[House Report 109-474]
[From the U.S. Government Publishing Office]
109th Congress Report
HOUSE OF REPRESENTATIVES
2d Session 109-474
======================================================================
ENERGY AND WATER DEVELOPMENT APPROPRIATIONS BILL, 2007
_______
May 19, 2006.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______
Mr. Hobson, from the Committee on Appropriations, submitted the
following
R E P O R T
[To accompany H.R. 5427]
The Committee on Appropriations submits the following
report in explanation of the accompanying bill making
appropriations for energy and water development for the fiscal
year ending September 30, 2007, and for other purposes.
Introduction
The Energy and Water Development Appropriations bill for
fiscal year 2007 totals $30,017,000,000, $545,773,000 above the
President's budget request, and $172,000,000 below the amount
appropriated in fiscal year 2006.
Title I of the bill provides $4,983,803,000 for the
programs of the U.S. Army Corps of Engineers, a decrease of
$345,367,000 below the fiscal year 2006 enacted level (adjusted
for one-time emergency spending) and $250,803,000 over the
budget request. The fiscal year 2007 budget request for the
Corps of Engineers totals $4,733,000,000, which is composed of
entirely of new budget authority.
The fiscal year 2007 budget request for the Corps' Civil
Works program continues the performance-based ranking system
instituted in fiscal year 2006 with two major modifications to
the guidelines. The first allows risks to human life to be
considered along with economics for flood and storm damage
reduction projects. The second changes the prioritization
process for environmental restoration projects. This
performance-based system is intended to focus limited federal
resources on the efficient completion of high economic-value
projects while suspending or terminating work on other projects
found not to be of as high an economic value and on
congressionally mandated projects that have been included in
prior Administration requests. The Committee supports the
concept of focusing limited resources on completing high-value
projects already under construction, and the Committee
recommendation is based in large part on the Administration's
performance-based approach. The Committee bill and report
retains changes to improve the Corps' project management and
execution, particularly in the areas of reprogrammings,
continuing contracts, and five-year budget planning.
Title II provides $940,934,000 for the Department of
Interior and the Bureau of Reclamation, $17,198,000 over the
budget request, and $113,939,000 below the fiscal year 2006
enacted level. The Committee recommends $900,779,000 for the
Bureau of Reclamation, 17,198,000 above the budget request and
$120,087,000 below the fiscal year 2006 enacted level. The
Committee recommends $40,155,000 for the Central Utah Project
including $965,000 for deposit into the Utah Reclamation
Mitigation and Conservation Account, both the same as the
budget request.
Title III provides $24,373,489,000 for the Department of
Energy, an increase of $326,717,000 over fiscal year 2006 and
$298,772,000 over the budget request of $24,074,717,000.
The Energy Supply and Conservation account, which funds
renewable energy, energy efficiency, nuclear energy, non-
defense environment, safety, and health programs, and energy
conservation, is funded at $2,025,527,000, an increase of
$102,166,000 over the request and $212,900,000 above the
current year enacted level. The Committee recommends
$4,131,710,000 for the Office of Science, an increase of
$30,000,000 over the budget request and $535,317,000 over the
current year.
Environmental management activities (i.e., non-defense
environmental cleanup, uranium enrichment decontamination and
decommissioning fund, and defense environmental cleanup) are
funded at $6,441,126,000, a decrease of $595,614,000 below the
fiscal year 2006 enacted level and an increase of $161,088,000
over the budget request.
The Committee recommends a total of $574,500,000 for the
Yucca Mountain repository. This includes $186,420,000 for
Nuclear Waste Disposal, an increase of $30,000,000 over the
request, and $388,080,000 for Defense Nuclear Waste Disposal,
the same as the request. The additional funds are provided for
the Department to begin to move spent nuclear fuel away from
reactor sites to interim storage.
Funding for the National Nuclear Security Administration
(NNSA), which includes nuclear weapons activities, defense
nuclear nonproliferation, naval reactors, and the Office of the
NNSA Administrator, is $9,199,811,000, an increase of
$95,314,000 over fiscal year 2006. The Committee recommendation
includes $1,593,101,000 for Defense Nuclear Nonproliferation, a
decrease of $21,738,000 over the current year and $133,112,000
below the budget request.
Title IV provides $227,774,000 for several Independent
Agencies, a decrease of $40,652,000 from fiscal year 2006 and
$21,000,000 below the budget request of $248,774,000. The
requested funding is provided for the Defense Nuclear
Facilities Safety Board, the Delta Regional Authority, the
Nuclear Regulatory Commission Inspector General, and the
Nuclear Waste Technical Review Board. The request for the
Nuclear Regulatory Commission is increased by $40,000,000, of
which $36,000,000 is offset by license fees and annual charges.
An additional $5,000,000 is provided for the Denali Commission.
The request for the Appalachian Regional Commission is reduced
by $30,000,000, and no funds are provided for the Office of
Inspector General for the Tennessee Valley Authority.
TITLE I
DEPARTMENT OF DEFENSE--CIVIL
Department of the Army
Corps of Engineers--Civil
INTRODUCTION
The United States Army Corps of Engineers traces its
history to 1775, when Congress established the Continental Army
with a provision for a Chief Engineer to oversee the
construction of fortifications for the Battle of Bunker Hill.
An Act of Congress permanently established the Corps in 1802.
The Corps' Civil Works role and mission is grounded in a series
of laws enacted since 1824. A brief legislative history of the
Corps follows.
The General Survey Act of 1824 authorized the
President to have surveys made of routes for roads and canals
of national importance, in a commercial or military point of
view, or necessary for the transportation of public mail. The
President assigned responsibility for the surveys to the Corps
of Engineers. A second act, also signed in 1824, appropriated
$75,000 to improve navigation on the Ohio and Mississippi
rivers by removing sandbags, snags and other obstacles, and was
subsequently amended to include other rivers such as the
Missouri. This work was also given to the Corps of Engineers.
