maintenance charges assessable against 
the Pueblos' irrigable newly reclaimed lands and established a formula 
to determine appropriate charges, (Act of August 27, 1935; 49 Stat. 
887) (1935 Act). The Secretary has entered into agreements with MRGCD 
pursuant to these statutes. In addition, the Bureau of Indian Affairs 
(BIA), Bureau of Reclamation (BOR), and the Pueblos entered into a 1981 
Agreement specifically regarding Pueblo water requirements. The 1981 
Agreement defined roles for BOR, BIA, the Pueblos, and MRGCD regarding 
storage and release of water for the Pueblos and established ``Annual 
Computation Procedures'' to calculate the estimated storage required to 
satisfy the Pueblos' prior and paramount water needs each year. No 
formal adjudication of water rights has ever been initiated or 
completed for the Middle Rio Grande.

   Is there a current contract in place between the BIA and 
        MRGCD to ensure that adequate OM&R is being performed on the 
        facilities delivering water to Pueblo lands?
    Answer. In accordance with the provisions of the 1928 and 1935 
Acts, as amended, the Secretary of the Interior, through the Bureau of 
Indian Affairs, and MRGCD executed a new agreement in September 2004 
regarding the payment of operation, maintenance and betterment charges 
for the newly reclaimed lands of the six Middle Rio Grande Pueblos 
(Pueblos). The agreement also addresses Annual Work Plans which are 
developed by the parties in coordination with the Pueblos and identify, 
for each year, the necessary operation, maintenance and betterment work 
and other projects to be performed by MRGCD in order to receive payment 
under the agreement.

   How will the $1.9 million be expended?
    Answer. The BIA's budget request stems primarily from calculations 
made under section X of the new agreement, which follows the operation 
and maintenance payment formula prescribed in the 1935 Act. The Annual 
Work Plan will prioritize and determine specific operation, maintenance 
and betterment work projects each year, and annual funding will be used 
to pay for those projects. Funding will also be used in part to cover 
BIA program needs, including salaries and administrative costs, system 
operators and water masters, and the functions of the Secretary's 
Designated Engineer (established pursuant to the 1928 Act).

   Will there be any significant rehabilitation of the water 
        supply infrastructure on Pueblo lands? (BIA)
    Answer. The new agreement specifies that operation, maintenance, 
and betterment include actions involving the rehabilitation of existing 
irrigation structures and facilities. The extent to which calculations 
made under the 1935 Act's payment formula, incorporated in section X of 
the agreement, and available appropriations to make these payments will 
allow for ``significant rehabilitation'' of the infrastructure 
supplying Pueblo lands remains unclear. The new agreement provides a 
vehicle by which any additional funds could be provided to MRGCD to 
perform ``Special Projects'' that exceeded the general operation, 
maintenance and betterment work to be performed annually. MRGCD also 
received approximately $3 million under the Department's Water 2025 
initiative for water conservation and infrastructure improvements, 
which could be used to the benefit of the structures serving Pueblo 
lands.

                             ISLAND ISSUES

    Question 73a. Compact accountability: Improving accountability in 
the use of U.S. funding was a guiding principle in the negotiations and 
enactment of P.L. 108-188, the law which approved a 20-year extension 
of the Compacts of Free Association with the Marshall Islands and 
Micronesia.
    Would you please generally describe how the new accountability 
mechanisms are working?
    Answer. The amended Compact's new accountability mechanisms are in 
place. While all problems have not been immediately eliminated, we have 
a much greater ability to identify and correct problems. Compact grants 
are managed with new tools: (1) prior approval of the use of grant 
funds by joint management committees, (2) required quarterly financial 
and performance reports, (3) increased oversight by Department of the 
Interior personnel, and (4) the ability to withhold grant funds.
    Aided by a new financial management system and its unitary 
government, the Republic of the Marshall Islands has made the 
transition to the new system without much difficulty. The Federated 
States of Micronesia (FSM), partially because it has four diverse 
states, has had more difficulty in coordinating budgeting, performance, 
and financial reporting. The Department is engaging the FSM national 
government on a variety of fronts to provide more oversight of the 
sector grants. In this regard, Office of Insular Affairs (OIA) is 
working cooperatively with the governments to define additional tools 
and reports needed to monitor sectoral performance and the appropriate 
use of grant funds. For example, in order to emphasize the purpose 
behind the capacity building grant, we are working with the FSM 
government to remove recurring costs from that grant. OIA also 
withholds funds to guarantee compliance with grant terms and 
conditions. We have already had to withhold grant funds from the FSM on 
two occasions to address compliance issues. For example, we recently 
suspended funds to Chuuk State's school feeding program when OIA was 
unable to verify that food purchases actually reached students.
    OIA is now in the process of applying special mid-year grant 
conditions to two of FSM's sector grants. With regard to the health 
sector, we are requiring the FSM national government and Chuuk State to 
develop a plan with OIA to promptly address deficiencies found in the 
Chuuk health dispensary program. At a minimum, quick progress is 
expected to address (1) drug restocking issues, (2) the continued 
payment of wages to health assistants who have abandoned their jobs, 
and (3) the closure of non-functioning dispensaries. Similarly, we are 
imposing similar conditions to improve the delivery of educational 
programs to the children of Chuuk. The list of areas identified as 
needing immediate improvement includes, but is not limited to, 
eliminating opportunities for waste, fraud and abuse in payroll and 
procurement practices; ensuring classrooms are equipped with textbooks 
and other basic instructional materials; and addressing administrative, 
teacher, and student attendance issues. These actions have come as a 
result of a series of consultations with the FSM national government 
and Chuuk State. If adequate progress is not achieved by August 2005, 
Joint Economic Management Committee is poised to consider withholding, 
suspension, or redirection of funds in its allocation of fiscal year 
2006 sector grants.
    Question 73b. One of the new accountability requirements, section 
104(h), is that the President shall report annually to Congress 
regarding conditions in the Freely Associated States (FAS) and on the 
use of U.S. assistance. The first such report was due last December 
31st. When do you expect the report will be transmitted to the 
Congress?
    Answer. We apologize for the delay. The report is in the review 
process, and we expect that it will be sent to the Congress in two to 
four weeks.
    Question 73c. One issue during approval of the Compact was whether 
U.S. oversight should be provided by DOI officials resident in the FAS, 
or by officials sent from an oversight office in Hawaii--the approach 
favored by the Administration and agreed to by Congress. Would you 
generally describe how this arrangement has worked and provide specific 
information on the number of trips, and ``employee-days'' spent on the 
ground conducting oversight, in: Majuro, Kwajalein/Ebeye, Kosrea, 
Pohnpei, Chuuk and Yap, during FY04?
    Answer. The Department of the Interior's (DOI) oversight of the 
Compact also includes in-country personnel stationed in Pohnpei and 
Majuro. This allows for constant coverage of Pohnpei State and the FSM 
National Government, as well as the government of the RMI.
    The Hawaii-based approach has worked well. Hawaii's position midway 
between the FAS and the United States' mainland has allowed for easy 
communication and coordination in either direction. DOI has been able 
to recruit, and expects to retain, qualified personnel with experience 
in the FAS in relevant professional fields. Basing personnel in Hawaii 
allows for efficient use of personnel and has created a consistent team 
approach that we expected in dealing with Compact issues.
    In Fiscal Year 2004, DOI employees spent many days in the field. 
The days reported on the following page do not include travel days to 
and from Honolulu, only days on site. The location designated as 
``Regional'' includes grant-related meetings held in Guam or the CNMI.
    Question 74a. Compact Trust Funds: One essential element of the new 
Compacts is the establishment of Trust Funds for each of the two FAS. 
The U.S. and other nations' contributions to these funds are to be 
invested so that compounded earnings over the next 20 years will 
provide an alternate source of revenue after the term of U.S. annual 
assistance expires in 2023.
    Although the law was signed in December of 2003, I understand that 
the investment accounts have not yet been established. Why has the 
Department taken so long to implement a policy that could have been 
easily anticipated?
    Answer. The governments of the United States, the Republic of the 
Marshall Islands (RMI) and the Federate State of Micronesia (FSM) have 
acted expeditiously with regard to the trust funds.
    While the Compact of Free Association Amendments Act of 2003 became 
public law in December of 2003, the U.S. Congress added requirements 
that then had to be ratified by both the RMI and FSM. The Department of 
the Interior initiated the incorporation process through draft articles 
of incorporation to the respective presidents of the RMI and FSM on 
April 9, 2004.
RMI Trust Fund
    The Trust Fund for the People of the Republic of the Marshall 
Islands (RMI Trust Fund) was incorporated in the District of Columbia 
on April 28, 2004. Both the drafting of articles and incorporation 
occurred before the exchange of diplomatic notes establishing May 1, 
2004 as the date of implementation of the Compact amendments relating 
to the RMI.
    The diplomatic notes stated that the RMI would deposit its $25 
million on May 14, 2004, and that the United States would deposit its 
$7 million two days later.
    Records show that the RMI deposit of $25 million arrived at the RMI 
Trust Fund's bank on June 1, 2004, and the Department of the Interior 
deposited the United States' contribution $7 million on time on June 3, 
2004. Additionally, the United States made its Fiscal Year 2005 
contribution of $7,588,500 on October 5, 2004. This last contribution 
was actually made early.
FSM Trust Fund
    The FSM considered the changes in the Compact amendments imposed by 
the United States Congress and ratified the Compact amendments on May 
26, 2004. The FSM and the United States established June 25, 2004 as 
the effective date for implementation of the Compact of Free 
Association Amendments for the FSM. Compact language, agreed to by both 
parties, called for the FSM to make its first contribution to the FSM 
Trust Fund by September 30, 2004.
    The FSM Trust Fund was incorporated on August 17, 2004. The FSM 
contributed its $30 million on schedule on September 30, 2004. The 
Department of the Interior, on behalf of the United States deposited 
its Fiscal Year 2004 contribution of $16 million on October 5, 2004, 
and its Fiscal Year 2005 contribution of $16,188,000 also on October 5, 
2004.
Investment Advisor and Trustee
    It is expected that the Trust Fund Committee will rely to a great 
extent on the advice of its Investment Advisor in allocating of assets 
among a range of investment vehicles. Intending to speed the selection 
process for the trust funds, the Department of the Interior, prior to 
incorporation of the trusts, issued a request for information to 
determine the range of possible candidates for the positions of 
Investment Advisor and Trustee.
    Once incorporated, the RMI Trust Fund Committee embarked on a full 
competitive process for selecting an Investment Advisor and Trustee. 
The Trust Fund Committee determined that a full competitive process, 
although time consuming, was appropriate to ensure that the right 
choices be made for these very important functions. In order to 
conserve trust fund assets, the Department of the Interior gave a grant 
to the RMI to hire a law firm to issue requests for proposals and 
receive responses on behalf of the RMI Trust Fund. Sixteen responses 
were received for Investment Advisor and seven responses were received 
for Trustee. The responses were analyzed by a financial advisory firm 
from New York. A subcommittee of the RMI Trust Fund Committee then 
spent a day interviewing the top four candidates for Investment 
Advisor. Based on advice and interviews, the RMI Trust Fund Committee 
has selected its Investment Advisor and Trustee. The RMI Trust Fund 
Committee expects to begin shifting assets to investments that pay a 
higher rate of return within the next two months.
    The FSM Trust Fund is embarking on its selection process for 
Investment Advisor and Trustee, which, it is anticipated, will be as 
thorough as that for the RMI Trust Fund. OIA has again offered a 
technical assistance grant to help fund this process.
    Question 74b. Would you please estimate the lost value to these 
Trust Funds which has resulted, so far, from these delays?
    Answer. The Department of the Interior views the incorporation 
process and initial deposits as being on time.
    Question 75a. Impact of American Job Creation Act of 2004 on the 
Insular Areas: Would you please provide the Administration's best 
estimate of the impact of the American Jobs Creation Act provisions 
regarding residency and income sourcing on the government revenues of 
the USVI, American Samoa, Guam, and the CNMI?
    Answer. Because the territories administer their own internal 
revenue departments, the Treasury Department does not have access to 
the tax data necessary to determine the revenue impact of AJCA on the 
territories. To the extent that the tax base of each territory depends 
upon the definition of ``bona fide residency,'' the Act may result in a 
net transfer of tax revenue from the territories to the Federal 
government. Lacking in-depth studies, it is difficult to estimate the 
effect of the legislation on the territories, although the USVI is 
likely to experience the greatest impact because of its proximity to 
the United States.
    Question 75b. Would you tell me what steps the Department believes 
are appropriate to respond to this impact, and what steps are being 
taken, if any, by the Administration.
    Answer. We are concerned that delays in issuing implementing 
regulations might cause some businesses to leave the territories. We 
therefore support the Department of the Treasury's efforts to issue 
proposed implementing regulations expeditiously. The Department of the 
Interior is working with Treasury so that the regulations attempt to 
avoid unintended consequences for the territories As for any long-term 
impacts, the Department is making a sustained commitment to assist the 
islands to market their competitive advantages to private sector 
investors. We believe that such a sustained effort is crucial to the 
long-term wellbeing of the territories.
    Question 76a. Impact of the phase-out of garment quotas on the 
CNMI: Would you please provide the Administration's best estimate of 
the impact of the phase-out of garment import quotas on the revenues of 
the government of the CNMI economy?
    Answer. The World Trade Organization (WTO) garment quotas were 
phased out as of Jan. 1, 2005. The world-wide impact is still uncertain 
but large. In the CNMI, smaller factories are expected to close. No 
estimate of the impact on government revenues has been made.
    It is important to note that from the beginning of this 
Administration, we focused efforts on private-sector led economic 
development. Part of this effort was focused on increasing interest in 
the islands within the business community of the 50 states. To this 
end, we hosted two conferences. We hosted the Secretary's Investment 
Development Conference in Washington, D.C. in 2003 with 550 
participants from 50 states and the islands, and the Secretary's 
Business Opportunities Conference in Los Angeles in 2004 with over 
1,000 participants.
    In May, we will launch the first-ever DOI-led Business 
Opportunities Mission to Guam, Saipan, and Palau. Many of the companies 
interested in the Mission are pursuing business opportunities that they 
first learned about at the conferences. Other missions to our other 
insular areas are also being planned. Additionally, we have provided 
technical assistance to territorial economic development agencies and 
other local business, trade, and tourism development organizations.
    The Administration's commitment to encourage private sector 
development on the islands is unprecedented, and we plan to continue 
our efforts to grow business opportunities for the islands.
    Question 76b. Does the Department support the proposal of the 
Government of the CNMI to reduce the local content requirement of 
General Note 3(a) of the Tariff Schedules from 50 percent to 30 
percent?
    Answer. We are not aware of any legislative proposal to reduce the 
local content requirement of General Note 3(a)(iv), and as such, the 
Administration has not taken a position on this issue.
    Question 77a. CNMI Cover over: The Commonwealth of the Northern 
Mariana Islands maintains that the U.S. owes the Commonwealth proceeds 
of taxes, fees, and other collections derived from the Commonwealth--
the so-called ``cover over''--as required by Section 703(b) of the 
Covenant.
    Do you agree that the U.S. currently owes some cover over, and if 
so, what is your best estimate, or your best estimate for a range, of 
the amount owed by the U.S.?
    Answer. It appears that funds are owed by the United States to the 
CNMI. Section 703(b) of the Covenant requires that ``the proceeds of 
all customs duties and Federal income taxes derived from the Northern 
Mariana Islands '' and ``the proceeds of any other taxes which may be 
levied by the Congress on the inhabitants of the Northern Mariana 
Islands'' be paid to the CNMI treasury. Section 7654 of the Internal 
Revenue Code of 1954, applicable with respect to the CNMI pursuant to 
section 601 of the Covenant, provides detailed rules regarding the 
cover over of income taxes. Section 7654 generally requires both the 
U.S. Treasury and CNMI treasury to cover over to one another the taxes 
they collect with respect to income from the other jurisdiction.
    In 1990, the IRS suspended payments to the CNMI due to concerns 
about whether taxpayer information provided to the CNMI as a necessary 
part of the cover over process was adequately protected from disclosure 
as required by Federal law. This problem was resolved in 2003, and the 
Department of the Treasury is working with the CNMI to determine what 
is owed.
    Question 77b. Is there disagreement between the U.S. and the CNMI 
on what the amount owed is, and generally, what are the reasons for the 
disagreement on the amount?
    Answer. The Department of the Treasury has not yet completed its 
review of what is owed. The CNMI asserts that the amount owed by the 
United States under Covenant section 703(b) is $110,505,859. The United 
States Department of the Treasury has not been able to confirm this 
amount because of the difficulty in locating records.
    Question 77c. Conceptually, do you have any objection to the 
enactment of legislation that would require clarify congressional 
intent regarding any questions regarding the interpretation of the 
Covenant, and calling for negotiations between the U.S. and the CNMI 
with the object of reaching a settlement within a reasonable period of 
time on a cover over amount that would fulfill the United States' 
obligations under Section 703(b)?
    Answer. We have no objection to the concept of Congress clarifying 
its intent on this matter and calling for reasonable steps to implement 
that intention.

