[House Hearing, 105 Congress]
[From the U.S. Government Publishing Office]



 
                 DEPARTMENT OF THE INTERIOR AND RELATED

                    AGENCIES APPROPRIATIONS FOR 1999

========================================================================

                                HEARINGS

                                BEFORE A

                           SUBCOMMITTEE OF THE

                       COMMITTEE ON APPROPRIATIONS

                         HOUSE OF REPRESENTATIVES

                       ONE HUNDRED FIFTH CONGRESS

                             SECOND SESSION

                                ________

   SUBCOMMITTEE ON THE DEPARTMENT OF THE INTERIOR AND RELATED AGENCIES

                      RALPH REGULA, Ohio, Chairman

JOSEPH M. McDADE, Pennsylvania         SIDNEY R. YATES, Illinois
JIM KOLBE, Arizona                     JOHN P. MURTHA, Pennsylvania
JOE SKEEN, New Mexico                  NORMAN D. DICKS, Washington
CHARLES H. TAYLOR, North Carolina      DAVID E. SKAGGS, Colorado
GEORGE R. NETHERCUTT, Jr., Washington  JAMES P. MORAN, Virginia
DAN MILLER, Florida                    
ZACH WAMP, Tennessee                   

 NOTE: Under Committee Rules, Mr. Livingston, as Chairman of the Full 
Committee, and Mr. Obey, as Ranking Minority Member of the Full 
Committee, are authorized to sit as Members of all Subcommittees.

Deborah Weatherly, Loretta Beaumont, Joel Kaplan, and Christopher Topik,
                            Staff Assistants

                                ________

                                 PART 11
                                                                   Page
Review of National Energy Policy.................................    1
Backlog Maintenance for Land Managing Agencies...................  147
Backlog Maintenance for Cultural Agencies........................  349

                              


                                ________

         Printed for the use of the Committee on Appropriations

                                ________

                     U.S. GOVERNMENT PRINTING OFFICE
46-891                      WASHINGTON : 1998
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                       COMMITTEE ON APPROPRIATIONS                      

                   BOB LIVINGSTON, Louisiana, Chairman                  

JOSEPH M. McDADE, Pennsylvania         DAVID R. OBEY, Wisconsin            
C. W. BILL YOUNG, Florida              SIDNEY R. YATES, Illinois           
RALPH REGULA, Ohio                     LOUIS STOKES, Ohio                  
JERRY LEWIS, California                JOHN P. MURTHA, Pennsylvania        
JOHN EDWARD PORTER, Illinois           NORMAN D. DICKS, Washington         
HAROLD ROGERS, Kentucky                MARTIN OLAV SABO, Minnesota         
JOE SKEEN, New Mexico                  JULIAN C. DIXON, California         
FRANK R. WOLF, Virginia                VIC FAZIO, California               
TOM DeLAY, Texas                       W. G. (BILL) HEFNER, North Carolina 
JIM KOLBE, Arizona                     STENY H. HOYER, Maryland            
RON PACKARD, California                ALAN B. MOLLOHAN, West Virginia     
SONNY CALLAHAN, Alabama                MARCY KAPTUR, Ohio                  
JAMES T. WALSH, New York               DAVID E. SKAGGS, Colorado           
CHARLES H. TAYLOR, North Carolina      NANCY PELOSI, California            
DAVID L. HOBSON, Ohio                  PETER J. VISCLOSKY, Indiana         
ERNEST J. ISTOOK, Jr., Oklahoma        ESTEBAN EDWARD TORRES, California   
HENRY BONILLA, Texas                   NITA M. LOWEY, New York             
JOE KNOLLENBERG, Michigan              JOSE E. SERRANO, New York           
DAN MILLER, Florida                    ROSA L. DeLAURO, Connecticut        
JAY DICKEY, Arkansas                   JAMES P. MORAN, Virginia            
JACK KINGSTON, Georgia                 JOHN W. OLVER, Massachusetts        
MIKE PARKER, Mississippi               ED PASTOR, Arizona                  
RODNEY P. FRELINGHUYSEN, New Jersey    CARRIE P. MEEK, Florida             
ROGER F. WICKER, Mississippi           DAVID E. PRICE, North Carolina      
MICHAEL P. FORBES, New York            CHET EDWARDS, Texas                 
GEORGE R. NETHERCUTT, Jr., Washington  ROBERT E. (BUD) CRAMER, Jr., Alabama
MARK W. NEUMANN, Wisconsin             
RANDY ``DUKE'' CUNNINGHAM, California  
TODD TIAHRT, Kansas                    
ZACH WAMP, Tennessee                   
TOM LATHAM, Iowa                       
ANNE M. NORTHUP, Kentucky              
ROBERT B. ADERHOLT, Alabama            

                 James W. Dyer, Clerk and Staff Director











     DEPARTMENT OF THE INTERIOR AND RELATED APPROPRIATIONS FOR 1999

                              ----------                              


 TESTIMONY OF MEMBERS OF CONGRESS AND OTHER INTERESTED INDIVIDUALS AND 
                             ORGANIZATIONS

                              ----------                              

                                       Wednesday, January 28, 1998.

                    REVIEW OF NATIONAL ENERGY POLICY

                                WITNESS

HON. CECIL H. UNDERWOOD, GOVERNOR, WEST VIRGINIA

    Mr. Regula [presiding]. I call the Interior Appropriations 
Committee to order. I'll have a brief opening statement. We 
have other members coming. We unfortunately ran into some time 
problems. They're having a memorial service for Sonny Bono that 
was scheduled at this time, so we did move it an hour, but 
nevertheless, we want to go ahead with the hearing. As you can 
see from the numbers of people here, there's a lot of interest 
in this hearing.
    What I plan to do with the panels is to have all three 
panels on, and then we'll do questions after we finish hearing 
from the three panels, and the members can direct them to 
whomever they choose.
    All of the members have their staff people here to report 
back to them. Also, we'll send copies of all the testimony to 
our colleagues on the committee, and we'll summarize it for 
them, so that the members are aware of what you bring to us 
today.

                             energy issues

    I think it's an important hearing. I think that with the 
global warming issue and many others that affect energy, this 
is something we need to address. One of the areas of concern 
that I have, is that we've had a proliferation of studies. We 
just have a few of them back here, and we probably have three 
times as many as studies in the office.
    Well, it's nice to study, but let's get down to it; let's 
get some results. And we have calculated that on fossil energy 
research, we've spent $8 billion in the last 20 years since the 
Department was established. We've spent $10 billion on energy 
efficiency, and about $2 billion on clean coal. So we have a 
total of $20 billion that we have spent in the last 20 years, 
through this subcommittee on energy efficiency, fossil energy, 
and coal, and we're interested in what the results are. What do 
we have to show for it? What has changed as a result of these 
expenditures? And I hope that this hearing today will give us 
some sense of direction for the future in the way in which we 
manage our stewardship for the monies that will be made 
available.
    The President talked about $6 billion last night for global 
warming, and obviously some of that has to be expended through 
this committee, since we have the responsibility for all of the 
expenditures on the fossil and efficiency side of the 
Department of Energy. And obviously, other committees will be 
impacted likewise.
    I think the President mentioned the balanced budget, and 
one of the contributing factors in reaching that, is to the 
fact that the American economy has been extremely productive in 
terms of tax dollars, a 40, almost a 50 percent increase in 
revenues over the last 5 years, with only a 14 percent increase 
in inflation.
    So the real credit for the success of economy belongs with 
the people of America, the managers of the private sector 
industries, and the fact that Americans I think work hard and 
smart.
    But we're trying to determine what our national energy 
strategy is. The projects and technologies are financed in this 
committee, and are we getting good results for the foreseeable 
future? Even with major changes taking place in the structure 
of the U.S. utility industry, fossil fuels will continue to 
provide the vast majority of this Nation's electricity.
    I think it's inescapable that we're going to have to use 
fossil fuel to meet the Nation's needs for electricity well 
into the next century.
    We also have to recognize that our research budgets have 
been declining. One of the things we've tried to do is to get 
private sector contributions on energy research, and get the 
private sector involved in the development of programs that 
will work.
    I think our Nation's Achilles heel--good morning, David----
    Mr. Skaggs. Good morning.

                         energy policy overview

    Mr. Regula [continuing]. Glad you could be here--in energy 
policy remains our continued and growing reliance on cheap, 
imported oil. Today our oil imports hover at about 50 percent 
of our requirements, a substantial percentage which lies in 
countries with potentially unstable governments. The President 
alluded to that last night in the case of Iraq.
    In 1992 we passed the Energy Policy Act. One provision 
calls for the Secretary of Energy to establish a program to 
promote the development and use of domestic replacement fuels 
for transportation, to ensure the reduction of oil imports and 
the reduction of greenhouse gas emissions. This is 1992.
    These goals include the replacement of at least 10 percent 
of petroleum fuels by the year 2000, and a 30 percent 
replacement by the year 2010. And one of the questions for the 
day is, are we actually going to reach those goals? Are we 
headed in that direction? And to what extent should the Federal 
government be involved? What is the role of the Federal 
appropriations process, and what administrative and other 
remedies are needed.
    The administration has undertaken an aggressive research 
program in conjunction with the ``big three'' auto makers to 
achieve the technology for producing an 80-mile per gallon 
automobile. It's called the Partnership for a New Generation of 
Vehicle, and we'll hear more about this program. But it's an 
example of the kind of approaches that DOE is trying as a means 
of addressing a major energy concern.
    When and if this technology does become market ready, will 
it be at a cost which is competitive in the marketplace?What 
role will natural gas, a domestic, environmentally clean, fossil fuel 
play in achieving our Nation's energy goals? And what are we doing to 
take advantage of this fuel's environmental benefits in the electric 
generation and transportation sectors?
    And I would say, Mr. Yates, as chairman of this committee 
for many years, has always had a deep commitment to dealing 
with our energy problems, and has been very supportive of these 
programs, as evidenced by the numbers here in expenditures. And 
we hope that we can determine what some of the good results of 
this has been. We of course had the Clean Coal program that 
Senator Byrd, and myself, and others pushed. I think it's 
beginning to yield exciting results.
    Should we be focusing on major programs in cooperation with 
industry, along Clean Coal and PNGV lines or should we be 
exploring smaller efforts?
    Obviously, these issues are complex, and there are no doubt 
numerous ideas as how to address them. But as we are 
approaching a balance budget, we need to continue streamlining 
and eliminating federal agencies, or programs that do not work 
to reduce the size of our federal overhead costs. And despite 
the numerous demands being placed on us for increased 
achievements in energy technologies, the answer cannot be an 
increased bureaucracy in DOE.
    Likewise, as much as we might like it to be otherwise, this 
committee must operate within a constrained budget environment. 
For the past 3 years--and I don't agree with this, but we have 
been selling Strategic Petroleum Reserve oil to pay for SPR 
operations. Then Chairman Yates was a strong supporter of this 
program, because it did give us a degree of independence, but 
because we've had a tight constraint on our budget, we've been 
forced to do that. And I think we absolutely have to stop that, 
and maintain the integrity of the SPR Reserves.
    Today we've invited witnesses with diverse roles in our 
Nation's energy policy. We have the private sector and we have 
the states, and they have a very important role to play. And of 
course, DOE.

                              partnership

    I think by having the three panels each present their point 
of view, will give those of you who are representing the 
private sector, the states, and DOE, the opportunity to hear 
from others. Because this is really a partnership effort. If 
we're going to succeed, and have a strong energy policy that 
will serve our Nation well into the future, and give us the 
security we need, it's going to take a three-part partnership: 
states, federal, and private sector.
    And so, by being here, all three of these facets of the 
responsibility, we certainly will have an opportunity to share, 
and then in the questions you'll have an opportunity to hear 
what others are saying, and to determine whether your programs, 
for example, at DOE are working well in conjunction with the 
state and local governments.
    Energy plays an enormous role. I don't think anybody thinks 
there would have been a Desert Storm war, had Kuwait had 
nothing but sand. And of course, we wouldn't have needed a 
Desert Storm if Kuwait were nothing but sand, because I don't 
think Saddam Hussein would have been very interested in having 
more sand.
    So energy policy cuts across defense; it cuts across 
foreign affairs. I believe that Secretary Albright's on her way 
to the Middle East today, and always in the background is 
energy. So establishing constructive policies for the upcoming 
century is extremely important. And that's the objective of 
this hearing, to find out what works, are we getting results, 
and what should we be doing as we make priority allocations.
    I've always said that policy follows the checkbook. And so 
the way in which we appropriate money has an important impact 
on policy. Therefore we need the best advice that all of you 
can offer to us.
    Mr. Yates?
    Mr. Yates. Thank you, Mr. Chairman. I thought you had an 
excellent statement, and I agree completely with the purpose of 
this hearing and with the goals that you established for the 
subcommittee. There are so many subjects in the grand field of 
energy now, that are changing and being changed.

                              deregulation

    One in which I'm particularly interested is the question of 
deregulation. When I got out of college, I got a job as a 
lawyer in the Office of the Commerce Commission, which had 
jurisdiction over the regulation of public utilities, and 
particularly the fights that took place over the rates that 
were charged, the increases in rates that were charged by the 
utilities. Now, the states have to wrestle with the problem as 
to whether to allow the deregulation of the utilities, and give 
up the overseeing of the--jurisdiction over the ratemaking.
    And, I don't know whether that's good or bad. I don't know 
if there was a question as to whether these were monopolies at 
that time. I don't know how much has changed since--well, now, 
this is--when did I graduate from college?
    This goes back to 1935. Time has gone on since then.
    Mr. Regula. You've done very well at it. [Laughter.]
    Mr. Yates. And so perhaps we've had enough of the 
regulation of the utilities since that time.
    A further question that we've dealt with for some time, 
what to do with the federal power organizations, the Southwest 
Power Administration, TVA, Bonneville, and the others; should 
they be defederalized and turned over to private ownership.
    I've always supported them, because--I've always of course 
been a devotee of lower rates for the ratepayers, and I don't 
know whether or not if you defederalized these huge energy-
making organizations, that those who depend upon the 
electricity they provide will have to pay substantially 
increased rates.
    So those are some questions. Also, I saw on television a 
couple of nights ago that there was an electric automobile that 
somebody had bought in California, and was driving it around 
the streets.
    How long have we been trying to get an electric automobile 
on the streets. We can get the automobile on the streets, but 
we've got to find a battery. I don't know whether this new 
automobile had a marketable battery in it. At any rate, this 
person who drives it likes it very much.
    Mr. Regula. I think Mr. Keese will be able to tell us about 
that.
    Mr. Yates. About the battery?
    Mr. Regula. Yes.
    Mr. Yates. At any rate, it's a tremendously important 
subject that you have raised, Mr. Chairman, and I kept thinking 
as you talked about the fact that we have limited supplies of 
petroleum, and we continue to depend upon petroleum. Does this 
mean that one of these days our friends from Californiawon't be 
as adamant about no offshore leasing? Will they be less adamant about 
not opening up ANWR? These are the things that are implicit in the 
problem you've raised.
    So I look forward to the testimony of the witnesses with a 
great deal of anticipation, and I thank you for having me.
    Mr. Regula. Thank you. Mr. Skaggs and Mr. Wamp, if you 
don't have any objection, we'll go ahead. And if you have 
something----
    Mr. Skaggs. Two very quick points.
    Mr. Regula. Okay.

                         national energy policy

    Mr. Skaggs. A little bit of piling on. Thanks for doing 
this, Mr. Chairman; I agree with the importance of it.
    Two quick observations. One, I think we had an enormous 
missed opportunity at the time of the Persian Gulf war to 
really use that to leverage a coherent and comprehensive 
national energy policy. We picked at the edges a bit, but 
didn't get the core job done, I'm afraid.
    Secondly, to the extent that your opening statement has 
sort of set up a competition between fossil fuel and energy 
conservation, I just hope our witnesses will address themselves 
as is appropriate to the question or the proposition.
    My assumption has been that an important part of the 
rationale for any government intervention in these areas, is 
the absence of sufficient market forces to address the needs. 
And my further supposition would be that there are probably 
more market reasons for private funding of research in the 
fossil fuels area perhaps, than in the other energy 
conservation areas, and I just hope we will engage on that. 
Thank you.
    Mr. Regula. I think from looking at the panel of witnesses, 
we're going to get a lot of very useful information.
    Mr. Wamp?
    Mr. Wamp. Let's hear it, Mr. Chairman.
    Mr. Yates. Okay.
    Governor Underwood, we have place for you on this panel. In 
fact, you'll be our leadoff witness.
    Mr. Regula. We're very pleased at the first panel to have 
Governor Underwood, from the State of West Virginia. The second 
witness will be Mr. William Keese, who's chairman of the 
California Energy Commission. Third, will be Sara Ward from the 
State of Ohio, the Office of Energy Efficiency. And last, Bill 
Valentino, president of the New York State Energy Research & 
Development Authority.
    Governor, we're pleased you're here, and we look forward to 
hearing from you.

              Introductory Statement of Governor Underwood

    Governor Underwood. Thank you, Mr. Chairman and members of 
the committee, for inviting me to participate in your hearing 
today. I certainly applaud you for your opening comments, and 
for--I want to confirm my views. This is a very important 
subject. Certainly, it is to me.
    Mr. Yates. Mr. Governor, would you please pull the 
microphone closer to you? You have a very gentle voice.
    Governor Underwood. Thank you. I also have a cold.
    Mr. Yates. How did you get elected? [Laughter.]
    Mr. Regula. He had a very strong program. [Laughter.]

                          regional perspective

    Governor Underwood. I want to bring to you the perspective 
of an energy-producing state, which relies on energy-intensive 
industries for its economic foundation. I also bring to you a 
regional perspective, as I am currently serving as chair of the 
Southern States Energy Board. I also bring a perspective of 
being a strong advocate for the use of technology to move us 
into the 21st century. As a matter of fact, if we had 
videoconferencing capabilities, I could have been in 
Charleston, spent 5 minutes of my day, and not had to take a 
whole day to share my ideas with you.
    I also come as advocate of recycling. I was governor, the 
first time elected in 1956, and I have two distinctions now. 
I'm the oldest in the history of the state, as well as the 
youngest in the history of the state. And for you Members of 
Congress, the only advantage I can think of is, that the 
political enemies I couldn't defeat, I've outlived. [Laughter.]
    Mr. Skeen. That's the best way to get rid of them.
    Mr. Yates. Me too, Governor.
    Mr. Skeen. Oh, to be 80 again.
    Mr. Yates. Oh, to be 85 again.

                                research

    Governor Underwood. Well, an inspiration for me to come 
back was the Members of Congress, particularly in the Senate.
    I've been a strong advocate of research all my life. I, 
along with Senator Byrd, and a dozen other West Virginians. In 
1985 I formed an organization called Software Valley, and this 
was an effort to establish a relationship between high 
technology, and its application to a basic industry state, 
particularly the fossil fuels industry. And since 1985 we've 
made tremendous progress, have had a great number of new 
companies come to the state in the field of technology, and 
many new, exciting things are happening in the coal, oil, and 
gas industry.
    I sense the urgency more acutely perhaps, such as R&D, 
would be critical to efforts in three main areas: helping our 
domestic energy producers to meet the challenges of the new 
regulation of an economy in transition; to explore ways that 
energy-producing companies and traditional industries, which 
use significant amounts of energy, can become environmentally 
responsible, while maintaining economic vitality; and third, to 
develop new markets for traditional energy resources and 
applications to meet the changing market opportunities.
    We have laid out a long-range plan for the approach along 
these three lines. We are in the process now of considering 
from the state, revising a deregulation of the power industry. 
We see a great potential for a northeastern market that we 
could supply at very competitive rates.
    We also have two concerns about deregulation--One, we enjoy 
one of the lowest power rates in the country, and we're not 
quite sure if we can maintain those for our own people in 
industries under deregulation. Also, we have a concern that 
deregulation, with the competitive elements increasing and 
accelerating, that there will be less inclination on the part 
of the industry to devote funds to research.
    And so, those are our principal concerns. We've had 
extensive use of the Department of Energy's Industry of the 
Future program, and we're working in several different 
directions with our basic industries in the state, and we think 
that has great promise. It's been very successful. It's a 
partnership between government, between our universities, 
between the private sector, and the metals industry, the 
extractive industries, and glass.
    In December we signed an agreement, or a memorandum of 
understanding, a working relationship with the 
NationalLaboratory in Idaho, and we're working with them on some air 
activities and desulfurization of coal, and metals--a new technology 
for the manufacture of metal products, and in the area of wood 
products. We think that has great potential.

                           barriers to goals

    I'm concerned about two very important barriers to the 
achievement of our long-range goals. We have serious concerns 
with the Environmental Protection Agency's emission standards 
for NOx, as proposed November 7. Likewise, our state 
is also concerned about how, as a result of the Kyoto 
Conference, new restrictions on greenhouse gases could have a 
devastating impact on the cost of energy production and the 
economy of our state.
    The EPA proposals would reduce 44 percent of our West 
Virginia sources. This would require power plants in the state 
to reduce NOx emissions by as much as 85 percent of 
1990 levels, and other industrial manufacturing sectors by 25 
to 70 percent. The impact on the State could be severe. It 
could wipe out much of our industrial base, and 12 to 15 
percent of the workforce of our economy.
    During my first term as governor, we went through the giant 
step to full mechanization in the coal industry, and 
experienced a 25 percent displacement of the workforce in 
little over a year's time. And I know from my own experience 
the economic pain and shock that we suffered during that time. 
We think that the global agreement in Kyoto--it's totally 
impossible for us, and we think it's very unfair to the United 
States as an energy-producing nation.
    And so, that summarizes the statement, which I'd like to 
leave with the Committee in more detail.
    Mr. Regula. And without objection, your full statement will 
be made a part of the record. And I would say to all the 
witnesses, we'll put the complete statements in the record. As 
much as you can, summarize and make your points, because we 
want to move along, and give everybody an opportunity to be 
heard.
    Also, I want to say, we're going to go straight through 
until we finish the hearing, without breaking, because you're 
all busy people, and we want to complete as quickly as 
possible.
    Thank you, Governor. And I hope all of you can stay, so 
that we can ask questions at the completion of the panels.
    [The information follows:]

[Pages 9 - 14--The official Committee record contains additional material here.]


                                       Wednesday, January 28, 1998.

                         NATIONAL ENERGY POLICY

                                WITNESS

WILLIAM J. KEESE, CHAIRMAN, CALIFORNIA ENERGY COMMISSION

    Mr. Regula. Our next witness is Mr. Keese, the chairman of 
California Energy Commission.

                      deregulation and california

    Mr. Keese. Mr. Chairman, Members, I'm pleased to be joining 
you here, and I'm pleased to be here with my fellow energy 
officers, all of whom belong to the organization, NACIO, and 
basically the organization's function is to communicate and 
share information, and I will refer to that later. It's a very 
important role we seek with DOE in information exchange.
    The Energy Commission in California has been around for 23 
years, and we're the largest state organization, and I speak 
from that perspective. I speak from the perspective that we are 
going to be deregulating imminently, and I bring to you our--
figures.
    I have submitted my written statement and detailed all the 
issues in front of you, so I'm going to deal today with just 
three themes: the impacts of deregulation; the need for a 
broad-based collaboration, involving all sectors of the energy 
industry; and finally the need to stay connected to the 
marketplace, as we adopt funding priorities for our societal 
needs.
    Restructuring has drastically changed the industry in 
California. We introduced competition and the necessary adjunct 
of that, which was allowing utilities to recover their stranded 
costs. These had two very detrimental effects on research 
programs and energy efficiency programs.
    Let me give you an example. And Governor, this will answer 
your question.

                                research

    Private industry research in California three years ago, 
was $135 million a year. Prior to a reorganization, it was down 
to $60 million a year. This year the private electric industry 
is spending zero on research.
    As a result, our legislature stepped in and appropriated 
$62 million a year to the Energy Commission to do essential 
research. Sixty-two million is less than one-quarter of 1 
percent of our $23 billion energy budget in California. It is 
critical in the short-term that research funds, other public 
funds, not go down. It is critical in the long-term that we 
figure out some way to make funding on a permanent basis.
    In the energy efficiency area the figure is--it went down 
from $450 million a year to $240 million a year, again, because 
the legislature mandated that number.
    Mr. Yates. Can I interrupt and ask you, why did the private 
industry stop their research?
    Mr. Keese. The incentives created in the restructuring are 
such that they virtually must stop. Every dollar they do not 
spend, they can put in their pocket, and therefore, the 
reductions are brutal. I don't project what it's going to be 
after 4 years, when these costs are paid for, and thisincentive 
does not exist. But the incentive under restructuring is so great. If 
this was in a social atmosphere, this would result in siblings knocking 
off siblings. I mean, the competition is terribly brutal.
    Mr. Yates. War.
    Mr. Keese. It would be. It would be. And so, that's the 
incentive.
    Electric industry restructuring is on its way in 15 states, 
and this will lead to restructuring of all energy programs. And 
this is my second point.
    Collaborative efforts among states, DOE, and the research 
community become essential. The research must involve all 
elements of the new energy industry, and must focus more on 
technologies, which will benefit society, and which will make 
it to the marketplace. Successful results must become the 
standard of activities.
    Mr. Regula. That's what we're trying to find out today.
    Mr. Keese. We're attempting to do that in California as we 
establish our research program. We are adopting goals and 
strategies. We intend to work with other states. We've signed 
an MOU with New York, The Electric Power Research Institute, 
The Gas Research Institute, University Laboratories, and 
National Laboratories. We want in particular to avoid 
duplicative efforts.
    We're prepared, and will sign shortly an MOU with the 
Department of Energy, to try to work collaboratively with them. 
We're optimistic about this. We believe that one of the 
principle roles of DOE in the new market will be to become the 
prime coordinator of energy research, a coordinator.

                          technology transfer

    While I have stressed focused research here, I want to 
stress a second aspect, and that is, technology transfer, 
information transfer.
    We have done extensive work in California on alternative 
vehicle infrastructure as an example. There is no need to 
duplicate this work, but if other states aren't going to 
duplicate this work, they've got to find out about it. And we 
think that's another key role that DOE should play. When DOE 
joins us in funding infrastructure research, it must be passed 
on to the other states. We think that information transfer 
should become an integral aspect of collaborative research.
    My third theme is connection to the market. Energy policy 
initiatives should focus on meeting societal needs, where 
invested dollars have the highest return and the greatest 
likelihood of success. These attributes are also necessary, if 
you're going to have a successful collaboration, because it 
requires mutual interest by all the collaborators. So success, 
again, becomes the criteria.

                           funding priorities

    You asked us about funding priorities. I'm going to give 
you a listing. We believe that the allocation should go in this 
order: end use efficiency, including transportation; renewable 
resources; environmental technologies, including global climate 
change science; advance clean power generation; distributed 
energy resources and grid interface technologies; and 
transmission and distribution reliability technologies.
    We think that funding allocations should again be based, in 
large part, on proven track records and highest return for the 
invested dollar.
    I have further developed each of these issues, and given 
you examples in my written statement.
    At this point I'd like to emphasize a couple of other areas 
where we believe DOE should play a pivotal role.
    We believe energy policy and environmental policy must be 
linked. For example, biomass reduction is an environmental 
concern. Generation of electricity from biomass is an energy 
concern, and can assist in handling the environmental concern. 
Linkage is essential, if we're going to continue to deal with 
biomass. We cannot deal with biomass as a strict, new source, 
of electrical generation.
    Another example I will give. Global climate science must be 
developed at the federal level; we can't do it at the state's 
level. But it's both an energy and an environmental concern.
    In California, with our strategies that we've adopted, and 
we adopted a CO2 lowering strategy in 1991--we now produce 10 
percent less CO2 per capita than the national average, and we 
do this because of our joint environmental energy strategy, our 
appliance standards, our building standards, and what we did in 
our business community. It is essential that DOE start linking 
environmental policy and energy policy.
    My final point would be data collection. It becomes more 
critical in an unregulated, deregulated market. Command and 
control allowed the regulators to order things. Now that we're 
going to free everybody, we must have timely, accurate data, 
and we believe that that's a function of the Federal 
government, and it should be done by the Energy Information 
Agency.
    In summary, we believe that DOE must remain the leader in 
energy programs in the new environment, partnering with states, 
partnering with industry, and partnering with research 
facilities. We agree with you, this is an appropriate time for 
an expansive review of federal energy policy, and we're 
reviewing state energy policy at the same time. We'd be happy 
to work with you as you go forward, and deal with the specifics 
of the items I brought.
    [The information follows:]

[Pages 18 - 28--The official Committee record contains additional material here.]


    Mr. Regula. Thank you. And I know the members will have 
questions when they finish the panels. I appreciate your 
statement.
                              ----------                              

                                       Wednesday, January 28, 1998.

                         NATIONAL ENERGY POLICY

                                WITNESS

SARA WARD, OFFICE OF ENERGY EFFICIENCY, OHIO
    Mr. Regula. Our next witness is Sara Ward, the Office of 
Energy Efficiency, in Ohio.
    Ms. Ward. Thank you, Mr. Chairman and Members of the 
Committee. I appreciate the opportunity to be here today, and 
to speak to you.

                      deployment and demonstration

    The Office of Energy Efficiency is located in the Ohio 
Department of Development, and we administer both the Low 
Income Weatherization Assistance Program, as well as the State 
Energy Plan funding that this subcommittee oversees.
    The role that I would like to emphasize today is that of 
deployment and demonstration, and the important role that I 
think states play in that process. And I guess I'd like to 
respond to a couple of things that you also mentioned in your 
remarks, which I will do at the end of my testimony.
    The emphasis that I've mentioned I think is something that 
we've demonstrated very well, and you're looking for impact and 
success stories. In this packet that everyone has, there are 13 
one-page success stories about the various programs that we 
have administered through the State Energy Plan and 
Weatherization. They deal with the residential sector, small 
businesses, the commercial sector, manufacturing. Also there 
are some cross-cutting efforts associated with the deregulation 
of the electric industry in Ohio.
    And, as you know, Mr. Chairman, that's been going on in 
Ohio as well. We're not quite as far along as California, but I 
think you also know that utilities have been preparing for 
deregulation since the early 1990s, as they have downsized 
their companies, and restructured their companies. And DSM, and 
many of the programs, NRD, that were sponsored by those 
utilities are falling by the way-side as they've prepared to 
become very lean so they can be competitive.
    I think it's most critical to think about things like the 
residential sector in Ohio. In 1995 the combined electric and 
gas bill for residential consumers was over $5.3 billion. Ohio 
has 4.5 million households, and more than 80 percent of those 
were built prior to the 1980 implementation of the first model 
energy code in Ohio. At least one out of five Ohio households 
carries a higher than average energy cost burden for paying its 
utility bills because the household's income is at or below 150 
percent of poverty.
    An additional problem is that a significant number of these 
households are some of the least and the most poorly maintained 
houses in the State. Approximately one-third of these 
households participate in some form of financial assistance, 
like the LIHE Program, Homeowners' Assistance Program, the 
senior energy program.
    The energy burden for the majority of these consumers 
ranges between 10 to 25 percent of their incomes. Ohio's 
residential consumers and the building industry and the housing 
industry that serves them have been a real high priority for 
our State.
    The subcommittee does not address the financial assistance 
side of this equation, but I think it's important to be aware 
that in Ohio alone in this year we will spend more than $165 
million dealing with helping individuals pay their utility 
bills. So it's very critical that there be some assistance for 
households that need to save, and weatherization steps where we 
need to provide that need.

                                studies

    Now I know you've heard about the studies that have been 
done by Oakridge National Labs. Ohio has also done some recent 
studies and we have found that we have increased our savings by 
5 or 6 percent per house because we have employed, through 
applied research, diagnostic technologies, and we have focused 
our resources in such a way that we are saving 23 to 24 percent 
on average per household.
    We are also doing an environmental impact study as a result 
of the weatherization work, and the results of that should be 
out in February, and I look forward to sharing that information 
with the committee, because I think there is something worth 
looking at with regard to the energy efficiency initiatives and 
emissions reductions.

                          state energy program

    I'd now like to jump quickly to the State energy program 
and talk a little bit about the other services that we focus on 
and provide in the residential, business, and commercial 
sector. We also have a very strong educational component, not 
only working with schools, but also working with consumers in 
general and working with the delivery network and the 
infrastructure for energy efficiency services.
    One of the things that we are trying to do is move the new 
technology into the broader marketplace by providing technical 
and financial assistance, when possible, to help establish best 
practices in the infrastructure, in particular, of the building 
industry, and I think one of the questions that I would add to 
this committee is, when the technology is ready for the 
marketplace, will the marketplace be prepared to accept and 
adopt that technology? Will consumers know how to discern and 
how to choose which is going to be the better technology for 
them to save them more money? Will the delivery network and the 
infrastructure, the vendors and the suppliers, the contractors 
that are supposed to deliver these services, know how to 
successfully do that? I submit that they may not know how 
unless there are States such as ourselves providing this kind 
of support to that infrastructure, providing them with 
training, providing them with opportunities to work and 
demonstrate these technologies.
    I think that's one of the important roles that the State 
plays in this process, and I believe that it's something that 
we all do very differently. One of the nice things about the 
State energy plan is that it offers flexibility, so that 
eachState can focus in those areas where their expertise is needed the 
most.
    I'm not going to go through the specific success stories 
because they're all in your packet, but we have worked with 
various levels of success with both delivery at the local 
level, the community level, and the State level. One example: 
you're familiar with the new Ohio School Facilities Commission 
that just started the end of last year. They have a new design 
manual that they've put in place for all new construction of 
new schools throughout the State. We were able to get involved 
in the middle of that process, take a look at their design 
specifications, and make sure that they are going to meet best 
practices and high-quality standards with regard to energy 
efficiency and durability of those school buildings, as well as 
health and safety.
    So those are the kinds of things that I think States are 
able to do. They can be at the right place at the right time 
and impact early on in the design stages and design processes 
to make sure that people do it right the first time, and you 
don't have to spend the money to go back and retrofit.
    I think it's important for the committee to realize that my 
testimony speaks to what I believe are market failures. Part of 
the role that States must adopt is to help address those market 
failures by preparing the infrastructure and customers both to 
be competitive in the electric industry and also to be able to 
provide these new services successfully.

                              partnership

    Another point that I wanted to make, you talked about a 
partnership between the Federal, State, and private sector, and 
I would submit that there's a fourth partner, and that is local 
communities. And I think that that's another area where States 
have been very successful by working with local communities, 
their small businesses, their organizations that serve 
generations of industry, that have been in those communities 
for a long time. They are not quite sure how to deal with 
electric de-regulation and restructuring. They're not sure how 
they're going to compete, how they're going to choose, how 
they're going to be able to compare one versus the other type 
of service. They need education. They need support. They need 
good information to make those choices and those comparisons.
    One of the things that we're working with communities on is 
trying to help them understand how they can aggregate both 
residential, business, and industry to be more competitive and 
purchase in larger quantities in the marketplace.

                            recommendations

    I guess, finally, I'd like to make a couple of 
recommendations that I think are important for your 
consideration as you go forward. The Department of Energy has 
taken, I think, an important step in their building 
technologies and use sector to begin to pull a large number of 
programs together into a more strategic, broad range approach, 
and I've been fortunate to serve on that process. As a member 
of the State Energy Advisory Board, I was invited to be a part 
of that strategic planning committee, and I think that this 
kind of work is important, and I think it's critical that 
States have a very strong role in that process, so that we can 
work with the Federal Government to determine how to best 
deploy these technologies. So I'd like to applaud both this 
committee for encouraging DOE to take that approach, as well as 
DOE for following through.
    I guess in light of restructuring and the changing roles of 
the Federal and State government, as well as the energy 
industry, I think it requires that each of us focus on those 
things that are our strengths, those things that we can do the 
best, and I believe that States can best be the deployment 
mechanism for these programs, both educating their consumers 
and the infrastructure that is in place to deliver these 
services.
    Mr. Regula. Thank you. Of course, your statement, full 
statement, will be made a part of the record.
    [The information follows:]

[Pages 33 - 43--The official Committee record contains additional material here.]


                                       Wednesday, January 28, 1998.

                         NATIONAL ENERGY POLICY

                                WITNESS

BILL VALENTINO, PRESIDENT, NEW YORK STATE ENERGY RESEARCH AND 
    DEVELOPMENT AUTHORITY
    Mr. Regula. Our next witness is Bill Valentino, president, 
New York State Energy Research and Development Authority.
    Mr. Valentino. Thank you, Mr. Chairman.
    Mr. Regula. Thank you for coming.
    Mr. Valentino. Thank you.
    Distinguished members of the committee, I really appreciate 
the opportunity to be here, and I really applaud the committee 
for having the meeting right now. I don't think you could have 
picked a better time.