Subsequent Acts of Congress expanded the Corps'
responsibilities for navigation.
The Rivers and Harbors Act of 1909 expanded the
Corps' Civil Works authority by authorizing the consideration
of hydroelectric power generation in the planning, design and
construction of water resource development projects.
The 1917 Flood Control Act established a role for
the Corps in flood damage reduction, which became a national
flood protection role for the Civil Works program in the 1936
Flood Control Act. The Flood Control Act of 1944 gave the Corps
a recreation role that was added as part of flood control at
Corps reservoirs. The 1962 River and Harbor Flood Act expanded
that role by authorizing the Corps to build recreational
facilities as part of all water resource development projects.
The environmental role to protect, restore and
manage the environment emanates from the Rivers and Harbors Act
of 1899 that assigned the Corps the mission to prevent
obstacles in navigable waterways. As concerns over the
environment grew in the late 20th Century, the Clean Water Act
of 1972 broadened this responsibility by giving the Corps the
authority and direction to regulate dredging and activities
that result in fill being placed in the ``waters of the United
States,'' including many wetlands. Additional legislation
passed in the 1986 Water Resources Development Act further
expanded the Corps' environmental role to include enhancing and
restoring natural resources at new and existing projects, and
the Water Resources Development Act of 1990 made environmental
protection one of the Corps' primary water resources
development missions.
The Water Supply Act of 1958 gave the Civil Works
Program the authority to include water storage in new and
existing reservoir projects for municipal and industrial uses.
The Flood Control and Coastal Emergency Act (P.L.
84-99) and the Stafford Disaster and Emergency Assistance Act
gave the Civil Works program direct authority to help the
nation in times of national disaster. P.L. 84-99 directed the
Corps to provide emergency assistance during or following flood
events to protect lives, public facilities and infrastructure.
The Stafford Act authorized the Corps to support the Federal
Emergency Management Agency in carrying out the Federal
Response Plan (now the National Response Plan), which requires
26 federal departments and agencies to provide coordinated
disaster relief and recovery operations.
Title 10 of the U.S. Code, (Navigation and
Navigable Waterways), as further outlined in Title 33, enables
the Civil Works program to provide services to other federal
entities, states, or local governments on a reimbursable basis.
This work includes flood control, the improvement of rivers and
harbors, research, and support to private engineering and
construction firms competing for, or performing, work outside
the United States. The Support for Others program engages the
Corps in reimbursable work that is determined to be in
America's best interests.
MAJOR MISSION AREAS
Currently, the Corps accomplishes the Civil Works mission
through the following major business programs:
Navigation.--The role of the U.S. Army Corps of Engineers
with respect to navigation is to provide safe, reliable, and
efficient waterborne transportation systems, such as channels,
harbors and waterways, for movement of commerce, national
security needs and recreation. The Corps seeks to accomplish
this mission through a combination of capital improvements and
the operation and maintenance of existing projects. Capital
improvement activities include the planning, design, and
construction of new navigation projects. In fiscal year 2004,
the Corps operated and maintained 12,000 miles of commercial
inland navigation channels; owned and/or operated 257
navigation lock chambers at 212 sites; and maintained 926
coastal, Great Lakes and inland harbors.
Flood damage reduction.--Section 1 of the Flood Control Act
of 1936 declared flood control to be a proper Federal activity
since improvements for flood control purposes are in the
interest of the general welfare of the public. The Act
stipulated that for Federal involvement to be justified, ``the
benefits to whomsoever they may accrue (must be) in excess of
the estimated costs, and the lives and social security of
people (must be) otherwise adversely affected.'' In fiscal year
2004, the Corps managed 383 major lakes and reservoirs; and
constructed or controlled 8,500 miles of federal levees. Over
the last ten years, the average annual damages prevented by
Corps projects totaled $21.1 billion.
Ecosystem restoration.--The Corps of Engineers incorporated
ecosystem restoration as a project purpose within the Civil
Works program in response to increasing national emphasis on
environmental restoration and preservation. Historically, Corps
involvement in environmental issues focused on compliance with
National Environmental Protection Act requirements related to
flood protection, navigation, and other project purposes. More
recent efforts have involved pro-active restoration measures to
damaged ecosystems, and the provision of local environmental
infrastructure.
Hurricane and storm damage reduction.--Congress authorized
Federal participation in the cost of restoring and protecting
the shores of the United States, its territories and its
possessions. Under current policy, shore protection projects
are designed to reduce damages caused by wind-generated and
tide-generated waves and currents along the nation's ocean
coasts, Gulf of Mexico, Great Lakes, and estuary shores.
Hurricane protection was added to the erosion control mission
in 1956 when Congress authorized cost-shared Federal
participation in shore protection and restoration of publicly
owned shore areas. Federal assistance for periodic nourishment
was also authorized on the same basis as new construction, for
a period to be specified for each project, when it is
determined that it is the most suitable and economical remedial
measure.
Water supply.--National policy regarding water supply
states that the primary responsibility for water supply rests
with states and local entities. The Corps may participate and
cooperate in developing water supplies in connection with
construction, operation and modification of Federal navigation,
flood damage reduction, or multipurpose projects. Certain
conditions of non-federal participation are required.
Hydroelectric power generation.--Congress, through various
statutes, has directed the Corps to consider the development of
hydroelectric power in conjunction with other water resources
development plans. The Corps owns and operates nearly one-
quarter of the United States' hydropower capacity, with 75
projects in operation.
