[Senate Hearing 108-]
[From the U.S. Government Publishing Office]
DEPARTMENTS OF TRANSPORTATION, TREASURY AND GENERAL GOVERNMENT, AND
RELATED AGENCIES APPROPRIATIONS FOR FISCAL YEAR 2005
----------
U.S. Senate,
Subcommittee of the Committee on Appropriations,
Washington, DC.
MATERIAL SUBMITTED BY AGENCIES NOT APPEARING FOR FORMAL HEARINGS
[Clerk's Note.--The following agencies of the Subcommittee
on Departments of Transportation, Treasury and General
Government, and Related Agencies did not appear before the
subcommittee this year. Chairman Shelby requested these
agencies to submit testimony in support of their fiscal year
2005 budget request. Those statements submitted by the chairman
follow:]
SAINT LAWRENCE SEAWAY DEVELOPMENT CORPORATION
Prepared Statement of Albert S. Jacquez, Administrator
The U.S. Saint Lawrence Seaway Development Corporation (SLSDC or
Corporation), a wholly owned government corporation and an operating
administration of the U.S. Department of Transportation (DOT), is
responsible for the operations and maintenance of the U.S. portion of
the St. Lawrence Seaway between Montreal and Lake Erie. This
responsibility includes maintaining and operating the two U.S. Seaway
locks located in Massena, NY, and vessel traffic control in areas of
the St. Lawrence River and Lake Ontario. In addition, the SLSDC
performs trade development functions designed to enhance Great Lakes
St. Lawrence Seaway System utilization.
Since its opening in 1959, the binational St. Lawrence Seaway has
been a vital transportation corridor for the international movement of
bulk commodities such as steel, iron ore, grain, and coal, serving a
North American region that makes up one quarter of the U.S. population
and nearly half of the Canadian population. The binational waterway
serves as a deep draft waterborne link between major U.S. and Canadian
agricultural, manufacturing, and industrial cities, including Chicago,
Detroit, Toronto, Cleveland, Duluth, Toledo, Milwaukee, Montreal, and
Green Bay, and European, South American, and North African markets.
The SLSDC coordinates its activities with its Canadian counterpart,
The St. Lawrence Seaway Management Corporation (SLSMC), particularly
with respect to rules and regulations, overall day-to-day operations,
traffic management, navigation aids, safety, environmental programs,
security, operating dates, and trade development programs. The unique
binational nature of the Seaway System requires 24-hour, year-round
coordination between the two Seaway entities.
The SLSDC's principal performance goal is to provide a safe,
secure, reliable, and efficient U.S. portion of the St. Lawrence Seaway
to its commercial users. Since its opening in 1959, more than 2.3
billion metric tons of cargo has been transported through the combined
sections of the St. Lawrence Seaway (Montreal-Lake Ontario and Welland
Canal) with an estimated value of more than $400 billion.
The navigation season typically runs from late March to late
December. During the 2003 navigation season, the availability of the
U.S. sectors of the Seaway, including the two U.S. locks maintained and
operated by the SLSDC, was 98.9 percent; the annual goal is 99 percent.
Weather and vessel incidents were the causes for all delays in 2003. Of
the remaining factors that cause lockage shutdowns, the one that the
SLSDC has the most control over is the proper functioning of lock
equipment. During the 2003 navigation season, there were no system
delays due to malfunctioning lock equipment.
FISCAL YEAR 2005 BUDGET ESTIMATE
The SLSDC's fiscal year 2005 budget request provides the agency
with the funding necessary to provide a safe, secure, reliable, and
efficient waterway system for the movement of commercial goods to and
from the Great Lakes region of North America.
The SLSDC fiscal year 2005 proposed level of $16,800,000, includes
an appropriation request from the Harbor Maintenance Trust Fund of
$15,900,000 and an estimated non-appropriated $900,000 in non-Federal
revenues. This proposed level will allow the agency to fund its 157
Full-Time Equivalent (FTE) staff and continue the day-to-day
operational and maintenance programs for the U.S. portion of the St.
Lawrence Seaway between Montreal and Lake Erie. These programs include
managing vessel traffic control in areas of the St. Lawrence River and
Lake Ontario, maintaining and operating the two U.S. Seaway locks, and
continuing increased security-related activities that were initiated as
a result of the terrorist-related events of September 11, 2001. In
addition, the SLSDC performs trade development activities designed to
enhance Great Lakes St. Lawrence Seaway System awareness and
utilization.
The request also directly supports four of the five President's
Management Agenda (PMA) initiatives (budget and performance
integration, strategic management of human capital, financial
performance improvement, and electronic government expansion; the SLSDC
is exempt from competitive sourcing as a government corporation), the
Department's strategic goals of Global Connectivity (efficient cargo
movement) and Security (transportation system recovery), as well as the
SLSDC's internal strategic goals. These agency goals include: safety,
security, and the environment; reliability and availability; trade
development; and management accountability. The request, separated by
Departmental strategic goals and performance measures, includes
$15,650,000 in appropriated funds directed at maritime navigation
programs and personnel, and $250,000 towards the SLSDC's security and
infrastructure protection activities.
The SLSDC's budget request also includes funding for the Seaway
Automatic Identification System (AIS) and the agency's financial
management system, both of which support the PMA. The AIS system, which
serves as one of the agency's ``Expanding E-Government'' PMA
initiatives, utilizes Global Positioning System (GPS) to allow the
SLSDC to more efficiently manage vessel traffic control and vessel
transits at the U.S. Seaway locks. Implemented at the start of the 2003
navigation season, the Seaway became the first inland waterway in the
western hemisphere to implement an operational AIS vessel traffic
services system.
The SLSDC's financial management system supports the President's
``Improving Financial Management'' initiative and includes nine
subsystems that allow Corporation officials to track all financial-
related information and meet all independent auditor reporting
requirements. The SLSDC has received 40 consecutive unqualified or
``clean'' financial audits since its first audit in 1955, a major
achievement under the PMA initiative of financial performance
improvement. The AIS system and the financial management system
represent $70,000 of the fiscal year 2005 budget estimate. This amount
is consistent with the fiscal year 2004 request for operating and
maintaining these two programs.
CONCRETE REPLACEMENT PROJECT
The fiscal year 2005 appropriation request is $1.627 million above
the fiscal year 2004 enacted level and is principally attributable to
the planned start of a $6 million concrete replacement project at the
two U.S. Seaway locks ($1.5 million each year in fiscal years 2005-
2008). The Eisenhower Lock has a history of concrete problems, caused
by the use of natural cement in the mix composition during the
construction of the lock. Due to the amount of concrete in need of
replacement, the difficulties associated with accessing these areas of
deteriorated concrete, and the need for in-house maintenance crews to
focus on other essential non-concrete lock maintenance projects, it is
more efficient and cost effective for outside contractors to complete
this project. The SLSDC's Office of Engineering has researched other
solutions to the concrete deterioration problem and found that there
are no other substances as effective as concrete in protecting the
structural integrity of the lock chambers.
The concrete replacement work to take place in fiscal years 2005-
2008 includes areas identified by the U.S. Army Corps of Engineers
(Corps) in its 1991 lock survey and evaluation of the two U.S. Seaway
locks (Corps Technical Report ITL-91-4, November 1991). The report
concluded, ``It is important for the SLSDC to maintain an aggressive
maintenance program of replacing deteriorated concrete. In the near
future, attention should be given to the repair of deteriorated
concrete near the bottom of the lock walls at Eisenhower Lock.''
Since 1991, the SLSDC has made in-house repairs to the most
critical areas identified by the Corps, but further deterioration and
harsh winter conditions have caused additional damage to the lock walls
at Eisenhower Lock and newly-identified problems at the Snell Lock have
also been targeted for replacement. In addition to concrete
deteriorating along the lower portions of the lock walls, freeze-thaw
damage is significant in the lock walls at high and low pool levels at
both locks. As it deteriorates, pieces of concrete become dislodged and
fall into the lock chambers. This poses a risk to people on the decks
of commercial vessels and pleasure boats.
Due to the amount of concrete in need of replacement, the
difficulties associated with accessing these areas of deteriorated
concrete, and the need for in-house maintenance crews to focus on other
non-concrete lock maintenance projects, it is more efficient and cost
effective for outside contractors to complete the project than in-house
personnel.
Between 1959 and 2003, the SLSDC expended more than $25 million on
concrete replacement at the two locks during the off-season winter
months, with the majority of work taking place at the Eisenhower Lock.
Most of the work over that time was completed with in-house labor. The
last major concrete replacement projects that utilized contractors were
completed in fiscal years 1986 and 1987, at a total cost of $4.3
million. The Seaway is a single-lock system, consisting of 15
individual U.S. and Canadian locks; a delay/shutdown to any one of the
locks would cause a delay/shutdown of the entire waterway. Although the
SLSDC has never experienced a major lock failure, the Canadian Seaway
agency suffered a lock failure at the Welland Canal in 1985, which
trapped 53 vessels above the Canal for 24 days at a cost to the
carriers of $24 million.
ENHANCED SEAWAY INSPECTION PROGRAM
The SLSDC and the U.S. Coast Guard (USCG), in conjunction with
Transport Canada and the SLSMC, signed a Memorandum of Understanding in
March 1997 to develop a program of coordinated vessel inspection and
enforcement activities to expedite the safe transit of shipping through
the Great Lakes Seaway System. The principal goal of the Enhanced
Seaway Inspection (ESI) program is to inspect all ocean vessels for
safety and environmental protection in Montreal, Quebec, before they
enter U.S. waters. Starting in 2002, security-related risk assessment
inspections have been conducted concurrent with the ESI, further
improving transit times for Seaway users. In 2003, the SLSDC continued
this program and met its internal performance goal of inspecting 100
percent of all ocean vessels in Montreal (208 total inspections).
The ballast water exchange program continues to be an important
function of the ship inspection program. These inspections are carried
out concurrently with the ESIs, by Corporation personnel in Montreal.
In 2003, 56 ballast water examinations were conducted in Montreal on
ocean vessels transiting the Seaway. The SLSDC performed 31 ballast
water examinations for subsequent trip vessels and eight follow-up
examinations in Massena.
Prior to the inception of the ESI program, foreign flag vessels
experienced numerous delays at the U.S. locks to accommodate USCG-
required safety-related inspections, as well as ballast water
management activities. Inspection in Montreal eliminates duplicative
inspections, allows for a seamless and efficient transit of the Seaway,
and provides a better location for repair resources, if required. This
improved inspection regime has saved each vessel, on average, 4 hours
per transit and ensured that any safety or environmental issues are
addressed prior to entering U.S. waters. As a result, ocean carriers
using the Seaway saved more than $500,000 in operating costs during the
2003 season. Seaway customers have responded favorably to the ESI
program through annual customer surveys.
CRITICAL INFRASTRUCTURE AND NAVIGATION SECURITY MEASURES
The SLSDC has been proactive in implementing increased security
measures following the events of September 11, 2001. Within days of the
terrorist attacks, risk assessment inspections of all foreign flagged
vessels were conducted in Montreal, prior to their entry into U.S.
waters. This protocol was developed with the full cooperation of the
Canadian SLSMC, as well as U.S. and Canadian law enforcement and Coast
Guard personnel. The protocol was further refined in March 2002 when
the risk assessment inspection was combined with the existing Enhanced
Seaway Inspection (ESI) program. By combining the two inspections into
a single process, foreign-flag vessels are not unnecessarily delayed
for security screenings, unless the initial risk assessment compels an
additional examination. During the 2003 navigation season, SLSDC
inspectors completed 216 risk assessment inspections in Montreal.
Security procedures, both maritime and internal, were developed to
ensure that security was enhanced while minimizing any impacts on the
efficiency of Seaway operations. In late 2001, SLSDC inspection
personnel logged substantially more staff hours in carrying out the
risk assessment protocol than normally projected. However, when the
protocol was refined in 2002 and merged with the existing ESI program,
this impact was ameliorated.
Another major security milestone for the SLSDC was the expansion of
the U.S. and Canadian Seaway mandatory Notice of Arrival requirement
for all foreign commercial vessels. With the start of the 2002
navigation season, all foreign ships entering the St. Lawrence Seaway
are required to give 96-hour advance notification of arrival in
Montreal, Quebec. Ships failing to give complete notice are prohibited
from entering the Seaway.
The notification requirement on the St. Lawrence Seaway is unique
because it mandates 96 hours notice prior to arrival in Montreal, as
opposed to all other U.S. waterways which require the notice prior to
reaching the first U.S. port of call. This modified requirement was
needed due to the geography of the key U.S. ports on the Great Lakes
Seaway System, which are several hundred miles into U.S. waters and, in
many cases, require transit of all 15 Seaway locks before reaching the
port. The Seaway's 96-hour notification requirement provides SLSDC
officials, as well as law enforcement and intelligence agencies, even
more advance notice (approximately 10 additional hours) to review
vessel crew lists and manifests before the vessel enters U.S. waters.
The SLSDC immediately sends the pre-entry information it receives to
the USCG, which in turn submits the information to its National Vessel
Movement Center for screening through various law enforcement
databases.
Other U.S. and Canadian agencies involved in the development of
both the risk assessment inspection program and 96-hour notification
requirement included Transport Canada, Citizenship and Immigration
Canada, Canadian Navy, Royal Canadian Mounted Police, U.S. Customs,
U.S. Immigration and Naturalization Service, and the U.S. Consul
General's Office in Montreal.
In February 2002, the SLSDC contracted for services to assess the
physical security for SLSDC infrastructure and workplace assets in
Massena. This assessment was intended to supplement and enhance an
initial security assessment that was conducted immediately following
September 11. The assessment focused on the two U.S. Seaway locks, the
Eisenhower Lock Visitors' Center, and the SLSDC's marine base/
maintenance facility. In addition, another contractor conducted a
detailed blast analysis of the highway tunnel under the Eisenhower
Lock. Based on the contractor's recommendations, the SLSDC has made and
continues to make several security enhancements and improvements to the
lock infrastructure and other workplace assets. It is estimated that
the SLSDC will expend more than $2.2 million in other-than-personnel
security enhancements and improvements during fiscal years 2002 through
2005.
Significant security-related enhancements and improvements made to
date include:
--Installation of approximately 4,400 feet of additional 8-foot-high,
chain-link fencing and various slide and swing gates. Gate
controllers will not be installed until the fiber optic system
is installed.
--Purchase of a Nasatka portable vehicle barrier to shut down or
control access, as needed, to our facilities, particularly the
Eisenhower Lock highway tunnel. This vehicle barrier has been
deployed during elevated threat level conditions.
--Construction of approximately 61 concrete ``jersey barriers''
topped with a 4-foot-high section of chain-link fence to keep
vehicles and pedestrians in the Visitors' Center parking lot
from approaching too close to the lock structure. These
barriers, built at a considerable cost savings with in-house
labor, will also be used in conjunction with the Nasatka
portable vehicle barrier to shut down or control vehicular
traffic.
--Completion of several improvements at the Eisenhower Lock Visitors'
Center, including (a) fencing of both ends and the lock side of
the lower and upper observation decks, (b) closure of some
ground level observation area to visitors, (c) movement of
visitor parking areas further away from the lock chamber, and
(d) setup of a security checkpoint at the Center entrance with
a security guard on duty during operating hours.
In fiscal year 2003, the SLSDC contracted with the firm of Edwards
and Kelsey to conduct an engineering plan for the implementation of
other security-related enhancements recommended in the previous
assessments. At the end of fiscal year 2003, the SLSDC finalized plans
to install a fiber optic network necessary for the electronic-based
security enhancements. In fiscal year 2004, the fiber network will be
installed and the purchase and installation of video cameras and smart
card/EZ pass systems for access to gates and buildings will be
finalized. The SLSDC will contract with an ``8-a, small business'' firm
for the installation of the security enhancements. In fiscal year 2005,
the SLSDC will continue to aggressively pursue the objectives of its
security program, which includes greater protection of SLSDC
facilities, new and improved measures for employee and visitor entry
into facilities, and planned contingencies for facilities/
infrastructure in the event of a heightened security alert.
The SLSDC fully participated in the U.S. Department of
Transportation's role in the TOPOFF 2 weapons of mass destruction
response exercise mandated by the U.S. Congress and conducted in May
2003. The agency is currently participating in several preparatory
exercises that will culminate in ``Exercise Forward Challenge '04''--
the government-wide continuity of operations exercise that is scheduled
for May 12-13, 2004.
In addition, the SLSDC will continue to work cooperatively with
security and intelligence officials at both the Departments of
Transportation and Homeland Security to ensure that the St. Lawrence
Seaway, and its navigation assets, is protected to the maximum extent
possible. This relationship was highlighted by the General Accounting
Office's Top Fiscal Year 2004 Management Challenges for the Department
of Transportation (Establishing and Managing an Ongoing DOT/Department
of Homeland Security (DHS) Programmatic Relationship).
The SLSDC has worked closely with DHS and the Transportation
Security Administration (TSA) since their inception. In February 2002,
the Corporation contacted officials in the TSA Explosives Unit to
request its consultation on security concerns regarding the Eisenhower
Lock highway tunnel. Additionally, SLSDC security and emergency staff
have also conducted a series of informational meetings with TSA
officials from its Office of Maritime and Land Security to educate them
on those same issues. To date, SLSDC/TSA interactions have proven to be
informative, constructive, and useful.
TRADE DEVELOPMENT INITIATIVES
Since 1985, the SLSDC has performed trade development and
promotional activities geared at generating trade to and from North
America via the Great Lakes Seaway System. Program-wide activities
include hosting overseas trade missions that promote the entire Seaway
System at maritime and trade-related exhibitions, developing commodity-
specific marketing plans, and working directly with ports, carriers,
terminal operators, labor, and importers/exporters in the development
of promotional materials and initiatives. Overseas trade missions,
which include U.S. and Canadian maritime, government, industry, and
labor delegates, have led to the development of new international cargo
movements into the System. Since 1985, the SLSDC has sponsored 26 trade
missions to 56 cities in 37 countries. In October 2003, the SLSDC led a
23-member delegation of U.S. and Canadian Great Lakes executives to
Belgium and The Netherlands, two of the Seaway's largest trading
partners.
In addition to overseas trade missions, the SLSDC is working with
various Great Lakes Seaway System port authorities, the Great Lakes
Cruising Coalition, the Great Lakes Waterways Management Forum, State
and local governments, and tourism associations, to attract cruise
vessels into the Great Lakes. Also, the SLSDC is working on joint trade
development initiatives with the Canadian SLSMC to maximize the use of
waterborne transportation as North American highways become more
congested, including the examination of the Seaway System for short sea
shipping movements and niche container trade as well as exploring
partnerships with other inter-modal connections in an effort to
generate new business for the Seaway System.
In an effort to provide its global customers with a single portal
for news and information related to the Great Lakes Seaway System
commercial navigation, the SLSMC and SLSDC developed and launched a
binational Internet web site (www.greatlakes-seaway.com) in 2001 that
has been extremely well received domestically and internationally from
the maritime and trade communities. In 2003, average monthly site page
hits grew from 70,000 in 2002 to more than 120,000 hits. The site
recorded an all-time high in December 2003 with 153,000 page hits, and
received more than 1.4 million hits for the year from viewers in more
than 110 countries.
u.s. army corps of engineers' great lakes st. lawrence seaway study
The Water Resources Development Act of 1999 directed the Corps, in
consultation with DOT (through the SLSDC), to undertake the Great Lakes
St. Lawrence Seaway Study (Study) to examine improvements to the
commercial navigation infrastructure of the Great Lakes St. Lawrence
Seaway System. Since January 2001, the Corps has partnered closely with
DOT/SLSDC to carry out the Study's reconnaissance phase.
The Corps completed a 2-year reconnaissance study in February 2003
and concluded that more analysis was needed to determine if a Federal
interest exists to improve the commercial navigation infrastructure on
the Great Lakes and Seaway. The current scope of the Study is to
establish a 50-year baseline for the current infrastructure to analyze
the engineering, economic, and environmental consequences of
maintaining, and not maintaining that infrastructure at its current
level of reliability. The Study is primarily a commercial navigation
study, but as evidenced by the composition of the Steering Committee,
it will include environmental considerations.
On May 1, 2003, the U.S. Department of Transportation and Transport
Canada signed a Memorandum of Cooperation that established the intent
of each agency to work together to ensure the future viability of the
Great Lakes Seaway System as a commercial navigation waterway.
Memorializing this intent in the MOC document cleared the way for
Canada to work together with the Corps and DOT on the Study.
Currently, all projects related to the revised scope of the Study
are underway (engineering, economics, and environmental), along with
meetings of the Study Steering Committee. The Steering Committee is
made up of the senior level officials from Corps, DOT, Transport
Canada, SLSDC, Canadian SLSMC, as well as representatives from the U.S.
Fish and Wildlife Service and Environment Canada.
SEAWAY AIS/GPS PROJECT
Since 1992, the SLSDC has worked with the U.S. Department of
Transportation's Volpe National Transportation System Center and
Canadian partners to design and implement state-of-the-art AIS/GPS
navigation technology.
On March 31, 2003, with the start of the navigation season, the
U.S. and Canadian Seaway agencies began enforcing mandatory AIS use on
commercial vessels entering the waterway in North America to employ
this technology as a requirement for transit. The AIS/GPS project
represents a major step forward in marine navigation technology. In
fact, the Seaway is currently the world leader in developing shore-side
applications for AIS/GPS.
AIS technology uses data from ship-to-ship, ship-to-shore, and
shore-to-ship, thereby enabling a constant two-way communication
between mariners and the three Seaway vessel traffic control centers.
Originally developed primarily for safety reasons, AIS has become
increasingly of interest to maritime security officials in the post-9/
11 environment as it offers the ability for them to track any vessel
carrying a transponder with great precision.
In the near future, permanent installation of AIS equipment will be
required onboard commercial vessels in the entire Great Lakes St.
Lawrence Seaway System from the Lakehead in Duluth, MN, to traffic
entering the Gulf of St. Lawrence on the Atlantic. Adoption of the
technology, which has been approved by the International Maritime
Organization, was embraced early on by the Canadian Shipowners
Association and the Shipping Federation of Canada, both of which
provided technical and financial assistance. The Department's Volpe
National Transportation Systems Center served as technical contractor
for development of the AIS project, which began almost a decade ago.
AIS will soon be required internationally on commercial vessels and
will be mandatory throughout the Great Lakes Seaway System by December
2004.
2003 NAVIGATION SEASON OVERVIEW
The estimated tonnage for the combined sections of the St. Lawrence
Seaway in 2003 was 40.9 million metric tons. This was 500,000 metric
tons or 1 percent below the 2002 total (a decrease of 1 percent). The
decrease can be attributed, in large part, to higher global freight
rates, weaker U.S. dollar valuation, the continuation of grain export
reductions (7 percent decrease) due to lower European grain imports,
and significant reductions to general cargoes, including iron and steel
products (38 percent reduction). The reduction of import steel also had
a secondary effect on export grain. It is estimated that approximately
20-30 percent of ocean-going vessels exporting grain from the Great
Lakes Seaway System enter the waterway carrying steel. The final weeks
of the navigation season did result in high levels of grain movements
on Canadian lakers as the Canadian Wheat Board began moving more grain
exports via the St. Lawrence Seaway. In addition to cargo movements,
estimated total commercial transits through the St. Lawrence Seaway
were on par with 2002 levels at 3,886 transits.
Several commodities posted increases in 2003: iron ore (up 10.5
percent to 10.7 metric tons); coal (up 33 percent to 4.1 million metric
tons); petroleum products (up 2 percent to 1.8 million metric tons);
salt (up 17 percent to 2.3 million metric tons); stone (up 8 percent to
800,000 metric tons); potash (up 48 percent to 144,000 metric tons);
ores and concentrates (up 68 percent to 357,000 metric tons); and
gypsum (up 25 percent to 652,000 metric tons).
CONCLUSION
The SLSDC's fiscal year 2005 budget request reflects the agency's
ongoing commitment of providing a safe, secure, reliable, and efficient
waterway and lock transportation system for the movement of commercial
goods to and from the Great Lakes region of North America. Maritime
commerce on the Great Lakes Seaway System is vitally important to the
Great Lakes regional economy, annually supports more than 150,000 U.S.
jobs, $4.3 billion in personal income, $3.4 billion in transportation-
related business revenue, and $1.3 billion in Federal, State, and local
taxes.
Since 1959, the SLSDC has played a significant role in not only the
operations and maintenance of the U.S. Seaway assets, but also in the
promotion and development of new business for the waterway in concert
with its North American stakeholders. As the St. Lawrence Seaway nears
its 50th year of operation, the SLSDC remains committed to working with
its customers and stakeholders to ensure the waterway's reliability and
competitiveness for its next 50 years.
______
MERIT SYSTEMS PROTECTION BOARD
Prepared Statement of Neil Anthony Gordon McPhie, Acting Chairman
Chairman Shelby, Ranking Member Murray and members of the
subcommittee, thank you for the opportunity to submit this statement
for the record on the fiscal year 2005 appropriations request for the
U.S. Merit Systems Protection Board (MSPB or ``the Board''). This year
is particularly significant for the Board, as 2004 marks the agency's
Silver Anniversary. Over the course of the Board's 25-year history, its
Chairmen, Board members and staff have held steadfast and true to the
agency's mission: to serve as guardian of Federal merit systems. In
those 25 years, the Board has issued decisions in over 239,000 cases.
The Board has issued over 80 reports of studies of the Federal merit
systems and the degree to which employees are managed free from
prohibited personnel practices. In addition, the Board has conducted
outreach activities on its findings on appeals and studies to promote
the improved application of merit principles. I am pleased to take this
opportunity to explain to the subcommittee the basis for the
President's appropriations request on behalf of the Board and its
importance in enabling the Board to continue to fulfill its statutory
missions during fiscal year 2005.
OVERVIEW OF THE REQUEST
The President is requesting $35,303,000 in appropriated funds to
support the operations of the Merit Systems Protection Board. This
request represents a $1,800,000 increase over the fiscal year 2004
appropriations request. This increase covers the $1,501,000 in
additional expenses resulting from the January 2004 and 2005 pay raises
that were included in the President's budget. However, because Congress
approved a higher pay raise for fiscal year 2004 than the President
recommended, MSPB needs an additional $375,000 to cover the difference
between the President's recommended raise and the amount that was
ultimately approved by Congress. This request also covers the increase
in commercial rent charges for fiscal year 2004 ($183,000), the $78,000
necessary to provide for inflationary costs increases in other non-
personnel costs and the $38,000 necessary to cover the cost of Workers
Compensation Programs in fiscal year 2005.
At the request of the Office of Management and Budget (OMB), the
Merit Systems Protection Board is not requesting that funds be
transferred from the Civil Service Retirement and Disability Trust Fund
for fiscal year 2005. Instead, at OMB's request, the funding previously
supplied from the Trust Fund for adjudication of Civil Service
Retirement appeals is being requested as part of the regular
appropriation total of $37,303,000.
fiscal year 2003 and fiscal year 2004 accomplishments with fiscal year
2005 OUTLOOK (BY BUDGET ACTIVITY)
ADJUDICATION
The bulk of the Board's resources are dedicated to processing our
appellate workload; 192 FTE--or 84 percent of the 228 FTE estimated for
fiscal year 2004 and fiscal year 2005--will be used for adjudication.
During the last several years, we have maintained an average processing
time of approximately 3 months for appeals and other cases processed in
our regional and field offices. However, the average case processing
time at headquarters increased slightly because the Board functioned
with only one member for approximately 6 weeks in fiscal year 2003.
We estimate that in each of the next 2 years the administrative
judges will process approximately 7,300 appeals and other cases in our
regional and field offices, and the Board members will adjudicate
approximately 1,300 cases at headquarters. In fiscal year 2003, the
Board decided 8,416 cases: 7,227 in the regional and field offices and
1,189 in the headquarters office. The average processing times were 94
days in the regional and field offices and 295 days for headquarters.
Of the Board's final decisions that were appealed to the U.S. Court of
Appeals for the Federal Circuit, the Court left 94 percent of the
Board's decisions unchanged.
This case workload is determined by factors beyond our control, as
it results from the number of appealable actions taken by Federal
agencies, the number of employees who decide to challenge those
actions, and from legislative changes that affect our jurisdiction. Two
such changes are enactment of the Homeland Security Act of 2002 and the
National Defense Reauthorization Act of 2004. Under these statutes, the
Department of Homeland Security (DHS) and the Department of Defense
(DOD), respectively, were granted authority to establish their own
appeals process.
The Department of Homeland Security has decided to retain MSPB
appeal rights for its employees at the regional and headquarters
levels. DHS issued proposed regulations establishing an expedited
appeals processing system which requires the Board to process employee
appeals using shorter timeframes at the headquarters level. As required
by statute, DHS officials consulted with MSPB prior to issuing those
regulations.
These expedited procedures might well require an increase in our
adjudication staff in the headquarters office. Further, while DOD
employees' MSPB appeals rights are currently limited by statute to the
petition for review (PFR) level, it is still possible that DOD will
also decide to provide first-level MSPB appeals rights for its civilian
employees by regulation. If DOD does not provide first-level MSPB
appeal rights for its employees, we expect the number of PFR's to
increase, as this avenue of appeal will present DOD employees with
their first opportunity for an independent review of the agency's
employment action. This increase in PFR's will likely require
additional Board staff to review the PFR's at MSPB headquarters.
Notwithstanding the new DHS appeals procedures or the changes to
DOD's appeals procedures, the Board will still hear DOD and DHS appeals
under the Whistleblower Protection Act, the Uniformed Services
Employment and Reemployment Rights Act, and the Veterans Employment
Opportunities Act. Thus, the Board is seeking the level of funding
reflected in its fiscal year 2005 budget request because we do not
anticipate a decrease in the Board's caseload or staffing needs.
It is important to note that even a small increase in workload per
administrative judge could cause a significant increase in processing
times. MSPB needs the requested funds in order to maintain the
adjudication staff and to continue technological improvements that will
facilitate case processing and avoid escalation of costs to the
government as a whole.
Achievement of the Board's performance goals related to the
adjudication of cases at headquarters depends on having a quorum of
Board members. When the Board has a full complement of three members,
cases at headquarters are closed by a unanimous vote or a majority vote
of the Board. When the Board has only two members, there is a quorum,
but no majority is possible unless both members agree. If the two
members cannot agree, the Board's regulations permit the issuance of a
``split-vote'' order, which makes the initial decision under review
final but not precedential. When the Board has only one member, as it
did for almost 2 months during fiscal year 2003, no decisions can be
issued.
I am serving under the recess appointment I received from the
President in April 2003. On December 10, 2003, the President designated
me as Vice Chairman of the Board. Because the position of Board
Chairman was vacant, I became the Board's Acting Chairman pursuant to
the Board's operating statute, 5 U.S.C. 1203(b). Unless confirmed, my
appointment to the Board will end when Congress adjourns sine die at
the end of the 108th Congress. The term of the current Board member,
Susanne T. Marshall, ended on March 1, 2004. However, Ms. Marshall has
exercised her option to continue to serve in this position for up to 1
additional year if no successor is named. While the President has
recently submitted a nominee to the Senate for confirmation to fill the
one remaining vacancy on the Board, this position has been vacant since
December 2001. The Board has not had its full complement of three
members since then.
During fiscal 2003 MSPB implemented an electronic appeals process
(e-Appeal) that allows appellants to file an initial appeal using the
Internet.
The Board's new alternative dispute resolution pilot program,
called the Mediation Appeals Program (MAP), became fully functional in
fiscal year 2003 with the completion of mediation training by 15 Board
employees. As part of the training, these employees completed three to
five co-mediations with dispute resolution experts. Fifty percent of
the completed co-mediations resulted in settlements of pending appeals.
MERIT SYSTEMS STUDIES AND OVERSIGHT
The MSPB has the statutory responsibility to conduct studies of the
civil service and other merit systems in the Executive Branch. Our goal
is to support strong and viable merit systems that ensure the public's
interest in a high quality, professional workforce managed under the
merit principles and free from prohibited personnel practices. In
fiscal year 2005, the MSPB will increase its program of in-depth,
timely analysis of major merit and human capital management issues. In
fiscal year 2005 we expect to issue at least six reports and a
quarterly newsletter, ``Issues of Merit.'' This function will use
approximately 13 FTE, or about 4 percent of the approximately 228 FTE
the Board is projected to use in fiscal year 2005.
The Board makes reports of our studies available to a wide
audience, including the President, members of Congress, Federal policy
officials, managers, employee groups, academicians and others with an
interest in the merit systems and Federal human resources management.
Reports address policy issues as well as issues that affect the
operation and practice of merit in the workplace. In fiscal year 2005,
we will continue our efforts to work with organizations such as the
Federal Executive Boards, the Senior Executive Association, and the
Federal Managers' Association.
The President's Management Agenda item on Human Capital Management
and GAO's rating of human capital management as high risk influence our
report topics. Alternative systems, such as those authorized by the
Homeland Security Act of 2002 and the National Defense Reauthorization
Act of 2004, are covering larger and larger portions of the workforce.
Our charter to examine the policies and implementation of traditional
and alternative personnel systems and their impact on merit principles
and prohibited personnel practices is more important than ever.
We are working closely with other research groups from the General
Accounting Office, the Office of Personnel Management, the National
Academy of Public Administration, and the Partnership for Public
Service to include a sharing of research agendas and an expansion of
peer reviews of our respective work products. These other groups have
either a constituency group funding them or are direct agents of the
administration. Accordingly, their clients' interests shape the views
they express on an issue. MSPB is distinct in its statutory mission to
provide an independent, unbiased perspective. Our clients are the
American people and our responsibility to them is to protect the
public's interest in a viable, merit-based system.
In fiscal year 2003, the MSPB released three major studies and
three editions of the newsletter. The major studies were, The Federal
Selection Interview: Unrealized Potential, which makes recommendations
to improve this important part of the selection process, Help Wanted: A
Review of the Federal Vacancy Announcements, which makes
recommendations to make vacancy announcements more useful in the
recruitment process, and The Federal Workforce for the 21st Century:
Results of the Merit Principles Survey 2000, which addresses employees'
concerns before September 11, 2001. We are also planning our largest
Merit Principle Survey ever using electronic web-based methodology.
This electronic survey capability will be a centerpiece of our research
agenda.
MANAGEMENT SUPPORT
The management support function, which uses approximately 26 FTE,
or 11 percent of the 228 estimate in fiscal year 2004 and fiscal year
2005, provides the necessary management support for information
resources management, human resources management, budget, finance,
procurement, equal employment opportunity, travel, space and property
management. The management support function, which uses approximately
26 FTE, or 11 percent of the 228 estimate in fiscal year 2004 and
fiscal year 2005, provides the necessary management support for
information resources management, budget, finance, procurement, equal
employment opportunity, travel, space, and property management.
Fiscal year 2003 was the first year that we were required to have a
financial audit pursuant to the Accountability of Tax Dollars Act of
2002. We received a clean audit opinion. An additional important
administrative accomplishment was the development and implementation of
the Continuity of Operations Plan.
The Board determined that a restructuring of its regional and field
office configuration was necessary in order to consolidate resources
and to allow for the most efficient management of case processing.
After evaluating workload shifts, costs, economies of scale, changes in
the Federal workforce, and the flexibility needed to adjust to civil
service reform, Board management determined that it was necessary to
close two of these offices to enable the Board to further its mission
more efficiently and effectively.
Effective March 31, 2004, the Board closed its field offices in
Seattle, Washington and Boston, Massachusetts. This action affected a
total of 12 employees in these two offices (four in the Boston office
and eight in the Seattle office). The Board received authority to grant
voluntary early retirement and voluntary separation incentive payments
to affected employees. The Board will continue to operate five regional
offices (Philadelphia, Washington, Atlanta, Chicago, and San Francisco)
and three field offices (New York, Dallas and Denver).
The restructuring was accomplished without a reduction in force.
Every employee in the affected offices was offered a reassignment to an
equivalent position within the Board. These reassignments were made
without loss of pay or grade for the affected employees. Additionally,
the Board will pay all required and most optional relocation expenses
for employees who are reassigned. Eligible employees who declined the
reassignment were offered the option of taking voluntary early
retirement or the voluntary separation incentive payments. Under these
arrangements, only five employees are separating from the Board; three
are retiring and receiving voluntary separation incentive payments, one
employee transferred to another Federal agency and one employee is
serving in a temporary assignment, while seeking other employment.
We believe that the restructuring will have a neutral budgetary
impact. The annual rent on the Seattle field office is approximately
$150,000 and the rent on the Boston field office is approximately
$100,000 annually. As of April 1, 2004, the Board will cease to pay
rent on the Seattle office. We are tied to a lease agreement that will
obligate the Board to pay some amount for the Boston property through
the end of the lease term, which is February 14, 2005. However, we are
currently negotiating with the management company in an effort to pay a
lesser amount from April 1, 2004, through the end of the lease period.
We anticipate that any savings in rent expenses will be offset by an
increase in expenses associated with the additional staff needed to
meet the challenges presented by the new Department of Homeland
Security and Department of Defense appeals systems.
In fiscal year 2004, the Board implemented a new case management
system. This system replaces a 13-year-old case management system,
whose major components had long become obsolete. Two of the features of
this new system that will improve the overall efficiency of the
adjudicatory process include: (1) interfaces between the Board's Case
Management System, Document Management System, and Document Assembly
System to reduce duplicative data entry and to automate the use of data
from CMS to produce standard case documents; and (2) use of off-the-
shelf software as the basis of the system, which will allow more
frequent upgrading of other software.
Additionally, in fiscal year 2004, the Board expects to replace all
of the agency's personal computers (PC's) in accordance with our policy
of replacing PC's every 4 years. As part of that upgrade, we will
update word processing and other desktop software, and we will
investigate the feasibility of installing a wireless network within our
building.
Finally, the Board's information resource management office will
continue to enhance information technology security for the Board's IT
systems. These enhancements will follow up on the recommendations of
the independent auditor which were included in the agency's fiscal year
2003 Federal Information Security Management Act report.
In fiscal year 2005, we will implement a pilot program to evaluate
the cost and feasibility of scanning case documents received from the
parties. This is another phase of the e-Filing initiative which would
permit documents that we do not produce or receive in electronic form
through e-Appeal to be made part of the electronic case file
nonetheless.
CONCLUSION
I am honored to serve as Acting Chairman of the Merit Systems
Protection Board. The Board and its staff continue to work diligently
to maintain the reputation for efficiency, effectiveness and fairness
it has earned over its 25-year history. I have enjoyed serving the
Board as a member and now as Acting Chairman. I welcome the opportunity
to lead the organization as it builds upon its legacy of excellence for
service in the public interest.
______
U.S. ACCESS BOARD
Prepared Statement of Lawrence W. Roffee, Executive Director
INTRODUCTION
The Access Board is requesting a total budget authority of
$5,686,000 for fiscal year 2005. The proposed budget is a 5.3 percent
increase over the amount appropriated for fiscal year 2004. The Board
is not planning new costly initiatives in fiscal year 2005 but will
continue with the programs started in fiscal year 2004, and has
followed the directives issued by the Office of Management and Budget
for the preparation of the fiscal year 2005 budget.
GOVERNMENT PERFORMANCE AND RESULTS ACT ANNUAL PERFORMANCE PLAN
Following the Government Performance and Results Act (GPRA), the
Board has established long-range goals and annual objectives that
describe the strategies it will implement to achieve the long-range
goals. The objectives are described in terms that permit future
assessment regarding whether the objectives were achieved. To satisfy
the requirements for an annual performance plan and review, this budget
justification presents information under each of the Board's program
areas regarding the long-range goals, reports on the results of the
fiscal year 2003 activities, reviews the planned fiscal year 2004
activities, and presents the fiscal year 2005 objectives.
The Board was established by section 502 of the Rehabilitation Act
and is the only Federal agency whose primary mission is accessibility
for people with disabilities. The Board is responsible for developing
guidelines under the Americans with Disabilities Act, the Architectural
Barriers Act, and the Telecommunications Act for ensuring that
buildings and facilities, transportation vehicles, and
telecommunications equipment covered by these laws are readily
accessible to and usable by people with disabilities. The Board is also
responsible for developing standards under section 508 of the
Rehabilitation Act for accessible electronic and information technology
used by Federal agencies, and for providing training under the
Assistive Technology Act to Federal and State employees on obligations
related to section 508 of the Rehabilitation Act.
In 2002, the Board was given new responsibilities under the Help
America Vote Act to serve on the Board of Advisors and the Technical
Guidelines Development Committee that will assist the new Election
Assistance Commission in developing voluntary guidelines and guidance
for voting systems, including accessibility for people with
disabilities.
The Board also enforces the Architectural Barriers Act and provides
training and technical assistance on each of its guidelines and
standards, and on a variety of other accessibility issues.
Additionally, the Board maintains a small research program that
develops technical assistance materials and provides information needed
for rulemaking.
The Board has adopted this mission statement to guide its programs:
The Board is the catalyst for achieving an accessible America. The
statement recognizes that achieving an accessible America requires
bringing together public and private sectors. The Board has established
three long-range goals for its programs:
--Take a leadership role in the development of codes and standards
for accessibility;
--Work in partnership with agencies and others to make the Federal
Government a model of compliance with accessibility standards;
and
--Be known as the leading source of information about accessibility
and disseminate that information to customers in effective
ways.
In developing objectives and strategies for achieving the long-
range goals, the Board seeks to work together with its stakeholders
toward common objectives. The Board's plan is simple: work with its
stakeholders to establish consensus-based guidelines and standards that
are fair, reasonable, and acceptable to all interests; where the Board
has enforcement responsibilities over Federal agencies, assist those
agencies to achieve full compliance; and involve its stakeholders in
developing and disseminating materials and manuals that will help them
understand and comply with our guidelines and standards.
The Board's programs will result in accessible buildings and
facilities, transportation vehicles, telecommunications equipment, and
electronic and information technology across our country and,
ultimately, the full economic and social integration of people with
disabilities into our society. Achieving these results will depend not
only on the Board's activities, but also on the level of commitment and
action taken by other Federal agencies, State and local governments,
and businesses who are required to comply with or enforce the various
laws that guarantee the civil rights of people with disabilities.
ACCESSIBILITY GUIDELINES AND STANDARDS
The Board will continue to develop and update accessibility
guidelines and standards and to work cooperatively with organizations
which develop codes and standards affecting accessibility through
fiscal year 2005 and beyond. The status of current guidelines and
standards efforts is presented below.