                            energy research

    NYSERDA, in all fairness to Bill Keese, NYSERDA has--it's 
not as big as California Energy Commission, but we have the 
largest energy research program. New York State is in the 
process of going through a painful restructuring process, and 
I'm also the chairman of the New York State Energy Planning 
Board.
    What I'm going to try to do is make three different points. 
My last name is Valentino; I'm used to being last and trying to 
fill in the blanks. [Laughter.]
    So I'm going to try to emphasize three different points in 
the time available to me. The points are that energy efficiency 
research is very important to the Nation in the context of 
restructuring, but particularly because of climate change.
    The second point is a little bit different. The States are 
very key energy research players, but particularly because 
they're the best bet for small business energy product 
development.
    The last thing is, to be effective as a Nation, DOE has to 
do a better job of including all the energy research players in 
the implementation of a national energy research strategy.
    From the States' perspective, energy is one of the biggest 
calls on our economic resources, and it's probably the biggest 
polluter. While most States believe that utility restructuring 
will bring lower rates, those of us in New York State are not 
convinced, for instance, that it will reduce the air pollution 
entering into our State. We're at the tailend of the process, 
and no disrespect intended, but all your air seems to move into 
New York, and it's kind of stopped at the border. [Laughter.]
    The States are putting a lot of reliance on energy 
efficiency research, not just to save energy and reduce 
environmental emissions, but also to develop the type of high-
value-added manufacturing-type products that will enable the 
Nation to compete in the global marketplace.
    For the second time, I left a few studies here, probably in 
that pile over there, but ACEEE did a study recently that's 
complimentary on State energy programs and probably would be 
good for the staff to provide detail.
    State research programs have traditionally operated by 
filling in the gap. If we can--we're opportunistic--get 
somebody else to do our research, we're going to do it. If 
there's a significant public need, we end up doing it, and I 
would argue that one of the reasons that State programs have 
grown is because the Federal programs haven't always been as 
responsive to what the States have needed.
    We've been successful because of certain strengths. I think 
we know our energy demographics better than anybody. We know a 
lot about institutional barriers, and that was mentioned. But 
we're good at commercialization. I think our particular skill 
is our ability to work with small startup businesses, 
technology companies, where a large percentage of the new ideas 
and job growth occur. When I'm talking about small business, 
I'm not talking about the SBA definition of 500 employees. The 
types of folks we work with tend to be a dozen, half a dozen, 
or one woman working in her garage.
    At NYSERDA, over the last five years, we've successfully 
commercialized over 50 energy or environmental technology 
products. Just one example, we were talking about batteries and 
transportation; we brought into commercial revenue service to 
the Nation, North America's first hybrid electric transit bus. 
We also have a hybrid electric truck on the street, and our 
hybrid electric taxicab hit the streets in New York last year. 
And we have a lot of examples like that that, if I had time, I 
would get into it. Our hybrid electric program, for instance, 
started two years before DOE and the Federal Transit 
Administration started their hybrid electric program.
    One of the points I want to make is the national labs, with 
some of the best talent and resources, have a difficult time 
working with anything but the largest corporations or smaller 
companies in their immediate geographic areas. States really 
work best with small companies.

                         utility restructuring

    With respect to utility restructuring, we believe 
restructuring will bring a lot of innovation and efficiency. I 
think early indications are that it won't be across the full 
range of needed research, as the various energy competitors 
look at the short-term advantage. It's hard to generalize where 
private sector research is going to end, but I would expect the 
national labs to have to pick up gaps in high-risk basic 
research. I think the States will pick up the slack in applied 
R&D.
    The whole R&D channel isn't just restructuring; it's 
climate change, and at NYSERDA we believe--we go along with the 
recommendations of PCAST, the President's Advisory Council on 
Science and Technology, and they say in their report that 
investments in energy efficiency R&D are the most cost-
effective way to simultaneously reduce the risk of climate 
change, reduce oil import interruptions, reduce local air 
pollution, and the point I'm trying to make, and at the same 
time, improve the productivity of the United States economy. We 
feel that the Federal Government's funding priorities should 
reflect that.
    In respect to funding, with utility restructuring, the old 
paradigm is broken, and, frankly, I can't give you specificity 
as to what DOE's or the national lab, budget should be, or what 
the State's budget should be really. I do know that you can't 
shut off the spigot all of a sudden and expect to start it up 
later, when we find there's needs. It takes at least 10 years 
to develop a quality energy research program, I think we have 
to keep the energy R&D infrastructure intact, at least during 
the transition.
    Irrespective of what the budget numbers are, the way we're 
currently conducting or organizing energy research in this 
country isn't as good as we should be doing it. We're not all 
working together effectively. Again, to quote the recent PCAST 
report, ``The Federal Government will get the biggest bang for 
their buck by pursuing strategies that leverage work in the 
States and the private sector.'' And we talked about 
partnerships, Mr. Chairman. I think leveraging, collaboration, 
and partnerships are just not a matter ofpooling dollars with 
co-funding. It also means to use the intellectual resources of the 
States and the private sector to validate some of these ideas and 
strategies that seem to come up from within the Beltway or from among 
the more remote national laboratories.
    So I guess the States would like to see a DOE program that 
involves all research partners in a meaningful--I really want 
to emphasize ``meaningful''--way, and that really supports 
competitive selection of research projects, that supports 
efficiency in renewables, with also an eye on the potential for 
commercialization, working with small companies, where I think, 
at least in our State, most of the ideas come and at least two-
thirds of our job growth comes. Without this integrated 
approach, I think the ratepayer cost would be significantly 
higher in the long run, our environment will deteriorate, and 
we may miss this opportunity to really be the global leaders in 
energy and environmental technology products.
    Thank you very much for this opportunity.
    Mr. Regula. Thank you, and I would suggest that once we get 
the DOE budget, I would like to submit it to all of you and for 
your observations in writing, if nothing else, as to whether it 
accomplishes some of the things that you've all outlined in 
making the partnership effective. So I hope you can stay, and 
we'll have some questions.
    [The information follows:]

[Pages 47 - 52--The official Committee record contains additional material here.]


                                       Wednesday, January 28, 1998.

                         NATIONAL ENERGY POLICY

                                WITNESS

E. ALLEN WOMACK, JR., SENIOR VICE PRESIDENT AND CHIEF TECHNICAL 
    OFFICER, INDUSTRIAL GROUP, McDERMOTT INTERNATIONAL, INC.

                              Introduction

    Mr. Regula. We'll go on to our next panel for the moment. 
The second panel is industry witnesses: Mr. Womack of 
McDermott; Mr. Edelheit of General Electric; Mr. Sharkey, AISI, 
American Iron and Steel; Mr. Rosenfeld, Chrysler; and Mr. 
Moore, the Institute for the Study of Earth, Oceans, and Space 
at the University of New Hampshire.
    As was in the previous case, we hope you can summarize, and 
obviously the entire statement of each of you will be made a 
part of the record and will be summarized for the committee 
members.
    Our first witness will be Mr. Womack, a senior vice 
president and chief technical officer, Industrial Group of 
McDermott International. Mr. Womack.
    Mr. Womack. Thank you, Mr. Regula. I do appreciate the 
opportunity to be here this morning and talk about this 
subject. My company, McDermott International, is, with its 
subsidiary, Babcock and Wilcox, engaged in the supply of power 
generation and fuel production capital equipment worldwide, and 
much of this equipment goes into supporting the hydrocarbon-
based energy economy that we presently have.

                        national energy strategy

    I've elected to use the testimony and the time that I have 
to try to focus on an aspect of this subject, which has been 
mentioned already a couple of times this morning. My focus is 
on the global challenge to reduce greenhouse gases, 
particularly CO2, which was alluded to in your opening 
statement, and by the President last night in his State of the 
Union message. It seems to me that this is a profound 
overhanging issue on the national energy strategy, and to 
reduce CO2 to pre-1990 levels is going to be an enormous and 
complex challenge scientifically, and perhaps even more 
economically, to achieve meaningful reductions with an 
acceptable level of economic impact. Because of the 
international and economic dimensions of the issue, I think 
government leadership and stimulations are appropriate and 
necessary.
    Fossil and hydrocarbon fuels today account for 84 percent 
of the energy we use in the economy for electricity, heating, 
transportation, and industry. A major benefit of the use and 
availability of these fuels is our high national standard of 
living and economic health. Economically viable replacements 
for these fuels and equipment are not readily available. It's 
important to note that hydrocarbon fuels will most likely 
satisfy the future growth in energy production in the 
economically-developing nations as well, including China. 
That's certainly what's happening now.

                        renewable energy sources

    Renewable sources of energy, while they're attractive, 
appear to be unlikely to contribute more than about 10 percent 
to energy production in the near term. The point of all this is 
that any approach to CO2 reduction in the foreseeable future, I 
think, has to recognize the continued extensive use of fossil 
fuels to meet our energy needs.
    Now despite the recently increasing global concern, there 
is no specific economic motivation favoring low CO2 production, 
and more importantly, there hasn't been one specifically, 
historically to favor low CO2 production. This situation may 
change in the future, but we really don't know when or how. So 
as with earlier environmental issues, the government has an 
important opportunity to encourage development aimed at 
widening options and reducing economic impacts. We believe it's 
important for the U.S. Government, and especially the 
Department of Energy, to lead and stimulate the development of 
CO2-reducing energy technology programs through the investment 
of public funds.

                             doe priorities

    I recommend that the DOE consider four priorities in 
realigning its technical development and budget to address this 
challenge.
    First, develop retrofittable CO2-reducing technologies 
which, by pursuing a program which develops and demonstrates 
CO2-reducing measures which can be used with the existing 
fossil fuel capital investment in the economy, which is quite 
large. This approach reduces the need for expensive replacement 
and minimizes economic impact, and the developments which are 
obtained in such a program would also be available for 
incorporation in the new fossil fuel equipment installed in 
developing nations.
    The program could be patterned after, or even added to, the 
DOE's clean coal technology program, which has already 
demonstrated a number of environmentally-responsive retrofit 
technologies. And in conjunction with that, Mr. Chairman, it's 
important to continue support of DOE's program for techniques 
to reduce NOx, which is already a part of the clean coal 
program because NOx is an important named greenhouse gas along 
with CO2 in the Kyoto Agreement, as you know.
    Secondly, I suggest that we extend fossil fuel technology 
development to new approaches which will use fossil fuels in 
the future and produce less CO2 per unit of energy. We need 
significant increases in efficiency. We also need these new 
technologies to be economically-competitive, again, especially 
since their initial usage may be in developing nations.
    Development and commercial demonstration of energy-
producing technologies that inherently emit less CO2 needs to 
be accelerated. Technologies including fuel cells and coal 
gasification hold promise. For example, while all fuel cells 
produce less CO2 per unit of energy output, plain or solid 
oxide fuel cell stacks have a unique ability to emit a 
concentrated stream of CO2 for easy capture. The current DOE 
fuel cell program does not include this technology. This 
example highlights the need to broaden that program quickly, to 
make results available sooner, and focus on options which 
provide advance hydrocarbon energy conversion process, that 
have features which will enable easier CO2 capture. Early 
results from that kind of a program could have global benefits.
    Thirdly, I recommend that we support CO2 mitigating 
technologies. Earning fossil fuels will inevitably result in 
CO2 production. Chemical engineering has methods which can 
extract CO2 from exhaust gases and put it in a form of storage 
or further processing, but their economics are very poor for 
capture of CO2 from flue gas.
    The DOE recently initiated a program which is an 
appropriate beginning toward the development of meaningful CO2-
mitigating technologies based on capture and subsequent 
handling. This program should be expanded as rapidly as 
promising technologies emerge.
    And, finally, I recommend that we continue the innovative 
development of end-use efficiency improvements. The facts of 
the situation, as has been mentioned before, suggest that many 
of the most economically-attractive short-term options to 
mitigate CO2 productions are end-use efficiency improvements. 
DOE's programs in this area deserve continued support, and 
these options are going to be needed to reach any of the large 
mitigation goals being discussed today.
    If we have a challenge to reduce CO2 levels globally in the 
energy economy, it's going to be a very daunting challenge. We 
have to be realistic about the importance of fossil fuels and 
the world energy economy, and especially in our own country. I 
don't think any single system or technology will magically 
yield significant reductions. There are, however, many 
promising technologies which, if developed, can help us get 
there.
    Because the economic benefits are uncertain at this time, 
we urge the U.S. Government to shoulder a major portion of the 
burden, working in collaboration with industry, with full 
recognition of commercial realities. If we undertake such 
programs aimed at demonstrating practical techniques, I think 
that initiative will give us the best chance of future success 
in reducing CO2 emissions worldwide, and in handling, within a 
tolerable economic framework, any mandate with regard to 
reducing CO2.
    Thank you, Mr. Chairman.
    Mr. Regula. Thank you.
    [The information follows:]

[Pages 56 - 67--The official Committee record contains additional material here.]


                                       Wednesday, January 28, 1998.

                         NATIONAL ENERGY POLICY

                                WITNESS

LEWIS S. EDELHEIT, SENIOR VICE PRESIDENT, CORPORATE RESEARCH AND 
    DEVELOPMENT, GENERAL ELECTRIC COMPANY

    Mr. Regula. Mr. Edelheit.

                        partnership and research

    Mr. Edelheit. Thank you very much. I'm Lonnie Edelheit. I'm 
senior vice president of research and development for General 
Electric Company. As you know, GE has several large businesses 
which both generate power as well as sell products that use a 
lot of energy.
    And I'm here because I believe that partnership between DOE 
and industry working together can really make major changes to 
the issues that we're facing. In particular, DOE funding of 
industry can play a big difference to the country. And as an 
example, I'd use the advanced turbine system, the ATS program, 
which I believe in the end DOE is going to be able to say made 
a big difference in terms of efficiency on a big scale. I think 
they're going to be very pleased with that program.
    Before I start talking about industrial research, let me 
just say that I think our primary priority should be funding of 
universities' basic research, in particular. Not only will that 
give us the basic ideas we need, but also train the engineers 
and scientists that we're going to need in the future to deal 
with these very large issues.
    I'd like to address two questions that we face every day in 
our large corporate research lab in GE which does research for 
all of our businesses, trying to be vital and relevant. And the 
two questions I'd like to talk about are, when shouldthe 
Department of Energy fund industrial research and development, and 
also, what criterion they should consider on particular projects.
    First, I think it's appropriate for government to fund 
industry to address national priorities which have risks that 
are too high or, more particularly, don't meet the current 
requirements of the marketplace. I think that, for example, 
future R&D to take the cost out of fluorescent lamps, 
significantly compact fluorescent lamps could, in fact, change 
the energy use equation, but the market's not telling us that 
that's what they want right now. And so funding in those areas 
where there's a national need coupled with too high a risk for 
industry is a good place to be looking to put your money.
    Second of all, I think if the goal is to put products into 
the marketplace, in the end, it's only going to be industry 
that can do it. By not having industry involved right in the 
beginning at the R&D phase, we can have some wonderful R&D, but 
we won't get products in the marketplace. If the national need 
requires products in the marketplace, I think industry should 
be in it as early as possible. You know, you might think about 
low-cost variable speed electric drives, for instance, which 
could really lower the use of energy in homes and factories, 
and that's not going to happen without industry involvement.
    Finally, or next, third, to speed up the introduction of 
technology--the ATS program, for example, where we're trying to 
take the energy efficiency from 55 all the way to 60 percent, 
it's a very big stretch for combined cycle turbines. I believe 
it would have taken decades without that money that you're 
putting into that program, and that's a place where you can 
really make a difference.
    Finally, I think that R&D and technology to minimize the 
regulatory issues that are going to be develop is maybe a 
better place to consider putting your money. We have to find 
very cost-effective solutions to these problems, and only with 
R&D are those solutions going to be developed. If regulations 
are made without really dealing with the research and 
development of products, we're going to have a lot of 
contention, a lot of fighting, and perhaps some very cost-
ineffective solution to those problems. So I think that if 
you're considering regulations; you ought to consider R&D 
funding at the same time.

                          national priorities

    Finally, let me recommend a couple of criterion on how you 
should determine which products to fund. I think we need 
roadmaps. We need visions. We've been working with things 
called multiple generations of products. You don't think about 
what the next product is you need; you think about what's 
happening into the future and think about multiple generations 
of product. We find that to be a very useful construct.
    I find in my company that cost-sharing is the best sign of 
commitment, and I think it works both ways. If industry is 
putting too much money into a project, they probably were going 
to do it themselves anyway. If, on the other hand, industry's 
not putting any money into it, I think there is a real 
indication that they're really not ready to commercialize it. I 
think the whole cost-sharing equation is something that's worth 
a lot of thought.
    Finally, I think we need very open processes, open R&D 
processes, and competitive bidding. There's going to be winners 
and losers. We're used to that, but in the end, working with 
industry to set stretch goals, to really push us further than 
we think we can get now, and then watching industry compete for 
those and finding creative, innovative solutions to those 
problems, is a very good process to use.
    Those are a few thoughts. I've got a little more 
information than what I gave you, and I think government 
funding in the past has been very effective. If it's done right 
I think it can be effective in the future. I think we can make 
huge contributions to meeting these national priorities we've 
been talking about today.
    Thank you very much.
    Mr. Regula. Thank you very much, and we want to make sure 
we do it right. That's why we're having this hearing.
    [The information follows:]

[Pages 70 - 74--The official Committee record contains additional material here.]


                                       Wednesday, January 28, 1998.

                         NATIONAL ENERGY POLICY

                                WITNESS

ANDREW G. SHARKEY, PRESIDENT AND CEO, AMERICAN IRON AND STEEL INSTITUTE

    Mr. Regula. Mr. Sharkey, the president and CEO of the 
American Iron and Steel Institute. Thank you for coming.
    Mr. Sharkey. Good afternoon. On behalf of the U.S. producer 
members of the American Iron and Steel Institute, thank you for 
this opportunity to appear before you and the committee.

                          energy conservation

    I thought I would spend a short time this afternoon 
focusing on two sections of our statement. One, energy 
conservation that has been achieved through voluntary programs, 
and, two, some recommendations on designing new or enhanced R&D 
programs drawn from steel's record of successful collaborative 
research with the government on energy efficiency and energy 
conservation issues.
    Steelmaking is an energy-intensive process and relies 
heavily on coal. As you well know, Mr. Chairman, burning coal 
generates more than carbon dioxide per unit of energy than 
other fuels. So what have we tried to do to be part of the 
solution instead of part of the problem?
    First, we have reduced energy consumption per ton of steel 
and the corresponding carbon dioxide emissions by about 45 
percent since 1975, largely through investments in new 
technologies. Improvements in energy efficiency are achieved 
principally through large capital investments which the steel 
industry has undertaken even in times of severely-restricted 
cash flow, and there are examples in our written statement.
    We have also achieved energy reductions from process 
improvements to increase yield and decrease rejections, thereby 
reducing the amount of product that has to be put back through 
the steelmaking process. I hasten to add that the steel 
industry has established this remarkable record without 
government mandates or energy taxes.
    Second, we have worked with our major customer groups to 
find ways to reduce energy use and rehouse gas emissions in the 
manufacture and use of their products. Let me give you just one 
example in the automotive sector.
    At the moment, the auto project most important to us is 
PNGV, the Partnership for New Generation of Vehicles. I say 
this because we are just about to roll out steel's entry in the 
PNGV search for the material of choice for the body of the 
proposed new supercar. We call our entry the ultralight steel 
auto body. This is a project involving 35 steel companies from 
18 nations around the world. So it is a truly collaborative 
international process. It is a prime example, I think, of how 
well-meaning industries and market conditions can and will 
drive energy efficiencies on a voluntary basis.
    While public funds collected under the PNGV banner were 
being awarded to researchers to find alternatives to steel, 
steel has been moving forward with its own money to be part of 
the solution. Phase one of the research cost $2 million and 
resulted in a successful design or computer simulations. The 
ULSAB Consortium then committed an additional $20 million for 
phase two to build an actual body in white or space frame to 
validate the design and manufacturability. Phase two was just 
completed successfully.
    The ultralight steel autobody design offers a 25 percent 
savings in weight over the average of a typical 1998 four-door 
sedan. The car companies will be able to make it in production 
volumes and with current manufacturing systems. Crash 
simulations indicate that it will exceed current Federal safety 
standards and that stiffness, a measure of performance, will be 
improved significantly.
    Beginning on March 4 of this year, the North American 
members of the ULSAB Consortium will transfer this technology 
breakthrough for free to the automakers. This will include 
giving the Big Three car companies all the technical details of 
this project. We are bringing the demonstration structure to 
Washington in March to show and explain to those working on 
PNGV. We will be sure to invite you, so that you can see this 
example of what the steel industry is doing to contribute to 
the fuel-efficient car of the future.
    Third on the list of what we are doing to reduce our energy 
use and emissions. is to aggressively promote steel recycling. 
Steel is the most recycled material on earth. More steel is 
recycled than all other materials combined. Everything made 
from steel, from paperclips to battleships, is recyclable and 
is being recycled. Every ton of scrap that we put back in the 
furnace brings with it the energy used to make it in the first 
place. Recycling is something all of us can do to conserve 
energy, and the steel industry is the leading recycler.
    We intend to continue pushing hard on all of these and 
similar programs, and we don't need government mandates to make 
us do it. On the other hand, we would be happy to work with 
government, which brings me to steel's record of successful 
public-private partnerships on energy research and some 
recommendations for going forward.

                          partnership research

    In terms of collaborative research, a properly-constructed 
public-private collaborative research program could make a real 
contribution to the development of the technology necessary to 
reduce energy use in the future. This is a very relevant topic 
for the steel industry because it is related to work we are 
already doing with the DOE Office of Industrial Technology. In 
fact, we are one review away from publishing the environmental 
chapter of the steel industry technology roadmap. I have more 
about that technology roadmap in our written statement.
    Collaboration with DOE on the technology roadmap is a 
continuation of a series of projects made possible by the 
metals initiative which began as the steel initiative 12 years 
ago. The most recent success story from the metals initiative 
family of research is the advanced process control project. The 
APC program has yielded significant discoveries and the patents 
to go along with them, in the measurement and control of the 
steelmaking process. These inventions will increase yield and 
decrease rejections.
    The metals initiative is a good program, and we would like 
to thank you, Mr. Chairman and the subcommittee, for your 
support for it each year. It is also a good model for 
collaborative research programs for global climate technology 
breakthroughs.

                            recommendations

    Finally, our recommendations: I would like to suggest four 
things that might be considered as you design a new or enhanced 
program. One, focus on eliminating waste, not treating it. We 
believe the program should focus on the elimination of waste 
streams and specifically not on end-of-pipe treatments.
    Two, a preference for demonstration projects. Many 
processes which could either replace environmentally-risky 
operations or eliminate them altogether exist today at the 
pilot stage in steel and other energy-intensive industries. The 
next logical step is to take them to demonstration scale, but 
this can still be risky business. There remains a legitimate 
role for government to assume some of this pre-commercial risk. 
The government investment frequentlydraws in the rest.
    Demonstration projects are closest to success, and hence 
the benefits to the industry and the environment are closer at 
hand. These projects should be given priority over lab and 
pilot-scale work in any new or enhanced program.
    Third, investment in offshore research: any new program 
should not disqualify a proposed project because the research 
site is outside the United States. A good example from our 
industry is thin-slab casting. This technology was developed in 
Germany, but was first commercialized and is now widely adopted 
in the U.S. It promises to make a strong contribution to the 
continuing competitiveness in the American steel industry in a 
world of rapid technology advances. This is not the giveaway of 
U.S. know-how feared by some, although the results would, of 
course, be shared with others who accept a part of the risk. 
Rather, benefits of the commercial versions of these 
technologies will be reaped here in our plants, benefits which 
might never have become available if the U.S. standalone rule 
is imposed. We just don't have the luxury of trying to do 
everything stateside.
    And, finally, widening the partnership door: as is 
currently the practice in DOE-based research partnership, the 
emphasis in draft documents we have seen is on groups of 
collaborators, either ad hoc groups or pre-existing industry 
groups like the Institute. We're proud of the advances we've 
been able to make as a collaborative group working with the 
government, but at the same time we recognize there are 
occasions in which a partnership between the government and an 
individual company or facility makes sense as well. Any 
guidelines for additional sources of collaborative research 
should accommodate both collaborative and individual partners.
    In summary, we believe a sound collaborative research 
policy can be built around three principles: one, aim high. 
Focus on new processes that eliminate waste streams and not on 
pollution control treatment and remediation. Two, aim smart. 
Focus on demonstration projects which, although still pre-
competitive, are by definition closer to commercial readiness, 
and, therefore, more likely to be successful and return value. 
And, three, aim everywhere. Support U.S. investment in projects 
both here and overseas. The benefits are felt here no matter 
where the ideas originate.
    Again, on behalf of our U.S. member companies, thank you 
very much for this opportunity.
    Mr. Regula. Thank you.
    [The information follows:]

[Pages 79 - 88--The official Committee record contains additional material here.]


                                       Wednesday, January 28, 1998.

                         NATIONAL ENERGY POLICY

                                WITNESS

PETER M. ROSENFELD, DIRECTOR, NEW GENERATION VEHICLE PROGRAMS, CHRYSLER 
    CORPORATION

    Mr. Regula. Our next witness, Peter Rosenfeld, director for 
the Partnership for a New Generation Vehicles, Chrysler.
    Mr. Rosenfeld. Mr. Chairman and members of the committee, 
I'm here today as the U.S. automotive industry's 
representative. I am Chrysler Corporation's director for the 
Partnership for a New Generation of Vehicles, otherwise known 
as PNGV. My comments today, as well as the submitted written 
testimony, represent the collaborative work of the Ford Motor 
Company, General Motors, and Chrysler Corporation.

                        vehicle energy research

    I appreciate the opportunity to speak with you today about 
the strategic long-range plan for fossil fuel energy research 
and development, as well as energy efficiency and conservation 
research. More specifically, I'm here today to address the most 
important vehicle energy research areas, to explore at the 
Federal level that which is best left to industry, and that 
which is of a lower priority.

                            partnership role

    You've already mentioned your familiarity with the PNGV 
program, the partnership between the U.S. automakers and the 
Federal Government. One of our shared goals is to pursue 
research that will develop commercially-viable automobile 
technologies which can deliver up to three times today's fuel 
efficiency in a typical mid-size family sedan. This objective 
is founded in a common belief between our industry and 
government that we must address issues of national interest 
while at the same time recognize that we need to be responsive 
to the demands of our common constituent, the consumer citizen. 
By so doing, the partnership hopes to impact constructively 
energy security, environmental quality, and energy security in 
global economic competitiveness of the United States. We need 
to recognize these macroscopic matters with products that will 
offer all of the performance, utility, affordability, and 
safety of today's vehicles. We need to do so at a time when 
gasoline prices in the United States are cheaper than bottled 
water, and neither member of the partnership wishes to 
constrict the free demand market which exists here in the 
United States.
    The partnership is founded on the premise that leveraging 
our combined resources is a more efficient and effective means 
of achieving our common goals. When we established the 
partnership four years ago, our joint declaration of intent 
stated, and I quote, ``It is envisioned that there will be a 
significant cost-sharing by industry and government. The 
proportion of Federal funding will be higher for high-risk 
projects where the outcome is uncertain, and that of industry 
funding will be higher for technologies with a clear, near-term 
market.''
    We all recognize that government would need to take the 
lead where private industry simply could not justify the 
investment to its second and third key constituents, its 
employees, and its shareholders. Industry is hesitant tocommit 
to technologies which have a potential payoff beyond the planning 
horizon. Doing so jeopardizes jobs and investor return. On the other 
hand, integration of commercially-viable technologies into vehicles is 
clearly the responsibility of the automakers.

                             research areas

    During the past four years, industry and government have 
spent some time getting used to working together. Like any 
partnership, we've had our ups and downs, but overall, industry 
is very pleased with the outcome. Up to this point, PNGV has 
been exploring the significant array of technological 
developments with its partners at the national labs, at 
universities, at automotive suppliers, with individual 
inventors and the automakers themselves. We have investigated, 
for example, numerous alternatives for energy conversion, 
energy storage, materials, propulsion systems, and electronic 
devices. Together, we are now ready to focus on our efforts on 
four key research areas which offer the most promise for 
achieving the PNGV objectives. These areas on which to 
concentrate to make a difference are: direct injection engines; 
low-cost, high-efficiency electric drives needed for hybrid 
propulsion; low-cost, low-mass vehicle materials, and fuel 
cells. The submitted written testimony provides details for 
each of these elements.
    Our government partners share this recognition of the key 
technological challenges now facing the PNGV program. Our 
alignment is helping to keep the United States in the forefront 
of this competitive pursuit. On behalf of the U.S. automotive 
industry, I assure you that we intend to continue to provide 
focus to this effort. The result will be a more efficient use 
of Federal research, a more effective deployment of that 
technology into the vehicles of the American and global 
marketplace, and the achievement of our joint goals of national 
interest, including the 7 million workers that compose the 
automotive business in the United States.
    Thank you very much.
    Mr. Regula. Thank you.
    [The information follows:]

[Pages 91 - 100--The official Committee record contains additional material here.]


                                       Wednesday, January 28, 1998.

                         NATIONAL ENERGY POLICY

                                WITNESS

BERRIEN MOORE III, DIRECTOR, INSTITUTE FOR THE STUDY OF EARTH, OCEANS, 
    AND SPACE, UNIVERSITY OF NEW HAMPSHIRE

    Mr. Regula. Our next witness--I'll preface this by saying 
Governor Underwood alluded to the fact that we need to look at 
all dimensions of this, environmental as well as energy, and so 
on. And I think that's very much in keeping with the next 
witness--Mr. Berrien Moore, who is the director of the 
Institute for the Study of Earth, Oceans, and Space at the 
University of New Hampshire, which encompasses many elements 
here that the governor was alluding to. We're pleased that you 
could be here.

                              co2 problem

    Mr. Moore. Congressman, I'm delighted to be here, and as 
you note, I am going to take a somewhat different tact on this 
problem, but I think it's particularly appropriate, given the 
wide scope of this subcommittee.
    It's also appropriate that we recognize the nature of the 
CO2 problem. Even if the U.S. fossil fuel emissions went to 
zero, carbon dioxide would continue to increase in the 
atmosphere. Therefore, I think we must continue to think afresh 
about this problem.
    My paper focuses on three aspects. The first is the role of 
terrestrial systems as a possibility for storage of carbon, and 
hence the reduction of atmospheric CO2.
    Second is the question of verification. It's very easy to 
verify fossil fuel emissions because we tax fossil fuel. It's 
much more difficult to verify small changes in large numbers, 
and that would be the nature of biotic storage. And certainly 
any trading scheme for carbon emissions would depend an 
adequate verification strategy.

                              terrestrial

    And, finally, I have just a few comments about the protocol 
coming out of Kyoto, and particularly the role of terrestrial 
systems as recognized in that protocol. First, are terrestrial 
systems significant? Well, currently there's about 5 gigatons, 
billion metric tons, released per year due to fossil fuels, and 
from our studies from Kyoto, we see there's about a half a 
gigaton of this release retrieved back to the terrestrial 
system through photosynthetic processes. That's actually 
without even trying. That's just what is occurring today.
    We might ask ourselves, what could be done in this country 
if we actually tried to store carbon in terrestrial systems. 
The paper works through three simple examples. The first is to 
look at agricultural systems in the United States. There are 
roughly 2.5 million square kilometers in agriculture in the 
United States. There's between 3,000 and 6,000 grams carbon 
meter squared. Even if you could get a slight change, an 
additional 100 grams carbon per meter squared, you could 
sequester an additional quarter of a gigaton per year. Now 
that's rather significant. That's roughly a 50 percent increase 
in the net biotic storage going on globally today.
    It would also be a win-win strategy. In all likelihoodyou 
would make the soils more water efficient and you would perhaps prevent 
nutrient runoff, which is one of the problems that we appear to have 
been observing on the Eastern Shore last year.

                             Riparian Zones

    That thought actually raises another issue. That is the 
question of riparian zones. In the United States there are 
roughly 3 million miles of rivers. Let me beg your forgiveness 
and convert that to metric, which is the only way I can think. 
However, also, as a mathematician, I discovered my paper has a 
mathematical error in it, and therefore, I'd like to collect 
them later and resubmit my test score. [Laughter.]
    Mr. Dicks. Correct it for the record.
    Mr. Moore. I will certainly correct it for the record. I 
can't program a video machine either. [Laughter.]
    So you have roughly 5 million kilometers of rivers. Suppose 
2 million of this 5 million could be planted in increased 
riparian zones; it's roughly 50 meters on either side. And that 
would constitute a net storage, if these areas grew up as 
forests, of 40 gigatons. This is a rather significant number. 
In fact, if you assume a net storage of 20 gigatons, and if you 
assumed that this took place over four years, you could store 
an additional half a gigaton per year, which is essentially the 
global sink in biotic terms just within the United States.
    I think I'll skip the last example. It just, once again, 
looks at the net forest soils of the world, and you'll notice, 
though, that in the protocols coming out of Kyoto, forest soils 
for some reason are not allowed to be included, though 
agricultural soils can be.

                           atmosphere issues

    This brings me to a very important issue, and that is the 
issue of verification of sources and sinks. How are we going to 
actually document what countries are doing, particularly if we 
include, as Kyoto does, the question of biotic storage? This is 
a very complicated problem, and like most complicated problems, 
it's not going to be solved with a single silver bullet. It 
will require remote sensing, pilot plot studies, as well as an 
array of atmospheric measurements of carbon dioxide.
    The issue of the atmosphere is extremely important. One of 
the ways it will perhaps verify sources and sinks, essentially 
measuring the concentration as it changes in the atmosphere and 
then try to back-calculate to the sources and sinks. As such, 
we must have a very good understanding of what the terrestrial 
and oceanic systems are doing. And in that regard, it's 
particularly unfortunate that the Department of Energy has 
essentially eliminated oceanic carbon cycle research, and I 
think that given that the oceans are the primary repository for 
atmosphere CO2, that's really quite unacceptable.
    I'd also like to point out that there's a historical 
analogy on the issue of verification, and that's the Nuclear 
Test Bans Treaty, and I think verification will be central in 
subsequent negotiations.
    And, finally, my paper ends with a few comments on Kyoto. I 
think it was a rather remarkable achievement. At least, parties 
went away ready to work on hard issues. But on the issue of 
biotic storage there was a restriction which I find 
unfortunate, and that is it only considers biotic storage 
associated with human actions since 1990. This is going to make 
an already complicated topic almost impossible. How are we to 
determine whether the biotic storage that occurs in our 
national forests is because of actions that we took since 1990, 
or perhaps it's the actions that we took 20 or 30 years ago 
that are beginning to be reflected today.
    So I think that certainly this is something that needs to 
be addressed, and I look forward to working with this committee 
and others in doing so in the future.
    [The information follows:]

[Pages 104 - 110--The official Committee record contains additional material here.]


    Mr. Regula. Thank you, and I think in light of what's 
prospectively developing on global warming and the President's 
statement that there will be $6 billion spent on it, that we 
have to assess all these things. Obviously, some of it's going 
to come in the direction of this subcommittee, which leads me 
to what I just said to the staff person here. When we get the 
DOE budget, which will be shortly, we're going to summarize it 
and send all of our witnesses a copy, both those of you here 
and to the State witnesses, and ask you for your reaction in 
light of your testimony this morning. We want to do a 
constructive job of making sure that, as we allocate these 
resources, we're doing it very well. And I've been extremely 
impressed with both panels, and I say this because our next 
panel will be DOE, and to alert you that your proposals will be 
subject to scrutiny. You've heard the panelists, so you'll have 
some idea of where they'll be coming from in responding to what 
you're proposing to us.

                         doe/state partnerships

    Also, I note Governor Underwood has a time commitment, and 
I have just one question, Governor, before you have to leave, 
and that is, do you think in the past that DOE has been 
effective in developing the partnership with the States which 
you seem to indicate in your testimony is extremely important, 
given the fact that we have one set of taxpayers and one set of 
people that we serve? We're trying to determine what's the most 
effective way to serve this, the body politic.
    Governor Underwood. We have a good relationship with them. 
We have developed a good working relationship with them in West 
Virginia. They have an office in Morgantown, as well as one in 
nearby Pittsburgh. And the Industry-of-the Future Program I 
think holds a great deal of promise. We are happy with the 
working relationship.
    Mr. Regula. And you're anxious to even enhance that 
relationship, if I understand your testimony.
    Governor Underwood. Yes.
    Mr. Regula. Well, we'll look forward to your response to 
their budget proposals, and again, thank you for coming, and I 
realize you have to get on your way.
                              ----------                              

                                       Wednesday, January 28, 1998.

                         NATIONAL ENERGY POLICY

                               WITNESSES

HON. ERNEST J. MONIZ, UNDER SECRETARY OF ENERGY,
PATRICIA F. GODLEY, ASSISTANT SECRETARY FOR FOSSIL ENERGY,
DAN W. REICHER, ASSISTANT SECRETARY FOR ENERGY EFFICIENCY AND RENEWABLE 
    ENERGY

                              Introduction

    Mr. Regula. Our last panel is the Department of Energy, and 
you've heard a few challenges this morning, so you'll have an 
opportunity to respond. Our first witness will be the Honorable 
Ernest Moniz, the Under Secretary of Energy, who's relatively 
new to the job--what, two months?
    Mr. Moniz. Going on three.
    Mr. Regula. He came here from MIT, which is a rather 
respected institution in our society.
    And then we'll have the second witness who will be Pat 
Godley, Assistant Secretary for Fossil Energy, and lastly, Dan 
Reicher, Assistant Secretary for Energy Efficiency and 
Renewable Energy.
    We're pleased that you could be with us this morning, and 
share your observations on the future course of the DOE in 
meeting some of the challenges that you've heard from the other 
witnesses.
    So, Dr. Moniz, you're on.
    Mr. Moniz. Thank you, Mr. Chairman, members of the 
subcommittee. I appreciate very much the opportunity to testify 
here and for your long-time support of the Department and its 
programs. This is my first opportunity to appear before you, 
and I look forward to a sustained and fruitful collaboration in 
advancing America's national interests.
    As you said, I joined the Department less than three months 
ago, and at the Secretary's direction, have assumed broad 
responsibilities for science and technology programs across the 
full range of departmental missions. I confess to having felt 
somewhat like the proverbial dog that finally caught the car by 
the tailpipe. However, the proverbial response of ``now what?'' 
met with a clear answer from the Secretary: reduce tailpipe 
emissions. I guess that's PNGV.
    And that, in fact, takes us to the subject of this hearing. 
I know I'm carrying coals to Newcastle in emphasizing to this 
committee the importance of affordable and abundant supplies of 
energy to America's prosperity and environmental stewardship 
and national security. And we share both the opportunity and 
the responsibility to advance those interests.