Recreation.--The Corps is one of the nation's largest
providers of outdoor recreation opportunities, and ranks first
among federal providers of outdoor recreation. Although known
primarily for the opportunities managed at its lake projects,
the Corps also participates in the planning, design and
construction of recreation facilities at a wide variety of
other types of water resource projects. Such facilities might
include hiking and biking trails associated with a stream
channel or levee primarily designed for flood damage reduction.
There is no general authority for Corps participation in a
single purpose recreation project.
CONTINUING AUTHORITIES PROGRAM
The continuing authorities program (CAP) establishes a
process by which the Corps of Engineers can respond to a
variety of water resource problems without the need to obtain
specific congressional authorization for each project. The CAP
program is comprised of individual programs for nine different
types of projects, each with its own program authority and
strict limits on the federal contribution, which are as
follows:
Section 14 Emergency streambank and shoreline
erosion.--Authorized by section 14 of the 1946 Flood
Control Act, work under this authority allows emergency
streambank and shoreline protection for public
facilities, such as roads, bridges, hospitals, schools,
and water/sewage treatment plants, that are in imminent
danger of failing. The cost share is 65% federal and
35% non-federal; and the federal share cannot exceed
$1,000,000 per project.
Section 103 Hurricane and storm damage reduction.--
Authorized by section 103 of the 1962 River and Harbor
Act, work under this authority provides for protection
or restoration of public shorelines by the construction
of revetments, groins, and jetties, and may also
include periodic sand replenishment. The cost share is
65% federal and 35% non-federal; and the federal share
cannot exceed $3,000,000 per project.
Section 107 Small navigation improvements.--
Authorized by section 107 of the 1960 River and Harbor
Act, work under this authority is intended to provide
improvements to navigation including dredging of
channels, widening of turning basins, and construction
of navigation aids. The cost share is 80% federal and
20% non-federal; and the federal share may not exceed
$4,000,000 for each project.
Section 111 Storm damage attributable to federal
navigation works.--Authorized by section 111 of the
1968 River and Harbor Act, work under this authority
provides for the prevention or mitigation of erosion
damages to public or privately owned shores along the
coastline of the United States when these damages are a
result of a federal navigation project. This authority
cannot be used for shore damages caused by riverbank
erosion or vessel-general wave wash. It is not intended
to restore shorelines to historic dimensions, but only
to reduce erosion to the level that would have existed
without the construction of a federal navigation
project. Cost sharing may not be required for this
program. If the federal cost limitation of $2,000,000
per project is exceeded, specific congressional
authorization is required.
Section 204 Beneficial uses of dredged material.--
Authorized by section 204 of the Water Resources
Development Act of 1992, work under this authority
provides for the use of dredged material from new or
existing federal projects to protect, restore, or
create aquatic and ecologically related habitats,
including wetlands. The cost sharing (25% non-federal,
75% federal) would be applied to the incremental cost
above the least cost method of dredged material
disposal consistent with engineering and environmental
criteria.
Section 205 Small flood control projects.--Authorized
by section 205 of the 1948 Flood Control Act, work
under this authority provides for local protection from
flooding by the construction or improvement of flood
control work such as levees, channels, and dams. Non-
structural alternatives are also considered and may
include measures such as installation of flood warning
systems, raising and/or flood proofing of structures,
and relocation of flood prone facilities. The cost
share is 65% federal and 35% non-federal; and the
federal share may not exceed $7,000,000 per project.
Section 206 Aquatic ecosystem restoration.--
Authorized by section 206 of the Water Resources
Development Act of 1996, work under this authority may
carry out aquatic ecosystem restoration projects that
will improve the quality of the environment, are in the
public interest, and are cost-effective. There is no
requirement that a Corps project be involved. The cost
share is 65% federal and 35% non-federal; and the
federal share per project cannot exceed $5,000,000
including studies, plans and specifications, and
construction.
Section 208 Snagging and clearing for flood
control.--Authorized by section 208 of the 1954 Flood
Control Act, work under this authority provides for
local protection from flooding by channel clearing and
excavation, with limited embankment construction by use
of materials from the clearing operation only. The cost
share is 65% federal and 35% non-federal; and the
federal share may not exceed $500,000 for each project.
Section 1135 Project modifications for improvement of
the environment.--Authorized by section 1135 of the
Water Resources Development Act of 1986, work under
this authority provides for modifications in the
structures and operations of water resources projects
constructed by the Corps of Engineers to improve the
quality of the environment. Additionally, the Corps may
undertake restoration projects at locations where a
Corps project has contributed to the degradation. The
primary goal of these projects is ecosystem restoration
with an emphasis on projects benefiting fish and
wildlife. The project must be consistent with the
authorized purposes of the project being modified,
environmentally acceptable, and complete within itself.
A non-federal sponsor is required to provide 25% of the
cost of the project; and the federal share of each
separate project may not exceed $5,000,000, including
studies, plans and specifications, and construction.
FY 2007 Budget Overview
The fiscal year 2007 budget request for the Corps of
Engineers totals $4,733,000,000. The Committee recommends a
total of $4,983,803,000 for the Corps of Engineers, a decrease
of $345,367,000 from fiscal year 2006 enacted levels (adjusted
for one-time emergency spending) and $250,803,000 above the
request. The budget request represents a continuation of the
performance-based system based on the ratio of remaining
benefits-to-remaining costs initially proposed in the fiscal
year 2006 budget request. This performance-based system is
intended to focus limited federal resources on the efficient
completion of high economic-value projects while suspending or
terminating work on other projects found not to be of as high
an economic value and on Congressionally mandated projects that
have been included in prior Administration requests.