                      Questions From Senator Akaka

 IMPACT ON AMERICAN SAMOA OF THE LOSS OF FEDERAL INVESTMENT INCENTIVES

    I understand that well over half of the government revenue of 
American Samoa is attributable to the Possessions Tax Credit, a Federal 
tax credit designed to promote private investment in the territories. 
However, the credit is scheduled to phase out at the end of this year.
    Question 1a. What steps has the Department taken to either avoid or 
anticipate this loss of revenue?
    Answer. The credit will terminate at the end of calendar year 2005. 
However, the American Samoa Delegate has introduced legislation that 
would extend its applicability to American Samoa. The Department is 
studying the impact of the credit and possible alternatives to it. In 
addition, we have provided a technical assistance grant to the American 
Samoa Government to study alternative ways of preserving the canning 
industry in American Samoa.
    Ultimately, American Samoa has no alternative but to promote more 
aggressively private sector investment and to diversify its economy. 
The Department recognizes that this is the most important priority 
facing American Samoa and the other insular areas and is making a 
sustained commitment to help the islands market themselves to private 
sector investors. The Department sponsored major conferences in 2003 
and 2004 to allow island leaders to market the insular areas to U.S. 
businesses. We are following up with business opportunities missions to 
the islands. We believe that a sustained commitment to private sector 
development will pay off and recognize that the alternative is 
perpetual dependence on the Federal government.
    Question 1b. If an alternate investment incentive is not 
recommended by the Administration and enacted by Congress this year, is 
the Department prepared to increase American Samoa's Operations subsidy 
to help offset the very substantial revenue loss? If not, what 
assistance are you prepared to offer Samoa?
    Answer. As noted, the Department is studying the possible impact 
and alternatives. We are not contemplating any changes in the operating 
subsidy.

                      NATIONAL PARK SERVICE BUDGET

    Question 2a. I am pleased that you have included a small increase 
for Park Operations, although most of the increase is targeted for 
repair and rehabilitation of historic buildings. With such a small and 
targeted increase on one hand, and growing visitorship and almost 
annual increases in the number of Park Service Units on the other, how 
do you intend to maintain the Park Service's long-standing excellence 
in conserving natural resources, historic and cultural sites, and 
public education?
    Answer. As noted, the National Park Service 2006 request includes 
an increase of over $50 million in its operating account. Included 
within this increase are funds to fully cover a 2.3 percent pay 
increase for government employees and a series of targeted increases in 
selected areas such as preservation of cultural resources, natural 
resource inventory and monitoring, information technology, and 
partnership program oversight. These critical increases, taken in 
conjunction with the significant boost provided for park operations in 
2005, will allow the NPS to sustain visitor services and provide 
effective stewardship of resources. The NPS is concurrently undergoing 
a series of management improvements and reforms which will also better 
enable them to deliver the kind of service to the public that it 
expects. By using innovative approaches to management and budgeting, 
the NPS will be able to continue its long tradition of excellence.
    Question 2b. As you know, I remain concerned about the ability of 
the Park Service to implement the National Parks Air Tour Management 
Act, enacted in 2000, under current funding scenarios. Comments by 
witnesses at the oversight hearing in July 2004 indicate that the Park 
Service is underfunding the soundscape program and related activities 
to work with the Federal Aviation Administration (FAA). In FY 2006, it 
appears that there is a nearly $4 million decrease in the ``Reduce 
Natural Resources Preservation Program'' (NRPP), which includes the 
soundscape program. However, the proposed budget does not include a 
line item or indicate exactly the funding and staff for the program 
activities that contribute to the NPS work with the Federal Aviation 
Administration in developing the management plans for air tours over 
National Parks.
    Please provide for the record the funding and staff levels for the 
proposed budget for FY 2006, and enacted levels for FY 2000 through 
2005.
    Answer. The reduction to NRPP project funding will not affect the 
Natural Sounds Program. The Natural Sounds Program is listed separately 
under ``Other Servicewide Programs'' in the Park and Program Summary at 
the end of the Operation of the National Park System appropriation 
section in the NPS Budget Justifications; prior to 2004 it was listed 
as the Overflight Management Program. In 2004, project funding has been 
supplemented for the program by Recreational Fee Demonstration (20%) 
funding. Decisions are pending on whether the projects are still 
eligible to receive such funding under the changes outlined in the 
Federal Lands Recreation Enhancement Act of 2004 (FLREA).