                           why energy matters

    Energy is an economic driver. Americans spend more than 
$500 billion per year on energy. Yet many Americans do not 
appreciate the technology, the entrepreneurship, the can-do 
spirit that lies behind the energy sources that they so easily 
call into service with the turn of the ignition key or the 
flick of a switch. Energy offers economic opportunities. The 
global market for energy supply equipment alone is about $300 
billion. This will grow proportionately as world energy 
capacity doubles over the next few decades, and of course if we 
include the value of products whose marketability depends on 
energy performance--cars, appliances, et cetera--the global 
market reaches to the trillions of dollars. Our Federal 
policies and programs should help Americans take advantage of 
that growing market.
    Energy is a strategic global commodity. We have learned 
through harsh experience the price and availability of energy 
resources in one region can have global implications. 
Competition with and within the developing world for fossil 
fuel resources will become tense over the next decades.
    Energy affects the environment. Energy production and use 
are principal contributors to local, regional, and global 
environmental problems. Smog, acid rain, and particulates 
affect quality of life at local and regional levels. On global 
scale, there is little doubt that human activities associated 
with energy production and use have significantly altered the 
composition of atmospheric gases. The vast majority of engaged 
scientists anticipate that business as usual greenhouse gas 
emissions will in the next century seriously impact climate and 
human affairs. The risks are considerable. Prudence demands a 
measured, strong response to ensure that sustained technology 
innovation positions America for continued prosperity and 
quality of life.
    In fact, protecting and preserving the environment 
increasingly makes good business sense. I just returned from 
the North Slope of Alaska, in Anchorage, where John Brown, the 
very successful CEO of the BP group, noted, quote, ``I 
believe''--this was on Saturday, last week--``I believe we can 
and should be in a position where as an industry we are 
offering our customers choices and opportunities which will 
allow them to use the energy they need at an attractive price 
without damaging the environment. That's what people want, and 
one of the basic lessons of business is that you ignore your 
customer at your peril, and once again, I think we can do it.''

                    energy research and development

    Brown's optimism, which I share, is rooted in science and 
technology. The key role of energy research and development 
will be woven throughout the administration's forthcoming 
comprehensive energy strategy. A first draft will very soon be 
released for public comment. It's organized around common-
sense, high-level goals: improve the efficiency of the energy 
system; ensure against energy disruptions; promote energy 
production and use in ways that reflect human health and 
environmental values; expand future energy choices; and 
cooperate internationally on energy issues. These goals will be 
backed up by more detailed objective strategies, and we look 
forward to a dialog with this committee as the final document 
takes shape.
    Mr. Regula. Are you having dialog with the private sector 
and the States----
    Mr. Moniz. Yes.
    Mr. Regula [continuing]. In the process of developing this?
    Mr. Moniz. Yes, we will. In fact, starting on February 
the12th, and extending through about nine days, we will have four 
meetings throughout the country--the first is in Houston on the 12th, 
then Sacramento, then Detroit, and then back here in Washington, D.C. 
In addition, we will be soliciting written inputs over the Internet or 
any other form people desire. So we want a broad public dialog.
    Our success in reaching these goals tomorrow depends on our 
energy R&D plans today. Technology links to a ton of coal or a 
barrel of oil or a stiff breeze or the sun's warmth, to 
economic activity and to environmental stewardship. We are 
identifying a variety of energy technology pathways to help 
define the needed R&D portfolio. I will describe some of these 
very, very briefly. We will elaborate somewhat in the 
statements by Pat Godley and Dan Reicher.
    I would stress that each demands a strong Federal role, 
particularly as the R&D headlights are lowered in the private 
sector, because of both restructuring and globalization 
processes. One pathway is increasing our domestic energy 
supply. We are developing technology pathways to increase 
access to such resources while minimizing environmental 
impacts.
    Again, if you will permit me an anecdote, on Friday on the 
North Slope I saw firsthand the impact that technology has and 
its potential. A new field there, the Alpine Field, is 
accessible to exploration only because of the new 3-D seismic 
and drilling technologies, and its development will impact only 
.2 percent of the surface area.
    Mr. Regula. In the present, development has what percent?
    Mr. Moniz. The Prudhoe Bay is about 2 percent. So it's a 
factor of 10 reduction in the footprint. So it's very 
impressive to see, as time goes on----
    Mr. Regula. In less----
    Mr. Moniz. Impact on the surface area.
    Mr. Regula [continuing]. Square miles of the impact? Is 
that----
    Mr. Moniz. Exactly, right.
    Mr. Regula. By the new technology?
    Mr. Moniz. Correct.
    Mr. Regula. That's an enormous breakthrough.
    Mr. Moniz. Yes, it's a steady development coming from these 
new drilling technologies and the ability to use much better 
characterization of the reservoirs.
    Further, in terms of potential, there are huge natural gas 
resources, of course, there, largely untapped because of 
transportation issues. A DOE-industry cost-shared collaboration 
is developing the revolutionary ceramic membrane that will 
produce synthesis gas in one step, thereby perhaps dramatically 
reducing the cost for conversion to a liquid form, and adding 
significantly to our domestic energy supply.

                         environmental security

    Other pathways address environmental security. New 
technology is clearly key to long-term greenhouse gas emission 
reduction, although I stress that the goals served by this new 
technology include protecting the economy and promoting 
security.
    Relevant energy pathways roughly in a time ordering that 
reflects major contributions to emissions reductions can be 
grouped in three baskets: energy intensity, carbon intensity, 
sequestration. I'd say a few words about that.

                             fossil energy

    Our energy intensity is about 50 percent higher here than 
in other industrialized countries, suggesting we have the 
potential for significant further gains. Also, 85 percent or 84 
percent of America's energy use is derived from fossil energy, 
and since fossil fuels will continue to dominate energy use for 
many decades, efficiency of fossil use is a very high priority. 
Important examples include co-generation, intelligent building 
control systems, fuel cells joined with combined cycle plants, 
integrated gasification combined cycles, and of course the 
PNGV.
    Carbon intensity, again, many examples in the fossil area, 
including increased use of natural gas in advanced turbines in 
the near term, perhaps to methane hydrates in the long term. We 
want to extend the life cycles of existing nuclear reactors, 
and quite clearly, emphasize strongly development of new 
renewable energy sources, such as advanced wind turbines, 
onsite solar and photovoltaics, and co-firing of coal plants 
with forest and agricultural biomass.
    Carbon sequestration we mentioned earlier is an example of 
a high-risk, potentially very high-payoff research program, 
payoff many decades down the road presumably, but we will be 
more aggressively pursuing these, or proposing to do so, in the 
coming budget with examples including the capture of combustion 
gas, the use of microalgae to convert power plant CO2 to 
biomass, and the injection of CO2 into various subsurface----
    Mr. Regula. You anticipate you're going to get a good chunk 
of the $6 billion that was talked about last night? [Laughter.]
    Mr. Moniz. We will be coming forward with, I would say, a 
strong initiative in terms of increased, and hopefully focused, 
R&D, yes.

                             basic research

    Another pathway I'll just mention, of course, is basic 
research. Many areas of basic research underlay future energy 
capabilities: bioscience, its photoconversion, advanced 
materials, and understanding of the global carbon cycle, 
including, as was just discussed, for the issue of 
understanding both sources and sinks.
    And new tools, such as simulation capability, being 
developed in our weapons program, are going to bring new 
understanding to global systems, subsurface phenomena, and 
combustion science.
    All these pathways are part of our balanced energy R&D 
portfolio. Using the public funds for the public good, we have 
the responsibility to manage these funds effectively. Examples 
of management initiatives underway or poised for increased 
emphasis are stronger R&D integration through a reinvigorated 
R&D council, led by the Under Secretary; contract reform; 
updating R&D performer selection, and sharpening the framework 
of industrial partnership programs, and implementation of an 
aggressive R&D roadmapping strategy that will both sharpen 
missions and provide for more stringent program reviews.
    In conclusion, let me emphasize that although the R&D 
payoffs of individual programs are sometimes uncertain, and 
often long in gestation, as is appropriate to high-risk, high-
potential research, we know from experience that science and 
technology have been at the core of American productivity 
gains. I would like to emphasize the need for investing now. 
Perhaps this point is best made by a story, the story of 
General Lyautey, a French general, who upon returning to his 
chateau following foreign services, asked that a certain tree 
be planted. The gardener protested that this tree would not 
bear fruit for 100 years. Lyautey's response was simple: then 
plant it this afternoon; we have no time to lose.
    So if we're going to meet the Nation's crucial 
energy,environmental, and security needs of the next century, we have 
no time or energy to lose. My colleagues and I look forward to working 
with the committee, with the States, with industry, and with the public 
to shape and advance that portfolio. In fact, Mr. Chairman, your 
suggestion of soliciting the comments of these distinguished panelists 
on our forthcoming budget submission we view as very constructive, and 
we offer our services in helping you do that in any way we can.
    Thank you for your attention, and we will be happy to 
address questions.
    [The information follows:]


[Pages 117 - 131--The official Committee record contains additional material here.]


    Mr. Regula. Thank you.
    Pat Godley, the Assistant Secretary for Fossil Energy.

                            energy strategy

    Ms. Godley. Mr. Chairman, and other members of the 
subcommittee, my brief comments today will address R&D policy 
from the perspective of energy supply. Mr. Chairman, to put it 
in its simplest terms, no rational energy strategy can afford 
to overlook any affordable domestic energy resource, certainly 
not one that is rooted in economic reality. An effective energy 
strategy, if it is to make a discernible difference in our 
energy future, must recognize that every one of our domestic 
energy supply options must be part of a balanced portfolio.
    The comprehensive energy strategy we will offer in coming 
weeks will be pragmatic. It will recognize that there's a 
critical role for renewable energy resources in our future, 
resources like solar, wind, and geothermal resources, just as 
there is for fossil fuels, coal, petroleum, and natural gas. It 
will also recognize that we must preserve the technological 
option of nuclear power and continue to pursue the long-range 
potential of fusion energy. It will recognize that the strength 
of our economy is founded on affordable energy, and that 
historically the root of every energy crisis we have sustained 
in this country has been an overreliance on a single form of 
energy. The strategy we are developing will emphasize that this 
is a mistake we must not repeat.
    Mr. Chairman, as you are well aware, the United States 
remains an energy-rich Nation. The vast wealth of our coal 
resources surpasses the entire energy content of all of the 
world's known producible oil. We have enough natural gas for 
decades for use in homes, power plants, and increasingly in our 
transportation fleet. The sunlight that falls on just 1,300 
square miles, about one-tenth of the area of the site in Nevada 
where we used to test nuclear weapons, has enough potential 
energy to meet the Nation's total demand for electricity. Or 
consider that the wind that blows across just 1 percent of the 
land in the 48 contiguous states has enough energy to meet 20 
percent of current U.S. power needs.
    Even large quantities of petroleum, arguably the fuel of 
most immediate concern to us, lie untapped within our borders. 
In fact, for every barrel of oil we have produced in the 
history of our domestic petroleum industry, we have left nearly 
3 barrels in the ground. The collective wealth of these and 
other energy resources is the true measure of this Nation's 
energy potential. Mr. Chairman, as you are also well aware, 
potential is one thing; delivering on this potential is 
another. The key to changing potential into reality is 
technology and a national energy strategy that encourages the 
development, demonstration, and commercial deployment of new 
energy technology.
    We face many challenges as we approach the coming new 
century: the need for a cleaner environment, the need to slow 
the buildup of greenhouse gases, the need to sustain economic 
growth, to continue to producing the high-quality jobs that are 
chiefly responsible, as you mentioned earlier today, for this 
year's historic balanced Federal budget, and the need to co-
exist in a global community, where energy is an instrument for 
global peace and prosperity, rather than wedge that drives 
nations farther apart.

                            technology needs

    In each of these areas, Mr. Chairman, new and better 
technology can and must play definitive role. But in today's 
competitive economy, the bottom-line balance sheet often 
dictates near-term corporate priorities, as well as 
governmental priorities, and we heard that again from our 
earlier witnesses. In today's cost-cutting climate, the 
technologies that can achieve the full potential of our 
domestic energy wealth and convey the benefits of a cleaner 
environment and a more secure energy future will be developed 
only if we sustain a commitment to cost-shared public-private 
R&D partnerships.

                              partnerships

    In the coming weeks, Mr. Chairman, we will return before 
this committee to present our 1999 budget proposal, and as we 
make our case for the funding priorities of these programs, we 
will describe in more detail some of the significant results 
emerging from our government/industry/academic partnerships.
    Let me give you just a couple of examples of what the 
combined talents and resources of government and industry can 
produce. With regard to electricity supply, as you are 
personally aware, Mr. Chairman, from your visit earlier last 
year to Tampa, Florida, our clean coal technology program now 
has in place the foundation for an entirely new approach for 
generating electricity from coal: gasification combined cycle 
technology. This is technology that rivals natural gas in terms 
of reducing smog and acid rain pollutants, and moreover, sets 
us on a new path toward unprecedented power-generating 
efficiencies and correspondingly lower greenhouse gas 
emissions.
    With regard to domestic oil supplies, travel to Utah or 
Michigan or Colorado, and you'll see oil fields operating today 
that, if it wasn't for the government/industry co-sponsored 
reservoir class program, would be sitting idle and abandoned.
    With regard to natural gas supply, travel to south Texas 
and you'll see a natural gas industry that has reserves valued 
at more than $1.4 billion because technology developed in our 
joint program with industry has identified gas that older 
exploration and production processes would have missed.

                     renewable energy partnerships

    I also want to take just a couple of more minutes to 
impress on this committee the significant progress of our 
renewable energy partnerships. Consider that just a fewyears 
ago a kilowatt hour of electricity produced by photovoltaics cost 90 
cents to generate. Today because of sustained commitment to joint 
government/industry R&D, that cost has dropped to as low as 18 cents, 
90 cents to 18 cents.
    Or consider that at the Geysers in California, because of 
better technology, the cost of geothermal energy has been cut 
almost in half, from 9 cents per kilowatt hour to 5 cents, or 
that wind energy, once 40 cents per kilowatt hour, today can be 
generated for only 5 cents a kilowatt hour, and as a result, 
wind is already producing enough electricity for 1 million 
Americans.
    We must continue this progress. We must recognize that 
support for one fuel resource does not mean opposition to 
another. For example, biomass can be co-fired with coal in an 
industrial boiler, and the combination reduces greenhouse gas 
emissions. That diversifies our energy options, promotes rural 
development in our farm communities, and helps keep coal in our 
energy mix.
    The advanced drilling systems we developed can be equally 
beneficial in extracting the energy potential of geothermal 
resources. One day, perhaps if we're truly successful and truly 
progressive, we might see hybrids of renewable and fossil fuel 
energy technologies linked together to form energy islands. The 
PCAST panel called them energy plexes.
    This is our vision of the optimal use of our energy 
resources, and this type of long-range thinking, planning 
outside of our traditional fuel stovepipes, we believe is the 
mark of a truly progressive energy strategy. But as you are 
well aware, Mr. Chairman, the success of these programs depends 
on far more than just coordinated planning and implementation 
within the Department of Energy. It will take a committed 
partnership of government, our national laboratories, 
universities, and industry, each doing what it does best, but 
each also knowing what the other is doing, to realize the full 
potential of energy resources that fuel the strength of this 
Nation.
    Thank you, Mr. Chairman. At the appropriate time I'd be 
happy to answer your questions.
    Mr. Regula. Thank you.
    Mr. Reicher, the Assistant Secretary for Energy Efficiency 
and Renewable Energy.
    Mr. Reicher. Mr. Chairman and members of the subcommittee, 
as the final witness, I will be brief, recalling Congressman 
Udall's frequent observation at the conclusion of opening 
statements: everything has been said, but not everyone has said 
it. [Laughter.]

                           energy efficiency

    I appreciate this opportunity to present the Department's 
approach to energy efficiency. As Under Secretary Moniz and 
Assistant Secretary Godley noted, our emerging energy strategy 
strikes a careful balance between producing energy more 
effectively and using it more efficiently.
    Mr. Chairman, there is an unfortunate tendency to view 
energy efficiency as somehow different from our traditional 
energy investments, as some green alternative to the real 
business of energy. The plain fact is that about 93 percent of 
the energy we consume today comes from fossil and nuclear fuel. 
So in a very real sense, energy efficiency today is grounded in 
making better use of conventional energy sources. Most energy 
experts agree that we must make major investments to develop 
clean, renewable energy sources to ultimately replace 
conventional energy. In the meantime, however, conventional 
energy supplies are far too precious to waste.
    The heart of our energy efficiency program centers on 
developing the technologies that enable us to get more service 
from every unit of energy, and from this flows a number of 
important benefits: extending the life of our domestic 
reserves, reducing our dependence on oil from potentially 
unstable regions, minimizing the adverse environmental and 
human health effects of energy use, including greenhouse gas 
emissions, and making our industries and economy more 
productive and more competitive. The investments we make in 
energy efficiency do not simply save energy; they represent one 
of the cheapest, least-intrusive ways of meeting requirements, 
and one of the best public investments we can make to ensure 
the productivity and competitiveness of our economy.

                              partnerships

    Let me share some examples with you. Our Office of 
Industrial Technologies has been working with the steel 
industry on advanced process controls as part of our 
Industries-of-the Future Program. You heard this referred to 
earlier by the representative of the steel industry. These 
process improvements and other advances will enable a growing 
steel industry to cut energy by 10 percent by 2010, reduce 
waste, and improve productivity substantially.
    At the recent Detroit auto show, Chrysler, Ford, and GM 
announced dramatic breakthroughs toward accomplishing the joint 
industry/government goal of developing a safe, clean, and 
affordable mid-sized family car that gets 80 miles per gallon 
and carries six passengers. Many of the technologies which 
enable these breakthroughs are a direct result of the 
Partnership for a New Generation of Vehicles, including hybrid 
electric drives, direct injection engines, fuel cells, and 
lightweight materials. PNGV brings the auto industry, 
government, and the national laboratories together to develop 
these critical technologies.
    In the building area, just five building technologies 
supported by the Office of Energy Efficiency and Renewable 
Energy have saved U.S. consumers $33 billion in energy costs, 
more three times the entire R&D investment of the office for 
the past 20 years. It is worth noting these five same 
technologies cut carbon by some 19 million metric tons, 
illustrating how a well-defined energy technology strategy 
offers the key to addressing climate change cost-effectively.
    The Federal energy management program is helping us to 
capture energy savings in the Federal sector, where we spend 
about $8 billion on energy annually, approximately 2 percent of 
all U.S. energy use. We have recently announced agreements that 
will leverage billions in private sector investments to improve 
the Federal Government's energy efficiency. We will be able to 
pay this investment back and put billions back in the pockets 
of U.S. taxpayers just fromthe money we save on our national 
energy bill. Our cost is the administration of these programs, a price 
we can cover in part from the energy savings we realize.
    Mr. Chairman, I stated earlier that our strategy strikes a 
careful balance between supply and demand. It also is designed 
to encourage an integrated application of efficient supply 
systems, such as advanced turbines and fuel cells, with the 
efficient use of power, including waste heat. Such an approach 
is referred to as combined heat and power.
    Charles Bayless of Tucson Electric Power and Tom Casten of 
Tri-Gen Energy illustrated the potential of CHP systems in a 
recent editorial in The Washington Post. They said the 
following: ``The average American power plant burns three units 
of fuel to produce only one unit of electricity, venting the 
other two-thirds as heat. In effect, two-thirds of every coal 
mine is a wasted hole in the ground. It's as much wasted energy 
as Japan uses each year to fuel its entire economy.''

                            energy strategy

    Our energy strategy will help us eliminate this waste by 
making the R&D investments needed to generate and use energy 
efficiently. Some U.S. companies have increased efficiencies to 
nearly 90 percent in some site-specific applications by 
combining efficient onsite generation with efficient use.
    Our technology strategy involves extensive work with 
private sector partners and the states to assure that our 
programs are relevant, the government's role is appropriate, 
and that payoff is in sight. By focusing our investments in 
areas where private resources are lacking and where there is a 
potential to realize substantial public benefits, we can better 
ensure that we are targeting our efforts appropriately and 
leveraging resources in the bargain.

                       when to terminate support

    As technologies approach commercial viability or as our 
partners signal that programs are not working, or that we 
should refocus, we can end public support or shift resources.
    As Chairman Keese stressed, States are important in these 
determinations. Let me give you two examples of where we have 
made these hard choices. In our Industries-of-the-Future 
Program, we have at least for the time being discontinued work 
with petroleum refiners because of a lack of progress, and we 
are moving forward to establish a new Industry-of-the-Future 
initiative with the mining industry.
    In the PNGV program we cut investments in technologies that 
were not advancing as well as others and applied them in areas 
promising higher returns. Mr. Chairman, the process can work. 
In the coming weeks I will also return to talk to you about the 
Office of Energy Efficiencies and Renewable Energy's budgets 
and its programs. We have worked hard to make our budget more 
accessible and more transparent, and I want to thank your staff 
for the help with that.
    We are terminating programs that are not meeting our goals. 
I look forward to reporting to you on our budget and programs, 
and to working with you and your staff to develop a program 
that delivers the energy security, environmental benefits, and 
increased competitiveness that energy efficiency promises.
    Thank you.
    Mr. Regula. Thank you.
    Now at this time we are going to have the questions for any 
of the panelists, and I want to start with Mr. Nethercutt 
because he has a speech commitment. Mr. Nethercutt?

                     strategy to terminate support

    Mr. Nethercutt. Thank you, Mr. Chairman, very much, and I 
want to thank all the witnesses. I've been listening 
attentively, and I've learned a lot from you all, and I think 
you're to be congratulated on presenting your positions very 
well.
    I want to start with the agency witnesses and focus on the 
topic of balanced budgets, economizing, efficiency in 
government. My sense is that there are many, many small 
programs within the Department of Energy that sort of keep 
going. They're on and on and on every year, and perhaps you 
have some come to mind from the witnesses here, and perhaps 
from the other two panels of witnesses, especially related to 
energy efficiency.
    I think your challenge and ours--and I'm interested in 
learning what the industry and the state representatives here 
today have to say about it, too. What should be our strategy 
for determining how to terminate these endless programs 
sometimes, and maybe small ones that don't hold great promise, 
and having--if you all with, with all respect, the courage to 
say that this isn't working, it hasn't worked--talk about 
collaboration, collaborate with the industry and say that's a 
no winner. What is your strategy for doing that? Because I 
think this subcommittee is likely to say, among other things, 
this is what we charge you to do. And I'd be interested in 
knowing what the industry and the state representatives have to 
say as well. From a policy standpoint that's definable, that's 
clear to everybody, how do you do that and what's your 
recommendation for getting it done, so you save money and then 
put it into places where it can really do some good?
    Mr. Reicher. Mr. Nethercutt, we take that imperative very 
seriously, and I think it entails in the energy efficiency 
program a very careful review. I'm new to that office, only 
been there a few months, but I am looking very carefully at 
each part of the program and asking the very hard questions 
about the appropriateness of the government's role, whether we 
can expect to pay out in a fairly reasonable timeframe, what's 
the industry's----
    Mr. Nethercutt. What would fairly reasonable be in your 
judgment, if you can say at this time, understanding you're new 
to the--
    Mr. Reicher. It depends on what you're funding, whether 
it's more of applied research versus basic research. So it's 
hard to give general timeframes, but in the applied area, where 
we're trying to move technologies, we've got to see payoffs in 
the five-to-ten-year perspective in many cases.
    Mr. Nethercutt. I don't mean to interrupt you. I notice in 
the testimony today there's reference that there are a wide 
range of improved clean energy options: renewable, fossil, and 
nuclear could be introduced and widely deployed within the next 
two decades. We just finished, 1979 to 1998 time period, we 
finished two decades at the Department of Energy. I guess I'm 
interested in knowing whether you think it might take another 
two decades to deploy some of these things, or is that an 
overstatement? Anyway, maybe incorporate it in your answer.
    Mr. Reicher. Yes, I will. I will do that. I mentioned two 
examples where fairly recently, we have made the hard decisions 
to terminate work in the Partnership for a New-Generation-of-
Vehicles, again working very much with industry, with the 
automakers and their suppliers, made rather large decisions to, 
for example, no longer focus on gas turbine engines for 
automobiles, and we're going to take the money we save there 
and apply it into to more high-priority areas. So that, I 
think, gives you a sense that we're capable of doing it.
    In the case of Industries-of-the-Future, as I mentioned, we 
tried, and frankly, did not succeed in our work on developing a 
technology plan with the oil refining industry. We've made the 
decision that that work is, at least for now, not going to go 
forward. By the same token, the mining industry has come to us 
and said, ``We like what you're doing in this program. Can we 
sign on?'' So, again, we made that hard decision and we're 
moving forward.
    Addressing your other question of the last 20 years, I 
guess what I'd say is I think too often we lose sight of the 
fact that over the past 20 years we've had a huge array of 
success with a number of these technologies, and you've heard, 
across the fossil area and into the energy efficiency and 
renewable energy area, and so I would stress that that's got to 
be looked at. I mentioned just five technologies alone where 
the savings are in the many billions of dollars as a result of 
the development with DOE support, and most importantly, as 
you've stressed, the actual deployment of those technologies in 
the public.
    Mr. Nethercutt. Yes, sir?

                       New Evaluation Approaches

    Mr. Moniz. May I just add that, briefly, just to indicate 
that while Dan has addressed some of the issues specifically in 
the program, to note that we are engaged in implementing some 
new processes which are somewhat broader. For example, I 
alluded briefly to the R&D council which will be--which is, I 
should say--is a council which I now chair and which is looking 
at integration of our R&D. That has the prospect of 
efficiencies. It has the prospect of increasing in general, the 
level of competitive grants in the programs, and Dan, for 
example, is working hard at that at EE.
    We intend to invoke more peer review, and very importantly, 
it is a home for what I intend will be a pretty aggressive 
roadmapping strategy. For example, they are--and I might add 
that these two offices are collaborating very well--including 
on a roadmap for clean power.
    The importance of the roadmapping strategy, which is 
characterized in my view by having sort of--setting a goalpost 
and getting the relevant stakeholders involved in trying to 
reach something approaching at least a consensus view for 
getting there. It provides a framework for prioritization, for 
evaluating programs, and therefore, for advancing the process 
that you advocate.

                         Collaboration with EPA

    Mr. Nethercutt. Secretary, let me just sort of take time--I 
heard what you said, and I appreciate the collaboration. Have 
you thought of collaborating with EPA in making the approval 
process or the regulatory process less burdensome to industry 
in terms of advancing technologies? I mean, that seems to me to 
be a technology or I should say a collaboration that will 
enhance technology, enhance efficiency, cut down on bureaucracy 
and cost, and all those things that I think most of us want to 
avoid.
    Mr. Moniz. Yes, in fact, I think that refers to the 
priorities which one of the panelists--I apologize for not 
recalling which one--indicated in terms of, for example, waste, 
in terms of having a focused technology development go from 
what do you do with the waste to how do you prevent the waste, 
and that's where certainly interactions also with regulators I 
think can be very important.
    Mr. Nethercutt. Will you develop the strategy and a plan to 
deal with EPA or other regulatory agencies?
    Mr. Moniz. Actually, Dan, why don't you respond to Mr. 
Nethercutt's question.
    Mr. Reicher. There are number of cases, and increasingly, 
where we are in fact working very closely with EPA. I mentioned 
in my testimony the issue of combined heat and power, both how 
you generate and use power more effectively and integrate them 
in industry, and we're working very closely with EPA because it 
turns out there are, in fact, regulatory barriers to the use of 
combined heat and power in industry and in other sectors, and 
that's just one of many, many examples where I think we are 
increasingly working, and quite effectively, with the 
regulators, and not just EPA, but with state regulators as 
well, because they often hold the keys to this process.
    Mr. Moniz. A more regular process would be an interesting 
idea.
    Mr. Nethercutt. It will save a lot of stress in the real 
world, if that can be done, because talking about the mining 
industry, I went to a mining conference out west, and the wrath 
against EPA was, doggone it, you stay out of the permit process 
until the end, and then you come in and say you can't do it, 
and it drives them nuts, and it costs lots of money just in 
that one industry alone.
    Mr. Moniz. That one area I wasn't raising because it's 
quite different, but given the general geography, I was at 
Hanford last week, for example, and there, of course, was a 
formal arrangement involving the State EPA and the Department 
in terms of how we go toward cleanup.
    Mr. Nethercutt. I agree. Tri-party agreement is great.

                    Technology Performance Criteria

    Ms. Godley. I think one last point to make, and it ties in 
with the roadmapping, technology roadmapping, effort that Dr. 
Moniz is leading within the Department, and that is one key way 
to know when to terminate a project is to have set ahead of 
time clear criteria for success for that project, along with 
timetables. This is something that Chairman Regula had a big 
role in designing in the clean coal technology program, and 
both participants from industry, as well as government, could 
have technological performance criteria to evaluate projects 
against. So there was no surprise and we would know what the 
status of projects were, and I think that's something we'll see 
more of in connection with our roadmapping efforts.
    Mr. Nethercutt. I wonder if I could solicit, Mr. Chairman, 
in the time remaining anybody from these otherpanels who may 
want to comment about this concept I have of trying to have efficiency.

                         Project Determination

    Mr. Edelheit. I'm not sure I can answer your question 
completely, but talking about when you kill projects and how 
you kill projects. It's a big problem, and I'll give you one 
technique that we've used in GE. I run a large central research 
lab at General Electric, 1,500 people. We do the advanced 
development for all of GE's businesses, and we were almost 
killed by the company a few years ago because of that very 
issue. The idea was the scientists were just working on 
projects forever, and they always have a million reasons to 
keep going. And what we did was change the way the project was 
funded. We said now the businesses have to fund us directly, 
and now we're talking about real money as opposed to sort of 
corporate money or government money.
    Mr. Regula. Potential customers would have to be part of 
it, is that it?
    Mr. Edelheit. Yes, and so what happens is that now we don't 
get funded if the business no longer finds it real valid, and I 
talked about it in my testimony, this issue of cost-sharing. In 
principle, if you're really going to introduce this technology 
to the marketplace, eventually industry is going to have to put 
a lot more money in than the R&D funds, and that's what I would 
be watching. If industry isn't committing a large amount of its 
own funding over time, and perhaps with the performance goals, 
and also in some pre-arranged way, you can tell pretty quickly 
whether or not this is really going to be introduced in the 
marketplace, really going to make a difference, at least in 
that set of programs. That would be one technique I would use.
    Mr. Nethercutt. Okay. Mr. Valentino. Yes, sir?

                   Competitive Selection of Projects

    Mr. Valentino. First of all, I'd like to second what the 
gentleman from GE said about collaboration and co-funding. And, 
also, he made a point earlier about competitive selection of 
projects. I just wanted to comment about how do you terminate 
programs, and the corollary is how do you initiate programs, 
and just mention very briefly what I have to--what I'm faced 
with in my organization in New York.
    We have an annual plan that we update every year that gets 
widespread peer review and technical comment, and then when we 
go into a new area, we have kind of workshops where we get 
everybody in a room like an EST-seminar and nobody leaves for 
two or three days until we decide what are the research 
impediments in various areas, and then we have a competitive 
selection process to try to get the best ideas and we look at a 
focused program.
    But the last thing I want to mention, and this really also 
talks to some of the comments that were made here today about 
public participation. For every one of my program areas I have 
an outside technical peer review panel which includes some of 
the clients we collaborate with. It includes stakeholders in 
general, and it includes technical experts. At the end of the 
year, they are asked whether they thought our program was 
successful, and they give us comments, but they also let us 
know whether they were actively--you know, the things they told 
us were considered, and that goes to my board of directors. Now 
to the extent that they would comment that something we did 
really wasn't effective, that would eliminate it, but I would 
also offer to Mr. Moniz, when he talked about having public 
hearings about some of their activities, I would argue that 
that really isn't enough. You have to be in the back side of 
the process and ask people, are you satisfied that you have 
been actively considered and that the work, the outcome of this 
work, is what the stakeholders ask for on the front end?
    Mr. Nethercutt. Thank you very much. Mr. Chairman, I do 
have to leave. I wish I could stay. I have a lot more 
questions.
    Mr. Regula. We'll do as much as possible, and I think 
especially to our state and private industry witnesses we'll 
get the DOE budget to them, for their comments.
    Mr. Nethercutt. Great.

                             State Research

    Mr. Regula. Thank you. I might ask, do California and Ohio 
have a somewhat comparable peer review, and do you have success 
in getting rid of things that don't work? I know how 
bureaucracy is, not easy.
    Mr. Keese. Mr. Chairman, I have to talk about the past and 
the future.
    Mr. Regula. Right.
    Mr. Keese. In the past we have had research and development 
programs that have generally hand in hand at a very low level 
in very targeted areas with a very limited budget. So I think 
that the result was that we were self-limiting. We had nowhere 
near what we felt was necessary.
    Under our new environment, which we now have, starting 
January 1st of this year, we have $62 million a year to put 
into research and development programs----
    Mr. Regula. State money?
    Mr. Keese. State money. We have $62 million a year. We are 
doing what we talked about. We are going to attempt to work 
with DOE and see if we can collaborate and maybe match some of 
those programs. We are looking for a program, and programs will 
rise to the top if they are outfunded by collaborators. We 
intend to leverage our money three, four, five times and get 
the other participants in to make sure that they're valid 
projects. And we have already set the goals and at the same 
time we set the goals we have defined how we're going to 
evaluate them down the line. So at the get-go, we are deciding 
how we will evaluate what we're doing here.

                     Electric Industry Deregulation

    Mr. Regula. And you're saying research, especially in 
electricity, becomes important because of the competitive 
environment that the electric industry is going to be in with 
deregulation. Then they can spend money.
    Mr. Keese. They're spending none, and I would stress two 
words, I guess: technology is going to be the solution, and 
reliability is going to be the problem. In our case, we have 
mother utilities who were responsible to make sure there was 
enough generation that got transmitted, that got delivered, and 
distributed. Now that particularly the tie is cut from 
generation, the distribution utility is just going to take what 
they get. The transmission company, the ISO in our case, is 
going to take what they get and deliver it, but nobody is out 
there to assure that any particular generator will stay online, 
will be concerned about maintenance, will make the abrupt 
decision at some moment that it's no longer efficient to 
operate the plant, and will go out.
    So what we need is tremendous technological advances. The 
blackouts we had, the outages in California of 1996 were not 
caused in California. They were caused in Oregon, and they were 
caused because the system could not accommodate thesmall 
problem that started. So we need a lot of research, a lot of 
technological advances in how we handle the transmission system, so 
that we can assure the reliability.
    Mr. Regula. How are you going to know if you're a producer 
how many people you're going to have as customers next year?
    Mr. Keese. It's the market.
    Mr. Regula. Yes, I understand that.
    Mr. Keese. In our case, everything the investor-owned 
utilities own, although they're divesting, must go into our 
stock market, what we call our power exchange. So they have to 
deliver it to the power exchange, and the power exchange makes 
it available.

                  Public utility commission decisions

    Mr. Regula. So the State is going to monitor the consumer 
base that needs to be filled then. Is that correct?
    Mr. Keese. The public utilities commission is going to 
regulate the distribution utilities only for how they 
distribute it. FERC and the ISO are going to regulate the 
transmission system. Nobody is going to regulate the generation 
side. Now we have in the West somewhat an overabundance of 
generation now----
    Mr. Regula. That's what I understand.
    Mr. Keese. At the Commission we're looking at, between 
January 1st and the end of summer, perhaps having six or seven 
new power plants for 3,500 to 4,000 megawatts in the pipeline. 
We've had two applications already; we've got another 10 people 
talking to us. So we may have that much going toward new 
generation.

                             Nuclear energy

    But the nuclear plants are set out there, and who knows how 
long they'll go after 2002. Things are going to change after 
2002, but we're----
    Mr. Regula. Why?
    Mr. Keese. Well, because the payoff of the stranded assets 
uses perhaps 25 to 30 percent of the bill right now.
    Mr. Regula. The nuclears are stranded?
    Mr. Keese. The nuclears are stranded. They'll be paid off, 
and if they can't generate--all the new power plants are next 
generation natural gas; every one of them is combined cycle 
natural gas of some sort or other. And they're talking about 
coming in between 2.5 and 3 cents, where you may be talking 
about a dime or 13 cents for a nuclear plant. So there's going 
to be a dynamic that takes place in 2002. In the meantime, 
these are designated must-run and you buy it; you buy their 
production anyway. They're designated must-run.

                       Ohio's Evaluation Process

    Mr. Regula. Ohio, do you have a good peer review?
    Ms. Ward. We do. In the context of deployment programs, we 
are very deliberate in deciding how we want to evaluate the 
impact of these programs. So what we do, Mr. Chairman, is 
essentially decide what data we need to collect, and establish 
a mechanism for evaluating at the end of the process whether or 
not we achieve the result we were looking for.
    In the case of the low-income weatherization program, 
because of the evaluation we've done, we have eliminated 
certain measures completely. We do not offer them because they 
do not save energy. In the case of home energy rating systems, 
in the State of Ohio we worked to try to get that into the 
marketplace using the same technology that has been so 
successful for low-income weatherization. We have just recently 
made the decision that the marketplace is not ready for this.
    The housing industry doesn't need the stretch in the 
mortgage right now, and unless we are prepared to subsidize the 
cost of providing those ratings, it's not going to work in the 
market. So we've made a decision to pull back the organization 
and kind of put it on a shelf and mothball it and tell them in 
the future, the marketplace is prepared and will be ready to 
react to it at that point. In the meantime, we'll be working on 
building the infrastructure, working with the housing industry 
and contractors, so that they can deliver the quality service 
that we know is needed to get the savings.
    In the evaluation process, we not only look at numbers and 
quantification, but we also take a look at quality. We talk to 
the end-users, the customers, the folks who had to deliver the 
service at the local level and find out from them, was this the 
most cost-effective process for you? Was this a cost-effective 
end result for you as a consumer? And we take all of that into 
consideration as we design our next set of deployment efforts.