The Committee has recommended a rescission of unobligated
balances from construction projects in Louisiana that have been
fully funded through completion, at full federal expense, in
supplemental appropriations. In recognition of the continuing
and very real needs in the region for water resource projects,
the majority of this funding is allocated to projects in the
area not funded under the Administration's budget request.
The budget request also contains $20,000,000 in the
Investigations account to continue the effort, initiated with
$30,000,000 in supplemental appropriations, to create a
national inventory and database of flood and storm damage
reduction projects and for assessing project structural and
operational integrity and their associated risks. The Committee
supports this effort; however, it is concerned with the Corps
proposal for the execution of this activity. Given the
uncertainty associated with the scope and process for this type
of national inventory, the Committee believes the Corps should
reevaluate its approach. The Committee therefore directs the
Corps to execute a pilot project to determine the nature and
extent of the task and further define the necessary parameters
prior to initiating the inventory across the nation. The
Committee further directs the Corps to give priority
consideration to the Sacramento area for the pilot project as
the region has a clear and pressing need for such an inventory
and assessment.
Until such time as the Committee is satisfied the Corps has
a executable plan and direction for this activity, no
additional funds are provided. Further, the Committee notes
there is no explicit authorization for this activity in the
Investigations account.
The Committee has recommended funding for the major
rehabilitations at Markland Locks and Dam and Locks No. 27,
Mississippi River, critical elements of the Ohio and
Mississippi River systems. The Committee does not view the
rehabilitaiton of existing infrastructure as a new construction
start, but rather a necessary investment to ensure adequate
functioning of the Nation's water resource infrastructure.
A summary table illustrating the fiscal year 2006 enacted
appropriation, the fiscal year 2007 budget request and the
Committee recommended levels is shown below:
[Dollars in 000s]
----------------------------------------------------------------------------------------------------------------
Fiscal Year Fiscal Year Committee
Account 2006 Enacted 2007 Request Recommendation
----------------------------------------------------------------------------------------------------------------
Investigations.................................................. $162,360 $94,000 $128,000
Hurricane disasters assistance.................................. 37,300 .............. ..............
Construction.................................................... 2,348,280 1,555,000 1,929,471
Hurricane disasters assistance.................................. 101,417 .............. ..............
Rescission...................................................... .............. .............. -56,046
Mississippi River and tributaries............................... 396,000 278,000 290,607
Hurricane disasters assistance.................................. 153,750 .............. ..............
Operation and maintenance, general.............................. 1,969,110 2,258,000 2,195,471
Hurricane disasters assistance.................................. 327,517 .............. ..............
Regulatory program.............................................. 158,400 173,000 173,000
FUSRAP.......................................................... 138,600 130,000 130,000
Flood control and coastal emergencies........................... .............. 81,000 32,000
Hurricane disasters assistance.................................. 2,277,965 .............. ..............
General expenses................................................ 152,460 164,000 156,300
Hurricane disasters assistance.................................. 1,600 .............. ..............
Office of Assistant Secretary of the Army (Civil Works)......... 3,960 (\1\) 5,000
Total, Corps of Engineers....................................... 8,228,719 4,733,000 4,983,803
Appropriations.................................................. 5,329,170 4,733,000 4,983,803
Emergency Appropriations........................................ 2,899,549 .............. ..............
----------------------------------------------------------------------------------------------------------------
\1\The budget proposes to fund this office from within the General Expenses account. For purposes of comparison,
the budget request includes $6,000,000 for these activities in fiscal year 2007.
FISCAL YEAR 2007 BUDGET PRESENTATION
The Corps of Engineers has proposed several changes to the
manner in which the civil works program is presented and
appropriated. The most significant is the movement of four
categories of projects and programs from the Construction
account into Operation and Maintenance. Additionally, the
budget request aggregates Operation and Maintenance projects
into geographical regions and provides only a top line
appropriation for all projects contained within each of the 21
regions.
The Committee supports a more systematic approach to the
funding of the Operation and Maintenance account and
understands the dynamic nature of the project needs within this
account. The Committee is concerned that this method of
budgeting provides little transparency of the proposed
expenditures by project for Congress and for local and regional
partners of the Corps of Engineers. We note, however, that the
accountability of the Corps under this scenario differs little
from that of past years, when the Corps interpreted its
reprogramming authority to be 50 percent of the entire
Operation and Maintenance account. In that case, while funding
amounts were assigned to each project within the Act, there was
no assurance that this amount of funding would be provided to
the individual projects as identified.
The Committee retains Endangered Species Act (ESA)
compliance and beneficial use of dredged material in the
Operation and Maintenance account with the exception of the
Section 204 program. ESA compliance and dredged material
facilities are a necessary and required cost of the nation's
waterway system and are appropriately considered an operation
and maintenance cost. The Section 204 program is retained in
the Construction account with the remaining Continuing
Authorities.
The Committee recommends that the Operation and Maintenance
account be appropriated based on the geographic regions
contained in the budget request with the following
stipulations:
The Corps will provide, under signature
within 30 days of enactment, to the House and Senate
Committees on Appropriations the planned funding
allocations by project for this account, including a
detailed accounting of activities previously funded
under the Columbia River and the Missouri River Fish
Mitigation projects;
The Corps will maintain this information on
its website;
The Corps will not deviate from this
allocation of funds without a clearly articulated
management plan outlining the circumstances under which
a reprogramming between individual projects is
justified and the process by which these decisions will
be made;
This management plan shall be provided to
the House and Senate Committees on Appropriation for
approval;
As part of the management plan, the Corps is
instructed to develop a communication plan for how this
process will be coordinated with, and justified to, the
impacted Members of Congress, water system users, and
other interested parties.