ADA and ABA Accessibility Guidelines
This rule will revise the accessibility guidelines for the
Americans with Disabilities Act (ADA) and the Architectural Barriers
Act (ABA), and include new guidelines for accessible housing covered by
both of these laws. Through this rulemaking, the Board will ensure
consistency and coordination in the development of guidelines
applicable to the public and private sector, as well as the Federal
Government. A notice of proposed rulemaking (NPRM) was published for
public comment in November 1999. The NPRM consisted of separate scoping
parts for each law. The ADA scoping part was based on the
recommendations of the Board's ADAAG Review Advisory Committee and
covers private facilities, such as places of public accommodation and
commercial facilities, and State and local government facilities. The
ABA scoping part applies to Federally financed facilities and is based
on the ADA scoping part, with a few changes due to differences in the
coverage of the two laws. For example, the ABA scoping part covers
facilities leased by Federal agencies. The NPRM contained a single set
of updated technical requirements based on the recommendations of the
ADAAG Review Advisory Committee. Both the ADA and ABA scoping parts
reference these common technical requirements. The comment period for
the proposed rule closed in May 2000 and over 2,500 comments were
received. The Board held two public hearings on the proposed rule. The
Board also held informational meetings in Washington, DC in October
2000 to hear from industry associations and disability groups on issues
regarding automated teller machines, reach ranges, and captioning
equipment for movie theaters. The Board required further information on
these issues before deciding how to address them in the final rule.
In April 2002, the Board placed in the docket for public review a
draft of the final guidelines to promote harmonization of the Board's
guidelines with the International Code Council (ICC)/American National
Standards Institute (ANSI) A117.1 Standard on Accessible and Usable
Buildings and Facilities and the International Building Code. The ICC/
ANSI A117 Committee and the ICC were in the process of revising the
private sector codes and standards. This provided another opportunity
to harmonize the Board's guidelines with those of the private sector.
The Board's final rule will be published in fiscal year 2004.
Outdoor Developed Areas
The Board's Outdoor Developed Areas Regulatory Negotiation
Committee presented its report to the Board in September 1999. This
committee developed new sections for parks, trails, and camping and
picnic areas. In October 2001 the Board sponsored an information
meeting on the final report of the Outdoor Developed Areas Regulatory
Negotiation Committee. The meeting was attended by about 50 individuals
and was held in Denver, CO during the annual meeting of the National
Recreation and Park Association. The meeting was informal and provided
an opportunity for a dialogue with Board members about the report.
In September 2003, the Board decided to develop an NPRM on Outdoor
Developed Areas using only its rulemaking authority under the
Architectural Barriers Act. Taking this approach will help move this
rulemaking forward and allow the Federal Government to take the
initiative of addressing accessibility in this area before applying
requirements to State and local governments or private entities. Future
rulemaking under the ADA would be enhanced by the experience of
implementing accessibility guidelines at Federal facilities. The
Federal Government would gain experience in implementing the guidelines
and this experience should prove important before applying them to
other entities. A proposed rule will be published for public comment in
fiscal year 2004.
Passenger Vessels
In September 1998, the Board convened a 21-member Passenger Vessel
Access Advisory Committee to develop accessibility guidelines for
cruise ships, ferries, excursion boats, and other vessels covered by
the Americans with Disabilities Act. The committee presented its report
with recommendations to the Board in November 2000. The Board created
an ad hoc committee of Board members to begin developing a proposed
rule on access to passenger vessels.
Standard means of boarding passenger vessels and the interaction
between vessels and shoreside facilities present unique challenges to
accessibility. It is a major issue the Board will address in guidelines
it is developing for passenger vessels. The Board held public meetings
in New Orleans (August 2003) and Seattle (September 2003) to gather
information and input on viable access solutions that will allow
persons with disabilities independent access onto and off of large
vessels such as cruise ships, dinner boats, ferries, and gaming boats.
Over 150 vessel designers and operators, pier operators, persons with
disabilities, and others attended the meetings. A notice of
availability (or draft rule) is expected to be published in fiscal year
2004.
Public Rights-of-Way
In October 1999, the Board created a 32-member Public Rights-of-Way
Access Advisory Committee to assist it in developing new guidelines for
access to sidewalks, street crossings, and related pedestrian
facilities. The committee presented its report with recommendations to
the Board in January 2001. The committee is continuing to meet to
develop recommendations for a technical assistance manual for agencies
and practitioners to support implementation of the future guidelines.
In June 2002, the Board released draft guidelines on accessible public
rights-of-way for public comment. The draft guidelines were made
available for public review and comment prior to issuing a notice of
proposed rulemaking. Written comments were accepted until October 28,
2002; we received approximately 1,400 comments--all of which are
available on our website.
A public meeting on the draft guidelines was held in Portland, OR
on October 8, 2002. The meeting provided an opportunity for industry
groups, persons with disabilities, civil engineers, local governments,
and other interested parties to comment on the published draft. Over
100 people attended the meeting, and approximately 40 people provided
testimony. Comments focused on the impact of various provisions in the
guidelines. A proposed rule is expected to be published in fiscal year
2004.
Fiscal Year 2003 Results--Rulemaking
In fiscal year 2003, we did not issue any guidelines.
Fiscal Year 2003 Results--Codes and Standards
Our long-range goal is to take a leadership role in the development
of codes and standards for accessibility. The Board works with model
code organizations and voluntary consensus standards groups that
develop and periodically revise codes and standards affecting
accessibility. We have voting membership in several codes and standards
organizations, and monitor or are actively involved in the development
or revision of dozens of other codes and standards affecting
accessibility.
We believe this goal enhances the Board's credibility as a
knowledgeable source of information regarding technical aspects of
accessibility. Additionally, by working cooperatively with codes and
standards-setting bodies, Federal and private codes and standards will
be more similar, or harmonized, and the Board will be more alert to
non-Federal influences affecting its constituencies. Harmonization
between Federal and private requirements will make it more likely that
buildings and facilities will be accessible, thus reducing the
necessity for complaints and litigation. Some highlights of
accomplishments in fiscal year 2003 include:
--The parent of a child with a hearing loss petitioned the Board to
include new provisions in ADAAG for acoustical accessibility
for individuals who are hard of hearing because the acoustical
environments found in many schools today are barriers to
communication and therefore to learning for children with
hearing impairments. Rather than initiating rulemaking, the
Board collaborated with an existing Acoustical Society of
America (ASA)/American National Standards Institute (ANSI)
Working Group on Classroom Acoustics to develop private sector
technical and scoping standards. The standard was recently
adopted by ANSI. The approved standard, Acoustical Performance
Criteria, Design Requirements, and Guidelines for Schools (ANSI
S12.60-2002), sets specific criteria for maximum background
noise and reverberation.
--Currently, the Board is finalizing revisions to the ADA and ABA
accessibility guidelines. A key goal of this revision is to
make the guidelines more consistent with model building codes
and industry standards, particularly those issued by the ICC/
ANSI A117 Committee. The ICC/ANSI A117.1 standard is referenced
by the International Building Code and various State codes,
among others. While the Board's guidelines derive from earlier
versions of the ICC/ANSI A117 standard, significant differences
between the documents have remained. From the outset of its
rulemaking to update the ADA and ABA guidelines, the Board has
sought to reconcile these differences. The ICC/ANSI A117
Committee is in the process of updating the A117.1 standard and
is working to harmonize the new edition with the Board's
upcoming guidelines. In April 2002, the Board released a draft
of the final ADA and ABA guidelines to facilitate this effort.
Later, the ICC/ANSI A117 Committee completed a series of
hearings on changes to the standard to make it more consistent
with the Board's draft final guidelines.
Fiscal Year 2004 Plans--Rulemaking
In fiscal year 2004, we will issue one final guideline and three
proposed guidelines:
--Final rule on revisions to the ADA and ABA accessibility guidelines
--NPRM on outdoor developed areas
--Notice of availability (draft rule) on access to passenger vessels
--NPRM on access to public rights-of-ways
Fiscal Year 2004 Plans--Codes and Standards
The Board will be assisting the new Election Assistance Commission
in the development of voluntary voting system guidelines under the Help
America Vote Act. Among other things, the legislation requires the new
Election Assistance Commission to develop voluntary voting system
guidelines, including accessibility for people with disabilities. The
voting system guidelines are to be developed with the assistance and
input of a Technical Guidelines Development Committee and Board of
Advisors. The legislation requires that the Access Board be represented
on both groups.
As a result of the September 11, 2001 attacks on the World Trade
Center, code provisions for emergency egress from tall buildings are
being re-examined. There is renewed interest in the use of elevators
for both occupant egress and fire fighters access. Therefore, a
workshop on the Use of Elevators in Fires and Other Emergencies will be
held on March 2-4, 2004, in Atlanta, GA. This workshop is being co-
sponsored by the Access Board, the American Society of Mechanical
Engineers, National Institute of Standards and Technology,
International Code Council, National Fire Protection Association, and
the International Association of Fire Fighters.
Fiscal Year 2005 Objectives--Rulemaking
In fiscal year 2005, we will issue three final guidelines:
--Final rule on outdoor developed areas
--NPRM on access to passenger vessels
--Final rule on access to public rights-of-ways
Fiscal Year 2005 Objectives--Codes and Standards
In fiscal year 2005, the Board will continue efforts to harmonize
its guidelines with model codes and standards, including the ICC/ANSI
A117.1 Standard for Accessible and Usable Buildings and Facilities.
TECHNICAL ASSISTANCE
The Board provides technical assistance to a wide variety of people
regarding the accessibility guidelines and standards it issues. The
Board's customers include architects, builders, designers,
manufacturers, people with disabilities, State and local governments,
and Federal agencies. The Board's technical assistance program has four
components:
--Responding to customer inquiries. The Board responds to about
13,000 customer inquiries each year. We have four toll-free
telephone lines for customers to call with questions. Customers
also e-mail and fax us questions. Many literally are sitting at
a drawing table with a design problem. They want accurate,
reliable, and timely advice. Our customers value being able to
discuss their questions directly with our accessibility
specialists who developed the guidelines and standards.
--Developing and disseminating bulletins, manuals, and other
publications. The Board maintains about 30 publications on
accessibility issues. These range from short bulletins
responding to frequently asked questions about specific issues
such as accessible parking, to manuals on the Board's
guidelines and standards. We send out about 12,000 publications
each year in print and alternate formats.
--Providing training. The Board conducts about 100 training sessions
each year. Training usually is provided at conferences and
seminars sponsored by other organizations. Training sponsors
generally reimburse us for travel expenses.
--Maintaining the Board's website. The Board's website (http://
www.access-board.gov) has become a very effective way to
distribute information to the public. Customers can download
many of our publications and view our accessibility guidelines
and standards from our website. We received over 12 million
``hits'' on our website in fiscal year 2003.
The Board also has established partnerships with other
organizations such as the American Institute of Architects, the
National Association of ADA Coordinators, the Disability and Business
Technical Assistance Centers, and the Information Technology Technical
Assistance and Training Center (ITTATC) to disseminate information
about the Board's programs. The ITTATC, which is funded by the National
Institute on Disability and Rehabilitation Research, collaborates with
stakeholders to improve the awareness and availability of accessible
electronic and information technology and telecommunication products
and services and disseminates information, training, and technical
assistance. Many of the Board's guidelines and publications are
available through these organizations' on-line networks. The Board also
provides training for these organizations. The Board's long-range goal
is to be known as the leading source of information about accessibility
and to disseminate information to our customers in effective ways. As
we revise the guidelines for the Americans with Disabilities Act and
the Architectural Barriers Act and develop guidelines for new areas
such as outdoor developed areas, passenger vessels, and public rights-
of-ways, there will be increased demands for technical assistance from
existing and new customer groups. There also will be opportunities to
use existing partnerships and establish new partnerships with customer
groups to disseminate information about the Board's guidelines and
standards.
Fiscal Year 2003 Results--Leading Source of Information
As a result of our expertise in accessibility issues, many
government agencies and private organizations ask for our assistance in
ensuring access at their facilities. During fiscal year 2003, we met
with staff from the General Services Administration (GSA) on the design
of a new courthouse annex in Washington, DC and plans for a new
courthouse in Eugene, OR and we visited an existing courthouse in Upper
Marlboro, MD with GSA staff. We also reviewed accessibility issues for
the planned new Department of Transportation headquarters building.
Many foreign government agencies also ask for our assistance in
promoting access in their countries. In fiscal year 2003, we met with
the Chairman of the Disability Rights Commission from the United
Kingdom. The Disability Rights Commission helps implement the
Disability Discrimination Act of 1995. We also met with a researcher
from Sweden regarding accessible design and provided information on
model building codes and met with Japanese researchers regarding
Japanese initiatives on ``talking signs'' and detectable warnings. We
also met with an Australian company representative to provide feedback
on a new pocket Braille writer and with staff from the Royal National
Institute for the Blind (England) to discuss United States and European
cooperation on accessibility standards for information technology. We
also hosted an architect from Portugal who is in the United States
through the Fulbright Visiting Scholar Program. Recognizing the
international interest in access to information technology, we recently
posted translations of the section 508 standards in Spanish and
Japanese on our website.
Each year the Board meets outside of Washington, DC to encourage a
more direct and open dialogue with members of the public about
accessibility and the work of the Board. These visits outside the
Washington beltway substitute for one of the Board's regular meetings,
which are held every other month in the Washington, DC area. In
September 2003, the Board held a meeting in Seattle, WA. During its
stay in Seattle, the Board explored accessibility as it pertains to
information technology and outdoor environments such as parks and
trails. In a visit to Microsoft headquarters, the Board was briefed by
representatives from Microsoft, Hewlett Packard, Cingular Wireless, and
NCR Corporation on industry efforts to improve access to information
technology. Presentations included information on how accessibility is
mainstreamed into operating systems, other software, hardware and
telecommunications products and services. The Board also toured several
area parks to learn more about ways of providing access to campgrounds,
picnic areas, trails, and other outdoor sites.
The Board also held public meetings in Seattle and New Orleans to
gather information and input on viable access solutions that will allow
persons with disabilities independent access onto and off of large
vessels such as cruise ships, dinner boats, ferries, and gaming boats.
Over 150 vessel designers and operators, pier operators, persons with
disabilities, and others attended the meeting. In advance of the
meetings, the Board toured vessels and boarding facilities at area
ports.
Digital wireless phones present significant compatibility and
interference problems for people who use hearing aids and cochlear
implants. The Board assumed a lead role in organizing a conference on
the subject held in September 2003 at Gallaudet University in
Washington, DC. Sponsored by the Interagency Committee on Disability
Research (ICDR), the ``Summit on Interference to Hearing Technologies
by Digital Wireless Telephones'' explored compatibility issues and
potential solutions. Digital wireless phones, unlike analog wireless
phones, can emit interference caused by radio frequency from the
antenna and magnetic interference from the battery leads and other
electronic components. Noises resulting from such interference, which
were simulated at the conference, make them virtually unusable by
people who use hearing technologies. Participants included
representatives from the digital wireless phone and hearing
technologies industries, disability organizations, research centers,
and Federal agencies such as the Federal Communications Commission
(FCC) and the Food and Drug Administration (FDA).
In fiscal year 2003, the Board responded to 12,193 customer
inquiries; distributed 1,673 information packets; and conducted 90
training sessions which were attended by 8,414 people. An information
packet usually contains several publications. Since we do not collect
data on publications disseminated through partner organizations, the
actual number of publications disseminated to our customers is greater
than our current data indicate. Technical assistance, research, and
training projects funded in fiscal year 2003 include:
--Recreation Technical Assistance with the Marina Operators
Association of America. This project will develop technical
assistance and training materials and conduct training sessions
for marina operators on the requirements of the new guidelines
for marinas and boating facilities.
--Maintenance and Weatherability of Detectable Warnings with the
Transportation Research Board. The Board has contributed to a
larger project funded by several transportation industry
organizations to collect and report on detectable warnings
testing undertaken by several State departments of
transportation. The Board will be a member of the project
advisory committee.
--Curb Ramp Directionality Workshop with the Institute of
Transportation Engineers. This project will bring together
highway engineers, orientation and mobility specialists, and
consumers in a 2-day workshop to consider possible changes to
roadway design that can facilitate wayfinding.
--Passenger Vessels Coaming Research with the Volpe Transportation
Research Center. This project will investigate current and
possible approaches to shipboard coaming treatments for
accessibility.
We use existing partnerships with organizations and will be
establishing new partnerships to develop training and technical
assistance materials. We have used our website to provide copies of the
Board's guidelines and answers to frequently asked questions about the
guidelines so that more customers can get the information they need.
The number of user sessions on our website continues to grow. There
were approximately 1,423,465 user sessions in fiscal year 2003, nearly
200,000 more than the previous year. Due to the increasing use of the
Board's website, we are focusing on web-based dissemination of
information since this allows a variety of options for speedy
distribution at a low cost to the Board. We also published and
distributed six issues of Access Currents, a free newsletter the Board
issues every other month by mail and e-mail. In addition, we responded
to press inquiries from:
--National and syndicated newspapers, magazines and radio and
television shows such as: Houston Chronicle; Los Angeles Times;
and the Washington Post.
--Government related newspapers and journals including: Government
Computer News and Federal Computer Week.
--Disability related newsletters including: Report on Disability
Programs and the Disability Compliance Bulletin.
--Trade association periodicals such as: Transit Access Report; Land
Development Today magazine; Buildings Magazine; States News
Service; and the International Council of Cruise Lines
newsletter.
--Local newspapers, television, and radio stations such as: Orange
County Register; Nashville City Paper; Daily Times (Merryville,
TN); Canyon Current (Canyon City, CO); El Nuevo Dia (The New
Day), a newspaper in Puerto Rico; and the Daily Camera
(Boulder, CO newspaper).
We also wrote an article on section 508 for Telecommunications for
the Deaf, Inc. (TDI) and developed an article on the Board's section
508 standards for the Information Technology and Disabilities Journal,
a new, quarterly electronic journal.
We added to our growing inventory of technical assistance materials
by creating new brochures on the Board and the Architectural Barriers
Act. We also posted several new documents on the Board's website,
including a research report on play surfaces, a new report on audible
pedestrian signal products and their interface with traffic signal
controllers, and a summary on ADAAG's detectable warning requirements.
We also updated the on-line version of ADAAG including the requirements
for children's elements, prisons and courtrooms, play areas, and
recreation facilities into one integrated document.
Last September, the Board issued new guidelines that address access
to various types of recreation facilities covered by the ADA. These
guidelines, which supplement the Board's ADA Accessibility Guidelines,
specify access to amusement rides, boating facilities, fishing piers
and platforms, golf courses, miniature golf courses, sports facilities,
and swimming pools, wading pools, and spas. The guidelines are one of
the first of their kind in detailing access to these environments. To
help users become familiar with the Board's new recreation facility
guidelines, including the meaning and intent of specific provisions, we
developed seven supplementary guides on each of the facility types
covered. The guides summarize and explain requirements for each
facility type.
Fiscal Year 2004 Plans--Leading Source of Information
The upcoming publication of the new ADA and ABA Accessibility
Guidelines offers a timely opportunity to develop and implement an
accessible web-based technical assistance and training strategy to
augment current Board publications. Completion of the revised and
reformatted ADA and ABA Accessibility Guidelines will necessitate a
review of the Board's many technical assistance manuals and
publications. Many documents will need revision; others may no longer
be required, and some new publications may be indicated.
The redesign of our agency graphic identity has provided us with a
coordinated range of new templates for the layout of reports,
bulletins, our internet presence, and other print and electronic
materials. We developed this new and more appropriate graphic
expression, including both logo and text, for our family of print
materials. We did this to reflect the Board's professionalism and to
communicate that we are the only Federal agency devoted to
accessibility in the built environment and in communications and
electronic technologies.
Also, in a few years we will be largely finished with our planned
rulemaking activities. It is an opportune time to share our
accomplishments and insights with the rest of the world and encourage
them to look at some of the access issues we have explored such as
access to electronic and information technology, playgrounds, and
recreation facilities. To do this will require that our documents
become available in other languages. In fiscal year 2004, we will
redesign most of our publications as well as our website using the
Board's new graphic identity and will translate the ADA and ABA
Accessibility Guidelines into other languages.
Fiscal Year 2005 Objectives--Leading Source of Information
In fiscal year 2005 and beyond, we will develop training and
information materials on our planned final rules on outdoor developed
areas, access to passenger vessels, and access to public rights-of-
ways. As we publish final rules, we make every effort to ensure that
training and technical assistance materials will be available to
organizations and individuals that must apply the new requirements.
Additionally, we plan to further our outreach activities to foreign
government agencies who ask for our assistance in promoting access in
their countries. In recent years we have hosted numerous delegations
from other countries who are interested in learning more about our
experiences with the Americans with Disabilities Act and other laws, as
well as to discuss general accessibility issues. We plan to share our
accomplishments and insights with the rest of the world by translating
many more of our documents and guidelines into other languages and by
looking for opportunities to work collaboratively with international
entities on accessibility issues. With this new material we can more
effectively encourage others to look at some of the unique access
issues we have addressed.
ARCHITECTURAL BARRIERS ACT COMPLIANCE AND ENFORCEMENT
The Board enforces the Architectural Barriers Act (ABA), which
requires that most buildings designed, constructed, altered, or leased
by the Federal Government and certain other Federally financed
facilities be accessible to people with disabilities. Complaints
received by the Board concern post offices, national parks, military
facilities, veterans hospitals, subway stations, and a variety of other
facilities. When the Board has jurisdiction and finds that the
applicable accessibility standards were not followed, we request a
corrective action plan and monitor the case until the barrier is
removed. Even when the Board does not have jurisdiction or no violation
is found, we attempt to negotiate voluntary barrier removal.
The Board's long-range goal is to work in partnership with Federal
agencies and others to make the Federal Government a model of
compliance with accessibility standards. The Board's experience with
resolving complaints is that most violations are not intentional. When
violations are found, it is usually because the people responsible for
designing buildings, reviewing plans, and on-site construction did not
have a good understanding of the accessibility standards and how to
apply them. People responsible for building planning and design at
headquarters, regional and field offices, and local sites must have a
working knowledge of the accessibility standards if compliance is to be
achieved. As Federal agencies are reorganized and personnel assignments
and responsibilities change, it is important that agencies have
effective systems for training new people responsible for applying the
accessibility standards and for monitoring compliance with the
Architectural Barriers Act. Training will be even more important when
the accessibility guidelines and standards for the Architectural
Barriers Act are revised.
Fiscal Year 2003 Results--ABA Compliance
In fiscal year 2003, the Board received 140 written complaints.
These included complaints investigated under the Architectural Barriers
Act, and also those concerning facilities not covered by that law but
potentially covered by other laws, such as the Americans with
Disabilities Act and the Rehabilitation Act. Of the 140 complaints, we
opened 83 as new Architectural Barriers Act cases. Although the Board
did not have authority under the Architectural Barriers Act in the
other 57 complaints, we responded to the complainants, usually by
referring them to the appropriate enforcement agency. In addition, we
referred another 37 complainants to other agencies for action when our
investigations revealed there was no violation of the Architectural
Barriers Act or we did not have jurisdiction. The Board receives many
comments from its customers, indicating they are pleased that we make
this extra effort to ensure that their complaints are addressed. The
Board continued its high rate of successful complaint resolution in
fiscal year 2003. Of those cases closed where the Board had
jurisdiction and a violation of applicable standards was found, 100
percent resulted in the successful removal of barriers. Additionally,
in those instances where the Board did not have jurisdiction over the
facility or no violation was found, we negotiated voluntary barrier
removal in 21 percent of the cases.
The Board responds quickly to all new complaints and contacts
complainants frequently to update them on the status of their
complaints. In fiscal year 2003, the Board sent initial letters to
complainants acknowledging receipt of their complaint or began an
investigation of the issues they raised within an average of 4 days.
The Board's customers regularly say they are pleased to hear from a
Federal agency so promptly. It is Board practice to keep complainants
informed on a regular basis throughout the course of our
investigations. In fiscal year 2003, we contacted 116 complainants to
provide updates on the status of their complaints.
Fiscal Year 2003 Results--Working in Partnership with Agencies
During fiscal year 2003 we continued ongoing actions under our
long-term goal of working in partnership with agencies and others to
make the Federal Government a model of compliance with accessibility
standards. Under our partnership with the National Institutes of Health
(NIH), we completed a series of training sessions on accessibility
requirements under the Americans with Disabilities Act Accessibility
Guidelines and the Uniform Federal Accessibility Standards.
We completed our partnership with the General Services
Administration (GSA) resulting in its development of a comprehensive
desk guide of GSA policies and procedures regarding accessibility for
use by GSA personnel to assist in implementing its National
Accessibility Program. We also continued working in partnership with
the Smithsonian Institution, Kennedy Center, and Library of Congress to
develop a resource tool that organizations can use as guidance in
evaluating and improving their emergency evacuation plans for persons
with disabilities.
Fiscal Year 2004 Plans--ABA Compliance
In fiscal year 2004, the Board will continue to investigate
complaints under the Architectural Barriers Act. At the beginning of
fiscal year 2004, the Board had 104 active cases. We expect to receive
145 new complaints in fiscal year 2004. Of this total, we estimate that
85 will be opened as new Architectural Barriers Act cases and 60 will
be referred to other agencies for enforcement under other laws, such as
the Americans with Disabilities Act and the Rehabilitation Act. The
Board anticipates responding to complaints in an average of 3 or fewer
business days and will continue to provide periodic updates to
complainants on the status of their complaints. We also will evaluate
and refine our electronic complaint-filing system and the compliance
and enforcement information presented on our website.
Fiscal Year 2004 Plans--Working in Partnership with Agencies
In fiscal year 2004, we will continue working with agencies to
assist in development of ways to assess and improve plans for emergency
evacuation of persons with disabilities. We will continue efforts to
learn about plans or actions being developed by the standard-setting
agencies with regard to implementation of the new ABA standards.
Fiscal Year 2005 Objectives--ABA Compliance
In fiscal year 2005, the Board will continue to investigate
complaints under the Architectural Barriers Act. We estimate that we
will have 105 active cases at the beginning of fiscal year 2005 and
will receive 145 new complaints. We expect to open 85 new Architectural
Barriers Act cases and refer 60 complaints to other agencies for
enforcement under other laws. We will continue to provide good customer
service.
Fiscal Year 2005 Objectives--Working in Partnership with Agencies
Once new ABA standards are issued by the standard-setting agencies,
our objective will be to work with the agencies on the development of
web-based training or other interactive methods to ensure their
effective implementation. In addition, we will continue our efforts to
work with agencies to identify and publicize best practices for
ensuring ABA compliance.
______
OFFICE OF PERSONNEL MANAGEMENT
Prepared Statement of Kay Coles James, Director
Mr. Chairman and members of the subcommittee, I am pleased to have
this opportunity to submit for the record a statement discussing the
appropriations request for the Office of Personnel Management (OPM) for
fiscal year 2005 and the relationship between that request and the
implementation of the President's Management Agenda and other critical
administration initiatives.
Before reviewing the President's request for appropriations for
OPM, I would like to provide some context by outlining briefly the
significant strides we have made and the tremendous challenges we face.
Consistent with our objective of shaping a Federal workforce that
honors the President's commitment to the taxpayers for citizen-
centered, results-oriented, market-based government, we have made the
President's Management Agenda the cornerstone of our corporate
management. We are proud to note that the Office of Management and
Budget cited us as one of the two most improved agencies, based on our
rating on the Executive Branch management scorecard. Our employees have
embraced the agenda and work as a team to identify and solve management
problems. Since September of 2002, under the competitive sourcing
initiative, OPM employees have aggressively competed and won all 11
competitions undertaken.
Given the government-wide nature of our responsibilities, we have
focused on improving the strategic management of human capital in all
agencies in many ways. We have analyzed the human capital efforts of
agencies and shared our insights and guidance by providing agencies
with workshops, tools, and information on specific human capital
topics.
Perhaps our most groundbreaking achievement was our joint effort
with the new Department of Homeland Security (DHS) in creating a human
resources management (HRM) system that provides the flexibility to
manage more than 180,000 employees in a manner consistent with the
unique mission requirements of that Department. The pioneering
development of such a system through a joint regulatory process was
unique. The collaborative and inclusive nature of the process involved
employees, managers, the Department's largest labor unions, and a broad
array of stakeholders and experts from the Federal sector and private
industry. Currently, we are reviewing the many comments submitted in
response to the publication of draft regulations on February 20, 2004.
In addition, in conjunction with DHS and other agencies, OPM
assisted Federal employees with safety planning, both at work and at
home. Our efforts involved producing a series of publications to
educate Federal workers and their families on dealing with emergency
situations and providing training for employees in both security and
emergency procedures. Further, we have conducted, for the past 2 years,
surveys on emergency planning in the agencies and have worked to
highlight areas of improvement to ensure better safety for employees.
Beyond DHS, OPM is now working in a total partnership, as
prescribed by law, for the standup of the new National Security
Personnel System at the Department of Defense (DOD). OPM and DOD are
pursuing a similar process to that used during the DHS process, with
joint agency staff teams, meetings with unions and stakeholders, and,
ultimately, joint signoff of implementing regulations by Secretary
Rumsfeld and me.
In fiscal year 2005, our appropriations request will build on those
achievements in several ways. First, it will help us to continue to
focus on the strategic use of human resources flexibilities tailored to
each agency's unique requirements.
Second, it will enable us to build the capacity to hold agencies
accountable for using tools effectively, as well as sustaining the core
values of Federal service. Third, OPM's budget request includes funding
for security and emergency action programs to support increased
outreach efforts designed to ensure the safety and security of the
Federal workforce. OPM's efforts are being conducted in conjunction
with the DHS and the General Services Administration.
A significant highlight of our request is the support for OPM to
continue our critical work as the managing partner for e-Government
projects. For example, our request for $6.615 million will allow us to
complete the Federal payroll enterprise architectural model and
recommend a technology solution to replace legacy systems following the
consolidation of payroll providers. We project that this investment
will help yield over $1 billion in cost savings and avoidance through
the project's life cycle. Also, with $3 million in base funding and
$3.9 million from our revolving fund, we will continue our recruitment
one-stop initiative to operate and enhance the USAJOBS Federal
employment information system, increasing usage and satisfaction for
Federal job seekers. Since launching new technology in August of 2003,
the USAJOBS website has been used by job seekers to log more than 53
million visits; and more than 483,000 new resumes have been created by
Americans interested in public service careers. Through the USAJOBS
website, this initiative is delivering to Federal agencies a greater
number of highly-qualified candidates in a more efficient and cost-
effective manner.
While the requests for other e-Government initiatives are somewhat
smaller, they are no less crucial. The $2 million requested for the
Enterprise Human Resources Integration effort will enhance the
capability of agencies to submit timely and accurate data
electronically to OPM's data warehouse. This data warehouse will help
improve decision making and policy development through comprehensive,
accurate, and efficient transfer of data, as well as by allowing
improved analytics. Additionally, with our requested $2 million in
salaries and expenses funding for e-Clearance, we will promote
reciprocity of security clearances among agencies. Expanding
reciprocity can save money and improve efficiency without adverse
consequences to security.
Our $800,000 request for the e-HRIS initiative will enable us to
research, plan, and develop a project plan to establish standardized
and integrated human resources information systems across the Federal
Government, and the $685,000 sought for e-training will facilitate the
transformation of the Go.Learn.gov site to a fully reimbursable
activity that increases economies of scale and, through shared
solutions, reduces duplicative investments.
In addition to the innovative approaches taken in our e-Government
initiatives, the establishment of the Human Capital Performance Fund is
a major step toward transforming Federal employment by creating a pay-
for-performance culture. This Fund is an important tool for use by
Federal agencies in rewarding high-performance employees. It points the
way toward greater emphasis on employee performance contributions to
mission accomplishment, rather than longevity. By requiring robust
performance management as a criterion for funding, it would also
provide an incentive for agencies to improve their performance
management systems and human capital strategies and align them more
closely with their missions and goals.
As you are aware, the establishment of this Fund has not affected
the operation of the General Schedule pay system itself. Individual
employees remain at their existing grades and steps and continue to
receive annual across-the-board pay adjustments, locality payments, and
periodic within-grade increases. However, if the request for $300
million for the Human Capital Performance Fund is granted, high-
performing employees will be rewarded with additional payments that
will be treated as basic pay for the purposes of retirement and other
benefits and will stay with the employees in the future.
OPM will administer the Fund to ensure that agency plans for the
distribution of payments from the fund are predicated strictly on
appropriately assessed employee and/or organizational performance.
Full funding of this request is essential to the progress of
meaningful pay reform for the benefit of dedicated employees,
critically challenged agencies, and taxpayers.
Of course, beyond the e-Government initiatives and the Human
Capital Performance Fund, OPM is requesting funding for the ongoing
operation of our transformed agency. Our focus will be to build the
government's capacity for human capital flexibility, accountability,
and national security. With the funding we have requested for our new
organizational framework--called Team OPM--we will concentrate on
developing strategic human resources flexibilities through approaches
tailored to each agency's unique requirements. We will also build the
capacity to hold agencies accountable for using tools effectively, as
well as sustaining the core values of Federal service. Also, as noted
earlier, we will devote additional resources to the support of
government-wide disaster and emergency action working groups.
Turning to our request for resources to support these priorities,
it is important to note that the total OPM fiscal year 2005 budget
request of slightly more than $35 billion, an increase of nearly $1.4
billion, includes appropriations that are 98 percent mandatory and only
2 percent discretionary.
OPM's general fund request for basic operating expenses totals
$131.3 million and covers 831 full-time equivalent (FTE) employees.
This includes $114.9 million in annual funds, $11.4 million in no-year
funds for the e-Government projects discussed earlier (excluding
recruitment one-stop), and $5 million in 2-year funds to coordinate and
conduct program evaluation and measurement.
The annual funds include an increase of slightly more than $3
million and 24 FTE to increase the human capital support to agencies,
to develop hiring solutions, to provide enhanced information technology
support, to conduct competitive sourcing studies, and to support
homeland security and emergency response needs.
With regard to the transfers from benefits trust funds, OPM is
requesting a total of nearly $128.5 million to support 1,151 FTE in the
administration of the employee retirement and insurance programs. This
includes more than $100.8 million in annual funds, representing an
increase of almost $2.2 million from fiscal year 2004. These resources
will be devoted to retirement benefits calculation, increased call
center support during peak season, telephone system upgrades, and
contract cost increases. The total also includes more than $27.6
million in no-year funds for the retirement systems modernization
effort.
It is important to note here that a significant portion of the
funding for the Office of the Inspector General in OPM is derived from
trust fund transfers, too. That request will be discussed in greater
detail by that office in a separate statement, but it should be
mentioned that the overall request totals $18.1 million dollars and 140
FTE. Of that total, $1.6 million would come from general funds, while
$16.5 million would represent transfers from the trust funds. Of
course, we strongly support the important work of Inspector General Pat
McFarland and his fine staff. OPM maintains an independent relationship
with the IG, but on issues of common concern, such as the maintenance
of employee and retiree confidence in the trust funds and the Combined
Federal Campaign, the teamwork and professionalism of the IG and his
staff are outstanding.
In addition to the 141 FTE financed by reimbursements from other
agencies for the provision of HRM technical assistance and from OPM
programs for the provision of agency-wide services, it is also worth
noting that OPM provides a variety of services that are financed by
payments from other agencies through our revolving fund.
For ongoing revolving fund programs, the fiscal year 2005 budget
includes slightly more than an estimated $1 billion in obligations and
2,601 FTE to be financed by payments from other agencies for OPM's
services.
These services include professional development and continuous
learning for Federal managers and executives; providing one-stop access
to high-quality e-training products and services; testing potential
military personnel for the Department of Defense in those locations
where it is cost-effective for OPM to do so; providing employment
information and assessment services; automating other agencies'
staffing systems; providing examining services when requested by an
agency; providing technical assistance and consulting services on all
facets of HRM; coordinating the selection and development of
Presidential Management Fellows; and, through contracts with private
companies, conducting suitability and security investigations.
As always, the OPM budget request includes mandatory appropriations
to fund the government contributions to the health benefits and life
insurance programs for Federal annuitants. This is because OPM serves
as the ``employing agency'' for these individuals relative to these
benefit programs.
Given the mandatory nature of these payments, we are requesting a
``such sums as may be necessary'' appropriation for each of these
accounts. We estimate that, for the 500,000 annuitants under age 65 who
elect post-retirement life insurance coverage and for whom we are
responsible, $35.0 million will be needed, while an appropriation of
about $8 billion will be required to pay the government's share of the
cost of health benefits coverage for the 1.9 million annuitants who
participate in that program. That represents an increase of $688
million over fiscal year 2004.
In addition, as mandated by the financing system established in
1969 by Public Law 91-93, liabilities resulting from changes
(principally pay raises) since that year which affect retirement
benefits must be amortized over a 30-year period. We are requesting a
``such sums as may be necessary'' payment to the Civil Service
Retirement and Disability Fund for that purpose. We estimate the amount
needed to be $26.4 billion, an increase of $402 million to cover this
service cost that is not funded by and for active employees under the
Civil Service Retirement System.
Finally, the President's budget for fiscal year 2005 proposes a pay
increase for white-collar workers of 1.5 percent, to be distributed
between an across-the-board raise and locality pay as determined by the
President later in the year. In addition, funding in the amount of 0.2
percent has been included in agency budgets for use in addressing
specific recruitment and retention needs. When combined with the basic
pay adjustment and the $300 million request for the Human Capital
Performance Fund, the overall amount available for a pay adjustment
amounts to 2.0 percent.
Once again, we have included in the government-wide general
provisions in the budget the appropriate legislative language to ensure
that blue-collar Federal employees receive pay adjustments up to the
amount received by their white-collar colleagues if warranted by local
private sector market rates.
Thank you for the opportunity to discuss OPM's request for the
record. I would be pleased to provide any additional information the
subcommittee may require.
______
Prepared Statement of Patrick E. McFarland, Inspector General
Mr. Chairman and members of the subcommittee, thank you for
providing me with this opportunity to discuss the President's fiscal
year 2005 request for appropriations for the Office of the Inspector
General (OIG). The total request for the Office of the Inspector
General is $18,088,000, which is an increase of $2,257,000 above the
amount appropriated in fiscal year 2004. Of this amount, $1,627,000 is
from the salaries and expenses/general fund, and $16,461,000 is from
the trust funds. The additional resources are requested to:
--Increase criminal investigative oversight of the Office of
Personnel Management (OPM) administered trust fund programs;
--Conduct audits of pharmacy benefit managers participating in the
Federal Employees Health Benefits Program (FEHBP);
--Expand the scope of audit for the largest community-rated health
maintenance carriers;
--Further develop computer assisted audit tools and techniques to
ensure effective audits of the FEHBP;
--Increase the number of health carrier information systems audits;
and
--Provide pre-award contract audit support.
The Office of the Inspector General recognizes that oversight of
the retirement and health and life insurance trust funds administered
by OPM is, and will remain, its most significant challenge. These trust
funds are among the largest held by the United States Government. Their
assets totaled $650.0 billion in fiscal year 2003, their revenue was
$78.2 billion, and their annual program and operating expenses were
$164.1 billion. The amounts of their balances are material to the
integrity of the government's financial position. I continue to
allocate the vast majority of the Office of the Inspector General's
efforts and resources to trust fund oversight, and we remain fully
committed to trust fund activities.
OPM makes outlays from the retirement trust funds in the form of
payments to millions of annuity recipients. The health insurance trust
fund provides payments to approximately 260 health insurance plans
nationwide. In turn, the health insurance carriers pay millions of
claims for services filed by their enrollees and health care providers.
We have shown through our investigations and audits that such health
insurance payments may be at risk through improper, inaccurate or
fraudulent claims.
We are obligated to Federal employees and annuitants to protect the
integrity of their earned benefits. Our audit and criminal
investigative work reduces losses due to fraud and otherwise improper
payments and recovers misspent funds whenever possible. We have a
special obligation to the Federal agencies and the American taxpayers
who provide the majority of the funding.
The Office of the Inspector General has achieved an impressive
record of cost effectiveness. Audits and criminal investigations of the
OPM administered trust fund programs have resulted in significant
financial recoveries to the trust funds and commitments by program
management to recover additional amounts. Since fiscal year 1992, these
recoveries and commitments have exceeded $1 billion which is
approximately $10 of positive financial impact for each direct program
dollar spent. In addition, we believe that Office of the Inspector
General audits and criminal investigations provide a significant
deterrent against future instances of fraud, waste, and abuse.
The Office of the Inspector General's fiscal year 2005 request
includes additional resources totaling $2.25 million. Of this amount,
$0.6 million will be used to increase criminal investigative oversight
of the Federal Employees Health Benefits Program and the Civil Service
Retirement/Federal Employees' Retirement programs.
These additional criminal investigative resources will be dedicated
to speed the handling of our current inventory of criminal
investigative cases and also increase our ability to handle the growing
number of referrals we have been receiving because of past success. As
a result of this additional oversight, we expect to increase the number
of arrests, indictments and convictions by approximately 60 percent, as
well as increase financial recoveries by $5 million for the trust funds
from criminal investigations. We are particularly concerned with the
extent to which health care fraud puts the health and safety of current
Federal employees, annuitants, their survivors, and eligible family
members at risk.
An additional $0.7 million will be used to conduct audits of
pharmacy benefit managers (PBMs). It is estimated that $6 billion will
be paid during 2004 in prescription drug premiums by the Office of
Personnel Management and Federal employees. This represents
approximately 26 percent of total premiums paid for health benefits
coverage for Federal employees and annuitants. The premiums paid for
prescription drug coverage have risen exponentially over the last 10
years. However, Federal prescription drug benefits have never been
audited because the FEHB Program historically has defined health care
providers and suppliers as other than Federal subcontractors. Since
health care providers and suppliers, including PBMs were not
subcontractors, they were not subject to our audits. In light of
increasing expenditures on prescriptions and allegations against PBMs,
the FEHB Program has amended its carrier contracts to define PBMs as
Federal subcontractors subject to our audits.
By performing these audits, we will help the FEHBP recover
inappropriate costs charged to it in previous years, negotiate more
favorable contracts, and positively affect the future costs and
benefits provided to program enrollees. Ultimately, these audits will
reduce health care costs while improving the quality of health care for
FEHBP enrollees.
An additional $0.5 million will be used to expand the scope of
audits for the largest community-rated health maintenance organization
carriers participating in the FEHBP. During fiscal year 2002, $4.9
billion of FEHBP premiums were paid to community-rated carriers. Of
this amount, $3.4 billion was paid to 25 carriers most of whom use some
sort of experience-based rating to set premiums. The additional
resources will enable us to expand the audit testing to include reviews
of this information to identify overpayments charged to the FEHB
Program which will result in increased financial recoveries to the
Program totaling approximately $5 million.
An additional $0.3 million will be used to increase the efforts of
our office's information systems audit program. The purpose of this
program is twofold: (1) to perform information systems audits of Office
of Personnel Management systems, including computer security, and (2)
to develop computer-assisted audit tools and techniques (CAAT) such as
computer claims analysis applications that our auditors use while
conducting carrier audits. These new computer-related resources will be
used primarily to increase the number of information systems audits we
conduct on providers participating in the FEHBP.
Also, we will further our development of a data warehouse of health
benefit claims. A data warehouse offers the best opportunity for
detecting erroneous health benefit payment transactions by medical
providers, insurance carriers and subscribers by accumulating all
benefit claims for all fee-for-service insurance carriers in a single
data repository. This effort will enhance our current claims reviews by
enabling the auditors to target certain types of potential claim
payment errors on a program-wide rather than on a plan-by-plan basis.
