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f. . Questions presented: (1) Does Section 7(a)(2) of the ESA, 16 V.S.C. ~ l536(a)(2), which requires each federal agency to insure that its actions do not jeopardize the continued existence of listed species or modify its critical habitat, override the statutory mandates or constraints placed on the agency's discretion by other acts of Congress? (2) Did the court of appeals correctly hold that EPA's decision to transfer pollution permitting authority to Arizona under the CWA, 33 U.S.c. ~ 1342(b), was arbitrary and capricious because it was based on inconsistent interpretations of Section 7(a)(2) of the ESA and, if so, should the court of appeals have remanded to the EPA for further proceedings without ruling on the interpretation of Section 7(a)(2)? Congressional Funding Update - FY2007 Continuing Resolution: A $493.5B FY2007 continuing resolution authorizing federal spending through September was signed by the President on February 15, after the Senate ended debate and voted 81-15 to passed H.J. Res. 20. The resolution sets "top-tier" program spending limits, within which federal agencies generally must chose how to fund programs, and report back to Congress in 30 days. Some of the figures are as follows: Natural Resources Conservation Service, Conservation Operations, $759M but with no money for watershed and flood prevention operations (and snow survey program funding is not separately listed Sec. 20104); Army Corps of Engineers' construction $2.334B and general expenses $166.3M (Sec. 20301); Bureau of Reclamation money is not specifically listed; U.S. Fish & Wildlife Service, Resource Management $IB; U.S. Geological Survey investigations and research $977. 7M; Environmental Protection Agency (EP A) Superfund $1.25B; and EPA Clean Water Act State Revolving Funds (SRF) $1.08B. FY2008 Federal Budget Information: . Corps of Engineers Budget -- The President's $4.87IB FY2008 budget request for the U.S. Army Corps of Engineers includes $2.47IB for operation and maintenance of Corps facilities, $1.523B for construction, $180M for regulatory programs, $177M for administration, $90M for investigations, and $40M for emergencies. Since the Corps already has a large backlog of ongoing projects, the budget limits funding for new project studies. Of note, rather than a long list of spending for specific projects, the budget suggests ranking authorized projects by primary purpose and main Corps mission area, using a benefit-cost ratio, with priority given to funding those projects with the highest performance measured by economic and environmental returns. Projects with a cost-benefit ratio below 1.5 would be considered for deferral. Projects addressing "significant risk to human safety" would get sufficient funds to "support an uninterrupted effort." John Paul Woodley, Assistant Secretary of the Army for Civil W orles, said, 'This civil works budget is the highest ever to be forwarded to Congress, and it provides critical funding...to contribute to the nation's economic and environmental well being." The budget is 9% higher than last year, with $3.9B from the general fund, $735M from the Harbor Maintenance Trust Fund, $209M out of the Inland Waterways Trust Fund, $81M from the Coastal Wetlands Restoration Fund, and $37M from a proposed recreation user fee. For more information see www.usace.armv.mil/cw/cecwblbudgetJbudget.pdf. e National Water and Climate Center -- Within the FY2008 request for the U.S. Department of Agriculture, Natural Resources Conservation Service, is a small increase to $10. 76M for the Snow Survey and Water Supply Forecasting Program managed by the National Water and Climate Center (NWCC) in Portland, Oregon. The WSWC has consistently supported federal funding to maintain and expand this important program, which over the years has struggled to maintain and operate its system of 900 manual snow courses and 730 automated SNOTEL (SNOwTELemetry) sites, which require regular repair. This state-of-the-art system uses meteor-burst radio communications to transmit data from remote mountain locations to provide water users, water managers, emergency management personnel and others with near real-time snowpack data and needed information to effectively manage our natural resources, protect our environment and increase public safety. The Council has urged the Administration and the Congress to provide a minimum of$12.3M to support the Snow Survey and Water Supply Forecasting Program. Some recent program challenges include funding rescissions, the need to establish a data collection system "fail over" site to comply with government continuity of operations requirements, and the need to move one of its current master 9