Further, the Corps is instructed to reevaluate the
management of this account. At a minimum, the Corps shall
consider: the proper level of decentralization versus
centralized command and control; internal controls to ensure
funds are spent appropriately; minimum standards of reporting
for financial management purposes; and the method by which
funds are allocated and shifted among specific projects. The
Corps shall submit a report, with findings and recommendations,
to the House and Senate Committees on Appropriations within 60
days of enactment of this Act.
The proposed movement of projects from the Construction
account into Operation and Maintenance obfuscates that the
Administration's budget request reduces the level of funding
allocated to operation and maintenance of our nation's
waterways by $52 million from the fiscal year 2006 request. The
following table provides a comparison.
----------------------------------------------------------------------------------------------------------------
Fiscal Year
Account Fiscal Year 2006 Fiscal Year Fiscal Year
2006 Request Enacted\1\ 2007 Request 2007 Adjusted
----------------------------------------------------------------------------------------------------------------
Operations and Maintenance...................... $1,979,000 $1,969,000 $2,258,000 $1,927,000
Construction.................................... 1,637,000 2,348,000 1,555,000 1,886,000
----------------------------------------------------------------------------------------------------------------
\1\Reflects 1% rescission.
Last year, the Gulf Coast hurricanes showed in stark relief
examples of the inadequacy and neglect of our nation's water
resource infrastructure. Given the lessons of last year, the
level of Operations and Maintenance funding proposed by the
Administration is inadequate. The Committee has reallocated
funding to bring the account to approximate parity with last
year's funding. The Committee has also provided an additional
$10,000,000 to the Ohio River and tributaries navigation system
to implement the improvements as outlined in the Great Lakes
and Ohio River Division's Five Year Development Perspective.
Though inadequate to address all identified needs, the
additional funding is provided to support the efforts of the
Division and stakeholders in the development of this
perspective. This plan is discussed below in more detail under
the heading Five-Year Development Plans.
Program Management and Execution
Over the past two years, the Committee has embarked on a
concerted effort to improve general budgeting and project
execution by the Corps. This effort was precipitated, in part,
by a progressively tighter fiscal environment, the enormous
backlog of Civil Works projects, and the realization that the
Civil Works program has become an agglomeration of individual
projects of interest to the Congress and the Administration,
with little or no systematic approach to the Nation's water and
coastal infrastructure underlying the selection of which
projects received funding.
The Committee maintains the Civil Works program must be
managed as a program rather than a collection of individual
projects. The Committee supports the Corps mission and believes
the Nation's water resource infrastructure is a critical
element of our transportation system. Nevertheless, it is
essential the Corps takes a more sophisticated, business-like
approach to project execution. The Corps must restore this
Committee's confidence in its ability to execute the
appropriations provided by Congress as well as provide
technical assessments of the Nation's water resource
infrastructure needs. The Gulf Coast hurricanes of 2005 have
resulted in enormous pressures on the Corps; its ability to
execute projects and critically assess its own performance,
both past and present, are now at the forefront of the Nation's
consciousness.
The Committee remains concerned that the Corps cannot
provide the Congress with accurate accounting of its financial
commitments, both in terms of contractual obligations and
promises to repay past reprogrammings. The Committee supports
the creation of a Chief Financial Officer for the Corps of
Engineers and supports additional headquarters personnel to
staff such a position. The level of decentralization versus
command and control should be reevaluated in light of the
Corps' inability to provide timely and accurate accounting of
financial information. In addition, the Corps should examine
revising the reporting requirements in its financial accounting
system to ensure that critical information is collected and
reported upward.
Last year, the Committee directed the Corps to give
immediate attention to several program management issues
including: five-year plans, conservative use of reprogramming
and continuing contracts, performance based budgeting and
Congressional justification materials. The Corps and the
Administration have made progress in each of these areas, but
much work remains. Collectively, the Congress, the
Administration and the Corps of Engineers must work together to
ensure that constrained federal resources are spent
effectively, commitments to local sponsors are honored,
projects are completed in an efficient manner, and taxpayers
receive the greatest return on their investment.
Five-year comprehensive budget planning.--In response to
growing concern that the Civil Works program lacks a clear set
of priorities to guide either development of the annual budget
request or annual appropriations bills, the Committee directed
the Corps over the last two years to prepare and submit a
comprehensive five-year plan for the Civil Works program. Such
a plan, in the view of the Committee, would begin to allay the
concern that the Civil Works program has become nothing more
than an assortment of individual projects lacking a coherent
focus.
The Committee reiterates its strong belief in the value of
developing five-year plans and longer-term strategic visions to
help guide budget requests and Congressional spending
decisions. Such plans force discipline and regional integration
in making budgetary decisions and encourage stability from year
to year. By providing the Congress and the Executive Branch a
view of what lies ahead in the Civil Works program, a
comprehensive five-year plan may alleviate some of the pressure
to fund every project in each fiscal year. The development of a
plan will also require the Corps to make the necessary
tradeoffs to integrate individual projects into a coherent
Civil Works program for future years. In the absence of a
rational strategy, the long-term vitality of the Corps is
placed at risk and scarce federal resources will be squandered
on projects of limited national benefit.
The Committee is pleased with the ASA(CW)'s and OMB's
willingness to pursue a more robust five-year plan for the
Corps of Engineers Civil Works Program. The version of the plan
provided in fiscal year 2006 was an improvement over the last
submission and the Committee looks forward to further
refinements to the plan.
The Committee is, however, disappointed in the decision
made by the ASA(CW) to instruct the Great Lakes and Ohio River
Division to remove the Ohio River and Tributaries Navigation
System Five-Year Development Perspective from the Division's
website because it is not consistent with the Administration's
policy. This plan is the most comprehensive and informative
report that has come to the attention of the Committee. In it,
the Corps attempts to assess the current status and
``acceptable'' level of performance for projects under its
jurisdiction. The Committee rejects the view that this plan
would in any way require the Administration or the Congress to
fund these projects at the level recommended in this plan, nor
does the existence of the plan insinuate that the
Administration or Congress agrees with the assessment. The
report is, however, an attempt from a technical perspective to
assess the current state of the Ohio River's navigation
infrastructure. As such, the Committee applauds the efforts of
the Great Lakes and Ohio River Division and other interested
parties in the development of this ``perspective.''