                                                     [$000]
----------------------------------------------------------------------------------------------------------------
                                                            FY      FY      FY      FY      FY      FY      FY
                                                           2000    2001    2002    2003    2004    2005    2006
----------------------------------------------------------------------------------------------------------------
Natural Sounds Program funding (ONPS)...................   1,000   1,003     949     931     921     909     920
Project funding.........................................     960       0       0       0     683    *300    *749
FTE.....................................................       2       2       4       6       5       5       5
----------------------------------------------------------------------------------------------------------------
* Pending decision whether project scope is eligible under FLREA

    Question 2c. I want to compliment the Park Service for their fine 
research on Japanese Americans in World War II, the theme study, and 
particularly the overview of WWII Japanese-American relocation sites, 
entitled ``Confinement and Ethnicity.'' I appreciate the work that the 
Park Service is doing on individual sites, and look forward to working 
with you to improve and expand this program.
    For the record, please provide detailed funding information, by 
site, for the period of FY 2000 to 2006. Please include staff levels 
for the sites and related Park Service efforts that support the 
initiative such as historical, archaeological, or other studies 
underway. Thank you.
    Answer. The National Park Service administers two sites that 
commemorate the internment of Japanese Americans during World War II: 
Manzanar National Historic Site, in California, and Minedoka Internment 
National Monument, in Idaho. Funding levels and staff (expressed in 
terms of full-time-equivalent positions, or FTEs) for the two sites are 
as follows. FTEs are not available beyond FY 2004.

------------------------------------------------------------------------
                                                           Minedoka
           Fiscal Year             Manzanar National      Internment
                                    Historical Site    National Monument
------------------------------------------------------------------------
2000............................  $483,000--2 FTE...  0
2001............................  $486,000--3 FTE...  0
2002............................  $642,000--6 FTE...  $180,000--1 FTE
2003............................  $925,000--8 FTE...  $180,000--3 FTE
2004............................  $916,000--11 FTE..  $178,000--3 FTE
2005 (est.).....................  $943,000..........  $183,000
2006 (request)..................  $965,000..........  $187,000
------------------------------------------------------------------------

    Although the National Park Service does not have an official 
program devoted to the Japanese-American experience during World War 
II, the NPS in engaged in several activities that relate to that 
experience:

   The NPS is preparing for transmittal to Congress a National 
        Historic Landmark theme study that identifies more than 40 
        sites significant to the Japanese-American experience during 
        World War II. Two of the sites, the internment camps of Tule 
        Lake in California and Grenada in Colorado, are scheduled to be 
        considered for recommendation for National Historic Landmark 
        designation by the Landmarks Committee of the National Park 
        Service Advisory Board in April.

   The NPS is also near completion of a special resource study 
        of Bainbridge Island, Washington, the first location from which 
        Japanese Americans were forcibly removed from their homes to be 
        sent to internment camps during World War II.

   One of the NPS's web-based ``Teaching with Historic Places'' 
        lesson plans is on the War Relocation Camps of World War II.
    Each of these activities has drawn from information compiled in the 
1999 publication entitled ``Confinement and Ethnicity, An Overview of 
World War II Japanese American Relocation Sites,'' which was prepared 
by the NPS's Western Archeological and Conservation Center.

                    Questions From Senator Landrieu

    Question 1. The President's Budget proposes to eliminate the 
National Center for Preservation Technology and Training, a National 
Park Service office located on the campus of Northwestern State 
University in Natchitoches, Louisiana. While the National Parks Service 
Budget Justifications for 2006 calls for its elimination ``in order to 
support higher priorities that are a federal responsibility,'' the 
Center was actually created within the Department of Interior by the 
1992 Amendments to National Historic Preservation Act and has 
functioned since as an Interior program since its founding in 1994. How 
do you explain an apparent lack of awareness of your own Department's 
programs, particularly one that has been providing cutting edge 
research, technology and training opportunities to the NPS and its 
partners for over a decade?
    Answer. The proposal is not to eliminate the center but to 
eliminate direct Federal funding for the center. NPS recognizes that 
the NCPTT has provided a valuable service. However, the NCPTT could 
become self sufficient by charging user fees to the entities that 
directly benefit from the services. In an effort to ensure that NPS 
resources are aimed at the programs that most directly serve the parks, 
the NPS proposes to eliminate funding for the NCPTT. In the past, none 
of these grants have been used to directly benefit NPS park units. The 
NPS will continue to rely on the Historic Preservation Center in 
Frederick, Maryland, for training park staff on preservation work on 
historic buildings, which does provide direct assistance to parks.
    Question 2. During President Bush's first term in office, the 
Administration's management agenda emphasized technology transfer as a 
way to improve productivity, reduce government and increase public-
private partnerships. Given this emphasis, why would you seek to 
eliminate a program which has proven to be a low cost, highly popular, 
cost effective model of public-private partnership and technology 
transfer?
    Answer. The proposal is not to eliminate the center but to 
capitalize on the popularity of the NCPTT to operate through user-based 
fees.
    Question 3. In November of 2004, the Department of Interior 
released its 2004 LWCF report on the state assistance program. In the 
introduction, the report states, ``we have much to celebrate--40 years 
and 40,000 projects--an unparalleled national portfolio of state and 
local parks and recreation areas, safe and accessible places of health 
and inspiration for all Americans.'' What changed between November of 
last year and February of this year to lead the Administration to zero 
out a program it apparently considered to be successful just three 
months ago?
    Answer. Nearly 40,000 grants, valued at approximately $3.6 billion, 
have been awarded since the program was established. The LWCF State 
assistance grants support State and local parks that have alternative 
sources of funding through State revenues and bonds.
    The Administration is systematically assessing every government 
program using the Program Assessment Rating Tool (PART). As the 
Administration strives to reduce the Federal deficit, focusing on high-
priority direct Federal responsibilities is imperative. The reduction 
in State Conservation grants funding will allow NPS to focus on park 
activities that align with agency priorities.
    A PART review in 2003 found that the program could not adequately 
measure performance or demonstrate results.

                    Questions From Senator Feinstein

                  DON EDWARDS NATIONAL WILDLIFE REFUGE

    Question 1. In 2002, I worked to bring together a group of State 
and private parties to acquire the former Cargill Salt Flat Ponds--
potentially spectacular wildlife habitat right on San Francisco Bay.
    It is my understanding that in order to restore and manage the 
approximately 9,600 newly acquired acres for the Don Edwards National 
Wildlife Refuge, the Fish and Wildlife Service will require an increase 
of $540,000 in its operations and maintenance funding.
    I am very concerned that the President's budget proposes to remove 
the $532,000 FY 2005 appropriation for conservation work on the refuge. 
Given that over 90% of San Francisco Bay's wetlands have been lost, do 
you believe that is important to restore these lands in Don Edwards 
Refuge? How much funding will you allocate to the Fish and Wildlife 
Service for this effort in the FY 2006 budget?
    Answer. The Department of the Interior greatly appreciates your 
efforts in securing protection for the former Cargill Salt Ponds in San 
Francisco Bay. As you are aware, this property is now part of the Don 
Edwards San Francisco Bay National Wildlife Refuge, the first urban 
National Wildlife Refuge established in the United States, which is 
dedicated to preserving and enhancing wildlife habitat, protecting 
migratory birds, protecting threatened and endangered species, and 
providing opportunities for wildlife-oriented recreation and nature 
study for the surrounding communities. We concur that the Cargill Salt 
Ponds property has the potential to become spectacular wildlife habitat 
and it is important to restore this area to tidal marsh.
    Habitat restoration funding for the National Wildlife Refuge System 
is allocated on a priority basis using the Refuge Operating Needs 
System (RONS). RONS is a database used to identify funding and staffing 
needs for the National Wildlife Refuge System. The projects contained 
in RONS are used in budget justifications presented to the Department, 
OMB, and Congress. Several RONS projects for Don Edwards SF Bay 
National Wildlife Refuge to maintain and operate 9,650 acres of salt 
ponds for wildlife habitat were funded in the 2004 President's Budget 
Request.
    Currently, there are 35 other projects in RONS at Don Edwards 
National Wildlife Refuge, but because they are not currently the top 
priorities in the System, they received no funding in the proposed FY 
2006 budget. However, the U.S. Fish and Wildlife Service, which manages 
the National Wildlife Refuge System, has been active in forming public/
private partnerships to continue its work restoring the Cargill Salt 
Pond property. For example, approximately $5 million in private funding 
was used to begin interim management and restoration of the ponds. We 
are happy to report that wildlife populations are responding favorably. 
The Service also continues to work with many Federal, State, and local 
agencies as well as private organizations and individuals to develop a 
long-term restoration plan for the salt ponds.
    Finally, in FY 2004, $460,000 was appropriated to assist with 
operation and maintenance of the salt ponds. That funding was included 
in the Refuge's base allocation, was continued in FY 2005, and will 
continue in FY 2006.
    Question 2. I also understand that two important sources of FY 2005 
funding for the United States Geological Service (USGS) assistance to 
the refuge totaling approximately $900,000 will no longer be available 
in Fiscal Year 2006. Do you agree with me that Geological Service 
studies regarding refuge restoration are important, and how you propose 
to fund them?
    Answer. The USGS has been conducting salt pond studies at Don 
Edwards NWR over the last three years, in a partnership effort with the 
California Coastal Conservancy.
    Over the last two years, the California Coastal Conservancy has 
been able to fund a total of $1.5 million for USGS to conduct research 
at Don Edwards NWR. We understand that the Coastal Conservancy funds 
are not anticipated to be available beginning in 2006.
    The USGS contribution to this partnership has been $545,000 a year 
for the past three years, including:

   $195,000 from the USGS Priority Ecosystems Program. This 
        program is funded at $12.0 million in 2005 and 2006. In 2006, 
        the project may be eligible for funding if the allocation 
        criteria are met and weighed against other Survey-wide 
        priorities.

   $350,000 as part of a three-year award from the USGS Quick 
        Response Program. While the Quick Response Program is funded in 
        total at $350,000 in 2006, this particular project would have 
        to meet the Quick Response Program criteria and weighed against 
        other Survey-wide priorities.

