1. Environmental Protection Agency

President Bush has requested $7.626 billion in discretionary spending and 17,850 Full Time Equivalents (FTEs) for the EPA's FY 2004 budget. The President's request is a $500 million decrease and approximately a 52 FTEs increase over the FY 2003 EPA enacted budget. The Agency's core operating programs for air, water, land and enforcement activities, under the President's budget request, will be $4.25 billion or 55.7% of the President's budget request.

Clean Air

The budget requests $7.7 million (from a zero baseline) related to modeling of mercury controls options. The Committee supports the agency's efforts to increase knowledge of the most effective mercury control options. The Committee believes, however, that this modeling would be improved by, and should be conducted in, consultation with and input from the Department of Energy.

Superfund and Brownfields

The FY 2004 request for Superfund is $1.39 billion, which is an increase of $121 million over the FY 2003 enacted levels. A large reason for the increase is $155 million dedicated to Superfund Remedial Actions. The Committee believes that cleaning up superfund sites is a top priority and strongly supports the President's commitment in the budget to this program.

The Committee strongly supports the Administration's request of $210 million for the brownfields program, an increase of $42.3 million from the FY 2003 enacted level.

State Revolving Loan Funds

The President's budget request includes $850 million for states and Indian tribes for the Clean Water State Revolving Fund (CWSRF), a reduction of $500 million from the FY 2003 enacted level. The Drinking Water State Revolving Fund (DWSRF) is requested at $850 million, the same as enacted in FY 2003. The Committee appreciates the Administration's support for maintaining a federal contribution to the Clean Water fund until 2011 and the Drinking Water fund until 2018. In order to meet the backlog in local clean water and drinking water projects, the Committee supports spending levels for both SRFs at levels not less than those enacted in FY 2003 and would urge the Budget Committee to support increased funding for these important loan funds.

3. Department of Interior

The budget request for FY 2004 appropriations for the Fish and Wildlife Service is $1.3 billion, $4 million over FY 2003. Including the mandatory funding, the budget request is $1.97 billion. In this, the centennial anniversary of the National Wildlife Refuge System, the Committee is pleased with the $25.5 million increase from the FY 2003 enacted level included in the President's budget request. There are a number of important initiatives, such as combating invasive species, being undertaken by the National Wildlife Refuge System, that the Committee

supports. The Committee also supports the $38 million request for the Partners for Fish and Wildlife program. The Committee recognizes the need for additional law enforcement and strongly supports the $1 million increase over FY 2003 for these activities.

5. Department of Homeland Security (DHS)

The President requested $36.2 billion in spending for DHS's FY 2004 budget. The Committee is pleased with the inclusion of the $3.5 billion for first responder preparedness grants. This grant program is consistent with the intent of legislation reported by the Committee in the 107th Congress (S. 2664). Included in the Department's budget is $6 billion for the Emergency Preparedness and Response Directorate. Included in the Directorate is the Federa! Emergency Management Agency (FEMA), which is under the jurisdiction of this Committee. The Committee intends to monitor closely the integration of FEMA into the Department in order to ensure that the core missions of FEMA continue to be priorities for the Administration. The Committee is pleased with the President's commitment to pre-disaster hazard mitigation in the Department's FY 2004 request. This program was authorized by legislation reported by this Committee and signed into law (P.L. 106-390) in the 106th Congress.

We are concerned, however, that the post-disaster Hazard Mitigation Grant Program is eliminated in the DHS FY 2004 request. Often, post-disaster is when significant steps can be made to minimize the damage caused by any future disaster.

The Committee is also pleased with this budget's commitment to infrastructure security. The President's FY 2004 request includes approximately $500 million to assess the nation's critical infrastructure, much of which falls under this Committee's jurisdiction including water facilities, nuclear power plants and chemical facilities.

This budget request also includes $30 million for planning and design of a departmental headquarters. The Committee is concerned that this request is premature. To date, the Administration has maintained that all decisions regarding the number and job functions of the employees to be located at a department headquarters are in the very earliest stages. Without at least some of these answers, an allocation for planning and design of a building seems premature.