                       States Sharing Information

    Mr. Regula. Do the states have a mechanism of sharing? You 
know, the states have become the innovators in many respects in 
government programs. Do you have a way in which, if something 
works well in California, that other states can find out about 
it and replicate it?
    Mr. Keese. If there is, it is probably through the DOE. In 
the case of New York, specifically, we have signed a memorandum 
of understanding within the last week--actually, I guess it was 
about--you signed it a month ago, where we're going to attempt 
not to duplicate. So we're going to say, all right, you're 
doing that; we're not going to do it. We're doing this.
    Mr. Regula. So experimentation might be taking place in New 
York that will be ultimately beneficial to all the states, but 
you're not going to do it, you'll let them do that one, and 
you'll do some other one?

                             Roles For DOE

    Mr. Keese. Right, and we, when we're talking about roles 
for the DOE----
    Mr. Regula. Yes.
    Mr. Keese [continuing]. What we're talking about, we think 
it is--this should be DOE's role. Now if DOE is going to fund 
an infrastructure program in California, and we're going to do 
it and come up with the records, maybe it should be our 
obligation to go out with DOE and spread it around the country, 
but we can't really convene a meeting of 50 states and say, 
``Come; we're going to tell you about something.''
    Mr. Regula. No, but DOE would seem to me to be the central 
repository of information where they could disseminate, and my 
question I guess--well, go ahead.

                   State coordination and co-funding

    Mr. Valentino. Well, I want to comment exactly on what 
you're saying, Mr. Chairman. There's an organization that I 
might have mentioned earlier called Association of State Energy 
Research and Technology Transfer Institutes (ASERDI) where 
there's 19 state research organizations. I was the chair for 
the past four years, but it includes a number of organizations, 
elements of five national labs, and it includes EPA; it 
includes EPRI and GRI. This organization has been in existence 
for about six or seven years, and if DOE had a more active role 
in doing the coordination, this organization probably would not 
have been formed.
    Mr. Regula. Do you think DOE should do this coordination?
    Mr. Valentino. I absolutely do, and I also want to mention 
the other thing in the front end in terms of looking at what 
should be funded. In New York we co-fund at least three to one 
right now, where we have about $15 million and it turns into a 
$60 million program, but 95 percent of our projects have co-
funding not by DOE, but by the potentialusers of the 
technology. So you don't end up with an annual final report that sits 
on somebody's shelf. You end up with technology--yes.
    Mr. Regula. You've got a new mission, I think.
    Mr. Moniz. Would you repeat the name of the organization? 
I'm sorry.
    Mr. Valentino. ASERTTI.
    Mr. Regula. I'm hearing partnership is the way to do this--
private, state, Federal.
    Mr. Keese. That's the way you connect to the marketplace--
--
    Mr. Regula. Right.
    Mr. Keese [continuing]. Through the collaboration, through 
the partnership. And we really--a number--during the 
presentations here, the states have been involved in a lot of 
DOE activities, joint DOE activities. The states have really 
not been involved at the front end in prioritizing and get 
involved in project setting. We'll be happy to look at their 
budget and comment. Are states going to be involved in your 
council, the council structure you have set up? I thought you 
were going out to industry and----
    Mr. Moniz. No, the directing council is an internal 
integrating mechanism. The national energy strategy process 
will be going out to the states in about two weeks. That is 
public comment in a few days, and then a meeting in Houston, 
for example, and Sacramento, the 13th.
    Mr. Regula. Because we don't need another study to put on 
that pile. We want something that works and that the private 
sector is going to benefit from, and the states, and most 
importantly, the people of this country.
    Mr. Moniz. We are certainly hoping, as Pat Godley 
mentioned, that it will be a very pragmatic statement of what 
we need to do with our partners. It will be brief as well.

                             cO2 emissions

    Mr. Regula. Dr. Moore, he is gone? I was interested in his 
comment that a great proportion of CO2s are not 
manmade. My question is, in this effort to get 7 percent below 
1990 levels in the U.S.--of course, I was in Kyoto, and several 
of those countries we met with made it very clear they weren't 
going to do anything, particularly the Chinese. It was a very 
empathic no.
    But, in any event, can we impact on the non-manmade, which 
is apparently about 96 percent of CO2 emissions? Are 
we able to do something about that, since it's the largest 
portion of them?
    Mr. Moniz. Well, I think we should separate the issues. 
First of all, there is, of course, a large carbon cycle 
involving----
    Mr. Regula. Right.
    Mr. Moniz [continuing]. As was discussed, the ocean, 
ecosystems, the atmosphere, et cetera. The issue which is 
behind the focus in Kyoto is the fact that manmade emissions 
coming from activities, particularly over the last 50 years, 
although going back to the end of the last century, in 
particular, have clearly impacted in changing, if you like the 
equilibrium level of carbon dioxide in the atmosphere; that is, 
it's roughly a 30 percent increase over the sort of steady-
state, natural background level. So what we're addressing here 
is in some sense the increment of carbon dioxide over the 
natural level from human activities, and stabilizing that over 
the years.
    Again, I would just stress that there is--first of all, no 
issue in terms of the increased CO2 levels versus pre-
industrial levels. There's no issue about the science of the 
greenhouse gas effect. There is, as you know, debate about, for 
example, when you come down to various regional implications, 
we are going to be pushing the science very hard, as I 
mentioned, including some of our newest innovation tools over 
the next 10 years. We want to understand the global carbon 
cycle much better, for all kinds of reasons, including the 
kinds of verification tasks which Dr. Moore described.
    Mr. Regula. Well, there's so much to cover here, and it's 
1:30, so I think we're probably going to have to adjourn. I 
think this is--in the great long-term scheme of things 
developing a rational, pragmatic energy policy is extremely 
important, if future generations are going to enjoy the same 
quality of life we do. It seems to me, again, as I said before, 
partnership is the key. This has been excellent testimony, and 
we'll look forward to the private sector witnesses and the 
state reacting to your budget proposal. Is there something that 
will work?
    Well, thank you all for coming.
                                       Wednesday, February 4, 1998.

         BACKLOG MAINTENANCE HEARING FOR LAND MANAGING AGENCIES

                               WITNESSES

BARRY T. HILL, ASSOCIATE DIRECTOR FOR ENERGY, RESOURCES AND SCIENCE, 
    GENERAL ACCOUNTING OFFICE
CLIFF FOWLER, ASSISTANT DIRECTOR, GENERAL ACCOUNTING OFFICE
ROBERT J. WILLIAMS, ACTING INSPECTOR GENERAL, U.S. DEPARTMENT OF THE 
    INTERIOR, INSPECTOR GENERAL OFFICE
ROBERT YOUNG, DEPUTY ASSISTANT INSPECTOR GENERAL FOR AUDIT, U.S. 
    DEPARTMENT OF AGRICULTURE, INSPECTOR GENERAL OFFICE

                      Opening Remarks--Mr. Regula.

    Mr. Regula. The hearing will come to order.
    I'd like to get the hearing underway for the Department of 
Interior and Related Agencies. We have a very important hearing 
this morning. We're pleased to welcome all of you and take your 
testimony.
    What triggered this morning's hearing, in part, is what I 
have before me, a maintenance backlog set of numbers that add 
up in to $12.8 billion (in 1998). That's a lot of money. That's 
a lot of backlog. What we're trying to determine is whether 
this is really a credible set of numbers. If it is, we have to 
take that into account in prioritizing the monies that we 
distribute in this committee.
    I said at the outset as chairman of this committee that we 
really have three classes of projects--must do to maintain and 
protect our resources; secondly, need to do, things that we 
need to do if at all possible; and then nice to do programs. 
We're interested in sorting those out. I think the nice to dos 
have to have somewhat of a lower priority.
    The other point that I've been interested in is the need to 
take care of what we have. It is always more interesting to go 
out and buy new lands and build new buildings and not take care 
of the facilities that we already have. Yet, that is an 
extremely important responsibility of the agencies supported by 
the committee budgets.

                           purpose of hearing

    The purpose of this hearing is to ascertain what the real 
backlog maintenance is. What is the basis for $12.8 billion? Is 
that real or is that just one of those windshield surveys or 
off-the-cuff decisions? How do you get to these numbers and are 
the numbers credible? Do we have a system in place, and this is 
very important, to prioritize maintenance requirements? Is 
there a system in each of the agencies to ultimately meet those 
needs and are they planning to reduce the backlog? We have to 
put a high priority on maintenance and taking care of backlog 
needs.
    We have two opportunities to do that. One is, of course, 
that there are monies available in the FY 98 Land and Water 
Conservation Fund, a very substantial amount, and I am 
disappointed that the report I received on Monday indicates 
that the Administration is not putting a very high priority on 
that. Perhaps we can address some of those opportunities. The 
second, of course, is the Recreation Fee Demonstration Project 
which offers an opportunity to address backlog maintenance.
    This morning we will hear from the GAO and the Inspectors 
General from the Department of Interior and the Department of 
Agriculture on our first panel, and then we will hear from the 
new Assistant Secretary in the Department of the Interior and 
from the representatives of our land management agencies. What 
I plan to do this morning is to take questions from our 
colleagues on the subcommittee after each panel so we can move 
the hearing expeditiously.
    Do either of you want to comment?
    Mr. Skeen. I think you've about covered it. Let's get on 
with it.
    Mr. Regula. OK. Our first witness this morning will be 
Barry Hill, the Associate Director for Energy, Resources, and 
Science, the General Accounting Office.
    We're pleased to have you here, Mr. Hill. Your entire 
statement, and that's true for all of you, will be placed in 
the record. If you could summarize, it would be helpful given 
our time frame.
                              ----------                              

                                       Wednesday, February 4, 1998.

                UNITED STATES GENERAL ACCOUNTING OFFICE

                                WITNESS

BARRY T. HILL, ASSOCIATE DIRECTOR FOR ENERGY, RESOURCES AND SCIENCE, 
    UNITED STATES GENERAL ACCOUNTING OFFICE

                       maintence backlog in parks

    Mr. Hill. Thank you, Mr. Chairman, I will be brief. Thank 
you very much Mr. Chairman and members of the subcommittee. It 
is my pleasure to once again appear before this subcommittee 
and to have the opportunity today to address the maintenance 
backlog issue in our Nation's parks. Before I discuss this 
issue, I would like to first introduce my colleague. To my 
right is Cliff Fowler, who is our Assistant Director in charge 
of National Park issues.
    Before I start my summary, I would like to briefly comment 
on what you will be hearing from this panel. You asked each of 
us to address a number of points related to the maintenance 
backlog situation at each of the Federal land management 
agencies. Bob Williams, from the Interior IG Office, is going 
to discuss those issues relating to the Bureau of Land 
Management and Fish and Wildlife Service, and Bob Young, to his 
left, from the Agriculture IG Office, will do it for the Forest 
Service, and Cliff and I will discuss the National Park 
Service.
    Specifically, you asked us to address the following three 
issues: First, what is the composition of each agencies backlog 
estimate; second, what is the reliability of these estimates, 
and third, how are the agencies managing their backlogs? In 
addition, you also asked us to discuss any recent requirements 
that have been placed on these agencies that may have a 
positive impact on what is being done in this area.

                      common themes among agencies

    While the specifics vary from agency to agency, our reviews 
show some common themes running throughout our respective 
analyses. Overall, you will hear that each agency has 
significant maintenance backlogs that they are trying to deal 
with, and that there are issues with each agency's approach to 
managing their maintenance backlogs that need to be addressed. 
Specifically, the agencies' maintenance backlog estimates do 
not accurately reflect their maintenance needs because they 
include activities and projects that go beyond what is normally 
considered maintenance, such as new construction and the 
expansion or enhancement of existing facilities.
    In addition, the maintenance backlog data are not reliable. 
This is largely due to the absence of a common definition about 
what should be included in maintenance backlogs and because of 
outdated information.
    And finally, the agencies do not have a systematic way of 
identifying total maintenance needs and tracking progress 
against these needs.
    On a positive note, recent new accounting standards as well 
as management changes prompted by the Government Performance 
and Results Act could, if properly implemented, help the 
agencies develop more accurate data on their maintenance 
backlogs and track progress in addressing these needs.

                     national park service backlog

    Now I would like to summarize the results of the work that 
we did at the National Park Service. At the same time as new 
parks are being added to the national park system and existing 
parks are being further developed and improved, conditions in 
many parks are deteriorating. An indication of this 
deterioration has been the increasingly large maintenance 
backlogs cited by the National Park Service and others. The 
Park Service has reported that the maintenance backlog has more 
than tripled over the past ten years.
    For years, the Congress has been concerned about the growth 
of the maintenance backlog at the same time that hundreds of 
millions of dollars are being provided each year to deal with 
it. The Park Service estimated, as of January 1997, that its 
maintenance backlog was about $6.1 billion. Most of this 
amount, about $5.6 billion, or about 92 percent, were 
construction projects. The remaining 8 percent, or about $500 
million, consists of smaller maintenance projects such as 
reroofing or repainting buildings.
    Our analysis of this estimate shows that it does not 
accurately reflect the scope of the maintenance needs of the 
park system. We reviewed the Park Service's list of projects in 
the construction portion of the maintenance backlog and found 
that at least 21 percent, or $1.2 billion of the $5.6 billion, 
is not for maintenance but for new facilities. We visited four 
parks to review some of the projects listed in the Park 
Service's maintenance backlog estimates and found such things 
as the following:
    At Acadia National Park, we found a $16.6 million project 
to replace the visitor center and construct a park entrance. 
Colonial National Historical Park included $24 million to build 
a colonial parkway bicycle and walking trail. Delaware Water 
Gap National Recreation Area included $19.2 million to build a 
visitor center and rehabilitate facilities. And Rocky Mountain 
National Park included $2.4 million to upgrade entrance 
facilities.

                backlog maintenance definition problems

    Mr. Chairman, I would like to make one thing very clear. We 
do not question the need for these facilities; however, 
including these kinds of new construction projects or projects 
that expand or upgrade park facilities in an estimate of the 
maintenance backlog is not appropriate because it goes beyond 
what could reasonably be viewed as maintenance. As a result, 
including these projects in the maintenance backlog only 
contributes to the confusion about the actual maintenance needs 
of the National Park System.
    We also found that the Park Service's estimate of its 
maintenance backlog is not reliable. The agency does not have a 
routine, systematic process for determining its maintenance 
backlog. Instead, its maintenance backlog estimates are 
complied on an ad hoc basis in response to requests from the 
Congress or others. The most recent estimate of $6.1 billion 
was based largely on information that was compiled by the Park 
Service over four years ago and has not been updated to reflect 
changing conditions in individual park units.
    Officials from the individual parks that we visited said 
that they were not even asked to provide specific updated data 
to develop this latest estimate. In fact, some of these 
estimates had changed significantly since they had provided 
them four years ago. For example, Acadia National Park's 
estimate to replace the visitor center and construct a park 
entrance had been reduced from $16.6 million to $11.6 million; 
and Rocky Mountain's $2.4 million project to upgrade the 
entrance facility is no longer a funding need at all because it 
is being paid through private means. This fact, as well as the 
absence of a common definition of what should be included in 
the maintenance backlog, contributes to an estimate that is 
both inaccurate and out-of-date.
    We also found that the Park Service has not used the 
estimated backlog in managing park maintenance operations. 
Consequently, it has not specifically identified its total 
maintenance backlog. Accordingly, the agency cannot determine 
whether the conditions of park facilities are improving or 
worsening. Since the backlog far exceeds the funding resources 
being made available to address it, thePark Service has focused 
its efforts on identifying its highest priority maintenance needs.
    However, given that substantial additional funds from the 
Demonstration Fee Program are now available to address 
maintenance, over $100 million starting in fiscal year 1998, we 
believe that the Park Service needs to more accurately 
determine its total maintenance needs and track progress in 
meeting them so that it can determine the extent to which they 
are being met.

                    new federal accounting standards

    Recently, new Federal accounting standards, as well as the 
management changes prompted by the Results Act, are in effect 
for the Park Service and for other agencies. If properly 
implemented, these tools should help the agency to better 
address its maintenance backlog. The Federal accounting 
standards require Federal agencies to develop better data on 
their maintenance needs. The standards define deferred 
maintenance and require that it be disclosed in agencies' 
financial statements beginning with fiscal year 1998.
    In carrying our the Results Act, the Park Service is 
requiring its park managers to measure progress in meeting a 
number of key goals, including whether and to what degree the 
conditions of park facilities are being improved. When fully 
implemented, this requirement should make the Park Service as a 
whole, as well as individual park managers, more accountable 
for how it spends maintenance funds to improve the condition of 
park facilities.
    In summary, Mr. Chairman, in our view there should be no 
free lunch. While the Park Service will enjoy the benefits of 
over $100 million annually in increased funding, now more than 
ever, it must be prepared to demonstrate what is being 
accomplished with these resources. To do so will require the 
agency to develop more accurate data on its maintenance backlog 
and to track progress in achieving it. If implemented properly, 
the new accounting standards and the provisions of the Results 
Act should go a long way in addressing the concerns that have 
been expressed by Congress and others over the years.
    Mr. Chairman, that completes my statement. I would be happy 
to answer questions from you or any other member of the 
subcommittee.
    [The information follows:]

[Pages 152 - 164--The official Committee record contains additional material here.]


    Mr. Regula. I think what we'll do is have the other two 
panel members present and then we'll have questions from our 
members.
    Our next witness is Inspector General Williams from the 
Department of the Interior. Mr. Williams?
                              ----------                              

                                       Wednesday, February 4, 1998.

 OFFICE OF INSPECTOR GENERAL, UNITED STATES DEPARTMENT OF THE INTERIOR

                                WITNESS

ROBERT J. WILLIAMS, ACTING INSPECTOR GENERAL
    Mr. Williams. Mr. Chairman, members of the subcommittee, I 
am pleased to be here today to provide testimony on our review 
of the maintenance backlogs of the Bureau of Land Management 
and the U.S. Fish and Wildlife Service.
    Before discussing the results of our review, I would like 
to make a comment about our audit coverage. Because of time 
limitations, we did not have an opportunity to determine 
whether personnel complied with procedures for establishing and 
managing the maintenance backlogs on a bureauwide basis. 
However, to the extent that testing was performed, we will 
provide our comments on our findings.

             bureau of land management maintenance backlog

    I will now discuss the results of our review. For the 
Bureau of Land Management, as of September 1997, the bureau 
reported a maintenance backlog of $220 million, which comprises 
the bureau's corrective maintenance needs. The backlog includes 
corrective maintenance projects such as replacing floors and 
repairing foundations and road and trails that had been 
degraded or damaged.
    The backlog also includes cyclic maintenance that is 
performed on a periodic basis, generally at more than five-year 
periods, such as replacing roofs or repainting bridges. The 
corrective maintenance backlog does not include equipment or 
facility replacement, land treatments, the cost of equipment 
repair, or routine maintenance such as road grading, janitorial 
services, and recreational site cleanup.
    The Bureau's maintenance management system was designed to 
provide an inventory of facilities and information on current 
and future maintenance needs and on the condition of facilities 
for field offices to use in setting their priorities. However, 
the system is not centralized, and bureauwide information is 
compiled from data provided by each of the field offices.
    The Bureau includes items in its system based on 
maintenance needs identified by the field personnel during the 
course of their daily activities. There is no guidance on 
performing condition assessment surveys and no requirement for 
higher level reviews or approval of any items added to the 
backlog.
    The cost estimates for backlog projects are usually 
developed by the field personnel, with some oversight provided 
by the state office engineering staffs. The estimates are 
generally prepared using historical data, such as bid 
abstracts, or general industry guidelines.

                         cost estimate problems

    In our September 1997 audit report entitled ``Recreation 
Management, Bureau of Land Management,`` we concluded that the 
cost estimates in the Bureau's maintenance management system 
did not accurately reflect funding needs and that the cost 
estimates were often significantly overstated, unsupported, or 
inaccurate. The report also said that the system did not 
provide the Bureau with reliable information that could be used 
to make management decisions on prioritizing maintenance needs.

                          inadequate controls

    The Bureau has not implemented adequate controls to ensure 
that the data in its management system are reliable. We 
identified wide disparities in the scope of work and the cost 
estimates for similar projects, especially for road 
maintenance, which accounts for $160 million, or 73 percent, of 
the Bureau's $220 million corrective maintenance backlog. For 
example, the Nevada backlog of $62 million was based on 
bringing all roads up to standard regardless of use or demand 
for improvements, whereas California's backlog of $10.4 million 
was based on bringing up to standard only those roads that were 
heavily used or for which there was a public demand for 
improvements. We estimated that if Nevada had used California's 
method, the backlog would decrease by $40 million. Conversely, 
had California used Nevada's method, the backlog would increase 
by $20 million.

                           definition issues

    We also believe that planned cyclic maintenance projects, 
such as replacing roofs, should not be included in the Bureau's 
backlog because such projects represent future, not deferred, 
maintenance. The inclusion of cyclic maintenance is not 
consistent with the recent Federal Accounting Standard No. 6, 
which defines deferred maintenance as work that ``was not 
performed when it should have been or was scheduled to be and 
which, therefore, is put off or delayed for a future period.''
    In recent reviews, the Bureau has also identified 
inaccuracies in its maintenance backlog. For example, in 
December 1997, the Colorado State Engineer reduced the backlog 
estimate for recreation sites from $1.3 million to $420,000 to 
reflect adjustments for projects that were no longer needed or 
had been funded and for work that had been performed as far 
back as 1991.

                           backlog management

    In terms of managing the backlog, according to Bureau 
personnel, corrective maintenance projects are identified and 
prioritized at the field level as part of its annual workplan 
and budget process. Working committees consisting of field and 
state office personnel determine the priority of these 
projects, with the highest priority given to health and safety. 
Bureau personnel said that priorities are assigned to a limited 
number of projects based on anticipated funding levels and that 
priorities are not recorded in the Bureau's maintenance 
management system.
    Although the Bureau has established priority categories for 
its projects, it has not assigned priorities to specific 
backlogged projects at the national level or established a 
formal plan to address the backlog. Bureau officials said that 
a formal, centralized priority system was not needed because 
the Bureau's maintenance needs far exceeded funds available for 
maintenance.
    According to Bureau headquarters personnel, funding for 
maintenance is distributed on the basis of historic 
allocations. If funds exceed the previous year's funding level, 
the increase is distributed to each state office based on that 
state's percentage of scheduled maintenance needs or its 
percentage of the backlog as reported in the system. In using 
this method, the Bureau has little assurance that funds are 
always provided for the highest priority projects.
    We also found that the Bureau does not have formal 
procedures for tracking corrective maintenance accomplishments 
or for recording the costs incurred on individual projects, 
other than construction projects, in either its maintenance 
management system or in its financial accounting system.
    This concludes my discussion of the maintenance backlog for 
the Bureau of Land Management.

             fish and wildlife service maintenance backlog

    Mr. Regula. Thank you very much. Wait a minute, you've got 
one more.
    Mr. Williams. For the Fish and Wildlife Service, yes. I 
know you're on the edge of your seats, but----
    [Laughter.]
    Mr. Williams. As of December 1997, the U.S. Fish and 
Wildlife Service reported that the refuge system backlog was 
$599 million, and that the hatcheries and other facilities 
backlog was $118 million. According to the Service, the backlog 
includes equipment and facilities replacements, provided that 
the replaced items are of similar size and purpose. The backlog 
also includes maintenance that is needed to repair or 
rehabilitate facilities or equipment, including the 
modification of existing facilities for new or enhanced 
functions if the project does not increase the size of the 
building by more than 10 percent. The Service's backlog does 
not include routine operational maintenance or the construction 
of new facilities.
    The Service's backlog is based on information contained in 
two maintenance management systems: one for its refuge system 
and one for hatcheries. According to Service officials, station 
managers at field locations develop the backlog data by 
conducting inspections to identify maintenance needs and by 
developing cost estimates for items entered into their 
automated systems. Regional office engineering staff is 
responsible for reviewing these estimates on an as-requested 
basis.

                       backlog data availability

    At the six sites we visited, we were unable to determine 
whether the backlog data were complete and accurate because 
only 5 of the 174 projects we reviewed had documentation to 
support the recorded cost estimates, and the Service did not 
require that the results of the annual inspections be 
documented in its files. Although we found documentationthat 
reviews of the backlog were conducted, we did not find documentation on 
the contents of the reviews or the adjustments that may have been made 
to the backlog data as a result of these reviews.
    The recently issued Financial Accounting Standard No. 6 
states that deferred maintenance should include only those 
costs of replacing parts and structural components and exclude 
the cost of expanding the capacity of an asset or otherwise 
upgrading it to serve needs different from, or significantly 
greater than, those originally intended. As such, we believe 
that the inclusion of costs for totally replacing equipment or 
facilities and for expanding buildings for new or enhanced 
functions is inconsistent with the Standard.
    As of December 1997, the Service's recorded backlog of $599 
million included costs of $140 million for equipment 
replacement and costs of $150 million for facilities 
construction. We could not readily determine what portion of 
the construction costs were for replacing or for expanding 
facilities to provide new or enhanced functions.
    The Service uses its backlog data to select projects for 
funding and for allocating funds. Station managers rank 
projects recorded in the maintenance management system and 
assign the highest priority to health and safety projects. 
Other projects are assigned rankings on a judgmental basis to 
address that station's mission-essential needs.

                            project ranking

    According to the Service, the rankings assigned to projects 
by field office personnel are reviewed at the regional offices 
to validate the health and safety designations. At the six 
sites reviewed, we found that the projects which had been 
assigned the highest rankings had been funded.
    The Service relies on its regional backlog list and 
rankings for allocating funds to the regions. For refuges, 
funds are allocated to the regions based on their percentage of 
the backlog. For hatcheries, one-third of the maintenance 
budget is retained by the headquarters and is assigned to field 
locations for projects that address national priorities such as 
tribal fishery or mitigation programs. The remaining two-thirds 
of the budget is allocated based on each region's percentage of 
the total maintenance backlog.
    As with the Bureau of Land Management, the Service has 
little assurance using this method of allocation that the 
highest priority projects on a Servicewide basis are always 
funded. The Service has the capability to report its progress 
in managing the backlog. Specifically, the Service has a 
separate account in its financial accounting system to record 
the cost of each funded project. However, the Service's 
maintenance management systems are not integrated with its 
financial accounting system.
    Overall, we concluded that the Service has the framework 
for an effective maintenance management system, provided that 
personnel comply with the procedures described in my statement. 
This concludes my prepared statement.
    [The information follows:]

[Pages 169 - 184--The official Committee record contains additional material here.]


    Mr. Regula. Thank you.
    Our next witness is Mr. Robert Young, the Deputy Assistant 
Inspector General for Audit, USDA Inspector General's Office. 
Thank you for coming.
                              ----------                              

                                       Wednesday, February 4, 1998.

                UNITED STATES DEPARTMENT OF AGRICULTURE

                                WITNESS

ROBERT YOUNG, DEPUTY ASSISTANT INSPECTOR GENERAL FOR AUDIT

                   forest service maintenance backlog

    Mr. Young. Thank you, Mr. Chairman and members of the 
committee. I am pleased to be here to provide testimony about 
the maintenance backlog on Forest Service property.
    In response to your request, we reviewed the Forest Service 
system for determining the maintenance backlog, assessed 
reliability of the backlog data reported, and determined how 
the agency managed the backlog. We obtained information and 
interviewed agency officials at the Washington office, two 
regional offices, and four national forests.
    The Forest Service manages over 191 million acres and has 
almost $8 billion in plant, property, and equipment. These 
assets are extremely varied and include roads, buildings, dams, 
trails, bridges, and equipment, each of which require unique 
maintenance applications. Because of the millions of people 
visiting the national forests each year and the intrinsic risk 
of some of the structures, like bridges, to public safety, the 
management of maintenance is a very demanding, complex, and 
critically important activity.
    In a paper prepared by the Forest Service to support its 
fiscal year 1998 budget request, the Forest Service stated that 
funding for its infrastructure was not keeping pace with the 
growing needs and the condition of the infrastructure was 
declining. It cited a maintenance backlog of between $7.3 and 
$8.3 billion.
    The maintenance backlog information currently reported by 
the Forest Service, except for 1997 roads maintenance data, was 
actually compiled prior to 1994. In general, the methodology to 
gather this information was not documented and the maintenance 
backlog figures reported also included various non-maintenance 
activities such as upgrading, reconstructing, and adding 
capacity to existing property. In general, the maintenance 
backlog information reported by the Forest Service was 
outdated, inconsistent, inflated, and not readily supported.

                       management of maintenance

    The Forest Service's management of maintenance, because of 
the decentralized organizational structure of the agency, is 
largely performed at the local level. Forest Service budget 
requests cannot adequately address the maintenance backlog 
because the annual funding requirements are not known. The 
budget process itself to some extent exacerbates this problem. 
Maintenance is funded through several budget line items, only 
one of these, infrastructure management, includes an expanded 
budget line item which appears to specifically denote 
maintenance. Other related budget line items combine funding 
for activities in addition to maintenance. As a result, 
accountability over maintenance becomes lost in pools of funds 
which can be used for various non-maintenance activities.
    Funds are appropriated along line items, such as National 
Forest Systems, and not by functional activity, like 
maintenance. As a result, the funding is subjected to absorbing 
overhead charges as the appropriations are reallocated down 
through the organizational framework. Our review of four 
national forests disclosed that the total salary and overhead 
allocations absorbed between 32 and 50 percent of the initial 
appropriation before the funding was made available to the 
districts for expenditure. This impact on available funding 
contributed to the maintenance backlog at the operational 
level.
    In a 1991 review, GAO identified that the Forest Service 
did not have a system in place to record recreation 
maintenance. GAO made a series of recommendations, to include 
(1) instituting a requirement that maintenance needs data be 
collected, and (2) installing internal controls to ensure that 
the accuracy of the reported maintenance data backlog.

                          no common definition

    In 1994, we followed up on these recommendations and found 
that, despite the general agreement of the Forest Service three 
years prior, little or no corrective action had been taken. We 
also found that the Forest Service had not established a 
comprehensive, systematic method to collect, verify, and report 
backlog information. In addition, the Forest Service had not 
established a common definition for maintenance backlog, thus 
impairing the accuracy of the reported data.
    We recommended that the Forest Service establish 
performance measurements and objective, quantifiable, and 
measurable goals over maintenance activities. Once again, the 
Forest Service generally agreed to implement our 
recommendations. The Forest Service pledged corrective action. 
Concern centered around the development of an initiative called 
``Meaningful Measures,'' a process whereby operations and 
maintenance activities could be tracked. However, during our 
current review, we were informed that the deferred maintenance 
component of Meaningful Measures had only recently been 
completed and is only now being disseminated.

               development of property management system

    In addition to Meaningful Measures Initiative for 
recreation, the Forest Service has been developing an automated 
system since 1993 called INFRA, short for infrastructure, which 
will serve as the agency's property management system. This 
system does not yet have the capability, however, for recording 
and compiling maintenance backlog. A Forest Service official 
informed us that the definition and business rules to determine 
maintenance backlog have not yet been agreed upon. The Forest 
Service stated that the system should have the capability to 
quantify and track maintenance backlog data by the end of 
fiscal year 1999.
    In summary, it is our opinion that maintenance should be 
classified as an expanded budget line item. This would require 
separate budget formulation and require that records be 
maintained to control expenditures. It would also provide much 
greater visibility for this critical activity. Further, we 
recommend that the Forest Service broaden its strategic plan, 
issued pursuant to Government Performance Results Act of 1993, 
to include developing strategies to strengthen its management 
over maintenance.
    This concludes my statement. I would be pleased to answer 
any questions that you might have.
    [The information follows:]

[Pages 188 - 197--The official Committee record contains additional material here.]


    Mr. Regula. Thank you very much.

                           non-reliable data

    It seems to me what we've heard is a serious indictment of 
the way in which maintenance is being handled by all of the 
agencies. It's not for not knowing what should be done, but 
it's a matter of acting on your recommendations which 
apparently have been given to them over a period of years, plus 
the fact that we've had the requirement with changes in the 
Federal Accounting Standards and the Government Performance and 
Results Act. It doesn't appear to me that they are being 
implemented. My impression is that the data we receive is not 
reliable.
    I think there's a high priority in talking about it because 
it's supposed to generate funding, but there is a low priority 
on acting on the information available and there's not a very 
reliable basis to make these estimates. We've heard all kinds 
of numbers and that's why we're having this hearing; what's the 
basis for saying there's $10 billion, $12 billion, $14 billion 
in backlog maintenance. There is no common definition of what 
is backlog maintenance. In the Park Service it's new 
construction. I find it hard to believe that new construction 
is backlog maintenance, yet that number is thrown into the mix. 
There is no priority system that I can ascertain, and no system 
for reporting progress. It seems to me that there's a dearth of 
good management in dealing with something that's 
criticallyimportant to safety, it's important to the enjoyment of the 
parks, it's important to preservation. The President in his State of 
the Union mentioned that we need to maintain our treasures, preserve 
them, but I don't see a lot of evidence of a commitment to 
accomplishing that objective.

                      questions from the committee

    I had a lot of questions which I'll submit largely for the 
record, and for all the other members who want to likewise 
submit questions for the record, I hope you will be prompt in 
responding because we want this information in developing the 
1999 budget. I thought it was an interesting comment that there 
ought to be a specific line item, a way of making sure that 
these funds get used for taking care of backlog maintenance. 
But, again, we need to know what's reality and what's just 
talk.
    I'd be interested, and I'd like an answer from each of you, 
have you made these recommendations and expressed these 
concerns in the past to the agencies that you're responsible 
for so that they are aware of the very problems that you 
outline in your testimony? We'll start with you, Mr. Hill.
    Mr. Hill. Yes, Mr. Chairman, we have made recommendations. 
As far back as at least ten years ago, when we first started 
addressing the maintenance issue and the maintenance backlog 
was appearing to become a problem, we have repeatedly pointed 
out the need to get a handle on this maintenance issue in terms 
of having some type of a system for just accounting for what 
the maintenance needs are and having some type of 
prioritization system for determining just where we're going to 
be funneling those resources to deal with the most critical 
maintenance problems.

                    need more agency accountability

    As you accurately pointed out, I think the current 
requirements with the accounting standards and the Government 
Performance and Results Act reinforces the concern that the 
Congress as a whole has towards a lot of the Federal agencies 
in terms of trying to get more management and accountability in 
the operations of these programs. You can't keep just dumping 
money year after year and not see results. I think that's what 
these initiatives are really pushing toward.
    Mr. Regula. That's our goal.
    Mr. Williams?
    Mr. Williams. In terms of the priority systems and some of 
the maintenance management systems, we have done reviews and 
identified improvements and made recommendations for those for 
BLM. Currently, we're doing a maintenance audit of Fish and 
Wildlife, so we hope to make recommendations to address the 
problems we've identified in that particular review.
    But in terms of doing this review and getting a cross-
cutting perspective, I think we've identified some new 
requirements and additional recommendations that either the 
Congress and/or the bureaus could consider in developing a plan 
or addressing the concerns that we have here today, such as a 
common definition for deferred maintenance that is consistent 
with the new Federal Accounting Standard. Again, the standard 
doesn't have to be in place until the fiscal year 1998 
financial statements, so there's some time to get this thing in 
place.
    Mr. Regula. Do you sense there is a commitment to do 
something?
    Mr. Williams. In discussing both what we found here with 
the Department and in some of the new efforts that are ongoing 
within the Department, yes, I sense that there is a definite 
commitment, as well as a willingness to improve the process and 
get things corrected.
    Mr. Regula. Mr. Young.