                                 CALFED

    Question 3. I know the Committee has scheduled a water symposium 
this coming April. As we think about solutions for drought and water 
shortages in the West, I believe that the CALFED legislation that the 
Chairman and ranking member helped to pass last year is a model for 
solving Western water problems. We brought all the stakeholders 
together and found a way to improve our water supply while restoring 
water quality and the environment. Madam Secretary, I want to thank you 
for your help on this bill, and I would be interested to know: do you 
agree that CALFED is a model for solving Western water problems?
    Answer. CALFED is a comprehensive long-term solution to the complex 
and interrelated problems in the Bay-Delta, the watersheds that feed 
it, and the areas served by waters diverted out of it. A consortium of 
Federal and State agencies fund and participate in the CALFED program, 
focusing on the health of the ecosystem and improving water management 
and supplies. In addition, CALFED addresses the issues of water supply 
reliability, aging levees, and threatened water quality.
    On October 25, 2004, the President signed the CALFED Bay-Delta 
Authorization Act (the Act), providing federal authorization from FY 
2005 through FY 2010 for implementation of the CALFED Program. The 
newly authorized activities include the Environmental Water Account, 
Conveyance, and Levee Stability programs, as well as for CALFED Program 
oversight and coordination. The Act authorized up to $389 million to be 
appropriated for these activities, and it has a number of reporting 
requirements.
    The 2006 budget request includes $35 million for Reclamation 
including:

   $10 million for the Environmental Water Account;
   $10 million for the Storage Program;
   $3 million for Conveyance;
   $4 million for Water Use Efficiency;
   $4 million for Ecosystem Restoration; and
   $4 million for Planning and Management activities.

                             COLORADO RIVER

    All seven Colorado River Basin states--Colorado, New Mexico, 
Wyoming, Utah, Arizona, Nevada and California--have written you with an 
urgent request to fund Lower Colorado River regulatory storage 
projects. Specifically, the seven states are interested in an up to 
10,000 acre-foot reservoir near the All-American Canal, and dredging 
sediments that have accumulated behind Laguna Dam.
    Question 4a. The seven states say that these proposals, and I 
quote, ``would be of great benefit to the Colorado River Basin states, 
. . . providing opportunities for water conservation, storage, and 
conjunctive use programs, and setting the stage for new cooperative 
water supply and water quality management endeavors with Mexico.'' Do 
you agree?
    Answer. The Department evaluates the merits of such proposals on an 
individual basis for their benefits to the nation, in accordance with 
the Economic and Environmental Principles and Guidelines for Water and 
Related Land Resources Implementation Studies.
    Question 4b. How much funding could the Bureau of Reclamation 
productively put to use for these projects in fiscal year 2006?
    Answer. In the President's 2006 Budget, there are two proposals: 
$700,000 for preliminary All-American Canal regulating storage 
reservoir work and $2.6 million for sediment dredging above Imperial 
Dam.

                               RECYCLING

    Question 5. The President's budget provides less and less funding 
for Title XVI recycling projects every year, even though these projects 
reduce dependence on the Colorado River in an environmentally sensitive 
manner. Do you believe there is a need for federal assistance to 
recycling projects, and if so, what form should the federal assistance 
take?
    Answer. Over the past 11 years, more than $289 million has been 
provided to local water agencies to plan, design and construct 19 
authorized Title XVI projects. Several projects have been completed; 
however, most projects are still under construction. Nevertheless, many 
of these ongoing projects are partially complete and also delivering 
reclaimed water. The Title XVI water reclamation and reuse program has 
proven to be a successful and popular program, especially in the urban 
areas of the West. The Department believes that the program has met its 
primary mission of demonstrating that recycling and reuse can expand 
and augment existing water supplies. Reclamation intends to continue to 
support the completion of those ongoing projects included in the 
President's budget request in prior years. The President's request for 
Title XVI funding has been in the $11.5 million to $12.5 million range 
for the past 3 years. Although there is interest in Federal funding to 
promote water recycling, relative to the other needs and priorities 
associated with Reclamation's core mission to deliver water and power, 
the optimal level of funding for FY 2006 is the $10,229,000 requested 
in the President's budget to continue work on ongoing projects.

                                JAY MOON

    Last year's omnibus appropriations bill required that the Mojave 
National Preserve grant a temporary grazing permit to the permittee for 
Clark Mountain allotment lands, Jay Moon.
    Question 6a. Given that the vast majority of the Preserve has 
already been set aside for conservation and recreation purposes, I 
strongly believe that the National Park Service should make every 
effort to allow any remaining ranchers who wish to do so to continue to 
graze within the Preserve consistent with applicable laws and 
regulations. Do you agree?
    Answer. Continued grazing in the Preserve is consistent with the 
General Management Plan for the area.
    Question 6b. Given the aridity of the Preserve, offering a grazing 
permit but withholding water facilities is largely an empty gesture. 
Will you commit to allow the return of the previous water facilities 
under this temporary grazing permit?
    Answer. The remaining ranchers within the Preserve will have access 
to a supply of water.

                               HEADWATERS

    Question 7. I understand that the Bureau of Land Management's 
California Office believes about $1 million annually for the next five 
years is needed to implement the Headwaters Forest Reserve Resource 
Management Plan. Do you agree that full implementation of the 
Headwaters plan is important? How much is in the FY 2006 budget on this 
issue?
    Answer. The Department believes that full implementation of the 
Headwaters plan is important, just as we believe full implementation of 
all National Landscape Conservation System (NLCS) and other resource 
management plans is an important goal, given available funding. We 
anticipate that it will take 5 years to meet the BLM's implementation 
goals for the Headwaters Plan, pending the outcome of future 
appropriations. For FY 2006, BLM has targeted $1.2 million for 
implementation of the Headwaters plan.

                        HAZARDOUS FUEL REDUCTION

    Question 8. The Bureau of Land Management's hazardous fuel 
reduction program is important for California. In particular, we rely 
on the approximately $2 million in annual grants for local FireSafe 
Councils to implement community protection measures. Do you plan to 
continue these grants, which are needed to protect the hundreds of 
thousands of people at risk in Southern California?
    Answer. The Department supports the excellent work of the 
California FireSafe Councils in protecting their communities from the 
damage of catastrophic wildfires. We have enjoyed very positive 
collaboration with them and will continue to cooperate with them and 
support their efforts in the future with financial support.

                             LAKE BERRYESSA

    Question 9. I understand that Napa County is having problems with 
the recreational facilities at Lake Berryessa, which is currently 
managed by the Bureau of Reclamation. What is the time frame to get a 
final Environmental Impact Statement completed on a new Visitors 
Services Plan?
    Answer. Reclamation has reopened the public review and comment 
period for the draft EIS for the Visitor Service Plan for Lake 
Berryessa for 45 days from February 16, 2005 through April 4, 2005. The 
purpose of reopening the comment period is to consider additional 
economic information needed to determine the preferred alternative.

           REPROGRAMMING OF LAND AND WATER CONSERVATION FUNDS

    Question 10. Last year's Omnibus included a provision which 
required the BLM to reclaim $10 million in unobligated Land and Water 
Conservation Funds (LWCF) in order to finance current year projects. It 
is my understanding that the Department of Interior has been evaluating 
land acquisition projects nationwide which have yet to expend 
previously appropriated dollars in order to determine from which it 
will collect this $10 million, including the roughly $13 million in 
unobligated funds for California projects.
    Rep. Bono and I wrote to you about this issue several weeks ago to 
ask that the approximately $2.9 million in unobligated funding for a 
Riverside County project (Portero Canyon) be reprogrammed for an 
adjacent project (the Cathton Property), which is contiguous with a BLM 
fringe-toed lizard preserve and Joshua Tree National Park. This 
reprogramming had the support of both the original sponsor, Rep. 
Calvert and California BLM Director Mike Pool several months before the 
Omnibus even passed, and consequently, this funding is potentially in 
jeopardy only because no action was taken on their request within the 
Department in these intervening months. Can you tell me what the status 
of this issue is?
    Answer. In the 2005 Interior Appropriation Act, Congress earmarked 
$16.85 million for specific, itemized land purchases and directed that 
$10 million worth of land acquisitions be carried out using BLM's 
unobligated land acquisition balances. We undertook a lengthy review of 
all BLM currently funded projects and worked closely with the House and 
Senate Appropriations Committee to identify the specific balances to be 
redirected. The $2.9 million in unobligated funds for the Potrero Creek 
project has been identified for this purpose. The Potrero Creek project 
was identified because there were no willing sellers.

                         NATIONAL PARKS BUDGET

    Question 11. The National Parks Operations budget currently 
operates at a substantial annual deficit.
    The $50.5 million increase in the President's budget request for 
Park Operations is almost entirely for fixed costs including pay and 
benefit costs to cover current Park Service employees. While I'm 
pleased these fixed costs have now been budgeted for, when they have 
not been in the past, the President's request includes no programmatic 
increases for Operations. These programmatic increases are necessary to 
meet the visitor service and resource projection needs of the parks.
    How is the President's request addressing the programmatic needs 
associated with the estimated annual operational deficit?
    Answer. The Department and the National Park Service do not 
anticipate an operational deficit in 2006 and fully expect that, by 
sustaining the robust programmatic base increases provided in the 2005 
appropriation, visitor services and resource protection needs of parks 
will adequately be addressed and there will not be an operational 
deficit. The Fiscal Year 2006 President's request boosts operational 
funding for the National Park Service bringing total funding for this 
account to a record level of $1.734 billion.
    Within the Operation of the National Park System account, base 
funding for the National Park System is also at an all-time high. In 
2005, $1.047 billion in base funding was appropriated and every park in 
the National Park System received a base increase. The 2006 base 
funding request builds off of the record funding in 2005 and provides 
an additional $21.9 million for a total of $1.069 billion. This would 
provide an increase in base funding for every park in the National Park 
System for a second year in a row and would sustain the enhancements to 
visitor and other services provided in 2005.
    Question 12. The Kings Canyon-Sequoia National Park in California 
has been struggling with the problem of illegal marijuana cultivation 
within the park grounds. I understand that other National Parks are 
facing this issue as well. How is the National Park Service working to 
address this problem?
    Answer. A special agent has been assigned to Sequoia-Kings Canyon 
devoted exclusively to combating marijuana cultivation in the park. Two 
seasonal rangers have also been assigned to address this problem. In 
addition, almost all law enforcement rangers in the park have received 
tactical military training, including detailed instruction on 
conducting covert operations, reconnaissance/surveillance missions, and 
tactical raids to assist with this problem.
    Sequoia-Kings Canyon NP is partnering with the Drug Enforcement 
Agency (DEA) to eliminate marijuana cultivation in the park, and is 
also collaboratively working with the County Sheriff's Office and the 
Immigration and Customs Enforcement Agency, which has provided 
helicopter support and reconnaissance to the park. The park also 
anticipates that it will receive High Intensity Drug Trafficking Area 
(HIDA) funding from the Office of National Drug Control Policy for 
reimbursement for travel and overtime to combat marijuana cultivation, 
as this area has recently been designated a HIDA for marijuana.
    Across the National Park System park managers are increasing the 
efforts to counteract illegal drug trafficking by enhancing law 
enforcement cooperation and coordination with Federal, State and local 
law enforcement authorities; engaging in proactive patrols; and 
employing the use of surveillance systems. Rangers also participate in 
drug education programs and are active in Drug Abuse Resistance 
Education (DARE) programs in schools across the country.

