July 9, 1998

Paul Liebendorfer P.E.
Bureau of Federal Facilities
Division of Environmental Protection
State of Nevada
333 w. Nye lane, room 138
Carson City, NV 89706-0851

DEFENSE PROGRAM FUNDING FOR ENVIRONMENTAL RESTORATION AT THE NEVADA TEST SITE (NTS)

Reference: Ltr, Liebendorfer to Johnson, dtd 6/8/98

As discussed in our recent meeting, we agree with the state of Nevada's position favoring acceleration of Defense programs (DP) funded clean-up work at the NTS. We recognize the benefits of aligning the DP clean-up work more closely with the overall environmental Management (EM) Program plans and schedules for the NTS. Our Budget requests for FY 1999 and FY 2000 provide for increasing the annual clear-up budget from the current level of $800,000 to $1.0 million in our FY 2001 budget submittal, and to maintain no less than that level in the out years.

We look forward to continued discussions and interactions as we work toward meeting or exceeding our commitments established in the Nevada Federal Facilities Agreement and Consent Order.