                         inventory of property

    Mr. Young. I guess what we have done is taken a step back 
from maintenance. We've worked with the Forest Service and made 
recommendations along the lines, first of all, they have to 
identify what property they own. That's been a problem within 
the Forest Service. As of now, they are working very hard in 
trying to do an inventory to find out exactly what property and 
equipment they own, where it's located, and then, based upon 
that, they will be developing the information concerning 
maintenance.
    A lot of this has to do with the new accounting standard 
which has generated the effort to try to pull together accurate 
figures that pertain to maintenance and also accurate figures 
that pertain to what property they own. In doing the financial 
statements over the last several years, we've had to take issue 
with the fact that they couldn't substantiate the figures that 
they were using for plant, property, and equipment.
    Mr. Regula. Is it your feeling they've tended to ignore the 
recommendations? I might say, tongue in cheek, they ought to 
put a farmer in charge because he knows what he owns. But have 
they tended to ignore your recommendations?
    Mr. Young. When it comes to trying to get a handle on what 
inventory they have or what property they have, they really 
haven't. They've initiated an effort, starting about 18 months 
ago, to try to, first of all, correct their systems so they had 
systems in which to collect the information necessary to get a 
handle on their property. By doing that, they will also get a 
handle on what type of maintenance they need and where the 
property is across the country, where problems are that need to 
be corrected. So yes, they are working on it.
    Mr. Regula. Mr. Skeen.

                   definition of backlog maintenance

    Mr. Skeen. I think the most pertinent part of this whole 
situation is having a definition of what you're talking about. 
Evidently you've had these inspections in the past. Have you 
not gone through this exercise before?
    Mr. Young. Yes.
    Mr. Skeen. What was the result of establishing definitions 
of what maintenance requirements are and so forth? None?
    Mr. Young. As far as the Forest Service is concerned, there 
is a varied definition. It depends on where you go. It's a very 
decentralized organization and each regional forest had a 
little different perspective of what deferred maintenance was 
or was not. So that's a problem to begin with and that's what 
they are working on, trying to get a common definition that can 
be used throughout the agency.
    Mr. Skeen. I think that's what we need to start with right 
now. We have no track record of having anything that is a 
standardized system pertaining to that kind of work and the 
appropriations needed to handle that kind of work. That's what 
is so amazing to us. We're lost. The Forest Service could take 
us out and lose us in the woods, and the Park Service over 
there is going to build customized outhouses. It's about time 
we settled down because getting this money is getting tougher 
and tougher.
    Mr. Hill. Mr. Skeen, if I could respond to that.
    Mr. Skeen. I'm waiting with baited ears.
    Mr. Hill. We found a similar situation in the Park Service 
in terms of inconsistencies in the understanding----
    Mr. Skeen. Do all agencies resist that, with kind of 
attitude is there that they would like to describe their own 
work needs and so forth?
    Mr. Hill. I don't know what the motivation of the agencies 
are, but from what we see, factually speaking, they are doing 
it differently.
    Mr. Skeen. Each one of them?
    Mr. Hill. Each agency across the agencies. The thing I 
really wanted to point out to you was I think a lot of this 
confusion would be clarified by the new standards. I would like 
to read the standard to you because it is a pretty good 
definition of maintenance. It talks in terms of maintenance 
being ``the act of keeping fixed assets in acceptable 
condition.'' It includes preventative maintenance and normal 
repairs, ``including the replacement of parts and structural 
components and other activities needed to preserve the asset so 
that it continues to provide acceptable service and achieve its 
expected life.'' It also says that ``modifications or upgrades 
that are intended to expand the capacity of an asset are 
specifically excluded from the definition.''
    Now if each of these agencies would adopt that definition, 
which they're required to do, I think that would be a giant 
step forward in terms of clarifying the problem and getting 
them all on the same level.
    Mr. Skeen. I think it is just primary to dealing with this 
problem. If you don't have a common definition of this thing, 
we're like Alice in Wonderland down here because they sit there 
and tell you what they need in the way of money but they can't 
tell you why they need it.
    Mr. Hill. That's exactly right.
    Mr. Skeen. Thank you, Mr. Chairman.
    Mr. Regula. Mr. Kolbe.

                      interior agency coordination

    Mr. Kolbe. Thank you, Mr. Chairman, for holding this 
hearing. I think it is certainly needed to deal with something 
that the subcommittee has been trying to get a handle on, and 
it is obvious the agencies aren't getting a very good handle on 
it.
    Just following up on one point that was brought out in a 
line of questioning by Mr. Skeen and each of you described the 
different systems there. Three of the agencies we're talking 
about come under the Interior Department, the other one under 
the Agriculture Department, but I'm not sure that makes any 
difference. I'm kind of curious as to why we should be talking 
about each of these developing their own system for tracking 
this backlog. Is the mission so fundamentally different that we 
can't have a common way of defining maintenance needs 
throughout the property of the Federal Government? Why should 
we have separate definitions for each agency? And why should we 
have separate tracking systems for each agency? Why isn't there 
a common tracking system for these? Is anybody talking to each 
other about this, about getting a common system here? I don't 
know which one of you wants to answer that.
    Mr. Hill. Let me start on a positive note. There is 
discussion going on within the Department of the Interior at 
least. The agencies have formed a committee or commission that 
is currently working on starting with that accounting standard 
and clarifying it within Interior in terms of what that really 
means. I think starting with that accounting standard is a good 
basis. Obviously, there is going to have to be some guidance, 
some policy interpretations in terms of unique resources, 
unique missions, unique roles of the various units--parks 
versus fish and wildlife refuges. There is some uniqueness to 
their missions and to what they're managing and there may have 
to be some clarifications and minor modifications of this 
definition. But you would hope that when it is all said and 
done, it would be a pretty standard definition of what 
maintenance is, and it certainly would not include the umbrella 
of projects and activities that are currently being included in 
that maintenance definition.
    Mr. Kolbe. If I might, and then turn to Mr. Williams here, 
but in listening to these three statements today, the only one 
of these agencies that gets a passing grade is Fish and 
Wildlife. It's the only one that appears to have developed any 
kind of a system. Why can't we use that as a model?
    Mr. Young. In terms of the system, we have to start with 
the definition. If the definition is consistent, what you're 
looking at in terms of divergence between the bureaus is that 
the types of projects that go into those different categories. 
For example, as Barry mentioned, Fish and Wildlife would have 
protected threatened and endangered species--that would 
probably not be in any other bureau--so they would have to have 
projects captured under that category. But, again, we would 
only be looking for those that meet the definition of deferred 
maintenance. So that may be a way to capture common data 
elements for maintenance backlog. But I think you're going to 
have to have some separation or different modules for each of 
the bureaus to address those different and distinct types of 
projects that they would have that would not be in the other 
bureaus.
    Mr. Kolbe. Okay. Do you have any comment on that?
    Mr. Williams. No, sir.

                      accuracy of dollar estimates

    Mr. Kolbe. We've seen some different estimates. You used 
the figure $6.1 billion in talking about Park Service for its 
maintenance backlog, $5.6 billion of which were construction 
projects. But you testified that the number is neither accurate 
nor is it current. What are the more accurate figures, do we 
know? Do we have any idea of what we're talking about here?
    Mr. Fowler. No, we do not know and I don't think the agency 
knows. That's the whole point.
    Mr. Kolbe. Who makes the decision that construction of a 
visitor center gets into the list of maintenance projects? Is 
that being made at that park, is it being made at the region, 
or is it being made here in Washington?
    Mr. Fowler. It's made at the park. Each park, as I 
understand it----
    Mr. Kolbe. Feeds up its list of maintenance.
    Mr. Fowler. Its list. For the figures that you cite, the 
$6.1 total and $5.6 in construction, each park submits its 
total list of needs. Now the distinction we're trying to draw 
and I hope this is clear to everyone is that the list of needs, 
must be a component of maintenance. A new visitor center, for 
example, while that is in the total list of needs, is obviously 
not maintenance.
    Mr. Kolbe. But not every new construction project ends up 
getting listed as a maintenance project; is that right?
    Mr. Fowler. The construction projects that have been 
identified as being unique at a park are on that list of needs 
that we talked about. Now that list, I think the Park Service 
would even agree, that list is not real accurate because they 
don't really use it in managing, they don't use it in the way 
they're collecting their data. Basically,they are ad hoc 
estimates that they come up with when they're asked questions by you 
guys and by others.
    Mr. Kolbe. So it is not--the final question, Mr. Chairman--
it is not used really in preparing the budget estimates, is 
that right?
    Mr. Fowler. No, that figure is not. Their budget estimates 
are prepared on a year-by-year basis, recognizing that there is 
not going to be enough money to address all their needs. 
Obviously, their highest priority needs are what they put in 
the budget.
    Mr. Kolbe. For that year?
    Mr. Fowler. For that year.
    Mr. Kolbe. I'm still not clear how it ends up getting used 
that way.
    Mr. Fowler. Well, let me try again. As a management tool, 
that total number, the $6.1 million total, $5.6 million 
construction, is not used as a management tool by the Park 
Service. They prepare those numbers to answer questions----
    Mr. Kolbe. Respond to Congress, basically?
    Mr. Fowler. Basically.
    Mr. Kolbe. Thanks, Mr. Chairman.
    Mr. Regula. I think Mr. Kolbe has hit on something, and 
that is to use some common definitions and perhaps the 
accounting requirements and the Results Act we could achieve 
that goal. As one committee with many different agencies, it 
would make it much easier for us if there were a common 
definition. I think you've made that quite clear that there's a 
wide variety of definitions, probably one definition for 
putting out press releases and another definition for doing 
something about it.
    Mr. Hill. Could I just say one thing, I mentioned this in 
my summary statement. We do not question the need for any of 
these projects.
    Mr. Kolbe. I understand that.

                             defining needs

    Mr. Hill. Let's understand that. It's just a question of 
when you sort out what are their maintenance needs versus what 
are their construction needs versus what are other needs, it is 
all lumped together.
    Mr. Kolbe. I understood you. You made it clear and I 
understood we're not talking about whether these projects are 
valid or not, the question is are we talking about maintenance 
or not? Apparently we haven't been talking about maintenance at 
all.
    Mr. Hill. That's what you can't tell based on the way they 
account for this.
    Mr. Regula. Mr. Skaggs.

                     solutions to accounting issues

    Mr. Skaggs. Thank you, Mr. Chairman. Good morning, 
gentlemen. I'm always struck by sort of the similarities 
between politics and sportscasting in which you've got to be 
able to say the obvious and make it sound profound. So I'm 
going to take a shot at that just to make sure I'm getting it.
    Basically, budgets depend on policy and policy depends on 
facts. What you're telling us is we're not getting the facts or 
we're not getting a coherent data set from these agencies about 
one of the things we're responsible for formulating budgets 
about. Mr. Chairman, we don't have jurisdiction over OMB, but 
it seems to me that they ought to be at the table because, 
correct me if I'm mistaken here, it is the responsibility of 
OMB to try to identify and impose some accounting standards on 
the executive branch of Government, is it not?
    Mr. Hill. Yes, it is.
    Mr. Skaggs. Have they made any effort that you all are 
aware of to deal with this problem?
    Mr. Williams. They are issuing guidance for the Standard 
No. 6 for the fiscal year 1998 financial statements.
    Mr. Skaggs. The new Federal accounting standards you all 
referred to?
    Mr. Williams. Correct. The effective date is for the fiscal 
year 1998 financial statements, which will be audited during 
fiscal year 1998, and fiscal year 1999. So when the bureaus 
generate their financial statements for fiscal year 1998, they 
will have to comply with the new Standard No. 6. So there is 
guidance coming out.
    Mr. Skaggs. Prior to the issuance of Standard No. 6, was 
there any general guidance to executive departments from OMB 
about how to work these numbers?
    Mr. Young. Not that I'm aware of. And, again, there wasn't 
any requirement to specifically report deferred maintenance in 
the financial statement.
    Mr. Skaggs. So it is correct that the buck stops at OMB in 
terms of trying to find consistency and coherence in Federal 
accounting?
    Mr. Hill. Well, we're viewing it from the standpoint of 
Interior and Forest Service. We're certainly seeing that the 
buck should stop at the Interior level. Interior has got three 
of these agencies that we're aware of that are doing this 
differently and inconsistently. At a minimum, the buck should 
stop there with regard to the Interior agencies.
    Mr. Skaggs. No, I don't mean to suggest that a good 
financial officer ought not to have figured this out already 
and done something about it. But I also want to see who else in 
the chain of command ought to have been attending to the issue.
    Prior to this new Standard No. 6, wasn't there something in 
just generally accepted accounting principles about definitions 
that could inform this exercise of what's maintenance, what's 
deferred maintenance, what's new construction, what's 
additions? This isn't rocket science, is it?
    Mr. Williams. To the best of my recollection, there is not 
any specific standard other than for us to audit the 
information that is provided by the bureaus to assess that it 
is accurate. If they were reporting either maintenance or 
construction incorrectly or inaccurately, we would identify 
that to the bureaus and then they should have made the 
adjustments to their statements to correct that specific 
problem. But there's no specific standard. It is kind of our 
general standards to ensure that the information provided is 
supported and is accurate.
    Mr. Skaggs. There's nothing that makes this judgment call 
as to a Federal Government building any different than it is 
for somebody dealing with this judgment about plant and 
equipment at Coca Cola, right?
    Mr. Hill. That's correct. I think what triggered all this--
--
    Mr. Skaggs. If that's correct, why aren't we merely making 
reference to generally accepted accounting principles that any 
CPA would apply to this issue?
    Mr. Hill. I think the requirement from the CFO legislation 
that the agencies have consolidated financial statements, I 
think as that has been unfolding, they have been seeing that 
there have been some difficulties,inconsistencies in terms of 
how you treat certain Federal assets and things of that nature. I don't 
know for a fact, I can only guess, that it may have prompted someone to 
look at the standard and realize that maybe we need to clarify this 
further because it is not being handled consistently.

                      use of accounting principals

    Mr. Skaggs. Just two other quick points, if I may, Mr. 
Chairman. It does seem to me it gets to the question of 
intention, whether you discovered very much of a conscious 
effort to mislead as opposed to sloppiness and just incoherence 
because standards weren't very consistent. By way of example, 
it seems to me if, under generally accepted accounting 
principles, a capital asset has exhausted its useful life, then 
the replacement of that, while perhaps more accurately 
described as new construction, could also be legitimately 
thought of as deferred maintenance. I'm wondering whether 
that's a legitimate question to raise on some of these, case-
by-case.
    Mr. Hill. There are some gray areas here. The example I 
always like to use is if you've got a 40 year old visitor 
center that was built to accommodate so many people visiting a 
park. It's getting old, it's deteriorating, needs a new roof, 
needs new plumbing, and has lots of maintenance that needs to 
be done on it. There's a point in time at which you'd say what 
we need to do is replace that visitor facility and build a 
bigger one, a more modern one, one that can comply with the ADA 
requirements, one that can handle more visitors to the park. 
Yes, there are some prudent things that need to be done in 
terms of upgrading and modernizing the park system or any of 
these other agencies. But from an accountability and an 
accounting standpoint, you would think there is a better way to 
account for that on the books. I think that's what we're 
talking about.
    Mr. Skaggs. Agreed. If I'm a park superintendent or a 
district ranger in the Forest Service dealing with a situation 
like that, to put it in the deferred maintenance category isn't 
a fundamentally deceptive thing to do, is it?
    Mr. Hill. I think that portion of the existing facility 
should be considered to be a deferred maintenance item. If 
you're going to replace the original item with a bigger one 
that does something different or upgrades it, that is something 
else other than maintenance. That's an improvement or an 
upgrade. When you finally go ahead and put that facility on 
line and take out the old one, then you're going to make an 
accounting adjustment to your books to wipe off that portion of 
the deferred maintenance.
    Mr. Skaggs. Thank you, Mr. Chairman.
    Mr. Regula. Yes, Mr. Kolbe, who has jurisdiction over OMB, 
wants to make a comment.
    Mr. Kolbe. Mr. Skaggs raised a very good point about the 
OMB, and my subcommittee that I share, does have jurisdiction 
over OMB, so I can assure you we'll ask them some questions 
about these kinds of standards and what they do or don't do. I 
appreciate your bringing it up.
    Mr. Regula. Mr. Wamp?
    Mr. Wamp. Thank you, mr. Chairman. If misery does love 
company, today is a happy day. [Laughter.]

                             accountability

    The last time we were here it was just the Park Service and 
now it has expanded in terms of a critical review. The woodshed 
is getting full here. But this hurts. What I want to repeat for 
those who weren't here during the Park Service presentation, 
this is like a married person finding out their spouse is 
bouncing checks all over town. You still love that person 
deeply, but you don't like it. That's the way I look at this. 
I've got posters in my office of Park Service and Forest 
Service assets. I am so proud of what we have. This 
subcommittee is a delight to serve on. But this is like major 
pain for us to see this lack of accountability.
    I totally agree we need systems, and this is an editorial 
comment, and then I've got a couple of specific questions, 
systems and definitions and we've got to start somewhere to 
build a fence around more accountability. But some of this, 
frankly, I think is just a question of good common sense and 
someone taking responsibility up and down the chain of command. 
One of the problems we found on the $100,000-plus toilet 
problem at the Park Service is no one could be identified as 
the responsible person. It was just like somewhere in this 
agency there's a problem and someone doesn't come back and take 
responsibility for it. I think some of that, frankly, 
transcends a system or a definition of maintenance backlog. It 
really strikes at the heart of you might fix the system and 
still be back here in two years if we don't put chain of 
command in place at these agencies where there is more 
accountability built in.
    There are dozens of questions, many of them we will submit 
for the record, many of them you've already answered in your 
questions and in your testimony. All the questions need to be 
answered. But I also think that at the end of this day everyone 
that is listening is going to know what needs to be done. Go 
ahead and answer the questions because we need to hear it, we 
need it for the record, but then just do it. I see a lot of 
hearings where the questions are answered and you all get rid 
of us and then it just goes back to the way it was. This one 
hurts too deeply in my opinion.

                        prioritization of funds

    One of my questions really for the GAO is how does this 
muddy the prioritization between new programs and backlogged 
maintenance when we don't have this kind of definition? The one 
who is going to suffer is the person that uses the Great Smokey 
Mountain National Park or the Cherokee National Forest where 
they're expecting new put-ins to be built and we can't tell the 
difference between what is a real live construction capital 
need, as Mr. Skaggs said, and what's backlogged maintenance. 
They send a fuzzy budget up here and we've got this kind of 
inefficiency and we don't fund it, then the users raise cane 
with us that we don't care about our forests and our park 
service. They lose. We lose. You lose. We've got to do better. 
That's the editorial comment.
    The second question for each of you is, what kind of 
written recommendation--I know the IG plays a different role 
than the GAO by statute, by definition--but what kind of 
written recommendations do you have that we can look at, that 
you've made to these agencies for changes? You talked about how 
you made some recommendations for changes with Agriculture, for 
instance, of how they need to change their practices. What can 
we take today and try to put into application from specific 
recommendations you made? And do you need to make further 
written recommendations? You're knowledgeable. Having done 
these studies, you are knowledgeable about what needs to be 
done. We need to see annually that these changes are being 
made.
    The GAO first, please.

                        accountability problems

    Mr. Hill. Let me address your first question which dealt 
with how they currently account for this clouds up the problem. 
It clouds it up a lot. I think you've hit thenail right on the 
head. You basically don't know what you're paying for. You don't know 
what you're getting when you're giving them all this money. If you 
don't have a good feel for what you're total maintenance needs are, and 
total construction needs, and total land acquisition needs, or any 
other major expenditures in terms of maintaining, upgrading, 
modernizing, expanding your existing facilities, whatever your goal or 
purpose is, the first thing you need is a good inventory of each of 
these categories. And then you, Congress, working with the agency, sets 
the policy in terms of what do we want to do here, what do we want to 
do for the future.
    Certainly, one would think that fulfilling basic yearly 
maintenance needs would have a very high priority. We want to 
maintain what we've already put in place. That should have a 
high priority. But, obviously, we also want to think of the 
future in terms of making the park system, the fish and 
wildlife refuges and so forth even better for the public, the 
ever-expanding public that is visiting those facilities. So I 
think it is very important. And when you don't have a clear 
delineation amongst these various categories, you're really not 
in a good policy position to fund this in an effective way.
    Then there is the second double-whammy. Not only are you in 
a poor position to effectively fund it and manage it, there's 
no accountability. After you've given all this money, if they 
come back next year and say the backlog has grown bigger, you 
don't know what they've done with this money. If you're giving 
them $300-$400 million to deal with their maintenance problem, 
you'd expect there to be some accountability--here's how we 
spent that $300 million, here's the park's portion of the 
maintenance backlog we were able to address, here's what else 
has been added to the maintenance backlog. You're in a better 
position then to know from a funding standpoint just what needs 
to be done there.

                       implementing requirements

    Now to your second question dealing with the 
recommendations. I think there's enough in place right now from 
a requirement standpoint. What we need to do is to keep our eye 
on these agencies to make sure they implement what they are 
already being required to do. I think between the accounting 
standards that are going to be put into effect, that really 
should help clarify from a definitional purpose just what 
maintenance is, and from the Results Act standpoint in terms of 
them having to specify what their goals are for managing these 
units, setting up performance measures that they're going to 
try to achieve, and having baseline data that we can on a year 
by year basis see exactly how are they managing this particular 
agency and how effectively are they achieving their goals, I 
think that is all in place.
    What is needed now is to hold the agencies' feet to the 
fire in terms of implementing what is already on the books. I 
think adding new requirements at this point would only confuse 
and basically give them more cover to say it's going to take us 
five or ten years to do this new requirement.

                     accountability for maintenance

    Mr. Wamp. Should these IG offices then take current rules 
and law and make recommendations for changes? Or have they? Do 
they exist, or do you need to do more work on making 
recommendations for management practices within these 
respective agencies?
    Mr. Williams. In terms of the accountability, we have done 
audits of the National Park Service and the Bureau of Land 
Management, and we're currently doing an audit of the Fish and 
Wildlife Service. So we have addressed some of the problems 
we've identified in terms of accountability for maintenance: 
how the funds are being spent and how the maintenance 
management systems are not providing the information that would 
be used to make proper decisions.
    In terms of doing this review and talking with GAO, as well 
as Agriculture, we found that there is probably a need to look 
at some new recommendations. For example, one that we have 
talked about extensively is to come up with a common definition 
of deferred maintenance, particularly as it relates to the 
Standard.
    Second, even though there may be some requirements on the 
books, there's probably a need to clarify those requirements, 
particularly as they relate to standard and consistent 
procedures for doing condition assessment surveys, which 
identify and estimate the cost of projects, and for identifying 
priority categories so that you understand what is being 
funded; for example health and safety or endangered species 
projects. You can understand what the priority is and why it 
has been assigned.
    There is also a need to establish consistent procedures to 
update the backlog and approve any new items added to the 
backlog or to validate the cost estimates.
    Then there probably has to be a long-term plan, whatever 
that may be, five years or seven years, to accomplish that 
maintenance backlog. Once you have it estimated, you need to 
come up with a plan to attack that backlog over a period of 
years, as well as have a tracking system so that you can 
measure accomplishments. Tied in with that would be goals and 
performance measures to hold people accountable for 
accomplishing that particular plan.
    Finally, I think there's a need to integrate the 
maintenance management systems with the financial accounting 
systems. You will find that generally they are not integrated. 
If you try to go to the accounting system or the maintenance 
management system, you generally cannot reconcile the two. So 
you may be able to get some information from the maintenance 
system, but it won't tie into the financial accounting systems, 
and vice versa.
    I think that lays everything out and gives you a plan. One 
of the things we have thought about is, as a result of this 
testimony, we should provide this as a report and make some 
recommendations.
    Mr. Wamp. Very quickly, Mr. Chairman. On a scale of 1 to 
10, what kind of cooperation do you get from these agencies 
when you have to conduct a review like this and make 
recommendations?
    Mr. Williams. In most cases, I find it's a 10. They've been 
very cooperative with us.
    Mr. Regula. It's nice that they cooperate, but we want some 
action. We'll be interested in your recommendations what we can 
build into the bill by way of requirements to get some 
standardization.
    Mr. Nethercutt.

                         agency accountability

    Mr. Nethercutt. Thank you, Mr. Chairman. Welcome, 
gentlemen. Thanks for your work. Interesting to listen to this 
today and the commentary and the exchange between members and 
you as witnesses. I know there are some fine people sitting 
behind you that at some point probably spent some time in 
private life, nongovernment service. It just strikes me that 
the performance and the information, and I guess the 
deficiencies that you have identified here today,would likely 
never be acceptable in the private sector.
    There seems to be some disconnection, with all due respect 
to people who are serving Government, but there seems to be 
some disconnection in this accountability question when 
agencies are operated in this fashion. I guess I'm struggling 
to try to get through that and make sure there is this 
accountability. I don't question the motives of people who are 
going to testify here today, but there is this disconnection 
that seems to make all of us suffer and struggle for some 
accountability, some requirements that people do what they are 
supposed to do. In private life, your board of directors fires 
you if you don't do the job well.

                forest service road maintenance concerns

    Having said that, Mr. Young, I want to just focus on a 
couple of questions with you relative to the backlog for road 
maintenance in the Forest Service. Last summer, the estimate 
that the Forest Service came up with was about $5 billion. Now 
I understand that it is $10 billion, at least based on the new 
roadless policy and the moratorium that has been established by 
the Forest Service which affects my part of the country and the 
western States. Mr. Skaggs said that the policy depends on 
facts. So I conclude that if the facts are wrong, the policy 
ought to be wrong. Do you have any explanation, sir? In your 
review, did you find any justification or any enhanced 
reliability for the $10 billion maintenance figure on roads 
that the Forest Service came up with relative to their $5 
billion figure some months ago? Or is it all phoney? Is it all 
unreliable?
    My next question would be, if that's unreliable, is the 
policy unreliable with regard to the justification for having a 
moratorium on road construction?
    Mr. Young. We did not specifically look at road maintenance 
as a separate item. What we found was a lack of support for all 
numbers. In trying to take a number and tie it back from a 
bottom-up type approach, that's where we ran into problems. 
There was simply a lack of documentation to support the numbers 
that we reviewed.
    I guess, in answer to your question, one of the problems in 
getting these numbers is a more basic problem, and something 
that the Forest Service is currently working on, I think we 
addressed in 1995. In that year, we gave an adverse opinion to 
the financial statements. One of the primary reasons for that 
was the basis that they did not have a handle on plant, 
property, and equipment. They didn't have a reliable number. I 
think that stems back to some of the problems we have. They 
took our recommendations and are currently working on them to 
try to get a better inventory, a better handle on what they own 
and where it is located. In that process, I think they will 
also get a better handle on maintenance and what a good number 
is and have the support necessary that when they provide a 
number they have the support to justify that number is correct.
    Mr. Nethercutt. Do you have any idea how long it might take 
the Forest Service to come up with numbers that are reliable, 
that you could certify as being accurate and reflective of the 
maintenance requirements? What is the shortest time you think 
it could be done and you could get some reliable information?
    Mr. Young. Right now they are projecting to have that work 
done at the end of this fiscal year. So starting in fiscal year 
1999 they are projected to have a good number that we can deal 
with. We're trying to monitor that. They have a tremendous 
amount of work to do to accomplish that in the next eight or 
nine months.
    Mr. Nethercutt. I'm informed that there's been discussion 
that there's been work on this for the last 18 months already. 
Is this then a two year project, thereabout, it should take to 
come up with this information?
    Mr. Young. Yes. When we issued our financial statement, 
that was one of the reasons for the adverse opinion. At that 
point in time, they initiated a project to try to address all 
their accounting problems. One of the biggest problems is 
getting a handle on plant, property, and equipment--how much is 
it worth, where is it located, what do they own. They have been 
working on that essentially for the last 18 months. It's a huge 
undertaking by the Forest Service and it just takes time to do.

                     obtaining reliable information

    Mr. Nethercutt. How about you, Mr. Hill, Mr. Williams, what 
is your sense of how long it would take the agencies that are 
under your review to do their work to come up with some 
reliable information upon which we can judge whether the 
policies that they are implementing based on that information 
is good or bad?
    Mr. Williams. As I mentioned, Accounting Standard No. 6 is 
required for the 1998 financial statements. Today it doesn't 
appear that the Department of the Interior will have a problem 
in meeting that particular deadline. But until we audit those 
statements in support of those particular numbers, I really 
can't comment. But once we've completed the financial statement 
audit for 1998, we'll have a better handle on that. But right 
now, it looks as if they're on schedule.
    Mr. Nethercutt. Any comment, Mr. Hill?
    Mr. Hill. I'm going to let Mr. Fowler answer that. He's 
probably has better information than I have.
    Mr. Fowler. I would pretty much agree with what Bob just 
said. The only other point I would add is that to play all that 
out in a meaningful, accurate way, in the case of Park Service, 
doing that is going to require development of some good 
baseline data on what current conditions are in the park 
system. That's a core thing that needs to be done. I think that 
will take some time.
    Mr. Nethercutt. I've only been on this subcommittee for 
three years, and it's a wonderful opportunity, but I've heard 
this before. It has gone on every single year. It's ``We'll get 
the job done.'' It isn't done.
    Wouldn't it make sense, again, a little bit facetiously, 
but wouldn't it be a fair policy for the agency heads or those 
who have jurisdiction and responsibility, where the buck stops, 
to say if I don't get this job done, I'm out. Or is that too 
harsh?
    Mr. Young. That's too drastic.
    Mr. Nethercutt. Okay. We politicians have to do it. People 
in public life many times have to do that. We have to say this 
is my commitment, if I don't get it done, hire somebody else. I 
don't know any other way. Maybe you have a suggestion.
    Mr. Young. I think you ought to ask the next group that 
question.
    Mr. Nethercutt. Not going to touch that one? Okay. Thank 
you all.
    Mr. Regula. We're going to have two votes. Mr. Miller, 
would you like to ask your questions before the vote?
    Mr. Miller. No, I'm not going to have any questions, Mr. 
Chairman.

                          chance of accidents

    Mr. Yates. I just have one question, Mr. Chairman.
    You had talked about the backlog in maintenance that is 
estimated at $14 billion. To me, that raises the specter of 
danger, of the possibility that because of the great need of 
corrections to be made, it raises a greater possibility of 
accidents. Have you in your research encountered any 
connection?
    Mr. Hill. All I can say is the maintenance backlog problem 
is a real problem, there's no question about that. With regard 
to the National Park System, there are definite maintenance 
needs and needs that affect health and safety issues at the 
parks really need to be dealt with.
    Mr. Yates. Forest Service has it too, hasn't it?
    Mr. Hill. And the Forest Service. I think in every agency 
there is a real maintenance backlog problem. What we're trying 
to talk about here is no one really knows the extent of this 
maintenance problem because, from an accounting/accountability 
standpoint, there's a lot of things lumped into what is 
currently referred to as a maintenance backlog.
    But there is no doubt about it that in each of these units 
there are definite serious maintenance problems that have to be 
dealt with.
    Mr. Yates. Are you redefining what maintenance is so that 
we do have some precision?
    Mr. Hill. The accounting standards are currently clarifying 
what is being defined as maintenance for the purposes of 
including them in the financial audit statements that will be 
required.
    Mr. Yates. So that you won't be able to make a statement 
like that next year, will you?
    Mr. Hill. I sincerely hope not. We'll see.
    Mr. Yates. Thank you, Mr. Chairman.
    Mr. Regula. We're going to recess. We have two votes and 
then we will come back. It is my intention to finish the 
hearing, to go straight through until we finish it.
    [The information follows:]

[Pages 213 - 221--The official Committee record contains additional material here.]


                                       Wednesday, February 4, 1998.

                UNITED STATES DEPARTMENT OF THE INTERIOR

                                WITNESS

JOHN BERRY, ASSISTANT SECRETARY FOR POLICY, MANAGEMENT AND BUDGET

    Mr. Regula. We will reconvene.
    Our next witness is John Berry, Assistant Secretary for 
Policy, Management and Budget.
    Mr. Berry, I've been very aware that in the few months that 
you've been at Interior, you're trying to work in the same 
direction that we are. So we look forward to your testimony. As 
you heard this morning, there are obviously some problem areas 
that we need to try to address, working together. So we look 
forward to hearing from you.
    Mr. Yates. Mr. Chairman, I understand the Smithsonian has 
just gone to pieces. [Laughter.]
    Mr. Regula. Well, they'll probably come up and need a 
little money. [Laughter.]
    Mr. Berry. Mr. Chairman, thank you. I very much appreciate 
it. I am especially pleased that the first testimony of my life 
is before this subcommittee and under your leadership, and Mr. 
Yates, Mr. Skaggs, and Mr. Nethercutt. Thank you for your 
support.
    Mr. Chairman, if it's okay with you, what I plan to do is 
submit my testimony for the record. I would like to go through 
six points.
    Mr. Regula. Without objection, the entire statement will be 
a part of the record.

                           management issues

    Mr. Berry. I'd like to touch on a couple of points. First, 
thank you for the focus and attention you have brought to this 
subcommittee. It is clear that you have identified the 
management problem,--and we are very grateful--and provided the 
resources to begin to move out on the solution. I think what we 
need, and what I hope to lay out for you today, is a management 
plan. The plan will show you that we can get you the 
information that you need to hold us accountable so that 
together we can resolve and get away from discussion of a 
backlog. I think more than a money issue, this is a management 
issue. We need to show you that we can spend those resources 
well to justify getting the additional money that might be 
needed.
    I've been on the job now for 10 weeks. Before I was sworn 
in to this position I came to your last hearing and sat in the 
back of the room for the whole hearing. I was well aware of 
your attention to this. So from the day I walked in the door, 
this probably has been my number one priority.
    We have responded to the directive that you gave us in the 
Conference Report and have contracted with the National Academy 
of Public Administration to do a top-down review of the Denver 
Service Center, the National Park Service, andtheir 
construction management practices. Their midterm report is due April 1; 
their final report is due June 15th.

               review board and private sector practices

    We have an eight member review board. In the contract I 
specifically made the point that we wanted a strong private 
sector and a State and local perspective on the board so that 
it would not just be a Federal perspective in looking at these 
construction practices. I know from some of my friends in the 
private sector community that construction management has 
gotten extraordinarily lean in the past 10 years. It has really 
gotten down to the bone. Most people are using management 
practices where they don't even have secretarial assistance 
anymore; that is, they are very efficient. The bottom line is 
if we can't be as efficient, then we ought to get out of the 
business.
    Mr. Regula. You're saying the private sector?
    Mr. Berry. The private sector practices in terms of 
construction management.
    Mr. Regula. Yes, right.
    Mr. Berry. That ought to be the standard by which we are 
judged. So we have asked, and I have asked, and made clear to 
the National Academy that I want this to be a top-down, bottom-
up review, no holds barred. They should feel free to come in 
with any recommendation, but the standard that I want to hold 
them to is the private sector. If we can't do it as well, then 
we ought to get out of the business.
    So we're going to be working on that, and we'll be sure to 
keep you in the loop as we get reports back from the Committee 
and make sure that the staff is well aware as we move forward 
with that study.

                      construction lists for 1999

    Let me move in to more of the topic of today's hearing with 
you. My third day on the job I asked for the construction 
management list, and I received a number of them. They have 
been compiled over the years for a variety of different 
reasons. The total numbers go from $3 billion to $12 billion--
it's all over the place. I realize this is a mess; it's a mess 
for us, and it's a mess for you. How do you get your hands 
around this chimera that keeps moving around?
    So what I did was throw them all out, and start over. We 
didn't have the time, because of the budget preparation for our 
1999 budget that was coming to you, to do everything that I 
wanted to do. So I've developed a two-prong approach. The first 
approach is for the 1999 budget I've directed the Bureaus--and 
you have a copy of a memorandum in front of you, and we've 
submitted some other memoranda for the record along this 
regard--to develop a prioritization list that will have 
essentially three categories on it. The first is urgent, life, 
health and public safety projects--construction projects that 
are needed to protect either the public's life, health and 
safety, or our employees' life, health and safety. Those should 
be the first projects we look at in addressing the backlog.
    Mr. Regula. This is for all three?
    Mr. Berry. This is for all of the Interior Bureaus.
    Mr. Regula. All right.
    Mr. Berry. The second category, Mr. Chairman, is ongoing 
construction. I was concerned, obviously, that if you had 
started construction projects, we didn't want to stop in 
midstream. It would be a waste of money to stop. If the 
Congress had already appropriated funds and something was under 
construction, we ought to continue or complete those projects. 
So there will be a second categorization listing so that you'll 
be aware of what those projects are.
    The third categorization is urgent natural and cultural 
resource issues. This is a category that we wanted to put in 
because neither of us want to be embarrassed if there is 
something there that you need to know about. If Lincoln's birth 
place home, for example, was going to collapse, or if there is 
an action that the Fish and Wildlife Service should take to 
protect an endangered species that might go extinct, you ought 
to know about that and we ought to know about that. Even though 
it may not affect life or health and safety, it is, obviously, 
critically important in a public policy sense, and we ought to 
make you aware of that. So we'll have those three categories.
    We have been working with the Bureaus to scrub the lists 
that they have submitted and make them fit into those three 
categories. As of this point, the only one that we're happy 
with and will be submitting to you in the green books is the 
Fish and Wildlife Service. In the green books that you'll be 
getting there will be an asterisk essentially saying that this 
list will be submitted at a later date. My target is that we 
will have those to you by the end of February in time for your 
hearings.
    What I've told OMB, and I'll make the same commitment to 
you, is that we will give you these lists for review with a 
veto pen. We'll give you the rationale for why every project is 
in one of those three categories. If you don't think it passes 
the laugh test, we'll take it off the list. We'll just strike 
it. What I would like to do is build a consensus that among OMB 
and you and us that we will all agree that this is a pretty 
solid list, that these are good projects and we ought to move 
out on them, and we ought to identify the resources. What we 
ought to do is take all the different pots of money that you've 
given us--like that 20 percent fee money that is supposed to be 
distributed nationally--and apply them toward the list. Eighty 
percent is supposed to go back to the park, but the 20 percent 
nationally ought to go toward this list. If there are projects 
on the list that are in the park, their fee money ought to go 
toward these projects first, and then any of the repair and 
maintenance monies that you give us in the budget for 1999 
would, again, be applied to this list. You would be able to 
check projects off the lists and hold us accountable. This is 
the list, this is what's done, and one by one they're coming 
down--in other words, we're addressing that need.

                      five-year construciton plan

    The second prong of this attack is more of a long-term 
strategy, and Mr. Nethercutt, this is where it gets to the 
point that you had raised. You were asking, can we get an idea 
of this number? Can we get another list?
    Respectfully, sir, I would say that would be a waste of 
time. We don't need to know--whether it's three, six, twelve, 
or ten billion. I don't care. What we need to do is give you a 
manageable plan that identifies the needs consistent with a 
prioritization system that to which you can evaluate and make 
changes. At the end of the day we'll agree that it's a good 
system. By the year 2000 budget, next year's budget--and we've 
already started working on this--we will submit a five-year 
construction plan for each of our Bureaus. It will be a five-
year plan for repairs and rehabilitations, and it will be a 
five-yearplan for our construction projects, and that will be 
an improvement. Once that plan is in front of you, that's the backlog. 
If it isn't on that list, it can wait until the sixth year. In other 
words, we will have prioritized it in such a way so as to make you 
aware of what the backlog is. You will have in front of you a plan. 
Rather than wasting a lot of time having people come up with the 
twelfth list, with a new twelfth total number which won't help us 
manage this, I would rather take that energy and put it toward a five-
year construction plan that you can have in front of you to evaluate at 
next year's hearing. So that's the second prong in our attack.
    I would stipulate to everything that was said this morning 
before. In other words, I agree with all of the things that 
were said this morning by the investigators. I found the same 
things and have the exact same concerns. What I would like to 
do is, knowing this, move forward with our game plan.
    The second thing that they've identified is there are 
different definitions across Bureaus--and I'll submit this for 
the record, Mr. Chairman--I credit the IG for bringing this to 
my attention. In addition, we also have a report--and I 
apologize because we just got clearance last night to give it 
to you, but we'll make copies available to the Committee--that 
has been worked on for the past year that essentially also 
backs up everything the investigators have said this morning. 
We've had our own Bureaus looking at it. This is a mess and we 
need to clean it up.

           interior planning design and construction council

    What I have done to resolve that is yesterday, after the IG 
brought this to my attention on Friday, I appointed the 
Interior Planning Design and Construction Council. It will be 
chaired by Sky Lesher, the Deputy Chief Financial Officer, and 
Mike Koss, Director of the Office of Management Risk and Public 
Safety. There will be representatives from each of the eight 
Bureaus. I have given a directive with the following task: by 
the end of February I want common definitions and standards on 
what is repair, what is operations, what is maintenance, what 
is repair and rehabilitation, and what is construction. This 
isn't, as people have said over and over, rocket science. We 
ought to be able to say if we are replacing a visitor's center, 
for example, and that we're expanding it beyond 25 percent of 
its original size, then we can define that. It should be X 
percentage; if it's larger, it goes into a new construction 
category; if it's under that, it's replacement. We ought to be 
able to define that, and it ought to be standard. Those 
definitions ought to apply to all of our Bureaus consistently. 
The problem you have here is that one day you have the Park 
Service in front of you that has an operations and maintenance 
account that merges operations funding of the parks with 
maintenance funding. The next day you've got Fish and Wildlife 
in front of you that separates that, so they've got a 
maintenance account that is separate from operations. This 
needs to be consistent for your evaluation of us so that you 
can hold us accountable for how the money is being spent, and 
for our managers to know how the money is being spent.
    So by the end of February the Council is supposed to come 
up with those definitions and standards. By the end of March 
they're supposed to come up with the procedures and processes 
for how the agencies can then manage those definitions, fitting 
them into each of their existing systems.
    Now, I don't think we need to waste a lot of money on 
buying new computer systems. We ought to not reinvent the 
wheel. I don't think every agency needs to have the same 
computer system or even the same software. As long as they can 
produce and make their system shape to the same definitions, I 
don't care what system they're using to get there, as long as 
what they get can be evaluated.
    By the end of April, they are supposed to have the guidance 
to the Bureaus on how to prepare the five-year plan for the 
year 2000 budget, so that we can submit that to you next year 
in a timely manner for your evaluation. That is one of my 
strong goals.
    Finally, and let me close with this, Mr. Chairman. In the 
budget that the President is submitting to you this year, we've 
got the message. OMB heard, we heard from you, and the priority 
that you have put on this is exactly right. I think the country 
owes you a debt of gratitude. You told me once when I was at 
the Smithsonian, that if you don't replace the roof of a barn, 
you will lose the walls within a year. It's that hole the size 
of a nickel in the roof that can lead to a hole the size of a 
couch in the wall and then the whole structure collapses. So if 
you can fix that nickel up front, it will cost you ten bucks. 
Later on it will cost you a lot more, and we need to get this 
together so that we can show you. We really appreciate the 
resources you've given us in the past.