                    Questions From Senator Cantwell

    Question 1. In order to address recurring drought conditions, 
accommodate agricultural expansions, promote water and fish and 
wildlife conservation, and provide water for over half a million new 
residents in the Yakima River basin, Congress passed legislation in 
1994 authorizing the Yakima River Basin Water Enhancement Program. 
Despite these efforts, the Yakima River Basin suffers acute water 
supply problems in drought years. A dry winter in 2000-2001 and a lack 
of storage capacity led to catastrophic drought in the summer of 2001. 
That year, holders of junior water rights received as little as 40 
percent of their allocations and farmers lost an estimated $250 million 
in crops, which had a $750 million negative impact on the regional 
economy. The drought also put a severe strain on the hydropower system 
and contributed to the western energy crisis. Unfortunately, my State 
seems to be headed towards another abnormally dry year with snow packs 
in the Cascade Mountain Range forecasted at levels far below average. 
For these reasons, the Yakima Basin Water Enhancement Project is a high 
priority for Central Washington. That is why I was very disappointed to 
see that funding for the Yakima Basin Water Enhancement Project was 
reduced.
    Please explain why the Department of Interior chose to reduce 
funding in fiscal year 2006 for this critical program?
    Answer. Although funding has been reduced slightly from the FY 2005 
enacted level, the funding requested in the Fiscal Year 2006 
appropriations request is adequate to continue all aspects of this 
important program. The funds requested will allow funding for two 
irrigation districts to continue studies to determine the feasibility 
of specific measures identified in the districts' water conservation 
plans, as well as funding to two districts for continued implementation 
of conservation measures provided by their respective feasibility 
studies and to monitor the effects on river diversions of those 
specific conservation measures. The funding will also allow for other 
activities to continue on this important project.
    Question 2. The Yakima Basin Storage Study has received $4 million 
in federal funds over the last three fiscal years. These funds matched 
dollar for dollar $4 million in contributions from the State of 
Washington. Again, given the low water forecast for Washington state, 
finding long term solutions to water storage is critical. The federal 
government should engage the residents of the Yakima Basin in its study 
of potential solutions to water storage problems.
    Will you describe the public process you will use to engage Yakima 
Basin residents and also detail which criteria will be considered as 
you assess whether or not to complete all aspects of the Yakima Basin 
Storage Study.
    Answer. Throughout the spring and summer of 2005, Reclamation along 
with the State of Washington will host public involvement meetings to 
explain and answer questions about the Black Rock Alternative report. 
Public meetings will also be conducted throughout the Yakima Basin and 
elsewhere to further engage the public in the Storage Study and seek 
their input into alternative development, refinement, and screening. 
The format of the public involvement sessions will be both facilitated 
(information sharing, question and answer) and open house. We also 
provide opportunities for public involvement via our Internet site, 
where the public can submit questions, suggestions, and subscribe to 
our mailing list. Periodic status updates and fact sheets will be 
disseminated both through the Internet site and via the mail.
    Public involvement will continue for the duration of the study, 
however once we move into the Environmental Impact Statement (EIS) 
phase of the study, the public involvement process will become more 
formal and public scoping meetings (recorded and transcribed) will be 
conducted. General public involvement meetings will also continue 
during the EIS phase of the study.
    Reclamation expects to complete all aspects of the Yakima Basin 
Storage Study; however some alternatives may be dropped from further 
consideration for technical, economic, environmental, or other reasons. 
Consultation with cost-sharing study partners and public acceptability 
of alternatives also may influence which alternatives will be carried 
forward into the next phase of the study. As authorized by Congress, 
Reclamation will compare alternatives based on their capability to 
provide benefits to endangered and threatened fish, irrigated 
agriculture, and municipal water supply. As part of this process, all 
the project alternatives are compared against the criteria established 
by the Economic and Environmental Principles and Guidelines for Water 
and Related Land Resources Implementation Studies.
    Question 3. On February 16, 2005, I joined nine other Senators, 
including a number of members of this Committee, in writing you to 
express our concerns about proposed rulemaking relating to the 
hydrorelicensing process. This proposed policy is set out in a Notice 
of Proposed Rulemaking entitled ``Procedures for Review of Mandatory 
Conditions and Prescriptions in FERC Hydropower Licenses'' published in 
the Federal Register on September 9, 2004. Prominent among our concerns 
is the proposed appeals process. As you know, the Department of the 
Interior has the statutory duty under sections 4(e) and 18 of the 
Federal Power Act to issue mandatory conditions and fishway 
prescriptions to protect fish, wildlife, and Federal and tribal lands, 
impacted by hydroelectric facilities. The regulation would give a 
license applicant the right to appeal a license condition or fishway 
prescription if the applicant is not in agreement with the Department's 
actions. However, the proposed rule grants no such right of appeal to 
Tribes, States, or other interested parties.
    These issues are critical to my state and I would like to know when 
I can expect your response?
    Answer. The Department received numerous comments reflecting 
various perspectives on this issue during the 60-day comment period on 
the proposed rule. Those comments are now being reviewed. The 
Department expects to publish a final rule in late spring.
    Question 4. I want to thank you for supporting our successful 
establishment of the Lewis and Clark National and State Historical 
Park. I was very pleased to see the President's FY 2006 budget request 
included $1.6 million for land acquisition for this effort.
    Can you please detail for me how these funds, if appropriated, 
would be used? How does this funding fit into the total funding needs 
and timeline to complete establishment of this park? Will these areas 
be ready in time for Pacific Northwest celebrations of the Lewis and 
Clark bicentennial in November of 2005?
    Answer. The NPS projects that $3.75 million is needed to complete 
the land acquisition for the Lewis and Clark National Historical Park 
in Oregon and Washington. The President's request of $1.6 million would 
be used to purchase approximately 180 acres from the Cathlamet Timber 
Company, a willing seller. This would complete the new Dismal Nitch 
Unit in Washington. The remaining $2.15 million is the estimate for the 
acquisition of land at other park sites in Oregon and Washington, 
including the new Station Camp Unit in Washington.
    Question 5. I remain concerned about competitive sourcing plans 
within the National Park Service.
    Can you provide me an update on this Administration priority? 
Please detail specifically all jobs that have been considered, or 
future plans, for outsourcing for National Parks within Washington 
state. How much has the Department spent on competitive outsourcing 
studies to date? How do these numbers compare with competitive 
outsourcing in other National Parks?
    Answer. The Department has successfully completed the third full 
year of competitive reviews under the competitive sourcing initiative. 
We believe that competitive sourcing reviews improve the quality, 
efficiency and effectiveness of the services we deliver to the American 
people. We have learned a lot about this initiative since we began in 
March 2002. One of the most significant lessons learned has been the 
importance of adequate planning prior to formal announcement of a 
review. We have completed reviews on approximately 3,000 Full Time 
Equivalent (FTE) under formal studies and currently have approximately 
2,000 FTE undergoing preliminary planning efforts. To date, only one 
permanent Interior employee has been involuntarily separated as a 
result of the competitive sourcing initiative.
    With regard to competitive sourcing for NPS in the state of 
Washington, a total of 4 FTE were converted from government positions 
to contractor positions during 2002 and 2003. These conversions 
occurred prior to the policy established in May 2003 that requires 
agencies to first conduct a competitive sourcing study. In FY 2008, NPS 
plans to begin a preliminary planning effort to determine if 83.5 FTE 
at Mount Rainier National Park should be the subject of a competitive 
sourcing review. In comparison, a competitive sourcing study of 
Southeast Archeological Center in Florida had at a one time cost of 
$129,000 with projected savings over 5 years of $4.2 million. Forty-
three FTE were studied with the government bid prevailing. A 
competitive sourcing study of Natchez Trace Parkway maintenance cost of 
$192,000 with projected savings over 5 years of $1.105 million. 
Seventy-four FTE were studied with the government bid prevailing.
    Question 6. I understand that a number of Habitat Conservation Plan 
(HCP) applications in Washington state have been delayed due lack of 
available Fish and Wildlife Service personnel. This has resulted in 
increased costs for applicants who are forced to hire outside 
consultants to navigate through the complicated application process. In 
addition, current HCPs are not being properly monitored to ensure 
compliance.
    Please explain what you plan to do to ensure that HCPs are 
permitted within an acceptable time frame and to ensure quality 
monitoring of HCPs.
    Answer. The Habitat Conservation Plan (HCP) workload in the state 
of Washington remains large. Statewide, approximately 24 HCPs currently 
are being developed, and 11 HCPs have been approved and are being 
implemented and monitored. Many of these HCPs are complex, involving 
multiple stakeholders, multiple species, and multiple land and water 
uses. Larger scale HCPs (covering hundreds of thousands to millions of 
acres) require extensive staffing and can take several years or longer 
to complete, depending on funding, scope, complexity, and level of 
public interest.
    Staffing levels to support HCP work in the state of Washington have 
been reduced by approximately 2 FTEs since 2001. The Fish and Wildlife 
Service uses workforce planning and prioritization to focus our efforts 
on (1) completion of regional HCPs that provide the greatest 
conservation benefit for our efforts, such as the statewide Forests and 
Fish HCP under preparation by the Washington Department of Natural 
Resources, and (2) implementation and monitoring of completed HCPs.
    In addition, the Fish and Wildlife Service is planning to 
streamline the HCP application process based on ideas generated at a 
November 2004 national streamlining workshop. Streamlining solutions 
under consideration include: (1) eliminating layers of review by 
delegation of permit authority to Field Supervisors for permits having 
minimal effects to the human environment; (2) combining decision 
documents and eliminating duplicative text; (3) providing template or 
standard language for certain documents; (4) providing additional 
training to staff in collaboration, negotiation, and problem solving 
skills; and (5) increasing the use of project management tools that 
clearly define roles, responsibilities, schedules, and processes for 
issue resolution. National and regional teams are working to implement 
streamlining actions.
    The Fish and Wildlife Service also provides Endangered Species Act 
section 6 planning assistance grants to states to develop HCPs. This 
funding can be used by states, or can be passed by states to third 
parties, to hire consultants to prepare documents, conduct outreach, 
and complete biological surveys and inventories. These activities can 
expedite the HCP approval process while facilitating economic 
development and species conservation. Approximately $6.8 million in HCP 
planning assistance grants have been awarded to the State of Washington 
since 2001:

   2004--5 HCPs, $2.3 million
   2003--5 HCPs, $1.7 million
   2002--1 HCP, $1 million
   2001--7 HCPs, $1.8 million