This will provide a significant improvement in our audit efficiency and
effectiveness by offering us the opportunity to address significant
issues one time only, instead of multiple times per year and to recover
overcharges to the program when appropriate.
The data warehouse will provide information enabling our criminal
investigative staff to react quickly to criminal investigative leads.
For example, the OIG investigators will be able to determine the
potential program risks associated with an identified provider or
subscriber fraud allegation, and take appropriate action in a matter of
hours instead of the days or weeks currently required.
The remaining $0.1 million increase will be used to obtain
technical expertise in the field of pre-award contract auditing. We
will perform audits of selected bid proposals before OPM enters into
large contracts with vendors.
I would also like to bring to your attention the significant
progress we have made in implementing Public Law 105-266, the Federal
Employees Health Care Protection Act of 1998. Final regulations
necessary to implement the financial sanctions authorities provided in
this legislation were published in the Federal Register in March 2004.
These financial sanctions, in the form of civil monetary penalties and
monetary assessments, provide OPM the ability to recover, through
administrative action, FEHBP funds lost to provider misconduct. In
addition, we believe they will serve as a deterrent against FEHBP
program violations.
Also, OPM is now using new suspension and debarment regulations
that went into effect during fiscal year 2003, to process actions. To
date over 3,400 debarments under the new authorities have been issued.
These new authorities are more efficient to administer and are designed
specifically to address health care provider integrity concerns within
the FEHBP. They have largely supplanted the previous regulations which,
although we have used them to issue over 24,000 debarments and
suspensions since 1993, are relatively inefficient to operate and,
since they were dependent on Medicare or other agency debarments, were
not tailored directly to the health, safety, and integrity issues that
are most significant in the FEHBP.
Thank you for this opportunity to present my resource request for
fiscal year 2005.
______
GENERAL SERVICES ADMINISTRATION
Public Buildings Service
Prepared Statement of F. Joseph Moravec, Commissioner
As Commissioner of the Public Buildings Service of the U.S. General
Services Administration, I am pleased to present a statement for the
record regarding our fiscal year 2005 budget request.
There are three primary programs within the Federal Buildings Fund
(FBF)--New Construction, Leasing, and Asset Management.
NEW CONSTRUCTION
We construct new buildings when our agency customers have a need
for specialized space. The majority of our newly constructed buildings
are courthouses, border stations, laboratories and highly specialized
facilities like the U.S. Mission to the United Nations and the National
Oceanic and Atmospheric Administration, (NOAA) Weather Satellite
control center. The courthouse construction program has a fewer number
of projects this year due to the large investment required to construct
the Los Angeles, CA Courthouse. This project is the No. 1 priority on
the Judiciary's 5-Year Plan, which reflects priorities approved by the
Judicial Conference.
As part of our performance-based budget, we have committed to
completing 85 percent of our new construction projects on schedule, and
within 1 percent of the original appropriation by fiscal year 2005. PBS
is undertaking many initiatives to keep projects on schedule and within
budget. Project status is being closely monitored throughout design and
construction to alert us to any emerging issues in a timely manner. For
projects over $25 million, evaluations are scheduled at 15 percent, 60
percent and 100 percent of the design process. In addition, a new
performance measurement tool has been developed and implemented. This
tool allows comparison of a project's construction schedule and outlays
to standards and reports variances for both measures.
LEASING
GSA has a total leased inventory of over 160 million square feet
located in 6,200 buildings across the United States and its
territories. Our leasing program is an important tool for managing our
portfolio because when clients' space requirements cannot be met with
available Federal space, we lease space from the private sector. This
program area has been undergoing significant expansion due to the
growth of Defense, law enforcement, and security-related agencies. The
decision to lease space is part of a coherent overall local Portfolio
Strategy. Our strategies to keep leasing costs at or below market
levels include comparing lease offers to comparable industry
benchmarks, using market surveys to comparison shop for best prices,
using published market sources to gain a better understanding of area
markets and partnering with the private sector for brokerage services.
We are very proud that our vacant space within our leased inventory is
1.4 percent. The top priority within the Leasing Program is
implementing the National Broker Contract. Analysis has indicated that
``no cost'' contracts and limited fee-based broker contracts will help
meet future capacity needs, lower leasing costs and provide a higher
level of customer service and satisfaction. GSA has taken the first
steps toward implementing this important initiative.
ASSET MANAGEMENT
Repairs and Alterations
Our inventory of owned buildings contains more than 100 million
square feet of space where the design and physical condition of the
space make it very difficult to meet modern day needs. This space
typically has inefficient energy systems, lacks the flexibility to
readily provide state-of-the-art information technology features to
occupants and--for those buildings constructed during the 1960's and
1970's--have exterior materials which have outlived their useful lives.
To address many of these issues we have instituted a portfolio
restructuring and reinvestment strategy that uses private sector
techniques to tier our owned properties, remediate those that can still
cost-effectively contribute to the overall financial strength of the
FBF, and reshape other parts of the portfolio to include disposal of
some properties. GSA measures the percentage of government-owned assets
with a Return on Equity greater than 6 percent to gauge progress in
this area. For each of the past several years, we have directed nearly
$1 billion toward the reinvestment in the modernization of our
inventory, with on-time, on-budget completion a program priority.
Within government owned space, the vacancy rate is 8.3 percent with 35
percent committed to tenants and 25 percent currently under
construction or alteration. That makes the amount of vacant available
space in the owned inventory 5.0 percent.
Operations
The most critical initiative affecting the Asset Management program
is the Human Capital Strategy. The Human Capital Strategy/Workforce
Transformation project is primarily driven by the following factors:
--An aging workforce and previous inability to replenish talent lost
through attrition;
--Customer demands for more complete real estate services; and
--Skills needed to focus PBS business priorities on customer
relationships.
PBS is currently engaged in implementing a comprehensive Human Capital
Strategy that will guide the recruiting, training, management and
deployment of our most important asset in the years ahead.
For GSA to meet our customers' expectations and remain cost
competitive with the private sector, we must maintain below-market
operating costs and reduce energy consumption, while simultaneously
maintaining a high level of customer satisfaction. Our strategy is to
leverage buying power through better planning, using national tools
like the Federal Supply Schedule, and holding contractors accountable
for performance. We must leverage our workforce via user-friendly
contracting vehicles, multi-regional operations/maintenance and energy
contracts, electronic data systems, contractual data sharing, workload
visibility, and national vendor alliance management and acquisition.
Because many operational services are readily available from the
private sector, and to obtain the best possible value for the taxpayer,
we are subjecting many of the activities we currently perform with in-
house staff to the rigorous analysis required by the A-76 process.
I am willing to answer any questions you or other members of the
subcommittee may have on the President's fiscal year 2005 budget
request for the General Services Administration.
______
GENERAL SERVICES ADMINISTRATION
Prepared Statement of Stephen A. Perry, Administrator
Mr. Chairman and members of the committee, the General Services
Administration (GSA) budget request for fiscal year 2005 reflects our
strong commitment to fulfilling our mission, which is: ``to help
Federal agencies better serve the public by offering, at best value,
superior workplaces, expert solutions, acquisition services and
management policies. All areas of GSA, including the Public Buildings
Service, the Federal Technology Service, the Federal Supply Service,
our Office of Governmentwide Policy and our Office of Citizen Services
are working together to efficiently and effectively meet the
requirements of our Federal agency customers and the public.
Americans demand that the Federal Government show results.
Accordingly, President Bush has challenged GSA and all Federal agencies
to improve performance through the use of good management practices as
outlined in the President's Management Agenda. In striving to achieve
improved performance results, Federal agencies often rely upon GSA to
provide the property management and acquisition services they need for
successful operation. Additionally, each Federal worker relies upon
GSA's assistance in creating a productive work environment by providing
the appropriate facilities, equipment, supplies and services they need.
GSA is committed to achieving our critically important mission in an
efficient and effective manner that yields best value for the American
taxpayer.
In the last few years, GSA has strengthened its Performance
Management Process to document customer-focused goals, action plans and
performance measures to enhance our achievement of high performance
results and accountability. Our fiscal year 2005 budget request will
provide the resources needed to achieve these high priority goals in
support of Federal agencies, including our support of the U.S.
Military, Homeland Security, the Judiciary and other law enforcement
and security related agencies.
As you know, GSA offers its core expertise in acquisition services
to Federal agencies on a ``non-mandatory'' basis. Therefore, agencies
can decide to devote their own resources directly to the acquisition
process or they can use GSA to provide this service. Where GSA provides
the most efficient and effective approach, agencies are increasingly
deciding to use GSA and thereby reducing the overall cost to the
government. Further, this enables the customer agency's personnel to
avoid duplication of effort and focus on their core missions. GSA
charges fees to cover its costs and most of GSA's resources come from
these customer payments. In fact, only a relatively small amount of GSA
resources, close to 1 percent of funding, is from direct
appropriations.
FISCAL YEAR 2005 BUDGET REQUEST
The total GSA budget for fiscal year 2005 budget is $24.3 billion.
This is a 3.0 percent increase over fiscal year 2004, representing
increased business in revolving funds (i.e., the General Supply Fund
and the Information Technology Fund). Approximately 1 percent, or $218
million, of this amount is for funding GSA's appropriated activities.
The volume of services that GSA provides to other Federal agencies
has increased each year because of our successful efforts to make GSA a
more timely and cost-effective source for property management and
acquisition services. At the same time, we have made process
improvements and significantly streamlined our organization. Our
employment level of 12,508 for fiscal year 2005 is 26 percent below the
fiscal year 1995 levels. Lower employment levels mean that only 5.0
percent, or $1.2 billon, of our budget is expended for salaries and
benefits and that 95 percent of GSA's funding is spent directly with
private sector firms for goods and services procured on behalf of
Federal agencies.
For fiscal year 2005, although our overall net request for budget
authority is down $225 million from fiscal year 2004, given the
increased income level there is a robust construction and repair and
alteration program. In addition, our request also funds modest spending
increases to support our E-Government component of the President's
Management Agenda. The fiscal year 2005 budget does not include a
request for an appropriation to the Federal Buildings Fund (FBF). The
FBF New Obligational Authority request is funded entirely from rent
revenue and other income to the Fund.
Public Buildings Service
GSA's Public Buildings Service (PBS) has reinvigorated the process
for carrying out its responsibility to maximize the value of GSA's
portfolio of government-owned buildings. The government-owned
facilities under GSA's stewardship represent a real estate portfolio
with a replacement value of approximately $34.7 billion. For fiscal
year 2005, we are requesting $7.2 billion in New Obligational Authority
(NOA) to spend available resources in the Federal Buildings Fund. Of
this amount, $980 million is for our Repairs and Alterations program.
One of GSA's biggest financial challenges is funding the large
backlog of deferred maintenance and repair work at its government-owned
facilities. To address this challenge, we have taken steps to transform
our owned portfolio into one comprised of well-maintained, modernized,
functional assets with positive cash flows. We have determined that in
order to better allocate our funds for capital investment, we must
redeploy our non-performing assets so that those properties that remain
in our portfolio will provide appropriate workplaces for Federal
workers.
PBS has begun to implement the policy of Executive Order 13327 on
Federal Real Property Asset Management. GSA already ``promotes the
efficient and economical use of America's real property assets.'' We
use asset management principles to allocate the limited resources of
the Federal Buildings Fund to address the backlog of Repairs and
Alterations projects. These asset management principles were applied to
develop our $980 million Repairs and Alterations program for fiscal
year 2005. The program includes:
--$394 million for basic (non-prospectus) Repairs and Alterations
--$473 million for prospectus Repairs and Alterations
--$50 million for design
--$13 million for chlorofluorocarbons program
--$30 million for energy conservation program
--$20 million for glass fragmentation retention program
There is $650 million for Construction and Acquisition of
Facilities in GSA's fiscal year 2005 budget request. It includes the
following projects:
--$381 million for construction for U.S. Courthouses in Los Angeles,
CA and El Paso, TX; and design of a U.S. Courthouse in San
Diego, CA
--$89 million for FDA Consolidation in Montgomery County, MD
--$14 million for FBI Facility in Los Angeles, CA
--$2 million for Southeast Federal Center Site Remediation,
Washington, DC
--$53 million to purchase 10 West Jackson Blvd., Chicago, IL
--$91 million for 12 Border Stations
--$10 million for non-prospectus construction and acquisition
--$10 million for repayment to the Judgment Fund
Government-owned space represents approximately half of our
inventory, however, today we are continuing to secure leased space to
meet general-purpose office and special space needs. For fiscal year
2005 we project adding 2.6 million rentable square feet of leased space
to our inventory. Under the Federal Buildings Fund operating programs,
the $3.7 billion budget for Rental of Space is based on projections of
known requirements such as (1) leases already in the inventory and the
scheduled cost increases associated with these leases and (2)
identified expansion and cancellation projects.
The $1.7 billion budget request for Building Operations funds
essential building services provided by PBS for facilities occupied by
our Federal Government customers, including cleaning, maintenance,
minor repairs, utilities, space management and other building services.
The following performance measures illustrate some of our
successes.
--Costs for leased space are 7.4 percent below the industry average.
--Operating costs are 14.8 percent below industry benchmarks.
--Energy consumption has been reduced by 19 percent from the fiscal
year 1985 baseline. PBS plans to reduce energy consumption by
an additional 11 percent by the end of fiscal year 2005.
--PBS has improved the percentage of Repairs and Alterations projects
completed on time from 75 percent in fiscal year 2001 to 78
percent in fiscal year 2003.
Electronic Government
Expanding the scope and level of the Federal electronic government
(E-Gov) program is a major focus of the President's Management Agenda.
Through E-Gov initiatives GSA is transforming the way information is
disseminated to the American people. By leveraging Internet
technologies, GSA is building a more citizen-centric and results-
oriented Federal Government. In support of E-Gov initiatives, our
budget request includes $23.4 million in Operating Appropriations for
select E-Gov initiatives led by GSA, $5 million for the E-Gov Fund, and
$40 million in the General Supply Fund for government-wide initiatives.
To provide much needed resources for E-Gov projects, GSA is
proposing a new general provision that would amend existing law to
permit the Administrator, after consulting with the Office of
Management and Budget, to retain surplus funds generated by the
operation of the General Supply Fund in an amount not to exceed $40
million in any given fiscal year and use those funds for E-Gov
initiatives. These funds would be used for government-wide E-Gov
projects for purposes authorized under the E-Gov Act of 2002 (Section
3604 of Title 44). The fiscal year 2005 budget anticipates $40 million
in funding from the GSA General Supply Fund.
GSA realizes that common solutions shared by agencies are
absolutely critical to the effective and secure operations of the
government. The $23.4 million requested in the fiscal year 2005 budget
will be used to provide standardized Federal approaches to electronic
government. GSA will provide a leadership role to customer agencies by
integrating key E-Gov initiatives into the daily business of
government. For example:
--USA Services, one of the President's E-Gov initiatives, is part of
GSA's Office of Citizen Services and Communications. USA
Services seeks to make government more citizen-centric by
providing a front door where citizens can get answers to their
questions about the Federal Government by phone, on line, by e-
mail, or by print publications. At the same time, USA Services
seeks to improve citizen customer service government-wide. We
are requesting $1.5 million to establish government-wide
standards in customer service, performance benchmarking, and
best practices for Federal contact centers responding to
citizen inquiries.
--A component of USA Services is the internet site FirstGov.gov, the
official web portal of the U.S. Government. We are requesting
$17.3 million, an increase of $3.7 million, to maintain and
enhance FirstGov.gov by further leveraging Internet technology
and by providing a highly secure environment. And by sharing
the FirstGov technology and infrastructure, we are helping the
government reduce costs. In fiscal year 2003, there were 580
Federal web sites using FirstGov.gov search services as their
primary search engine mechanism, equating to a savings of $21
million from avoiding the need to purchase search engine
software for each individual web site.
--GSA is playing a key role in setting standards for identity
management and electronic authentication. In order for the
Federal e-Government initiatives to be successful, the Office
of Governmentwide Policy is working towards establishing a
cross-agency governance structure and process for e-
Authentication and identity management in order to unify
Government systems. GSA is requesting $4.6 million to support
this effort, an increase of $0.57 million.
Another key E-Gov initiative led by GSA is e-Travel. In 2003, the
Office of Governmentwide Policy (OGP) and our partner agencies
established a standard booking engine as well as a consistent travel
and voucher system for the Federal Government. As the e-Travel service
becomes operational, management of the e-Travel contracts will transfer
from the Office of Governmentwide Policy (OGP) to the Federal Supply
Service (FSS) in fiscal year 2005. FSS will integrate e-Travel with
GSA's other travel service offerings. GSA will provide an additional
$9.9 million to this E-Gov project in fiscal year 2005 through the
General Supply Fund.
We believe these and other E-Gov initiatives are critical to
becoming a citizen-centric government. These projects provide
government-wide solutions to meet common needs across agencies, thus
eliminating redundancies and duplicate spending.
APPROPRIATION REQUEST
While only about 1 percent of the total proposed budget is funded
through direct appropriations, our Operating activities are a vitally
important part of GSA's total program. These funds support our Office
of Governmentwide Policy function, the Office of Citizen Services and
Communications, the E-Gov Fund, the Office of Inspector General, Former
Presidents, the Presidential Transition, and various other operating
programs. The $218 million requested is $15 million above fiscal year
2004 levels. Approximately half of this increase, $7.7 million, is for
Presidential transition.
Our request is shown by account in the following table:
THE FISCAL YEAR 2005 BUDGET IN SUMMARY
[In thousands of dollars]
----------------------------------------------------------------------------------------------------------------
Fiscal Year Fiscal Year Fiscal Year
2003 Actual 2004 Current 2005 Request
----------------------------------------------------------------------------------------------------------------
TOTAL OBLIGATIONS
Operating Accounts (Appropriations)............................. $853,133 $206,550 $218,682
Federal Buildings Fund Direct (Including Appropriations)........ 6,546,606 7,100,494 7,313,195
Reimbursable Programs........................................... 1,245,899 1,014,798 1,155,694
Real Property Relocation........................................ .............. 6,050 6,000
General Supply Fund............................................. 4,066,351 4,896,773 5,130,708
Information Technology Fund..................................... 10,034,941 9,970,687 10,071,313
Working Capital Fund............................................ 316,914 347,877 357,698
Federal Citizen Information Center Fund (Reimb.)................ 2,650 3,901 4,353
Permanent Appropriations........................................ 15,928 29,493 34,926
-----------------------------------------------
Subtotal.................................................. 23,082,422 23,576,623 24,292,569
===============================================
REQUIRING APPROPRIATIONS ACTION
Operating Appropriations:
Office of Governmentwide Policy............................. 55,569 59,669 62,100
Operating Expenses, GSA..................................... 81,089 83,971 82,175
Electronic Government Fund.................................. 4,968 2,982 5,000
Election Reform Payments.................................... 650,000 0 0
Election Reform Reimbursements.............................. 14,903 0 0
Office of Inspector General................................. 37,270 38,938 42,351
Federal Citizen Information Center.......................... 13,356 13,917 14,907
Presidential Transition..................................... 0 0 7,700
Former Presidents........................................... 3,156 3,373 3,449
-----------------------------------------------
Subtotal Budget Authority/Appropriation................... 860,311 202,850 217,682
===============================================
Federal Buildings Fund New Obligational Authority:
Construction & Acquisition of Facilities.................... 734,868 745,314 650,223
Repairs and Alterations..................................... 985,009 1,002,997 980,222
Installment Acquisition Payments............................ 178,897 169,677 161,442
Rental of Space............................................. 3,381,265 3,551,032 3,672,315
Building Operations......................................... 1,546,514 1,608,064 1,709,522
-----------------------------------------------
Subtotal FBF New Obligational Authority................... 6,826,553 7,077,084 7,173,724
FBF Net Budget Authority.................................... 463,347 254,194 15,447
FBF Appropriations.......................................... 375,711 459,669 0
-----------------------------------------------
TOTAL, Transportation/Treasury Appropriation Action (BA/ 7,673,508 7,266,017 7,376,499
NOA).....................................................
===============================================
Budget Authority............................................ 1,310,302 443,127 218,222
Appropriations.............................................. 1,222,666 648,602 202,775
Total, VA/HUD Appropriations Action (BA): Federal Citizen 13,356 13,917 14,907
Information Center (Direct)....................................
----------------------------------------------------------------------------------------------------------------
Mr. Chairman, this concludes my formal statement, and I look
forward to continuing to discuss our fiscal year 2005 budget request
with you, members of the committee and your staff.
______
DEPARTMENT OF TRANSPORTATION
Federal Motor Carrier Safety Administration
Prepared Statement of Annette M. Sandberg, Administrator
OVERVIEW: SAFETY, SECURITY, PRODUCTIVITY
People depend on motor carriers for the safe, reliable, and
efficient movement of the goods they use everyday. The trucking
industry comprises almost 650,000 motor carriers operating in
interstate commerce and some 7.9 million large trucks. Trucks account
for most of the freight movement in our Nation's transportation system.
Approximately 80 percent (by value) of all domestic commodity movements
are carried by truck. The trucking industry also employs approximately
9.9 million people in jobs related to trucking activity, including
several million drivers. People rely on motor coaches for safe and
secure transportation. Commercial motor coaches traveled 2.4 billion
miles in 2001, carrying more than 500 million passengers. Clearly, both
the trucking and motor coach industries contribute to competitiveness
and a robust economy.
Mobility, as crucial as it is to our economic well-being, presents
significant hazards in terms of safety on our highways. Trucks and
buses share roadways with passenger vehicles and pedestrians. Over the
last several years, approximately 5,000 people have died annually in
crashes involving a truck. This is unacceptable. Truck transportation
of hazardous materials presents even greater potential safety
consequences. And, there is increasing recognition and appreciation
that there can be no safety without security. In most cases, there is a
close connection between safety and security, and strategies designed
to mitigate one often impact both.
FMCSA has defined five strategic goals linking to Department of
Transportation and national objectives, illustrated in Figure 1 below.
Among these, safety is FMCSA's primary mission. At the same time, the
agency looks to employ a coordinated strategy that balances the inter-
relationships between these missions and leverages solutions that
achieve the greatest overall public good.
The agency's $455 million request for fiscal year 2005 will fund
programs and activities supporting all five agency strategic goals.
Figure 2, below, illustrates the allocation of funds by agency
strategic goal in our fiscal year 2005 budget request.
CMV SAFETY
Safety is the capstone of this agency's strategic hierarchy. The
FMCSA safety vision is to develop and promote, in coordination with
other Departmental modes, data-driven, analysis-based, and innovative
programs to achieve continuous safety improvements in the Nation's
highway system, intermodal connections, and motor carrier operations.
Saving lives and reducing crashes involving trucks and motor coaches on
our highways is the agency's primary mission, and our fiscal year 2005
budget request allocates approximately 86 percent of the agency's
resources to 10 performance segments in support of this strategic goal.
Figures for 2002 show a reduction in truck-related fatalities of 4.2
percent from 2001, despite a projected increase in truck vehicle miles
traveled (TVMT). This decrease extends to five consecutive years (1998-
2002) the trend of improved commercial motor vehicle safety. We may be
beginning to realize the results of agency regulation and safety
interventions undertaken since the establishment of the agency in 1999,
enabling us to pursue with greater confidence our coordinated safety
strategy.
With the encouragement of Secretary Mineta, FHWA Administrator
Peters, NHTSA Administrator Runge, and I are coming together for
safety. Improving highway safety is an administration and national
goal. All highway fatalities are unacceptable. If we are to stem the
tide of this terrible loss of life on our Nation's highways we all must
play a role, combine our knowledge and expertise, and coordinate our
program delivery. My colleagues and I share the belief that our
programs are complementary rather than competing. So, FMCSA will work
together with FHWA and NHTSA to pool and focus our effort, energy, and
resources where they will have the greatest impact on safety. Our new
CMV safety goal, harmonized with the DOT Highway Safety performance
goal and FHWA and NHTSA measures, evinces our intermodal approach.
Encouragingly, FMCSA achieved its fatality rate performance target for
2002.
Enforcement is FMCSA's primary safety mitigation strategy and the
agency's core competency. Appropriately, it is the focus of the
greatest share of program resources. FMCSA conducts enforcement
operations and provides grants to support State enforcement efforts. To
the extent possible, we look to increasingly align Federal and State
enforcement operations in mutually-reinforcing ways. The effectiveness
of enforcement interventions in reducing crashes, fatalities, and
injuries is borne out by findings of the CR Impact Assessment Model and
the Roadside Inspection and Traffic Enforcement Intervention Model. We
propose to expand the toolbox of enforcement techniques, close
loopholes permitting unsafe practices, and improve our penalty
structure. We look to implement a balanced enforcement model--an
approach that balances and capitalizes on prevention (compliance
reviews, safety audits), deterrence (inspections, traffic enforcement),
and remediation (sanctions and penalties) interventions. New entrant
safety audits will broaden our enforcement regime.
Information is a high near-term priority. As a data-driven
organization, information is the essential backbone for all major FMCSA
operational and support programs and activities. To ensure our maximum
operational effectiveness and efficiency, we need to base our decisions
on the highest quality data possible and sound statistical analysis of
that data. A highlight for fiscal year 2005 will be issuing the results
of the Large Truck Crash Causation Study. Information initiatives are
addressed in the respective performance segments and the cross-cutting
Information Management proposal for fiscal year 2005 is attached as an
Appendix.
States play essential partnership roles in highway safety,
providing critical safety data and extending regulation and enforcement
reach. The Motor Carrier Safety Assistance Program, which provides
(MCSAP) grants to State highway safety authorities, is the primary
means we have of moving our goal of safety advocacy from focus to
action.
HM SAFETY
FMCSA authority extends to enforcing compliance with the Federal
Hazardous Materials Regulations (FHMRs) to provide adequate protection
against the risks to life and property inherent in the highway
transportation of hazardous materials in commerce. The agency's goal is
to reduce serious reportable hazardous materials incidents involving
trucks. This links to and supports the DOT hazardous materials
performance goal. Approximately 5 percent of the agency's fiscal year
2005 budget request is attributed to 3 performance segments
contributing to achievement of this goal. A priority initiative is the
institution of a grant program to extend safety inspection by States of
HM carriers crossing the borders.
HM SECURITY
Continued emphasis on commercial carrier, driver, vehicle, and
cargo security, and particularly hazardous materials operations is
required, supporting the DOT Security strategic goal and administration
priorities. Following the successful transfer of the Transportation
Security Administration (TSA) to the Department of Homeland Security,
FMCSA will continue to work in concert with TSA and other agencies to
establish the protocols ensuring the security of commercial motor
vehicle transportation. To this end, FMCSA has designated approximately
2 percent of the fiscal year 2005 budget request to two performance
segments aimed at heightening the awareness of hazardous materials
carriers to security threats.
CMV PRODUCTIVITY
The efficient movement of goods is a critical component of a
healthy economy. FMCSA's authority extends to ensuring compliance of
household goods carriers with the Federal Motor Carrier Commercial
Regulations (FMCCRs). Judging by complaints received on our hotline,
and more recently on the new website we have established for this
purpose, closer scrutiny of and attention to the responsibilities of
carriers and the rights of consumers is needed. Reducing the cycle time
for response to complaints is a priority. Our fiscal year 2005 budget
request includes approximately 1 percent for two performance segments
supporting CMV productivity and the integrity of goods movement. Our
aim is to provide informative and timely responses to all household
goods complaints and HHG Congressional inquiries. We will track our
progress toward accomplishment of this goal by the following two new
performance metrics: percent of HHG consumer complaints receiving an
initial response within 72 hours of the complaint, and percent of HHG
Congressional inquiries receiving an initial response within the DOT
time limit.
ORGANIZATIONAL EXCELLENCE
At the core of organizational excellence are our strategies for
developing, acquiring, and sustaining the components of capability to
perform our safety, security, and productivity missions: people,
information, and financial resources. The President's Management Agenda
(PMA) frames our agency efforts to ensure we put the right capability
in the right place, at the right time, and at the right cost. Our five
Organizational Excellence performance segments align with the PMA
initiatives. We aim to sharpen our resource effectiveness and have
allocated 6 percent of our fiscal year 2005 budget request in support
of these performance-accelerating strategies.
In addition to the PMA, we are increasingly integrating findings
and recommendations of the Government Accounting Office (GAO), DOT
Office of the Inspector General (OIG), and the National Transportation
Safety Board (NTSB) as integral components of our agency strategy and
operational guidance. Our activities supporting these recommendations
are addressed in our performance budget narrative. As a result of these
efforts, we are pleased to have closed numerous recommendations in
fiscal year 2002.
Strategic Management of Human Capital and Competitive Sourcing.--We
will soon complete our agency-wide competency survey, and the priority
objective will be the completion of the agency's Human Capital Plan.
The Human Capital Plan will provide baseline information about the
competencies of our workforce relative to our mission and performance
targets; projections of potential competency gaps; and strategies for
preventing those gaps. Competitive Sourcing is one approach in a
coordinated strategy for managing human capital effectively and
efficiently, along with hiring, learning and development, the use of
personnel flexibilities, restructuring and reorganization of work, and
contracting new work to result in best-value service to our customers.
Budget and Performance Integration and Financial and Procurement
Performance.--Our agency's initial performance budget effort 1 year ago
provided the framework for a more performance-based approach to
formulation of this year's request. Agency senior leadership met and
reviewed cross-cutting performance implications in the allocation of
program resources in this performance budget request for fiscal year
2005. To advance our resource-to-results linkage, we have integrated
our grant programs into our program logic, the better to track and
discern the contribution of complementary Federal and State program
efforts. We are also piloting FMCSA Division Administrator annual State
plans to further increase the linkage between Federal and State plans,
and to strengthen alignment with national goals. Our alignment and
attribution of resources by performance segment also supports our
advances in managerial cost accounting.
E-Government.--FMCSA is a data-driven and citizen-centered
organization. The agency looks to increasingly capitalize on
information and IT to streamline internal processes, and to increase
public accessibility to programs and information. Our e-Gov initiatives
include advances in e-grants, business compliance one-stop, e-
rulemaking, and others.
FMCSA ADMINISTRATOR'S IMPERATIVES
My priorities for fiscal year 2004-2005 include:
--Full implementation of the New Entrant Program as mandated by MCSIA
--Reauthorization of FMCSA safety programs
--Improved safety data to inform targeting of enforcement operations
--Reduction in the backlog of rulemakings
--Improving the credibility and integrity of the CDL program
--Improving cycle time for response to household goods complaints.
______
Bureau of Transportation Statistics
Prepared Statement of Richard Kowalewski, Deputy Director
Mr. Chairman, Ranking Member Murray, members of the subcommittee,
thank you for the opportunity to discuss the Bureau of Transportation
Statistics' fiscal year 2005 budget request.
The Bureau of Transportation Statistics (BTS) proudly joins other
agencies in our Federal statistical system to provide the unbiased data
that drive planning, projections, and policies at the Federal, State,
and local levels. Those decisions in turn determine the course of
countless business and civic initiatives that support our prosperity,
quality of life, and well-being as a Nation. In the transportation
arena, BTS is committed to helping ensure the health and growth of
efficient, safe, and environmentally sound infrastructure and
operations across the various transportation modes.
The availability and use of BTS data support each of Secretary
Mineta's Strategic Goals of safety, mobility, global connectivity,
environmental stewardship, security, and organizational excellence.
While our data are critical for decision making, they also provide an
important, unbiased report card. The success of government programs
cannot be simply proclaimed; it must be objectively measurable by the
people those programs serve. Thus, BTS plays a critical role at both
ends of the policymaking process: we fuel transportation decisions and
help provide critical performance benchmarks. Operating under the
strict guidelines that apply to any Federal statistical agency, and in
line with congressional intent in creating BTS, we do our work
objectively, free of bias toward any one mode of transportation.
RECENT ACCOMPLISHMENTS
BTS has accomplished much in the past year and has set its sights
on doing fewer things better in the budget year to come. Our fiscal
year 2005 budget request of $32.2 million from the Highway Trust Fund
reflects critical information needs and incorporates decisions we have
made internally to further the work that supports our mandate. In
addition, as authorized in the VISION 100 aviation legislation, we
propose that $4.045 million in reimbursable funding from the Airport
and Airway Trust Fund be used to cover direct costs of our air
transportation statistics program, which produces our most-requested
and closely watched data.
BTS's air transportation statistics program is relied upon for
decisions with far-reaching economic implications. Our data on
passenger enplanements drive the Federal Aviation Administration's
(FAA) distribution of Airport Improvement Grants, and our data on
flight delays and their causes help in FAA's decisions about
infrastructure and operational investments, as well as decisions by the
airlines and the traveling public. We have worked with Alaskan carriers
to improve the quality of the monthly traffic data that they report to
BTS and which the U.S. Postal Service uses to decide which carriers are
eligible to receive mail contracts for intra-Alaskan mail under the
Rural Service Improvement Act. We provided airline financial and
operating information for decisions on post-9/11 grants and loan
guarantees to passenger and freight carriers. Our aviation data assist
the Transportation Security Administration in decisions regarding the
allocation and deployment of resources across the country, and support
the Office of the Secretary in making decisions about service to
underserved communities and on international routes.
For more than 11 years, Congress also has turned to BTS for both
in-depth and quick turn-around answers, briefings, and visual
presentations of data. We have analyzed the impact of railroad
rationalization in the upper Great Plains, compared the costs of
highway and rail construction, and assessed the impact of international
trade on highway demands in our border States. We have prepared maps
showing structurally deficient and functionally obsolete bridges in
each State and congressional district so that members of Congress can
be better informed in setting priorities on infrastructure needs.
As the smallest of the Federal statistical agencies, BTS has always
worked hard to maximize available resources, matching the right
expertise to the job at hand and tuning our programs based on
customers' feedback. That feedback has helped us determine the most
effective approach in doing fewer things better.
In 1997, for example, we developed an innovative survey design that
allowed us to cut the size of the Commodity Flow Survey in half,
reducing its budgetary cost and burden on respondents, without
compromising data quality. Between 2001 and 2003 we replaced a 30-year-
old patchwork mainframe computer system that had been running our
aviation data programs and replaced it with a modern mid-tier computer
platform to increase our efficiency and the data's usability. Our work
in helping to develop, validate, and verify performance measures for
DOT contributed toward the high ranking of the Department's fiscal year
2003 performance report by the Mercatus Center of George Mason
University--DOT's performance report tied for number one in the Federal
Government.
BTS is working to improve its operations through initiatives of the
President's Management Agenda, and to reorganize our lines of business
to be simpler, more easily managed, and more results-oriented. As
envisioned in the Administration's Safe, Accountable, Flexible, and
Efficient Transportation Equity Act (SAFETEA) legislation and our
budget, BTS proposes to sharpen its focus around five core data
programs and two cross-cutting research programs. The core data
programs are freight, travel, transportation economics, air
transportation, and geographic information systems. The cross-cutting
programs assess overall transportation system performance and improved
statistical methods to address transportation-specific problems.
In the freight and travel areas, this past year saw the release by
BTS of the full datasets from our two major survey activities, the
National Household Travel Survey, collected in 2001-2002 with the
Federal Highway Administration (FHWA), and the Commodity Flow Survey,
collected in 2002 with the Census Bureau. Analysis of each of these
datasets will play a critical role in driving Federal, State, and local
transportation planning and investment for the next 5 to 10 years.
BTS is especially pleased to have unveiled two new economic indices
that for the first time provide a comprehensive picture of
transportation activity, help us to analyze its economic impact, and
provide better information on what passengers pay for airline service:
--The monthly Transportation Services Index (TSI) measures outputs in
the for-hire movement of freight and people and is a new
leading economic indicator, better clarifying our understanding
of transportation's relationship to the economy.
--The quarterly Air Travel Price Index (ATPI) illustrates the rate of
national and local market fluctuations in the price of air
travel. The ATPI yields greater understanding of the cause and
effect relationship between airline industry market decisions,
external market factors, and the affordability of travel.
These indices provide new insight into interrelationships and
potential macro-economic impacts of changes in transportation activity.
This, in turn, helps economists better anticipate turning points in our
Nation's economy. We are also working, consistent with the late Senator
Moynihan's original vision for BTS, on improving our measures of the
productivity of the Nation's transportation sector.
In fiscal year 2004, BTS also released an innovative product called
GeoFreight, an intermodal freight planning tool on CD-ROM that
graphically displays the geographic relationship between freight
movements and infrastructure. Developed jointly with FHWA, the tool was
designed to aid the planning of State and local governments and augment
their ability to anticipate demands on capacity.
Our work on improved statistical methods has led to the adoption of
a new method to protect the confidentiality of statistical data that
responds to customer demands to make more data available while
preventing the disclosure of confidential data. We also led the
development of Information and Dissemination Quality Guidelines for the
Department, as required by recent data quality legislation.
We have also worked at increasing the accessibility of our data.
Our Web-based data platform, TranStats, has won several awards as an
exemplary e-government initiative, including the Industry Advisory
Council/Federal CIO Council Excellence.Gov Award (Top 5 Winner), the
Sun/Computerworld iForce Excellence Award for Business Intelligence,
and the Computerworld Honors Program Award. Along with our other web-
based information services, we serve an estimated 3.7 million users per
year, allowing users to analyze data on-line and access electronic
copies of the documents of the National Transportation Library.
CHALLENGES THAT REMAIN
While BTS has made good progress in many areas of our statistical
programs, challenges remain that need to be addressed to improve BTS's
performance, such as BTS's freight flow data for imports and exports,
geolocation data on the Nation's transportation network, and exposure
data for general aviation operations.
Recently, the Transportation Research Board has called upon BTS to
fill gaps in our freight data program. The modest budget increase we
have requested for fiscal year 2005, along with our refocusing of
effort on core programs, will allow us to increase sample sixes on our
key freight and travel data, improving the quality of data available to
our users.
BTS has much to accomplish at a time when our Nation has a new
level of interest in and understanding of how the interconnectedness of
our transportation system affects global competitiveness and national
security. We need to develop a more timely and complete understanding
of freight flows, as our economy moves increasingly to a just-in-time
rhythm. We need a more comprehensive overview of our Nation's mobility
and connectivity by collecting data that link transit trips, passenger
terminal information, highway usage and capacity, and levels of
commercial service. We also need improved highway safety exposure data,
allowing improved analysis of the area where most of our transportation
deaths occur. Possession of these data would reveal areas of economic
opportunity, help us set our course more precisely, and help us to
better predict the potential transportation impacts of terrorist
attacks.
We look forward to working with the committee to meet the Nation's
needs for reliable, accurate transportation data, so that our
policymaking can be well-informed and our transportation planning can
make accurate assessments of the Nation's transportation needs. We will
continue to seek out innovative data collection strategies that provide
better data quality at lower cost.
______
Research and Special Programs Administration
Prepared Statement of Samuel G. Bonasso, Deputy Administrator
Chairman Shelby, Ranking Member Murray, and members of the
committee, on behalf of the Research and Special Programs
Administration (RSPA), thank you for the opportunity to address the
important safety, environmental and other performance goals supported
by the President's fiscal year 2005 funding request for RSPA. With the
active participation of our State, local, private sector and university
partners, RSPA has made significant advances in meeting our performance
goals, and we are looking forward to working with the members of this
committee and with the Congress in continuing to reduce deaths,
injuries, property damage and economic consequences resulting from
hazardous materials, pipeline, and other transportation incidents.
Working together, we need to develop and implement the programs and
systems America needs to meet the important transportation safety
challenges facing the Nation.
Effective fulfillment of RSPA's safety responsibilities is critical
to both the transportation and economic needs of the Nation.
Approximately 28 percent of America's freight ton-miles involve
transportation of hazardous materials, regulated by RSPA. The safe and
secure movement of hazardous materials is fundamental to America's
economy and industry, delivering much of the petroleum products and raw
materials that fuel American business. Hazardous materials are also
fundamental to everyday personal needs--for example, chlorine treats
our water, making it safe to drink; anhydrous ammonia fertilizes our
fields, allowing America to feed our Nation and some of the world. The
volume of hazardous materials regulated by RSPA is substantial:
--The Office of Pipeline Safety regulates 2.3 million miles of
pipeline that move 63 percent of America's consumed energy--
they are literally the arteries of our way of life. On a ton-
mile basis, pipelines carry 21 percent of the Nation's freight.
--The Office of Hazardous Materials Safety regulates over 800,000
daily shipments of hazardous materials--working with all modes
of transportation on packaging and handling to help assure safe
movement through America's transportation system. Hazardous
materials outside of pipelines account for 7 percent of the
freight ton-miles transported annually in the United States.
--The Transportation Safety Institute conducts cutting-edge training
in hazardous materials safety, as well as safety, security and
environmental stewardship training in all modes of
transportation for State and local first responders, public and
private sector engineers, inspectors, and other employees.
Equally important to the efficient operation of America's
transportation systems are RSPA's emergency transportation and research
activities. Through RSPA:
--The Office of Emergency Transportation manages the DOT Crisis
Management Center, a 24/7 operations center to track and
respond to natural and human-caused transportation incidents;
and coordinates continuity of operations and emergency
transportation planning for all Department of Transportation's
(DOT) operating administrations and in direct coordination with
all other Federal departments.
--The Office of Innovation, Research and Education leads DOT's
involvement in the President's Hydrogen Fuel Initiative,
coordinating with all DOT administrations, the Department of
Energy and other Federal agencies in conducting research and
development and standards-setting activities to ensure the
safety of hydrogen-fueled vehicles and the infrastructure to
support them.
--The Office of Innovation, Research and Education manages 26
University Transportation Centers that conduct research in all
areas of transportation engineering and management, advancing
the state of the practice and preparing students to be the
transportation systems leaders of tomorrow.
--The Volpe National Transportation Systems Center provides technical
systems expertise to all DOT agencies and non-DOT clients in
all areas of transportation systems, including safety, homeland
and national security, mobility, environmental stewardship,
systems engineering, navigation, operator performance, and
economic analysis.
Implicit in all of these regulatory, technical, research and
training activities supporting safety is a significant concern for
national and homeland security. Our overall focus on safety supports
administration and Congressional goals for improving transportation
security. All of RSPA's offices work closely with the Department of
Homeland Security to ensure that our program activities keep security
as an important focus, an integral part of providing safe
transportation systems.
RSPA's budget is performance-based, keyed to DOT's six strategic
goals, rather than to specific ``budget line activities.'' RSPA strives
to deliver the results that Congress expects in all six DOT strategic
areas:
--Safety.--Enhancing public health and safety by working toward
elimination of transportation-related deaths and injuries.
--Mobility.--Advancing accessible, efficient intermodal
transportation for the movement of people and goods.
--Global Connectivity.--Facilitating a more efficient domestic and
global transportation system that enables economic growth and
development.
--Environmental Stewardship.--Promoting transportation solutions that
enhance communities and protect the natural and built
environment.
--Security.--Balancing homeland and national security transportation
requirements with the mobility needs of the Nation for personal
travel and commerce.
--Organizational Excellence.--Advancing the Department's ability to
manage for results and achieve the goals of the President's
Management Agenda.