Misplaced emphasis on expenditures.--The Committee
continues its direction that the Corps adhere to a fiscal
management practice that fully honors congressional direction
and accepts a higher level of carryover funds in order to
achieve greatly increased transparency into project costs and
multiyear funding commitments.
The management changes initiated last year have resulted in
higher levels of carryover as predicted. However, the estimates
of carryover of available funding, after adjusting for Act
language, total 13 percent, of which only 5 percent is
unobligated. In the Committee's view this is an acceptable
level of carryover and significantly less than other agencies
that execute major public infrastructure projects. In a time of
limited discretionary spending, it is the Committee's belief
that the Corps must execute its program in a fiscally
responsible manner. This will require more attention and effort
on the part of the Corps in developing project estimates, but
should result in a lower level of unobligated carryover in the
future as the transition to the new business model is fully
executed through the budgeting process.
As noted in last year's report, prior to fiscal year 2006,
the Corps operated with a formal strategy to expend 99 percent
of annual appropriations. While this strategy had a justifiable
basis and sounds reasonable in theory, the Corps became
inordinately focused on the 99-percent expenditure goal. The
strategy ignored project financial requirements in future years
and congressional project allocations for the current year. The
consequence of this policy, perhaps unintended, is the creation
of significant payback requirements that are not currently
budgeted.
Reprogrammings.--In fiscal year 2006, the Committee
recommended changes to the reprogramming authorities allowed
the Corps of Engineers. For the first year, these reprogramming
requirements were carried in Act language rather than in the
report. This change was based, in large part, on a report by
the Government Accountability Office (GAO) which found that the
Corps had come to rely on reprogramming as its primary
instrument to manage funds. It no longer reprogrammed funds in
cases of unforeseen need or changed circumstances but as a
substitute for an effective and fiscally responsible financial
planning, management and priority-setting system for the Civil
Works program. GAO findings show that funds where moved into
and subsequently, out of, projects on the same day or within a
matter of days.
The Committee recognizes that there are legitimate
instances where reprogramming is necessary and desirable, and
has endeavored to work with the Administration and the Corps to
ensure those instances are addressed expeditiously. The
flexibility to move funds among projects is a necessary tool to
adjust to changing project conditions and needs; the guidelines
imposed by the Committee are simply a method to exercise
Congressional oversight to ensure that the Civil Works program
is being executed consistent with Congressional intent. The
Committee reminds the Administration that once a project is
provided funding in this, or any other Act, and signed by the
President, all projects are of equal merit. The Committee will
not accept differential treatment of projects based on whether
they are contained in the bill or in report language nor on
whether the Administration considers a project to be
``budgetable.''
One of the reasons given to allow the Corps broad
reprogramming authority is that budgets are developed and
submitted to the Congress months prior to the start of the
fiscal year. The Committee is well aware that project
circumstances may change in that timeframe, and has therefore
offered the Corps and the Administration the opportunity to
provide the Congress updated estimates for this subset of
projects prior to the House and Senate conferencing their
respective bills. This conference occurs only months prior to
the start of the fiscal year and such changes can be
accommodated as necessary. The Committee therefore no longer
has patience for this argument. While there will likely still
be changed circumstances to individual project needs during the
year, these may be addressed through the reprogramming
authorities and processes.
The change to a new business model within the Corps has
resulted in a transition period; however, the accountability
and reliability of the program will improve as Members of
Congress, local sponsors, and contractors can be certain that
appropriated funds will be expended on those projects for which
they were intended. It is this Committee's intent that past
commitments to Members and local sponsors be met. To this end,
the Committee has provided funding in the Construction and
Investigations accounts to address a subset of the projects
that will require payback in fiscal year 2007.
Past practices have resulted in a cumulative financial
obligation that is significant, a undefined, and in large part,
unbudgeted. In an era of limited Federal budgets and increasing
needs for our Nation's infrastructure, this practice cannot be
maintained. The Committee remains concerned that neither
Congress nor the Corps knows the full extent of the payback
required. Accordingly, and for the second year, the Corps is
directed to submit a report to the House and Senate Committees
on Appropriations within 30 days of enactment of this Act
summarizing, by project, the total cumulative amount of
repayments owed to the donor projects. As a result of this
Committee's extreme frustration in the Corps inability to
provide such critical information, the Act contains general
provisions which transfer $10,000,000 from the Expense account
and $1,000,000 from the Office of the Assistant Secretary for
Civil Works into the Operations and Maintenance account to meet
unbudgeted critical needs of the nation's water resource
infrastructure in the event the report is not received in the
timeframe required.
To ensure that the expenditure of funds in fiscal year 2007
is consistent with congressional direction, to minimize the
movement of funds, and to improve overall budget execution, the
bill incorporates by reference the projects identified in the
report accompanying this Act into statute. In addition, the
bill again includes a section prohibiting the obligation or
expenditure through a reprogramming of funds that:
(1) creates or initiates a new program, project or
activity;
(2) eliminates a program, project or activity;
(3) increases funds or personnel for any program,
project or activity for which funds have been denied or
restricted by this Act;
(4) reduces funds that are directed to be used for a
specific activity by this Act;
(5) increases funds for any existing program, project
or activity by more than $2,000,000 or 25 percent,
whichever is less; or
(6) reduces funds for any program, project or
activity by more than $2,000,000 or 25 percent,
whichever is less.