    Nationwide, the Fish and Wildlife Service receives $2 million 
annually for HCP implementation and monitoring, a portion of which is 
allocated to the state of Washington. The Fish and Wildlife Service and 
NOAA-Fisheries currently are joint parties to several large HCPs on 
over 2 million acres in western Washington and expect more HCPs to be 
completed statewide in the coming year. Our field offices in Washington 
currently are able to dedicate 1.5 FTEs statewide to HCP compliance 
monitoring. We coordinate with NOAA-Fisheries, permittees, Tribes, and 
others to monitor HCP compliance and effectiveness, and properly 
implement completed HCPs in the state. For example, the Fish and 
Wildlife Service and NOAA-Fisheries review periodic and annual reports 
prepared by permittees and respond to compliance issues raised by third 
party monitors. In addition, the Fish and Wildlife Service also 
operates under a joint compliance monitoring program with NOAA-
Fisheries for HCPs in the state of Washington. Collectively, we 
selectively monitor a small portion of HCP implementation activities 
each year by conducting site-level assessments. We focus on aspects of 
HCPs not monitored by our partners, targeted at resources and issues 
where there is scientific uncertainty. Results to date indicate a 
strong desire by permittees to excel in performance under their HCPs.
    Question 7. The Department's FY 2006 detailed budget justifications 
were delivered to Congress only intermittently over a period of three 
weeks after the Presidents released his full budget. This contrasts to 
the Department of Energy which was able to deliver its entire budget to 
the Senate, with accompanying electronic versions, in a complete 
package within a few days of the President's budget request.
    What accounts for these unacceptable delays? Should the Senate 
assume that the Department of Interior does not believe Congress needs 
these materials to conduct its Congressional oversight 
responsibilities? Will you commit to improving this issue in future 
years?
    Answer. To answer this question it is important to note the 
distinction between the Department of the Interior's budget and the 
Department of Energy's budget. The Department of the Interior's budget 
is comprised of 16 volumes and 6,001 pages. The budget for the 
Department of Energy is comprised of 7 volumes and 3,910 pages.
    The Department delivered its detailed summary of the 2006 budget on 
January 7, the day the President's budget was released. This document 
was followed by the delivery of the detailed budget justifications, 
most (70%) within the week following the release of the President's 
budget. These budget justifications were delivered on the dates listed 
below:

------------------------------------------------------------------------
           Budget Justification                     Delivery Date
------------------------------------------------------------------------
Bureau of Reclamation.....................  February 7
Central Utah Project Completion Act.......  February 7
Minerals Management Service...............  February 7
Office of Surface Mining..................  February 7
Office of the Special Trustee.............  February 14
U.S. Geological Survey....................  February 14
National Park Service.....................  February 14
Office of Inspector General...............  February 14
Office of Insular Affairs.................  February 16
Fish and Wildlife Service.................  February 18
Bureau of Indian Affairs--Book 1..........  February 18
Bureau of Land Management.................  February 23
Bureau of Indian Affairs--Book 2..........  February 23
Natural Resource Damage Assessment........  February 23
Departmental Management...................  February 28
Office of the Solicitor...................  March 7
------------------------------------------------------------------------

    It is also important to note that the Department has one of the 
most complex budgets, with over 180 separate treasury accounts. This 
compares to the Department of Energy's 50 treasury accounts. The 
Department will continue to try to expedite the delivery of the budget 
justifications.
    Question 8. I was very disappointed to see a 12 percent cut back to 
the Payment in Lieu of Taxes program, a critical program throughout the 
Western United States.
    Does the Department of Interior not agree with Congress that this 
is a vital program for counties with large portions of federal land? 
Please detail specifically what these cuts will mean for each county 
within Washington state.
    Answer. The most recent payments to counties were the 2004 payment, 
in which the counties in Washington received a total of $5.9 million. 
PILT's payment formula requires the Secretary to base annual payments 
on a number of variable factors, including revenues paid to States, 
acreage, and population so it is not possible to predict with accuracy 
what the payment level will be to counties in Washington in 2006.
    Question 9. Secretary Norton, on January 31, 2005 I introduced the 
bipartisan Ice Age Floods National Geologic Trail Designation Act of 
2005. As you may know, this bill would empower the National Park 
Service to create a national geologic interpretive trail from western 
Montana, through Northern Idaho and Eastern Washington, and terminating 
on the Oregon Coast and is based on the recommendation of a February 
2001 the National Park Service special resources study.
    Could you please state for the record that the Department supports 
this bill and will work with Congress to ensure its timely passage?
    Answer. We recognize the importance of interpreting resources 
related to the story of the Ice Age Floods. However, since no hearings 
have been held, the Department has not yet taken a formal position on 
this bill.
    Question 10. Secretary Norton, the Department's budget requests 
assumes that oil drilling and production in Alaska's Arctic National 
Wildlife Refuge would generate $2.4 billion in bonus bid revenues for 
the federal treasury. I realize oil prices have increased recently, but 
I am concerned that this estimates may be unrealistic. The Department 
of Interior has indicated that 400,000 to 600,000 acres within the 
refuge would be leased in a first lease sale. Thus, to generate $4 
billion, companies would have to lease the area at $6,667 to $10,000 an 
acre--even though recent lease bonus payments in northern Alaska 
average $50 an acre and drilling advocates insist the industry will 
only develop a 2000 acre ``footprint'' within the refuge. Please 
explain this discrepancy.
    Answer. Bonus bids received for recent lease sales in Alaska have 
been lower because of lower expectations regarding the potential size 
of resources on the lands being offered. As the U.S. Geological Survey 
notes in its 2002 assessment of the petroleum resources of the National 
Petroleum Reserve-Alaska (NPR-A), most oil accumulations in NPR-A are 
expected to be of moderate size, on the order of 30 to 250 million 
barrels each, but large accumulations like Prudhoe Bay are not expected 
to occur.
    Similarly, the amount of oil as compared to the area of land in 
which it is contained can be a factor. The U.S. Geological Survey's 
2002 assessment for the NPR-A showed the mean of technically 
recoverable oil resources contained in the 24.2 million acre NPR-A 
assessment area to be 10.6 billion barrels, while the mean value of 
technically recoverable, oil resources for the 1.9 million acres of 
ANWR's assessment Area is 7.7 billion barrels of oil.
    Finally, if the $50 an acre figure refers to the information 
contained in the report prepared by Richard Fineberg, it is important 
to note that Mr. Fineberg's information on bonus payments is presented 
in nominal dollars and has not been updated to 2005 dollars.
    Question 11. In addition, the costs of operations for oil 
development in Alaska are the highest in the world.
    How has the Department factored the higher costs associated with 
the construction of air strips, housing, food, waste disposal 
facilities, drilling facilities, pipelines, and pump stations in its 
estimates of how attractive oil drilling and production in this remote 
area will be to oil companies?
    Answer. The model used by the Bureau of Land Management as a part 
of its development of revenue estimates considered the costs of 
operating on the North Slope of Alaska as compared to operations in the 
Lower 48.
    Question 12. Moreover, the recent Arctic Climate Impact Assessment, 
which was commissioned by the Arctic Council, reports that global 
warming will result in a shorter oil drilling season in Alaska. A 
shorter drilling season would affect the amount and costs of oil 
recovery in the Arctic Refuge's coastal plain.
    How has the Department accounted for the likelihood of a shorter 
drilling season in its budget revenue estimate?
    Answer. The Department's analysis was completed prior to the 
issuance of the Arctic Climate Impact Assessment. As such, the 
Department's analysis does not take the assessment findings into 
account.
    Question 13. Finally, you may be aware that British Petroleum and 
ConocoPhillips have announced that they are cutting back their plans to 
explore for oil in Alaska. British Petroleum, for example, recently 
shut down its oil well, which is the closest oil well to the Arctic 
National Wildlife Refuge. British Petroleum has also stated that it 
will not conduct any more ``frontier'' development in Alaska but 
instead will focus on getting more oil from already developed fields in 
Alaska. The company is focusing on new exploration in Venezuela and 
China, where the price of production is much lower. ConocoPhillips 
joined British Petroleum in pulling out of Arctic Power, a lobbying 
group that advocates drilling in the Refuge, and has stated that 
drilling in the Arctic Refuge is no longer a priority for the company. 
ConocoPhillips has stated that it will instead focus investments on 
getting more oil out of Prudhoe Bay and other developed fields and on 
exploring and developing the National Petroleum Reserve-Alaska.
    How do these recent developments impact the Department's estimation 
of revenue generation from drilling in the Arctic National Wildlife 
Refuge?
    Answer. The Department does not believe these actions impact the 
revenue estimate.
    Question 14. Secretary Norton, I was pleased that my legislation to 
authorize a much needed expansion of Mount Rainier National Park was 
signed by the President on October 10, 2004. I am very disappointed, 
however, that the Department's FY 2006 request failed to include any 
funding to continue acquisition of these expansion lands.
    Does the Department not agree with the Mount Rainier General 
Management Plan that this is a priority need? Please detail how much 
funding will be needed to complete this expansion. What is the status 
of the Carbon River Road and how did recent flooding impact visitor 
access to the Northwest portion of the Park?
    Answer. The Department agrees that acquiring the land for Mount 
Rainier National Park that is needed for replacement recreational 
facilities for the area that has been regularly flooded by the Carbon 
River is an important goal. However, budget limitations prevented the 
Department from including in the FY 2006 budget proposal funds for 
every project that we believe is important.
    Land acquisition costs for the approximately 800 acres that were 
authorized for the expansion are estimated at about $6 million. $1 
million was appropriation for FY 2005. In addition to land expansion 
costs, the construction of site development (campground, picnic sites, 
ranger contact station, utilities, roads, and minimal seasonal housing) 
is estimated to cost $5.2 million.
    The Carbon River Road was closed due to flooding on January 17, 
2005. The flooding damaged about half a mile of the six and a half mile 
road. Repairs were made by the Mount Rainier road crew and were 
completed on March 5. The road reopened on March 14.
    Question 15. Secretary Norton, I understand that Bureau of Indian 
Affairs and the Veterans Administration signed a Memorandum of 
Understanding to better coordinate services to Indian veterans.
    Could you please provide me with a description of that MOU and 
update me on the progress towards meeting the stated goals and 
objectives outlined in this document? I would appreciate specific 
examples of progress within Washington state.
    Answer. The Bureau of Indian Affairs does not have a Memorandum of 
Understanding with the Veterans Administration. In a discussion with 
the Indian Health Service within the Department of Health and Human 
Services, we understand that they are working with the Veterans 
Administration to better coordinate services to Indian veterans. You 
may wish to contact the Director of the Indian Health Service, Dr. 
Charles Grimm, at 301-443-1083, for the information.
    Question 16. Secretary Norton, the Upper Columbia United Tribes 
(UCUT) organization was formed in the early 1980's as a voluntary 
consortium of the Coeur d'Alene, Kalispel, Kootenai, and Spokane 
Tribes. In now includes the Colville Tribe. Through UCUT, these Tribes 
build on shared histories and cultural ties and collaboratively address 
challenges in management of natural resources. In the late 1980's, the 
Tribes obtained a small grant and eventually persuaded Congress to 
establish a BIA line item appropriation. Unfortunately, despite a clear 
record of success at managing reservation and aboriginal territory 
wildlife habitats, and the proven ability to leverage multiple funding 
sources for the benefit of numerous tribal and public lands, the 
President has consistently refused to allocate funding for the UCUT 
program in his annual appropriations request.
    Does the BIA not support the efforts of UCUT? Please explain why 
funding is allocated to similar tribal fisheries management programs 
like CRITFC and NWIFC, but not to UCUT. If competing funding priorities 
were not an issue, what is the ideal amount of funding BIA would 
request for UCUT efforts?
    Answer. The BIA supports all efforts that contribute to the goal of 
improving the quality of life and economic vitality in Indian 
communities. We agree that UCUT provides high quality services to its 
member tribes. However, BIA funding for CRITFC and NWIFC stems from two 
landmark court cases within the tribes' respective treaty area. See 
United States v. Washington, 384 F. Supp. 312 (W.D.Wash. 1974), 
affirmed sub nom., Washington v. Washington Passenger Vessel 
Association, 443 U.S. 658 (1979), and subsequent decisions; United 
States v. Oregon, 302 F. Supp. 899 (D.Or. 1969), affirmed, 529 F.2d 570 
(9th Cir. 1976), and subsequent decisions. There is no similar 
requirement to provide BIA funding to UCUT. As a result, continued 
funding for UCUT is not being sought in the 2006 Budget in order to 
focus BIA resources on higher priorities to tribes on a nationwide 
basis.
    Question 17. Lake Roosevelt Management funds enable both the 
Colville Tribes and the Spokane Tribe to carry out their governmental 
responsibilities under a five party Cooperative Management Agreement 
executed in 1990 between the two tribes, the Bureau of Reclamation, the 
National Park Service, and the BIA. The Agreement divides Lake 
Roosevelt into management zones and charges the five governmental 
parties to the Agreement with management responsibility for a given 
zone. Congress has appropriated Lake Roosevelt Management funds to the 
BIA every year since 1990, and it has remained $630,000 for the past 
five year. Unfortunately I understand that the President's request does 
include funding for this successful program.
    Is the Department not supportive of this effort? Please explain why 
the President's budget request does not provide funding for this long-
term, successful program.
    Answer. The Department believes that the Colville Tribes' and the 
Spokane Tribe's participation in the efforts associated with the 
Cooperative Management Agreement for Lake Roosevelt is important and 
agree that those efforts have been successful. The funds were 
eliminated in 2006 because we believe it is the general procedure 
across the Administration to discontinue earmarked funding for 
unrequested projects.
    Question 18. Secretary Norton, the Snoqualmie Indian Tribe has 
applied for initial reservation for gaming on a 56-acre parcel of land 
located within the Urban Growth Boundary of the City of Snoqualmie in 
the State of Washington. As you may know, this application is widely 
supported by the local community and the Tribe has taken extraordinary 
steps to accommodate the process and to involve the local community in 
the planning for the eventuality of Casino Snoqualmie and of the 
Tribe's rightful presence in its historic homeland. In February of 
2004, the Bureau of Indian Affairs issued a Finding of No Significant 
Impact (FONSI) that was signed and issued by Regional Director Stan 
Speaks.
    Based on this widespread support, including from the Department, 
why has there been such a frustratingly long delay in publishing the 
Determination to Place Land Into Trust since all of the regulatory 
requirements have been met? Please provide me with an update on this 
situation and a specific timeline for when the Snoqualmie Tribe will be 
able to complete this vital step towards tribal self-sufficiency. If 
there are specific barriers to resolving this issue, please explain 
them and how Congress can best resolve these issues.
    Answer. A Finding of No Significant Impact (FONSI) was signed by 
the Bureau of Indian Affairs Regional Director, Northwest Region. 
However, upon review by the Director of the Office of Indian Gaming, it 
was determined that the Environmental Assessment (EA) for this proposed 
project should have had substantial revisions before a FONSI was 
issued. Therefore, it was resubmitted to the Regional Director on 
November 23, 2004. The Department is waiting for the Snoqualmie Tribe 
to modify the EA as requested before continuing its review of the 
Tribe's application. We realize that the proposed project has the 
support of the local community, but we believe that it is essential 
that a FONSI not be issued for an EA unless we are satisfied that the 
EA will withstand scrutiny.