                         1999 budget increases

    In the budget this year we are requesting some significant 
increases along these lines. For the Park Service, we are going 
to be requesting a 115 percent increase over their baseline for 
the repair and rehabilitation account, and a 95 percent 
increase in the cyclic maintenance program. I'll be honest with 
you, if we didn't have that list that I was telling you about 
categorized and prioritized in terms of life, health and 
safety, urgent critical natural and cultural, and ongoing 
construction projects, I would be remiss to support an increase 
of this size. But I think you're going to be happy when you see 
this list, and when we come up with that list, you'll be able 
to see a direct correlation of where that money is going and 
what's getting fixed with it. That's my goal, and that's my 
hope and my pledge to work with you in that regard.

                       management responsibility

    Finally, I think there's a lot of questions about where the 
buck stops. I don't think the buck stops at OMB. I think it 
stops right here with the guy right in front of you. OMB is 
super to work with. They were super in preparing this budget. 
They actually were absolutely a delight to work with. I think 
they are probably, among Federal agencies, the most 
unappreciated of Federal civil service but are among the most 
dedicated hardest working people. They really go the extra 
mile, and they worked with us and put together a plan that I 
think you're going to endorse when you look at the increases. 
We really got the message on this repair and rehabilitation 
thing.
    They have charged me with the management responsibility, 
and I have laid in front of you the plan of what I want to do. 
I hope it passes your muster and we can agree that if you'll 
endorse, we'll roll out on it and we'll work together on it. If 
a year from now, I can't put in front of you a five-year plan, 
you ought to ask for my resignation, period. Mr. Nethercutt, 
you're right--I'm the one who's accountable,and I serve at the 
pleasure of the President, but the reality is that Congress controls 
the purse, and I know that well. I've worked with the Appropriations 
Committee for 10 years. If we can't give you the information that you 
need to hold us accountable, you can't do your job, and, therefore, you 
ought to ask us to get the heck out of the way.
    So I make you that pledge. If I can't live up to this in a 
year, you ought to ask for my resignation, and I think I would 
happily give it to you.
    [The information follows:]

[Pages 228 - 231--The official Committee record contains additional material here.]


    Mr. Regula. Thank you, good statement.
    Is the Forest Service working parallel with you? Are you 
communicating?
    Mr. Berry. I've talked with Jim Lyons, and I believe 
they're going out at the same time. I can't really speak for 
them, Mr. Chairman. We are in communications.
    Mr. Regula. Well, we'll have an opportunity to ask them in 
the future.
    Mr. Yates.
    Mr. Yates. I am very impressed with the statement you made 
and the procedures that you've outlined that you propose to 
pursue. I think there's something that makes me wonder, though, 
well, where have you been? [Laughter.]
    I had the impression that Bonnie was a pretty good 
Assistant Secretary. Why didn't she come before us? I don't 
remember her testifying as you are testifying, but she was 
there and she was the presence. For all the deficiencies that 
are present now and that you are seeking to correct, 
apparently, she wasn't as efficient as we had the impression 
that she was.
    Is my impression wrong?
    Mr. Regula. Take the Fifth. [Laughter.]
    Mr. Yates. Anyway, I think you outlined it well.
    What are your--what do you see as your principal problems?
    Mr. Berry. I'll tell you, I think----

                             funding needs

    Mr. Yates. Is it lack of money?
    Mr. Berry. Mr. Yates, we have more resources established in 
this year's budget, so, yes, there's more money that can be 
applied to this. The backlog clearly exceeds the monies that 
we've been getting.
    Mr. Yates. Do you need more money?
    Mr. Berry. In the budget there is a request for increases, 
Mr. Yates, yes, sir.
    Mr. Yates. Do you need more money?
    Mr. Berry. Yes, sir.
    Mr. Yates. Okay. [Laughter.]
    How much more money do you need?
    Mr. Berry. In the budget request you've got in front of you 
there's some pretty significant increases, and, to be honest 
with you, this is going to go against something my grandfather 
told me long ago. He said----
    Mr. Yates. Well, you should never go against your 
grandfather. [Laughter.]
    Mr. Berry. You're right.
    He told me, Mr. Yates, ``If somebody offers you something, 
take it with your left and hold out your right.''
    In this case, I think what we need--these increases are 
significant. What we need to do is build a trust with you, and 
we need to restore our credibility with you. That is my game 
plan for this year. I can----
    Mr. Yates. Well, you've started out well, let me put it 
that way.
    Mr. Berry. I don't think we need more money than what we've 
requested in the budget, to be honest with you, because----
    Mr. Yates. Yes, but those are increases.
    Mr. Berry. They are increases.
    Mr. Yates. But you need that money?
    Mr. Berry. We could use that money, and we could put it 
toward this plan.
    Mr. Yates. That isn't the same thing. You need that money?
    Mr. Berry. Yes, sir.
    Mr. Yates. All right. Just the fact that you can use it 
doesn't mean the same as needing it. Now do you need it?
    Mr. Berry. Yes, sir. [Laughter.]
    Mr. Yates. You don't remember what the figure is?
    Mr. Berry. I can get you the numbers. This year there's an 
$82 million increase over fiscal year 1998 for the National 
Park Service.
    Mr. Yates. Total? Just for the Park Service?
    Mr. Berry. That's just for the Park Service. We do have 
increases requested for Fish and Wildlife and the Bureau of 
Land Management, and we'll get you those, and the Bureau of 
Indian Affairs. I'm including the Bureau of Indian Affairs in 
this, and I think that's an important point to point out. We 
have some significant safety and health issues in our Indian 
schools, and I think it's our responsibility. If we're going to 
continue--if the Federal Government is going to accept the 
responsibility for educating these children, we need to provide 
them a safe environment in which to go to school, and I was in 
some schools in North and South Dakota two weeks ago that I 
would not have my nieces and nephews in. They are not safe, and 
we need to correct that. We're going to have a request for 
increases there as well for you, but it's going to be on the 
same prioritization list. I'm holding them to the same 
standard. They've got to--we're going to put in front of you a 
list that----
    Mr. Yates. Well, you better move those up because that's a 
question of health and safety, and I think that should come 
first.
    Mr. Berry. Absolutely, that's our first priority. The 
standard that I'm applying to all the Bureaus, Mr.Yates, is 
life, health and safety first for either the public or our employees. 
If it affects the health or safety of our visitors, that ought to be 
priority number one. That's our chief focus in 1999 for this year. Next 
year what we don't finish this year will become, obviously, the 
priority for year one of that five-year plan. That's going to be the 
bulk of our first year request. In other words, the same priority will 
be there for you in that five-year plan.
    Mr. Yates. Your request for the Park Service is about $80 
million. Now you haven't told us what the other funding is, and 
you've said you need that.
    Mr. Berry. I do have the total here, Mr. Yates. The total 
maintenance we're requesting is $546 million for 1999 in the 
budget request.
    Mr. Yates. Just for this year?
    Mr. Berry. Just for 1999.
    Mr. Yates. What was it last year?
    Mr. Berry. $464 million.
    Mr. Yates. So you're raising it by $60 million, right?
    Mr. Berry. More like $80 million.
    Mr. Yates. More like $80 million?
    Mr. Berry. Yes.
    Mr. Yates. Okay, that's going to take a little doing, I 
think, but to the extent that we can, I think you're off on the 
right foot, and we'll see what we can do.
    Mr. Regula. You're talking about need here, but based on 
the testimony we've heard thus far, predicated on what? You're 
going to have to come back to us and define these with greater 
clarity to ensure that it's not just a number that you pulled 
out of the sky.
    Mr. Berry. Absolutely. Mr. Chairman, that's my goal. The 
list that we're going to give you, when you look at these 
lists, they'll be line item projects, and you and your staff 
will be able to go down with a pencil and eliminate those that 
you don't think pass the laugh test.
    Mr. Regula. To verify the $546 million in question?
    Mr. Berry. Right, and I guarantee you if our lists don't 
total up to those numbers, then I won't request the money. But 
I'm pretty confident looking at just the general lists that 
we've gotten to date--Bob, do you have that book?
    Mr. Lamb. Yes.
    Mr. Berry. Let me show you why this is taking us a little 
longer than I thought.
    Is this just the Park Service?
    Mr. Lamb. No, that's everybody. Those are the lists.

                     construction lists priorities

    Mr. Berry. These are the lists that we're going through and 
we're scrubbing, just to give you a size of the----
    Mr. Yates. That you're scrubbing?
    Mr. Berry. We are scrubbing. We're going through and 
prioritizing what affects life, health and safety first so that 
we can break out because in all these pages it's a mix-match, 
I'll be honest with you. It is not prioritized as carefully as 
it needs to be, and that's what we're doing. I was not happy 
with submitting a list that did not have that careful 
prioritization, and so we couldn't--in all honesty, I didn't 
get in here until the end of November. So in terms of the 
budget time line I just couldn't get it done before the time to 
go to print, but we'll have it done by the end of February for 
you, and then you'll be able to look at that, and we will have 
given it a good scrub to those standards--the life, health and 
safety, and urgent natural cultural resources, and ongoing 
construction projects, those three categories. In that way, 
with the lists that you will have you will know that it's 
legitimate and where the money, if you give us money, will go. 
In other words, no longer will it be just, well, if you give us 
money, we'll make some progress on it, and you don't know what 
you've gotten.
    We'll give you a plan. You'll have a list, and if you give 
us the funds, we'll be able to show you how it's solved. That's 
the game plan, or that's my game plan.

                       annual maintenance funding

    Now, with your permission, Mr. Chairman, there is one--and 
I'm not asking for it this year, but if this works, if we're 
successful in getting a five-year plan in front of you, one of 
the things that you'll see in this report where they compared 
us to the private sector, that the Government is not good at 
doing, is the annual maintenance, the fixing of the nickel-size 
hole. The maintenance levels that the Federal agencies have 
been receiving have been pretty straight-lined in terms of just 
the annual maintenance level. I don't have this, and I'm not 
requesting this now, but I just want to warn you that what may 
come out of this at the end of the day after we do the five-
year plan is let's show you what the plan for the backlog is 
and what needs to be done to address it. But we may request a 
year from now an ongoing increase in the annual operations or 
the annual maintenance monies that are spent for fixing those 
nickel-size holes so that we don't get into a situation where 
there's a backlog again.
    So that would be my longer term goal, but I'm not ready to 
ask you for a year yet. That, I think, is next year's thing. I 
need to restore our credibility with you in terms of getting 
over this backlog. There ought not be a term called backlog. We 
ought to have a management plan in front of you. We ought to 
have a game plan for how we're going to fix it, and then 
there's no more discussion about a backlog.
    You can't be held accountable by the American public for 
this backlog because we haven't put a plan in front of you. 
Once we've got a five-year plan in front of you, if the 
Congress decides that you're not going to provide the funds for 
the plan, then that would be an issue of accountability. Until 
we can put that in front of you, it is unfair to hold the 
Congress accountable for this.

                      title V maintenance funding

    Mr. Regula. As you know, I insisted on backlog maintenance 
being included in the FY 1998 Title V, and the request from 
your three agencies for those funds to include not only land 
acquisition but also backlog maintenance.
    Did the agencies submit requests for that, for the 1998 
Title V money?
    Mr. Berry. For the 699 amount?
    Mr. Regula. Right.
    Mr. Berry. Yes, the special one-time fund. Sir, this plan 
that we're developing for 1999 would also be the same list that 
we would work against with 1998 resources.
    For example, the 20 percent of the fee monies that the park 
has for 1998 would be applied toward this prioritization list. 
Any monies that you agree to set aside out of that $699 
million, we would propose would go toward this list. So you 
will have one list. We have a lot of pots of money out here, 
and I think whenever you have a lot of pots of money coming 
fromdifferent directions, it's important that you have some 
mechanism to hold everything in sync. I think the way to hold this in 
sync is to get one list, and then we'll apply those different resources 
toward it, and you'll see where that list comes down, and, hopefully, 
totally eliminate it.
    Mr. Regula. Did their request include maintenance money?
    Mr. Berry. Yes, sir.
    Mr. Regula. Do you know how much the total was that was 
requested?
    Mr. Berry. I would have to----
    Mr. Regula. It was $20 million, as I understand it, that 
has been put in but----
    Mr. Berry. $29 million has been requested, for the record. 
In terms of specific requests, I don't know off the top of my 
head.
    Mr. Regula. If you could supply that for the record because 
we'll have questions for the record.
    Mr. Berry. Yes, sir, I will. I appreciate that, Mr. 
Chairman.
    Mr. Regula. Mr. Nethercutt?
    Mr. Nethercutt. Thank you, Mr. Chairman.
    Mr. Berry, thank you for your candor. Maybe you've 
established a new standard that I would hope could be 
replicated maybe from the top of the Government down in terms 
of accountability and responsibility.
    I'm wondering in your analysis of the blue book that you 
looked at----
    Mr. Berry. We're still looking at. [Laughter.]

                    unused or under-used facilities

    Mr. Nethercutt. I understand--whether there's any 
consideration of unused or under-used facilities in there? Are 
there any structures, any assets that perhaps we can dispose 
of, maybe sell them to the States, or give them to the States 
or just not use them anymore because they're unused or under-
used? Is that a possibility?
    Mr. Berry. Mr. Nethercutt, I think what you'll find--and I 
was amazed by the visitation numbers that we're facing on our 
public lands--I think probably one of the fastest growing 
businesses in the country is the recreation industry. Our 
numbers on BLM land, on national parks, Fish and Wildlife 
refuges, it is phenomenal, the growth, in terms of public 
usership and demand.
    There is no question that if there's a facility--let me 
show you. This will give you a sense of the visitorship totals. 
You can see how that is just increased. These facilities are 
under a lot of increased usage, and that just increases the 
wear and tear, quite frankly. So that's where a lot of this 
need is coming from for repairs and rehabilitation, but I'll 
pick out a specific to try and answer your question.
    My understanding--and I'll let Mr. Stanton, the Director of 
the National Park Service, go into this with more detail with 
you because they are now doing a scrub of their entire housing 
inventory at the National Park Service. They're identifying 
where housing should occur at national parks and where it 
should no longer occur, and are there areas that maybe we built 
houses 20 years ago because there were no communities nearby 
for people to live. I mean, these were in the middle of nowhere 
then, but 20 years later now there are communities outside the 
gate that have housing supply and housing stock that is, quite 
frankly, better than what we were providing employees in the 
park. We ought to get out of that business in those places. We 
ought to knock those houses down and allow the employees to 
live in those communities in nearby places. There are still 
many parks where there are no real alternatives. There's no 
alternative in Ringo National Park in Alaska. You have a 
national park the size of Indiana, so there are places where we 
ought to be in that business but there are some where we 
shouldn't be, and the Park Service is going through and doing 
that scrub. So I would use that as an example.
    In terms of this list I think when you see the projects 
that we're talking about, we're talking pretty basic 
facilities, and I think if we're going to be in the business of 
serving the public, we pretty much have to do this. You have to 
provide this.
    Mr. Nethercutt. I would just suggest as you go through this 
that maybe you think about it in those terms----
    Mr. Berry. That's a good point.
    Mr. Nethercutt [continuing]. And whether you should keep 
it, whether it's something that's expendable, notwithstanding 
the increase--I respect that there's the increase and the 
incidence of use very much, but that may be something you ought 
to think about.
    Mr. Berry. That's a good suggestion. I really appreciate 
that.

                               OMB's Role

    Mr. Nethercutt. The only other thing, and then I have to 
leave, Mr. Chairman, is you say you have had a good working 
relationship with OMB. Who is OMB? I mean, I know but in terms 
of----
    Mr. Berry. In our case, I deal directly with a gentleman 
named T.J. Glauthier who is OMB's organizer. Instead of 
Assistant Secretaries they have what they call PADS, Program 
Associate Directors, and T.J. is one of the best. He is just 
the salt of the earth, and we would be happy to come up and sit 
down with you and go over this and the game plan. I went to him 
with the management strategy, and he came through with the rest 
of the resources. So they've really, really done a good job.
    Mr. Nethercutt. And I think they are certainly good people 
at all levels of the government, many of whom are sitting here.
    What I've seen at least on the Agricultural Subcommittee on 
which I serve is that there seems to be--without trying to 
indict anybody--there seems to be a methodology, either coming 
from the White House or OMB, that says we're going to refuse 
some of the funding in a certain area knowing that the Congress 
will restore it, and then we can in our budget support other 
purposes for which we're committed. And I'm not sure whether 
that has happened in your experience with OMB, but I sense that 
it has happened in agriculture and other areas, kind of 
squeezing food programs--I should say squeezing agriculture 
research in favor of food programs, and then the Congress is 
somehow--we're the bad guys if we want to restore that 
agriculture research and perhaps trim back on some food 
programs.
    So my sense is that there is a priority setting that goes 
on through OMB, through the White House, that impacts your 
agency and others maybe not positively. It may not be you in 
the broad sense at fault, but I respect your view of this.
    Mr. Berry. In our case they have actually been extremely 
helpful and extraordinarily decent to work with, and we have a 
very positive relationship. So I understand what you're saying 
in terms of other agencies, but in our case, which isall I can 
really tell you about, it's been really good.
    Mr. Nethercutt. Well, congratulations. I hope I'm here when 
we have a chance to----
    [Laughter.]
    Mr. Berry. Bob, we've got to have this five-year plan done. 
[Laughter.]
    I want to put it in front of you, because I think then all 
of this talk about backlog goes away. It's a five-year plan, 
and if it ain't in there, it can wait until the sixth year, and 
that's why we really need to get it.
    Mr. Nethercutt. Well, good luck to you.
    Mr. Berry. Thank you, sir.
    Mr. Regula. I think you're right, Mr. Nethercutt. That's a 
game that gets played. We'll downsize what we'll do but not do 
it at the expense of something they like to do, and I want to 
say we're going to replicate this hearing a year from now, and 
I'm hopeful the results will be much more positive.
    Mr. Nethercutt. Thank you, Mr. Chairman.
    Mr. Regula. Thank you, Mr. Berry.
    Mr. Berry. Mr. Chairman, if I could, I would just like to 
give you for the record--these are just a record of the 
memoranda that verify the----
    Mr. Regula. These will be a part of the record.
    [The information follows:]

[Pages 239 - 246--The official Committee record contains additional material here.]


    Mr. Berry [continuing]. So that you'll know I'm not just 
talking here, that we've done what we're talking about.
    Mr. Regula. You've heard the old cliche, ``action speaks.''
    Mr. Berry. You've got it.
    Mr. Regula. Okay, we'll look forward to that.
    Mr. Berry. Thank you, sir. Thank you, Mr. Chairman.
    Mr. Regula. The next panel--is the four land management 
agencies.
    Thank you, gentlemen, for coming. I'm glad that you were 
here for the preceding testimony because this impacts very 
substantially on the future of your management 
responsibilities. I hope you understand what we're after, and 
that's just to maximize the dollars for the benefit of the 
public. They're paying the bill, and I would very much 
appreciate it if you could summarize your statements. 
Obviously, your entire statement will be made a part of the 
record, and we will read those, but perhaps we can move along 
expeditiously.
    Our first statement will be from Mr. John Rogers, Deputy 
Director, U.S. Fish and Wildlife Service.
    We heard Mr. Kolbe give you a fairly good grade this 
morning, so we look forward to hearing from you. You may 
proceed with your statement.
                              ----------                              

                                       Wednesday, February 4, 1998.

                UNITED STATES DEPARTMENT OF THE INTERIOR

                                WITNESS

JOHN ROGERS, DEPUTY DIRECTOR, FISH AND WILDLIFE SERVICE

                          John Rogers' Summary

    Mr. Rogers. Thank you, Mr. Chairman. We would hope the 
grade is somewhat better than just passing, but we'll let you 
be the judge of that.
    I'm pleased to be here today to discuss the Fish and 
Wildlife Service's maintenance management system, and, as you 
suggested, that the formal statement be put into the record.
    Mr. Regula. Without objection.
    Mr. Rogers. The Fish and Wildlife Service has had a 
comprehensive facility maintenance system in place since 1989. 
The purpose was conceived and is operated on four basic 
principles: first, to document maintenance backlogs; second, to 
identify project priorities; third, to provide a tool for 
planning and budgeting of maintenance needs on refuges and 
hatcheries; and, fourth, to provide accountability to track 
accomplishments.
    As the thrust of the hearing has gone so far, it's not 
surprising that we developed this system in response to the 
increasing backlog, and, in our view, insufficient funds to 
manage that backlog.

                fish and wildlife service backlog growth

    Though the Fish and Wildlife Service's share of the 
departmental backlog, as stated by GAO this morning may be just 
to the right of the decimal point, we find it is significant to 
the effectiveness and efficiency of our agency. It does amount 
to some $716 million and 11,000 individual projects on refuges 
and hatcheries. Unfortunately, over the past five years the 
maintenance backlog has grown approximately six percent per 
year. The reasons for this growth, as you are well aware, are 
complex, but they include, first, the aging of about $190 
million of refuge facilities and equipment that were purchased 
in the late 1970s as a part of the Bicentennial Land and 
Heritage program. These facilities, unfortunately, are all 
coming of age at once.
    Second, the refuge system continues to grow by 
approximately eight to ten refuges per year. Each new refuge 
comes with its own set of management and maintenance 
challenges. Finally, as I mentioned, the backlog continues to 
grow because of the primary reason that funding to deal with 
the backlog has been inadequate. Industry standards suggest 
about two to four percent of capital value be invested in 
maintenance each year. For the past five years the Fish and 
Wildlife Service has had about seven-tenths of one percent to 
invest in the maintenance backlog. This was increased to one 
percent this past year through the efforts of this committee, 
providing increase in maintenance, complemented by the Land and 
Water Conservation Fund increase.

                     maintenance management system

    I would briefly like to describe the system to you. The 
process of developing the database begins by documenting 
deficiencies against six major categories--first is buildings; 
second, utility systems; third, water management facilities--
and this would include low hazard dams; fourth, roads and 
trails; fifth, other structures, which are fences, gates, 
observation towers, etcetera; and, finally, vehicles and 
equipment. The system is sufficiently flexible to accommodate 
other categories, as needed.
    The maintenance management system, I want to emphasize, 
includes only projects for existing facilities--that is, it 
does not include new facilities or expansion of existing 
facilities. Also, cyclical maintenance or operations of a minor 
custodial nature, such as grass mowing, painting the fence, and 
janitorial services, are not included in the maintenance 
management system.
    We use standardized procedures for inspecting and 
documenting the backlog maintenance deficiencies. I would 
emphasize that our definition of a maintenance deficiency is a 
maintenance item that has not been addressed for at least one 
year. These procedures are documented in our Maintenance 
Management System Handbook, a copy of which I would like to 
submit for the record.
    Mr. Regula. Without objection.

                           review of projects

    Mr. Rogers. After deficiencies are identified at the field 
level, they are submitted by field stations for an annual 
regional office review. At the regional levels staff reviews 
consolidate and submit data to the Washington officefor the 
annual MMS update. We believe that the peer review that occurs at the 
Washington level is one of the most critical aspects of the system. It 
is the time we assure through specialists that the regions are 
consistent with the projects they put in the maintenance management 
systems. So that when priorities are determined, the projects are 
comparable.
    Using data from the most recent maintenance management 
system update, we request funds annually in the Fish and 
Wildlife Services budget to address the backlog. The total 
maintenance funding request, of course, is established within 
overall service priorities. Unfortunately, it's a delicate 
balance, as you know, that we have had to deal with in the 
past.
    Once we receive funds, however, we allocate them by 
project, and the funds may be used for project materials, 
engineering support, contracts, construction, inspection, 
temporary labor, but they may not be used for permanent 
salaries. We carefully track MMS expenditures and project 
completion is an integral part of the annual review by the peer 
review team.
    During the annual update field personnel not only enter new 
deficiencies and updates of existing deficiencies into the 
system, but also account for costs associated with completed 
work to ensure the integrity of the system.

                            lessons learned

    Now we have 10 years of experience, and we don't claim to 
be perfection yet, as Mr. Kolbe indicated, but we have learned 
a few things that have allowed us to refine, and, we hope, 
improve the system.
    First, the regional office overview of the field input is 
critical to provide consistency in the data before reporting to 
the Washington office. As I mentioned, another critical part is 
the peer review that takes place in Washington to make sure the 
database is accurate and that refinements are made on a 
national basis to ensure consistency from region to region.
    We have learned that the system must be kept simple to 
avoid bogging it down with too much detail and that an annual 
assessment is adequate. We have learned that the system must be 
dynamic because, as we all know, resource priorities and 
funding are changeable due to unforeseen circumstances--such as 
El Nino storm damages or unexpected equipment and facility 
breakdowns--and that priorities are best set at the field and 
regional levels. It is very difficult to try to set individual 
project priorities sitting in Washington.
    Formal condition assessments were found not to be necessary 
for all but the most technically complex facilities. I think it 
is that lesson that has led to some of the discrepancies 
between our data and what the IG found. Project cost estimates 
from contractors and vendors on many types of service 
facilities have been adequate and have saved time and money.
    Finally, it should not go without saying that field 
managers are very busy, and it was not until we were able to 
get their attention by, in fact, allocating money based on the 
quality and quantity of the data they submitted that they 
actively and enthusiastically participated.
    Mr. Chairman, as I said, we're not perfect, but in fiscal 
year 1997 we were able to allocate $32 million toward the 
successful completion of 1,650 individual refuge and hatchery 
projects. We found the system both simple and straight-forward. 
I would be happy to answer any questions you may have.
    [The information follows:]

[Pages 251 - 256--The official Committee record contains additional material here.]


    Mr. Regula. I'll have more but I think you heard the IG say 
that the maintenance system is not integrated with the 
financial management system.
    Are you trying to remedy that?
    Mr. Rogers. Well, in our view it could be integrated fully 
into the financial management system, but it would take a lot 
of money and a lot of accountants that we don't have. It is 
integrated in that all projects are identified by field station 
codes and project numbers so that they can be cross-sorted that 
way, but there isn't a one for one----
    Mr. Regula. You have enough pragmatic information?
    Mr. Rogers. That is correct.
    Mr. Regula. I was interested when you mentioned the 
utilities. I visited Fort Baker and I can say the Defense 
Department probably gets more funding than some of you, but in 
Fort Baker, which we may inherit, I learned that the utilities 
are going to cost big dollars with the upgrading of the houses. 
We may get something nice but extremely expensive, I think it 
illustrates what's happening and what happens if maintenance is 
neglected, and that's a classic example.
    Well, Mr. Shea, we're happy to welcome you. You're new on 
the block.
                              ----------                              

                                       Wednesday, February 4, 1998.

                UNITED STATES DEPARTMENT OF THE INTERIOR

                                WITNESS

PAT SHEA, DIRECTOR, BUREAU OF LAND MANAGEMENT
    Mr. Shea. Thank you, I've been on the job six months.
    Mr. Regula. Well, in Washington that's fairly new. 
[Laughter.]
    Mr. Shea. Absolutely, I've made employment decisions--one 
was to hire Barbara Wainman, and I want to thank you and say 
that I'm here at her direction.
    Mr. Regula. I don't know if I thank you. Barbara has been a 
very valued part of our team. [Laughter.]
    Mr. Shea. We did have that discussion.
    And then, secondly, related to today's hearing, I named a 
deputy director last week who is Nina Hatfield. Her area of 
specialization is the budget and the GPRA, and I do think we 
are, as Assistant Secretary Berry indicated, in the process of 
transition so that accounting practices can be jointly agreed 
to, and that we're held to that standard.
    So I would offer that as to where we will be a year from 
today.

                         lack of accountability

    I do have to agree with much of what the Inspector General 
said. There is a lack of direct accountability between the 
money that we believe is being spent in the field and where 
it's being spent, and I want to indicate the scope of the 
project that we have. As you know, our visitation in 1996 went 
to 60 million people going to our recreational sites on public 
lands that BLM has administrative responsibilities.
    Mr. Regula. Most people think the Park Service is where 
everybody goes to visit, but in reality I know your agency, as 
well as the Forest Service and the Fish and Wildlife Service 
have enormous visitation. That's an element that we need to be 
concerned about.
    Mr. Shea. We have 10,000 miles of trails, 76,000 miles of 
roads, and we have 264 million acres of land, and, believe me, 
having visited the 13 BLM States in the first 20 weeks that I 
was in my position, I can tell you the responsibility there is 
enormous. And, quite frankly, one of the tensions I see is 
between having a centralized enough of a system for 
accountability, and, yet, retain the aspect of decentralizing 
decision making so that we can administer those ways to help 
the public use it.

                           roads maintenance

    Mr. Regula. You mentioned roads, and I just want to ask. In 
backlog maintenance do you include roads because, of course, 
you get ISTEA, your Federal highway money, but do you add roads 
in your totals?
    Mr. Shea. Yes, we do. Out of approximately the $220 million 
figure that has been put forward as the allowance maintenance 
backlog, $160 million are for roads. I can tell you--and let me 
just describe a process that I went through in December and 
continued in January.
    We have not had a confirmed director in the BLM for 
approximately four years, and so what I'm trying to do is 
gradually put my hands around an enormous task. Mike Dombeck 
did a great job as acting, but I think there is a significant 
difference when you finally confirm a director.
    I talk to each State director every week, but when we had 
our budget, which I only found out I get the Wednesday before 
Thanksgiving and I'm expected to have it back to John Berry the 
Monday after Thanksgiving, and then, what can only be described 
from a new person's perspective as creative chaos, we are 
working through December with OMB to come up with what the 
Department's budget will be. I'm a loyal soldier and will do 
what I'm asked to do.
    Once I had the information from my state directors, I 
called them and went through what we were doing with their 
budgets, and one thing that I said to them is ``you will be 
judged on how you deal with maintenance--that has not 
necessarily been a part of your evaluation to date, but I want 
you to know, as your director, I will be talking with you on a 
weekly basis.'' And, I think the model that Assistant Secretary 
Berry has put forward is one that we are going to become very 
familiar with.
    I would beg to differ a little bit with the Fish and 
Wildlife Service--we need to make a very integrated approach 
between the GPRA and our budget figures because if we don't 
have those in sync, then we're going to be having sort of 
cacophony that you're hearing here in terms of the Inspector 
General's report.
    So you have my commitment, and I would cite one example. In 
Oregon in 1996 we had some flooding. If we had been able to 
have the proper maintenance on the roads, I believe we could 
have saved the American taxpayers about \1/2\ of the $40 
million because the damage that was done to culverts and other 
projects simply had not been maintained, and I think we need to 
have a five-year plan in place.
    Mr. Regula. Certainly, I will do what I can to get that 
road money increased because talk about safety and health and 
everything else, that's a very significant part, but is there 
any reason you could not use fee money for at least emergency 
work on roads?
    Mr. Shea. No, I understand that later this month you're 
having a hearing on the fee program, and Assistant Secretary 
Berry is coming, and I'm hoping to come as well. There is 
absolutely no reason why we can't use fee money. The difficulty 
can be related to the jurisdiction in which the fee is 
generated being applied to the roads there----
    Mr. Regula. Well, I understand.
    Mr. Shea. We operate ours State by State, and there are 
times when we do have some problem with that. But, no, I don't 
see any reason for that.

                           maintenance ideas

    Let me make one other observation that I plan to do as 
director. I travel a great deal, much more than I had 
anticipated, but as I go to each of the States now, I am asking 
the State directors to tell me and show me on-going maintenance 
projects. I think that kind of spot direction or check from a 
director is going to have a certain solidifying effect that is 
a priority----
    Mr. Regula. Yes----
    Mr. Shea [continuing]. And so I will be making those 
observations, and I would be happy to report to the Committee 
as we go forward.
    Again, I think as we get that five-year plan in place, one 
of the first ideas of maintenance that came to me was when I 
served on the Board of Trustees for a not-for-profit 
organization, and they had all these wonderful committees like 
publication and travel. They had one on the camp that had been 
donated to the association, and I was put on the camp 
committee, which, to my disappointment, there was a wonderful 
gentleman--indeed, a farmer--who lived on this not-for-profit 
organization for some time and he insisted that we have a 
maintenance schedule to the point that 20 percent of the budget 
each year was put to maintenance and it just became part of the 
routine. I think we need to have that priority. It is not a 
glory item; it is not--it generates a lot of----
    Mr. Regula. I agree.
    Mr. Shea. But if we don't do it, we're not doing the job 
that the American public is entitled to expect.
    So you have my commitment to do that, and, finally, I do 
want to echo something that John Berry said here. We are 
implementing--in fact, last Monday we started the ALMRS project 
in New Mexico, which is our data system for land management 
records. We also have a management information system that we 
are putting in place for budget so that we actually will be 
able with the State directors to see where the budget is being 
spent through the year and have greater accountability. But I 
think the use of information systems whether they are 
individually created or uniform--and I think we have to have 
some discussion about how we pay for those--are going to allow, 
I think, for a more accurate accountability rather quickly.
    [The information follows:]

[Pages 261 - 263--The official Committee record contains additional material here.]


    Mr. Regula. Thank you. We want to help. We want to be a 
part of the team, but we want to get the results. That's 
basically our objective here.
    Our next witness is Mr. Stanton who has been a director for 
how long?
                              ----------                              

                                       Wednesday, February 4, 1998.

                UNITED STATES DEPARTMENT OF THE INTERIOR

                                WITNESS

ROBERT STANTON, DIRECTOR, NATIONAL PARK SERVICE
    Mr. Stanton. Pat and I were sworn in on the same date, six 
months.
    Mr. Regula. So you don't have to plead guilty to what the 
GAO said exactly. [Laughter.]
    We're very much interested in the future, and, as they say 
downtown, ``the past is prologue,'' and it is in this case.
    So we appreciate your summarizing.