This provision shall not apply to the initiation of new
projects or activities under the continuing authorities
programs. However, new projects under the continuing
authorities program not identified in the conference agreement
to accompany this Act must be submitted to the House and Senate
Committees on Appropriations for approval. Reprogramming
approvals shall also be required for changes in a project's
scope and cost relative to what was submitted in the
justification sheets. These guidelines vitiate all other
reprogramming guidance provided in previous appropriations Acts
or their accompanying reports and shall be applied to all
accounts within the Corps of Engineers.
Not later than 60 days after the date of enactment of this
Act, the Corps of Engineers shall submit a report to the
Committees on Appropriations of the Senate and the House of
Representatives to establish the baseline for application of
reprogramming and transfer authorities for the current fiscal
year. The report shall include:
(1) a table for each appropriation with a separate
column to display the President's budget request,
adjustments made by Congress, adjustments due to
enacted rescissions, if appropriate, and the fiscal
year enacted level;
(2) a delineation in the table for each appropriation
both by object class and program, project and activity
as detailed in the budget appendix for the respective
appropriations; and
(3) an identification of items of special
congressional interest.
The Corps of Engineers shall not reprogram any funds received
as a non-Federal share for project costs.
Continuing contracts.--When entering into such contracts,
the Corps obligates the federal government to pay certain costs
from future appropriations. Contractors may perform more work
than is budgeted in any fiscal year, but when available
appropriations for the current fiscal year are exhausted, work
continues at the contractors' risk, with an expectation that
payment will be made from subsequent appropriations. Simple
interest may be added to any delayed payment that the
contracting officer determines was actually earned under the
terms of the contract and would have been made but for
exhaustion of funds. The Rivers and Harbors Appropriations Act
of 1890 first authorized the Corps to award continuation
contracts. Later, section 10 of the Rivers and Harbor Act of
1922 provided general authority to award continuing contracts
for any public work on canals, rivers, and harbors adopted by
Congress. These specific authorizations for continuing
contracts save the Corps from being in violation of the Anti-
Deficiency Act.
Last year, the Congress limited the Corps' ability to use
continuing contracts. This action was the result of several
years of increasing concern with the Corps' liberal use of and
inadequate budgeting for continuing contracts. The Committee
recognizes the Corps has taken significant steps to curb the
inappropriate use of this contracting mechanism, but believes
additional action is necessary to define the scope of out-year
obligations on these contracts.
Last year, the Committee requested that the Government
Accountability Office (GAO) review the Corps' use of continuing
contracts during fiscal years 2003 to 2005. The results of this
review, though preliminary, only confirm the Committee's belief
that the Corps had turned to this unique contracting authority
as the rule and not the exception. Combined with the drive to
expend virtually all of its annual appropriations, abuse of the
continuing contract authority drove the massive merry-go-round
of reprogramming.
For the period of fiscal years 2003 to 2005, GAO found that
the Corps had no real basis or rationale for the use of the
continuing contract clause in most of the contracts reviewed.
In the sample of continuing contracts reviewed, GAO found that
over 50 percent were less than 12 months in duration and valued
at less than $5 million. These findings only validate the
Committee's concern over excessive use of the clause. In one
case, the Corps even issued a continuing contract for
janitorial services. The most disturbing finding of the GAO
review was that the Corps was unable to identify the total
number of contracts awarded that included the continuing
contract clause. This was due to the fact that the Corps did
not track information on continuing contracts, despite the fact
that the Corps' financial management database had a field that
identified contracts with a continuing contract clause.
The Committee remains concerned that the Corps does not
have an accurate accounting of existing continuing contracts.
Therefore, the Corps is directed to hire a national accounting
firm, utilizing General Expense funding, to audit its
contracting records and provide a full accounting of all
existing continuing contracts, and their corresponding
obligations by fiscal year for the planned duration of the
contract. The findings of this audit should be provided to the
Committees on Appropriations by August 1, 2007.
The Committee reminds the Corps that Congress determines
how much funding is to be available for a particular project in
any given fiscal year, and the Corps must ensure that it
manages its program within the funds provided each year. The
Corps abrogates its management responsibilities and improperly
intrudes upon congressional prerogatives in determining annual
appropriation levels when the Corps reserves insufficient funds
to cover the work performed each fiscal year through the
duration of the contract or when, through reprogramming, it
makes available funds in excess of the amounts reserved in such
contracts in any fiscal year because of unbudgeted accelerated
contractor earnings. The Federal government, not the
contractor, must determine how much will be spent on each
project each year.
The bill includes a provision that prohibits the use of
funds provided in title I of this Act to execute any new
continuing contract (or modifications to any existing
continuing contract) that commits an amount for a project in
excess of the amount appropriated for such project in this Act.
In addition, the Committee continues its direction from last
year that the Corps shall:
(1) discontinue the practice of reserving
insufficient funds to cover the work to be performed
each fiscal year through the duration of the contract;
(2) discontinue the practice of reprogramming funds
to satisfy contractor earnings in excess of the amounts
reserved in the contract for the current fiscal year;
(3) discontinue the practice of issuing continuing
contracts for small-scale projects that are limited in
scope, schedule, construction and funding requirements;
(4) issue continuing contracts only when it is
determined that such a contract is the preferred means,
demonstrated by an alternative analysis, and only after
the approval of the House and Senate Committees on
Appropriations;
(5) budget fully the out-year costs of all existing
and new continuing contracts (or, if the budget year
policy is to eliminate the authority to execute such
contracts, fund fully the termination costs of such
contracts in the budget year);
(6) provide to the House and Senate Committees on
Appropriations within 30 days of enactment of this Act
a report identifying all existing continuing contracts
and the amount, by project, of the out-year funding
requirements of those contracts; and
(7) provide a quarterly update to the report
identified above in item (6).