The President's total budget request for RSPA in fiscal year 2005
is $137.3 million, an increase of $11.7 million (9.0 percent) over the
fiscal year 2004 enacted level. Seventy-five percent of the President's
fiscal year 2005 budget request for RSPA is dedicated towards achieving
results supporting the DOT safety strategic goal. Another 16 percent
supports the environmental stewardship strategic goal, reducing
environmental damage from pipeline incidents, with the remaining 9
percent supporting the other goals. The additional resources requested
will primarily support efforts to reduce hazardous materials incidents
and to advance preparation for emergency transportation response.
RSPA sets performance goals to implement the DOT strategic goals.
Some of those goals, and the funding requested to achieve them,
include:
--Safety.--RSPA requests $103.3 million, an increase of $7.6 million,
to meet our three critical safety performance goals:
--Reduce deaths, injuries, property damage and economic
consequences resulting from hazardous materials
transportation incidents.
--Reduce death, injuries, and property damage resulting from
pipeline incidents.
--Promote the safe transport of hydrogen fuels and fuel systems so
that alternative fuel vehicles can be developed as a safe
alternative to petroleum-fueled vehicles.
--Mobility/Security.--RSPA requests $5.7 million, an increase of $2.0
million, in order to prepare our Nation's transportation
system--in advance--to aid people and property harmed by
natural and terrorist disasters.
--Environmental Stewardship.--RSPA requests $22.5 million, an
increase of $1.7 million, to reduce the amount of oil or other
hazardous liquids released from pipeline systems.
--Organizational Excellence.--RSPA requests $5.9 million, an increase
of $0.4 million, in order to improve our operating efficiencies
in all programmatic areas.
RSPA is achieving results in all of our critical areas, and is
committed to continuing improvements in transportation safety. For
example:
--The number of serious hazardous materials incidents in
transportation has dropped by 18.5 percent since 2000.
--RSPA's Office of Pipeline Safety has addressed most of a 12-year
backlog of outstanding Congressional mandates and
recommendations from oversight agencies.
--RSPA is ensuring that pipelines are tested and repaired according
to higher integrity management standards, and RSPA is working
with our Federal partners to expedite the repair permits.
--Hazardous liquid pipeline incidents have decreased by 28 percent
and the volume of oil spilled has been significantly reduced.
--Third party excavation accidents have decreased by 59 percent over
the past 10 years, even while housing starts were on the rise,
which brings construction risk near pipelines by encroachment
on rights-of-way.
--RSPA's Transportation Capability Assessment for Readiness (TCAR)
scores continue to improve annually.
--The Transportation Safety Institute trains over 50,000 students
annually, graduated its 650,000th student in 2003, and recently
acquired university credit for various courses.
--The University Transportation Centers continue to graduate over
1,500 students with advanced degrees annually.
--RSPA's Hazardous Materials Emergency Preparedness Grants program,
which prepares communities to respond to hazardous materials
incidents, received a ``moderately effective'' score of 83
percent on a Program Assessment Rating Tool (PART) analysis
conducted for the fiscal year 2005 budget cycle. We are working
to remedy implement the recommendations resulting from the PART
analysis.
In conclusion, RSPA's requested $11.7 million increase will be
invested in improving our performance, further reducing death,
injuries, property damage and economic consequences resulting from
transportation incidents.
Again, Mr. Chairman, thank you for the opportunity to testify
before you today. I look forward to responding to any questions you may
have.
______
DEPARTMENT OF THE TREASURY
Financial Crimes Enforcement Network
Prepared Statement of William J. Fox, Director
Chairman Shelby, Senator Murray, and members of the committee,
thank you for the opportunity to submit my statement for the record on
the President's fiscal year 2005 budget request for the Financial
Crimes Enforcement Network. This $7.271 million request reflects the
important role FinCEN plays in the United States government's efforts
to understand, detect, and prevent terrorist financing.
On December 1, 2003, I became FinCEN's fourth director. Prior to
coming to FinCEN, I was working as the principal assistant to the
General Counsel of the Treasury Department on issues relating to
terrorist financing, which were issues that occupied a great deal of my
time. Coming from the Department, I understood, to a large extent, the
nature of FinCEN's responsibilities and what it was doing to carry out
the obligations imposed by these responsibilities. In these 5 months, I
have done a great deal of listening and learning from inside and
outside of FinCEN. I have met extensively with the law enforcement and
intelligence communities that we serve and the financial industry that
we help regulate. I also have met with some of my counterparts in
foreign governments and communicated with many more and I have met with
and listened to the staffs of interested committees in the Congress--
including this subcommittee.
In this short time, I have found an organization populated with
employees with diverse and highly specialized talents, who are
extremely dedicated to the agency and its mission. I have found an
agency that is a good steward of the human and capital resources that
have been provided by the Congress. However, I have also found an
agency facing many important challenges--challenges relating to the
effective and efficient management of the extremely sensitive data
collected under the Bank Secrecy Act; challenges relating to its
analytic staff and the analytic product they produce; challenges
relating to the administration of its regulatory programs under the
Bank Secrecy Act; challenges relating to refocusing its important
partnerships with financial intelligence units around the world--the
Egmont Group; and, challenges relating to the agency's present
organizational structure.
My statement will address how FinCEN is going to meet these
challenges and then it will focus on our fiscal year 2005 budget
request.
BACKGROUND
FinCEN's mission is to help safeguard the financial system of the
United States from being abused by criminals and terrorists. FinCEN
works to accomplish its mission through: (1) administration of the Bank
Secrecy Act--a regulatory regime that provides for the reporting of
highly sensitive financial data that are critical to investigations of
financial crime; (2) dissemination of the data reported under the Bank
Secrecy Act to law enforcement and, under appropriate circumstances,
the intelligence community; (3) analysis of information related to
illicit finance--both strategic and tactical analysis; and, (4) the
education and outreach provided to law enforcement and the financial
industry on issues relating to illicit finance. FinCEN has many
attributes that are key to understanding the agency and how it works to
achieve its mission:
--FinCEN is a regulatory agency.--FinCEN has an obligation to
administer the Bank Secrecy Act, the principal regulatory
statute aimed at addressing the problems of money laundering
and other forms of illicit finance, including terrorist
financing. It is responsible for shaping and implementing this
regulatory regime and, in concert with the functional banking,
securities, and commodities regulators and the Internal Revenue
Service, for ensuring compliance with that regime. The agency
is also charged with protecting the integrity and
confidentiality of the information collected under the Bank
Secrecy Act.
--FinCEN is a financial intelligence agency.--While not a member of
the intelligence community, FinCEN, with the help of the
Internal Revenue Service, collects, houses, analyzes and
disseminates financial information critical to investigations
of illicit finance.
--FinCEN is a law enforcement support agency.--While FinCEN has no
criminal investigative or arrest authority, much of our effort
supports the detection, investigation and successful
prosecution of financial crime.
--FinCEN is a network.--We are not directed to support one agency or
a select group of agencies. We make our information, products
and services available to all agencies that have a role in
investigating illicit finance. In fact, we network these
agencies. Our technology tells us when different agencies are
searching the same data and we put those agencies together--
avoiding investigative overlap and permitting the agencies to
leverage resources and information.
Given this important mission, FinCEN fits perfectly in the
Department of the Treasury; possibly even more so after the Homeland
Security reorganization rather than before that reorganization. The
creation of the Office of Terrorism and Financial Intelligence within
Treasury only enhances that fit. FinCEN will be able to help
``operationalize'' Treasury's policy priorities on these important
issues and our operational analytic work will complement the analysis
that will eventually be done in the newly created Office of Financial
Intelligence. I believe this coordinated effort will lead to a greater
emphasis and understanding of money laundering, terrorist financing and
other forms of illicit finance not only at Treasury, but within the
United States, and that will make us all safer. FinCEN will also
benefit from the Department-wide, policy-coordinating role this office
will provide.
FINCEN'S COUNTER-TERRORISM STRATEGY
The single, most important operational priority for FinCEN is
counter-terrorism support to law enforcement and the intelligence
community. To emphasize the importance of this work we have improved
and are now implementing a comprehensive counter-terrorism strategy
that draws from our analytic support to law enforcement, our regulatory
tools and expertise, and our international networking capabilities. We
believe the implementation of this strategy will strengthen our focus
and ensure that FinCEN is more active and aggressive rather than
reactive on issues relating to terrorism. The strategy has five basic
components.
Analysis of Terrorist Financing Suspicious Activity Reports
FinCEN analyzes suspicious activity reports for both tactical and
strategic value. At the tactical level, we are implementing a program
in which every report that indicates a connection to terrorism is
immediately reviewed and validated and then analyzed with other
available information. This information will be packaged and referred
to the Terrorist Threat Integration Center (TTIC), FBI-TFOS, and other
relevant law enforcement. Moreover, this information will be stored in
a manner that facilitates its access and availability for analysis. We
have already had success with this process resulting in important
information being passed along to law enforcement agency.
At the strategic level, we are also devoting analysts to study Bank
Secrecy Act data and all other available information to gain an
increased understanding of methodologies, typologies, geographic
patterns of activity and systemic vulner-abilities relating to
terrorist financing. These analysts will focus on regional and systemic
``hot spots'' for terrorist financing, studying and analyzing all
sources of information. Such focus, which produced the study mandated
by the Congress on Informal Value Transfer Systems, can significantly
add to the knowledge base of law enforcement. For example, we have
begun a process to comprehensively study illicit trade in diamonds and
other precious stones and metals and the links to terrorist finance.
Although this initiative is currently underway, in order to fully
implement it, we will need to upgrade analysts' security clearances and
obtain additional equipment appropriate for the handling and processing
of national security information.
USA PATRIOT Act Sections 311 and 314 Implementation
Some of the new tools afforded us through the USA PATRIOT Act are
proving to be invaluable in the war against terrorist financing,
particularly Section 314 of the Act. FinCEN also has initiated a
program to provide the analytic, regulatory and legal resources needed
to support effective implementation of Section 311 by the Treasury
Department. I have directed my staff to give priority to the pro-active
targeting of those financial institutions and jurisdictions that are
involved, wittingly or unwittingly, in the financing of terror. This
prophylactic measure goes to the very heart of FinCEN's mission--to
safeguard the financial system of the United States from money
launderers and the financiers of terror.
Building on a successful pilot program that we began with the
Bureau of Immigration and Customs on a 314(a) money-laundering request,
FinCEN is now dedicating several analysts to apply this program to all
314(a) terrorism requests. Specifically, the analysts will run all
314(a) terrorism-related requests against Bank Secrecy Act data
concurrent with these requests being sent to financial institutions.
Based on this initial data review, the law enforcement requester will
then be able to request a more in-depth analysis if desired.
International Cooperation and Information Sharing
FinCEN will increase the exchange of terrorist financing
investigative and analytical information with other foreign financial
intelligence units around the world. We are implementing a program by
which FinCEN will automatically request information from relevant
financial-intelligence-unit counterparts as part of any terrorism
related analysis project. As part of this program, we are also
upgrading our response to incoming requests for information from
financial intelligence units by providing appropriate information and
analysis from all sources of information.
Terrorism Regulatory Outreach
We will continue our work in improving our ability to provide
information to the regulated community to better identify potential
terrorist financing activity. One area of particular focus will be
money services businesses. Money services businesses continue to
require more attention and resources, and FinCEN will undertake an
initiative to educate segments of the industry most vulnerable to
terrorist abuse. These segments include small businesses that typically
offer money remittance services, check cashing, money orders, stored
value products and other informal value transfer systems. As we learned
from the attacks of September 11, funds used to finance terrorist
operations can be and have been moved in small amounts using, for
example, wire transfer, traveler's check and automated teller machine
services. I have directed FinCEN's Office of Regulatory Programs and
Office of Strategic Analysis to enhance our outreach program that will
include training on how terrorists have used and continue to use money
services businesses; the reason for and importance of the registration
requirement for money services businesses; and the importance of
complying with the reporting requirements of the Bank Secrecy Act,
especially suspicious activity reporting. We are planning to streamline
suspicious activity reporting for small money services businesses with
a simplified form.
Analytic Skill Development
As a general matter, I have directed that FinCEN make training of
personnel the highest human resource management priority. The top
priority of this new program will be analytic skill development
relating to terrorist financing. We plan to begin by seeking reciprocal
opportunities for terrorist finance analytic skill development within
law enforcement, the Egmont Group, the intelligence community and the
financial industry. This initiative is intended to build a foundation
for continuous improvement of our analytic assets through cross
training and diversification; production of joint terrorist financing
threat assessments and other reports; understanding of intelligence
processes; the international context of terrorist financing; and the
financial industry perspective. In addition, we will need to support
training focused on financial forensics, language skills, and
geographically targeted studies that focus on culture, infrastructure
and other unique aspects of a particular region.
I believe the full implementation of this strategy will materially
assist the Department of the Treasury and the United States in
addressing the financing of terror. Approaching this problem in a
systemic way with dedicated resources is, in our view, the best way to
make this strategy a success.
FINCEN'S NEAR TERM CHALLENGES
As I mentioned before, FinCEN is facing a number of significant
challenges. Because each of these challenges affects FinCEN's
effectiveness, I feel it is important to raise these challenges with
the subcommittee.
Security and Dissemination of Bank Secrecy Act Information
As the administrator of the Bank Secrecy Act, there is no duty I
view as more critical then the effective collection, management and
dissemination of the highly sensitive and confidential information
collected under that Act. If FinCEN does nothing else, it must ensure
that such data are properly collected, are secure and are appropriately
and efficiently disseminated. This is FinCEN's core responsibility.
FinCEN must modernize the way it houses and provides access to
information collected under the Bank Secrecy Act. Currently, our data
are accessed by most of our customers through an outmoded mainframe
system. This system does not have the robust data mining capabilities
or analytical tools we should be providing. This has led many of our
customers to ask for wholesale copies of the data, or direct access to
the data in a way that will not permit us to perform our
responsibilities relating to the administration and management of the
data. Accordingly, we must create a system that provides robust data
mining and analytical tools to our customers in law enforcement and
that preserves our ability to: (1) effectively administer and secure
and audit use of the information; (2) network those persons who are
querying the data to prevent overlapping investigations and encourage
efficient use of law enforcement resources; and, (3) develop and
provide adequate feedback to the financial industries we regulate,
which will ensure better reporting. That system is called ``BSA
Direct.''
When fully implemented, BSA Direct will make available robust,
state-of-the-art, data mining capabilities and other analytic tools
directly to law enforcement. We plan to provide all access to these
data through BSA Direct, working with our law enforcement customers to
ensure that their individual systems will be able to extract the
maximum value from the Bank Secrecy Act reporting. We will be exploring
ways to enable these agencies to integrate the Bank Secrecy Act
reporting with their other systems while maintaining, and even
improving our ability to audit and network the use of the data and
obtain feedback concerning their value. This new system will provide us
with the capability to discharge our responsibilities relating to the
administration of these sensitive data: security and access control,
networking, and feedback. This system will also significantly enhance
our coordination and information sharing abilities, as well as our
ability to safeguard the privacy of the information and monitor BSA
compliance. We have already started work on this system and its
deployment is crucial to FinCEN moving forward and meeting its various
challenges. We have requested in our fiscal year 2005 budget a transfer
of $2.5 million from the Internal Revenue Service for this system.
Enhancing FinCEN's Analytical Capabilities
Another challenge FinCEN is facing relates to its analytic
capabilities. In my view, FinCEN must move away from its current
emphasis on data checks and data retrieval, and move its analytic
resources toward more robust and sophisticated analysis. FinCEN had
moved to data checks and data retrieval in response to criticisms about
lag time in responding to simple requests for information. Now, as our
systems improve, our customers will be able to retrieve data
themselves, which will give FinCEN more time and resources for analysis
of data.
I believe that FinCEN can and must provide value through the
application of our focused financial analytic expertise to mining
information and providing link analyses that follow the money of
criminals and terrorists, or identify systemic or geographic weaknesses
to uncover its source or the existence of terrorist networks. For
example, in addition to providing geographic threat analysis for law
enforcement, FinCEN has been studying systemic trends in money
laundering and terrorist financing. We were instrumental in bringing
the black market peso exchange system to the forefront of policy
decisions, and we are focusing on other trends and patterns that we now
see emerging in the global market. I recently made a trip to Dubai to
participate in the growing dialogue on the potential use of diamonds
and other commodities for illicit purposes, including money laundering
and terrorist financing. We recently developed cases from Bank Secrecy
Act data involving foreign gem companies with links to the United
States and referred this information to law enforcement authorities.
This is part of our focus on and study of what may be another iteration
of money laundering and terrorist financing--commodity-based systems.
In my view, while FinCEN still has some of the best financial
analytic talent in the United States government, the challenges we face
require us to further develop that talent to enable the full
exploitation and integration of all categories of financial
information--well beyond Bank Secrecy Act information. I have directed
FinCEN's managers to concentrate on training, as well as the hiring of
new, diverse financial analytic expertise.
Enhancing FinCEN's Technology
As I have mentioned, information sharing is critical to our
collective efforts to detect and thwart criminal activity and that is
why I believe enhancing our technological capabilities is extremely
important. Section 314(a) of the USA PATRIOT Act allows law enforcement
to query United States financial institutions about suspects,
businesses and accounts in money laundering and counter terrorism
investigations. FinCEN facilitates this interaction between the
financial industry and law enforcement by electronically sending law
enforcement requests to various banks that, in turn, check their
records and relay the information back to FinCEN to then provide to the
requestor. This saves law enforcement time and resources. We are
currently enhancing the Section 314(a) electronic capabilities to allow
for the originating request to be made to FinCEN via a secure website.
This system is an example of how critical technology is to our law
enforcement counterparts.
We must continue to work to enhance the development of the PATRIOT
Act Communications System, a system that permits the electronic filing
of reports required under the Bank Secrecy Act. This system was
developed and brought on-line under a very tight legislative deadline.
FinCEN received the E-GOV award for its work on this system. Filing
these forms on-line is not only more efficient; it will help eliminate
some of the data errors and omissions.
As of April 19, 2004, 1.2 million Bank Secrecy Act forms had been
electronically filed through this system. We now support nearly 1,100
users, which include 15 of the top 25 filers of Bank Secrecy Act
information. These top 25 filers accounted for approximately 50 percent
of all Bank Secrecy Act forms filed in fiscal year 2003. While this is
all good news, the bad news is that the current number of forms filed
electronically remains quite small on a percentage basis. The forms
being filed through the PATRIOT Act Communications System represents
only approximately 5 percent of the universe of all Bank Secrecy Act
reports filed. I have directed our PATRIOT Act Communications System
team to reach out to the financial industry and determine what more
needs to be done to convince them to file electronically. As we learn
about what is holding institutions back from filing, I have directed
our team to work closely with system developers to build the system
stability and tools necessary to improve the overall percentage of
filing.
FinCEN presently lacks the capacity to detect Bank Secrecy Act form
filing anomalies on a proactive, micro level. As I mentioned earlier,
BSA Direct will integrate Bank Secrecy Act data into a modern data
warehouse environment and it will include tools to flag Bank Secrecy
Act form filing anomalies for action by FinCEN and/or referral to
appropriate authorities. In the meantime, FinCEN is developing a
request to the Detroit Computing Center to provide periodic exception
reports on financial institutions whose Bank Secrecy Act form filing-
volume varies beyond prescribed parameters during prescribed time
frames. While we will not be able to conduct the sophisticated
monitoring that will be available with BSA Direct, this interim step
should produce an alert in the event of a catastrophic failure to file
forms, as was experienced in the Mirage case in which the Mirage Casino
in Las Vegas failed to file over 14,000 currency transaction reports in
an 18-month period.
Enhancing FinCEN's Regulatory Programs
The administration of the regulatory regime under the Bank Secrecy
Act is a core responsibility for FinCEN. Given the nature of our
regulatory regime--a risk-based regime--our partnership with the
diverse businesses in the financial services industry is the key to our
success. I must tell you that it is my perspective that the financial
industry is generally a model of good corporate citizenship on these
issues. The industry's diligence and commitment to the recordkeeping
and reporting requirements of the Bank Secrecy Act is by and large
outstanding. The industry's cooperation with FinCEN in implementing
many of the provisions of the USA PATRIOT Act has strengthened the
foundation of our efforts to safeguard the financial system from
criminal abuse and terrorist financing. I have met with many of our
industry partners in the last several months, both old and new, and I
have been struck with how concerned they are that the information they
provide be of value to the fight against terrorist financing and other
financial crimes. In turn, FinCEN is committed to enhancing the
guidance they need as they strive to meet the requirements and
objectives of new regulations.
The challenge before FinCEN on this issue is simple: we must ensure
the remaining regulatory packages required by the USA PATRIOT Act are
completed and implemented. Moreover, as we work with our regulatory
partners to implement this regulatory regime, we must provide constant
feedback and guidance. We have asked the industry to create anti-money
laundering programs that are risk-based--custom tailored to each
institution based upon the business in which that institution engages
and the customers that institution has. We must find ways to help the
industry define that risk. Development of secure web-based systems that
will foster the communication discussed above is a step in the right
direction. But we must continue to find new and better ways to reach
out to the industry. They understand the threat money laundering and
illicit finance poses to our financial system and they are willing to
help.
Perhaps our most significant challenge lies in ensuring that
financial institutions are appropriately examined for compliance with
the Bank Secrecy Act and its implementing regulations. As you know, we
have issued and will continue to issue anti-money laundering program
regulations that will bring new categories of businesses under this
form of Bank Secrecy Act regulation for the first time.
We have and will continue to rely on the judgment, expertise, and
resources of the Federal banking, securities and commodities
regulators. But the expansion of the anti-money laundering regime comes
with the additional responsibility and challenges of examining
thousands of addresses and businesses for compliance. We have relied on
the Internal Revenue Service to examine those non-bank institutions.
The addition of the insurance industry and dealers in precious stones,
metals, and jewels, two categories of financial institutions for which
we will shortly issue final anti-money laundering program regulations,
will themselves stretch the resources of agencies responsible for
examination. We must find ways to ensure that these regulatory programs
are implemented in a fair, consistent and timely manner that is focused
on achieving the goals of the Bank Secrecy Act. Although difficult,
this is an issue that must be resolved.
Finally, we intend to take even a more active role in working with
our regulatory partners to ensure the effective examination of
financial institutions. We will find appropriate ways to enhance our
ability to provide prompt, interpretive guidance to examiners, obtain
consistency in the application of the regulations across industry
lines, and identify and address compliance issues as they arise.
Enhancing FinCEN's International Program
FinCEN's international initiatives and programs are driven by a
stark reality: finance knows no borders. Next year will mark the tenth
anniversary of the founding of the Egmont Group--a milestone event that
FinCEN will host in Washington, DC next June. The Egmont Group is an
international collection of ``financial intelligence units''--entities,
which, like FinCEN, are charged with the collection and analysis of
financial information to help prevent money laundering and other
illicit finance. The Egmont Group has achieved remarkable growth since
its inception in 1995. Membership has risen from 6 charter members to
84. This membership number will rise to 92 this year and is expected to
top 100 by the time of the June 2005 Plenary.
The Egmont Group serves as an international network, fostering
improved communication and interaction among financial intelligence
units (FIUs) in such areas as information sharing and training
coordination. The goal of the Group is to provide a forum for FIUs
around the world to improve support to their respective governments in
the fight against financial crimes. This support includes expanding and
systematizing the exchange of financial intelligence information,
improving expertise and capabilities of personnel employed by such
organizations, and fostering better and more secure communication among
FIUs through the application of technology.
Egmont's secure web system permits members of the group to
communicate with one another via secure e-mail, and to post and assess
information regarding trends, analytical tools, and technological
developments. FinCEN, on behalf of the Egmont Group, maintains the
Egmont Secure Web. Currently, 76 of the 84 members (90 percent) are
connected to the secure web site. I am very pleased to announce that
FinCEN will launch a new and more efficient secure web site for Egmont
in June. We expect this new site will generate more robust usage, which
will enhance international cooperation among Egmont members.
FinCEN has played a significant role in the growth and health of
the Egmont Group and it maintains bilateral information sharing
agreements with financial intelligence units around the world. However,
in my view, this program has not received the priority it should have
in recent times. Merely because of the simple statement I made
earlier--that finance knows no borders--we must step up our
international engagement with our counterparts around the world. Our
plan is to do three principal things:
--Lead the Egmont Group to begin focusing on actual member
collaboration. Egmont members should be collaborating in a more
systemic way to address issues relating to terrorist financing,
money laundering and other illicit finance at both a tactical
and strategic level.
--Enhance the FinCEN analytical product we provide to our global
counterparts when we receive requests for information. Today,
we principally provide the results of a data check. We think we
owe our colleagues more in-depth analysis of the information we
provide. As noted before, we will also be making more requests
for information and analysis from our partners--particularly
when the issue involves terrorist financing or money
laundering.
--Foster exchanges of personnel with financial intelligence units
around the world. We have already begun discussions with
certain counterparts about such an exchange and we are hopeful
we can begin this program soon. The benefits of this type of
exchange are obvious. It is the best way we can learn together
how to address a truly global problem.
FinCEN will also enhance its support for Treasury policy officials'
work in the Financial Action Task Force (FATF) and FATF regional
bodies. We will continue our work with the State Department in the
drafting and editing of the ``International Narcotics Control Strategy
Report.'' Finally, we will continue our important efforts on financial
intelligence unit outreach and training. Presently, we are working with
the United Arab Emirates on a South Asia FIU Conference for
Afghanistan, Bangladesh, India, Maldives, Pakistan and Sri Lanka.
Additionally, FinCEN has given its support and participation to the
``3+1'' Working Group on terrorist financing in the Tri-border Area.
The issues of information sharing and the bolstering of FIUs in the
participating states of Argentina, Brazil and Paraguay are critical
issues for the U.S. delegation to the ``3+1'' Working Group led by the
Department of State's Office of Counter-Terrorism.
FinCEN's Organizational Structure
We have been working closely with Treasury on our efforts to more
effectively marshal our resources at FinCEN. As a result, I recently
proposed a realignment of FinCEN that reflects my priorities to enhance
FinCEN's analytical component and improve its focus and services
devoted to outreach, education and technology on behalf of both its
clients and the financial services community. We have briefed your
staff on this proposal and, just last week; have received approval from
the Department to go forward with this realignment.
Essentially, the realignment provides the ability to pull out the
non-analytical functions presently entangled in FinCEN's analytical
unit so that those managers and analysts can focus exclusively on
analysis. We are also combining all client services and systems under a
single manager in order to ensure that our technology is coordinated
and better focused on serving its users. Similarly, I want this
organizational structure to highlight the importance of education and
training of our law enforcement clients and the regulated community.
Only by working closely and cooperatively with these groups can FinCEN
truly understand what services it must provide and what requirements it
must meet to assist in the detection, prevention and dismantling of
terrorist financing.
FISCAL YEAR 2005 BUDGET REQUEST
The proposed fiscal year 2005 budget is designed to assist in
strengthening our role in the United States Government's efforts to
understand, detect, and prevent terrorist financing. I also believe it
will allow us to begin to meet the challenges that I have outlined
above. The President's fiscal year budget request would provide
$64,502,000 and 291 full-time equivalents for FinCEN. This request
includes:
--$1.533 million and 4 FTE for program increases to:
--(1) enhance regulatory support to newly covered industries as
required under the USA PATRIOT Act ($0.278 million and 2
FTE);
--(2) enhance access to Bank Secrecy Act information by putting
information technology aids in place to the Gateway system
to increase the current 1,000 law enforcement users to
3,000 users by fiscal year 2008 ($1.055 million and 2 FTE);
and,
--(3) procure financial and administrative services which would
enable FinCEN to consolidate its accounting and financial
reporting by using a Treasury franchise service provider,
assuring continued submission to TIER and other accounting-
related reporting in the Treasury format ($0.200 million
and FTE).
--$2.5 million transfer from the Internal Revenue Service for the
Bank Secrecy Act (BSA) Direct System. See infra.
--$3.238 million and 10 FTE for adjustments necessary to maintain
current levels ($1.716 million) and program annualizations for
fiscal year 2004 initiatives ($1.522 and 10 FTE).
CONCLUSION
The fiscal year 2005 budget request for FinCEN supports the
President's fight against terrorism, and continues to build the
framework necessary for accomplishing our complex mission of protecting
the United States financial systems from abuses imposed by criminals
and terrorists and assisting law enforcement in the detection,
investigation, disruption and prosecution of such illicit activity
through our role as the administrator of the Bank Secrecy Act.
I look forward to continuing to work with you to meet these
challenges and enhance our contributions to the war on financial crime
and terrorist financing.
Mr. Chairman, this concludes my statement.
______
Alcohol and Tobacco Tax and Trade Bureau
Prepared Statement of Arthur J. Libertucci, Administrator
Mr. Chairman, Senator Murray, and members of the subcommittee, it
is my pleasure and honor to have the opportunity to highlight the
Alcohol and Tobacco Tax and Trade Bureau's (TTB) accomplishments for
the past year and discuss our fiscal year 2005 budget submission.
The Alcohol and Tobacco Tax and Trade Bureau was established
January 24, 2003, as a result of the Homeland Security Act of 2002. The
Act authorized the transfer of all of the firearms, explosives, and
arson functions of the Bureau of Alcohol, Tobacco and Firearms (ATF) to
the Department of Justice and established TTB within the Department of
the Treasury. While the agency was given a new name, the history of
TTB's regulatory responsibilities dates back to creation of the
Department of the Treasury and the first Federal taxes being levied on
distilled spirits in 1791.
The mission of TTB is to collect alcohol, tobacco, firearms and
ammunition excise taxes, to ensure that alcohol beverages are labeled,
advertised, and marketed in accordance with the law, and to administer
the laws and regulations in a manner that protects the revenue,
protects the consumer, promotes voluntary compliance, and facilitates
import and export trade in beverage and industrial alcohols.
Not since the late 1940's has there been such a large overhaul and
reorganization of the government and its agencies. The challenges in
standing up a brand new bureau were many, but the men and women on
board at the time of the transition understood and were ready for the
challenging job that lay ahead. When we began, we only had about half
of our projected FTE on board. Most of fiscal year 2003 and part of
fiscal year 2004 were dedicated to hiring personnel in all of our
offices in Washington, DC, and around the country, and finding
appropriate office space for field personnel.
Late in 2003 we began the move to our new headquarters location,
two blocks from the Department. This was accomplished in two phases. A
majority of the offices located in Washington, DC, which include
Headquarters and Field Operations staff, moved September 2003. My staff
and the Office of Chief Counsel moved April 2004. Our goal in both
moves was to continue with business as usual, carrying out our mission,
and have as seamless a transition as possible.
AUTHORITIES
TTB oversees the regulation of alcohol under the Federal Alcohol
Administration Act (FAA Act) and the Internal Revenue Code of 1986
(IRC). Under the FAA Act, TTB regulates the authorized operations,
labeling, advertising, and trade practices for those engaged in the
alcohol beverage industry. This includes trade practice provisions,
which regulate such practices as exclusive outlets, tied house
arrangements, commercial bribery, and consignment sales. These
provisions are intended to ensure fair dealing within the industry and
to protect the consumer by prohibiting sales arrangements that result
from anti-competitive practices.
We also administer the IRC provision relative to the qualification
and operation of distilleries, wineries, breweries, and industrial
alcohol producers and users. Under this authority, we administer
classification and collection of tax on alcohol products, and the
collection of various occupational taxes from alcohol dealers. TTB's
responsibilities under the IRC cover the production, packaging,
bottling, labeling, and storage requirements related to alcohol
products.
With respect to tobacco, TTB work involves chapter 52 of the IRC,
relating to the manufacture, importation, exportation, and distribution
of tobacco products. Specifically, we examine applications and issue
permits for tobacco manufacturers and importers, and export warehouses,
and oversee their operations. TTB classifies a wide variety of tobacco
products for tax purposes, and collects the tax on such tobacco
products, as provided under the statute and implementing regulations.
Finally, TTB also administers the excise tax on firearms and ammunition
pursuant to its authority under the IRC.
MISSION
TTB administers Federal tax laws on alcohol, tobacco, firearms, and
ammunition, and ensures that the alcohol and tobacco commodities TTB
regulates are lawfully sold in the United States. In carrying out its
mission responsibly, TTB must be sensitive to the industry's concerns
as the government's customers, by reducing delays and regulations that
impede business while also providing a tangible benefit to the American
public. TTB's history indicates that an appropriate regulatory presence
provides a deterrent against tax evasion schemes. TTB is committed to
carrying out its responsibilities in a manner that makes effective and
efficient use of the public resources entrusted to us. We carry out our
mission without imposing inappropriate or undue burden on those whom we
regulate and from whom we collect taxes. At the same time we maintain
an aggressive enforcement program that deters violations by industry
members and promotes voluntary compliance.
The split from our predecessor agency has enabled TTB to return to
its roots and focus on collecting the revenue and protecting the
public. In the year since our inception, we have returned to that core
mission, and we have proven that despite myriad administrative details,
we have been able to focus on excise tax collection. Allow me to
explain some of our highlights of the past year.
TTB created a Field Operations Directorate that includes the pre-
established National Revenue Center in Cincinnati, Ohio, which
reconciles returns, reports, and claims; screens applications and
issues permits; and provides expert technical assistance for industry,
the public, and government agencies to ensure fair and proper revenue
collection. The NRC is currently undergoing a business process
reengineering study in order to maximize customer service and
efficiency, while allowing TTB to handle an ever-increasing workload
with existing staff.
The Trade Investigations Division (TID), staffed with
Investigators, has seven field groups located across the country
dedicated to ensuring that only qualified applicants are granted
permits to engage in the production and distribution of alcohol and
tobacco products. Field investigations of industry members are
conducted to help promote voluntary compliance with the laws and
regulations enforced by TTB and prevent misleading labeling and
advertising of alcohol beverages.
Investigators also respond to credible information suggesting a
health-related contamination of an alcohol or tobacco product. In
addition, TID conducts trade practice and Certificate of Label Approval
(COLA) fraud investigations. Some investigations over the year have
resulted in revocations of permits or in the applicant withdrawing the
permit as it is unable to meet the government requirements to operate.
The work done by Trade Investigations is not only about educating our
customers, but showing our presence and clearly helping carry out our
unique and necessary mission.
Because of a greater field presence, in fiscal year 2003 we
accepted 13 Offers-in-Compromise (OIC) for a total of $1.162 million.
In fiscal year 2004, we have so far accepted 12 OICs for a total of
$270,086, and we have an additional 7 cases pending for $176,472. As an
example, we collected a $35,000 OIC from a company who was found to
have been receiving and shipping product without proper label approval.
Investigators also conducted a product integrity investigation into a
winery in the Southwest and found numerous label, record keeping, and
administrative violations. We have also participated in counterfeit
alcohol and tobacco investigations along the border in Texas and New
Mexico.
TTB's Tax Audit Division and program was first established in late
fiscal year 2003 as part of TTB's strategic plan to collect the revenue
that is rightfully due from the alcohol, tobacco, and firearms and
ammunitions industries because in the past, ATF's program priorities
and investigations were placed primarily on firearms and explosives.
The division was established to provide a systematic approach to
safeguard over $14 billion in annual revenue collected by TTB.
The Tax Audit Division verifies the proper payment of tax and
ensures compliance with the laws and regulations that protect the
revenue and promote voluntary compliance. TTB Tax Audit uses a risk-
based approach to target non-compliant industry members. A goal in 2004
is to establish a baseline for measuring tax revenue audited in a 5-6
year period and the industry compliance rate (percentage of taxpayers
audited with no material findings, thereby validating the amount of tax
paid was accurate and rightfully due).
TTB's accomplishments in Tax Audit include establishing 10 audit
offices across the country and recruiting and hiring 80 audit staff.
The average staff person has 10 years of previous audit experience and
holds one audit certification (i.e. Certified Public Accountant). TAD
also established a formal industry-training program: 75 percent of the
workforce has been trained in three or more industries (Distilled
Spirits Plants, Beer, Wine, Manufacture of Non-beverage Products, and
Firearms). They also implemented an automated audit documentation tool
to facilitate a standard audit approach and create efficiencies, and
developed an audit work plan scheduling 110 taxpayers for review in
2004.
I am pleased to report that initial audit findings have identified
approximately $4.7 million in additional tax revenue due, and to date,
these audits have resulted in approximately $500,000 in additional
revenue collected by TTB. Further, these audits have identified an
additional $523,000 in revenue due to the governments of Puerto Rico
and the Virgin Islands for taxes collected on articles (i.e. rum)
produced in Puerto Rico or the Virgin Islands (also called cover over).
These divisions work hand in glove with the Risk Management Staff
who develop, implement, and maintain programs that ensure TTB is
collecting all the revenue due and protecting the public. Divisions
within Headquarters Operations often support the work done by TTB
Auditors and Investigators in the field.
The Regulations and Procedures Division (RPD) drafts new and
revised regulations under the Internal Revenue Code and the Federal
Alcohol Administration Act. They issue rulings, procedures, and
informational documents to clarify the law and regulations. Most
notably, they evaluate important policy issues before TTB and write
proposed regulations and Treasury Decisions for publication in the
Federal Register and the Code of Federal Regulations.
In 2003, much attention was placed on the issuance of limitations
set for health claims related to consumption of alcoholic beverages. On
March 3, 2003, TTB, along with the Treasury Department, issued final
regulations to prohibit the appearance on labels or in advertisements
of any health-related statement that is untrue or tends to create a
misleading impression. The regulations require that specific health
claims must be truthful, adequately substantiated by scientific or
medical evidence, disclose the health risks associated with both
moderate and heavier levels of alcohol consumption, and outline the
categories of individuals for whom any alcohol consumption poses risks.
The new rules took effect June 2, 2003.
In addition, in March 2003, TTB and the Treasury Department issued
proposed regulations that would clarify the status of flavored malt
beverages by refining the regulatory definitions of ``beer'' and ``malt
beverage.'' The proposal would limit the amount of alcohol added to
beer or malt beverages through flavors use. It would also require
display of alcohol content on flavored malt beverage labels, and would
prohibit references to distilled spirits on all malt beverage labels.
The proposal garnered a considerable amount of congressional interest
and TTB received over 16,000 comments from the public; the norm is 10-
20 comments per Notice of Proposed Rulemaking. In the weeks and months
following the closure of the comment period, staff catalogued and
reviewed the comments. A decision will be published once Treasury
completes the review.
This past year brought the opening of the new laboratory facility
that TTB's Scientific Services Division shares with the ATF. This
state-of-the-art facility, which was dedicated in June 2003, in
Ammendale, Maryland, provides chemists and support staff an optimum
working environment in which to process samples for its customers. The
Laboratory supports TTB by providing expertise in the analytical
analyses of distilled spirits, wines, malt beverages, specially
denatured alcohol, non beverage alcohol, and tobacco products. TTB has
a second lab in Walnut Creek, California, known as the Compliance
Monitoring Laboratory that primarily conducts tests of alcohol
beverages. In this regard, TTB uses a market basket sampling approach
as well as other methods to evaluate products on the market and ensure
that products are properly labeled, do not contain prohibited
substances, and that the products do not impose a health hazard to
consumers.
An important component of TTB's external relations are its
partnerships in the international arena. The International Trade
Division (ITD) acts as TTB's liaison on issues related to alcohol
beverages, and facilitates the trade of alcohol beverages by serving as
an advisor to industry members, various U.S. Government agencies and
embassies. In this capacity TTB is represented at international trade
meetings and participates in international trade negotiations,
primarily working with the Office of the United States Trade
Representative (USTR).
Again, through ITD, TTB contributed to the World Wine Trade Group's
(WWTG) progress toward a labeling agreement designed to facilitate
trade in wine among the member countries. The WWTG is an informal group
of seven countries who have a common interest in exporting wine
worldwide. The United States, Canada, Chile, Argentina, South Africa,
New Zealand and Australia are members of this group.
Also, in the international trade arena, TTB continues to work with
USTR in crafting a Memorandum of Understanding (MOU) with Mexico to
clarify requirements for U.S. bottlers who receive bulk tequila. The
United States has worked hard to convince the Mexican government to
reconsider their proposal to ban the exportation of bulk tequila.
Mexico cited failures by other countries in protecting the standard of
tequila as a reason for suggesting the ban. Such a ban would adversely
impact the U.S. distilled spirits industry's ability to profitably
continue to sell and distribute tequila in the United States and all
over the world, and, in turn, cause Mexico to inadvertently hurt one of
their own most profitable exports. TTB participated in several meetings
this year in Mexico, the United States, and Canada and played a key
role in delaying the implementation of the bulk shipment ban by
describing to the Mexican government our past efforts in enforcing the
integrity of tequila and by stressing our continued commitment to
protect this beverage and demonstrating how the TTB enforcement
mechanism makes such a ban unnecessary. The MOU seeks to both clarify
and prevent undue extraterritorial requirements on U.S. bulk tequila.
One of the largest components of Headquarters Operations is the
Advertising, Labeling and Formulation Division. This division carries
out TTB's statutory mandate to prevent consumer deception and ensure
that alcohol labels provide the consumer with adequate information as
to the identity and quality of the product.
In fiscal year 2003, ALFD's staff of nine label specialists
reviewed 101,000 Certificate of Label Approval (COLA) applications and
issued nearly 75,200 certificates. Four formula specialists reviewed
over 1,800 domestic beverage alcohol formulas, and approximately 1,500
pre-import applications.
In May 2003, ALFD launched an electronic filing system for use by
industry members and third parties to file applications for COLAs. This
new web-based system, known as COLAs Online, provides industry members
with a streamlined, more expedient and paperless means of obtaining a
COLA. COLAs Online allows industry members to submit COLA applications
via the Internet, as well as provides a way for ALFD employees to
review the application electronically. Submitted applications are
electronically approved, returned for correction, or rejected. The
system also provides an online capability for industry members to
obtain the status of electronically filed forms and the Public COLA
Registry section of COLAs Online allows the public to view approved
COLAs, including images of the alcohol labels. We currently receive
approximately 15 percent of all COLA applications electronically and we
expect that amount to steadily increase with time.
In addition to these divisions, TTB is supported by a world class
cadre of attorneys and Office of Management personnel. Often these are
the employees who serve as the glue to the functions we perform as a
Bureau. Further, a majority of services we use are contracted out and
managed though a Memorandum of Agreement with ATF. This arrangement
facilitates TTB becoming a stand-alone Bureau within the Department of
Treasury. The memorandum will be renegotiated, but TTB continues to
search for, and has found, many new ways to less expensively outsource
required services including moving many management functions to the
Bureau of Public Debt.
FISCAL YEAR 2005 APPROPRIATIONS REQUEST
The funding request for fiscal year 2005 is $81.9 million and 544
FTE, a $2.4 million increase over fiscal year 2004. This increase
represents adjustments necessary to maintain current levels of
operations. It supports TTB's core mission to protect the public and
collect the revenue. The request is fiscally sound, and I believe that
we have proven that while we are a small Bureau, we are focused and
effective, providing results-driven service to America.
