Management-administered lands. We have been actively cooperating with all groups since early in the initial phases of the drought in order to make available every opportunity for flexibility in the use of the public ranges by qualified operators. Unfortunately, because of the critical shortage of water and forage, it has been necessary for many livestock operators to remove their animals from the public grazing lands. We are pleased to report that, in almost every instance, the rancher-cooperators have been understanding and have cooperated in every way possible. The operators realize the seriousness of long-term damage to the resources on the public lands if proper and wise management is not

exercised today.

Supplemental Funds

The House Interior Appropriations Subcommittee made $582,200 available for special drought assistance to the BLM in Oregon and Washington for the current fiscal year 1977. These moneys are being used to carry out additional drought relief measures on the public domain lands. A breakdown as to the proposed use of the emergency funds is as follows:

1. $50,000 to assess forage conditions and supervise range use to permit maximum livestock numbers consistent with available forage resources and good mangement practices.

2. $345,000 to improve and maintain existing water supply systems to make more water available for livestock and wildlife.

3. $100,000 to provide for gathering and placement of wild horses under the Bureau's ADOPT-A-HORSE program. Wild horses will be removed from areas where they exceed the capacity of the range and from areas where horses are under drought stress from lack of water. Approximately 95 wild horses have been gathered under these funds.

4. $54,900 to provide for surveys of forested areas to permit early detection of insect attacks on drought-stressed trees.

5. $32,300 to provide for additional fire protection capability.

In addition to the emergency funds that were made available, changes and shifts in regular programs and schedules have been made to respond to the drought crisis throughout the program.

For example, our districts have developed 31 springs and performed maintenance on 11 miles of pipeline using emergency funds. These funds enabled the maintenance of 102 springs in addition to our regular operating funds on 30 spring maintenance projects.

We have developed and maintained 11 wells using both emergency and regular funding. A total of 285 water tanks from regular funds and inventory are in use for the emergency where needed by operators. In addition, we

placed 30 water tanks obtained from emergency funds.

Reservoirs required maintenance and improvement in this drought situation.

Twenty-five reservoirs have been maintained with emergency funds and

three with regular funds.

In early May, cooperating with the Oregon State Department of Agriculture through assistance of the office of Senator Packwood, we were able to acquire 70 surplus military jet engine containers for use as stockwater tanks. Through a cooperative agreement with the State Department of Agriculture these tanks were made available for loan to livestock operators in eastern Oregon.

Recently, through cooperative efforts with the Oregon Governor's office, we have been able to acquire an additional 40 jet engine containers which, when delivered to eastern Oregon, will be made available for emergency water situations. Cost of delivery of the last 40 tanks from Arizona to Oregon will be approximately $7,500.

The Squaw Butte Experimental Station in Burns reported that, as of July 1, the average forage production in eastern Oregon was 49% of a median year. The primary problem confronting our resource management professionals and the livestock operators today is the realization that if the present drought continues into 1978, soil moisture needed for vegetative growth will be most critical and watershed conditions will undoubtedly suffer. Forage utilization on drought-striken range lands for two consecutive years can have serious

repercussions on forage and watershed conditions in subsequent years because of vigor of native forage plants in some areas throughout the State. Of even more serious nature is the continuing grazing by an increasing population of wild horses. Horse numbers must be reduced to optimum levels as well as making sure that domestic livestock grazing levels are consistent with the forage available and other uses.

Prior to the beginning of the current grazing season, we realized the situation would be serious. However, detailed information concerning forage conditions for specific areas was not available. We, therefore, adopted the statewide policy that we would issue licenses to grazing operators for their full normal use and then assess forage conditions as the season progresses. Adjustments in grazing use would then be made as determined necessary and grazing fees would be refunded for the amount of licensed grazing use not be made. We are now finding that forage conditions are depleted in some areas and livestock must be removed in accordance with the previously issued grazing license drought stipulations.

The emergency funds made available, and the cooperation and public participation during the past few months have done much to relieve the overall impact of the drought on the operation of the livestock users. We are certainly not over the hump yet with respect to the overall and long-term impacts of the drought. I certainly appreciate this opportunity to visit with you and am sorry that I cannot provide a more optimistic picture as to what may lie ahead with respect to the use and management of the public's range lands in southeastern Oregon.

Senator PACKWOOD. I have switched the order of the appearance and we will take the Small Business Administration next, and when they are done we will go to the Federal Disaster Assistance Administration.

Rick Hernandez and Don Chapman.

STATEMENT OF RICHARD HERNANDEZ, ASSOCIATE ADMINISTRATOR FOR OPERATIONS, U.S. SMALL BUSINESS ADMINISTRATION, ACCOMPANIED BY J. DON CHAPMAN, DISTRICT DIRECTOR, PORTLAND DISTRICT OFFICE, SBA

Mr. HERNANDEZ. I am here as Associate Administrator for Operations at the Small Business Administration, and one of my major responsibilities as Associate Administrator of Operations is the oversight of the disaster operations at SBA. I have brought with me today Don Chapman, District Director of the Portland District Office who is a little closer to the problem. Before I get into any testimony, which I am going to paraphrase, if you don't mind, I am going to read "A Declaration of Disaster Loan Area," 1358, Oregon.

Declaration of disaster loan area: All counties in the State of Oregon constitute a disaster area as a result of drought caused by severe crop losses during the 1976 crop year and continuing into the 1977

crop year.

Eligible persons, firms and organizations may file applications for loans for physical damage until the close of business on October 14, 1977, and for economic injury until the close of business on May 12, 1978.

Senator PACKWOOD. That is effective today?

Mr. HERNANDEZ. Today.

Senator PACKWOOD. The people who process loan applications through the SBA today now will be effected by this announcement you just made?

Mr. HERNANDEZ. Yes. In any case they may apply here. We are going to set up an office and do a circuit ride or whatever is needed. Don Chapman is going to supervise that operation for the next hour or as long as it takes to get the job done.

Senator PACKWOOD. Thank you very much. I am glad to hear that. Mr. HERNANDEZ. I am going to paraphrase the statement that I submitted for the record and hit on some of the things that I think need to be addressed, specifically regarding today's testimony.

On March 23 of this year, President Carter sent a message to the Congress outlining several proposals to mitigate some of the effects of this severe drought which is affecting widespread portions of the United States. One action taken by the President was the establishment of the Interagency Drought Emergency Coordinating Committee. The committee, consisting of the Secretary of the Interior, the Secretary of Agriculture, the Secretary of Commerce, and the Administrator of SBA, has the responsibility of designating areas eligible for Federal assistance due to severe drought conditions.

By August 8, 1977, the Interagency Drought Emergency Coordinating Committee had declared more than 2,000 counties in 34 States, Puerto Rico, and the Virgin Islands as emergency drought impact areas. This includes the entire State of Oregon. As a result of these