                     Questions From Senator Corzine

           LAND AND WATER CONSERVATION FUND STATESIDE GRANTS

    Question 1. Madam Secretary, as you are well aware, this year's 
budget eliminates funding for the Land and Water Conservation Fund's 
(LWCF) Stateside grant program.
    According to Interior's budget request, this program has been 
targeted for elimination because it duplicates state and local 
programs, and because it was unable to demonstrate results. Let me make 
it clear--this program is a partnership, it is not redundant and it has 
certainly produced results.
    Many eastern states--New Jersey in particular--do not enjoy the 
benefits of the large inventory of federal lands that the western 
states enjoy. From its beginning, the LWCF has been a vital part of the 
partnership to address this inequity. For the last 44 years, our State 
government has been willing to step up and fill this void, but we would 
not have had the success without the financial and technical assistance 
provided by the stateside program according to the New Jersey 
Department of Environmental Protection.
    Since the program's inception, the partnership between the LWCF and 
the State of New Jersey's Green Acres program has protected more than 
72,500 acres of open space and precious water sources in my State.
    In one instance, New Jersey utilized LWCF funding to preserve a 
sole source aquifer from imminent development. There is a lengthy list 
of other New Jersey natural treasures and crucial resources that have 
benefited from the LWCF-State partnership--among them are the Delaware 
and Raritan Canal, an important water source for Central New Jersey, 
and large tracts of the New Jersey Pinelands, a unique and precious 
ecosystem.
    It is truly a partnership--the State has used the seed money from 
the LWCF to leverage nearly $6 million in additional funding from local 
governments and conservation organizations over the last four years 
alone.
    Madam Secretary, with shrinking federal support for states' 
conservation efforts, how does the Department suggest that states like 
New Jersey--which are densely populated and lose precious open space 
and water resources to sprawl daily--secure funding to protect these 
treasures?
    Answer. As the Administration strives to reduce the Federal 
deficit, focusing on high-priority direct Federal responsibilities is 
imperative. The President's FY 2006 operating budget includes $50.3 
million for National Park units wholly or partly in the state of New 
Jersey. All of these Federal sites in New Jersey rely on Federal 
funding, whereas State and local parks have alternative sources of 
funding through State revenues or bonds.
    The budget includes over $380 million for our cooperative 
conservation programs, including $44.8 million for the traditional and 
conservation Challenge Cost Share programs; $80.0 million for the FWS 
Coastal Program, Migratory Bird Joint Ventures, and Partners for Fish 
and Wildlife; and $50.0 million for Landowner Incentive and Private 
Stewardship grants.

                CONSERVATION OF THE NEW JERSEY HIGHLANDS

    Question 2. On November 30, 2004, President Bush signed the 
Highlands Conservation Act into law. I sponsored the Senate version of 
this legislation, which requires the Secretary of the Interior, in 
consultation with the Secretary of Agriculture, to submit to Congress a 
list of the land conservation partnership projects submitted by the 
Governors of the four Highlands States that are eligible to receive 
financial assistance--New York, New Jersey, Pennsylvania and 
Connecticut.
    What steps has the Department of Interior taken to prepare the 
required list of projects to Congress? Has the Department contacted 
appropriate officials in the Highlands States? Has the Department 
established a procedure for the submission of requests? Have 
representatives of the Department met with officials from all of the 
Highlands states? If no meetings have occurred, why not? Are there any 
remaining questions from the Highlands States that need to be answered?
    Are you aware of reasons why the Highlands was not mentioned in the 
President's FY 06 budget? Does the Department expect to submit FY 06 
requests in a supplement to Congress? If so, when can this be expected? 
If not, why not?
    Answer. The new Act (P.L. 108-421) calls upon the governors of the 
four states, after input from local governments and the public, to 
compile annually the list of land conservation partnership projects for 
submission to the Secretary of the Interior. We have not, to date, 
received any submissions from the states. We would not expect to 
receive submissions from Connecticut or Pennsylvania until after the 
U.S. Forest Service completes the updated study to identify eligible 
lands of high conservation value as required by the Act.
    The Department is in the process of contacting and meeting with 
representatives of the states. For example, on February 4, 2005, 
Congresswoman Sue Kelly hosted a forum in Highland Falls, NY to discuss 
implementation of the Highlands Conservation Act. National Park Service 
and U.S. Forest Service staff participated in the meeting. We are also 
developing efficient procedures for administering the land conservation 
partnership projects in a manner that does not depart from previous 
state experience with applications for the Land and Water Conservation 
Fund. While we have not yet had the opportunity to meet with all of the 
states, we will be doing so in the near future. We believe the meetings 
will be most productive when we are able to discuss the procedures that 
will be employed.
    We are not aware of any remaining questions from the states, but 
are prepared to respond to any that may be asked as the implementation 
of the Act unfolds.