One of our priorities for fiscal year 2005 is to be completely
separate from ATF's Information Technology services. ATF is not a
service provider and is part of the Department of Justice. At this
time, ATF has given written notice that beginning in fiscal year 2006,
it will no longer service TTB's information technology needs. Also, ATF
may not be able to provide administrative and other management services
to TTB. We have formulated a plan that will help us cover services
internally and externally by outsourcing from the public and private
sectors. As resources become available, we believe we can judiciously
acquire the services needed to run our Bureau, although much work needs
to be done to complete this task by fiscal year 2006.
CONCLUSION
Through the judicious and responsible use of the resources Congress
provides, we look forward to continuing to provide services that are
not only unique in American Government, but provide a clear service to
America by collecting taxes and protecting the public. It is not only
my honor to lead the men and women of this Bureau, but I appreciate
your support of this new Bureau and our wholehearted efforts to carry
out our mission. Thank you.
______
U.S. OFFICE OF SPECIAL COUNSEL
Prepared Statement of Scott J. Bloch, Special Counsel
I am pleased to present testimony on behalf of the U.S. Office of
Special Counsel and our fiscal year 2005 budget request. As the new
Special Counsel, I look forward to working with the U.S. Senate in my
role as independent guardian of the merit system of civil service by
protecting Federal employees from unfair workplace discrimination or
mistreatment, including reprisal for whistleblowing, as well as
imposing corrective action to protect those employees and bringing
disciplinary action against negligent supervisors.
GOALS
My goals for the agency are twofold: (1) to continue to strengthen
the civil service merit system by vigorously enforcing the three
statutes for which the Office of Special Counsel bears responsibility:
the Civil Service Reform Act, the Whistleblower Protection Act, and the
Hatch Act; (2) to provide an intense, more visible level of enforcement
of the Uniformed Services in Employment and Re-Employment Rights Act
(USERRA).
GUIDING PRINCIPLES FOR ACHIEVING THESE GOALS
The integrity of the civil service merit system depends on the
alertness and effectiveness of its watchdogs. The most significant
challenge we face into next year is to eliminate our pending case
backlog and to develop methods to make the agency more efficient and
effective in its main mission, while at the same time assuring
complainants a fair review. No Federal employee should have to wait
years, in some instances, for a valid complaint or situation to be
addressed or an offending supervisor disciplined.
We will accomplish this by asking for great energy and focus of the
current staff, and by bringing on new talent, skilled at locating
issues and understanding problem solving, keen on protecting rights and
mindful of the need to address cases that lack jurisdiction or do not
meet the requisite thresholds. In all of this, we will be guided by the
understanding that this is being done so that we can better service the
merit system and protect whistleblowers. If we can do all of that, then
we can institute a mode of operation that prevents us from allowing
such a backlog of cases to surface again.
During this challenging time in our Nation, the security of the
country depends on our armed forces. And our armed forces depend as
never before on the vital roles played by national guardsmen and
reservists. Every reservist and guardsman must know that the United
States stands fully behind them, and will investigate and fight for
justice on their behalf regarding their employment and re-employment
after active service deployments. Without extremely strong enforcement
in this area, serving in the guard and reserves becomes less
attractive, and the entire military system currently in use becomes
weakened.
The teeth behind our effectiveness in enforcing each of our
mandates lie in our ability to litigate in pursuit of justice. To
become a more effective enforcer implies an increase in meritorious
litigation, which I hope to pursue.
Finally, I know that Congress also shares our desire to protect
Federal whistleblowers; however, the protection does not occur if
Federal employees do not know about the existence and purpose of the
Office of Special Counsel. Therefore, a critical function is our
extensive outreach and training efforts so that Federal employees know
they can call us when they have a complaint or problem within their
agency.
RELEVANT FUNDING FACTORS
For fiscal year 2005, the OSC is requesting $15.449 million, in
order to fund approximately 113 full-time employees (FTE) and related
non-personnel costs.
The purpose of this requested increase is to manage and process the
agency's steadily increasing workload since fiscal year 2000 of
prohibited personnel practice complaints, whistleblower disclosures,
and Hatch Act matters, and to reduce persistent case processing
backlogs--including serious backlogs in the processing of whistleblower
disclosures. Given the increasing workload of OSC, 113 FTE is a modest
request.
Looking at the data for the past several years, I believe several
factors account for or contribute to this workload increase. They
include: publicity about an increased number of high-profile cases
handled by the OSC, including whistleblower disclosures, and four
Public Servant Awards issued to whistleblowers by the OSC; heightened
awareness and concern over national security disclosures after the
events of September 11, 2001; increased public interest in elections
since the 2000 presidential election, and the start of the 2004
campaigns; the OSC's 2302(c) Certification Program; and significant
improvements in OSC's web site, increasing awareness by government
employees and others of the OSC and its functions.
I will highlight specific areas that I believe warrant an increase
in staffing:
--In April 2004, soon after I became the new Special Counsel, I
established a new Special Projects Unit (SPU) specifically to
examine the organization's system for handling cases, to handle
the pending backlogs, and to consider and experiment with new
methods for increasing the efficiency and effectiveness of all
other aspects of the OSC. Several of the most experienced OSC
attorneys are now assigned to the unit to help remove the
current backlog of cases and to prevent such problems in the
future. This includes a careful look at the agency's web site
and methods of electronic filing.
--Given the increasing numbers of complaints and cases in all units
of the agency, increased levels of labor and staff costs are
required to ensure no backlogs will build up again.
--Regarding prohibited personnel practice complaints, increased staff
costs are also required for higher compliance with the 240-day
prosecution deadline currently required by statute.
--I am confident of our ability to fulfill our stated goal of
providing a more visible level of enforcement of USERRA, even
in (and especially in) the midst of one of the largest-ever
demobilizations of reservists from overseas in the coming year.
In conjunction with other Federal entities, we will
aggressively prosecute USERRA claims. But this may require a
higher number of staff focused in the USERRA area.
--Public awareness of the OSC's Disclosure Unit (DU) has grown in
recent years and the greater awareness of national security
issues, following the terrorist attacks of September 11, 2001,
and subsequent events, have also caused a record number of
whistleblower disclosure filings with the OSC. During fiscal
year 2002-2003, for example, the DU received 535 or more
disclosures each year--compared with 380 disclosures in fiscal
year 2001 and an average of 360 in the preceding 4 fiscal
years. Many of the disclosures filed after fiscal year 2001
have dealt with national security issues (some involving
complex and sensitive classified material) that have required
the work of more than one DU staff attorney.
As of September 30, 2003, the total number of cases pending in
the DU was a record 690 (up drastically from 556 at the end of
fiscal year 2002, and 287 at the end of fiscal year 2001). A
significant number of these cases were more than a year old,
including matters designated after initial review as the
highest priority disclosure--an allegation of a substantial and
specific danger to public health and safety likely to merit
referral to the head of the agency involved for investigation.
The OSC is requesting additional FTE allocation to DU backlog
reduction efforts (i.e., to provide timelier resolutions of
whistleblower disclosures filed with the OSC).
By law, the OSC has 15 days to review a disclosure and to
determine whether there is a substantial likelihood that the
information provided discloses any violation of law, rule, or
regulation; gross mismanagement; gross waste of funds; abuse of
authority; or a substantial and specific danger to public
health or safety. Given the increasing numbers and complexity
of disclosures in recent years, as well as the time required to
contact whistleblowers, examine information submitted, perform
necessary analysis, and draft required correspondence, this
timetable has, in reality, proven to be unattainable in most
cases. This has resulted in a persistent backlog.
While the OSC is fully committed to directing whatever resources
are required to immediately process and refer critical national
security disclosures, additional resources (not only in staff
but in facilities and other resources needed to properly handle
such critical matters) are needed.
The Disclosure Unit backlog has become an issue of understandable
concern to Congress. It has also been a pressing concern to the
OSC, which has implemented several measures in recent years in
efforts to improve upon its timeliness in processing
whistleblower disclosures. For example, the DU has implemented
a priority system for matters received; those priorities are
tracked using the agency's automated case tracking system;
additional employees have been detailed to DU work; and, as
funds have permitted, a limited number of additional staff has
been allocated to the unit.
--In response to recent calls for the OSC to attack the problem more
aggressively, the OSC has begun the process of applying more
intensive and focused strategic workforce planning to that
problem, as part of a comprehensive strategy to address all
areas of backlog in the agency. No strategy can succeed,
however, without adequate funding to support additional staff
and associated resources. The OSC's fiscal year 2005 budget
request will provide funding for the additional staff needed to
more adequately comply with the 15-day time limit for DU
decisions, and to make progress toward the goal of reducing the
Unit's backlog.
--The increased amount of litigation necessary to strongly enforce
adherence to the statutes also has a cost in terms of employee
resources.
--Next, in this busy election year, we expect our Hatch Act
complaints and cases to increase as they always do during the
national election cycle. The unit has received a significant
increase in the number of complaints alleging Federal, State,
and local Hatch Act violations, and a steadily growing number
of requests for advisory opinions on the Act. Between fiscal
year 2001-2003, the Hatch Act Unit received an average of 198
complaints per year, compared to 84 complaints on average in
each of the previous 3 fiscal years. Likewise, there has been a
significant increase in the number of alleged Hatch Act
violations referred for field investigation--i.e., 35 in fiscal
year 2003, compared to 8 in fiscal year 2002, and 10 in fiscal
year 2001.
Hatch Act enforcement spawned lengthy and resource-intensive MSPB
litigation activity by OSC in fiscal year 2003.
The OSC's fiscal year 2005 budget request will provide funding
for the staff resources needed to handle increasing numbers of
Hatch Act complaints, opinions, and enforcement efforts,
including litigation.
--As mentioned, outreach within the Federal workforce is critical to
the mission of OSC. Success in outreach obviously generates a
greater numbers of complaints, whistleblower disclosures,
allegations and requests for assistance than in previous years.
I believe our excellent professional staff will rise to the
occasion, but the agency needs an increase in FTEs and an
increased travel budget to keep up with those demands.
--Higher labor funding is also required to better address Freedom of
Information Act (FOIA) processing, investigations, and
enforcement.
--The OSC's fiscal year 2004 funding was intended to pay for the cost
of 113 FTE, but the agency has incurred several unfunded
mandates: increased benefit costs (transit subsidy increases),
new requirements for financial statements and audits,
significant increase in costs under an interagency agreement
for receipt of administrative services, and unanticipated real
estate taxes for its D.C. office. Salaries and benefits make up
approximately 83 percent of OSC's operating expenses for fiscal
year 2004, so the agency has little ability to reprogram funds
when salaries and benefits for authorized FTE exceed
appropriations. While these types of costs may be easily
absorbed by most agencies' budgets that dwarf OSC's, these
types of expenses can easily swamp a relatively tiny agency
like ours, materially having an impact on achieving goals and
even core missions.
--To be successful in meeting our goals of vigorously enforcing the
statutes for which we are responsible, with the least possible
headcount, we are moving to further automate several steps
within our processes, which also bears costs in equipment and
development resources.
PROGRESS MADE
As noted earlier with respect to prohibited personnel practice
complaints, the OSC's ongoing and intensive efforts to improve upon its
responsiveness began to yield results in fiscal year 2003. The agency
processed 85 percent of those complaints within the 240-day timetable
established by Congress. The OSC intends to build on these results, and
achieve close to 100 percent success in this regard--all the while
avoiding any backlogs.
SUMMARY
The largest part of the requested increase in the fiscal year 2005
budget, therefore, is for the full cost of the fiscal year 2004 FTE
increase. The capacity to fund 113 FTEs is needed to properly manage
OSC's statutory responsibilities and to reduce, if not eliminate,
processing delays.
Our office exists to ensure good government. When people behave in
ways that do not promote good government, or jeopardize safety and
health in the Nation, we must take corrective and disciplinary action.
We exist to promote good, efficient, fair government, and integrity for
the Nation among the Federal workforce. The fiscal year 2005 budget
request will enable OSC to reach its mission to promote good government
in an expeditious way.
Thank you for your interest in the Office of Special Counsel.
______
FEDERAL ELECTION COMMISSION
Prepared Statement of Ellen L. Weintraub, Vice Chair
Mr. Chairman, Ranking Member Murray, and members of the committee,
it is my privilege to present the Federal Election Commission's (FEC's)
fiscal year 2005 appropriation request. To begin, on behalf of the
agency, I thank you for last year's appropriation. Your bipartisan
support of the FEC budget has enabled us to continue to implement the
Bipartisan Campaign Reform Act of 2002 (BCRA), which amended the
Federal Election Campaign Act of 1971.
Our fiscal year 2005 appropriation request is for $52,159,000, an
increase of $2,016,596 or 4.02 percent, and for 391 FTE, the same as
our fiscal year 2004 FTE level. This year, as last year, the FEC is
seeking only a modest increase over the fiscal year 2004 budget of
$50,142,404 (less the government-wide across-the-board 0.59 percent
rescission) and 391 FTE. I am pleased to report this request conforms
to the President's fiscal year 2005 budget request for the FEC.
Additionally, last year Congress appropriated $800,000 (less the
0.59 percent rescission) to the Commission for the operations of the
Office of Election Administration (OEA), with the understanding that
any remaining funds and other assets of the OEA would be transferred,
pursuant to section 801 of Public Law 107-252, to the Election
Assistance Commission (EAC) once the EAC was constituted. We are
pleased to report, effective April 1, 2004, the OEA and all of its
assets (including $500,527 in unobligated funds, property and records),
personnel and liabilities, were transferred to the EAC.
The fiscal year 2005 request represents a continuation of fiscal
year 2004 funding levels, adjusted for inflation, and salary and
benefit increases ($1,744,700--a 4.85 percent increase). As such, it
represents a Current Services request for fiscal year 2005, with no
additional funds or staff for new programs or initiatives by the FEC
and represents an overall increase of only 1.92 percent for non-
personnel costs. These minimal increases are detailed in our fiscal
year 2005 Budget Justification.
In its annual review of legislative recommendations, the Commission
has submitted 12 recommendations for legislative action. Four of those
were unanimously endorsed as priority recommendations; the remaining 8
as non-priority. The 4 priority recommendations, in brief, are that
Congress: (1) allow as a permissible use of Federal campaign funds
donations to State and local candidates and for any other lawful
purpose that does not violate subsection (b) of section 439a; (2)
increase the amount that authorized committees may give to authorized
committees of other candidates; (3) modify terminology of ``reason to
believe'' finding; and (4) require mandatory electronic filing of
Senate reports. The remaining 8 recommendations, while placed in the
non-priority category are, nonetheless, supported unanimously by the
Commission as substantive or technical in nature. We are confident
these legislative changes will result in efficiencies, not only for the
FEC, but also for the regulated community.
Over the past few years, the FEC has achieved major successes,
including meeting statutory and court deadlines for the BCRA
implementation and legal challenges to the BCRA, as well as the
expansion of the compliance program. These successes are the result of
FEC efforts and support from our Congressional oversight committees. In
addition, two programs have received accolades from the regulated
community--the Administrative Fine Program and Alternative Dispute
Resolution (ADR) Program. With the addition of these two programs, we
have been able to successfully streamline the enforcement process.
I now will provide a brief overview of the FEC's three core program
areas and relate those areas to the agency's fiscal year 2005 budget
request.
DISCLOSURE PROGRAM
The FEC's disclosure program includes not only the review and
placement of information on the public record, but also educational
outreach, including campaign finance workshops and seminars, a toll-
free line for consumer requests, and automatic fax transmission of our
publications 24 hours a day, 7 days a week. FEC meeting agendas and
related documents also are available on our web site. Our disclosure
program accounts for over a third of the agency's staffing (137 FTE),
distributed among the Public Records Office, Information Technology
Division, Reports Analysis Division, Press Office, Information Office
and those sections of the Office of General Counsel that formulate
proposed regulations and draft responses to advisory opinion requests.
Improvements in productivity, aided by IT enhancements, generally
have enabled the FEC to keep pace with the large increases in Federal
campaign finance activity during recent election cycles, activity which
has nearly doubled in the last 12 years. Total disbursements for a non-
Presidential election cycle have increased from $1.1 billion in 1986,
to $3.8 billion for the 2000 presidential and 3.1 billion for the 2002
congressional cycle--a 282 percent increase. We anticipate $4 billion
in total disbursements for Federal campaigns in the 2004 cycle, from
about 8,000 committees filing over 90,000 reports and generating 3
million itemized transactions. The 2006 cycle, a congressional cycle,
should be slightly lower in volume than the 2004 presidential cycle.
Every election cycle since 1992 has seen a new record in total spending
in Federal elections for Congressional and Presidential elections. With
your help, we are building an impressive communications system capable
of handling our Information Technology (IT) needs well into the future.
This system offers the capability of instantly updating our database
and expanding the types of information collected. As you are aware,
however, this system is expensive. The average annual cost is about $1
million to maintain the electronic filing system.
With the passage of mandatory electronic filing, we are beginning
to see the benefits of timeliness and work process improvements such a
sophisticated system affords. Since the institution of electronic
filing, median time to process all documents has improved from 10 to 11
days to 5 to 6 days.
COMPLIANCE PROGRAM
Obtaining voluntary compliance is the foundation of the FEC's
strategic and performance plans, and is at the core of our mission
statement. A credible enforcement program, however, is necessary to
provide sufficient incentive to the regulated community to achieve this
voluntary compliance. In fiscal year 2005, we anticipate assigning 189
FTE to the compliance function, including enforcement, supervisory and
support staff from OGC, Information Technology and the Audit Division.
In the audit track of the compliance program, we are pleased to report
sufficient resources have been provided to allow the Commission to
initiate 40 to 45 audits ``for cause'' for the 2004 election cycle, as
opposed to 25 in the 1998 cycle. Details on the compliance program are
contained in the fiscal year 2005 Budget Justification.
The first major overhaul of the FEC's enforcement program occurred
in May 1993. Faced with a large number of complex cases the Commission
developed the Enforcement Priority System (EPS), to prioritize cases
for substantive enforcement action. This system is designed to provide
a consistent and impartial ranking of cases based on the relative
seriousness of the alleged violations, and gives us a tool to match the
seriousness of a particular case to the resources available to
undertake the investigation. We use the EPS in conjunction with the
case management system, which enables the Commission to measure
performance with regard to the substantive resolution of cases by issue
and to measure timeliness of enforcement actions. Under EPS, the
Commission has activated more cases, closed more cases with substantive
action, and resolved some cases that would otherwise have been
dismissed.
The EPS has enabled the Commission to focus limited enforcement
resources on the more important enforcement actions and to close low-
rated and stale cases. The increased level of civil penalties assessed
by the Commission following implementation of the EPS has demonstrated
the benefits of pursuing more substantive cases. In 1991, there were
262 cases closed with civil penalties totaling $534,000; in 1995, there
were 229 cases closed with $1,967,000 in civil penalties. By fiscal
year 2003, there were 377 cases closed with civil penalties and fines
totaling $2,774,603.
Before 2000, the FEC's enforcement program was administered
entirely by the Office of General Counsel. Two new components of the
Commission's enforcement efforts--the Administrative Fine Program and
the ADR program--are administered by the Staff Director. The goal of
the ADR Program is to resolve matters quickly and effectively through
bilateral negotiations. Both the ADR and Administrative Fine programs
are designed to expand the FEC enforcement presence and resolve certain
types of cases without resorting to the more lengthy traditional
enforcement process. The Commission has met its compliance goals.
Today, the Commission focuses its legal resources on the more complex
enforcement matters, while using administrative processes to handle
less complex matters. For example, from fiscal year 1995 through fiscal
year 2000, the FEC closed an average of 197 cases each fiscal year. In
fiscal year 2001, with the addition of the Administrative Fine and ADR
programs, the FEC closed 518 cases, a 163 percent increase over the
fiscal year 1995-2000 annual average of 197 cases. In fiscal year 2002,
the FEC closed 229 cases, including enforcement, ADR and administrative
fine cases. The total in fiscal year 2003 was 535 closed cases. We are
confident the figure for fiscal year 2004 will be higher.
PUBLIC FUNDING PROGRAM
The Commission also administers the program providing a public
subsidy to Presidential election campaigns. During fiscal year 2005,
approximately 64 FTE from the Audit Division, Office of General
Counsel, and Information Technology Division, will be directly involved
in this program, which will entail audits of the seven candidates
receiving matching funds for the 2004 election. In addition, two
general election candidate committees will be audited, as will two host
committees and two convention committees, for a total of 13
Presidential audits in fiscal year 2004 and 2005. This program began
certifying eligible primary candidates for matching funds and
processing submissions for funding awards on January 2, 2004.
On a related matter, we believe it is appropriate to bring to your
attention the potential shortfall in the Presidential Public Funding
Program. There was a brief shortfall with the February primary matching
payments for the 2004 Presidential election, which was restored with
the February deposits to the Fund. This is the only anticipated
shortfall for the 2004 cycle. We did not experience a major shortfall
for the 2004 Presidential election because several major candidates
decided not to take Federal matching funds for the 2004 primaries;
however, this may change in future elections. The Treasury Department
maintains the matching fund account which is comprised of money derived
from a taxpayer check-off system. Shortfalls in 1996 and 2000 occurred
for several reasons. First, the eligibility requirements for receiving
matching funds have not been adjusted for inflation since 1974, thus
allowing more candidates to qualify for matching funds. Second, the
``front-loading'' of the primary and caucus nominating process which
puts a premium on ``early'' fundraising for Presidential candidates,
resulted in a high volume of funds being raised in 1995 and 1999 that
were eligible for matching payments in January of 1996 and 2000. Absent
legislative action, the Public Funding Program faces potential
shortfalls because of declining participation in the check-off program,
and the failure to index contributions to inflation while the pay-outs
are indexed.
The foregoing summarizes the FEC's fiscal year 2005 budget request.
For a more detailed review of this request, I would urge members of the
committee to consult our more detailed Budget Justification, which
includes charts delineating how our budget request would be allocated
and how it compares to previous years. It also demonstrates how the FEC
has developed and used strategic and performance planning.
Again, I thank you, Mr. Chairman and the committee, for your
continued support and the opportunity to present our fiscal year 2005
budget request.
______
OFFICE OF NATIONAL DRUG CONTROL POLICY
Prepared Statement of John P. Walters, Director
I am pleased to set forth the fiscal year 2005 budget request for
the Office of National Drug Control Policy (ONDCP). I want to thank the
subcommittee for its strong bipartisan commitment to our shared
national goal of reducing drug use in America, especially among our
youth. This subcommittee provides critical funding to support ONDCP's
programmatic, policy, and budget development functions.
Your support of ONDCP's $510.959 million budget request permits
ONDCP to continue fulfilling our dual mission of serving as the
President's primary Executive Branch support for counter-drug policy
and program oversight and simultaneously managing our own programmatic
responsibilities. We continue to work to achieve results of our stated
goals and we are meeting those goals. For example, in February 2002,
President Bush unveiled his goal of reducing youth drug use by 10
percent in 2 years in the National Drug Control Strategy. That goal has
been exceeded. The 2003 Monitoring the Future Study confirms that
current use (past 30 days) of any illicit drug between 2001 and 2003
among students declined by 11 percent. Similar declines were seen for
past year use (11 percent) and lifetime use (9 percent).
ONDCP takes seriously its primary statutory responsibility to
develop national drug control policy and a supporting budget, to
coordinate and oversee the implementation of that policy and budget,
and evaluate drug control programs to ensure that our efforts are
coordinated and focused on obtaining measurable results. In addition to
our policy role, ONDCP is responsible for managing and evaluating four
key programs: The National Youth Anti-Drug Media Campaign, the Drug-
Free Communities Support Program, the High Intensity Drug Trafficking
Areas Program (HIDTA) Program, and the Counterdrug Technology
Assessment Center (CTAC).
ONDCP is requesting $510.959 million in budget authority for fiscal
year 2005. The fiscal year 2004 enacted level is $522.247 million. The
budget request reflects four program accounts: Salaries and Expenses;
the Counterdrug Technology Assessment Center (CTAC); Other Federal Drug
Control Programs; and the High Intensity Drug Trafficking Areas (HIDTA)
program.
A. Salaries and Expenses: $27.609 million
In fiscal year 2005, ONDCP is requesting $27.609 million for
Salaries and Expenses to support a full complement of 125 Full-Time
Equivalents (FTEs) and a pay raise. The request reflects a decrease of
$222,321 below the fiscal year 2004 enacted amount. This request is
essential if ONDCP is to carry out its policy, budget, and programmatic
responsibilities in a manner consistent with achieving measurable
results. This includes:
Operational Request: $26.259 million
Will provide compensation and benefits for all authorized FTEs
including a full complement of Executive Level (EX) positions; contract
services; rental payments to the General Services Administration;
travel and transportation; communications and utilities; printing and
reproduction; supplies, materials and equipment.
Includes resources to support 125 FTEs, an increase of 5 FTEs over
the fiscal year 2004 enacted level. This FTE increase is requested to
offset the loss of many of the 30 military detailee positions the
Department of Defense has supported at ONDCP since 1996. Increasing the
staff level to 125 FTEs will enable ONDCP to assess and respond to the
drug threat facing the Nation. ONDCP will be able to monitor agency
implementation of the National Drug Control Strategy programs and
improve interagency coordination. ONDCP will be able to evaluate
programs and identify those that work. Additionally, ONDCP will be able
to provide policy guidance and oversight to the Counterdrug Technology
Assessment Center (CTAC), High Intensity Drug Trafficking Area (HIDTA)
Program, and Other Federal Drug Control Programs.
Provides for two new initiatives: High Speed TS Communication Line
Costs and Communication Line Costs for DOD Intel-Link computers on-
site. ONDCP will need to assume these costs because of budget
realignments within the DOD Counterdrug budget.
Policy Research Request: $1.350 million
This request will continue and expand ONDCP's policy research
program, an increase of $7,965 over the fiscal year 2004 enacted
amount. ONDCP conducts research to develop and assess drug policy,
identify and detail changing trends in the supply of and demand for
illegal drugs, monitor trends in drug use and identify emerging drug
problems, assess program effectiveness, and improve the sources of data
and information about the drug situation. The requested funding will
support a wide range of new and continuing policy research projects.
B. Counterdrug Technology Assessment Center (CTAC): $40 million
In fiscal year 2005, ONDCP is requesting $40 million to support the
Counterdrug Technology Assessment Center (CTAC). The fiscal year 2004
enacted level is $41.752 million. The aggregate request includes
funding for two distinct components: Research and Development Program
($18 million) and the Technology Transfer Program ($22 million).
Technology Research and Development: $18 million
Demand Reduction R&D Program: $12 million.--CTAC's Demand Reduction
Initiatives, in conjunction with the National Institute on Drug Abuse
(NIDA), will continue to improve upon existing technology available for
substance abuse, dependence, and addiction research. CTAC has
established a ``niche'' in developing and installing advanced
neuroimaging instrumentation at drug abuse research facilities
operating under grants from NIDA. The Demand Reduction Technology
Review Committee (DRTRC) has been established in conjunction with NIDA
to address and prioritize research initiatives with which CTAC can
assist in the future.
Supply Reduction R&D Program: $6 million.--This funding will
provide for developing technology for use by Federal, State, and local
law enforcement agencies in reducing the supply of illegal drugs by
developing technologies that satisfy identified law enforcement
requirements for increased investigative capability. Once tested and
evaluated, developed technologies become available either through the
Technology Transfer Program or through independent purchase. Sponsored
R&D items in fiscal year 2004 include a panoramic 360-degree video
surveillance camera, a Project 25 digital audio body-wire, and a Title
III telephone intercept expansion capability.
Technology Transfer Program (TTP): $22 million
The Technology Transfer Program (TTP) relies on technical and
operational performance testbed evaluations and outreach to industry to
acquire additional items for law enforcement. The TTP makes available
state-of-the-art, affordable, easily integrated, and maintainable tools
to enhance the capabilities of State and local law enforcement agencies
for counterdrug missions. TTP is not a grant program; rather, it
provides drug crime fighting information technology and analytical
tools, communications interoperability, tracking and surveillance, and
drug detection devices from a catalog of items proven to be
operationally effective by Federal, State, and local law enforcement.
Hands-on training and maintenance support are provided to all
recipients, and TTP maintains extensive records of State and local
applications and jurisdiction statistics on every aspect of the program
including the status of deliveries, departments receiving equipment,
and training records.
C. Other Federal Drug Control Programs: $235 million
In fiscal year 2005, ONDCP is requesting $235 million for the Other
Federal Drug Control Programs. The fiscal year 2004 enacted level is
$227.649 million. This account provides funds to a diverse group of
ongoing programs: the National Youth Anti-Drug Media Campaign, the
Drug-Free Communities Support Program, World Anti-Doping Agency (WADA)
Membership Dues, the U.S. Anti-Doping Agency, Counterdrug Intelligence
Executive Secretariat, National Drug Court Institute, and Performance
Measures Development.
The National Youth Anti-Drug Media Campaign: $145 million
In fiscal year 2005, ONDCP is requesting $145 million for the
National Youth Anti-Drug Media Campaign. The fiscal year 2004 enacted
level is $144.145 million. The Media Campaign uses multi-media
advertising and public communications strategies aimed at youth and
parents to promote anti-drug attitudes and behavior. The Campaign is a
comprehensive national effort that integrates paid advertising at
national and local levels with Web sites, clearinghouses, media events,
outreach to the entertainment industry, and strategic partnerships that
enable messages to resonate in ways that generate awareness and
ultimately change beliefs and intentions toward drug use by teens.
Recently, ONDCP released results from the Monitoring the Future
(MTF) Survey, which revealed that current use of illicit drugs among
8th, 10th, and 12th graders was down a statistically significant 11
percent from 2001. This reduction surpassed the President's ambitious
goal of reducing youth drug use by 10 percent in 2 years. Moreover, MTF
revealed that exposure to anti-drug advertising had an effect on
improving youth anti-drug attitudes and intentions.
While these results are promising, each day 4,800 kids try
marijuana for the first time and more adolescents continue to enter
treatment for marijuana dependence than for all other drugs combined,
demonstrating the need for continued funding. Therefore, this request
continues funding for ONDCP's Media Campaign, an integrated effort that
combines paid and donated advertising with public communications
outreach.
In January 2004, the Media Campaign launched a new effort to urge
friends and parents of teenagers to take early action against drug use.
This new effort targets those closest to the user--friends and
parents--and encourages them to intervene at an early stage. Giving
friends and parents of teens the skills necessary to recognize symptoms
of drug use and underage drinking, and to take action to stop it, can
make a difference in the futures of young people at an important
crossroads in their lives, before they need addiction treatment and
before they encounter life-altering or deadly consequences.
The Drug-Free Communities Support Program: $80 million
In fiscal year 2005, ONDCP is requesting $80 million for the Drug-
Free Communities Support Program (DFCSP). The fiscal year 2004 enacted
level is $69.587 million. The DFCSP provides a competitive process to
award matching Federal grants of up to $100,000 per year directly to
local community anti-drug coalitions for the purpose of supporting
local efforts to prevent or reduce drug use among youth. The program
currently supports over 600 community coalitions in all 50 States, the
District of Columbia, Puerto Rico, and the U.S. Virgin Islands.
Together, these community anti-drug coalitions serve a national network
of local citizens, community leaders, and key professionals working
daily to help keep young people free of the well-known dangers of drug
use, including the underage use of alcohol and tobacco. Approximately
30 of the DFCSP grants have been awarded to communities where American
Indian or Alaskan Native youth are the majority of young people served.
Approximately 40 percent of DFCSP grants go to communities in small
towns and rural areas.
Of the total amount of $80 million that ONDCP is requesting for
this program in fiscal year 2005, $74.2 million will be awarded in
grants to as many as 750 community anti-drug coalitions. An additional
amount of $1 million is requested to continue support for the National
Community Anti-Drug Coalition Institute to provide much-needed training
and technical assistance to the growing number of coalitions around the
country. An amount of $4.8 million is requested to support all other
costs associated with grants management, program evaluation, and
program administration.
World Anti-Doping Agency Membership Dues: $1 million
In fiscal year 2005, ONDCP is requesting $1 million for World Anti-
Doping Agency (WADA) Membership Dues. The fiscal year 2004 enacted
level is $0.795 million. The dues assessment is formula driven and
accounts for the increase from fiscal year 2004. WADA receives its
funding in equal amounts from the International Olympic Committee and
world governments. Governments are divided into six geographic regions.
The United States, along with Canada, Central America, the Caribbean,
and South America, are part of the Americas region. The Americas region
is required to contribute 29 percent of the governments' funding. As of
fiscal year 2004, the regions dues are based upon the relative
contribution levels to the Organization of American States.
Created in 2001, WADA is a partnership among world governments,
intergovernmental organizations, the Olympic movement, athletes, and
other entities concerned about the consequences of doping and drug use
in sport. WADA's mission is to promote healthy, doping free sport at
the international level. WADA's doping-control program is key to
upholding the fundamental rights of athletes to participate in doping-
free sport through an effective detection and deterrence program,
promoting consistency and ensuring an independent, quality-controlled
process seeking equity for all athletes in all sports in all countries.
In addition to drug testing, WADA's budget funds education and
prevention programs for athletes at all age and levels (with a
particular emphasis on youth) and research related to drug use in
sport.
United States Anti-Doping Agency: $1.5 million
ONDCP is requesting $1.5 million to support the United States Anti-
Doping Agency (USADA). The fiscal year 2004 enacted level is $7.158
million. Since fiscal year 2002, funding to support USADA has been
passed directly from ONDCP to USADA. USADA is a non-profit entity under
the leadership of an independent board of directors. USADA began
operations October 1, 2000, with full authority for drug testing,
education, research, and adjudication for U.S. Olympic, Pan Am Games,
and Paralympic athletes. Congress and the President have subsequently
recognized USADA as the official anti-doping agency for the above-
stated purposes (Public Law 107-67). Since its inception, USADA has
received worldwide acclaim for its effective and innovative testing and
education initiatives.
The $1.5 million request would support USADA's ongoing drug testing
regime that includes management, sample collection, and testing
procedures. The fiscal year 2005 request considers the adjudication
costs as the result of increased testing and the implementation of
blood testing, which is more costly (and accurate) than urine drug
testing. The request would also fund drug-related research, educational
programs aimed at school-aged athletes and coaches, efforts to inform
athletes of the rules governing the use of performance enhancing
substances, and the ethics of doping and its harmful health effects.
The public awareness efforts will be particularly important since the
World Anti-Doping Agency adopted a new universal Code in March 2003
that will govern U.S. amateur athletes.
Counterdrug Intelligence Executive Secretariat: $4.5
million
In fiscal year 2005, ONDCP is requesting $4.5 million for the
administration and operations of the Counter-drug Intelligence
Executive Secretariat (CDX). The fiscal year 2004 enacted level is
$2.982 million. The CDX staff was established to coordinate the
implementation of the General Counterdrug Intelligence Plan (GCIP)
established in February 2000 and revalidated in May 2002. Fiscal year
2005 funding of CDX will ensure that the action items established by
GCIP, as well as additional projects requested by the interagency
Counterdrug Intelligence Coordination Group, can be accomplished.
National Drug Court Institute: $1 million
In fiscal year 2005, ONDCP is requesting $1 million for the
National Drug Court Institute (NDCI). The fiscal year 2004 enacted
level is $0.994 million. Due to the fact that nearly 50 percent of the
Nation's drug courts have only been in operation for the last 4 years,
the Institute's education, research, and scholarship programs request
these funds to continue the expansion of its discipline-specific and
topic-specific drug court training programs for practitioners; to
convene regional evaluation trainings in order to provide a forum for
practitioners and researchers to enhance drug court evaluation
techniques; to continue to publish and disseminate monographs on
important and timely drug court issues; to continue to publish and
disseminate the National Drug Court Institute Review; and to continue
to publish and disseminate best practices fact sheets for drug court
practitioners.
Performance Measures Development: $2 million
In fiscal year 2005, ONDCP is requesting $2 million for Performance
Measures Development. The fiscal year 2004 enacted level is $1.988
million. ONDCP will use the requested funding to develop and implement
data sources to monitor illegal drug use and supply for national
policy-makers. Projects funded with these resources will include
efforts to work with selected programs to develop and/or improve needed
data sources. In recent years, ONDCP has worked with the National
Institute of Justice to redesign and expand the Drug Use Forecasting
program into the Arrestee Drug Abuse Monitoring program. ONDCP has also
worked with the DEA to improve the methodology of the Heroin Signature
Program and the Domestic Monitoring Program. The requested funding will
continue this collaborative interagency effort to develop and implement
programmatic performance measures.
D. High Intensity Drug Trafficking Areas (HIDTA): $208.35 million
In fiscal year 2005, ONDCP is requesting $208.35 million for the
operations of the High Intensity Drug Trafficking Area program ($206.3
million for grants and Federal transfers and $2.050 million auditing
for services and associated activities, including development and
implementation of a data collection system to measure program
performance). The fiscal year 2004 enacted level is $225.015 million.
Each HIDTA has an Executive Committee (EXCOM) that serves as the
governing body for the individual HIDTA. The EXCOM consists of an equal
number of representatives from local/State and Federal agencies. The
EXCOM is responsible for the development and implementation of the
HIDTA Strategy and the attendant initiatives and budgets, as well as
for the fiscal operations of the HIDTA.
The HIDTA mission includes coordination efforts to reduce the
production, manufacturing, distribution, transportation, and chronic
use of illegal drugs, as well as the attendant money laundering of drug
proceeds. In addition, HIDTAs assess regional drug threats, develop
strategies to address the threats, integrate initiatives, and provide
Federal resources to implement initiatives. These resources are
allocated to link local, State, and Federal drug enforcement efforts
and to optimize the investigative return on limited fiscal and
personnel resources. Properly targeted, HIDTAs offer greater efficiency
in countering illegal drug trade in local areas by facilitating
cooperative investigations, intelligence sharing (coordinated at HIDTA
Investigative Support Centers), and joint operations against drug-
trafficking organizations.
Since fiscal year 2002, in addition to recurring HIDTA funding,
ONDCP has provided additional funds to HIDTAs that have developed and
conducted investigations against major drug trafficking organizations
with connections to the Consolidated Priority Organization Target
(CPOT) list. (The CPOT list, developed in 2001 by key Federal law
enforcement entities, with input from the Intelligence Community and
other Federal agencies, is comprised of the drug trafficking
organizations generally agreed to represent the most significant drug
threat to the United States. The list, which is maintained by the
Justice Department, is updated periodically and is not public.) In
fiscal year 2004, ONDCP has proposed to make approximately $16 million
available to generate and advance investigations of domestic targets
with a nexus to or affiliation with major drug trafficking
organizations on the CPOT list. ONDCP hopes that continued
discretionary funding will be available for HIDTAs through the CPOT
Initiative in fiscal year 2005.
At present, 406 United States counties (about 13 percent of the
total) in 43 States, Puerto Rico, the United States Virgin Islands, and
the District of Colombia are designated as part of 28 HIDTAs. Since
January 1990, counties in the following 28 areas have been designated
as HIDTAs: Houston, Los Angeles, South Florida, New York, and the
Southwest Border, which includes partnerships in South Texas, West
Texas, New Mexico, Arizona, and Southern California (in 1990);
Washington/Baltimore, and Puerto Rico/U.S. Virgin Islands (in 1994);
Atlanta, Chicago, Philadelphia/Camden (in 1995); Gulf Coast (Alabama,
Louisiana, and Mississippi), Lake County, Indiana, the Midwest (Iowa,
Kansas, Missouri, Nebraska, North Dakota, and South Dakota), Northwest
(Washington), Rocky Mountain (Colorado, Montana, Utah, and Wyoming) (in
1996); Northern California (San Francisco Bay Area) and Southeast
Michigan (in 1997); Appalachia (Kentucky, Tennessee, and West
Virginia), Central Florida, Milwaukee, and North Texas (Northern Texas
and Oklahoma) (in 1998); and Central Valley California, Hawaii, New
England (Connecticut, Maine, Massachusetts, New Hampshire, Rhode
Island, and Vermont), Ohio, and Oregon (in 1999); Northern Florida and
Nevada (in 2001). The HIDTAs nationwide contribute significantly to the
removal of drug traffickers and the trafficking organizations that
drive the illegal drug market and also to the elimination of tons of
illegal drugs that flow each year through high intensity drug
trafficking areas to other American communities.
CONCLUSION
Thank you for the opportunity to provide this formal statement for
the record. I will be happy to address any questions you may have and I
look forward to working with this subcommittee as we work to meet the
goal of reducing drug use in America, especially among our youth.
______
SURFACE TRANSPORTATION BOARD
Prepared Statement of Roger Nober, Chairman
Chairman Shelby and members of the subcommittee, I am Roger Nober,
Chairman of the Surface Transportation Board (Board). I thank you for
the opportunity to submit this statement setting forth the Board's
budget request for fiscal year 2005.
BACKGROUND ON THE BOARD
The Board is a three-member, bipartisan, decisionally independent
adjudicatory body organizationally housed within the Department of
Transportation (DOT) with jurisdiction over certain surface
transportation economic regulatory matters.
The rail oversight of the Board encompasses rate reasonableness,
car service and interchange, mergers, line acquisitions, line
constructions, and abandonments. The jurisdiction of the Board also
includes certain oversight of the intercity bus industry and pipeline
carriers; and rate regulation involving noncontiguous domestic water
transportation, household goods carriers, and collectively determined
motor carrier rates. The Board is statutorily empowered, through its
exemption authority, to promote deregulation administratively.
The Board's Section of Environmental Analysis performs
environmental reviews on the Board's construction, abandonment, and
merger matters as required by the National Environmental Protection
Act. These reviews have become more complex and require significant
resources.
THE BOARD'S FISCAL YEAR 2005 BUDGET REQUEST
In fiscal year 2005, the Board requests budget resources totaling
$21,283,000. This budget request mirrors the Board's fiscal year 2004
budgetary authority approved by Congress, adjusted for the fiscal year
2005 pay raise and some program increases. In this budget request, the
Board also seeks resources and authority to operate at 150 FTEs, or
five more FTEs than the current level.
The Board would use the additional funds to address two primary
costs. First, the additional resources are requested to cover salary
and employee benefit costs associated with the fiscal year 2004 and
fiscal year 2005 pay increase. Unlike many agencies, there is little
room at the Board's current budget level to absorb a pay increase
without the additional resources, because fixed costs, including salary
and rent, comprise about 95 percent of the agency's expenses. Absorbing
even a small amount of the pay increase impairs the Board's ability to
perform its statutory mission.
Second, the Board would use most of the additional resources to
implement initiatives to expedite resolution of rail rate disputes
between railroads and their largest customers and to offer a meaningful
forum for the railroads' smaller customers. In fiscal year 2003, the
Board adopted new rules to streamline the rail rate process, and it now
provides for mediation and for technical conferences among the parties
and Board staff that have produced agreements on numerous discovery and
technical issues, thereby resolving matters that in the past would have
taken months to litigate before the Board. Nevertheless, the press of
large rate cases will continue, and we also expect parties will file
small rate cases once new procedures for such cases are in place.