                        Robert Stanton's Summary

    Mr. Stanton. Thank you, Mr. Chairman.
    It certainly is my pleasure to appear before you to address 
the National Park Service's planning, design and construction 
program, as it relates to the backlog, and, certainly, to join 
my three colleagues here with respect to managing our public 
lands.
    This is my second opportunity to appear before the 
Committee to address the subject of planning, design, and 
construction in the National Park Service. Certainly, the 
comments made by Assistant Secretary John Berry have the full 
endorsement of the National Park Service, and we're actively 
engaged in working with the agencies under John's leadership 
with respect to establishing a common terminology, a common 
definition, with respect to backlogs.
    I would ask, Mr. Chairman, that my prepared statement be 
made available for the record.
    Mr. Regula. Without objection.
    Mr. Stanton. And I would like to focus just briefly, if I 
may, with respect to the execution of the planning, design, and 
construction program of the National Park Service recognizing 
that a number of efforts are underway, as recommended by the IG 
and the GAO, and, certainly, as supported by Mr. Berry, that we 
are going to move forward with improving upon the very systems, 
again, the coordination between the various agencies with 
respect to the definitions. But that's the formulation side of 
the construction and maintenance program.
    We are addressing also the execution, and, to that end, we 
look to acting upon the recommendations of the National 
Association of Public Administrators with respect to their in-
depth review of how the National Park Service conducts its 
planning, design, and construction program, and we will 
certainly be working with Mr. Berry on that. In addition, we 
are taking a look at how we can best carry out those projects 
for which Congress has already appropriated resources in fiscal 
year 1997 and fiscal year 1998.
    We are applying what we call value analysis to ensure that 
even though those projects have been funded, that they are 
carried out in the most effective and efficient way possible, 
that we maximize the resources available to us. I have 
established as a priority the review of all of thoseprojects by 
an interdisciplinary team under the leadership of one of our top 
administrators, and they have looked at a number of projects and made 
recommendations as to how we can improve upon them----
    Mr. Regula. Mr. Stanton, we're not having another Delaware 
Water Gap----
    Mr. Stanton. In essence, that's the case, sir.
    In addition to that, I'm pleased to announce that we have 
awarded two contracts to conduct an inventory and assessment of 
our housing. We have 121 parks that have five or more housing 
units. As I made the commitment to the Committee in October at 
the oversight hearings, we will complete those reviews within a 
12-month period of time, which will be the basis for us 
determining the critical need for additional appropriations to 
carry out our housing program, and I'm very pleased that that 
program is moving forward.
    Regarding the fee program, we are strengthening our 
oversight with respect to the authority that this Committee has 
granted to us to retain fees to carry out our most critical 
health and safety projects, resource management needs and what 
have you. We will benefit from roughly $140 million in fiscal 
year 1998 that would be derived from the fee program, and we 
are working cooperatively with Mr. Berry, with our regional 
directors and others to make sure that we maximize the use of 
those revenues in the fee parks to carry out our most critical 
needs in health, safety and resource protection.
    Again, we want to thank the Committee for giving us that 
authorization.

                              gpra linkage

    One other point I must mention in echoing what John Berry, 
and Pat Shea, and others have said with resect to the 
Government Performance and Results Act. We recognize the 
obligation on our part to link, if you will, or to track, our 
expenditures in the context of what we've identified as our 
major program objectives and goals with respect to the 
Government Performance and Results Act. We believe that we have 
made some strides along those lines and that as we present our 
Government performance report to Congress for fiscal year 1998 
and fiscal year 1999, you will be able to see that linkage 
between how we've used our construction dollars, our 
maintenance dollars and other dollars appropriated to us to 
carry out those goals and objectives.

                         choosing by advantages

    Lastly, I might add that we are indebted to the U.S. Forest 
Service in that in 1995 we provided you with a report that said 
we would take a different approach of establishing our Service-
wide priorities for construction and major rehabilitation. The 
U.S. Forest Service has put in place a system referred to as 
``Choosing By Advantages,'' and it has been very beneficial to 
us in giving a true accounting of what our most critical needs 
are within the National Park System.
    Mr. Regula. So you're trying to replicate in the park 
system what they have found to be successful?
    Mr. Stanton. That's right, what has been successful.
    Mr. Regula. That's great.
    Mr. Stanton. We're only able to put that new system in 
place as it relates to the fiscal year 1999 budget. So, again, 
when the construction program, the maintenance program, is 
presented to you by Mr. Berry's office for fiscal year 1999, it 
will reflect the application of the Choosing By Advantages 
approach, and I think each of the projects will stand on their 
individual merits because they've gone through a very stringent 
review process.
    Again, we appreciate borrowing that from the U.S. Forest 
Service.
    Mr. Chairman, that concludes my comments with respect to 
the execution, and, again, we look forward to the leadership of 
John Berry and other members of the Secretary's office in 
formulating and executing our programs.
    [The information follows:]

[Pages 267 - 270--The official Committee record contains additional material here.]


    Mr. Regula. Okay, thank you.
    What you're saying to me is that the Park Service is going 
to achieve the goals that Mr. Berry has outlined and----
    Mr. Stanton. That is correct.
    Mr. Regula [continuing]. And we can look forward to that in 
fiscal year 1999, and, hopefully, we'll have information prior 
to the mark-up of fiscal year 1999 so that we can make sound 
judgments.
    Mr. Stanton. It's my understanding, Mr. Chairman, that in 
discussion with Mr. Berry and others within the Department 
certainly that is the target, to have the line item 
construction program for the National Park Service available to 
you in advance of the formal appropriations hearing.
    Mr. Regula. And what you hope to develop is good base line 
data that will be there for----
    Mr. Stanton. Consistent with our criteria, that is correct.
    Mr. Regula [continuing]. A five-year work out of the 
backlog. Is that correct?
    Mr. Stanton. That is correct.
    Mr. Regula. Our last witness today, Mr. Joslin, the Deputy 
Chief for the National Forest System. We're pleased to have 
you.
                              ----------                              

                                       Wednesday, February 4, 1998.

                UNITED STATES DEPARTMENT OF AGRICULTURE

                                WITNESS

ROBERT C. JOSLIN, DEPUTY CHIEF FOR NATIONAL FOREST SYSTEM
    Mr. Joslin. Thank you, Mr. Chairman.
    I'm another one of those six-month persons.
    Mr. Regula. I've been here 25 years, go ahead.
    Mr. Joslin. With no objection, I would like to submit my 
comments for the record.
    Mr. Regula. Without objection.
    Mr. Joslin. I would like to comment regarding the three 
areas--roads, recreation and facility utilization--and give 
some background to put our backlog situation in context and 
explain the distinct nature of the Forest Service 
infrastructure.

                          forest service roads

    As you know, there are 191 million acres in the National 
Forest System lands in the country. In fiscal year 1996 these 
lands had 859 million visitors, and I think that was the point 
that you made just a minute ago. About 1.7 million vehicles 
drive on the National Forest System roads every day for the 
purpose of recreation, which is over 10 times the use in 1950.
    What makes these figures interesting is that this use is 
highly dispersed. Predominately, the National Forest are now, 
more than ever, America's backyard for the purpose of 
recreation. The National Forest contains the places where 
Americans go more than on any other Federal lands. 
Predominately their visits are characterized by leisurely 
drives to see the scenery on a weekend camping trip to their 
favorite fishing hole, or Sunday picnic with the family.
    We are truly concerned about the infrastructure that these 
people see. When a forest visitor makes use of the facility at 
the National Forest, be it a bridge, road, camp ground or 
visitor's center, the condition of that facility is perceived 
as a condition of the job that the agency is doing.
    In total the cost of bringing our infrastructure to current 
standards is approximately $13 billion, including a road system 
backlog of approximately $10.5 billion.
    Let me concentrate on roads for a minute: currently, 
visitors will drive over more than 7,700 bridges of which 13 
percent are rated as deficient. We should be replacing or 
reconstructing 150 or more bridges per year; yet, annually, 
over the past five years we have averaged only 40 replacements.
    Although the National Forest System road system consists of 
about 380,000 miles, only 86,000 are driveable by passenger 
cars. What is important about that figure, Mr. Chairman, is 
that at the end of fiscal year 1991 we had 93,600 miles that 
could be driven by passenger cars.
    Mr. Regula. Let me interrupt you here because this roads 
issue, as you know, is always a topic of discussion.
    What percentage of your roads in mileage is logging and 
what percentage is for the recreation user?
    Mr. Joslin. Almost all of the roads are used by all 
recreationists, with the exception of those that are closed and 
some of the others. The same way when we talk about the trunk 
of a tree the main line roads that we have, and we have the 
arterials that go out and we have the collectors and the 
locals. Those roads are utilized by almost everybody for all of 
those kinds of things.
    Mr. Regula. So in terms of health and safety, it's 
important that these roads be built to decent standards----
    Mr. Joslin. That's correct. You don't want to have 
passenger cars out there----
    Mr. Regula. Because if there's a road, people are always 
going to drive on it, besides the person who may be logging, 
which is a temporary use.
    Mr. Joslin. Right.
    That figure has gone up substantially. As a part of the 
work that we've done in connection with looking at the whole 
transportation policy needs, we have gotten new information, 
additional information, concerning that backlog as a part of 
that effort.
    Mr. Regula. I notice----
    Mr. Joslin. It went up from and it's about double.
    Mr. Regula. That's one of my questions. How did you get the 
dramatic increase?
    Mr. Joslin. That's the result of the efforts that we put in 
reflecting that new data.

                         recreation fee program

    A couple of other items that I just want to refer to is the 
recreation fee program that was talked about here. We collected 
about $7.7 million, and $638,000 of that was expended in 1997 
and another $3.9 million will be expended in fiscal year 1998 
for the maintenance on the 40 projects. That's been an 
excellent opportunity for us, and we appreciate the efforts 
that you folks have put in to making that happen.
    Another item we're looking at to deal with our road 
infrastructure, we're implementing the direction of the 
subcommittee relative to what is referred to as the 10 percent 
fund to perform priority road, trail, and bridge maintenance 
projects, and, as you recall, that's about $50 million total in 
fiscal year 1996 and 1997. We're in the process now of 
implementing--those projects have to be done in the States 
where the money was collected, so we're doing that.

                         facilities renovation

    Lastly, I want to briefly note that renovating facilities 
is not the only important aspect of managing the 
infrastructure. It is equally important to ensure that those 
facilities which are not fully utilized are disposed of to 
avoid unnecessary expenditures. We have been especially 
successful in the road decommissioning program, having closed 
and stabilized 18,000 miles of road through fiscal year 1997. 
We'll close another 1,200 miles in fiscal year 1998----
    Mr. Regula. Are you closing roads because you can't keep 
them up to standards, or because the recreational users aren't 
using them?
    Mr. Joslin. It's a combination of several different things. 
Some of those that we're converting when we say that we're 
closing and decommissioning, we're converting those into 
trails, those kinds of uses.
    Mr. Regula. Okay.
    Mr. Joslin. Some of those are the kinds of roads that are 
no longer needed for management or dispersal of recreational 
vehicles. So it's a combination of items.

                            employee housing

    Mr. Regula. Okay.
    Mr. Joslin. We have much more work to do regarding the 
effective utilization of our employee housing and 
administrative buildings. We're concerned with the levels of 
utilization of employee housing, and much of our housing 
needed, in what were once very rural areas, may no longer be 
needed due to increasing urbanization, and some of my 
colleagues have talked to that. We intend to examine that issue 
further in the very near future.
    We appreciate the opportunity to be here today, and would 
be glad to answer any further questions that you might have, 
Mr. Chairman.
    Thank you.
    [The information follows:]

[Pages 274 - 277--The official Committee record contains additional material here.]


                          committee questions

    Mr. Regula. Well, we'll have a lot and will submit 
questions for the record.
    Let me urge you and your staff to be as precise as possible 
in answering these questions. Sometimes we get what I would 
almost classify as stonewalling historically on questions that 
we have submitted, and I have instructed the staff that if the 
answers aren't responsive, then send them back for a second 
time because we need information. We have so many dollars to 
allocate, and we want to use them as wisely as possible. I 
would say that, other than education, probably what your 
activities do is touch the lives of more people in terms of 
Federal functions than any other single thing, and it's 
something they like. They like recreation, they love the parks, 
they love all of your facilities, and so we owe it to them to 
have a quality experience for them. I think maintenance is a 
very important element. I mean, I look at the pictures here 
that you've submitted, and I see tables that are broken, 
barbecue grills that are down, and I'm sure all of you 
experience this. The American people have faith in you. They 
believe when they go to a park, when they go to Fish and 
Wildlife, or to the forest, or to the BLM, that their 
Government is going to do it right, and we want to respond to 
that faith that they have. That's why we're trying to work with 
you in addressing these problems, and I think it's clear from 
the testimony this morning that we need a credible database so 
that we can put the money where it is needed the most. That's 
something that you as managers certainly want to achieve too, I 
think, as part of your objective and you want to hold the 
people out in the field accountable. We have to be accountable 
to voters every two years, so you have to be accountable to the 
public, and your managers need to be accountable to you and you 
in turn to the people that we all represent.
    So I thank you all for coming this morning, and I hope that 
out of this effort we really get some positive results so that 
a year from now it will be something that we'll take some pride 
in based on what's been achieved.
    Mr. Stanton. Mr. Chairman, again, we appreciate your 
support and the point that you make certainly is extremely 
important to all of us with respect to the protection of the 
infrastructure but also protecting the resources provided for 
public use, which is critically important to all of us.
    Mr. Regula. Well, I know the First Lady is going to have a 
program on preservation, and that's part of what the President 
was alluding to the other night in the State of the Union 
address. There is nothing more precious than our land 
resources, and among the four of you, you control about 30 
percent of America. It's something that's a treasure. I live on 
a farm and maintain my own park. I visited Ronald Reagan's 
ranch, and Mrs. Reagan told me the President's comment about 
his ranch. ``This may not be heaven, but it's got the same ZIP 
Code.'' [Laughter.]
    I hope people will have the same feeling toward the public 
lands, which are the treasures that belong to all of us.
    With that, we'll adjourn the hearing.

[Pages 279 - 348--The official Committee record contains additional material here.]


                                        Thursday, February 5, 1998.

               BACKLOG MAINTENANCE FOR CULTURAL AGENCIES

                               WITNESSES

I. MICHAEL HEYMAN, SECRETARY, SMITHSONIAN INSTITUTION
LAWRENCE J. WILKER, PRESIDENT, JOHN F. KENNEDY CENTER FOR THE 
    PERFORMING ARTS
EARL A. POWELL III, DIRECTOR, NATIONAL GALLERY OF ART
JEFFREY T. LARICHE, ASSOCIATE MUSEUM DIRECTOR FOR FINANCE AND 
    ADMINISTRATION, U.S. HOLOCAUST MEMORIAL MUSEUM

                            Opening Remarks

    Mr. Regula [presiding]. The Interior oversight hearing will 
come to order. I know many of you have other obligations this 
morning, so we'll try to expedite this as much as possible.

                     backlog maintenance estimates

    We have backlog estimates from the four agencies before us 
totaling $300 million. As you all know, the President made a 
point in his State of the Union about preserving our national 
treasures, and I think your institutions are certainly at the 
forefront of what we would call national treasures. And of 
course, as part of preserving these is the maintenance of your 
facilities in a very effective way.
    I think what we're seeking in this hearing is: one, do you 
have a system in place to accurately establish the cost of 
maintenance needs, not only backlog, but on an ongoing basis. 
Secondly, are the current numbers that are in your budget 
justifications accurate? Does this really portray what you have 
in fact on maintenance? Do you have a system which establishes 
priorities or do you treat all maintenance needs equally? 
Obviously some are critical, some could be put off, and there 
should be a system. All we're saying is that we'd like to see a 
system in subsequent hearings so that in allocating the funds, 
we can address the high-priority items and plan prospectively 
to ultimately eliminate backlogs.
    What we're trying to do is to be constructive in the 
allocation of resources to address the problems that you see, 
and be helpful in any way to overcome what could, I think, be 
exacerbated by time. If you don't fix little things, they 
become big things and much more expensive.
    Mr. Skaggs, do you have any comments you'd like to make 
before we get started?
    Mr. Skaggs. I don't believe I do, thank you.
    Mr. Regula. Okay. Our first institution today will be the 
Smithsonian. And Mr. Secretary, Mr. Heyman, we're happy to have 
you. And I assume you have a little backlog in maintenance----
    [Laughter.]
    Mr. Regula [continuing]. Based on our conversations.
    Mr. Heyman. With the extended facilities that we have we--
--
    Mr. Regula. All of your statements will be made a part of 
the record and we'll appreciate a summarization.
    Mr. Heyman. Okay. Mr. Chairman, Mr. Skaggs: I have some 
material in my testimony that shows that as we increase our 
affiliations program and as that starts to get some bite--and 
it's beginning to now--we'll be moving a number of our 
artifacts out on long-term loans around the country which, for 
purposes of this conversation, means the pressure will be 
reduced a little bit with regard to our own storage needs.
    Mr. Regula. I think the McKinley Museum--I was just there 
for McKinley's birthday program--and they told me they had some 
there--artifacts.
    Mr. Heyman. Well, we have about six memoranda of 
understanding now with existing and new museums around the 
country, and we've got inquiries from 26 states. So I can just 
see and feel how this thing is beginning to catch on, and I'm 
fairly optimistic about our entering into more agreements. 
Perhaps I can talk a little bit more about that during our 
budget hearing. But it has some relevance, obviously, to what 
we're talking about here.
    You know that we operate more than 6 million square feet in 
300 buildings which we own.
    Mr. Regula. Three hundred.

                   summary description of smithsonian

    Mr. Heyman. The facilities include 16 museums and 2 storage 
sites in the Washington and New York areas; research facilities 
in Panama, in Maryland, in Massachusetts, and Arizona; and the 
zoological park in Washington; and a animal conservation 
facility in Virginia. So it's pretty vast.
    These facilities collectively house the collections which 
are of great value, and in many instances, irreplaceable. Many 
of the buildings themselves are historic structures.
    You'll recall that the Smithsonian had a commission of 
citizens appointed. In May of 1995, that commission on the 
future of the Smithsonian, reported. One of the matters that it 
took up was assuring the future splendor and functionality of 
facilities. Some of those, of course, were built in the last 
century. The commission noted the cost of maintaining them, let 
alone upgrading them, and stated that, of course, the need 
grows at an impressive rate when you have buildings of this 
age. I just want to do one quotation from that report. ``A 
continuing long-term plan for the needed renovations and 
restorations must begin immediately if the costs are to be 
contained in the future. The Institution has done a thorough 
job of identifying needs and estimating costs,'' said the 
commission. ``A total of $50 million each year for the next 
decade would assure that present facilities are restored to the 
point of being safe and appropriate for people and for 
collections.'' As you know, we have presented that analysis 
showing how our buildings age and at the point that they really 
need new renovation of a major sort, and how at $50 million a 
year we can keep them all above the line. So we have been 
seeking that kind of funding.

                   facilities planning and assessment

    Of course we conduct regular inspections of our buildings 
to identify deficiencies. We arrange for more detailed studies 
of specific problems when they are needed. The staff evaluates 
the relative urgency of deficiencies; their impact on the 
building and occupants; needed work on building exteriors and 
internal systems and all the rest; whether the problem is an 
active failure such as a roof leak, or an imminent failure such 
as a piece of equipment that requires frequent repairs, a 
predicted failure, or has a cost-effective payback period. 
It's, of course, a very complex analysis. It would be if we 
only had a single building or two, but with the extended 
facilities that we have, it obviously is very detailed. Rick 
Rice, who is Director of our facilities, is sitting behind me. 
If you've got technical questions, I'm clearly going to turn to 
him to help me.
    In any event, based on our analysis, as I indicated before, 
which of course we had provided to the commission on the 
future, we believe that, an annual funding of $50 million for 
repairs and restorations will ensure that we'll be able to 
provide responsible----
    Mr. Regula. That's 10 years.
    Mr. Heyman [continuing]. For over a 10-year period, we'll 
be able to provide responsible stewardship of the facilities. 
My guess is, although I don't know the numbers precisely, that 
the 10 years will bring us all above that line. Obviously we've 
got to establish a figure thereafter to keep us above that 
line. My guess is that it would be in the same neighborhood, 
although I'm not sure about that.
    We historically have treated the zoo budget separately from 
the rest of the institution. The sum that's needed over this 
decade at the zoo is about $10 million a year.
    Mr. Regula. That's in addition.
    Mr. Heyman. In addition to the $50 million. The 50, I don't 
really know the history of the separate treatment in budget 
preparation and submission of the whole of the Smithsonian but 
for the zoo--but that's been the tradition. But it is $50 
million and $10 million.

                     planned repair and renovation

    We're working on plans with priorities for the following 
four buildings, which are the ones that are below the line, or 
just about to be there. One is the Patent Office Building that 
houses the National Museum of American Art, the National 
Portrait Gallery, and the Archives of American Art. That 
building is an 1867 building. It was thoroughly renovated in 
1964. And the present master renovation plan calls for roof 
replacement, and that began this year--we're working on the 
roof at the southwest portion of that building right now--and 
the treatment of the building facades; and in addition all of 
the major building systems must be replaced. These include 
mechanical, electrical, telecommunications, plumbing, fire 
protection, and security. It's important for you to know that 
we'll take the opportunity of the renovation to return as much 
space as it turns out to be feasible for public and exhibition 
spaces, and we'll be discussing this further during the budget 
hearings this year. We estimate that's between $40 and $50 
million to do what I've just indicated.
    The National Museum of American History was completed in 
1911. Wings were added between 1960 and 1964. It's our largest 
building. It has over 1 million square feet for exhibit spaces 
and scientific research facilities, libraries, and 
administrative space. There's also space for the storage of 
collections, however, the space used for storage is diminishing 
as objects are being moved to the Museum Support Center in 
Suitland. The master renovation plan includes the installation 
of a new heating, ventilating, and air conditioning system. The 
renovation activities will also include upgrading fire 
protection, roof replacement, asbestos abatement, and 
improvement of the electrical, security, and communication 
systems. At the same time, we're going ahead with the 
construction of the congressionally approved east and west 
wings, as you know. And the latter, the west wing, is funded 
solely with private funds. We figure $100 million to $110 
million; $37 million has already been spent in this process. 
We've been addressing the problems as we've been going along, 
obviously.
    Another priority project for the institution is replacing 
the skylights and the window walls at the National Air and 
Space Museum. That's now under contract with no-year funds and 
1998 funds. And of course we're designing the major capital 
renewal projects at the Arts and Industry building in the 
castle. The castle, we estimate, will be between $30 million 
and $40 million, and A and I between $20 million and $30 
million.
    If you put all of those together, it's somewhere between 
$200 million and $230 million for those four major buildings.

                            future requests

    I again thank the chairman and other members of this 
committee for your continuing interest and support in this R 
and R program which is obviously critical for us. With the 
increased funding received from Congress since Fiscal Year 
1996--you'll recall we started at $24 million a year and our 
aim, and I know your aim, is to get us up to $50 million a year 
from that 24. With the additions that we've been getting on the 
24, we've made progress in addressing our needs. If we can get 
ourselves up to the $50 million a year plus what we need for 
the zoo, I feel very confident that we can maintain our 
facilities in very acceptable form.
    [The information follows:]

[Pages 353 - 356--The official Committee record contains additional material here.]


    Mr. Regula. Is the zoo a 10-year program too?
    Mr. Heyman. The zoo--Is the zoo a 10-year program?
    Mr. Rice. Yes, indeed.
    Mr. Heyman. Yes.
    Mr. Regula. I think it is, from what I've heard.
    Mr. Heyman. I've gotten a very fervent response back there. 
[Laughter.]
    Mr. Regula. Okay. Thank you. We'll hear from each of you, 
and then we'll go to questions.
    Mr. Wilker.
    Mr. Wilker. Mr. Chairman, I'm Larry Wilker, President of 
the John F. Kennedy Center for the Performing Arts. And 
appearing with me today on behalf of the Kennedy Center are 
Clifton Geeter, Vice President of Facilities; James Kirkman, 
Project Executive; William Becker, General Counsel; and Jared 
Baral, Office of Government Liaison.
    I previously have submitted to the committee my written 
statement concerning the Kennedy Center's minor repair program 
which I request be included in the record of this hearing.
    Mr. Regula. Without objection. All the statements will be 
put into the record.
    Mr. Wilker. Thank you.

                   organization of the kennedy center

    As the subcommittee is aware, the Kennedy Center, an 
independently administered bureau of the Smithsonian 
Institution, took over responsibility for operations and 
maintenance and capital repair of the Kennedy Center building 
on October 1, 1994. The facility, as you know, at that time, 
was in very poor condition.
    Following the requirements of the 1994 amendments to the 
Kennedy Center Act, we prepared the first ever comprehensive 
survey of the building's physical condition--a comprehensive 
building plan, which is updated annually. In the plan, we 
projected what would be required to bring the facility up to 
current life safety and accessibility standards while 
maintaining functionality.
    The plan estimated that it would take 15 years, through 
2009, to rehabilitate the structure. I'm pleased to report that 
we are proceeding well in executing our long-term program 
within the cost projections included in the 1995 plan.

                          minor repair program

    The Kennedy Center has developed a rigorous procedure for 
identifying minor repair work items and establishing priorities 
for completing them. Within these procedures, we have 
accomplished a great deal. The 1995 plan identified a backlog 
of minor repair work items that needed to be addressed in 
addition to capital repairs. We define minor repair and 
replacement work items as work items that are relatively small 
in scope and budget, or require relativelylittle consultant 
involvement.
    Since 1995, we have completed many other studies to clarify 
and better define the scope of work items that must be 
addressed. During Fiscal Years 1996 and 1997, we completed 
almost $2 million in minor repair work items identified as 
backlog by our consultants and Kennedy Center staff. According 
to our most recent status report on our minor repair program, 
the minor repair backlog includes work items with an estimated 
cost of $11.2 million. A summary of some of the most 
significant work items that we have completed is included in my 
written statement and in a status report that I just mentioned 
which I am submitting to the committee.
    The Center's minor repair program for Fiscal Year 1998 
calls for completion of work items totaling $1,683,000. Just a 
few examples of these work items that we'll be addressing this 
year include: installation of emergency lighting fixtures where 
there is currently none or where emergency lighting is 
insufficient; installation of panic hardware, a mechanism that 
allows immediate egress on roughly 20 doors throughout the 
building; installation of additional exit signs at locations 
where direction to an exit is not visible to occupants; 
installation of fire retardant material at places where pipes 
or ducts penetrate fire separation walls; and installation of 
carbon monoxide detectors in the parking garage.

                           emergency repairs

    In addition to the anticipated and projected minor repair 
work items, emergency repairs are completed each year as 
equipment and systems breakdown prematurely. And those repairs 
are included in the Kennedy Center's minor repair budget. As 
systems and features of the building deteriorate, unforseen 
breakdowns occur that require immediate attention to keep the 
facility operational. Some of these emergency repairs 
undoubtedly are due to deferred maintenance because of 
insufficient funding and repairs delayed by past funding 
constraints. As the capital repair program is implemented and 
the backlog of minor repairs is reduced, it is expected that 
the provision for emergency repairs will decrease.
    The list of minor repair work items and the priorities for 
completing the work will change from year to year. Additional 
engineering studies will identify work items not previously 
identified, capital repair projects will be developed that will 
include minor repair work items, and technology changes will 
render some systems obsolete. Therefore, the Kennedy Center 
updates the minor repair program on an annual basis. Planning 
for the Fiscal Year 1999 minor repair program is currently 
underway. It is expected that the Fiscal Year 1999 minor repair 
program will include work on elevators and escalators, repairs 
to the mechanical system, repairs to the building enclosure, 
and a provision for emergency repairs. The tentative budget for 
FY 1999 is $1,696,000.
    The Kennedy Center is the national center for the 
performing arts and the sole national memorial to the late 
President John F. Kennedy. As such, the building hosts upwards 
of 4.5 million visitors each year and is open 365 days a year, 
18 hours a day. The Kennedy Center board of trustees is 
committed to maintaining the building at a high standard and in 
a cost effective manner. We appreciate the support that this 
committee and the Congress has provided to enable us to 
accomplish what we have. And I am very grateful for the 
opportunity to appear before the subcommittee and respond to 
any questions you may have.
    [The information follows:]

[Pages 359 - 366--The official Committee record contains additional material here.]


    Mr. Regula. Thank you.
    Mr. Powell.
    Mr. Powell. Thank you, Mr. Chairman. Good morning. Members 
of the committee, thank you for the opportunity to meet with 
you. It is a privilege to be here to offer my comments on the 
National Gallery's long-term needs.

                   long term plans--national gallery

    One of the first commitments after taking over the 
director's job in 1992, was to begin plans to ensure the 
protection of the Nation's collection, as well as the 
preservation of the landmark John Russell Pope and I. M. Pei 
structures, which together comprise about 1.2 million square 
feet.
    The west and east buildings of the National Gallery are 
themselves national monuments, and we intend to keep these 
building functioning efficiently, securely, and safely, and 
want to ensure that they continue to serve the high aesthetic 
standard that is fundamental to the National Gallery's mission.
    We're enormously grateful for your support in funding our 
major critical projects from Fiscal Year 1994 through Fiscal 
Year 1998. The first of these--the major one--is the west 
building skylight replacement effort which is on schedule and 
on budget. And if we're a little bit lucky with the weather, 
we'll wind up finishing it, perhaps, a little bit early.
    Mr. Regula. If you don't have leaks.
    Mr. Powell. We have no leaks. We checked this morning 
before we came. [Laughter.]
    That, as you know, Mr. Chairman, is a phased and integrated 
construction plan which is just over half complete. The project 
preserves the west building from water leaks and greatly 
reduces the transmission of harmful ultraviolet light. It also 
has the net plus that when it's completed of being constructed 
with energy conserving multilayered glass, it will furthermore 
produce important savings in energy costs.
    Also underway is an upgrade of the National Gallery's 
systems for fire detection and suppression which is a second 
major critical project. The initial phases of this multi-year, 
state-of-the-art project are underway. The equipment we are 
putting in place is the most reliable and efficient available 
for an art museum. If you need technical comments on this, my 
colleagues Mr. Wilson, and Mr. Schneider could provide that 
information.
    In addition, we are now in the process of installing 
advanced direct digital controls for the heating, ventilating, 
air conditioning control system, which is the third major 
critical project. A $2 million energy efficiency grant from the 
Department of Energy offset over half of this cost. This new 
automation energy management system isexpected to begin 
yielding immediate operating cost and energy savings as it is brought 
on line.
    The west and east buildings have been very well maintained, 
yet some of the infrastructure systems have outlived their 
designed life expectancies. For example, the original steam and 
electrical distribution systems in the west building, which is 
55 years old, and the chillers and air handling equipment for 
the HVAC system, will need to be replaced.

                        studies and assessments

    Over the past 8 years, the Gallery has completed several 
specific studies and assessments identifying the areas that 
need to be addressed. An exterior building envelop study 
identified the most critical architectural and structural 
repair costs. Now, the first of these projects will begin in 
Fiscal Year 1999, with the reconstruction of the Mall entrance 
steps to the west building. They have settled over time and 
there's water leakage that could further destabilize those 
steps. In our Fiscal Year 1999 budget, we also identified 
critical mechanical and electrical requirements.
    We're grateful for your and OMB's interest and support in 
addressing these critical issues. Routine day-to-day 
maintenance and repair activities do not address deferred 
maintenance projects. The Gallery's annual appropriations take 
care of that routine maintenance repair, but not the larger 
requirements. And we have determined that an integrated plan to 
address a complete program is critical.

                         master facilities plan

     To that end, the National Gallery initiated the 
preparation of a master facilities plan last summer by the 
Vitetta Group--this is the same group that designed the 
skylight project that's underway and their expertise is in 
historic building preservation. We felt a master facilities 
plan was needed to continue to safeguard the facility's 
collection, public, and staff, and to establish priorities, and 
to provide an organized framework for effective implementation.
    A project team has been assembled that includes key members 
of our staff and the consultants to produce an integrated 
picture of the total repair and renovation requirements. The 
assessment is now in process and it will tell us by April, I 
believe, the precise condition of the facilities, and give us a 
relative risk or reliability determination. Our goals are to 
extend the useful life of the facilities for at least 25 years 
and to respond to new maintenance standards as they evolve.
    This year, the National Gallery has received $6.2 million 
in Federal appropriations for repair and renovation projects. 
But until the completion of the masters facilities plan, we 
really won't know the magnitude of our future needs; but I 
could, obviously, anticipate that an increase in funding 
annually over the next 8 to 10 years would be necessary beyond 
the $6.2 million to accomplish the necessary work to preserve 
the building grounds and control the maintenance backlog.
    We will undertake a repair program that will not reduce our 
public service. We don't want to close our doors. And as we 
have done, we have integrated the skylight system into a phased 
program so that the public and the majority of the Gallery's 
permanent collection is on view at all times. But we also, at 
the same time, can't defer needed renovations. So, critical, 
stand-alone projects that minimally impact the operations and 
visiting public would be implemented first. We will carefully 
develop a phased plan covering 8 to 10 years for the work and 
established priorities and disparate work items into an 
integrated design and construction project and develop full 
funding requirements.
    With the committee's assistance, we will proactively 
maintain a level of renovation that continues to minimize any 
risk to the collection and allows the Gallery to provide the 
consistently high-level of programs which we wish to continue 
to do. Our task is to manage this program responsibly and to 
have a plan which guarantees system replacement and repairs at 
the proper times. The goal is to allow the Gallery to continue 
to serve the public as a preeminent art museum for the American 
people. In fact, the longevity of the facilities, Mr. Chairman, 
over 50 years, in many cases, is a tribute to the original 
quality of the building construction and to the maintenance 
they have received over the years.
    Thank you very much.
    [The information follows:]

[Pages 370 - 374--The official Committee record contains additional material here.]


    Mr. Regula. Thank you.
    Our last witness is from the Holocaust Memorial Museum, Mr. 
LaRiche.
    Mr. LaRiche. Thank you, Mr. Chairman. I'm pleased to be 
here today to discuss our R and R program for the United States 
Holocaust Memorial Museum. I would also like to extend our 
directors, Dr. Reich, appreciation for the committee's interest 
and past support.

                       repair and rehabilitation

    We are the new fish in this rather impressive pond of R and 
R needs. We're fortunate that our building is relatively new, 
was well built, and is very sound. We're grateful to Congress 
and the administration for it's past support of our R and R 
program and grateful for the $500,000 increase to this program 
in the President's Fiscal Year 1999 budget, and an indication 
that the administration will support this increase for Fiscal 
Year 2000 as well.
    Since we opened our doors nearly 5 years ago, we have 
welcomed nearly 10 million visitors, almost four times the 
visitation we expected. Because of this unexpected level of 
visitation, wear and tear on the facility has been greater than 
expected. Also, during our early years, because of terrorist 
activity at home and abroad, we had to divert $3.5 million of R 
and R funding to physical projects to enhance the security of 
our physical plant. Therefore, we have had to delay needed R 
and R projects of a routine nature.Therefore, the $1 million 
increase--the $500,000 that has been indicated for this year, Fiscal 
Year 1999, and in the year 2000--that the administration is supporting 
will be very helpful. It will bring our overall funding for R and R to 
$2,750,000, and this will help us make significant progress on these 
delayed projects as well as maintaining the structure as needs arise.
    The goal of our R and R program is to avoid unneeded 
deterioration caused by having to defer necessary work due to 
lack of funds. And we have in place--and I brought as a witness 
today, our Director of Operations, Mr. Buddy Brown, who came to 
the museum with 27 years of experience at Bolling Air Force 
Base in his last role there as Deputy Director of Facilities--
and he's put in place, over the last 2 years, a comprehensive 
review of all our facilities, as well as the initiation of 
studies so that when we make projections they are sound 
projections for our needs in the future.
    Thank you for the opportunity to appear today.
    [The information follows:]

[Pages 376 - 377--The official Committee record contains additional material here.]