Additionally, the Committee believes that the Public Buildings Service (PBS) of the General Services Administration, as the real estate organization for much of the federal government, is best suited to manage the process of providing the necessary facilities for the new department. The Committee disagrees with funding this project from outside PBS's normal Federal Buildings Fund process at any time.

6. U.S. Army Corps of Engineers (Civil Works)

The President's request for the civil works program for the Army Corps of Engineers is $4 billion for FY 2004, a $630 million cut from FY 2003 level of $4.63 billion. Even though

funds have been requested to complete 13 construction projects, the Committee is concerned about the continued backlog in Corps projects, and we believe construction funds should be provided.

The Administration's budget proposes to expand the authorized uses of the Inland Waterways Trust Fund and the Harbor Maintenance Trust Fund to include financing 25 to 50 percent of operation and maintenance costs for inland waterways. Further for coastal harbors, the Harbor Maintenance Trust Fund would be used for the first time to finance the Federal share of project construction costs.

The Committee is opposed to these proposed changes. Both the Inland Waterways Trust Fund and the Harbor Maintenance Trust Fund contain substantial unused balances because there has been a failure to appropriate sufficient amounts from those trust funds to do the project work that Congress already has authorized as necessary to be performed.

The Committee believes that, instead of opening up the Inland Waterways Trust Fund and the Harbor Maintenance Trust Fund to pay for new uses, the surpluses currently in those trust funds should be spent down over a reasonable period of time for the purposes for which the trust funds were originally established.

6. Appalachian Regional Commission (ARC)

Last year, Congress enacted the Appalachian Regional Development Act Amendments of 2002 (P.L. 107-149) to reauthorize the non-highway programs of the ARC. For fiscal year 2004, the ARC is authorized at a level of $88 million. Of that amount, $5 million is specifically authorized for the Telecommunications and Technology Initiative. The Administration's fiscal year 2004 budget request includes $33.145 million for the ARC. This represents a 54 percent reduction from the fiscal year 2003-enacted level of $71.29 million and is 62 percent lower than the amount authorized for fiscal year 2004. The Committee supports full funding for the ARC, half of which is required to be spent in the region's economically distressed counties. Full funding for the ARC will allow the agency to continue its important economic development work to improve the quality of life in Appalachia.

7. General Services Administration (Public Buildings Service)

The Administration's FY 2004 budget proposal for the Public Building Service is $6.58 billion in new obligational authority. Of the new authority requested, $3.388 billion is allocated for rental of space; $1.609 billion is allocated for building operations; $1.013 billion is allocated for repairs and alterations; $170 million is allocated for installment acquisition payments; and $400.6 million is allocated for construction and acquisition of facilities. Unfortunately, the President has included no money for new courthouse construction. This lack of funding will delay even further many necessary projects. The Committee would like to work closely with the Budget Committee on an appropriate level at which to meet the continuing needs of the federal judiciary.

We appreciate this opportunity to comment on the programs within the jurisdiction of the Environment and Public Works Committee. We look forward to working with you as you prepare the FY 2004 budget.

Pursuant to section 301(d) of the Congressional Budget Act of 1974, we are submitting vs and estimates with respect to federal spending and revenues within the jurisdiction of ate Committee on Finance for Fiscal Year 2004.

Lues

Economic Recovery. Currently, our nation's economy needs to be strengthened. The dent and Members of Congress have proposed various economic packages. The Finance mittee may consider legislation designed to strengthen the economy.

Legislative Response to World Trade Organization's Ruling on Foreign Sales poration ("FSC")/Extraterritorial Income ("ETI") Regime. In 2001, the World Trade ganization ruled that the FSC/ETI regime is not permitted under the General Agreement on riffs and Trade ("GATT"). The Administration and Congress have agreed to respond to the ing. The Finance Committee may consider legislation to comply with the ruling.

Incentives for Charitable Giving. The Finance Committee has approved legislation that nhances support for charitable organizations. This legislation contains tax relief measures aimed at individuals and businesses.

Tax Compliance and Simplification. The Finance Committee has reported legislation that addresses abusive tax shelters. Additionally, in light of the Joint Committee on Taxation's