Therefore, one of the additional FTEs would be to implement the
congressional desire that the agency have an Administrative Law Judge,
who would assist in fostering agreements among the parties in various
agency proceedings and would expedite the resolution of small rate
matters. Additional FTEs would provide the Board with another 3-person
rate team for fiscal year 2005 to continue to resolve rate cases within
their statutory deadlines.
The requested authorization for 150 FTEs also will provide the
Board with the discretion to hire staff to replace tenured, retirement-
eligible staff prior to their anticipated retirement date. Several
retirements can be expected in the near future, and having the
flexibility to hire qualified people when they are available is
particularly important for a high-rated agency that must hire economic
and technical expertise when they are available in the labor market.
Consistent with appropriation acts for past fiscal years, the Board
requests a provision allowing user fee collections to be credited to
the appropriation as offsetting collections and used for necessary and
authorized expenses, to the extent that they are collected. The overall
budget request reflects the workload that is expected and the statutory
and regulatory deadlines associated with the resolution of the cases
filed.
RECENT DEVELOPMENTS THAT IMPACT THE BOARD'S BUDGET REQUEST--YUCCA
MOUNTAIN
Under the Interstate Commerce Act, the Board must authorize the
construction of new rail lines that are part of the national rail
system. Since the Board submitted its budget request for fiscal year
2005, it has been named a cooperating agency in the environmental
review associated with building a rail line to the repository at Yucca
Mountain, in Nye County, Nevada. The Department of Energy (DOE) has
been working for years on a program to use Yucca Mountain as a
repository for spent nuclear fuel and high-level radioactive waste that
would be transported there from throughout the United States.
On April 2, 2004, DOE announced that its preferred mode to
transport the radioactive materials from throughout the United States
to Yucca Mountain was ``mostly rail,'' and it selected as its preferred
corridor for a new rail line to Yucca Mountain one beginning near
Caliente, Nevada. Then on April 8, 2004, DOE announced its intent to
prepare an Environmental Impact Statement (EIS), as required by the
National Environmental Policy Act, for construction and operation of
this rail line.
On May 5, 2004, DOE formally requested that the Board, along with
the Bureau of Land Management and the Air Force, become a cooperating
agency on the environmental review of the Caliente Corridor leading to
the Yucca Mountain facility. DOE made this request due to the Board's
statutory authority to review rail construction projects and its
expertise in doing so.
Our responsibilities as a cooperating agency have already begun.
The Board's Section of Environmental Analysis attended the opening
meetings to determine the scope of the environmental review for this
project. Three meetings were held in Nevada over 3 days the week of May
3rd in Armagosa Valley, Goldfield, and Caliente. A meeting was also
held the week of May 10th in Reno, and another is scheduled for May 17
in Las Vegas. Additional meetings are planned for this month and there
will be numerous meetings this year and throughout the EIS process,
which the DOE expects to last at least 2 years.
DOE has not yet determined whether it will structure the line in a
way that would trigger Board review. While the Board receives many
applications to build new rail lines that are subject to the Board's
jurisdiction, not every rail line construction project requires Board
approval. The Board has jurisdiction over and must approve the
construction of any common carrier rail line--a rail line on which the
railroad must provide service to any shipper who requests it. However,
the Board does not license the construction of a private rail line--a
line over service is not available to the general public.
When the Board receives an application to build and operate a new
rail line, it conducts the required environmental review of these
projects and, unless the project is not in the public convenience and
necessity, licenses the project. In the typical case, the Board is the
lead agency for any necessary environmental review.
In conducting the environmental review, the Board is usually able
to accept certain services that are paid for by the project proponent.
For example, to complete the environmental review of a rail
construction project, the applicant selects a third-party contractor
from the Board's list of pre-approved contractors and retains it.
Although the contractor works at the direction of the Board's Section
of Environmental Analysis, the project proponent pays the contractor.
The Board is not reimbursed for its staff time or travel.
In discharging our duties as a cooperating agency, the Board will
require a third party contractor who will assist the Board by attending
meetings regarding the EIS, evaluating the environmental concerns, and
providing the specialized, technical expertise concerning issues
affecting the rail line construction that would supplement the work of
the Board's Section of Environmental Analysis. The Board is working
with DOE for DOE to reimburse the Board for the costs associated with
this contractor.
However, it would be difficult for the Board to accept any offer
for DOE to pay for Board staff and travel since, as discussed, in the
future DOE may seek Board approval for this line.
Since DOE may become an applicant before the Board, the Board does
not want to risk compromising its independence in considering the
merits of a DOE application by accepting financial support from DOE for
additional salary and travel costs. The Board's review of such a
proposal must be independent. Otherwise, if the Board issued a license,
that issuance could be subject to challenge in court on grounds that
the agency's independence was jeopardized by its acceptance of
reimbursements beyond those reimbursements that are ordinarily
permissible in any rail construction case. A successful challenge could
be costly to the taxpayers and delay the project.
The Yucca Mountain EIS process will require the resources for two
full-time staff and travel costs for the biweekly participation
meetings. The Board's participation in the Yucca Mountain EIS will
require 25 percent of the Board's current environmental staff, which
would adversely affect the Board's ability to conduct the environmental
reviews required for abandonment and rail line construction cases
currently pending before the Board and those that may be in the
pipeline awaiting formal filing. In order to fully participate, the
Board would need an additional 2 FTEs and $250,000 above what it has
requested for fiscal year 2005.
OVERALL GOALS OF THE BOARD
In the performance of its functions, the objective of the Board is
to ensure that, where regulatory oversight is necessary, it is
exercised efficiently and effectively, integrating market forces, where
possible, into the overall regulatory model. In particular, the Board
seeks to resolve matters brought before it fairly and expeditiously.
Through use of its regulatory exemption authority, streamlining of its
decisional process and the regulations applicable thereto, and
consistent application of legal and equitable principles, the Board
seeks to facilitate commerce by providing an effective forum for
efficient dispute resolution and facilitation of appropriate business
transactions. The Board continues to strive to develop, through
rulemakings and case disposition, new and better ways to analyze unique
and complex problems, to reach fully justified decisions more quickly,
and to reduce the costs associated with regulatory oversight.
To be more responsive to the surface transportation community by
fostering governmental efficiency, innovation in dispute resolution,
private-sector solutions to problems, and competition in the provision
of transportation services, the Board will:
--Continue to strive for a more streamlined process for the
expeditious handling of rail rate reasonableness and other
complaint cases, in an effort to provide additional regulatory
predictability to shippers and carriers;
--Continue to process diligently cases before the Board and to ensure
that appropriate market-based transactions in the public
interest are facilitated;
--Continue to develop new opportunities for the various sectors of
the transportation community to work cooperatively with the
Board and with one another to find creative solutions to
persistent industry and/or regulatory problems involving
carriers, shippers, employees, and local communities; and
--Continue to work to ensure the provision of rail service that is
responsive to the needs of customers.
FISCAL YEAR 2004 AND 2005 ACTIVITIES OF THE BOARD
Building upon the Board's success in fiscal year 2003--including
issuing 890 decisions in fiscal year 2003, developing regulations to
expedite the resolution of large rate cases,\1\ investigating ways to
improve the process for small rate cases,\2\ and informally resolving
disputes between railroads and between railroads and their customers--
the Board will continue to look for ways to streamline or otherwise
improve applicable regulations and the regulatory process and to
promote private-sector resolution of problems. In this regard, the
Board will entertain any proposed exemptions from regulation that might
be appropriate and resolve as expeditiously as possible petitions for
rulemaking filed by parties. The Board will also continue to look
independently for ways to shorten and streamline its procedures for
bringing and prosecuting both large and small rate cases, and to make
the environmental review process for new rail line construction cases
more streamlined as well. And it will continue to use its processes to
encourage private-sector dispute resolution.
---------------------------------------------------------------------------
\1\ Ex Parte No. 638, Procedures to Expedite Resolution of Rail
Rate Challenges to be Considered Under the Stand-Alone Cost
Methodology.
\2\ Ex Parte No. 646, Rail Rate Challenges in Small Cases.
---------------------------------------------------------------------------
As noted, the Board is requesting resources for 5 additional staff
positions in fiscal year 2005. In particular, the Board would use those
resources to establish a new rate team, to hire an administrative law
judge, and to add additional staff to its office that handles consumer
complaints. Although the Board has attempted to use retirements within
the agency to begin to realign its resources for its future needs, it
cannot complete that realignment through retirements alone.
The Board is seeking staff resources for three rate team personnel,
who will help move the rate docket forward. The workload involving rail
rates and services is expected to increase in fiscal year 2004 and
remain stable through fiscal year 2005, particularly given the likely
continuing expiration of long-term coal transportation contracts.
Currently, the Board has 5 coal rate complaint cases at various States
of adjudication and 5 petitions to reopen and reconsider in former coal
rate complaint cases, for a total of 10 rate cases under review. These
proceedings will require significant staff attention and additional
resources, given the complex nature of the cases, the numerous steps
such as motions and discovery resolution, and the tight 9-month
statutory timeframes for completion once the record is closed. Indeed,
the bulge in rate cases is already producing a strain on our resources,
which have historically been geared to handle two rate cases at a time.
(It is for this reason that we are requesting additional resources from
Congress for one additional 3-person rate team for fiscal year 2005.)
Additionally, the Board will continue to handle rail cases involving
questions of whether certain rail activity cannot be regulated at the
State or local level because such regulation is preempted by Federal
law.
In July and August, 2003, the Senate Committee on Commerce, Science
and Transportation considered and reported S. 1389, The Surface
Transportation Board Reauthorization Act of 2003. S. 1389 is a bill to
reauthorize the Surface Transportation Board for 5 years, beginning in
fiscal year 2004. Section 4 of S. 1389 addressed the small rate case
issue, and directed the Board to modify its small rate case procedures
to address many of their identified problems within 180 days.
Subsection 4) of that bill specifically directed that, when revising
its small rate case procedures, the Board ``may provide for an initial
determination of such [small] rate challenges by an administrative law
judge, with an opportunity for appeal of such determination by the full
Board[.]'' At a subsequent hearing on rail regulatory matters held in
October 2003, several Senate Commerce Committee members again noted the
benefits of the Board having an Administrative Law Judge to consider
small rate cases in the first instance, oversee discovery, and issue
preliminary decisions in matter of months compared to years with large
rate cases. The Administrative Law Judge would decide the cases under a
clear standard with cases being appealable to the full Board and
ultimately to the courts.
The final additional staff position would provide the Board
expertise on passenger rail service and would coordinate and resolve
scheduling and operational issues between freight railroads and between
those railroads and their customers. The Board's Rail Consumer
Assistance Program is an informal mechanism for resolving disputes that
has proven very effective, but additional resources will help it
address the increasing number of inquires that result from it becoming
more widely known.
With respect to rail carrier consolidations, we are not aware of
any major rail mergers in the immediate future. Therefore, the workload
in this category is expected to remain somewhat stable through fiscal
year 2005 because this category includes a broad array of control
transactions among larger railroads and smaller railroads. Of course,
it is impossible to know whether a major merger may be proposed during
fiscal years 2004 or 2005. As noted, the Board continues to resolve
issues related to past Class I rail mergers. Also, the Board will
continue to handle other rail consolidations involving smaller
railroads that are filed with it.
Concerning other rail restructuring matters, rail abandonment
decisions are expected to remain somewhat constant through fiscal year
2005. While the number of rail abandonments has remained at this level
for the past number of years, the increased complexity of abandonment
filings continues to require more than one decision in certain cases.
The Board continues to see a high volume of ``post abandonment''
activity relating to trail use, as proponents avail themselves of the
National Trails System Act, and also relating to offers of financial
assistance to continue freight rail service.
With the notable exception of the Yucca Mountain rail line
construction project, the Board projects that its line construction
docket will remain constant through fiscal year 2005. We emphasize that
demands on the Board to conduct environmental reviews for such
transactions continue to grow, and that such activities require a
significant number of resources to complete.
Other line transaction activity is expected to increase slightly
through fiscal year 2005 as more carriers continue to sell unprofitable
or marginally profitable lines as an alternative to service
abandonment, particularly in light of the recent economic downturn. In
the past few years, the Board has seen a number of line acquisitions by
both small carriers and noncarriers as rail carriers restructure their
rail systems.
SUMMARY
The Board's budget request would ensure the resources needed for
the Board to continue to implement its responsibilities expeditiously
and effectively as Congress intends. I would be happy to answer any
other questions that the Committee may have about the Board's fiscal
year 2005 budget request.
Attachment No. 1
SALARIES AND EXPENSES
[Dollars in thousands]
----------------------------------------------------------------------------------------------------------------
Fiscal Year Fiscal Year
Fiscal Year 2004 2005 Difference
2003 Actual Estimate Request From
----------------------------------------------------------------------------------------------------------------
Permanent Positions......................................... 145 145 150 5
Full-time Equivalents....................................... 137 145 150 5
Personnel Compensation and Benefits......................... $15,268 $16,025 $17,703 $1,678
Travel...................................................... $41 $80 $87 $7
Other Costs................................................. $3,998 $3,416 $3,493 $77
---------------------------------------------------
TOTAL BUDGET RESOURCES................................ $19,307 $19,521 $21,283 $1,762
----------------------------------------------------------------------------------------------------------------
CHANGES IN RESOURCES
For personnel compensation and benefits, $17,703,000 is requested
to support the Board's permanent positions. Included in this request is
$144,000 to fund the annual cost of the January 2004 pay raise and
$221,000 for the January 2005 pay raise. The request also includes
$50,000 for lump-sum leave payments to retiring employees.
A travel budget of $87,000 is requested primarily for on-site
visits to railroads to finalize audits and review public accountants'
workpapers, to physically inspect proposed rail abandonment and
construction sites, and to verify environmental data provided by
parties to proceedings, conduct operational reviews, meet with shippers
regarding rail service issues and compliance, defend the Board's
decisions in courts across the country, and generally provide
presentations, upon request, on issues within the Board's jurisdiction.
Due to the increased number of environmental reviews associated with
new rail construction cases and attendance at field hearings on high-
profiled cases, staff travel has increased and is expected to remain at
the increased level through fiscal year 2005.
Funding to cover other costs is requested at $3,493,000. Included
in this number are rental payments to the General Services
Administration (GSA) and payments for employee training, telephone
service, postage, information technology systems support and equipment,
miscellaneous services and supplies, and reimbursable services acquired
from other Federal agencies. The increase in other costs is mainly
associated with the projected increase in rental payments to GSA and an
increased level of security for all Federal agencies. The Board has
increased its level of physical security in light of recommendations by
GSA and the Department of Homeland Security and has implemented a
Business Continuity Plan along with sheltering-in-place procedures to
provide for the physical security of its employees and the continuity
planning and continuance of its statutory mission.
Attachment No. 2
FISCAL YEAR 2005 CONGRESSIONAL BUDGET JUSTIFICATION WORKLOAD SUMMARY \1\
----------------------------------------------------------------------------------------------------------------
Actual Fiscal Estimated \2\ Estimated \3\
Year 2003 Fiscal Year Fiscal Year
Board 2004 Board 2005 Board
Workload Category Decisions and Decisions and Decisions and
Court-related Court-related Court-related
Work Work Work
----------------------------------------------------------------------------------------------------------------
Rail Carrier Control Cases...................................... 52 55 55
Rail Rates and Service.......................................... 70 86 86
Rail Abandonments and Constructions............................. 512 501 501
Other Line Transactions......................................... 186 204 204
Other Rail Activities........................................... 33 51 47
Non-Rail Activities............................................. 39 51 53
-----------------------------------------------
Total..................................................... 890 948 946
----------------------------------------------------------------------------------------------------------------
\1\ At this time, the Board believes that the number of Board decisions and court-related work is the best
measure of workload at the Board. Certain activities performed at the Board that provide direct and indirect
support for rulemakings and decisions in specific cases are not reflected in these workload numbers. Such
activities not reflected include: enforcement activities; rail audits and rail carrier reporting oversight;
administration of the rail waybill sample and development of the Uniform Rail Costing System; and case-related
correspondence and informal public assistance.
\2\ Estimated workloads for fiscal year 2004 and 2005 are based on historical information regarding actual
filings and best estimates of probable future filings by parties. Because the Board is principally an
adjudicatory body, it does not directly control the level or timing of actual case filings.
\3\ Ex Parte No. 638, Procedures to Expedite Resolution of Rail Rate Challenges to be Considered Under the Stand-
Alone Cost Methodology.
______
OFFICE OF GOVERNMENT ETHICS
Prepared Statement of Marilyn Glynn, Acting Director
Thank you for the opportunity to submit a statement in support of
the request of the U.S. Office of Government Ethics (OGE) for fiscal
year 2005 resources of $11,238,000 and 80 FTEs. This request represents
an increase of $500,000, primarily to meet expected increases in
personnel costs.
The Office of Government Ethics is responsible for overseeing the
ethics program of the executive branch, a program designed to help
prevent conflicts of interest and promote integrity in Government. OGE
sets the requirements of the program, develops executive branch-wide
policies, serves as a resource/consultant to agency ethics officials
and monitors agency programs to help ensure that the agencies are
carrying out their responsibilities effectively. OGE also plays a
significant role in the review and certification of the financial
disclosure forms of nominees to positions requiring Senate
confirmation. The day-to-day activities of the program are the
responsibility of each executive branch agency. These activities
include initial collection and review of financial disclosure forms;
providing advice and training to agency employees on the criminal
conflict of interest laws and the executive branch standards of
conduct; and investigation and administrative enforcement of the
standards of conduct.
The ethics program that is directed by OGE is part of the basic
infrastructure that supports good governance within the Federal
executive branch. The resources expended by OGE to help promote
integrity and prevent conflicts of interest are small in comparison to
the resources expended by investigators and prosecutors who enforce
ethics and conflict of interest rules and laws. Moreover, our
preventive efforts help guard against the loss of resources through
inadvertent or deliberate misuse. We believe the resources we have
requested are those necessary to adequately support a strong ethics
program.
FISCAL YEAR 2005
We would like to highlight some of the major programs anticipated
for fiscal year 2005.
During any fiscal year in which a Presidential election occurs, OGE
anticipates a large influx of Presidential appointees, regardless of
the outcome of an election. OGE's role in clearing Presidential
nominees is designed to help them understand the application of the
conflict of interest requirements to their Government service and to
secure their agreement to taking the necessary steps to resolve
potential conflicts of interest. Our goal is to review nominee
statements in a timely manner to avoid any unnecessary delay in the
nomination/confirmation process. OGE's resources are shifted from other
programs during this period to handle the increased workload in our
financial disclosure review systems. Once an individual is appointed,
OGE follows through to see that any agreements made by an appointee to
address potential conflicts of interest are carried out. In addition,
during this period, OGE will continue to conduct a second level review
of over 1,000 annual and termination financial disclosure statements
filed by Presidential appointees each year.
As a part of the change that typically occurs after a Presidential
election, OGE also will provide ethics training through OPM, and the
White House if requested, to incoming Presidential appointees, new
noncareer SES and Schedule C appointees, and White House staff.
Additionally, we expect to help agencies provide accurate post-
employment advice to employees who are leaving the government.
In the education and training area, OGE will develop instructor and
participant guides to be used by departments and agencies to deliver
their annual ethics training, as well as training evaluation
instruments to measure what employees learned from various instructor-
led and web-based training courses. In training ethics officials, OGE
will develop and conduct additional instructor-led ethics training
courses for ethics practitioners, trainers, counselors, financial
disclosure reviewers, and enforcement officials in headquarters and the
regions.
To reach ethics officials outside the Washington area, OGE plans to
offer regional symposia for approximately 240 ethics practitioners in
the field. OGE maintains an e-mail list service to communicate with
2,000 practitioners and enforcement personnel world-wide. OGE also will
host the 15th Annual National Government Ethics Conference for
approximately 700 ethics practitioners in September 2005.
The Office has added an employee survey to its evaluations of
individual agency ethics programs. Begun on a more limited basis this
fiscal year, these surveys will be carried out throughout fiscal year
2005 in approximately one-third of the 35 Federal agencies evaluated.
The information gathered through the surveys helps provide OGE with a
better basis on which to judge the effectiveness of the individual
agency programs under review and the overall executive branch ethics
program.
OGE desk officers will maintain their day-to-day communications
with agencies assigned to them. This continuing liaison between OGE and
agency ethics staffs enables OGE to respond to the needs of the
agencies in a timely and accurate manner. In addition, this interaction
provides OGE with an early warning that an agency ethics program is
deficient or has problems that require specialized attention.
OGE will continue to provide international technical assistance at
the request of the Departments of State and Justice. In fiscal year
2005, OGE plans to participate in Global Forum IV, the Follow-up
Mechanism for the Inter-American Convention Against Corruption and the
evaluation mechanisms of the Council of Europe's Group of States
Against Corruption. The United States will also be reviewed under the
latter two mechanisms during fiscal year 2005.
These are just some of the programs and activities envisioned for
fiscal year 2005. We are pleased with the past success of the executive
branch ethics program and look forward to the challenge of maintaining
and enhancing the quality of the program.
NONDEPARTMENTAL WITNESSES
[Clerk's note.--The following testimonies were received by
the Subcommittee on Transportation, Treasury and General
Government, and Related Agencies for inclusion in the record.
The submitted materials relate to the fiscal year 2005 budget
request.
The subcommittee requested that public witnesses provide
written testimony because, given the Senate schedule and the
number of subcommittee hearings with Department witnesses,
there was not enough time to schedule hearings for
nondepartmental witnesses.]
Prepared Statement of the International Loran Association
On behalf of the International Loran Association (ILA), I am
writing in conjunction with your work on the fiscal year 2005
Department of Transportation, Treasury and Related Agencies
Appropriations bill. I respectfully request that this submission be
made part of your hearing record in conjunction with the subcommittee's
work.
The ILA is asking the committee to support $25 million in funding
from the fiscal year 2005 Federal Aviation Administration (FAA)
budget--the same level as requested last year--as the next increment
necessary to continue modernization and enhancement of Loran.
In recent years, the committee has provided about $120 million to
modernize and upgrade Loran because it is a multimodal navigation
system with demonstrated cost/benefits important for our national
transportation safety and security objectives. In fact, at this
juncture, it would cost about $100 million to decommission the system,
approximately the same amount that will be required to complete the
modernization. However, the most compelling reason to continue
providing resources to complete this work is because Loran is the only
multimodal system we have in the United States that can support the
global positioning satellite (GPS) system in all modes of
transportation, as well as in timing applications affecting the
majority of our population.
In previous years, our submissions for the hearing record have
documented numerous security, economic and technical issues as to why
the operation of our national infrastructure and the safety of our
citizens should not be placed at risk by depending solely on GPS for
vast transportation, timing and navigation needs. The Volpe Center's
``Vulnerability Assessment of the Transportation Infrastructure Relying
on the Global Positioning System'' in 2001 framed those issues
regarding overdependence on a single system, and an ever-growing body
of evidence continues to be amassed to validate the continuation of
Loran as the most complementary and cost effective system available to
support GPS and eliminate national vulnerabilities. Indeed, ongoing
studies have verified that not only is Loran the only other multimodal
system we have, but also that Loran is the most complementary and most
cost effective system we have.
As you and other committee members are aware, the FAA, the U.S.
Coast Guard (USCG), academic and industry experts have conducted an
active Loran evaluation program spanning several years and a final
report on that evaluation program is to be submitted to the U.S.
Department of Transportation (DOT) on March 31, 2004. There are two
major aspects to the report: one is the technical evaluation to ensure
a modern or enhanced Loran system can meet the performance requirements
of the FAA and USCG; and the other is a Loran benefit-cost study
completed by the Volpe Center in 2003. It is fair to say that the
technical evaluation section will be very positive, particularly
because virtually all of the contributing studies have been
continuously presented at numerous professional conferences and other
technical fora. In addition, previous DOT-sponsored economic studies on
Loran have been uniformly positive, and given the identified need for a
national GPS backup, it is virtually assured that the economic section
of the Loran evaluation study will be very favorable as well.
Other recent government documents also indicate there is widespread
acknowledgement that Loran is indeed the best system the country can
utilize to backup and support GPS.
For example, in April 2003, a Memorandum of Agreement (MOA)
regarding the recapitalization, modernization, and operation of Loran
was finalized and approved by the FAA, USCG, and DOT. This interagency
MOA states: ``The parties recognize the multi-modal nature of the Loran
navigation system and the necessity of managing Loran as a national
asset in a multi-modal manner. The purpose of this agreement is to set
forth terms by which the parties will provide service in order to
provide a multi-modal backup to the Global Positioning System (GPS)
based services''. In referencing the Volpe Study on GPS vulnerabilities
cited above, the MOA states: ``both the FAA and USCG acknowledged that
GPS is indeed vulnerable to intentional and unintentional interference
and that backup systems are required for both the National Airspace
System (NAS) and the Marine Transportation System (MTS) . . . The FAA
and USCG also recognize that Congress, aviation, maritime, and other
users regard Loran-C as a national asset that must be preserved as a
part of the nation's critical infrastructure''.
In January 2004, the DOT released a report for Secretary Mineta
entitled: ``Radionavigation Systems: A Capabilities Investment
Strategy,'' which also contained some important findings, even though
much of the report's information was approximately 1 year old. First,
it once again clearly identified Loran as the only multimodal backup to
GPS and the best theoretical backup to GPS. Second, although the Loran
report is less than 1 month away, it includes a recommendation to
``Complete the evaluation of enhanced Loran to validate the expectation
that it will provide the performance to support aviation Non-Precision
Approach (NPA) and maritime Harbor Entrance and Approach (HEA)
operations. If enhanced Loran meets the aviation NPA and maritime HEA
performance criteria, and is cost effective across multiple modes, the
Federal Government should operate Loran as an element of the long-term
radionavigation system mix''. In addition, the report looks forward and
identifies Loran as a backup for the new aviation Automatic Dependent
Surveillance--Broadcast (ADS-B) system and the new marine Automatic
Identification System (AIS), both of which will be widely used in the
future. Finally, the report suggests exploration of the collocation of
GPS augmentation and Loran facilities, which would not only maximize
their synergies but also optimize cost savings to the Nation.
From an international perspective, there is also recognition
regarding the need and benefits of Loran. Ultimately, that realization
will provide a major economic opportunity for U.S. technology because
of equipment standardization and market globalization, similar to what
has occurred with GPS. For example, in August 2003 the European
Maritime Radionavigation Forum published a study entitled: ``GNSS
Vulnerabilities & Mitigation Measures: A Study for the European
Maritime Radionavigation Forum,'' and among its conclusions were:
``There is a significant risk of losing GNSS for limited periods and in
limited areas . . . The consequences of losing GNSS will become greater
as reliance on it increases . . . Loran could provide an effective
backup in Europe, at a capital cost estimated at =50m''.
In addition, the ILA was invited to participate in a meeting in
Japan last fall, where representatives from Japan, China, Korea,
Russia, and the United States were asked to address the question of GPS
vulnerabilities and how to solve the problem. Virtually the entire
conference focused on one system: Loran.
In summary, recognition of the various safety, security, economic,
and political benefits that Loran can provide to the Nation has
continued to grow rapidly, based on solid scientific and economic
studies by our government, academia, industry, and other governments. A
positive Loran report will be delivered to the DOT on March 31, 2004,
and the DOT has committed to making a long-overdue Loran policy
decision. It is now a certainty that Loran provides the Nation with the
ability to mitigate GPS vulnerabilities in multimodal transportation
and timing applications that play key roles in the continuing
operations of the national infrastructure, and that the technology does
so at a remarkably low cost.
Loran's future, and its ability to complement GPS, depends on the
continuation of the modernization program, which is already well
underway. As previously documented, that modernization program will
reduce Loran's operations and maintenance costs from approximately $27
million a year to approximately $15 million annually, and enable
multimodal support at a fraction of the cost other single mode system
require. Moreover, the enhanced Loran system that will evolve from the
modernization program will provide better performance than the single
mode systems, and provide a national roadmap to future GPS-based
systems that can incorporate Loran as a backup, such as ADS-B and AIS.
As you and all committee members well understand, GPS has
recognized vulnerabilities that could potentially affect the safety of
tens of millions of Americans and the security of our critical national
infrastructure. In combination with a modernized Loran system, GPS and
Loran can together form the basis of a national infrastructure that is
extremely robust, now and well into our future.
For these reasons, we urge the committee to support fiscal year
2005 funding in the FAA budget of no less than $25 million to continue
a Loran modernization program that will help assure our Nation's
transportation safety and infrastructure security objectives are
achieved in a most cost-effective manner for government providers,
private users, and taxpayers.
______
Prepared Statement of Bernard H. Berne, M.D., Ph.D.
OPPOSITION TO BUDGET REQUEST FOR APPROPRIATION TO FEDERAL BUILDINGS
FUND FOR FOOD AND DRUG ADMINISTRATION CONSOLIDATION, MONTGOMERY COUNTY,
MARYLAND
I am a resident of Arlington, Virginia. I serve the Food and Drug
Administration (FDA) as a Medical Officer and as a reviewer medical
device approval applications. I am submitting this statement as a
private individual.
I ask your subcommittee to deny the administration's request to
provide $88,710,000 to the General Services Administration's (GSA's)
Federal Buildings Fund for the construction of a FDA Consolidation in
Montgomery County, Maryland. This request appears on page 961 of the
President's Budget for fiscal year 2005.
The General Services Administration (GSA) is now designing and
constructing this facility. GSA would use the additional funds to
continue this wasteful project in suburban White Oak, Maryland. Please
deny these funds for the following reasons:
Economic Considerations
FDA will need to pay rent to GSA if it occupies this facility. The
rents would likely be higher than rents that GSA and FDA pay to private
property owners, since GSA would not need to enter into competitive
bidding processes.
Congressional authorizing committees need to evaluate the current
costs of the consolidation and compare them to the costs of maintaining
FDA's current facilities. No Congressional committee has done this
during the past 15 years.
Lack of Need for Relocating FDA to White Oak Facility
All or nearly all of FDA's offices that would move to White Oak are
presently located in satisfactory leased facilities. Some, such as my
own, are now in excellent buildings. There is no clear need or economic
reason to relocate these offices to White Oak or to consolidate any
part of FDA at this location.
White Oak is an unsatisfactory location for FDA's headquarters
consolidation. The project would promote urban sprawl.
FDA's White Oak facility would occupy 125 acres next to a golf
course in a suburban residential neighborhood in Montgomery County,
Maryland. The FDA site is outside of the Capital Beltway on a largely
forested 750-acre property surrounded by heavily congested roads and
highways. The site is 3 miles from the nearest Metro station, and has
only infrequent bus service.
An FDA consolidation at White Oak would bring 6,000 FDA employees
to this Washington area suburb. Most would need to commute for much
longer times and distances than they presently do. White Oak is more
than 20 miles from most present FDA facilities.
I and thousands of other FDA employees presently commute to work by
Metro, as our workplaces are near Metro stations. This will be
impossible at White Oak.
FDA employees driving to White Oak will add traffic congestion and
air pollution to the Washington Metropolitan Area. This is especially
unfortunate because the Washington Metropolitan Area already has the
second worst traffic congestion of all urban areas in the United
States. The Federal Government will need to subsidize many improvements
to roads and public transit to accommodate the many FDA employees and
associated businesses that would relocate from better locations to this
distant suburb.
FDA employee surveys have revealed widespread opposition to this
relocation. Three years ago, a survey of those employees who would
relocate first to White Oak showed that 70 percent opposed the move.
Many stated that the relocation would impair FDA's ability to regulate
drugs and medical devices.
It is clear that the location of the facility will have long-
lasting adverse effects on FDA's ability to recruit and retain
qualified employees. Further, many more FDA employees will telecommute
than presently do. They will rarely work at the new facility. This will
greatly diminish FDA's efficiency and will contradict a major goal of
the FDA consolidation at White Oak.
The Washington Metropolitan area has a number of better sites at
which FDA can consolidate. Some of these, such as the Southeast Federal
Center in the District of Columbia, are near other Federal facilities
and Metrorail stations.
Legal Issues
On February 23, 2001, I and a number of other FDA employees joined
the Sierra Club and the Forest Conservation Council in a law suit that
is intended to stop the White Oak project. For a number of reasons,
FDA's occupancy of any buildings at White Oak would be illegal. The
U.S. District Court for the District of Columbia is presently
considering this suit.
The White Oak facility would house the Office of the Commissioner
of Food and Drugs, as well as most other FDA headquarters offices. This
would violate 4 U.S.C 72, which states:
``All offices attached to the seat of government shall be exercised
in the District of Columbia, and not elsewhere, except as otherwise
expressly provided in law.''
4 U.S.C. 72 is derived from the 1790 Act that established the District
of Columbia as the Nation's capital. The first Congress enacted this
law, which President George Washington signed.
There is no law that expressly provides that FDA's headquarters
offices shall be exercised outside of the District of Columbia.
The FDA Revitalization Act (Public Law 101-635; 21 U.S.C. 369b),
authorizes the Secretary of HHS to enter into contracts to acquire
property and to construct and operate a consolidated FDA headquarters
facility. This Act does not provide the location of the consolidated
facility.
I ask Congress not to appropriate funds to support an illegal
activity. The 1790 Act had the worthy purpose of ensuring that all
central offices of the Federal Government would consolidate in the
Federal capital District, and not elsewhere. The consolidated FDA
facility would be one such office that is ``attached to the seat of
government''.
Article 1, Section 8, of the Constitution gives Congress exclusive
jurisdiction over the District of Columbia. Your committee should take
no action to support the location of FDA's headquarters at a location
that is outside of the District. Any such action would tend to vitiate
this section of the Constitution, which 4 U.S.C. 72 is intended to
support.
Executive Order 12072, Aug. 16, 1978, (40 U.S.C. 490 note) states
in Section 1-1, Subsection 101:
``Federal facilities and Federal use of space in urban areas shall
serve to strengthen the nation's cities and to make them attractive
places to live and work. Such Federal space shall conserve existing
urban resources and encourage the development and redevelopment of
cities.''
White Oak is not in or near any city. An FDA consolidation at White Oak
(which is in an ``urban area'', the Washington Metropolitan Area) would
not strengthen any cities. The FDA facility would not encourage the
development or redevelopment of any cities.
Executive Order 12072, Section 1-1, Subsection 101, contains the
word ``shall'' in several locations. FDA therefore can not legally
locate its headquarters in suburban White Oak.
Executive Order 12072 and several Federal statutes require that
heads of Federal agencies consult with local city officials to obtain
their recommendations for and objections to all proposed new Federal
facilities. Neither GSA nor FDA officials ever consulted with officials
of the District of Columbia or of the City of Rockville in Montgomery
County, Maryland, concerning the White Oak facility.
This lack of consultation violated Executive Order 12072 and
several laws. It prevented District and Rockville officials from
recommending alternative sites for the consolidated facility within
their own jurisdictions and from objecting to the selection of the
White Oak site.
The Public Buildings Act of 1959, as amended, requires that the
Committee on Environment and Public Works of the U.S. Senate approve
prospectuses that describe the location and maximum costs of any large
buildings that GSA may wish to construct before Congress can
appropriate funds to design and construct such buildings. That
Committee has never approved a prospectus that describes FDA's White
Oak facility.
Paragraph 7 of Senate Rule XVI requires that committee reports on
general appropriations bills identify each provision ``which proposes
an item of appropriation which is not made to carry out the provisions
of an existing law, a treaty stipulation, or an act or resolution
previously passed by the Senate during that session.'' If your
committee proposes any appropriation of funds for an FDA consolidation,
your Committee Report needs to identify this appropriation as being one
that is not made to carry out the provisions of any existing law,
treaty, or act or resolution that the Senate has previously passed
during this session.
The Treasury and General Government Appropriations Act, 2000
(Public Law 101-58), the Consolidated Appropriations Act, 2001 (Public
Law 106-544), the Treasury and General Government Appropriations Act,
2002 (Public Law 107-67), the Consolidated Appropriations Resolution,
2003 (Public Law 108-7), and the Consolidated Appropriations Act, 2004
(Public Law 108-199) appropriated funds to GSA that could support FDA's
consolidation in Montgomery County, Maryland. However, all of these
Acts contain provisions that state:
``Provided further, That funds available to the General Services
Administration shall not be available for expenses of any construction,
repair, alteration, or acquisition project for which a prospectus, if
required by the Public Buildings Act of 1959, as amended, has not been
approved, except that necessary funds may be expended for each project
for required expenses for the development of a proposed prospectus.''
The Public Buildings Act of 1959, as amended, requires a prospectus
that describes FDA's White Oak facility because the project's cost
exceeds $1,500,000. No prospectus that described this facility had been
approved before Public Law 101-58, Public Law 106-544, Public Law 107-
67, and Public Law 108-199 were enacted into law. Therefore, GSA may
only legally use the funds appropriated in these Acts for ``required
expenses for the development of a proposed prospectus''. GSA cannot
legally use the funds to design and construct any buildings.
The report of the Committee on Appropriations of the House of
Representatives (House Report 107-152, July 23, 2001), which
accompanied the bill (H.R. 2590) that became Public Law 107-67, states
on p. 65 under the heading: ``General Services Administration''
``Federal Buildings Fund'' ``Construction and Acquisition''
``Recommendation'' the following: ``All construction projects funded in
this bill are subject to authorization by the Committee on
Transportation and Infrastructure''.
FDA's White Oak project was one of the construction projects funded
under Public Law 107-67 (H.R. 2590). Despite this, GSA is presently
designing and starting to construct the FDA consolidation without an
approved prospectus and without receiving authorization by the
Committee on Transportation and Infrastructure. GSA's actions are
contrary to the House Appropriations Committee's statement in House
Report 107-152, and, further, are illegal.
Some GSA officials claim that the FDA Revitalization Act (Public
Law 101-635) authorizes appropriations to GSA without the need for
prospectus approvals. This claim is incorrect. Public Law 101-635,
which amended the Federal Food, Drug and Cosmetic Act, authorized
appropriations that permit the Secretary of HHS to enter into contracts
to construct and operate a consolidated FDA facility.
Public Law 101-635 specifically limits the role of the
Administrator of General Services in the FDA consolidation to
consultation with the Secretary of HHS. Public Law 101-635 does not
authorize any appropriations that can permit GSA to conduct any such
activities, nor does it authorize any appropriations to GSA's Federal
Buildings Fund. Clearly, GSA will use any new funds illegally, just as
it is using the previously appropriated funds.
The National Environmental Policy Act (NEPA) of 1969 requires that
Federal agencies compare in an Environmental Impact Statement (EIS)
alternative locations for any large new Federal facility. However, the
EIS for the White Oak FDA facility did not make any such comparisons.
The EIS only compared the environmental impacts of an FDA
consolidation at White Oak with the ``no action'' alternative.
Following this legally inadequate comparison, GSA and FDA officials
selected White Oak as the location for the facility.
GSA and FDA officials therefore violated NEPA when they selected
the White Oak site. Congress should not appropriate funds to support
this illegal selection.
A Federal court may prevent FDA from consolidating its facilities
at White Oak for one or more of the above reasons. Congress should not
provide funds for FDA to occupy the White Oak facility until the
Federal courts decide whether the project can proceed.
I therefore ask that your subcommittee not provide the requested
$88,710,000 to GSA in this legislation. Thank you.
______
Prepared Statement of the American Passenger Rail Coalition
Chairman Shelby and Members of the Subcommittee on Transportation,
Treasury and General Government, thank you for the opportunity to
provide testimony on fiscal year 2005 funding for Amtrak, the Nation's
intercity passenger railroad. My name is Harriet Parcells and I am
Executive Director of the American Passenger Rail Coalition (APRC), a
national association of railroad equipment suppliers and rail
businesses.
For fiscal year 2005, Amtrak has requested $1.79 billion. Of this
total, nearly $800 million is for capital investments to continue the
work taking place under the leadership of Amtrak President David Gunn
to bring Amtrak into a state of good repair. Amtrak's request for
operations is $570 million, $11 million less than Amtrak requested in
fiscal year 2004 and an indication that Mr. Gunn's efforts to improve
efficiency, reduce costs and implement management reforms at Amtrak are
yielding positive results. APRC supports Amtrak's budget request and
asks the subcommittee to fund Amtrak at $1.79 billion. While we
recognize that funding constraints face the subcommittee, APRC believes
that funding Amtrak much below $1.79 billion would jeopardize the
substantial progress taking place at Amtrak. The administration's
fiscal year 2005 budget of $900 million for Amtrak is nearly 50 percent
below Amtrak's budget request and $318 million or 26 percent below
Amtrak's current appropriation of $1.218 billion. Funding Amtrak at
$900 million would provide virtually no funding to continue the
important capital investments identified in Amtrak's Five Year
Strategic Capital Plan and that Amtrak has been undertaking since 2003.
Amtrak President David Gunn has stated that funding at $900 million
would lead to a shutdown of the national system. APRC also supports
strong funding for the rail safety and research and development
programs at the Federal Railroad Administration.
AMTRAK RIDERSHIP IS STRONG ON TRAINS NATIONWIDE
Amtrak is a valued means of transportation used by million of
Americans annually. For travel in metropolitan corridors, Amtrak
provides a cost-effective, efficient alternative to congested highways
and airports. For residents of rural communities, Amtrak trains are
often the only convenient, affordable, all-weather public
transportation available. In fiscal year 2003, 24 million passengers
rode Amtrak trains, the highest level in Amtrak's history. Ridership
gains occurred on routes across the system. Each month from June-
December 2003, gains in rail ridership ranged from 7-12 percent over
levels for the same period in 2002. Amtrak ticket revenues also rose
each month from June-December 2003. Thanksgiving ridership was Amtrak's
highest ever for this holiday--Amtrak carried approximately 595,000
passengers over the 7 days from Tuesday, November 25-Monday, December
1. Ridership on Amtrak's long-distance trains was particularly strong,
with increases of 14 percent or more over last year.
Some policymakers question the need for long-distance trains, yet
the strong growth in ridership on these trains underscores the
important mobility and economic benefits they provide, especially for
America's small cities and rural communities (see table 1).
TABLE 1.--AMTRAK MONTHLY RIDERSHIP GROWTH JUNE-DECEMBER FISCAL YEAR 2003
COMPARED TO FISCAL YEAR 2002
[Amount in percent]
------------------------------------------------------------------------
Systemwide Long-distance
Month Total Trains
------------------------------------------------------------------------
June.................................... +6.8 +13.6
July.................................... +7.1 +9.4
August.................................. +7.3 +14.1
September............................... +11.4 +22.2
October................................. +10.7 +30.9
November................................ +11.7 +32.0
December................................ .............. +16.3
------------------------------------------------------------------------
Source: Amtrak and NARP News (Jan. 2004 issue).
California's Pacific Surfliner trains, operating between San Diego
and Los Angeles and Santa Barbara, continue to experience record-
breaking ridership. Two million passengers rode these trains in fiscal
year 2003, a 25 percent increase over fiscal year 2002. Ridership on
other major rail corridors in the State--the San Joaquin service and
the Capitol Corridor--also had strong ridership growth. Ridership on
the Texas Eagle rose 20 percent in fiscal year 2003 over 2002 levels.
In the Midwest, eight trains that serve the region experienced a 16
percent rise in ridership from May-December 2003 compared to 2002. In
the Northeast, Acela Regional trains carried more passengers than any
other Amtrak service in the Nation--nearly 6 million riders--up 3.7
percent over last year. The Pennsylvanian train ridership surged 64
percent, benefitting from a routing change that terminated the train in
Pittsburgh rather than Chicago.
Ridership Gains Continue in Fiscal Year 2004.--Gains in Amtrak
ridership continued in first 4 months of fiscal year 2004 (Oct. 2003-
Jan. 2004). Northeast Corridor ridership was up over 6 percent;
ridership on long-distance trains was up nearly 20 percent.
AMTRAK'S ABILITY TO CONTINUE CAPITAL INVESTMENTS IS CRUCIAL
Amtrak President David Gunn and the Amtrak Board of Directors began
implementing a program of capital investments in fiscal year 2003 that,
if sustained over the next several years, will bring the national
Amtrak system into a state of good repair. These capital investments
are essential to improving the reliability, safety and efficiency of
the national Amtrak system. Amtrak's accomplishments to date in making
capital improvements are significant. In fiscal year 2003, 147,600
concrete ties were installed in the Northeast Corridor, replacing old
wood ties. Twenty-two miles of continuous welded track were installed
and track bed was improved. These investments will provide a smoother
ride for travelers and reduce track maintenance costs. Track
improvements to a third track have increased capacity and enabled
speeds to rise from 60 to 110 mph. Thirty-three miles of signal cables
were replaced, 37 miles of electric catenary hardware renewed and 22
bridges retimbered. Substantial improvements were and continue to be
made to rolling stock. Twenty-one wrecked Amfleet and Superliner
railcars were rebuilt and 23 food service cars were remanufactured and
restored to service on routes around the country. One hundred and three
railcars and locomotives went through heavy overhauls or were
remanufactured. APRC urges Congress to provide Amtrak with sufficient
funding in fiscal year 2005 to enable the railroad to continue these
essential capital investments.
RAIL CAPITAL INVESTMENTS PRODUCE U.S. JOBS AND OTHER BENEFITS
The U.S. rail manufacturing and supply industry contributes to the
health of the U.S. economy, with over $20 billion in annual sales
(approximately $7 billion to U.S. intercity, commuter and transit
passenger railroads) and over 150,000 workers employed. Capital
investments made by Amtrak support jobs for Americans in factories and
businesses in States across the country. Investments in transportation
infrastructure are vital to the efficient movement of people and goods
and a robust, competitive economy. Every billion dollars invested in
transportation infrastructure projects creates approximately 42,000
jobs.
In the Pacific Northwest, investments in new rail infrastructure
and equipment by Washington, Oregon and public and private partners to
improve the quality and speed of rail service in the Pacific Northwest
High Speed Rail Corridor resulted in a tripling in intercity passenger
rail ridership over levels 10 years ago. With further investments, the
region anticipates rail ridership to grow to 2.2 million by the year
2018. The Midwest Regional Rail Initiative, a plan to link cities and
communities throughout the Midwest with improved passenger rail
service, is projected to stimulate substantial public and private
investment and create 2,300 permanent new rail service jobs, 6,300
construction jobs (over 10 years) and 18,200 indirect jobs. Public
investments to bring the Acela high-speed rail service to the Northeast
Corridor generated economic benefits for States and businesses around
the country. Contracts were signed with over 70 suppliers in more than
20 States.
AIR-RAIL INTERMODAL CONNECTIONS PROVIDE MANY BENEFITS
Intermodal transportation hubs that provide an easy transfer for
travelers between modes--from airplanes to intercity passenger trains
or intercity trains to local transit systems--enhance the efficiency of
the overall transportation system and provide many benefits to
travelers. While progress in developing intermodal connections has been
made since enactment of the ``Intermodal Surface Transportation
Efficiency Act of 1991'', much work remains in this area. Only a few
U.S. airports, such as Newark Airport in New Jersey and Burbank Airport
in California, provide an easy transfer between Amtrak trains and
airplanes. At Newark Airport, Continental Airlines and Amtrak have
created a code-sharing arrangement, the only one in the Nation, which
covers rail travel for Continental passengers between Newark Airport
and six cities on the Northeast Corridor. A study comparing travel by
several different modes (Amtrak, NJ Transit or by car) to Newark
Airport from nearby cities (Newark, NYC, Philadelphia, Trenton) found
that considerable time can be saved when rail transportation is used.
An added benefit is that adverse weather and road conditions which
cause great time increases for auto travel generally don't impact rail.
At Maryland's BWI Airport, travelers can easily connect between trains
and airplanes by a bus service that operates between the airport and
Amtrak's BWI train station. This service works well and is used by many
travelers. In Pennsylvania, part of the plan for the new Harrisburg
International Airport terminal is a $10 million train station, which
will connect to the new airport terminal by a glass-enclosed moving
sidewalk. A larger number of U.S. airports have convenient rail transit
connections to the airport: Atlanta's Hartsfield Airport; Chicago's
Midway and O'Hare Airports; St. Louis Lambert Field Airport; Washington
DC's Reagan National Airport and others. These types of intermodal
connections are commonplace throughout Europe and other parts of the
world where airports have become true multi-modal transportation
centers. U.S. transportation policy and funding should continue to
encourage development of intermodal centers and easy connections
between modes to boost the efficiency of the U.S. transportation system
and ease travel for passengers.
RAIL INFRASTRUCTURE BONDS TO COMPLEMENT APPROPRIATED FUNDS FOR RAIL
The need for funding to improve railroad infrastructure greatly
exceeds what is available through annual Federal appropriations. States
lack adequate funding to make these investments alone. An innovative
Federal-State partnership is needed. Several bills have been introduced
in the Senate and the House of Representatives that would fund
investments in rail infrastructure through tax-credit bonds or private
activity bonds. In the Senate, two comprehensive rail authorization
bills have been introduced. The American Rail Equity Act of 2003 (AREA)
or S. 1505 was introduced by Senator Kay Bailey Hutchison and
cosponsors. S. 1505 establishes a non-profit Rail Infrastructure
Finance Corporation (RIFCO) that is authorized to issue $48 billion in
tax-credit bonds for rail infrastructure investments over 6 years. It
also authorizes $12 billion for Amtrak over 6 years. A second bill, the
American Railroad Revitalization, Investment and Enhancement Act of the
21st Century (ARRIVE 21) or S. 1961 was introduced by Senator Ernest
Hollings and cosponsors and creates a non-profit public-private
partnership, the Rail Investment Finance Corporation (RIFCO), that is
authorized to issue $30 billion in tax-credit bonds over 6 years. S.
1961 also reauthorizes Amtrak at $1.5 billion per year for 6 years. In
the House, the Transportation and Infrastructure Committee approved
RIDE-21 (HR 2950) which authorizes $59 billion in rail infrastructure
improvements and establishes authority for States or State compacts to
issue $12 billion in tax-credit bonds and $12 billion in private
activity bonds over 10 years for investments for high-speed rail
infrastructure. APRC strongly supports enactment of legislation that
would establish a non-profit corporation authorized to issue bonds for
investments in rail infrastructure. The bonds would help address the
large unmet need for investments in rail infrastructure to improve
passenger and freight rail service and capacity and would complement
rail funding available through the annual appropriations process.
Chairman Shelby and members of the subcommittee, thank you for the
opportunity to provide testimony on the needs of our Nation's passenger
rail system.
______
Prepared Statement of the Coalition of Northeastern Governors (CONEG)
As the subcommittee begins the fiscal year 2005 transportation
appropriations process, the Coalition of Northeastern Governors (CONEG)
is pleased to share with the subcommittee testimony on the fiscal year
2005 Transportation and Treasury Appropriations bill. The CONEG
Governors commend the subcommittee for its past support of funding for
the Nation's highway, transit, and rail systems. Although we recognize
the extensive demands being made upon Federal resources in the coming
year, we urge the subcommittee to continue the important Federal
partnership role that is vital to strengthening the multi-modal
transportation system. This system is a critical underpinning to the
productivity of the Nation's economy and the security and well-being of
its communities.
First, the Governors urge the subcommittee to fund the combined
highway, transit and safety programs at levels that will continue the
progress in recent years to improve the condition and safety of the
Nation's highways, bridges and transit systems. These improvements,
documented in the U.S. Department of Transportation's 2002 Conditions
and Performance Report to Congress, were made possible by the
substantial level of investments made by the Federal-State partnership
in highway, bridge and transit infrastructure under the Transportation
Equity Act for the 21st Century (TEA21). Continued and substantial
investment in these infrastructure improvements--in both urban and
rural areas--is necessary if the Nation's surface transportation system
is to safely and efficiently move people and the substantial growth in
freight movement that is projected in the coming decade. According to
the Conditions and Performance Report, a combined Federal highway and
transit program of $53 billion annually is needed simply to maintain
our Nation's highways and transit systems in the current conditions.
Within the transit program, the Governors strongly urge the
subcommittee to provide funding levels that at least maintain the basic
program structure and address the solvency of the mass transit account.
Further, the Governors urge the subcommittee to continue the
traditional 80/20 Federal-State match for the New Start Program and the
Bus and Bus Facilities Discretionary Grant Program. These programs have
been instrumental in ensuring that needed funds are invested to improve
and extend transit services in both our urban and rural communities.
Second, the Governors strongly urge the subcommittee to provide at
least $1.8 billion in fiscal year 2005 for intercity passenger rail.
Intercity passenger rail is a vital part of the Nation's transportation
system, particularly in the Northeast and Mid-Atlantic region, where it
provides essential mobility, enhances capacity of other modes, and
provides much needed redundancy to the Nation's transportation system.
In recent years, the Congress has imposed discipline on the management
of Amtrak operations, with the result being greater financial
accountability and oversight of the Federal Government's investment in
intercity passenger rail. While the Congress, administration and States
continue to work cooperatively to determine the future of intercity
passenger rail and Amtrak in the Nation's transportation system, a
funding level of $1.8 billion in fiscal year 2005 will help provide a
period of stability for intercity passenger and commuter rail
operations. This funding level is critically needed to maintain
services and begin a program of essential investments in equipment and
infrastructure to bring the system back to a state of good repair for
reliable service. The United States Department of Transportation
Inspector General has noted that over $1 billion in capital funds is
needed annually just to sustain the current intercity passenger rail
system, regardless of who operates that system. The States are already
major investors in the current intercity passenger rail system, with
the Northeast and Mid-Atlantic States having invested over $4 billion
in intercity passenger rail operations and infrastructure since 1991.
Third, the Governors urge the subcommittee to continue funding for
investments in Intelligent Transportation Systems (ITS) that can
maintain and enhance the capabilities and security of the Nation's
transportation system. ITS helps States and communities along the
densely populated Atlantic Coast region improve the safe and reliable
operations on highway and transit systems on a daily basis. The
Northeast's rural areas and communities also benefit significantly from
ITS investments. The region's ITS systems, including those provided by
TRANSCOM and the I-95 Corridor Coalition, have demonstrated their
critical role, both in the emergency management and recovery phases,
when security demands put added pressure on the region's transportation
networks.
Fourth, safety on the Nation's highways, transit and rail systems
remains a priority of the Governors. The safety of the aging rail
tunnels along the Northeast Corridor is a particular concern, and we
urge the subcommittee to fund life safety improvements for the Amtrak-
owned Baltimore and New York tunnels. The Governors also support
maximum funding for the Section 130 Highway-Rail Crossing Program. As
part of the Federal-State partnership to correct hazardous conditions
on the Nation's highways, investments in highway-rail crossings can
reduce injuries and death from accidents even as they allow higher
train speeds and increased reliability.
Fifth, the Governors urge the subcommittee to provide sufficient
funding for border crossing and gateway infrastructure projects. A
strong program--one that invests in transportation projects addressing
both security and transportation needs--can contribute to safer, more
efficient and secure flows of people and goods across international
borders and through gateways.
Sixth, the Governors also support the President's funding request
of $20 million for the Surface Transportation Board. The Board is
essential for oversight and effective implementation of decisions
affecting the ongoing process of railroad consolidations that will
affect local and regional economies across the Nation.
Finally, the Governors support continued Federal investment in
transportation research and development programs, particularly the
Federal Railroad's Next Generation High Speed Rail program. This
program enhances safety and helps stimulate the development of new
technologies, which will benefit improved intercity rail service across
the Nation.
The CONEG Governors thank you, Ranking Member Patty Murray, and the
entire subcommittee for the opportunity to share these priorities and
appreciate your consideration of these requests.
______
Prepared Statement of the National Treasury Employees Union
NTEU represents 150,000 Federal employees in 29 Federal agencies
and departments, including the men and women who work at the Internal
Revenue Service. I appreciate the opportunity to provide the
subcommittee with comments on the IRS budget for fiscal year 2005.
There are several items in the administration's IRS budget that
NTEU believes would be detrimental to the IRS' mission. The two most
egregious items include the administration's proposal to contract out
tax collection to private tax collection agencies, and an inadequate
budget request that will prevent the IRS from continuing to improve its
customer service record while bolstering enforcement efforts.
PRIVATE TAX COLLECTION
The Treasury Department's fiscal year 2005 budget proposal to allow
the IRS to use private collection agencies to collect Federal income
taxes is risky, costly, and unnecessary. NTEU strongly opposes this
plan. This proposal would risk exposing sensitive taxpayer information,
would subject taxpayers to the abusive tactics of private debt
collectors, and would cost U.S. citizens much more money than if IRS
employees did the job.
IRS employees are the most reliable, cost-effective means for
collecting Federal income taxes. IRS employees can collect outstanding
debt more cheaply than private contractors. With an appropriation of
$296 million for compliance, the IRS could collect an additional $9.47
billion in revenue per year. That's a $31 return per dollar spent,
compared to only $3 revenue per dollar spent for private collection
agencies. Furthermore, there is the potential for abusive treatment
from private debt collectors. There is a very real risk of exposing
sensitive taxpayer information to those who might misuse it. In this
era of identity theft, I do not believe the Federal Government should
engage in practices that could needlessly expose confidential taxpayer
information.
A February 2003 Treasury Inspector General for Taxpayer
Administration (TIGTA) report faulted the IRS for failing to conduct
background checks on more than 2,100 private contract employees working
in offices in Maryland who had access to sensitive information. In 1996
and 1997 tax years, Congress authorized a pilot program to test private
tax collection. The 1996 program resulted in such egregious abuses by
private debt collectors that the 1997 program was cancelled. According
to an IRS Internal Audit Report (Ref. No. 080805, 12/19/97), the
private debt collectors under contract to the Federal Government
committed hundreds of violations of the Fair Debt Collection Practices
Act--including calling a taxpayer at 4:19 a.m.
There is widespread opposition to privatization of tax collection.
Several taxpayer advocacy groups: the Tax Executives Institute; the
National Association of Enrolled Agents; Citizens for Tax Justice;
Consumer Federation of America; Consumers Union; National Consumer Law
Center; National Consumers League; and large segments of the taxpaying
public oppose the privatization of collection duties. Specifically,
Global Strategy Group, Inc. conducted a poll last year that found 66
percent of respondents disapprove of allowing the Internal Revenue
Service (IRS) to hire private debt collection companies. When details
of the IRS's plan were provided, the number in opposition rose to 79
percent. The results of this poll strongly indicate that Americans
across all political, geographic and income lines oppose this proposal.
While the IRS is liable for damages caused by an IRS employee's
misuse of sensitive taxpayer information, taxpayers would not have
proper redress with the Federal Government for misuse of their
confidential information by contractors. Instead, taxpayers would be
left to seek damages against the private collection agency. It is plain
and simple. This plan to privatize tax collection at the IRS will hurt
U.S. taxpayers and will hurt IRS workers.
Having cited these failed attempts for private tax collection, I
would urge the subcommittee to prohibit any appropriation funds from
being used for contracting out tax collection services to recover U.S.
debt.
rifs
While NTEU agrees with IRS' goal of enhancing tax compliance and
enforcement, we don't agree with the approach of eliminating front-line
employees in order to pay for additional compliance efforts. As the
number of tax returns continues to grow, the number of IRS employees
continues to shrink. As the IRS Oversight Board pointed out in its 2003
Annual Report, the IRS workload has increased by 16 percent while at
the same time the number of full time equivalent employees has
decreased by 16 percent from 1999 to 2002. This is caused by a number
of circumstances, including an increasingly complex tax code and an
increasing number of tax returns--paper as well as electronic returns.
This has led to a serious decline in the size of the IRS workforce as a
way to cope with increasing budgetary demands.
NTEU strongly encourages the subcommittee to increase the IRS
budget by 10 percent over fiscal year 2004, as recently recommended by
the IRS Oversight Board in its fiscal year 2005 Budget/Special Report
(March 2004). The administration expects the IRS to do more with fewer
resources and this is simply an unrealistic demand placed on the IRS
workforce. If Congress wants more out of the IRS, then they are going
to have to pay for it. The IRS Oversight Board makes a compelling case
for increasing the IRS budget because it will ultimately mean an
increase in Treasury revenues.
I would encourage Congress to work with the administration to
anticipate costly events--such as pay increases or costly changes to
the tax code--and budget accordingly. This did not happen last year.
For instance, NTEU encouraged the IRS to make a supplemental funding
request for administering last summer's child tax credit refunds to
taxpayers. To our dismay, the request was not made and IRS was forced
to do more work without any additional resources. This places a great
burden on an IRS workforce that is expected to provide business results
while improving customer service. This is unrealistic and unfair.
Improving customer service, enhancing tax return processing and
increasing tax compliance will only occur if Congress and the
administration support increased funding for staffing, advanced
technology and equipment, and better training.
The IRS is using the excuse of bolstering compliance to justify a
recently announced reduction in force (RIF) of roughly 1,600 IRS Case
Processing and Insolvency support employees in 92 locations across the
country--only to turn around and hire 1,000 new employees to do the
same work in four consolidated IRS Service Center sites. NTEU opposes
the RIF and urges the IRS to keep its employees in the field, serving
the local taxpayers. NTEU urges Congress to appropriate the needed
funding to keep these employees in the field.
Presumably, IRS intends to save money and increase efficiency with
this move, but there is no evidence of cost savings and IRS' business
case assumptions are faulty. IRS has failed to provide information on
the cost of hiring and training new employees when the current
employees already know how to do the job.
In responding to the announcement of the RIFs, former IRS
commissioner Donald Alexander was recently quoted as saying,
``Centralization is not always more efficient, especially when it moves
support people away from those they are supporting.''
As one of the rationales for the current centralization, the IRS
indicates that Case Processing had not been reorganized since the
1970's. However, several attempts have been made to centralize Case
Processing over the years, but have failed and this function has
remained in the field. In fact, Case Processing functions were located
in Service Centers until the IRS reorganized 25 years ago to locate
these functions closer to the employees who perform collection and exam
work. Reorganizing for the sake of reorganization is a waste of time
and money, neither of which the IRS can afford to squander.
Case processing support employees assist Revenue Agents and Revenue
Officers in resolving issues related to overdue taxes. One of the more
important duties performed includes releasing liens on property once
overdue taxes are paid so that a taxpayer can secure a loan and
calculate interest penalty abatements.
Insolvency employees are responsible for monitoring tax compliance
throughout the life of the bankruptcy, including trust fund taxes and
pyramiding of business taxes. Insolvency employees must adhere to
strict deadlines in order to avoid violations of the automatic stay and
possible sanctions. Failure to take timely and appropriate actions
could result in the IRS being sued for damages and/or attorney fees.
Centralizing Insolvency work means that the new employees will need to
know the local rules and standing orders of the various bankruptcy
courts that take precedence under the Bankruptcy Code. It is
unreasonable to expect employees to be able to follow the rules of
dozens of different States and courts, likely resulting in delays and
errors and a greater cost to the IRS.
The IRS has failed to provide information on how local taxpayers
will be affected by its plan. Despite a lack of information from the
IRS on the affect on taxpayers, NTEU believes that this RIF will indeed
affect taxpayers nationwide.
Federal-State disclosure agreements--and the statutes that govern
these agreements--differ by State. Centralizing the Insolvency work
will mean that employees in the centralized sites will need to be
responsible for knowing and adhering to all 50 variations. It will take
longer for cases to close if they have to be shipped to a centralized
site and this could hurt the taxpayer who is waiting for her case to be
closed.
Currently, if a taxpayer has a question about the process, she can
find one of the Case Processing employees locally and get her question
answered. If these jobs are shipped out of State, it will be much more
difficult for the taxpayer to get her question answered, or for the
cases to be resolved in a timely and complete manner.
Finally, this removes accountability at the local level. If a
member of Congress is contacted by a taxpayer constituent with an IRS
case processing problem, that member will be directed to some out of
State Service Center where the new employee has no comprehension of the
region, much less the local personnel involved in closing a case, or
the member of Congress making the inquiry.
NTEU agrees with the IRS that there is a great need to bolster
enforcement efforts, but this RIF does not guarantee new or enhanced
enforcement positions. Once again, this is a waste of time and money
for the IRS. This is unfair to the current employees who are trained
and successfully performing the Case Processing and Insolvency work;
this is unfair to the taxpayers who rely on the services provided by
their local Case Processing workers.
IRS also has plans for a RIF of approximately 2,200 employees at
the Memphis Submission Processing Center. NTEU strongly disagrees with
the IRS' decision to conduct this RIF. The IRS claims that it is taking
this action because there has been an increase in electronic filing of
tax returns, and it no longer needs employees to process paper returns.
However, according to the General Accounting Office (GAO-02-205), the
IRS has fallen far short of meeting its electronic filing goals. IRS is
using unrealistic, optimistic assumptions to project the increase in
electronic tax return filing and then using these assumptions to
justify the RIF.
I commend the House of Representatives Appropriators who recognize
the risks of reducing IRS staffing of manual submission processing. In
House Committee Report 108-243, they have asked IRS to report back
prior to ``initiating any premature and ill considered reductions in
force . . .'' (see H. Rept. 108-243, IRS MANUAL SUBMISSIONS
PROCESSING).
NTEU recognizes that electronic filing will eventually become a
reality of IRS' modernization efforts. But we strongly believe that any
resulting reorganizations should occur when there is a genuine need for
a shift to an e-filing workforce and every effort should be made to
avoid a RIF by retraining and placement of current employees.
These examples of reducing the IRS workforce demonstrates the need
for Congress to commit to funding the IRS at adequate levels so the IRS
is not made to choose between bolstering enforcement and providing the
superior service our taxpayers expect and deserve. I hope the
subcommittee will give serious consideration to the Oversight Board's
recommendation and increase the IRS fiscal year 2005 budget by 10
percent over fiscal year 2004.
PAY PARITY
The administration has proposed a completely inadequate 1.5 percent
raise for civilian Federal workers in 2005, and a 3.5 percent pay raise
for members of the military. NTEU supports the higher raise for all
employees and I applaud the Senate's budget resolution calling for
civilian-military pay parity in 2005.
This vote--and in particular, the bipartisan nature of the vote--
not only sends an important message to Federal employees that they are
valued and respected but it is another important step in the
government's continuing efforts to recruit and retain the high-quality
employees the public wants and expects in Federal agencies.
The Senate budget resolution is in step with a recently approved
House resolution, which supports the concept of pay parity between
Federal civilian and uniformed military employees. By a vote of 299-
126, the members of the House went on record in support of equal pay
raises for both groups of public employees in 2005. The House vote
reflected the importance of pay parity and signaled that members of
Congress understand the need for fair pay in the competition with
private sector employers for the most talented workers.
The vote by the full Senate on the pay issue preceded the rejection
earlier this year of language supporting civilian-military pay parity
by the House Budget Committee in its 2005 budget resolution.
Congressional action on Federal pay reflects the role that civilian
employees play not only serving the public in their specific agencies,
but in the continuing fight against terrorism. They work in a variety
of capacities that impact national security, including such roles as
helping secure the country's borders, protecting the food supply, and
much more. Again, I commend those Senators who voted for the pay parity
resolution and urge the appropriators to fund civilian pay on par with
military pay at a 3.5 percent increase for fiscal year 2005.
CONTRACTING OUT
Finally, after a bipartisan compromise was reached on the fiscal
year 2004 Omnibus Appropriations bill, the White House insisted that
the conference committee strip language that would have provided a
level playing field for Federal employees whose jobs are made available
for private competition.
One bipartisan provision that was stripped from the bill would have
required contractors to show significant cost savings (the lesser of 10
percent or $10 million) over the in-house competitor in order to be
awarded a competition. Instead, agencies will now only have to take
cost savings into consideration during public-private competitions
since the requirement was removed from the bill language. This allows
the agencies to outsource the work regardless of whether or not it
saves the Federal taxpayers money--or costs the taxpayers more money.
Another provision that was stripped from the Omnibus bill would
have provided the Federal employees an independent and impartial venue
to appeal an agency's contract award decision. Stripping this provision
sends a clear message to Federal employees that the administration
wants private contractors to retain their unfair advantage in public-
private competitions.
The administration further weakened the Omnibus bill by limiting
the guarantee that all Federal employees would have the opportunity to
submit their own best bids. The altered bill language limits the right
of employees to come up with their own cost-saving bid to those
employees in only the agencies funded by the Transportation-Treasury
bill. This means, for competitions in most agencies, contractors will
still be able to submit their best bids while Federal employees will
not be allowed to offer their best bid.
NTEU strongly encourages the appropriator to include legislative
language that will level the playing field for Federal employees who
are expected to compete against private contractors. It is simply
unfair to give private contractors an unfair advantage in public-
private competitions when Federal employees can do the same job with
better and less costly results.
CONCLUSION
On behalf of the dedicated Federal employees NTEU represents, I am
proud to submit these views for the hearing record. I encourage the
committee to make a strong investment in the Federal workforce by
appropriating the 10 percent increase as requested by the IRS Oversight
Board; preventing private tax collection; prohibiting the IRS from
moving forward with the unnecessary RIFs; providing pay parity for
Federal workers; and giving the Federal workers a level playing field
when competing for their jobs with private contractors.
Without a doubt, the frontline employees are committed to working
with management and Congress to increase efficiency and customer
satisfaction. NTEU is committed to striking a balance between taxpayer
satisfaction, business results and employee satisfaction. I encourage
Congress to join us in this commitment.
______
Prepared Statement of the Air Traffic Control Association, Inc.
INTRODUCTION--AVIATION AT THE CROSSROADS
The Federal Aviation Administration is at a crossroads--and the
future of U.S. aviation hangs in the balance.
The administration has delivered to Congress a proposed fiscal year
2005 budget that cuts $393 million (14 percent) from FAA's capital
investment account, and provides less than current services funding for
ATC system operations and maintenance. Funding for RE&D, already down
to $117 million last year, is reduced another $2 million.
The FAA and the new Air Traffic Organization (ATO) are attempting
to respond to this new funding reality in the only way possible. The
organization is getting leaner. The mantra is managing to the reduced
level of resources, rather than responding to demand with increased
service. Every modernization initiative must be justified by an
immediate and measurable payback. Projects that deliver economies and
efficiencies for the air traffic service provider will be favored over
those that offer new, improved, and/or long-term customer benefits. And
under the administration's proposal, long term investment in promising
concepts and technologies is not receiving the ``mission drive focus''
required for what FAA is predicting to be an overall increase in
passenger traffic of 4.3 percent per year (5.2 percent increase
internationally) over the next 10 years. The ATO already has deferred
to future years the digital programming and data link elements of
NEXCOM, not waiting for future funding decisions by Congress. FAA was a
leading, global proponent of this technology and yet we are deferring a
solution that only a few short years ago was deemed vital to address
the imminent dearth of available radio frequencies.
On the other hand, Homeland Security requirements and the War on
Terrorism are placing new burdens and requirements on an already
stressed air transportation system. If past is prologue, the current
downturn in passenger traffic is temporary and aviation demand will
come roaring back. Most airports already are reporting passenger
traffic increases, and many are again experiencing congestion and
delay. Earlier this year, under DOT order two hub carriers American and
United agreed to a 5 percent reduction in flight schedules in order to
cut down on delays that reached the highest level ever recorded.
Because these cuts did not improve delays enough, DOT last week ordered
the airlines to reduce flights another 2.5 percent. This is not a long-
term solution to meeting passenger and airline demand for more capacity
at one of the world's busiest airports, much less a panacea for the
entire aviation system.
The path U.S. aviation has been placed on with this proposed budget
is clear: we will limp into the future with an air transportation
system that is inefficient, at capacity, and unprepared for a tripling
of demand in the future. The weight of increasing airline operations
due to the greater usage of smaller regional jets, and the increasing
burdens on aviation from the Department of Homeland Security will
paralyze the aviation system.
If instead we dare to envision a safe, secure, efficient, and
capable air transportation system in the future, we must be bold in our
approach, and we must act now. We cannot allow terrorists to scare us
out of the skies. We must not so constrain ourselves that in seeking
safety that we harness mobility. The answer is to be found in
technology, investment, vigilance, and perseverance in the face of
uncertainty--the very attributes that have carried aviation so far in
its first century.
THE CHANGED FACE OF U.S. AVIATION
The Nation has come to view aviation in a new light over the past 3
years. No longer is air transportation predominantly about travel and
tourism. Aircraft have been used as weapons against civilians, and we
must do everything reasonably possible to prevent it from happening
again. The Departments of Defense and Homeland Security rely on civil
aviation facilities and agencies to perform their mission. Aviation is
much more critical and important for United States and world commerce
today. America's vision of a global economy is based on the ability of
aviation to serve as the bridge connecting nations, cultures and
people. This vision--that is inclusive of, but transcends security--
must be the guiding force in developing a fresh perspective, and new
principles to guide Federal air traffic control investment policy and
planning.
--We demand more of the air transportation system than ever before.--
The Nation's aviation infrastructure must meet National Defense
and Homeland Security needs while continuing to function as the
economic engine that drives the National economy. Many of the
requirements, or safety procedures dictated by the added
requirements are new, for example upgraded surveillance
systems; data collection, transmission, and sharing
capabilities; reliable high speed communications networks; and
extensive plans, procedures, and facilities for Homeland
Security and National Defense. This means developing and
implementing new and improved air traffic systems that deliver
operating benefits for users and efficiencies for FAA while
strengthening security. It also means building an air
transportation system for the future that allows passengers and
shippers to go anywhere, any time, and hassle free. All of this
is a tall order. But for the safety and security of the public,
and the viability of the National economy, we must not deliver
less.
--Regular, robust investment in aviation infrastructure is a National
imperative.--The threat of terrorism has become an unfortunate
fact of life in the world today. Continual vigilance and
preparedness are a necessity. For aviation this means regular
investment in developing and implementing equipment and
technologies that can help counter ever changing, and
increasingly sophisticated dangers. Timely, continuous
investment in the public air transportation infrastructure is
no less important for civil aviation. FAA expects air traffic
demand to grow steadily over the next 10 years, with tower
operations to increase 28 percent, instrument operations to
increase 29 percent, and air route traffic control center
operations to increase 34 percent. We will not meet the
requirements of this capacity increase sufficiently under the
administration's current budget approach.
MEETING THE CHALLENGE
The Nation's air transportation system simply cannot fulfill
National Defense and Homeland Security requirements, and accommodate
ever increasing civil aviation demand on a diet of continually
diminishing resources. Even with the improvements and efficiencies
anticipated from implementation of the new Air Traffic Organization,
the administration's funding proposal for fiscal year 2005 is
unrealistic. FAA's mission is growing, demand is growing, and the only
thing shrinking is the budget to fund new technology and equipment to
handle this growth. ATCA therefore urges Congress to act upon the
following:
--FAA's Facilities and Equipment account must be funded at the
authorized level.--ATCA urges the Congress to appropriate, at
minimum, the full, authorized amount of $2.993 billion for FAA
Facilities and Equipment (F&E) in fiscal year 2005.\1\ FAA must
equip the aviation system for the War on Terrorism and still
continue fielding needed air traffic system improvements. And
just as important, FAA must begin to lay the groundwork for a
capable future air transportation system. FAA already is behind
the power curve installing the modernized systems that deliver
on the promise of its Operational Evolution Plan--systems that
are the necessary foundation for improved functionality, safety
and efficiency. Promising projects and technologies such as
controller pilot data link communications (CPDLC), Next
Generation Communications System (NEXCOM), and the System Wide
Information Management system (SWIM) are being deferred.
Others, like the User Request Evaluation Tool (URET), the FAA
Telecommunications Infrastructure (FTI), ADS-B programs (Safe
Flight 21), and Terminal Doppler Weather Radar (TDWR) product
improvements could be completed and continue delivering cost
and efficiency benefits to FAA and users sooner if additional
funding were applied. All of these projects are necessary, and
will have to be completed eventually. Interrupting these
efforts over and over again only increases the ultimate cost,
and postpones benefits. The ATO also must have the resources to
continue a vigorous NAS System Architecture and systems
integration activity. Because the new organization is
structured according to lines of business, an overarching
planning function is necessary to assure that requirements 5 to
10 years hence are anticipated and provided for, and that new
elements being delivered into the system interface correctly
and work together. Otherwise, equipment must continually be
redesigned and retrofitted at great expense.
---------------------------------------------------------------------------
\1\ Cutting funding for FAA F&E by 14 percent in fiscal year 2005
as the administration proposes could have an unintended, fiscally
disastrous consequence of invoking application of an enforcement
provision in authorization law that prohibits funding for FAA
Operations if Airport Grants and F&E appropriations are less than the
authorized amount. Clearly, the administration's proposal is out of
step with congressional intent that air transportation system
modernization and improvement be a National Priority.
---------------------------------------------------------------------------
--Aviation capabilities and resources of related agencies must be
protected and leveraged.--NASA's Aeronautics research
capability has become essential to FAA's mission, and must be
funded adequately. DOD's $69 billion research and development
activity must be consistently mined for concepts and core
technologies transferable to the civil sector. Synergy and
cooperation between Federal and civil research organizations in
the United States, and those of friendly governments around the
world should be investigated, enabled, and encouraged. The
world is a different place today than yesterday. The United
States should not be seen as ``going it alone.'' The ATC
organizations around the world have many ideas, programs, and
procedures that merit consideration and coordination in order
to ensure everyone's stated goal of global interoperability.
--The Federal Government must prepare for large funding requirements
associated with core future technologies.--There is universal
agreement that some core capabilities are essential to meeting
future Homeland Security/National Defense requirements, and to
accommodate air transportation demand we know is coming. The
first of these key technologies is an aviation system-wide
information network, through which all stakeholders, including
the DOD, DHS, and law enforcement, can derive whatever data and
information needed for the National Defense, security, and
safe, efficient aircraft operations. The second is a capable,
reliable data communications system connecting aircraft to the
air traffic control system. The third is a sophisticated
toolset enabling collaborative decision making among
participants in the ATM system. All of these technologies are
crucial for Defense and Homeland security missions. All will
enhance aviation safety and security. And all can be used to
increase operating efficiency, and overall system efficiency
and capacity. But a clear direction to proceed with development
and implementation, and a healthy flow of resources must be
applied now, if these technologies are to be available to meet
current and future demand.
--A Federal Government-wide, aviation community-supported air
transportation system future planning activity must be
supported and adequately resourced.--Secretary of
Transportation Mineta is leading an interagency effort
(including NASA, and the Departments of Defense and Homeland
Security) to design the Next Generation Air Transportation
System. This activity will be carried out through a Joint
Planning and Development Office (JPDO), with the advice of the
FAA Research and Advisory Committee. Secretary Mineta's
initiative should be supported, with the expectation that it
will be well managed, adequately resourced, and that it will
yield a product that can be the basis of community consensus
and capable of being implemented. It is recommended that this
effort be coordinated with other future design activities
around the world, with the object of assuring global
compatibility of ATM systems and a seamless future operating
environment. The future system plan should contain a realistic
roadmap for transforming current thinking and technology into
the future air transportation system, with recommendations for
policies and programs to facilitate the transition to a new
system and equipment for all aircraft operators. ATCA urges the
entire aviation community to support the activities of the
JPDO.
--The Nation's aviation research and development capability must be
recreated and empowered.--Congress is urged to authorize and
appropriate $500 million per year for the foreseeable future to
establish and resource a bold, aggressive, well-managed Federal
aviation research and development activity. Critical National
Defense and Homeland Security needs require that FAA and NASA
continually be on the forefront in developing and implementing
cutting-edge surveillance, communications, and information
technologies. There is simply no question that break-through
concepts and technologies will be essential if we are to safely
and efficiently accommodate a tripling of civil air traffic by
the year 2020. Developments of this nature take 10 to 15 years
or more to bring to fruition, so major investments in R&D
capabilities--labs, equipment, people--must be made today.
CONCLUSION
Global aviation is facing challenges of historic proportions.
Terrorism is a constant threat. Depressed demand as a result of 9/11
and economic recession have left governments and aviation enterprises
financially debilitated, and reluctant or unable to make investments in
infrastructure and capital equipment. The U.S. aviation system has
survived and is now growing at a pace last seen pre-9/11, yet
investment in the future is being cut. An increased investment in FAA
Airport Improvement Program funding cannot be viewed as a complete
solution to addressing future capacity when the users and passengers
are measuring our system on a curb-to-curb basis.
The success of the Nation's air transportation system depends on
achieving a collective commitment to secure a reliable, robust funding
stream for air transportation system modernization, the determination
and focus to complete projects already underway, and a forward looking
vision. The aviation system requires total commitment and full funding
in order to meet tomorrow's demand, and this is a commitment we must
make today in order to be successful.
Again, we cannot allow the terrorists to scare us out of the skies
or to divert our financial resources away from building the safest and
most efficient air traffic control system to meet growing demand.
Safety and security are inextricably linked, and overcrowded skies and
airports cannot be the result of terrorist threats, or they have won
and most assuredly we have lost.
We must not so constrain ourselves that in seeking safety we
harness mobility. The answer is to be found in technology, investment,
vigilance, and perseverance in the face of uncertainty--the very
attributes that have carried aviation so far in its first century.
______
Prepared Statement of the California Government and Private Sector
Coalition for Operation Clean Air
Mr. Chairman and members of the subcommittee, on behalf of the
California Government and Private Sector Coalition for Operation Clean
Air's (OCA) Sustainable Incentive Program, we are pleased to submit
this statement for the record in support of our fiscal year 2005
funding request of $31,000,000 for OCA as part of a Federal match for
the $180 million already contributed by California State and local
agencies and the private sector for incentive programs. This request
consists of $31,000,000 from the Department of Transportation (DOT) for
alternative fuel vehicle funding.
California's great San Joaquin Valley is in crisis. Home to over
3.3 million people, its 25,000 square miles now has the unhealthiest
air in the country. Even Los Angeles, long known as the smog capital of
the Nation, can boast better air quality by certain standards. While
peak concentrations of air pollutants are still greater in Los Angeles,
for the past 4 years, the San Joaquin Valley has exceeded Los Angeles
in violations of the ozone 8-hour Federal health standard.
A combination of geography, topography, meteorology, tremendous
population growth, urban sprawl and a NAFTA corridor of two major
highways with over 5 million diesel truck miles per day, have collided
to produce an air basin in which over 300,000 people, nearly 10 percent
of the population, suffer from chronic breathing disorders. In Fresno
County, at the heart of the San Joaquin Valley, more than 16 percent of
all children suffer from asthma, a rate substantially higher than any
other place in California. The extreme summertime heat creates smog
even though smog-forming gases are less than half the amount in the Los
Angeles basin. There is no prevailing wind to flush the natural
geologic bathtub and, as a result, pollutants and particulates
stagnate, accumulate and create unhealthy air.
Degradation of human health is not the only consequence of poor
quality air. In December 2003, the San Joaquin Valley Air Pollution
Control District Board decided to become the first Air District in the
Nation to voluntarily declare itself an ``extreme'' non-attainment
area. This designation, if approved by USEPA, will defer until 2010 the
date for attainment of Federal standards of air quality, but comes at a
cost of imposing permitting on thousands of more businesses and even
further discouraging business expansion or relocation. More Valley's
businesses will be required to obtain permits and comply with
increasingly burdensome regulations imposed by Federal and State law
and the Air Pollution Control District, resulting in added cost in
compliance, reporting and record keeping. At the same time, the area is
burdened by chronic unemployment rates of nearly 20 percent.
Encouraging business expansion in or relocation to the San Joaquin
Valley to combat unemployment will be extremely difficult in the face
of such regulatory burdens.
The San Joaquin Valley is home to the most productive agricultural
land in the world. Over 350 crops are produced commercially on 28,000
farms encompassing more than 5 million irrigated acres. While the
agricultural industry has made great strides at considerable expense to
replace old diesel engines and manage fugitive dust and other
emissions, farming does contribute to the problem. However, it is a $14
billion industry that forms the backbone of the Valley's economy, and
its vitality is crucial.
Industry alone is not the source of the Valley's poor air quality.
Population growth rates exceeding those in the rest of the State and
most of the Nation, in an area without effective mass transit, where
cheap land has led to a landscape of suburbia and sprawl, results in
excessive over-reliance on the automobile. Trucking has increased
dramatically with the increase in population, and Federal free trade
policies. Other factors such as fireplace burning in the winter, open
field agricultural burning because of lack of sufficient alternatives,
and wild fires resulting from lack of controlled burning in the nearby
foothills and mountains all contribute to the problem.
Despite the challenges listed above, much progress has been made.
The State has spent nearly $80 million on improvement and compliance
programs. Local government and private industry have spent over $100
million on technology and compliance. As specific examples, over one
half of the diesel operated irrigation pumps used by agriculture have
been replaced with cleaner engines. The City of Tulare has converted
its entire fleet of vehicles to natural gas as have several other
private fleet operators. A $45 million Federally financed comprehensive
study of ozone and particulate matter is nearing completion. As a
result, the number of 1-hour EPA health standard exceedences has been
reduced by 40 percent since 1989.
But much more needs to be done. The District estimates that daily
emissions must be reduced by 300 tons to achieve attainment. There is
no single or short-term quick fix. The entire Valley (an area the size
of the State of Connecticut) is part of the problem and the entire
Valley will need to be part of the solution.
The Department of Transportation is an important partner in
achieving air quality improvement. The Federal Clean Air Act requires
that transportation plans be consistent with State Implementation
Plans. Mobile sources are the single largest contributor to the San
Joaquin Valley's air pollution problem. Depending upon the season,
mobile sources contribute up to 60 percent of the emission inventory in
the Valley. Heavy-duty vehicles make up half of these emissions.
California and the San Joaquin Valley bear the emissions burden
associated with the significant volume of goods that flow into and out
of the country through vehicular traffic. It is estimated that 6
million truck-miles a day are traveled in the Valley. The emissions
associated with these activities are projected to grow significantly
with port expansions and upcoming changes associated with the
implementation of the North American Free Trade Agreement (NAFTA) that
will allow, for the first time, foreign trucks with less rigorous
emission controls to travel through the San Joaquin Valley.
Finally, heavy-duty mobile source emissions reductions are some of
the most cost-effective emission reduction programs currently
available. The cost-effectiveness of emission reductions achieved
through clean heavy-duty projects that are requested through the
Department of Transportation is approximately $13,650/ton of emission
reduced. In many cases this is one-half of the cost associated with
similar emission reductions achieved through the regulation of
industrial sources of pollution. If our request is fully funded, it
will provide up to 11,000 tones of emissions reductions over the 12
year life of the projects.
Operation Clean Air is a coalition of business, government, health
care, and environmental groups throughout the eight county San Joaquin
Valley Air Pollution Control District. Its goal is to clean the
Valley's air and increase its economic prosperity. The coalition seeks
to catalogue efforts that have produced positive effects and identify
those strategies that could produce even greater effects if supported
by sufficient resources. At the heart of its efforts will be an array
of sustainable, voluntary practices and activities that can and will be
undertaken by all of the residents of the San Joaquin Valley, both
public and private, to improve air quality.
This unique public-private partnership has invested considerable
resources in this project to date, and will continue to do so, but
Federal funding is both imperative and justified to help address what
is essentially an unfunded Federal mandate.
For fiscal year 2004, our Coalition is seeking funding of
$31,000,000 from the Department of Transportation (DOT) for alternative
fuel vehicles throughout the San Joaquin Valley Air Basin. We are also
seeking funding for alternative fuels infrastructure through other
avenues, which will allow accelerated introduction of alternatively
fueled vehicles in municipal fleets, public school fleets, and private
fleets. The widespread use of lower-emitting motor vehicles will
provide significant improvement to air quality in the San Joaquin
Valley while furthering the goals of the Department of Transportation
to reduce emissions from public fleets. Development of alternative fuel
infrastructure will augment the low-emission vehicle program by
providing much needed compressed natural gas (CNG) and liquefied
natural gas (CNG) fueling facilities.
Thank you very much your consideration of our requests.
______
Prepared Statement of the California Industry and Government Central
California Ozone Study (CCOS) Coalition
Mr. Chairman and members of the subcommittee, on behalf of the
California Industry and Government Central California Ozone Study
(CCOS) Coalition, we are pleased to submit this statement for the
record in support of our fiscal year 2005 funding request of $500,000
from the Department of Transportation (DOT) for CCOS as part of a
Federal match for the $9.4 million already contributed by California
State and local agencies and the private sector. We greatly appreciate
your past support for this study ($250,000 in fiscal year 2004) as it
is necessary in order for the State of California to address the very
significant challenges it faces as it seeks to comply with air
pollution requirements of the Federal Clean Air Act.
Most of central California does not attain Federal health-based
standards for ozone and particulate matter. The San Joaquin Valley has
recently requested redesignation to extreme and is committed to
updating their 1-hour ozone State Implementation Plan (SIP) in 2004,
based on new technical data. In addition, the San Joaquin Valley,
Sacramento Valley, and San Francisco Bay Area exceed the new Federal 8-
hour ozone standard. SIPs for the 8-hour standard will be due in the
2007 timeframe--and must include an evaluation of the impact of
transported air pollution on downwind areas such as the Mountain
Counties. Photochemical air quality modeling will be necessary to
prepare SIPs that are approvable by the U.S. Environmental Protection
Agency.
The Central California Ozone Study (CCOS) is designed to enable
central California to meet Clean Air Act requirements for ozone SIPs as
well as advance fundamental science for use nationwide. The CCOS field
measurement program was conducted during the summer of 2000 in
conjunction with the California Regional PM10/
PM2.5 Air Quality Study (CRPAQS), a major study of the
origin, nature, and extent of excessive levels of fine particles in
central California. This enabled leveraging of the efforts of the
particulate matter study in that some equipment and personnel served
dual functions to reduce the net cost. From a technical standpoint,
carrying out both studies concurrently was a unique opportunity to
address the integration of particulate matter and ozone control
efforts. CCOS was also cost-effective since it builds on other
successful efforts including the 1990 San Joaquin Valley Ozone Study.
CCOS includes an ozone field study, data analysis, modeling
performance evaluations, and a retrospective look at previous SIP
modeling. The CCOS study area extends over central and most of northern
California. The goal of the CCOS is to better understand the nature of
the ozone problem across the region, providing a strong scientific
foundation for preparing the next round of State and Federal attainment
plans. The study includes five main components:
--Designing the field study;
--Conducting an intensive field monitoring study from June 1 to
September 30, 2000;
--Developing an emission inventory to support modeling;
--Developing and evaluating a photochemical model for the region; and
--Evaluating emission control strategies for upcoming ozone
attainment plans.
The CCOS is directed by Policy and Technical Committees consisting
of representatives from Federal, State, and local governments, as well
as private industry. These committees, which managed the San Joaquin
Valley Ozone Study and are currently managing the California Regional
PM10/PM2.5 Air Quality Study, are landmark
examples of collaborative environmental management. The proven methods
and established teamwork provide a solid foundation for CCOS. The
sponsors of CCOS, representing State, local government, and industry,
have contributed approximately $9.4 million for the field study. The
Federal Government has contributed $4,874,000 to support some data
analysis and modeling. In addition, CCOS sponsors are providing $2
million of in-kind support. The Policy Committee is seeking Federal co-
funding of an additional $2.5 million to complete the remaining data
analysis and modeling. California is an ideal natural laboratory for
studies that address these issues, given the scale and diversity of the
various ground surfaces in the region (crops, woodlands, forests, urban
and suburban areas).
There is a national need to address national data gaps and
California should not bear the entire cost of addressing these gaps.
National data gaps include issues relating to the integration of
particulate matter and ozone control strategies. In addition, new
national ambient air quality standards will require air quality
assessments for time periods of greater duration, and the impact of
weekend travel activities on air quality will play a part in the
ability to simulate air quality for longer durations. That is why,
concurrent with the CCOS air quality field study, a $600,000 traffic
activity study was conducted for the purpose of gathering detailed,
hourly travel activity patterns during the field study. It is also why
the CCOS allocated an additional $250,000 to develop a link-based
digital map of roadways throughout the domain (using state-of-science
Geographic Information System, or GIS, software) that included the
activity patterns from the traffic study on specific roadway segments.
However, due to the scarcity of weekend data in the transportation
community and travel demand models, these projects were not able to
address the spatial change in travel patterns during a weekend. In
addition to the weekend activity issue, developing mobile source
emissions inputs for longer-term air quality modeling studies will
require more efficient mobile source emissions processing, including
better use of GIS software and technology.
For fiscal year 2005, our Coalition is seeking funding of $500,000
from DOT through highway research funds. The CCOS would use the
$500,000 requested for fiscal year 2005, in conjunction with other
funding, to study and integrate travel activity patterns into modeling
inputs. The CCOS would also use a fiscal year 2005 earmark to develop
more efficient mobile source emissions processing tools and improve the
consistency and linkages between travel demand models used in the
transportation community and emissions factor models used for
conformity purposes in the air quality community. DOT is a key
stakeholder because Federal law requires that transportation plans be
in conformity with SIPs. The motor vehicle emission budgets established
in SIPs must be met and be consistent with the emissions in
transportation plans. Billions of dollars in Federal transportation
funds are at risk if conformity is not demonstrated for new
transportation plans. As a result, transportation and air agencies must
be collaborative partners on SIPs and transportation plans. These plans
are linked because motor vehicle emissions are a dominant element of
SIPs in California as well as nationwide. Determining the emission and
air quality impacts of motor vehicles is a major part of the CCOS
effort.
Thank you very much for your consideration of our request.
______
Prepared Statement of Easter Seals
Chairman Shelby, Ranking Member Murray and members of the
subcommittee, Easter Seals appreciates this opportunity to share the
successes and needs of Easter Seals Project ACTION.
PROJECT ACTION OVERVIEW
The Transportation appropriations process initiated Project ACTION
in 1988 by providing funding to the Federal Transit Administration to
undertake this effort with Easter Seals. We are indeed grateful for
that initiative and the ongoing strong support of this subcommittee in
subsequent years.
Following its initial round of appropriations, Congress authorized
assistance to Project ACTION in 1990 with the passage of ISTEA and
reauthorized the project in 1997 as part of TEA21. The strong interest
and support of all members of Congress has been greatly appreciated by
Easter Seals as it has pursued project ACTION's goals and objectives.
Since the project's inception, Easter Seals has administered the
project through a cooperative agreement with the Federal Transit
Administration. Through steadfast appropriations support, Easter Seals
Project ACTION has become the Nation's leading resource on accessible
public transportation for people with disabilities. The current project
authorization level is $3 million, and Easter Seals is pleased to
request the appropriation of that sum for fiscal 2005.
The strength of Easter Seals Project ACTION is its continued
effectiveness in meeting the congressional mandate to work with both
the transit and disability communities to create solutions that improve
access to transportation for people with disabilities of all ages and
to assist transit providers in complying with transportation provisions
in the Americans with Disabilities Act (ADA).
The activities of the project are guided by input from a 19 member
national steering committee that includes representatives from
transportation and disability organizations. Easter Seals Project
ACTION has worked effectively with the Department of Transportation
under four Presidents, and numerous Department of Transportation (DOT)
Secretaries and Federal Transit Administration (FTA) Administrators.
Today, Project ACTION is working closely with Secretary Mineta and FTA
Administrator Dorn and their teams. Secretary Mineta, who worked on the
original authorization of Project ACTION, has worked closely with us
since taking over DOT.
Easter Seals Project ACTION was also heavily featured in the
President's New Freedom Initiative Progress Report released in 2004.
This demonstrates how closely the administration is working with
Project ACTION to reach our shared goal of a safe, accessible,
reliable, efficient and affordable transportation for and by citizens
with disabilities at the local, State, regional and national levels
throughout the United States.
SUPPORT FOR EASTER SEALS PROJECT ACTION
Easter Seals Project ACTION's successes are diverse and the value
of the Project to both the transit and disability communities can be
well documented. For instance, Barry Barker, Executive Director of the
Transit Authority of River City (Louisville, KY) states that, ``Easter
Seals Project ACTION's support has enhanced our ability to maximize the
quality of service we provide to all of our customers. The project
helps us provide our customers with the mobility necessary to fully
participate in the community.''
Maureen McCloskey, National Advocacy Director of the Paralyzed
Veterans of America states that, ``The forum that Easter Seals Project
ACTION has provided has created a dynamic dialogue between the
disability and transit communities that has resulted in increased
access to transportation for people with disabilities.''
EASTER SEALS PROJECT ACTION WORKING AT THE COMMUNITY LEVEL
Among the programs pursued by the project in the recent period have
been efforts aimed at increasing community capacity to meet the
transportation needs of people with disabilities. For instance, in
2001, Easter Seals Project ACTION initiated the first Mobility Planning
Services (MPS) Institute. The latest Institute took place in November
of 2003 and approximately 25 communities took part in the 2-day event.
This was the second group of communities to go through the MPS
training. The first group of 20 communities remains active and working
with Project ACTION to continue their work at the community level. To
participate in the Institute, each community had to identify a
leadership team to attend the training. The leadership team had to
consist of representatives from transit providers, disability service
providers and disability advocacy organizations. This team approach
will assure that all stakeholders are involved in implementing MPS. The
greatest success so far of the MPS concept has been that it provides
the disability community and the transportation industry an opportunity
to develop tools for working together where in the past there had often
been a lack of communication and in some cases even animosity. By
implementing MPS, communities do a better job of meeting the
transportation needs of people with disabilities and therefore better
meet the transportation needs of all residents. Communities that
participate in MPS receive ongoing in-depth technical assistance from
Project ACTION staff ranging from access to Project ACTION materials to
on-site training and facilitation by Project ACTION staff.
EASTER SEALS PROJECT ACTION WORKING AT THE STATE LEVEL
Project ACTION is partnering with the FTA on several initiatives
designed to increase the capacity of States to support accessible
transportation for people with disabilities.
The first initiative is a series of regional dialogues being held
throughout the country. These dialogues built on the success of 2002's
successful National Dialogue on Accessible Transportation. The goal of
these events was to bring people with disabilities and transit
providers together at the regional level to foster communication that
will hopefully lead to jointly developed solutions to unique barriers
to accessible transportation identified together in each region.
Project ACTION is also working with FTA to support the success of
the multi Federal Department ``United We Ride'' initiative. Project
ACTION helped facilitate a national meeting in March of Governor
appointed representatives from State Departments of Labor,
Transportation, Education and Health and Human Services. Forty-six
States and territories participated in this forum that was one of five
elements of an FTA effort to bring together Federal and State agencies
to help identify, plan and alleviate barriers to human service
transportation coordination. Project ACTION is assisted in the
dissemination of the FTA developed Framework for Action planning
process guide to help States and communities build and operate
coordinated transportation systems and has already begun to provide
technical assistance on its use throughout the country.
EASTER SEALS PROJECT ACTION WORKING AT THE NATIONAL LEVEL
Easter Seals Project ACTION actively works with both the disability
and transit communities to determine existing needs for products and
training. Easter Seals Project ACTION also convenes special topic
meetings to address concerns and identify strategies on issues
identified by various stakeholders. This year's special topic meetings
will focus on the development of a ``One System for All'', concept that
emerged from the Project's National Dialogue conducted last Summer. The
meeting will involve a small group of disability and transit advocates
to further develop the concept and also begin to address the design and
provision of technical assistance and other resources necessary to
advance the availability of seamless community transportation systems
for people with and without disabilities. Another special topic meeting
will bring together travel trainers to develop a curriculum for the
further training of these specialists that enhance the participation of
people with disabilities using fixed route transportation. Convening
special topic meetings enable Easter Seals Project ACTION the
flexibility to address emerging issues as they arise.
Some of the materials that Easter Seals Project ACTION has
developed during the past year include:
--A collection of ``success stories'' that share, in the own words of
people with disabilities, stories about their successful use of
transportation and the positive difference it made in their
lives;
--New resources and guidance on good practices for conducting
physical functional assessments for determining paratransit
eligibility;
--A collection of innovative practices in operating paratransit;
--A redesigned resource called ``You Can Ride,'' a reference guide on
how to use public transportation for people who can't read;
and,
--All resource materials available from Easter Seals Project ACTION
activities are available free of charge through the Project
ACTION catalog.
As mentioned, Project ACTION staff also are involved in
continuously providing technical assistance to transit providers,
nonprofit human service organizations, people with disabilities, and
the general public. The forms of technical assistance provided are
provided based on the determination of what would be the most helpful
in the situation being addressed. Assistance from Project ACTION ranges
from the delivery of basic information in the form of brochures from
our national clearinghouse to telephone, e-mail, participation in the
training program and on single or ongoing on-site work.
CONTINUING NEED FOR EASTER SEALS PROJECT ACTION
Access to transportation is a vital issue for people with
disabilities. For many people with disabilities, a lack of accessible,
affordable pubic transportation is the primary barrier to employment,
education and participation in community life. In his New Freedom
Initiative, President Bush recognized the importance of accessible
transportation for people with disabilities, and has proposed an
increase in Federal support for promoting innovative and alternative
transportation solutions for people with disabilities. As these
proposals are implemented, it will become increasingly important that
the resources and skills, relationships and knowledge that Easter Seals
Project ACTION has fostered remain strong. Should the appropriations
process support this New Freedom Initiative, Project ACTION is
committed to working with DOT on implementation.
There is a growing need for outreach by Project ACTION to specific
populations. While Project ACTION has historically worked with rural
communities to help address their transportation issues, the lack of
access for rural residents with disabilities is still unacceptable.
Easter Seals national headquarters and Project ACTION are working
together to coordinate efforts to better serve rural residents with
disabilities in a variety of service areas including transportation.
Further, as the population ages, there is also a need to provide
develop and provide additional specific resources and assistance to
transit providers and older passengers. Since most people will
experience some level of disability as they age and require accessible
transportation, Project ACTION's resources will again be invaluable as
transit providers struggle to meet the needs of this new wave of
riders.
FISCAL 2005 REQUEST
In order to continue the outstanding work of Easter Seals Project
ACTION, Easter Seals national headquarters respectfully requests that
$3 million be allocated in fiscal 2005 to the Department of
Transportation for project activities.
Mr. Chairman, thank you for the opportunity to present this
testimony to the subcommittee. Your efforts have improved the
accessibility of transportation for persons with disabilities and the
ability of the transportation community to provide good service to all
Americans. Easter Seals Project ACTION looks forward to continuing to
work with you toward the pursuit of these objectives.
______
Prepared Statement of the American Public Transportation Association
Mr. Chairman and members of the subcommittee, on behalf of the
American Public Transportation Association (APTA), thank you for the
opportunity to provide written testimony on the need for investment in
Federal Transit Administration (FTA) programs under the Transportation,
Treasury and General Government Appropriations bill for fiscal year
2005.
ABOUT APTA
APTA's 1,500 public and private member organizations serve the
public by providing safe, efficient, and economical public
transportation service, and by working to ensure that those services
and products support national economic, energy, environmental, and
community goals.
APTA member organizations include public transit systems and
commuter railroads; design, construction and finance firms; product and
service providers; academic institutions; and State associations and
departments of transportation. More than 90 percent of the people who
use public transportation in the United States and Canada are served by
APTA member systems.
OVERVIEW
Mr. Chairman, the fiscal year 2005 Transportation, Treasury and
General Government appropriations bill provides an opportunity to
advance key national goals through increased Federal investment in the
Nation's surface transportation infrastructure, including public
transportation. A study conducted by Wirthlin Worldwide in February
2004, found that most Americans (80 percent) see quality of life
benefits from increased investment in public transportation, and 76
percent of those surveyed support public funding for the expansion and
improvement of public transportation. Clearly, Americans support
Federal policies that create good, high-paying jobs, especially U.S.
jobs that cannot be exported. Investment in our national public
transportation and highway systems creates jobs--47,500 per $1 billion
of Federal investment. This investment does more than create jobs, it
helps improve the economy by reducing congestion, promoting energy
conservation, and providing transportation options to workers and tens
of millions of other Americans.
As a Nation, we need to maintain and improve the transportation
system that has served this country so well. Congress has made a
substantial investment in public transit systems around the country,
and those systems serve tens of millions of customers each day; but
much needs to be done to maintain and increase the return on that
investment. With ridership at record levels, the American Association
of State Highway and Transportation Officials (AASHTO) estimates that
an annual capital investment of more than $44 billion is needed to
adequately maintain, improve and expand public transportation across
America.
Demand for surface transportation options--including modern, safe,
and efficient public transportation service--is at an all-time high.
New transit service is being added in areas around the country,
including Houston, Minneapolis, Phoenix, and Charlotte. More and more
communities are voting for new and expanded transit service every year.
Demand for transit options is a product of growing frustration with
increased congestion that negatively affects our quality of life by
wasting time and money, and a desire for mobility options. The Wirthlin
Worldwide poll also demonstrates that voters support public
transportation regardless of whether they live in urban, suburban,
small urban or rural communities, and that they are more likely to vote
for Congressional candidates who support such investment.
Similarly, as the population ages, older Americans will need more
and better transit service. As driving becomes less of an option for
many older Americans, they as well as persons with disabilities are
seeking good public transportation options so that they can continue to
fully participate in society. Yet many older Americans and people with
disabilities live in areas where public transportation services are
limited or non-existent, despite the fact that access to good transit
service can mean the difference between living independently and moving
into assisted living. Nearly two-thirds of residents in urban, small
urban and rural communities have few if any transportation options--41
percent have no access to transit, another 25 percent live in areas
with below-average transit services. Clearly, our Nation's small-town
and rural areas have real and growing transportation needs.
FISCAL YEAR 2005 TRANSIT INVESTMENT
APTA believes it is crucial to provide significant investment in
the Nation's transit and highway infrastructure in the fiscal year 2005
appropriations process. That investment advances key national goals by
producing jobs, providing more mobility options to all Americans,
improving the environment and reducing dependence on foreign oil, and
by providing a solid return on the investment.
APTA's recommendations for reauthorization of the Transportation
Equity Act for the 21st Century (TEA21) propose to grow the transit
Federal transit program to $14 billion by fiscal year 2009. The Senate
has passed a TEA21 reauthorization bill that would authorize $8.65
billion for transit in fiscal year 2005, and we urge the subcommittee
to invest no less than that amount for the Federal transit program in
fiscal year 2005.
Mr. Chairman, in that regard we thank you for your outstanding
leadership as chairman of the Senate Banking Committee in crafting the
transit portion of that legislation, which addresses critical public
transportation investment needs.
PUBLIC TRANSPORTATION INVESTMENT CREATES JOBS AND GROWS THE ECONOMY
Americans are growing increasingly concerned about jobs. An
Associated Press poll taken March 19-21 showed that 35 percent of
Americans view economic conditions as the most important factor on
which they will vote. A Washington Post poll taken April 15-18 shows
that the economy and jobs are the most important issues that 26 percent
of voters want to hear about in the upcoming election, more than any
other topic. Polls by Newsweek and Harris this year have produced
similar results for the last several months. Jobs are the No. 1 concern
of Americans.
Policy makers know that increased investment in our Nation's
transit and highway transportation infrastructure will help the economy
and will produce jobs. The Department of Transportation has
demonstrated that for every $1 billion in Federal highway and transit
investment, 47,500 jobs are created or sustained. This view is shared
by Senate Environment and Public Works Committee Chairman James Inhofe
(R-OK), who stated upon passage of SAFETEA that the bill ``will create
nearly 2.8 million job opportunities for the American people.'' He went
on to call TEA21 reauthorization the ``biggest job creation bill of
this Congress.''
The jobs that investment in public transportation can create are
high-paying, stable, and cannot be exported. The jobs created are not
just those needed to operate new and expanded transit service, which
are significant; but also in the private manufacturing sector, which
supports and supplies the public transportation industry. For instance,
transit buses are built in, among other places, Anniston, Alabama;
Wichita, Kansas; Brownsville, Texas; Lamar, Colorado; St. Cloud,
Minnesota; Hayward, California; Imlay City, Michigan; Pembina, North
Dakota; and Oriskany, New York. Engines for those buses may be built in
Detroit or Columbus, Indiana. Spending on transit also benefits
hundreds of other private sector companies around the United States
that build rail cars, fareboxes, vehicle parts and equipment or provide
software, engineering, and construction services for the transit
industry. According to a Cambridge Systematics Inc. study, for every
$10 spent on transit capital projects, $30 in business sales is
generated. Every $10 invested in transit operations results in $32 in
private business sales.
Mr. Chairman, public transportation serves another important
economic purpose: alleviating highway congestion. According to the
Texas Transportation Institute's ``2003 Urban Mobility Report'',
congestion costs $69.5 billion annually--more than 3.6 billion hours of
delay and 5.7 billion gallons of excess fuel consumed. The report says
without public transportation, there would be 1 billion more hours (30
percent) more delay. The average driver is losing more than 1\1/2\
weeks of work (62 hours) each year sitting in gridlock. The average
cost of congestion per peak road traveler is $1,160 a year. All of that
congestion holds up more than 64 percent of the Nation's freight that
moves by truck on highways, which represents annual value to the
economy of more than $5 trillion. As the Free Congress Foundation's
Paul Weyrich and Bill Lind demonstrate in their study, ``How Transit
Benefits People Who Do Not Ride It'', public transportation, by
alleviating congestion, brings real benefits not just to those who use
it, but also to those who do not use it.
But public transportation does not just improve the economy by
taking cars off the road--it provides transportation options to low-
income workers who cannot afford to drive to work. According to the
Surface Transportation Policy Project, the proportion of household
expenditures devoted to transportation has grown from 14 percent in
1960 to almost 20 percent today. A recently published Bureau of
Transportation Statistics Issue Brief found that Americans who commute
by car or truck spent about $1,280 per year in 1999, while those who
were able to use public transportation to get to and from work spent
just $765 per year. Clearly public transportation provides real and
needed savings for the many entry-level workers coming into the
workforce who are so critical for the Nation's economy.
PUBLIC TRANSPORTATION IS IN DEMAND
Last November voters in several communities, including Denver,
Houston, Grand Rapids and Kansas City, approved by large margins new
local taxes to provide new and expanded public transportation services.
These were just a few of efforts across the country to increase funding
for transportation infrastructure, and follows successful actions in
other cities over the past 5 years to expand transit service, including
Phoenix, Charlotte, Dallas and Minneapolis.
That these referenda have been approved should come as no surprise.
Polls have consistently shown that the American public not only
supports increased public transportation services but also supports
providing the resources to pay for it. As mentioned earlier, the recent
Wirthlin Worldwide study showed that 80 percent of Americans surveyed
see quality of life benefits from increased investment in public
transportation; 76 percent support public funding for the expansion and
improvement of public transportation; two-thirds support pro-public
transportation Congressional candidates; and a majority (52 percent to
41 percent) of Americans believe transportation investment is
preferable to tax cuts to stimulate the economy. These findings hold
true across areas of all sizes--urban, suburban, small town and rural.
A poll taken in spring 2003 by APTA and the American Automobile
Association (AAA) showed that 95 percent of those surveyed said traffic
congestion, including commutes to and from work, had grown worse over
the last 3 years, with 92 percent believing it was either very
important (71 percent) or somewhat important (21 percent) for their
community to have both good roads and viable alternatives to driving.
The Wirthlin Worldwide poll demonstrates that support for public
transportation has increased dramatically not only in our biggest
cities, but in smaller urban communities and rural areas as well, where
40 percent of America's rural residents have no access to public
transportation, and another 28 percent have substandard access. It is
estimated that rural America has 30 million non-drivers, including
senior citizens, the disabled and low-income families, all of whom need
transportation options. According to a survey of APTA members, bus
trips in areas with populations less than 100,000 increased from 323
million to 426 million in a recent 5-year span.
While demand for new and expanded service is increasing, the
resources required to simply maintain the present level of service are
immense. A 2002 AASHTO report estimates that $44 billion is needed
annually to meet current transit capital needs for new projects and
improvements to existing systems as well to expand the availability of
transit service to more Americans.
PUBLIC TRANSPORTATION PROVIDES MOBILITY OPTIONS
Public transportation provides mobility options to persons who
choose not to, or cannot, drive because of age or a disability. For
many in this population, public transportation may be the only option
to living a fully independent and productive life. For many Americans,
public transportation can be the difference between staying in their
own homes or moving into an assisted living community.
According to the AARP's Beyond 50.03: A Report to the Nation on
Independent Living and Disability, released in August 2003, as people
move from their 70's into their 80's, the percentage of licensed
drivers falls to 50 percent from just over 90 percent. With the baby-
boom generation approaching retirement age, this means the population
of elderly Americans who do not have a driver's license will soon grow
significantly.
Persons with disabilities face similar mobility problems. Many
cannot drive or afford vehicles that are fitted to their needs. Public
transportation can provide them the options they need to stay active
and independent. However, according to AARP's report, 32 percent of
people with disabilities over 65 report that inadequate transportation
is a problem. The report states further that while public
transportation is more economically efficient in areas with high
population density, many older Americans with disabilities live
``outside of central cities in communities where public transportation
is found least often.'' This is becoming a growing problem, and it is
clear that we need to begin to address the important transportation
needs in these areas.
PUBLIC TRANSPORTATION PROVIDES GOOD VALUE
Unlike other modal transportation projects funded through the
Department of Transportation, major capital transit projects funded by
the FTA are subject to a rigorous Federal review process. A
comprehensive alternatives analysis process is undergone, with various
transportation alternatives weighed and considered. The overall review
process typically involves 5 or more years of planning, environmental
studies and technical analysis. The projects must be included both in
State and local transportation programs and plans. To qualify for
project approval and a full funding grant agreement, project sponsors
must demonstrate not only financial capacity to construct the project
but also to maintain and operate the service once put in place. Much of
the process turns on ridership and project cost estimates. In that
regard, we are pleased to note that ridership and project cost and
benefit estimates for recent new start and bus rapid transit projects
have been very accurate, and we will continue to work with the FTA and
our members to make sure that forecasting is as accurate as possible.
The result of this rigorous process is that the completed transit
projects provide real value and an excellent return on the dollar,
often in areas not typically recognized: increased value and income for
property owners; expanded markets, rising productivity and increased
revenues for business and commercial owners/occupants; and enhanced tax
revenues for local governments--from rising land values, expanded
development and an upsurge in business transactions. While we support
this rigorous review process and the excellent projects that result
from it, we remain concerned that it does not apply to other
transportation projects under the jurisdiction of the Department of
Transportation. We think it would be good public policy to have all
major Federally funded transportation projects subject to similar
Federal review processes.
PRESIDENT'S BUDGET PROPOSAL
The President's fiscal year 2005 budget proposal proposes to freeze
funding for Federal transit programs at the fiscal year 2004 level of
$7.266 billion. In its proposal for a 6-year authorization bill, which
was submitted to Congress 9 months earlier, the administration had
proposed to fund Federal transit programs at $7.369 billion in fiscal
year 2005, $103 million more than the amount for transit in the fiscal
year 2005 budget proposal.
Mr. Chairman, now is not the time to shortchange investment in
public transportation! While the administration continues to advocate
for policies that will support a healthy economy and produce more jobs,
its budget proposal for transit does not adequately address the need to
improve our Nation's transit systems, and create jobs in the process.
We again emphasize the 47,500 jobs created by every $1 billion invested
in the public transportation infrastructure or the $30 million in
private business sales that are generated for every $10 million
invested in transit.
Mr. Chairman, we strongly believe that growth of the Federal
investment in public transportation can help advance many of the
Nation's key goals, and that freezing Federal funding for transit
simply defers the growing backlog of unmet transit capital needs. We
urge the subcommittee to fund the Federal transit program in fiscal
year 2005 at no less than $8.65 billion, the amount provided in SAFETEA
(S. 1072), the Senate-passed TEA21 reauthorization bill.
CONCLUSION
Public transportation should and can play a key role in meeting the
goals of the administration and Congress in providing jobs and economic
development, energy independence, and mobility options for millions of
American. Mr. Chairman, we look forward to working with the
subcommittee as it takes up the fiscal year 2005 appropriations bills,
and urge you to invest in surface transportation programs at the
highest levels possible.
______
Prepared Statement of the National Association of Railroad Passengers
Thank you for the opportunity to submit this statement. We support
the Amtrak request for $1.798 billion. We also support efforts to make
the Federal Government a true funding partner with States to permit
development of high speed rail corridors, for which many States already
have well-advanced plans. Finally, we strongly favor Federal support
for the CREATE/Chicago Project to modernize Chicago's railroad
infrastructure, and we support continuing efforts to bring to fruition
a North Station/South Station Rail Link in Boston.
$900 MILLION IS A SHUTDOWN BUDGET FOR AMTRAK
Secretary of Transportation Norman Y. Mineta has made clear his
agreement that $900 million would be a shutdown budget. At his
interest-group budget briefing on February 2, I asked him about a
seeming disconnect between the administration's budget recommendation
and Amtrak President & CEO David L. Gunn's statement last fall that
$900 million is a shutdown budget that ``won't work.'' Mineta
responded, ``Gunn is right on the numbers'' but we are sending a
message about the importance of our reforms. The following table
illustrates the problem with $900 million:
[In millions of dollars]
------------------------------------------------------------------------
Amount
------------------------------------------------------------------------
Operating...................................................... 570
Debt Service................................................... 262
Environmental.................................................. 22
--------
Total.................................................... 854
------------------------------------------------------------------------
NOTE.--Amtrak has taken on no new commercial debt since David Gunn's
May, 2002, arrival, and has no plans to. The cost of debt service
peaks in Fiscal 2005 and declines thereafter. Most of the
environmental portion of Amtrak's capital budget involves work that
Amtrak is legally obligated to undertake, so could not be set aside in
favor of fleet or infrastructure work that otherwise would be
considered more vital to the system's continued, viable operation.
Gunn in February said Amtrak has ``a strategy of moving resources
from emergency repairs to programmed maintenance.'' This obviously
makes for more reliable service, while maximizing revenues (fewer en-
route problems means satisfied customers) and reducing maintenance
costs. However, much of the programmed maintenance is considered
capital, so a maintenance budget at or close to zero forces either an
immediate shutdown or an immediate downward spiral in service quality.
But this means the system would collapse on zero capital, and 2,000
employees would be let go. That's essentially what the administration's
$900 million would require.
PASSENGER RAIL SECURITY
We agree that rail security has been underfunded and join with
those noting the huge gap between Federal spending on aviation security
and on railroad security--$11 billion versus $115 million, according to
one representative at today's House subcommittee hearing. We understand
that the Bush Administration's Transportation Security Administration
request for fiscal year 2005 is $5.3 billion, of which all but $147
million is for air security.
The most obvious needs in rail security relate to infrastructure--
especially bridges, tunnels, stations and yards--and training for
front-line personnel.
Infrastructure.--Issues in the Northeast Corridor are well-known.
At major stations nationwide, items for consideration include: an
increased police presence with K-9 units, video surveillance at key
points of entry and exit, vapor detectors, coordinated plans for first
responders in case of an event.
Attention must also be paid, as Amtrak notes, to ``non-public
locations, such as loading docks, adjacent yards and buildings.''
Consider this recent news item regarding a major commuter railroad:
``Train yards in New Haven and Bridgeport have major security
problems 2 months after Federal Homeland Security chief Tom Ridge asked
rail operators to be on a heightened state of alert following the Spain
train bombings that killed 191 people, WTNH-TV reported Thursday. A
reporter and cameraman walked into the New Haven rail facility at 3
a.m. on a recent day and found no security or police guarding the
Metro-North trains that carry nearly 40,000 Connecticut commuters into
New York each weekday.
``No one stopped the news team, which was able to walk around the
rail yard for about two hours, the station reported. The reporter, Alan
Cohn, climbed aboard one of the engines . . . The television station
found a similar lack of security at the Bridgeport rail yard . . . It's
the job of Metro-North and Metropolitan Transit Authority police to
patrol [these] rail yards. Metro-North President Peter Cannito promised
that changes would be made.''
This report raises the obvious question: how secure are other rail
yards?
There is also a Federal interest in the security level of the
Nation's vast, privately-owned railroad system which is important both
to Amtrak's national network and to freight transportation. For
example, loss of major Mississippi River bridges, especially south of
Memphis where the number of crossings is small, could wreak havoc with
freight commerce.
Personnel.--Our understanding is that Israel, the U.K., and Germany
are nations where training front line staff has actually deterred
bombers and saved lives. This has been a sensitive issue in the United
States. Their approach needs to be studied to see what aspects of this
work could usefully be transferred. This does not mean ``pre-boarding''
interviews; that is not feasible for reasons discussed below. But
Amtrak's on-board employees in many cases have several hours or more of
intermittent contact with passengers and thus the possibility--with the
right training--of identifying potential wrongdoers.
What is not realistic.--Many Americans begin their thinking about
rail passenger security by citing baggage (and shoe!) X-ray procedures
they experience at airports but obviously not at train stations. Amtrak
(and most commuter railroads) have two extremes: places like New York's
Pennsylvania Station where passenger volumes and proximity to commuter
trains would make anything approaching airline-style security both
impractical and largely ineffective. Conversely, many small stations
have such small passenger volumes as to make any security equipment
seem wasteful. As Mesa Airlines CEO Jonathan Ornstein recently noted
(in a March 9 Washington Post report about holes in security at small
airports), ``When there are more TSA people than passengers, you have
to ask yourself, does that make sense?''
We note with approval that TSA seems to agree. For example, TSA
Undersecretary Asa Hutchinson said that the device that sniffs for
explosives and is in a month-long test at New Carrollton, Maryland, is
not permanent but simply to gain knowledge for TSA ``so that in the
event there is a specific threat or a specific need, we have the
knowledge, the capability to put inspections in place in a particular
threat environment.''
THE PUBLIC WANTS THE RAIL CHOICE
Amtrak's ridership reports starting around May show strong
increases--a further sign both that Gunn is succeeding in stabilizing
the railroad, and that people want the service. For the first 5 months
of fiscal year 2005 (October-February), ridership increases on the
long-distance trains ranged from 6 percent to 34 percent, with only two
routes below 10 percent. Short-distance route changes ranged from -3
percent to +22 percent, with 7 of 16 routes showing double-digit
percentage increases. (Actually, the New York-Pittsburgh route was up
104 percent but this is not exactly an apples-to-apples comparison.)
Two routes showed slight declines.
In March, systemwide ridership was up 3.2 percent and revenues were
up 5.8 percent versus 1 year ago.
THE NATIONAL NETWORK
We reiterate our strong belief that funding Amtrak's national
network is a Federal responsibility, and that implementation of any
``reform'' which requires a multiplicity of States to provide operating
grants is tantamount to shutting down the system. The suggestion--heard
more than once from Secretary Mineta--that a train could run ``closed
door'' through non-paying States is not workable because, almost
without exception, revenues lost from skipping any State would far
exceed the negligible cost savings. The Empire Builder in crossing the
thin northern tip of Idaho might conceivably skip Sandpoint, Idaho,
with minimal damage but it's hard to think of any other benign example.
Similarly, we do not believe a ``route closing commission'' could
shed any significant new light. The system is already so skeletal that
deletion of any surviving route would mean wholesale elimination of
service to major cities and States. Indeed, as we have testified
previously, we favor an expansion of the network.
Amtrak's Sunset Limited is often cited by Amtrak's critics as
wasteful because it would be cheaper to fly passengers from Orlando to
Los Angeles. However, relatively few passengers travel that entire
distance. Other city-pairs the route serves do not have direct flights,
or affordable flights, or in some cases any flights. In addition, some
passengers are physically unable to fly. And elimination of the Sunset
Ltd. would create a domino effect as the loss of connecting passengers
and ability to share facility costs with the Sunset would unravel the
economics of the Texas Eagle, City of New Orleans, and Crescent.
The large subsidy-per-passenger figures sometimes cited for given
Amtrak long-distance routes include ``fully allocated'' costs. These
are misleading because they often are interpreted to mean that
discontinuance of a given route would reduce Amtrak's operating grant
requirement by the product of the number of passengers times the fully
allocated loss per passenger. Using the Silver Star fiscal year 2002
figures at page 471 of the House subcommittee's April 10, 2003, hearing
record, the math would be $189 times 252,240.
The product does not represent an avoidable cost, since many
allocated costs will not disappear but simply get re-allocated to
surviving routes. Obvious example: a share of the Amtrak president's
salary. Also, a high proportion of long-distance-train passengers make
connections with other trains, so discontinuing one train negatively
impacts revenues on other trains.
This helps explain why ``FRA-defined train contribution'' figures
were developed, by Federal Railroad Administration working with Amtrak
when they were implementing the agreements under which DOT approves
funds before Amtrak gets them. In the case of the Silver Star, the FRA
defined contribution is actually positive: $12 per passenger or 2 cents
per passenger-mile. (Measures stated in terms of passenger-mile are
normally used in intercity travel statistics because they take into
account the dramatic variations in trip lengths.)
Thank you for considering our views. Please let us know if we can
provide further information that would be helpful to the committee's
work.
Prepared Statement of Signature Flight Support
THE EFFECTS OF CLOSING DCA TO GENERAL AVIATION
Ronald Reagan Washington National Airport was closed to general
aviation (``GA'') on September 11, 2001 and has not reopened since. It
is the only airport in the country that has been shut down to general
aviation. Following the September 11 attacks, the FAA also closed the
three small general aviation airports within 15 miles of Washington:
Potomac Airfield, Washington Executive Airport and College Park Airport
(``DC-3 airports''). Although the DC-3 airports have been allowed to
re-open, they are subject to unique tight restrictions and cannot land
any incoming traffic. No other airports in the country are subject to
comparable restrictions.
General aviation businesses that were operating at Reagan National
and the smaller DC-3 airports have suffered substantial losses as a
result of these closures and restrictions, which is entirely the result
of government edicts. The use of their property has been ``taken'' by
the Federal Government. They should be compensated for these losses.
Prior to 9/11, as the sole provider of ground support services for
general aviation at Reagan National, Signature Flight Support handled
an average of 175 flights per day, and employed 55 aviation service
professionals. Two employees now handle approximately 20 flights per
month. During the last 6 months, virtually all of these flights have
been government officials. The flights primarily are aircraft belonging
to the Bureau of Immigration and Customs Enforcement, the Drug
Enforcement Agency, the FBI, NASA, and miscellaneous dignitaries.
Although Signature's rent has been abated by the Metropolitan
Washington Airports Authority, Signature has suffered substantial
losses to revenues and workforce. In the 2\1/2\ years since closure,
Signature Flight Support alone has lost after tax profits, offset by
modest gains at our Washington Dulles and Baltimore facilities, in
excess of $10 million.
COMPENSATION IS NEEDED AND APPROPRIATE
The Fifth Amendment to the Constitution provides that no ``private
property shall be taken for public use without just compensation.'' The
closure to general aviation and its effect on Signature is legally
known as a regulatory taking. The general aviation shutdown has left
Signature with a facility and a business that cannot possibly be used
for any other purpose. Given this situation, the Federal Government
should compensate Signature and other similarly affected business for
the losses that have resulted. Compensation should be paid for the lost
profits and actual losses incurred since the closure of Reagan National
to general aviation.
Congress immediately recognized the need for compensation in the
wake of 9/11, when it passed the 2001 Emergency Supplemental, which
included $40 million to the Metropolitan Washington Airports Authority
to compensate its concessionaires for the temporary closure and reduced
commercial flight schedule at Reagan National immediately after 9/11.
However, this fund compensated businesses only for the period
immediately following 9/11; no funds were made available to businesses
that continued to suffer substantial losses at Washington area
airports. These losses were uniquely suffered at these airports. This
failure can and should be addressed this year. Funding for these losses
has now been fully authorized.
Last year, Congress recognized the importance of compensating
businesses for the significant losses suffered post 9/11 as a result of
the closure of general aviation. The FAA reauthorization bill, The
Vision 100--Century of Aviation Reauthorization, provides for the
reimbursement of losses incurred by general aviation entities. The bill
was enacted last December.
The compensation provision specifically states, ``the Secretary of
Transportation may make grants to reimburse . . . general aviation
entities for the security costs incurred and revenue foregone as a
result of the restrictions imposed by the Federal Government following
the terrorist attacks on the United States that occurred on September
11, 2001.\1\ Item 1 is ``general aviation entities that operate at
Ronald Reagan Washington National Airport.'' \2\ The statute authorizes
that $100,000,000 to be appropriated for reimbursements to carry out
the section. This year, Congress should follow through by making this
authorization a reality, particularly for the highest priority
category, which is the only category where general aviation has been
totally banned since 9/11.
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\1\ Public Law No. 108-176 (H. Res. 2115) (December 12, 2003).
\2\ Public Law No. 108-176 (H. Res. 2115) (December 12, 2003).
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A provision should be included in the Fiscal 2005 Transportation
Appropriations legislation that compensates those businesses that have
suffered losses as a result of the termination of general aviation
activity at Reagan National Airport. This provision should provide for
a minimum of $10 million, the approximate amount lost by Signature
Flight Support since the closure of Reagan National on 9/11.