    Mr. Regula. Thank you.

                  plan to address backlog maintenance

    A question to all of you. Would you be able to submit to us 
a general outline of what your plan or plans will be to meet 
and address these backlog maintenance problems, and an outline 
as to whether it's routine or whether its cyclical, like 
electric and so on, and how much you anticipate to get up to 
speed on these? Can we get those?
    Mr. Heyman. We certainly shall.
    Mr. Regula. I'd like to have them before we have our 
hearing with you, so we can prioritize your budgets. Backlog is 
No. 1 to me--getting that taken care of because it just grows 
in magnitude if we don't.
    And so in the interest of time, I'll go to the committee 
members. Mr. Skaggs?
    By the way we'll have many questions to submit for the 
record.

                       air and space museum annex

    Mr. Skaggs. Mr. Chairman, I'm just curious, since we, 
several years ago, started to hear about the particular 
difficulties with the Air and Space Museum artifacts in storage 
and threats there, how that's come along in the interim and 
what the--I don't think I heard you say anything about the 
annex and whether that is to be factored into your--It's 
obviously not a deferred maintenance item, but it's an 
important capital item.
    Mr. Heyman. Well, once we get the Dulles center complete, 
we'll be able to relieve an awful lot of the pressures at 
Garber and we'll be able to move a number of those artifacts 
over to the Dulles center.
    We are, at the moment, completing the construction 
drawings. We, of course, have gone through conceptual with the 
architects which are HOK, and in general we all know what this 
is going to look like. We are at the first stages now of the 
capital campaign. We have at least two very large requests out 
at the moment, and we're waiting to see what the ultimate 
reaction will be on those. We will be, obviously, enormously 
pleased if there's a good response at the beginning because 
that will get some momentum really going.
    My review of plan presently for the capital campaign for 
the Air and Space Museum indicates to me it's a pretty sound 
plan. I've been out on the road a little bit with Admiral Engen 
talking with potential folk. The regents at the last meeting, I 
think 2 weeks ago, established a board for the Dulles Center. 
So that will be in addition to the statutory board for the Air 
and Space Museum in general. We are presently recruiting people 
for that board who we hope will not only be able to give us 
general guidance, but will also be able to be very helpful in 
raising the necessary money.
    The money is a big challenge because if we do everything 
we'd like to do, we're talking about raising about $120 million 
to $130 million.
    The State of Virginia, by the way, is coming right forward 
meeting what it has indicated it will. The legislature shortly 
will appropriating the money that's necessary for the 
infrastructure that has been promised.
    So I think we're getting there. And that will of course 
relieve the problems at Garber once that occurs.
    So we're putting minimum attention in at Garber, but we're 
making sure the roof doesn't leak.
    Mr. Skaggs. Well, it was really the interplay between the 
two that I was curious about. It's too bad we weren't able to 
give you a ready-made infrastructure at no-cost. [Laughter.]

                   definition of deferred maintenance

    The other general question to the panel was, Mr. Chairman, 
we had a delightful time yesterday exploring the relative 
incoherence in the Department of the Interior and the Forest 
Service about definitions of what really is deferred 
maintenance. I assume with your relatively more easily embraced 
domains, you do have a good clear operational accounting 
definition of where to store these different items in your 
annual financial reviews. But if there's any question about 
that, I think we want to do our best to clarify it.
    Mr. Regula. If you'll yield; I would hope that would be in 
these reports I've asked them each to submit.
    Mr. Heyman. I think you'll find a uniformity of response 
among us in terms of the categorizations.
    Mr. Skaggs. Thank you.
    Mr. Heyman. Deferred maintenance to me has always meant 
maintenance I wish I had done. [Laughter.]
    Mr. Regula. Mr. Nethercutt?

                   maintenance inspections procedures

    Mr. Nethercutt. Thank you, Mr. Chairman. Welcome gentlemen. 
I consider with a bit of envy in terms of the jurisdiction over 
the facilities that you have that are so, I guess, enlightening 
for you I'm sure, on a daily basis as you go about your work. 
It's certainly a treasure for our country to have the 
facilities that you manage.
    Mr. Chairman, I was wondering about, with regard to 
Smithsonian, you testified in your statement that you folks 
conduct regular inspections of the facilities to identify 
deficiencies, and then your staff develops priorities for 
correcting the deficiencies. Are those inspections done on a 
regular basis or are they done on an ad hoc basis? Is there a 
time every year you do it and then make a list? And if so, I 
wonder if you have a priority list?
    Mr. Heyman. May I ask Mr. Rice to address that?
    Mr. Rice. Yes, sir; we do have a schedule. About every 2 
years each building has documentation which I can provide an 
example of if you wish. And we have a prioritization system and 
I can provide that with the Secretary's written responses.
    Mr. Nethercutt. I think that would be helpful, because I 
think we've increased your budget in this committee every year 
for the last 3, over and above what the administration had 
asked for. And so, I'm a little surprised that you don't do it 
more than every 2 years. But maybe that works for you. Do you 
think it's adequate?
    Mr. Rice. I think it's adequate; yes, sir. But, I will 
provide the documentation and that will clarify it.
    Mr. Nethercutt. That's great. Do you know what the total 
amount of maintenance backlog needs are right now? Or will you 
provide that if you don't know it generally today?
    Mr. Regula. If you'll yield, I would hope that we'll get 
this from all four agencies before we have the hearings. I've 
asked them to do that.
    Mr. Nethercutt. That's great.

                       use of private contractors

    Mr. Wilker I gauge from your testimony that you have a 
pretty good handle on your maintenance needs and you've 
appropriately categorized those. It appears you employ some 
private contractors to help you identify those needs. Has that 
been a good system for you?
    Mr. Wilker. That's helped a great deal. Annually, we review 
the entire building and prioritize those items that come up, 
anywhere from emergency light safety issues, to items which we 
can defer because they can be accomplished in our capital 
repair program. As part of that review we use outside 
consultants--architects, engineers, folks with expertise in 
various areas--to help us assess what needs to be done, what 
the cost might be, how pressing the need would be to accomplish 
it so that we can put it on a scale that has seven or eight 
different levels of priority.
    Mr. Nethercutt. It sounds like a good idea. It sounds like 
it works for you.
    Mr. Wilker. It works very well.
    Mr. Nethercutt. And that it addresses what you need to have 
done and then let us know.
    Mr. Powell, the master facilities plan that you speak of in 
your testimony, when will that be finished?
    Mr. Powell. I believe we'll have the initial phases of it 
completed by April 15.

                      prioritize maintenance needs

    Mr. Nethercutt. Okay, and that's a good idea it sounds like 
to me. But how do you prioritize your maintenance needs without 
that master plan? How have you done it in the past? Maybe I've 
missed it.
    Mr. Powell. Well, the maintenance needs are developed and 
accomplished largely with our staff. The ongoing maintenance is 
just accomplished with that. The larger plan and the larger 
items, for instance the skylight project that's underway right 
now, the master plan will contain items like that which we will 
then prioritize for you. But things that will come on line with 
that would be as a result of the building envelope study: it is 
the water-tight integrity of the walls of the buildings; 
electrical, steam issues; things that work now but will need to 
be replaced over time but are not part of routine maintenance.
    Mr. Nethercutt. Okay.

                     holocaust museum backlog needs

    The Holocaust Museum has had a tremendous increase in 
numbers of people, it looks like--very popular here in 
Washington. You've accumulated quite a backlog of maintenance 
needs it looks like in the very short time that you've been in 
operation. To what do you attribute that?
    Mr. LaRiche. Well, we've had a lot of wear and tear on 
carpeting and on finishes--metal surfaces that have been 
painted, far more than we had anticipated. And we also have a 
rather complicated skylight system ourselves and have 
encountered many leaks that we wish weren't there. But we've 
conducted, over the past couple of years, studies to see how 
these can best be dealt with and we have in our submission 
Fiscal Year 1999, as well as our future plans for submissions, 
a request for funds to take care of these.
    Mr. Nethercutt. You've also increased your personnel it 
looks like over the last year or two. It sounds like you've 
done that at the expense, perhaps, of your maintenance backlog. 
Do you see it that way?
    Mr. LaRiche. I don't see it that way, no. Most of our 
personnel has been, the largest increase has been on the 
private side, as a matter of fact, in order to honor the 
public-private partnership. Our council increased our private-
side budget by some $5 million this year so that we could 
continue the one-third, two-thirds split we've been having with 
the Federal Government. So our growth we anticipate on that 
side of the budget. We realize that we've been very generously 
treated by the committee and the administration, and we 
appreciate it.

                      priority setting procedures

    Mr. Nethercutt. What is your priority-setting procedure in 
terms of your maintenance and your repairs, and your upgrades 
and so forth? How do you go through that?
    Mr. LaRiche. Well, I'll ask----
    Mr. Nethercutt. Is there a formal procedure for it?
    Mr. LaRiche. The formal procedure is that our Director of 
Operations, Mr. Brown, meets with his staff. They do constant 
inspections of the facilities, they create work-flow analysis 
of what should be taken care of first in order to keep anything 
from deteriorating beyond what it should. And we have 
highlighted several projects as priority projects. One is to 
fix leaks in the north towers. We have four towers along the 
north side of our building, and we have a plan to take care of 
those leaks as well as, in a future year, we have drainage 
problems on our Hall of Remembrance, so we have to repair those 
drains to keep leaks from continuing.

                       contractor accountability

    Mr. Nethercutt. Let me ask you, you know, I'm not chasing 
ambulances here, but I mean, somebody built that building. I 
assume you had very good contractors, very good architects, and 
so on. This is unusual, it seems to me, that you're having 
these leaks and these problems on a relatively new building--a 
very new building. How do you explain that? Or is there an 
explanation for it? Or have you gone back to the contractors?
    Mr. LaRiche. We have. The warranties on the construction 
have expired. The leaks have begun----
    [Laughter.]
    Mr. Nethercutt. In 6 years? It's 6 years on a contract in 
my state.
    Mr. LaRiche. I believe ours were 2 years. And we have gone 
back to both architects and to the construction companies and 
with their assistance looked at ways to address these repairs.
    Mr. Nethercutt. To what extent are they providing 
assistance? Are they doing anything substantive or is it----
    Mr. LaRiche. They have given some substantive 
recommendations. [Laughter.]
    Mr. Nethercutt. But no money. [Laughter.]
    And no repairs. That's terrible, that you don't have a 
longer life----
    Mr. LaRiche. Were we to sue them, I'm afraid it would cost 
us more than fixing the leaks.
    Mr. Nethercutt. Well, thank you for being here today, all 
of you.
    Mr. Dicks. Would you yield on that question?
    Mr. Nethercutt. Sure.
    Mr. Dicks. Couldn't you have negotiated a better deal? I 
mean, could have the Government, I'm not saying you, but the 
Government, have negotiated a longer warranty period?
    Mr. LaRiche. I don't know the answer to that, but I can 
submit it for the record.
    Mr. Dicks. Yes. I mean, I just wonder whether we were 
limited to 2 years or was that just something that we agreed 
to.
    Mr. LaRiche. These contracts were negotiated before I 
arrived, but I would be glad to submit that for the record.
    Mr. Dicks. Thank you.
    Mr. Nethercutt. Let me take back my time, if I have 30 
seconds.
    The warranty may be 2 years, but I'm wondering--again, I 
don't want to get you in a law suit--but clearly you ought to 
threaten it at least--I mean that's real taxpayers money, and 
it is wrong that it's only a--you're looking at a three-year 
life, essentially. Somebody ought to really dig in on that one, 
it seems to me.
    Mr. LaRiche. Part of the problem, too, is that the building 
was built on fast-track, and I understand that it's quite usual 
when buildings are built on fast-track that some of these 
problems occur that don't occur when you take a longer time to 
build them.
    Mr. Nethercutt. Well, it wasn't cheap to build it. It was a 
lot of money, and there ought to be some accountability there 
someplace, because that's----
    Mr. LaRiche. And the money raised was privately raised. The 
council raised some $250 million in order to build the building 
and do the renovations to the annex building as well as to pay 
early operating costs for the council and for the staff.
    Mr. Nethercutt. Thank you.
    Mr. Regula. Mr. Dicks.

                          smithsonian funding

    Mr. Dicks. In reading the testimony from the Smithsonian, 
it sounds as if the commission that did the review came up with 
the number of $50 million a year for 10 years?
    Mr. Heyman. Right.
    Mr. Dicks. And you agree with that figure, but as I 
understand it the budget request for this year is only $40 
million.
    Mr. Heyman. Well, the budget request that has come to 
Congress is for $40 million, yes. [Laughter.]
    Mr. Dicks. That's not the one you sent to all of the----
    [Laughter.]
    Mr. Dicks. You still need the $50 million. Is that right?
    Mr. Heyman. Well, you know, $40 million is going to help a 
lot. But if we had had the extra $10 million, just as an 
example this year, we probably would not have to put into two 
phases part of the renovation that we're doing over in Natural 
History; we could have done it all at once. That probably would 
have saved a little bit of money to do it all at once, rather 
than in two phases.
    It's very difficult always to say exactly what it means not 
to have gotten the full amount----
    Mr. Dicks. Right.
    Mr. Heyman [continuing]. In the year you want, but I 
thought I would give you that example because it's very 
concrete in relationship to the kind of activity you could 
undertake if you had all the money at once.
    Mr. Dicks. Now--and that $50 million over 10 years--that's 
separate from the zoo construction.
    Mr. Heyman. That's right, sir.
    Mr. Dicks. And what was that number?
    Mr. Heyman. Ten.
    Mr. Dicks. Ten--and you got $4.5 million.
    Mr. Heyman. That's correct.
    Mr. Dicks. Is that adequate for this year?
    Mr. Heyman. Well, again, it's the same kind of problem.
    Mr. Dicks. Yes.
    Mr. Heyman. We'll do the things we have to do most for this 
year. It's really not adequate from the perspective of getting 
us closer and closer to being adequate across the board--you 
know, understanding that we're always going to need money 
because progressively buildings and facilities deteriorate, but 
to really assure us that not something major is going to break 
down.

                 visitor attendance in washington, d.c.

    Mr. Dicks. You mentioned in your statement that you had a 
dramatic increase in visitation.
    Mr. Heyman. Twenty percent this year.
    Mr. Dicks. Why is that?
    Mr. Heyman. Well, we've all had the same experience, and it 
means that an awful lot of people have been coming to 
Washington, a big rise in the numbers of folks who have been 
coming to Washington, and as far as I can see, I attribute it 
to a better economy and probably a better sense of security 
with respect to coming to the city. But for whatever set of 
reasons, the tourist rate has gone up considerably in the city.
    Mr. Dicks. So visitation is up. Will that have an effect on 
maintenance? I suppose it does; there are more people going 
through.
    Mr. Heyman. Well, it clearly does on some classes of 
maintenance. For instance, one of my colleagues here was 
talking about the rug, the rug in the National Air and Space 
Museum, which will have nearly 9 million people who have 
visited it this past year; it wears out considerably faster 
with all of those footsteps. And like things happen. In terms 
of basic systems, I don't sense there's a real problem with 
those, but as far as a variety of other lesser matters, 
obviously the replacement rate is increased.

                         kennedy center repairs

    Mr. Dicks. In looking at the statement of the Kennedy 
Center, 130 minor repair actions were implemented, or were they 
catalogued? I'm trying to decide which one it was. There's 
still quite a bit of--you did $1.5, $1.6, $1.7 million, but the 
need is around $10 million?
    Mr. Wilker. The total need at the moment is about $11.2 
million, I believe.
    Mr. Dicks. Yes, there it is.
    Mr. Wilker. And we're accomplishing just under $2 million a 
year in working away at that backlog.
    Mr. Dicks. Are there any serious matters that haven't been 
taken care of?
    Mr. Wilker. There is nothing worrisome. There are no 
emergency or life-safety issues. We addressed all of those 
first.
    Mr. Dicks. Okay. Thank you, Mr. Chairman.
    Mr. Heyman. Mr. Chairman, might I just say one thing?
    Mr. Regula. Yes.
    Mr. Heyman. We've given everybody this little pamphlet, 
which you might find useful as you see the way we analyze our 
sets of problems and thus we face up to trying to prioritize 
what we're doing, but we'll have a more technical 
prioritization schedule for you in relation to your questions.

                         smithsonian buildings

    Mr. Dicks. One final thing. In here it said that you're in 
300 different buildings?
    Mr. Heyman. Yes, sir.
    Mr. Dicks. Have you looked at that? Is that required? 
[Laughter.]
    Mr. Heyman. We would argue strenuously, yes, but I mean----
    [Laughter.]
    No, we--the history of the buildout of the Smithsonian over 
the last 150 some-odd years has been one that has been a 
response to opportunity and interest of people at the 
Smithsonian. Some things have gone away because they've just 
not worked very well, but some of them have just grown very 
immensely and very soundly where it was not planned, really. It 
came from the quality of the activities in place.
    One of those examples is really the Smithsonian 
astrophysical observatory, which now is a world-class 
astronomical undertaking, and 20 years ago, 25 years ago, it 
was a much lesser operation. But all kinds of things occurred, 
not the least, Sputnik, NASA's growth, satellites, and 
personnel. It just filled more and more niches until now it's a 
very substantial operation that has a budget; it must be around 
an $80 million a year operating budget.
    Mr. Dicks. Thank you, Mr. Chairman.
    Mr. Regula. Mr. Skeen.

                 kennedy center maintenance operations

    Mr. Skeen. Thank you, Mr. Chairman. Let me ask Mr. Wilker--
some years ago we had a discussion on the maintenance and 
upkeep. One of the problems that we had at the Kennedy Center 
was the garage, the parking garage in the basement. Did they 
every get that worked out--where there were bars coming up 
through the floor of the basement?
    Mr. Wilker. Yes, sir. That was a very serious problem. That 
was during the time when the building was being operated by the 
National Park Service----
    Mr. Skeen. That's correct.
    Mr. Wilker [continuing]. And we inherited that project 
about halfway through----
    [Laughter.]
    Mr. Skeen. You said the magic words about maintenance and--
--
    [Laughter.]
    Mr. Wilker [continuing]. About halfway through the 
construction period, and we managed to wrap it up about two 
years ahead of schedule, and it is completely finished now. It 
was a very serious problem because the parking garage actually 
holds up--it's the foundation for the building itself.
    Mr. Skeen. Well, you're also below the water line.
    Mr. Wilker. And part of it is below the water line; that's 
correct. You have a good memory.
    Mr. Skeen. I noticed that you're having other difficulties 
in other buildings around here. I can't believe that people are 
still designing buildings and putting them below the water line 
around this body of water that we have--the river and so forth. 
Like right now, it's up about flood stage.
    Mr. Wilker. Correct. We had a real water problem, because 
with the garage deteriorating----
    Mr. Skeen. You sure did.
    Mr. Wilker [continuing]. We had water coming up through the 
garage, and with the roof deteriorating, we had water coming 
down through the roof, so we had it in both directions.
    Mr. Skeen. And also there were also automobiles coming in 
there that were wet on the bottom and leaving the snow or 
material on the floor, so you had a real problem.
    Mr. Wilker. That's correct, but that's completely fixed.
    Mr. Skeen. The Park Service didn't do it for you.
    Mr. Wilker. Well, they started it, and we took over the 
project and completed it.
    Mr. Skeen. No out-houses down there? [Laughter.]
    Mr. Wilker. No out-houses.
    Mr. Skeen. And then also at that time, we had problems at 
the Smithsonian--not at the Smithsonian, but at one of the----
    [Laughter.]
    Mr. Skeen. Now, did you raise the ante for parking?
    Mr. Wilker. Did we raise----
    Mr. Skeen. What's the parking rate now? Is it $8.00?
    Mr. Wilker. The parking rate is $8.00; that's correct. That 
allowed us to institute a series of shuttle buses which we run 
now from parking garages and the Metro in the area as a service 
to visitors and to patrons, because as you know, our parking--
the building was built with 1,400 parking spaces for 7,000 
patrons, so we are very under-parked, if you will. And the 
shuttle buses now carry about 60,000 people a month to the 
Kennedy Center, and we still have a parking problem. So we've 
been trying to find creative ways of dealing with the 
visitorship that we have.
    Mr. Skeen. One way is to raise the parking fee----
    Mr. Wilker. Well, it helps us to accommodate the visitors 
in other ways.
    Mr. Skeen [continuing]. Which you probably had to do. I 
understand that.

                          skylight maintenance

    Then this window situation was one with the Smithsonian and 
the National Gallery of Art. Is that correct?
    Mr. Powell. I'm sorry, sir?
    Mr. Skeen. The windows.
    Mr. Powell. The skylights.
    Mr. Skeen. Skylights.
    Mr. Powell. Skylights.
    Mr. Skeen. So, we've had a problem with that in some 
buildings before. Is it the same building?
    Mr. Powell. The skylights in the West Building are the ones 
that are being replaced right now, and those----
    Mr. Skeen. But don't you have a problem somewhere else in 
the complex?
    Mr. Powell. No, those were the main problems. We had 
about--oh, during that heavy winter several years ago we had 
some leaks in the skylights of the East Building, but those 
have been repaired.
    Mr. Skeen. Thank you, Mr. Chairman. Thank you, gentlemen.
    Mr. Regula. Mr. Wamp.

                  establishing maintenance priorities

    Mr. Wamp. Mr. Chairman, let me say anecdotedly, if I might, 
that 10 nights ago my brother's bluegrass band from east 
Tennessee played at the Kennedy Center, so it was good for 
change to not just glean culture from the Kennedy Center,but 
actually leave some there. [Laughter.]
    Mr. Wilker. Well, we appreciate that. [Laughter.]
    Mr. Wamp. I'm not--it's culture, George, culture. 
[Laughter.]
    George was in east Tennessee for my birthday, the last of 
October, and he was filled with culture when he went back to 
Washington State.
    I'm not making news today, but I would like to serve on 
this subcommittee for the next 9 years, and so I have a concern 
about the priorities between maintenance and new programs and 
capital investment. To give you an example of what my concern 
is, I also serve on the Legislative Subcommittee, and if we had 
a finite amount of money and the proposal for the visitors' 
center is made to the Legislative Subcommittee, which it has 
been, and the dome leaks in the Capitol, but you only have 
``X'' dollars, obviously the decision to fix the dome has to 
take precedent over building the new visitors' center.
    I believe it's the will of this subcommittee to invest, at 
times, even more than the President's request for maintenance 
to keep the facilities under your charge in the best possible 
condition. But it's human nature when you're in your business, 
and many people's, to look for new programs, look for the new 
mousetrap, look for the new experience, look for a new 
frontier, and that conflict creates a problem for us because if 
we just kept building new buildings and enacting new programs 
and carrying over backlog maintenance, the person who sits on 
this subcommittee 7 or 8 years from now has a real problem 
meeting the basic needs of maintenance.
    I'm going to throw a jump ball and say, How can we set the 
priorities? How can we work with you? And right now, how do you 
set the priorities to keep down the temptation to build new 
buildings or to engage in new programs, versus trying to take 
care of the problems we have with overlapping backlog 
maintenance?
    Mr. Regula. Why don't you each respond to this question.
    Mr. Heyman. Well, this probably affects me more than the 
others because we have so much broader a program. It's no 
secret that our aspirations with regard to new facilities are 
much moderated from the time that, at least, I took over as 
Secretary.
    The major new facilities we're talking about are privately 
funded, not federally funded, and I think we--and I would hope 
you--will start to really give some very considerable thought 
to what ought to be the conditions when we do privately-funded 
buildings with respect to setting up depreciation schedules and 
having to find from private sources, as well as elsewhere, the 
resources to carry on the kinds of maintenance that we carry on 
with regard to Federal.
    And I hope that as time goes on and as Federal provisions 
become more difficult, for all the reasons that we know, that 
we'll give good attention to, at least in our case--and I would 
suspect with my colleagues here--ways that we can turn to the 
private sector to meet some of the growth needs with the proper 
protections against draining Federal budgets thereafter.
    Mr. Regula. But all new construction has operating costs 
down the road.
    Mr. Heyman. Yes, that will have to be discussed, too. 
That's right.
    Mr. Regula. So, it may be privately built, but it's 
federally operated.
    Mr. Heyman. But, clearly, if you do it the way I'm 
suggesting, maybe that's the way we can start to compromise 
need for growth and minimizing the impact of that growth on 
Federal budgets.
    Mr. Regula. Mr. Wilker.

                       public private partnership

    Mr. Wilker. Thank you. I agree with Mr. Heyman, and, 
clearly, the public-private partnership is one that is very 
much in place at the Kennedy Center. I think your comment is a 
very good one, and we all walk a fine line between trying to be 
as fiscally responsible as we can and still provide the 
programs and facilities to serve the American public and 
preserve this country's great cultural heritage.
    As far as the Kennedy Center is concerned, we're not 
involved at all in constructing new facilities. We're trying to 
bring up to a current standard a building which we inherited 
that was in very bad condition.
    Mr. Powell. I also think it's an excellent question, but I 
agree with my colleagues. The National Gallery has no new 
construction programs that would result in additional 
buildings. We do have--as the chairman knows, we are 
constructing a sculpture garden, which is privately funded, 
across from the Archives on Seventh Street.
    But our master plan which we will submit to the committee 
will show that the maintenance--and ongoing maintenance--is 
really what the Gallery is interested in seeing substantially 
supported. The West Building is 55 years old. The East Building 
is now 20 years old, so there are things that need to be dealt 
with there, but no new construction.
    Mr. Lariche. Likewise, the Holocaust Museum does not 
anticipate any new construction, and our R&R request in the 
President's budget we feel is the level that will enable us to 
keep a really sound building for the future.
    Mr. Wamp. Thank you, Mr. Chairman.
    Mr. Regula. A number of those in the audience and these 
gentlemen want to go to the funeral for Roger Stevens, so what 
I would anticipate, since we're going to have a couple of 
votes, is to wrap up here in the next 6 or 7 minutes and 
adjourn.
    Mr. Miller.

                        revenue receipts issues

    Mr. Miller. I'm sorry I missed the early part of your 
statements, so I may be repeating some of the questions, but 
let me ask two questions. One is the question of revenues that 
you all receive, and the issue of fees.
    One of the things--and I'm not necessarily advocating it--
but what is your position? The National Park Service has had a 
significant increase in fees to allow for maintenance of the 
Park Service, and it's been very successfully received in 
places. They are able to have money that can start fixing up 
the Yellowstone problems and the Grand Canyon problems.
    So at the Kennedy Center, where there is a fee, what is the 
position on fees set aside or designated for maintenance and 
repairs?
    Mr. Wilker. Well, with regard to the Kennedy Center, as you 
mentioned, almost all of our programs are fee-driven--all of 
our performances--although we started this year a program to 
make the arts available to all people, and we have had a great 
success with the program now, where every day of the week, 
every day of the year, we have a free performance at 6:00 p.m. 
in the evening. And that has been, since westarted that last 
March, has had over 130,000 people attend those performances.
    The way the Kennedy Center is structured financially is 
really a public-private partnership, with the Kennedy Center 
providing three-quarters of the funds through private means to 
run the building and provide the programs, and the Federal 
Government taking care of the facility. So we think that that 
is a very good deal for the Government, and a great 
relationship.
    Mr. Miller. How about the National Gallery of Art and the 
Smithsonian? I know there is a philosophy of not charging, but 
the National Park Service changed and it's been, I think, very 
successful because all of a sudden they now have money to do 
repairs and maintenance that they never had in the past. So, I 
mean, is there any discussion about that as an option?
    Mr. Heyman. Well, let me speak for the Smithsonian. This 
question arises often, as you might imagine.
    Mr. Miller. Right.
    Mr. Heyman. And it arose 2 years ago when the Senate 
committee, the appropriations subcommittee, asked for a report, 
and we labored hard on that. The regents reviewed it and came 
out with a conclusion that fees, certainly at this time in 
their view and in mine, were not justified.
    It's a very, very complex problem for us. We have some 
museums for which, in their organizing papers, especially when 
they were gift museums, there is a provision, as there is for 
the National Gallery, that no fees would be charged, and that 
was the understanding by the donor at the time that the museum 
was created.
    We have other museums wherein their statutory charter 
indicate that no fees can be charged, and obviously that could 
be changed by the legislature, but it would require legislative 
action in order to do it. Then we have a number of facilities 
where there are no restrictions of that sort, and the regents 
would have the discretion to impose fees or not to impose fees.
    And then, as I recall in that analysis, we were comparing 
ourselves with other buildings and with other monuments in the 
Washington, D.C. area, and it was very difficult to draw 
logical distinctions between, for visitors from around the 
United States, coming to Washington and coming to one of the 
Smithsonian museums, or going to the White House or going to a 
variety of the other kinds of monuments, including ones that 
have intensive programs--free.
    So, I must say, this is the kind of a problem that's bigger 
than the Smithsonian in a way, and in my view has to be 
addressed with respect to all of the Federal institutions that 
are in the Washington area.
    Mr. Miller. Well, you might look at what happened with the 
National Park Service. Every park doesn't have the draw of the 
Grand Canyon or the Yosemite, but my understanding is that it 
has been well-received by the Park Service and the people who 
visit the parks, and so it is an interesting analogy.
    I know we are short on time, but there is one other 
question I want to ask, but I'd like to hear the others comment 
on, are there any other ways to do maintenance----
    Mr. Regula. Let me suggest--that requires some extensive 
answers. Why don't you submit that for the record to all of 
them on the fee issue----
    Mr. Miller. Okay.
    Mr. Regula [continuing]. So at least we have it for the 
record.
    Mr. Miller. And as I said, I think the National Park 
Service should be given a chance to revisit the issue again.

                    costs to the federal government

    The other question I have--and maybe it would be better 
because of time to ask for a comment, and maybe GEO is even 
going to be better on this. We went to this hearing on the 
National Park Service, and we saw the out-house problem--you've 
heard about the $300,000-and-some out-house; the cost of 
employee housing on the Park Service was $400,000 to $500,000. 
And why does it cost so much for the Government to do 
something, was the bottom line question, and we never got a 
very clear answer from the Park Service.
    And so when you do HVAC work, is it much more costlier than 
if, you know, some big developer downtown does the same work? I 
mean, what--we want to make the best use of our tax dollars, 
and we can agree to a project--whether it's repairing 
escalators, or roof work, but does it cost a lot more for the 
Government to do the same work as the private sector? Or is 
there a better way to go about finding a way to utilize the 
best dollars?
    So, I think, as I say, we saw that in one recent hearing 
with the Park Service, which is of great concern. We're just 
not getting the best, and when you get only so much money for 
maintenance, you want to get so much done. You see there's a 
certain amount of waste because Government requires it. Does 
anybody have a comment on that before we leave for a vote?
    Mr. Heyman. Well, I'd just make one comment. I've never 
really tried to see it in action in Federal construction, but I 
sure did see it in State construction in California when I was 
chancellor at the University of California at Berkeley, and it 
clearly was a 15 percent to 20 percent margin, given 
procurement rules and bidding rules and the like. It's a much 
more formal process that simply adds money to it.
    On the other hand, it does also provide a much greater 
amount of oversight, and it protects against favoritism in most 
instances.
    Mr. Regula. Do you all concur on that?
    Mr. Miller. Okay, thank you all very much.
    Mr. Regula. Thank you for coming. The committee is 
adjourned.
    [The information follows:]

[Pages 391 - 437--The official Committee record contains additional material here.]




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                                                                   Page
Berry, John......................................................   222
Edelheit, L.S....................................................    68
Fowler, Cliff....................................................   147
Godley, P.F......................................................   111
Heyman, I.M......................................................   349
Hill, B.T......................................................147, 148
Joslin, R.C......................................................   271
Keese, W.J.......................................................    15
Lariche, J.T.....................................................   349
Moniz, E.J.......................................................   111
Moore, Berrien, III..............................................   101
Powell, E.A., III................................................   349
Reicher, D.W.....................................................   111
Rogers, John.....................................................   247
Rosenfeld, P.M...................................................    89
Sharkey, A.G.....................................................    75
Shea, Pat........................................................   257
Stanton, Robert..................................................   264
Underwood, C.H...................................................     1
Valentino, Bill..................................................    44
Ward, Sara.......................................................    29
Wilker, L.J......................................................   349
Williams, R.J..................................................147, 165
Womack, E.A., Jr.................................................    53
Young, Robert..................................................147, 185








                               I N D E X

                              ----------                              

                         Land Managing Agencies

                                                                   Page
1999 Budget Increases............................................   226
Accountability...................................................   206
Accountability for Maintenance...................................   208
Accountability Problems..........................................   207
Accuracy of Dollar Estimates.....................................   202
Agency Accountability............................................   209
Annual Maintenance Funding.......................................   234
Backlog Data Availability........................................   167
Backlog Maintenance Definition Problems..........................   150
Backlog Management...............................................   166
Bureau of Land Management Maintenance Backlog....................   165
Chance of Accidents..............................................   211
Choosing By Advantages...........................................   265
Committee Questions..............................................   278
Common Themes Among Agencies.....................................   149
Construction Lists for 1999......................................   223
Construction Lists Priorities....................................   234
Cost Estimate Problems...........................................   166
Defining Needs...................................................   203
Definition Issues................................................   166
Definition of Backlog Maintenance................................   200
Development of Property Management System........................   186
Employee Housing.................................................   273
Facilities Renovation............................................   273
Fish and Wildlife Service Maintenance Backlog....................   167
Five Year Construction Plan......................................   224
Forest Service Maintenance Backlog...............................   185
Forest Service Road Maintenance Concerns.........................   209
Forest Service Roads.............................................   271
Funding Needs....................................................   232
GPRA Linkage.....................................................   265
Implementing Requirements........................................   207
Inadequate Controls..............................................   166
Interior Agency Coordination.....................................   201
Interior Planning Design and Construction Council................   225
Inventory of Property............................................   199
John Rogers' Summary.............................................   247
Lack of Accountability...........................................   257
Lessons Learned..................................................   249
Maintenance Backlog in Parks.....................................   148
Maintenance Ideas................................................   259
Maintenance Management System....................................   248
Management Issues................................................   222
Management of Maintenance........................................   185
Management Responsibility........................................   226
National Park Service Backlog....................................   149
Need More Agency Accountability..................................   199
New Federal Accounting Standards.................................   151
No Common Definition.............................................   186
Non-Reliable Data................................................   198
Obtaining Reliable Information...................................   210
OMB's Role.......................................................   237
Opening Remarks--Mr. Regula......................................   147
Prioritization of Funds..........................................   206
Project Ranking..................................................   168
Purpose of Hearing...............................................   147
Questions for Assistant Secretary, PBA...........................   279
Questions for GAO on NPS Maintenance Backlog.....................   213
Questions for OIG on DOI.........................................   215
Questions from the Committee.....................................   198
Questions to BLM.................................................   299
Questions to FWS.................................................   306
Questions to NPS.................................................   311
Questions to the Forest Service..................................   329
Recreation Fee Program...........................................   272
Review Board and Private Sector Practices........................   223
Review of Projects...............................................   248
Roads Maintenance................................................   258
Robert Stanton's Summary.........................................   264
Solutions to Accounting Issues...................................   203
Testimony by Robert Stanton, Director NPS........................   267
Testimony of Barry Hill, GAO.....................................   152
Testimony of John Berry, Assistant Secretary PBA.................   228
Testimony of John Rogers, Deputy Director, FWS...................   251
Testimony of Patrick Shea, Director, BLM.........................   261
Testimony of Robert Joslin, Forest Service.......................   274
Testimony of Robert Williams, Acting Inspector General...........   169
Testimony of Robert Young, Office of Inspector General...........   188
Title V Maintenance Funding......................................   235
Unused or Under-Used Facilities..................................   236
Use of Accounting Principals.....................................   205

                                 Energy

Atmosphere Issues................................................   102
Barriers to Goals................................................     7
Basic Research...................................................   115
CO2 Emissions.........................................   145
CO2 Problem...........................................   101
Collaboration with EPA...........................................   138
Competitive Selection of Projects................................   140
Deployment and Demonstration.....................................    29
Deregulation and California......................................    15
DOE Priorities...................................................    54
DOE/State Partnerships...........................................   111
Electric Industry Deregulation...................................   141
Energy Conservation..............................................    75
Energy Efficiency................................................   134
Energy Research..................................................    44
Energy Research and Development..................................   113
Energy Strategy................................................132, 136
Environmental Security...........................................   114
Fossil Energy....................................................   114
Funding Priorities...............................................    16
Introduction....................................................53, 111
National Energy Strategy.........................................    53
National Priorities..............................................    69
New Evaluation Approaches........................................   138
Nuclear Energy...................................................   142
Ohio's Evaluation Process........................................   143
Partnership......................................................    31
Partnership and Research.........................................    68
Partnership Research.............................................    76
Partnership Role.................................................    89
Partnerships...................................................133, 135
Project Determination............................................   140
Public Utility Commission Decisions..............................   142
Recommendations..................................................31, 77
Regional Perspective.............................................     6
Renewable Energy Partnerships....................................   133
Renewable Energy Sources.........................................    54
Research......................................................... 6, 15
Research Areas...................................................    90
Riparian Zones...................................................   102
Roles for DOE....................................................   144
State Coordination and Co-Funding................................   144
State Energy Program.............................................    30
State Research...................................................   141
States Sharing Information.......................................   143
Strategy to Terminate Support....................................   137
Studies..........................................................    30
Technology Needs.................................................   133
Technology Performance Criteria..................................   139
Technology Transfer..............................................    16
Terrestrial......................................................   101
Testimony of Andrew Sharkey, III, American Iron and Steel 
  Institute......................................................    79
Testimony of Berrien Moore III, University of New Hampshire......   104
Testimony of Ceicil H. Underwood, Governor of West Virginia......     9
Testimony of E. Allen Womack, Jr., McDermott International.......    56
Testimony of Ernest Moniz, Under Secretary of Energy.............   117
Testimony of F. William Valentino, NY State Energy Research......    47
Testimony of Lewis Edelheit, General Electric Co.................    70
Testimony of Peter Rosenfeld, Chrysler Corp......................    91
Testimony of Sara Ward, Ohio Department of Development...........    33
Testimony of William J. Keese, California Energy Commission......    18
Utility Restructuring............................................    45
Vehicle Energy Research..........................................    89
When to Terminate Support........................................   136
Why Energy Matters...............................................   112

                           Cultural Agencies

Air and Space Museum Annex.......................................   378
Backlog Maintenance Estimates....................................   349
Contractor Accountability........................................   381
Costs to the Federal Government..................................   389
Definition of Deferred Maintenance...............................   379
Emergency Repairs................................................   358
Establishing Maintenance Priorities..............................   386
Facilities Planning and Assessment...............................   351
Future Requests..................................................   352
Kennedy Center Maintenance Operations............................   385
Kennedy Center Repairs...........................................   384
Long Term Plans--National Gallery................................   367
Maintenance Inspections Procedures...............................   379
Master Facilities Plan...........................................   368
Minor Repair Record..............................................   357
Opening Remarks--Mr. Regula......................................   349
Organization of the Kennedy Center...............................   357
Plan to Address Backlog Maintenance..............................   378
Planned Repair and Renovation....................................   351
Prioritize Maintenance Needs.....................................   380
Priority Setting Procedures......................................   381
Public Private Partnership.......................................   387
Questions for Holocaust Memorial Museum..........................   429
Questions for Smithsonian Institution............................   391
Questions for The Kennedy Center.................................   405
Questions for the National Gallery of Art........................   423
Repair and Rehabilitation........................................   375
Revenue Receipts Issues..........................................   388
Skylight Maintenance.............................................   386
Smithsonian Buildings............................................   384
Smithsonian Funding..............................................   382
Studies and Assessments..........................................   368
Summary Description of Smithsonian...............................   350
Testimony of Earl Powell, III, National Gallery of Art...........   370
Testimony of I. Michael Heyman, Smithsonian......................   353
Testimony of Jeffrey LaRiche, Holocaust Museum...................   376
Testimony of Lawrence Wilker, JFK Center.........................   359
Use of Private Contractors.......................................   380
Visitor Attendance in Washington, D.C............................   383