                           OFFSHORE DRILLING

    Madam Secretary, as you are aware, I am an active opponent of 
drilling off the mid-Atlantic coast. A few years ago, we corresponded 
regarding the Minerals Management Service's request for proposals (RFP) 
to conduct a study of the impact of drilling off the coast of New 
Jersey, and elsewhere along the Atlantic seaboard. I was pleased with 
our conversation, and glad to see that our discussions resulted in 
Interior's rescission of the RFP.
    As you are well aware, Congress has ritually debated this matter in 
the context of an inventory of oil and gas reserves on the Outer 
Continental Shelf (OCS). Today, drilling comes before this committee in 
the form of the Administration's proposal to allow drilling inside the 
Arctic National Wildlife Refuge.
    Madam Secretary, what worries me is that over the past year it has 
been reported by Roll Call that several policymakers believe that the 
importance of opening up the Arctic Refuge to drilling lies in the 
precedent that it will set about drilling in sensitive areas, such off 
the New Jersey shore. Other policymakers argue that we should open up 
the Arctic Refuge to increase domestic oil supply.
    Yet, despite these varying arguments, proponents of drilling in the 
Refuge are now using a parliamentary process designed to protect in 
order to force open the Arctic Refuge to drilling.
    By doing so, is the Department arguing that we must open up the 
Arctic Refuge to drilling simply for the revenue? If that is not the 
case--and I assume it is not--why is the budget process being used in 
order to legislate on this matter?
    Answer. The Budget estimates that revenues from the first lease 
sale in the 1002 Area of the Arctic National Wildlife Refuge will be 
approximately $2.4 billion, with half of that expected to go to the 
State of Alaska. CBO estimates this total to be $4 billion. Either way, 
this is a significant amount of revenue. The purpose of the budget 
reconciliation process is to allow Congress to enact legislation to 
support the budget in an expeditious and coordinated manner. Given that 
the President's budget assumes these revenues, it is reasonable to 
include them in the budget resolution.
    Question 4. Furthermore, what kind of precedent do you believe 
drilling in the Arctic Refuge sets when it comes to oil and gas 
exploration in other environmentally or economically sensitive areas?
    Answer. Drilling in the 1002 Area of ANWR is a unique situation. In 
1980, Congress, in section 1002 of the Alaska National Interest Land 
Conservation Act set aside the Coastal Plain of ANWR for study for its 
potential for oil and gas development. The 1002 Area is not designated 
as wilderness. In addition, the people of the State of Alaska strongly 
favor development of the area. Finally, the legislative provisions 
under consideration for authorizing an oil and gas program are among 
the most environmentally protective ever considered by the Congress.

                     Questions From Senator Salazar

                                  PILT

    Question 1. With so much of Colorado's land owned by the Federal 
Government, the Payment in Lieu of Taxes (PILT) Program is important to 
our local communities. As I traveled the state last week, I heard time 
and time again how important PILT funds are and how concerned people 
are over their reduction in the 2006 budget. Our association of 
Colorado counties (Colorado Counties Incorporated) has written me about 
the important role PILT plays in our rural and mountain counties. I am 
amazed that the Administration is cutting these funds by 12% to $200 
million when there is strong bipartisan support for funding this 
program at a minimum of $255 million. Would you please explain the 
reasons for these cuts?
    Answer. The 2006 budget for the Department makes difficult choices 
as part of the President's efforts to reduce the budget deficit by half 
over five years. The budget includes funding to compensate counties for 
lost revenue, providing a total of $200 million for the Payment In Lieu 
of Taxes program. Although a reduction from the funding level 
appropriated by Congress, the 2006 budget is 76 percent above the 
funding level ten years ago. By comparison the Department's 
discretionary budget is 52 percent above the 1996 funding level.

                                  LWCF

    Question 2. Secretary, as you know, in 1992 Colorado voters 
established Great Outdoors Colorado (GOCO). GOCO permanently provides 
Colorado's matching funds for LWCF stateside grants. From 1965-2004, 
LWCF funded 1,000 projects in Colorado in 59 of 64 counties for a total 
of $56 million. These projects have included preserving open space, 
wildlife habitat, and in establishing the Great Sand Dunes National 
Park. Many of these types of projects do not have funding streams other 
than the statewide grants, and that stateside grant money is used 
effectively and efficiently. This issue is very important to Colorado 
and our quality of life. Can you explain the decision to cut the 
stateside grant program?
    Answer. As the Administration strives to reduce the Federal 
deficit, focusing on high-priority direct Federal responsibilities is 
imperative. The reduction in State Conservation grants funding will 
allow NPS to focus on park activities that align with agency 
priorities. The President's FY 2006 operating budget includes $39.5 
million for National Park units in the state of Colorado. All of these 
Federal sites in Colorado rely on Federal funding, whereas State and 
local parks have alternative sources of funding through State revenues 
or bonds.
    The Administration is systematically assessing every government 
program using the Program Assessment Rating Tool (PART). A PART review 
in 2003 found that the program could not adequately measure performance 
or demonstrate results.
    Question 3. Would you please identify the programs that the 
Department considers more effective than the LWCF stateside grants?
    Answer. The President's FY 2006 Budget identifies two factors 
underlying a shift in strategies for achieving the goals of the LWCF. 
First, Federal and State managers are balancing the workload and 
funding requirements for operation and maintenance of lands already 
under their management with the effects of adding more lands to their 
land management portfolios. Second, tools other than land acquisition 
continue to demonstrate significant recreation and conservation 
benefits. Specifically, partnerships and cooperative conservation 
leverage funding, help build a Nation of citizen stewards, and improve 
results for the American public by addressing cross-jurisdictional 
issues and needs.

                             BLM/OIL & GAS

    As you are aware, Secretary Norton, Colorado and the BLM is 
experiencing a boom in the number of drilling permits (APDs) applied 
for and the resulting boom in wells actually being drilled on our 
public lands. I am concerned that while the BLM is emphasizing and 
funding the personnel needed to process APDs in a timely fashion, it is 
not funding the needed inspectors to enforce the stipulations and 
conditions under which those APDs are approved. We need to increase, 
the number of inspectors and inspections taking place in our growing 
production areas, and this budget does not appear to provide for that.
    Question 4. The President's budget calls for maintaining funding 
for Oil & Gas Management programs at 2005 levels by increasing user 
fees for processing APDs, what is the outlook for this fee being 
implemented?
    Answer. The BLM expects to publish a proposed cost recovery 
regulation shortly. We will request comments from the public and then 
anticipates publishing a final regulation by fall 2005. The regulation, 
to be implemented in FY 2006, will provide funding to allow the BLM to 
more effectively meet increased customer demand.
    Question 5. The increase in drilling activity in Colorado demands 
an increase in the number of inspectors and inspections in Colorado to 
insure it is done properly. Can you please tell us what the 
Department's priorities are in regards to Oil & Gas Management in terms 
of inspectors and inspections and how those priorities are reflected in 
the BLM budget justification? Will more funds be provided to the BLM in 
the Rocky Mountain West for more inspectors?
    Answer. Inspection and Enforcement (I&E) are integral and key 
components of Departmental management of both onshore and offshore oil 
and gas operations. In fact, I&E activities are identified as a high 
priority in the Department's Strategic Plan. The Department has 
committed considerable resources in recent years to ensure that we have 
an effective I&E program. Over the past four years, the BLM recognized 
the need to strengthen it's I&E program as the number of APDs approved 
and wells drilled increased. The BLM has been successful in 
documenting, through its budget justifications, its need for additional 
inspectors and obtain additional funding. Those funds have been used to 
hire additional inspectors in priority Rocky Mountain locations, 
including in the Piceance Basin of Colorado.
    The FY 2006 President's Budget Request maintains the past level of 
funding for the I&E program for oil and gas, coal, and other minerals. 
The BLM is committed to ensuring that priority inspections are 
completed even if adjustments within the oil and gas program are needed 
to keep pace with industry demand.

                               R.S. 2477

    Question 6a. Secretary Norton, as you know, R.S. 2477 is a 
controversial issue in Colorado.
    Can you update me and my fellow committee members on any upcoming 
plans to implement the disclaimer rule?
    Answer. Sections 315 and 316 of the Federal Land Policy and 
Management Act of 1976 (FLPMA) authorizes the BLM to issue recordable 
disclaimers of interest in land, to remove errors and inconsistencies 
in land records, and help remove clouds on the titles of lands or 
interests in lands that are the subject of disclaimer applications. 
Regulations to implement this authority were issued in September 1984.
    The disclaimer regulations allow a party who is an owner of land, 
or claims an interest in land managed by the Federal government, to 
petition the BLM to issue a determination that the United States does 
not have any property interests in conflict with the claimed lands or 
interests in lands, or that the Federal government's purported interest 
in the land managed by the Federal government has terminated by 
operation of law or is otherwise invalid. For example, a party may 
request a disclaimer to clear up uncertainty as to whether the United 
States retained a mineral interest before transferring a certain parcel 
of land to a private party. The disclaimer regulations are content-
neutral in that they do not specifically address R.S. 2477 right-of-way 
disputes, boundary disputes, or any other type of dispute over Federal 
ownership interests.
    On January 6, 2003, the BLM issued final regulations which amended 
the 1984 regulations. The amended regulations broaden the class of 
applicants who can use the regulations, by allowing any party who has 
any interest in a parcel of land, not only record owners of land as 
under the 1984 regulations, to petition the BLM for a disclaimer. The 
amended regulations also eliminate the application deadline as it 
applies to States, in light of changes in the Quiet Title Act (which 
had been amended by Congress after the BLM issued its 1984 
regulations). The amended regulations allow non-BLM Federal land 
managers to object to the issuance of a disclaimer by BLM, and also 
define the term ``State.''
    Question 6b. Secretary Norton, would you support legislation 
concerning R.S. 2477, potentially setting a deadline for states and 
counties to assert R.S. 2477 highway claims?
    Answer. In the Memorandum of Understanding Between the State of 
Utah and the Department of the Interior on State and County Road 
Acknowledgment (MOU) of April 9, 2003, we set up a process for 
resolving R.S. 2477 claims in Utah. The MOU set out several key 
principles, for example, that the State would apply for a disclaimer of 
interest only for roads that were and continue to be public and capable 
of accommodating automobiles or trucks with four wheels; and that 
neither the State nor any Utah counties would seek a disclaimer for any 
roads that lie within a unit of the National Park System or a unit of 
the National Wildlife Refuge System, or within Congressionally-
designated Wilderness Areas or Wilderness Study Areas designated on or 
before October 21, 1993, under Section 603 of FLPMA. We believe this is 
a practical, collaborative approach to resolving a long-disputed issue.

                         DEPARTMENT OPERATIONS

    Question 7. Recent media reports have uncovered that the Department 
of Education was paying media figures to promote the No Child Left 
Behind law. Can you assure us that no contracts of a similar nature 
have been provided by DOI? Will you direct your IG to conduct a full 
review in order to prove a full accounting of the contracts, especially 
to so-called ``personal service contracts,'' entered into by your 
office? Will you submit those findings to this committee?
    Answer. GovWorks is a Federal acquisition center within the 
Department of the Interior created pursuant to franchise fund authority 
provided by Congress in the Government Management Reform Act of 1994. 
GovWorks provides a variety of procurement, cooperative agreement, and 
grant agreement services to other Federal agencies on a service-for-fee 
basis.
    While GovWorks has entered into four public relations contracts, it 
has not awarded or administered such contracts using paid media figures 
and does not enter into ``personal service contracts''. We are 
developing procedures for future public relations contracts to include 
language prohibiting the use of paid media figures unless explicitly 
authorized by public law.
    We have worked closely with our Inspector General over the past 
several years to review GovWorks and its practices. As a result of the 
Inspector General's (IG) reviews, we have made numerous changes to how 
GovWorks operates. Our IG is continuing to review GovWorks fee-for-
service activities. We would be happy to share the results of that 
review with you.

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