For more than a century, the federal government has constructed water resource projects for a variety of purposes, including flood control, navigation, power generation, and irrigation. While most municipal and industrial water supplies have been built by non-federal entities, most of the large, federal water supply projects in the West, including Hoover and Grand Coulee dams, were constructed by the Bureau of Reclamation (Department of the Interior) to provide water for irrigation.

President Bush has issued a comprehensive energy policy initiative, which includes limited energy tax measures; the Administration has criticized such measures as being inconsistent with its free market philosophy. Several of the issues that drove energy policy and energy tax policy during the 106th Congress are extant: 1) tax incentives to increase the supply of oil and gas; 2) energy tax issues relating to energy conservation and energy efficiency; 3) energy tax issues relating to alternative fuels; 4) energy taxes/subsidies and residential energy costs; and 5) issues relating to electricity restructuring. In addition, there are certain energy tax provisions that are either expiring or are time-sensitive that the 107th Congress may choose to take action on.