In addition, any new continuing contract shall be submitted by
the Assistant Secretary of the Army (Civil Works) for approval
to the House and Senate Committees on Appropriations,
consistent with the reprogramming guidelines contained in this
Act.
Congressional justification materials.--The congressional
justifications submitted by the Corps in support of the annual
budget request, while vastly improved from last year, continue
to be inadequate for an appropriation request of nearly $5
billion. For the first year, the Administration presents the
budget estimate by mission area and presents information on
projects funded in the current year but for which no funds are
requested. The Committee continues to believe the materials
must include a clearly articulated overview and discussion of
policy proposals included in the annual budget request beyond
that which is included in the annual summary of the President's
budget request. The Committees on Appropriation should not be
required to consult multiple documents to gain a semi-complete
accounting of the Corps' budget request. The Committee
reiterates this information shall include, but not be limited
to, an analysis of appropriations language provisions and
changes; comparative amounts available for obligation;
comparative amounts showing obligations by object class;
summary of changes from the enacted level; a delineation of
responses to significant items included in the reports
accompanying annual appropriations Acts; appropriations and
authorizing histories; explanations of how individual projects
fit in the context of larger regional objectives, and narrative
and tabular summaries of program requests.
The Committee recognizes that continued improvements
required in the budget justifications will need to be developed
over time; however, the Committee expects major changes in the
fiscal year 2008 budget submission and pledges to work with the
Corps to develop implementing instructions to its program
offices.
Performance-based budget.--Last year, the OMB proposed
seven performance guidelines for funding Corps construction
projects in order to generate greater benefits. The current
budget request supports a major change to the guidelines
proposed in 2006 to ensure funding for flood and storm damage
reduction projects that address a significant, ongoing risk to
human safety. The Committee applauds the inclusion of this
consideration and appreciates the continued efforts of the
Administration in refining the rationale for focusing limited
federal resources on finishing the most important projects in a
timely manner.
Based on concerns that the ranking system, the ratio of
remaining benefits-to-remaining costs, has several inherent
biases, in fiscal year 2006 the Congress directed the Corps to
contract with the National Academy of Public Administration to
study and recommend factors which should be used in determining
the allocation of limited resources for the construction of
water resource projects. In determining the projects identified
in this report, the Committee used the Administration's ranking
system as a guide but not as a final determinative in the
allocation of funds and awaits the results of the above study
to further consider project allocations.
Savings and slippage.--In fiscal year 2006, the Committee
discontinued the practice of assuming an estimate for savings
and slippage within the Corps of Engineers civil works program.
As noted in last year's report, the practice had devolved into
a method to reduce projects in order to fund more projects than
an appropriation would support. This practice led to confusion,
and in some cases, allocations to projects in excess of
appropriated funding through reprogramming. As savings and
slippage occurs on any project in the Corps civil works
construction and investigations programs and the investigations
and construction elements of the Flood Control, Mississippi
River and Tributaries account in fiscal year 2007, resources
excess to a project's total needs shall remain available for
two years after the date of enactment of the Act making
appropriations for that particular project, after which time
unobligated balances may be transferred to other ongoing
projects, consistent with the reprogramming guidelines
contained in this Act. The Corps shall submit to the House and
Senate Committees on Appropriations an annual report detailing
project execution relative to stated capability and enacted
appropriations.
Continuing Authorities.--The Fiscal Year 2006 Act contained
direction for the Corps to provide the Committees on
Appropriations a management plan and delineation of all ongoing
projects and out-year funding requirements; this plan has yet
to be received though the Act directed it be submitted by
January 7, 2006. The Committee is aware that much ado has been
made with regard to Congress's inclination toward directing
funding to specific projects. The Committee has repeatedly
requested detailed information on this program. In response,
the Corps has not been able to provide information useful in
decision-making nor has it demonstrated a thorough knowledge
and accounting of the existing commitments or out-year program
requirements.
Until such time as the Corps can establish that it has a
firm grasp of the program, Congress has no reason to give the
Corps discretion. In light of the quality of information
provided to date, the Committee believes it has given more than
sufficient latitude by providing programmatic funding in excess
of Congressionally directed projects.
In an effort to reduce the backlog of projects, the fiscal
year 2006 Act placed a moratorium on the execution of new cost
sharing agreements. The Committee continues this direction with
the following exception: where sufficient funds are
congressionally directed or otherwise available to complete the
current phase, the Corps may execute the cost sharing
agreement. This exception does not obviate the need for the
Corps to meet all Congressionally directed project requirements
prior to executing any new agreements.
Funding provided for Continuing Authorities projects in
this Act shall not be available to initiate construction unless
construction can be completed within the funds provided.
Unobligated funds carried forward from previous years may not
be used to initiate any new projects unless submitted to the
House and Senate Committees on Appropriations and approved by
them.
Investigations
Appropriation, 2006................................... \1\$162,360,000
Budget estimate, 2007................................. 94,000,000
Recommended, 2006..................................... 128,000,000
Comparison:
Appropriation, 2006............................... -34,360,000
Budget estimate, 2007............................. +34,000,000
\1\Excludes emergency appropriations of $37,300,000.
This appropriation funds studies to determine the need, the
engineering and economic feasibility, and the environmental and
social suitability of solutions to water and related land
resource problems; and funds preconstruction engineering and
design, data collection, interagency coordination, and
research.
The Committee recommends an appropriation of $128,000,000,
a decrease of $34,360,000 from the fiscal year 2006 enacted
level, and $34,000,000 over the budget estimate. The budget
request and the approved Committee allowance are shown on the
following table: